tv Street Signs CNBC August 13, 2020 4:00am-5:00am EDT
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package. democratic vice presidential candidate kamala harris makes her campaign debut >> it is because of trump's failure to take it seriously from the start his delusional belief that he knows better than the experts. >> news crossing this hour on the oil mark just releasing its report and diving into the headlines of this key document global oil supply rose in july after saudi arabia ended its cut. exceeding the opec plus target and production started to recover. the opec plus cuts ease by over
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2 million barrels this month and shut in volume compensation. oil demand as we segue off that is expected to be 91.9 million per day and sheer 8.1 million per day. reducing their 2020 forecast by 140 -- what we are seeing in that down grade for several months global refinery will lag behind as product inventory levels were high stocks have risen by 16.2 million barrels in june and increased an average rate of 1.7 million barrels per day. crude prices remain in the range
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$40.77 average, for the wti price. for $42.224, brent >> the iae does dive in a little bit. saying since late may, new covid cases seem to be stabilizing since the early days of the pandemic talking about jet fuel in particular and they've revised data that shows that april the number of aviation kilometers was over 80% over 67% down. those signs will improve significantly. they've down graded estimate we continue to take a look at the travel segment this year also on supply we've seen evidence that the united states was stepping in in production in the may output
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fell nearly 2 million per day. it was below the all-time high seen in september. prices average higher since june u.s. production is starting to rise again canada is seeing production rising a couple of big take messages there. recovering in the two north american giants growing as opec plus ease their output cuts. k we are talking about more outputs. clearly along over oil demand is what they are witnessing in the oil markets so far in prices 45.30, a slight pull back on wti perched around that handle today. looking at those majors there in the red. shale is down 2%
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hard hit to bp more around total. getting to marcus who is the commodities strategist areas around precious metals and gold we saw significant reversal when gold has been a favorable asset class with investors what is going on with the trend. the underlying bullish narrative is very much in play we had that back up in u.s. treasuries particularly in real yields in the week if you look at gold's performance over the past month or so. it has materially outperformed we run a fair value against u.s. yields on the dollar we thought gold was looking
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about $250 we expect it to trade at a bit of a premium it was susceptible whether it got up to those highs when any of the supported past where we saw the support and we have not gone over and of course this sharp correction >> we did have information around the vaccine and more unusual aspect the russia vaccine and bullish comments about the potential and the testing regime and lack of final stage trials seen as quite significant and whether you want to be holding gold do you have concerns if there is a positive outcome around the vaccine that we see a big selloff around gold.
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>> the key thing in terms of how we feel it will work is what impact is it going to have particularly on the employment outlook. one of the key medium term arguments that gold will stay at a high price level is that real rates stay very low. even as growth recovers in the trough of q 2. central bank policies are at the bound and in some cases negative levels we've seen the rates become negative because we have this big back log in terms of unemployment and services unemployment actually a vaccine can change social interpretations and be a pan sea in enabling a more material and faster recovery in employment you start to have a different outlook in terms of central
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banks to tighten a little bit or at least not run quite so lose, it would be negative for the gold price it would be digested over a period of time rather than an immediate catalyst rather than to understand the outcome for the market given understanding how long immunity will last or how long a vaccine will be rolled out to be >> more immediately, you are seeing a decline in the u.s. dollar and an extraordinary turn of events and the strength of the u.s. dollar. do you have to buy into this story that the long-term bull run at this point to be a buyer of gold. >> i think it is one of the factors that you need to think is going to be a contributor that you think gold will move
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higher from here if you want gold to move to $2,500 for example on a sustaining basis and not on an overshoot, real rates can be really materially negative heading towards minus 2% hand in hand with that, you need to believe the dollar would be committed around 130 or so if you want to make the case that gold can sustainably trade higher, you are rerying on those two factors the stability and yield at this level, then you have seen the peak for gold already. >> markets will have to navigate
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in this direction. is this a gold trade around biden or trump that will depend on how much we've prepriced the outcome we've already prepriced a weaker dollar president there for a narrative that would support gold over the next month. it depends where we are on the price in the election. one possibility on that trade is that if we've got to the level we've got strong again and weak where the position is extended and the market is assuming that
