that's all for this edition of "dateline." i'm natalie morales. thanks for watching. [theme music] . welcome to "street signs." i'm karen tso with julianna tatelbaum. airlines surge despite a tougher quarter. telling cnbc a recovery will take time. >> until we have more clarity across europe, it will be a challenge to get traffic back up and demand coming back

progress on u.s./china trade talk as the world's biggest economies discuss technologies >> consumption, investments and exports fall sharply during the height of the pandemic president trump accepts the republican party nomination taking aim at the democrats accusing them of, quote, trying to steal the election. >> we have to be very, very careful. this time they are going to try to do it in the whole post office scam. you can see them setting it up watch them carefully we have to win this is the most important election in the history of our country. some breaking news coming

out of germany this morning. from the eve o from t from the ifo data. 92 92.6 versus the forecast of 92.2 you may recall back in april when we saw many lockdowns the data started to cross then and we are seeing recovery in those numbers. the ifo current conditions is 87.9 in august forecast was lower and what we are also seeing in the ifo expectations index is up to 97.5 in august versus a forecast of 98 so slightly under welming on

that number. this is germany's economy has contracted by 9.7% in the quarter. according to the statistics as consumption investments and exports fell sharply during the pandemic joining us now, our guest. thank you for joining us walk us through the ifo, is it aheading in the right direction? >> it is encouraging but very important to make a distinction between the current conditions as rightly mentioned is not as optimistic so companies are still suffering. expectations of a future are

relatively more optimistic than thought. clearly we have to be very cautious the uncertainties are very high. we expect a very strong third quarter of 3% growth compared to 9.7% contraction in the second quarter, so there is a recovery. so it is not clear the fourth quarter of this year to next year will see equally strengthened numbers the big question is will there be restrictions and again a slow down and company insolvencies. so there are many, many risk factors and we don't know where it is going to go. >> the germans have been cautious and prudent around covid-19 the concerns around the second

wave of infections that could coincide with the vaccine use. what do we expect germany to do with this information? >> we hope investment will pick up germany economy is highly dependent on the exports we've seen a contraction on gdp and exports. very high numbers of new infections elsewhere in the world, united states and other parts of europe picking up we must not forget the vulnerability of the economy so far. coming from the domestic, government consumption which has pushed a huge stimulus program and the question is will the german government be able to do that in the future if need be.

we must not forget the german economy is very volatile to the global economy >> i want to pick up on the comment around insolvencies and the outlook for german defaults. one of the big repercussions we saw is a number of these living dead firms firms that have taken advantage of low interest rates, built up debt and don't have sustainable business models to themselves. now current policies in place are going to exacerbate the problem and create the destruction. to what extent are you seeing this a problem in germany? >> a huge problem. in germany, we have a rule that as a company, you need to declare insolvency very quickly. the german government allowed companies to delay the

declaration until the end of september. this would probably be delayed again until early next year. we have seen the decline in the number of insolvencies in the first five months of this year once the deadline is approaching, the companies have to declare i feel we'll see a massive wave and increase of unemployment for me, this is the number one risk domestically in the german economy we have to watch, yes. of course, we probably already have a number of zombie companies. the government is giving generous credit guarantees to keep lending to companies. so not all companies will survive this but there is a big trade off if you force companies into insolvencies we are not sure which ones

the young companies that don't have deep pockets or those companies that don't have a future there is a difficult tradeoff and the government has decided let's rather try to rescue as many as possible clearly the trade is delaying the insolvency of the future >> what's the time line, marcel, you are looking at when it comes to this insolvency cliff you are seeing and continuing to insulate companies right now what is the time line we should be thinking about? >> so far, companies have until 30 of december 2020 to declare insolvencies the current government is discussing that into next year next year is a big election in germany. i doubt the government will be

able to be tough and say, well, in february or march, they'll have to be declared. there is a big opportunity the government will kicked can down the road as i said, to hope the crisis will abate and companies will be able to recover. but from any companies, it will be delaying the inevitable there is this political development. i expect that to extend the deadline that wave that could follow could be even more massive >> talking about the second quarter gdp numbers and the spending we saw down and exports down 20.3% seasonally adjusted what are we going to see in this

component. consumer spending is going to see challenges the recovery fund might have some impact and we are getting positive noise around u.s./china relations, phase one and that relations might be improving what should we make of these different components >> clearly, the big risk is the global economy over half is gdp exports we know in crises, global trade is declined strongly, the game as we had in global financial crisis in 2009, 2010, the economy could recover because of exports and countries like china started recovering earlier and stronger. this is outside the control of