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biden will be barrish on the dollar if you also see the democrats taking the senate, you could be in a position where you see a bigger fiscal expansion under a biden administration that gives you a stronger dollar and outweighs other impact at this point, it is too err will i to put on the trade just yet and depending on what other opportunities that is just yet >> can i bring out this barbell approach on the concern of the trump policies and clearly, there has been momentum around covid and risk because of some of the political noises around china. they've been buying risk and safe haven as well do you think that will continue? >> caller: that is a fair assumption that that will continue one of the things to be cautious
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about is that although over time it has a negative correlation with the rates market gold traded with the risk assets here that it is trading more with inflation and real rates in the short term and inflation moved with risk assets you see how gold would rally higher we have seen a pick up in inflation. that pushed real rates lower and
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lifted gold. if you think you've made a gold allocation and slightly step back and think about the defense asset and factor into what has happened with real rates the risk correlations are different. >> really interesting comments about gold the commodity strategist and a quick look at? market action, we've been weaker since we started in the trading session. down roughly .4% in europe, investors parking a lot of the assets on this stock. we rallied about 2% on the ftse. it was a strong day of trade given way to more trading today on these charts. this is how we approach the ftse
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giving back about half of the gains still above 6,000 points the dax yesterday only up by .7% .2% today. italian stocks slooit sliding by just over .1 of a percent. evenly split, we've basic resources weaker foder for the oil market this hour down .9% from this morning telecom gave us some numbers very strong for the market you can see it takes the top spot we'll be talking about that beat by deutsche telecom on the earnings expectations as it upsets forecast thanks to the historic merger with sprint. we'll talk about that shortly. hike!
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a jump along with raising its guidance after the u.s. t-mobile became the second largest state side following the merger with sprint eam monumental shift theout look is one bit better than consensus the third quarter itself was a lot better they were expecting some 25.6 billion euro. the core profit is up more than analysts had expected. companies are not saying they are impacted by the corona crisis they are seeing a slowing in
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orders from business clients and slower revenues from rooming that was overcompensated by more broadband and that part of the business that across from the board they call germany rock solid especially when it comes to broadband. they could add more than 80,000 new customers in that quarter. of course now that is the focus. three fifths of all the revenue is coming from the states the numbers look really good calling that historic step with the acquisition with sprit, they are playing in a different
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league they are parenting the integration with sprint will cost them money and that will weigh on money over the next years. >> i want to push on to thyssenkrupp the german steel company says it is showing signs of inflation after the sale of the elevator unit do you think you are seeing any signs of stabilization >> it doesn't if you look at the third quarter. the steel business is a huge drag on earnings after the third quarter, the loss was $334 million for the steel business for the full year, that would be
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one billion euro they need to p find a partner. that seems to be quite a tough challenging task clearly we know that merger didn't go through because of patent law they seem to be not too much interested increasing pressure on the management to find a improvement on the steel business. it is a huge drag on the earnings if you go through the other areas, it is not looking great but not a huge cat -- cat astro
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if i they are seeing a huge pick up as well. seeing stabilization in the fourth quarter of their fiscal year but not for the steel business but that seems to be deteriorating going into the fourth quarter they don't see any trend of stabilization here demand is low and competition is strong from china. back to you. >> thank you for the detail there. tui saw revenues wiped out after
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holiday bookings ground to a halt the company will not offer four-year forecast after seeing demand had returned since mid-june washington has announced it will hold off on eu hikes and unchanged about 15%. saying it acknowledged the long-running dispute saying brussels wasn't in compliance with the decisions you but will continue to look forward to the decision. under pressure and says organic profit is expected to fall as lockdowns continued in the market seeing a decline with an 8% fall in total val assumes
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to watches in switzerland. the outbreak weighed on luxury timepiece sales. not as hard as expected. a pop in the stock price today sales were back on the growth track in july as the majority of stores reopened. telling cnbc that consumers who visit are more likely to leave with a new watch >> overall, as traffic in some obvious areas where it is big for the market and travel through the airport. shopping centers as well, they have a lot for people to go shopping as well as a destination shop. what we have now where people
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are shopping and coming in on the value and product. despite traffic being down, we expect some strong numbers in june and july. showing growth german utility giant reported an 18% increase and profits boosted by the renewable portfolio. saying it will reach the upper end of the outlook range and confirmed its plans to increase the dividend how it is performing stock price sliding in section on 2%. posted a 35 million loss in second quarter ebita and a collapse in fuel demand.