the german government. i'm afraid what the german government will be able to do is to push public investment and spending to stabilize domestic consumption and domestic investment that is absolutely crucial we have a decline of almost 5% in germany if that continues, we'll see more job losses. one of the main focus of the german government at the moment is to help companies avoid default and to keep investments in german economy. this is the key focus, exports are outside the german government our projections on global trade are not very optimistic. we expect a continued period of low global trade that will hit the german economy very hard >> great to have you on the

show president of diw, berlin a quick look at the market action this morning. we pealed off the high of the session as we opened up the trade. a lot of hopes around fast tracking of vaccines for the covid-19 treatments and improvement on the trade fronts as we mentioned both u.s. and china in the trade agreement around the scenes have been progressing. a lot of good news in the market, currently up a third a percent. we've come off the higher ranges only up .2%. we were up almost .9 at one point and the dax up less than half a percent higher start and more than 1.1% increase up 16.5% leading .2 as well

a little disappointing i want to take to you pharma seeing bio tech company and the pharmaceutical giant that was prompted by the apple stock mix looking to reduce the tech giant's waiting. looking clearly astrazeneca is the one we've been watching in the covid news also exxonmobil and raytheon technologies big changes there. apple took effect after the closing bell as apple's market cap surpassed the $2 trillion mark and now trading a fraction weaker essilorluxottica may appeal court ruling stock price sliding .2

charlotte, talk us through the latest here. >> you remember the deal was presented in july last year. there has been several difficulties before the covid crisis one of these megadea deals and in july, starting legal preceding in netherlands for information regarding grandvision to assess the way gra grandvision has progressed the decision to suspend payments and stall payment to suppliers wanting to assess whether this was a breach of the takeover agreement. they may appeal this decision.

it has been a complicated takeover the commission also has to give their view whether they give a green light on this merger they've been delayed because the crisis has taken longer than expected they go through to sell shops, given some competition concerns on the wholesale market and prices for customers we hear that they have been reluctant in committing and we have the financial decision from brussels the complicated takeover in the mega merger giving the current context. we see essilor is one of the few stocks in the red this morning karen. charlotte, i'll pick up there. thank you for breaking it down for us

we'll squeeze in a quick break coming up on the show, sas warns of a quarterly loss. we'll bring you more from our exclusive interview from the ceo next you say that customers make their own rules.

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welcome back to "street signs. we have a number of headlines in the airline space. qantas will cut up to 2,500 jobs by outsourcing grounds operations bringing the company to nearly 30% of staff after projecting a nearly $7 billion revenue hit and projecting losses in 2021. delta airlines will furlough over 1,900 pilots in october the head of flight operations told employees the airline was overstaffed. adding that six months in, only

25% of the revenue has been recovered. a group of virgin atlantic creditors will vote on the $1.6 billion rescue package. should the vote fail to reach a majority, a judge could rule it is in the best interest of the creditors to go in cost cutting measures fail to support the collapse in air travel the airline added that activity would not return to pre-virus levels until 2022. saying they are still struggling with international demand and are relying on cargo revenue to maintain routes. >> it will be a challenge to get traffic back up. for us, our domestic demand has

rebounded nicely the peak summer season, in july, we saw some ease while we are struggling to get the intercontinental travelic going and maintaining cargo to maintain the flight on the international basis. >> a couple of stocks on the move today include the owner of iag. that stock bouncing 2.9% a strong print taking place for the british airways. lufthansa, 1.5% higher air france, klm in the green so fairly good news. easy jet isso outpacing along with ryanair is bouncing nicely tui are having challenges.

that stock is up 1.1%. the cruise ship operator, carnival is a big one. also getting bounces of roughly 3% so fairly up beat tick taking place. >> looking at oil prices, another component. and we've clearly moved off some of the lows in the session you can see oil prices around the storms in the gulf of mexico wti just slipping a tad. let's get to our guest, the associate in research. one of the big cause is the potential of further consolidation of the north america airline market give us a sense of who you expect >> it is a good point.

it is linked to cash burn. i think winter is going to be one of the seasonal problems for the airline that we are facing a tough environment and probably a bitter and bleak back drop what we see in the north atlantic losing money anyway that demand is short fall. we are seeing this ramp up and ramp down in business. this stark isolation taking place. one of the things an airline can do you can rule out this consolidation. particularly that bereft tail. i think less so in the north atlantic because three alliances hold the share and seeing more from smaller carriers pulling up

sticks >> the business travel segment clearly has been impacted. people not going to visit clients anymore. there has been a huge cut in those areas. talking to the consultant firms and that is change for the foreseeable future and many people still working from home how significant do you think it will be hit and for how long >> we've done a lot of work for how many people go from business trips to see clients and what percentage of the market travels how many times per year. the con exclusions we've drawn from our primary analysis is a secondary impairment it will be a slow recovery we don't think it will ever get

back to the 2019 basis the other thing is the risk of a vaccine. corporate and share holders a like are pinning their risks coming back from a number of years to the viruss. you have to ask the questions in the corporate standpoint in the face of the enthusiasm taking place. what is the availability of dosages going to be and what is the safety going to be given that they've safely produced this at the beginning of the year i don't think you can pretend there are any demand solutions that will take place overnight regardless of that corporate segment will be slow and uneven. >> what we have seen is an outperformance and travel and

leisure in that category you've managed to segment that even further seeing some what negative versus the budget carriers like ryanair that you think are better positioned talk us through why. >> it is a logical argument. they are exactly exposed to that market you talked about. that corporate long haul, transfer market you referenced clearly the other names you referenced are more exposed to the short haul regardless of any vaccine, short haul leisure will be the quickest to recover. i do think there is a broader market problem which makes one concerned about both legacy and low cost returns i know they are keen to let us

believe in the moment in share prices that everything is fine in terms of the uk consumer. isolation rules, tit for tat isolation rules and companies with a ramp up in the face of demand it is hard to get excited about airline prospects globally regardless >> everything has a price. i wonder what that means for the likes of virgin atlantic a lot of what has been flushed out depends on the airlines. i argue that the global industry party won't be returning to normalcy until 2024. should creditors be voting for this issue >> i think one of the most difficult things people are struggling with, actually middle market players, is how steep the recovery is going to be.

post the pentup demand we saw at t the end of may we'll see throughout july and august as well from the months of august to july, demand is down 15% the problem you highlight with a number of these votes taking place stla investors aren't entirely clear whatrecovery will look like some will talk 2027, others are talking 2024 the nonlinear recovery is prompting nervousness in the market as a result, people don't know when they'll get their cash back that's the biggest problem in the market it is a nonlinear demand recovery that's the biggest debate in the coming months. >> thank you, we appreciate it coming up on the show,

republicans warn of a cultural revolution is joe biden is elected as donald trump is nominated for a second term. more after the break we've had a ton of obstacles in finding ways to be more sustainable for a big company. we were one of the first stations to pilot a fleet of zero emissions electric vehicles. the amazon vans have a decal that says, "shipment zero." we're striving to deliver a package with zero emissions in to the air. i feel really proud of the impact that has on the environment. but we're always striving to be better. i love being outdoors, running in nature. we have two daughters. i want to do everything i can to protect the environment to make sure they see the same beauty i've seen in nature.

my goal is to lead projects that affect the world. i know that to be great requires hard work.

welcome back to the show travel stocks moving higher. scandinavian airline's ceo saying recovery will take time >> until we have more clarity on travel restrictions, it will be a challenge to get travel back up and the demand coming back. >> the dax hits one month high as the economy contracts the ifo points to recovery in business morale. >> progress on u.s./china trade talks that lifts the global

sentiment causing momentum on the major indices. president trump accepts the republican party and accuses the democrats of, quote, trying to steal the election >> we have to be very, very care tul. this time they are trying to do it with the whole post office scam can you see them setting it up be very careful and watch it carefully. we have to win this is the most important election in the history of our country. european markets have been bouncing into the green and not holding some of the higher ranges we've pealed off some of the peaks we have seen still solid but declining from what we had earlier from the

start of the session the major averages, the ftse holding 6,000 points you can see solid gains on the dax as well. risk on has moved the euro dollar rates to 1.18, 1.19 japanese yen on the back foot versus the u.s. dollar and the pound. still firmer in the daily session. the dollar is weaker versus safe haven swiss. more records on the s&p 500 and the nasdaq yesterday we are chasing a bit more green. phase one trade deal remaining in tact and more progress taking place in the conversations

investor community trade officials say washington and beijing remain committed to resolving any concerns around the trade one trade deal lighthizer and mnuchin held a call with the vice chair this morning. the call had been scheduled for the 15th of august but was rescheduled by president trump we have a bounce in japan and australia today. caution on the chinese market and hong kong. our colleague filed this report. >> investors have been waiting these trade talks especially after the mixed messages we got last week of when it will happen this offers some hope about areas two sides will be engaging in confirming the officials would be speaking with over the phone