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it is now reaching a turning point and sharp declines the ceo said june was less of a decline. i wouldn't say better. down 15% that is a book to bill ratio of 1.2. that cash flow, very positive. so we are financed through >> zurich insurance as the pandemic payouts hit its business those claims to reach $750 million. that strong capital position means they will recover from that loss. >> that has been unprecedented
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the riots and the high level of catastrophe which remind us of the fact that planet is in trouble. all together, they came in six months and made this unprecedented half year. we are happy we are still standing solidly we are strong and we can still recover from that. >> coming up, a rush for cars and clothes pushes core consumers to a sharper high in almost 30 years.
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china's recovery beating expectations in the guidance as sprint acquisition boosts performance and vice presidential candidate makes her campaign debut with a scathing call on trump >> it is because of trump's failure to take it seriously from the start his delusional belief that he knows better than the experts. >> a modest decline initially. for some of these markets tracking around morning lows trading off one and a quarter percent. we had a pop off slightly better
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the seeing anything different y but suggests the reversal. >> u.s. consumer prices up increased by 0.6% during the period, the sharpest jump in almost 30 years. a look at how treasuries are on the result you can see .65 is where we are trading on the 10-year let's bring the investment director at fidelity we did see moves yesterday worth noting on the bond auction
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back to the pre covid levels from a growth point of view. an element of stabilization. what do you make of a link on better news and whether it is the united states or europe? if we were to get a vaccine or if uncertainty were to be unproved the scars the economy have and will have to recover from the strong drop we are seeing an increase in savings which as a
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result should keep bond markets well supported as people search for income to place their savings in we have placed strong moves on the back of european recovery. swift moves noted on the yield to what extent do we trust these moves. it seems like fiscal disciplines have been tossed out of the window we've seen bond exposures at this point >> the bond review has been a meaningful step. for the first time, we have monetary support and coordinated fiscal policy support. a lot of the good news have been priced in.
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having to choose where to allocate, we do prefer corporate credit to the likes of italy or others who sooner or later will have to deal with what are going to be the rising gdp as a result of the fiscal policy to relate to the policy. credit better than at this stage. >> when we talk about corporate credit originally seeing swift moves where they raised it they are talking more qe down the track as we continue to see the economic weakness. who are these bond buying programs supporting now or are they weak areas that they will somehow help >> they are a broad base in
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think twice. the spectrum stands to benefit fromthat demand it depends on the policy risk. >> it depends where you are based. that seems like a much cheaper thing to do given that interest rate different enteral the dollar has come a long way from the down side. as a result of the actions and the central bank most bond increstors will have mainly bond-related risks if
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they are happy to take the risks, they should take that in general. that hedged approach will make risk development for investors >> taking you to news crossing the reaction of the u.s. decision around tariffs for airbus and other product saying it acknowledges the u.s. decision not to exacerbate the decision they want to negotiate a position saying the slow down and covid hit make it particularly urgent. we were debating this and saying how challenging it has been for both companies to embark around the layoffs and around ordering intentions given the huge slump.
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the u.s. has reported its biggest daily spike in deaths as california reported more than 11,000 cases for a second day in a row. hong kong has reported 69 new cases warning citizens to adhere to social distancing new zealand is tracing sources and the country had previously declared itself coronavirus free cases arising in france which paced a record of more than 2,000 new cases. a warning the country has, quote, been going the wrong way
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for weaks. the uk government is considering imposing quarantine on travelers from france. several countries reported a sharp rise in cases. spain and portugal are already self-isolating the government will not impose an immediate restriction on france and report a similar move on spain a few weeks back. >> they expect u.s. growth to remain weak until the virus is contained. saying americans must learn to live with the disease and san francisco fed chief warned the expiration of jobless benefits will impact consumer spending. also blaming states for not doing enough to subdue the virus adding that the economy will continue to suffer from these mistakes >> the consistent effort both
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place citizens at risk of severe illness and possible death and prolong the down turn. >> presidential candidate joe biden and newly chosen candidate kamala harris are appeared together >> the biden-harris democratic ticket take center stage >> your next vice president of the united states, kamala harris >> the first black woman on a major party ticket joe biden hopes that sends a message to young girls of color. >> today, just maybe they are seeing themselves for the first time as the stuff of president and vice president harris is a u.s. senator of california
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the daughter of immigrants from india and jamaica who met in a civil rights movement. >> marching in a struggle that continues today. i was part of it my parents would bring me to protests strapped tightly in my stroller >> already injecting enthusiasm in the campaign that raised more than $26 million since she joined the ticket. also planning on the strong and confrontational style against president trump. >> we have a president who cares more about himself than the people who elected him the president already accusing harris of being nas tity and disrespectful to biden when they were running against each other. >> she said horrible things about him. >> biden and harris both wore
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masks. they vowed to fight the spread of the virus and turn an an ailing economy in washington, alice bar, nbc news facebook is launching a voting center to educate people on the election. people can register and get the latest updates on mail-in ballots and deadlines. talks over a massive relief package remains stalled. accusing democrats over halting on ballots and postal service. >> we can't give them things they want that have nothing to do with the coronavirus. they don't have the money to do the universal mail-in voting. >> in a statement saying mnuchin
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made an attempt to reopen negotiations but turned down the around when they refused to compromise over the size of the plan a look at the markets early on in the session, we did have gains across the board you can see where wefinished u on theout pacing as we saw tech back in action quite a few trends where value has been in play not getting access to we chat on the apple
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platform, twitter was one of the lighter ones much stronger gains elsewhere on those big tech names let's get to the director of portfolio specialists. you were saying don't ditch some of the winners out there but what do you make of these players that could have ramifications on u.s. tech giants >> it is true on a lot of that the reason technology has been working so well is that earnings are predict nl in an unpredictable world
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this is still a lot of uncertainty. we continue to advocate our clients to stick with what is working. some of the value names that need to take a torch for the leadership the areas that have been working need to still work there is still a number of areas that lag the broader sectors the software and semiconductors have done welcoming out of this pandemic and the work from home environment. areas like it services and credit card processes lag and provide a lot of opportunities and give you some exposure and
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on the tale winds. >> the regulations and exposure. not to mention the u.s. as well. when we talk about the problems with china also single-name risk here what do you do here? do you spread the risk wide? >> a lot of these continue to become a little more stretched the single stock risk does increase there is an importance of those in your portfolio when when you look at the
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picture in the u.s., there is bluster but uncertain what will come of that it is a very powerful force and areas that continue to provide for your portfolios providing the dividend as we look at these names in your portfolio. >> we've seen a spike of the spotlight. where do you make of the investment for covid news. where should they place better bets in the market in that value play >> it almost seems the market has been covid on, covid off instead of risk on, risk off
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whenever the uncertainty creeps back into the picture, your growth areas seem to work a little better. as we look at what might work in value, we may be talking about our clients. you want to find value plays that provide you with a little disability into earnings and exposure into more positive trends in the u.s. looking to names towards the reopening but have invested in other ways of reaching the consumer that are not dependent on being able to
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go out and strike that product home builders have started to work if there is going to be a recovery, playing home builders would be uncertain if you want to try to play its growth versus value, maybe looking down could make sense as well looking to midcaps and small caps maybe providing opportunity but also provide leverage and get a little more diversity than owning a few large cap values. >> thank you for that and giving us your view on the various areas. now the session today, we let me take you back to those futures
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they have been a little weaker they've been interesting as we count down today we are just off on the record. if we get a little more appetite in session that will tilt us towards fresh highs on the s&p 500 which at this point, we've only witnessed on the nasdaq thank you for watching u.s. back shortly with "worldwide exchange. you say the customers make their own rules.
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