discussing the trade agreement the u.s. side talking about steps under agreement with both seeing progress. china said they have a constructive conversation on strengthening the policy and that the two sides agreed to continue pushing forward both sides signaling the deal there and wanting to resolve the issues around intellectual property theft and china snapping up more stuff to the tune of $200 billion china has been buying more u.s. goods under this agreement but it is still falling far behind the purchases in the overall target one would have thought beijing's

failure to live up to the bargain that would have further strange ties particularly the tough starts on china which trump has made very much a part of his campaign to be reelected. still the u.s. side has signaled it is satisfied with china's efforts and that was reiterated today. reporting from sydney, back to you. tiktok has filed a lawsuit against the u.s. government claiming it has been denied due process by the u.s. government also denying accusations that it is a national security threat but it remains in talk with microsoft and/or ca oracle over divesting the north meamerican

assets and a denial by mark zuckerberg raising concerns about tiktok. >> it is not just tiktok but these other chinese companies that can collect data on u.s. citizens, ship it over to the chinese servers and share it with the chinese i'm always amazed how some of these stories pop up that one for me, has zero probability. republicans defended president trump's response to the coronavirus after formally nominated. speakers throughout branding democrats as radicals and warning of a socialist america if the former vice president was

elected. >> president trump claimed democrats are trying to, quote, steel the election as he credited himself to building a strong economy prior to the pandemic >> our country depends on it our country can go in a horrible direction. before the plague came in from china, that's where we were going. the most successful economy in the history of our country the best unemployment numbers in history for african-american, asian-american, hispanic-american, women, college students, bad students, good students. everybody. >> it is interesting so far the republicans seem to have chosen to focus on the dark picture that they think america would look like under joe biden. to me, the republican party has

been dealt a blow in that president trump was counting on a strong economy from which to platform what we are seeing now is this k-shaped recovery where we are seeing a big divergence between the haves and the have notes and it is not the big platform the republicans were hoping to have behind them in these elections >> clearly they are concerned about a mail-in vote that is something he's trying to highlight. that does raise the question, why is he so concerned is it about a voter fraud or better turn out across the election would more votes translate to more votes for joe biden and harris i think that's the big question. it is debatable. we've seen in previous elections, it was positive for barack obama this time around, the middle

aged white americans might still end up voting for trump. it is hard to figure out how this one plays out >> it is it is hard to know how the coronavirus will factor in and how trump supporters feel about his handling he has been touting his successes. but his critics are arguing that his administration has made a lot of mistakes which cost a lot of lives for america how strongly that issue features relative to others free trade, high immigration and corruption in 2016 how those tally out with the coronavirus and his handling with the pandemic >> we've got tracie potts joining us live from washington, d.c. you can hear the conversation. we are trying to read the tea leaves and what the early

campaigning means. >> exactly so in reading those tea leaves, what we know is that republicans are going to be squarely focused on painting the democratic party as radical we heard that over andover las night. they are also very focused on joe biden with the president and other speakers saying that biden has not really done a lot to move america forward those seem to be the two big targets, the party and joe biden. they said this would be a largely positive and forward looking convention, they seem very focused on looking at the other side the theme today is land of opportunity. the featured speaker will be melania trump. all eyes will be on her speech after criticisms from the last time being too similar to michelle obama she'll be speaking from the

white house. typically the politics and the government are separated in this case, a lot of events are happening on federal property, such as the white house. we'll also hear tonight from secretary of state mike pompeo who has been largely the messenger of foreign policy for president trump. >> there has been a lot of attention between the relationship between floaters and voters a lot of attention on that hong kong confirms the first case of coronavirus reinfection, raising the alarm about the muho-ledity of srtiv imnity you say that customers make their own rules.

let's talk data. only xfinity mobile lets you switch up your wireless data whenever. i accept! 5g, everybody's talking about it. how do i get it? everyone gets 5g with our new data options at no extra cost. that's good. next item: corner offices for everyone. just have to make more corners in this building. chad. your wireless. your rules. only with xfinity mobile. now that's simple, easy, awesome. switch and save up to $400 a year on your wireless bill. plus, get $400 off when you buy the new samsung galaxy note20 ultra 5g.

twin tropical storms are heading to the u.s. gulf coast nbc's reporter filed this report from louisiana >> for a region used to dealing with hurricanes, this is still rare not one but two tropical systems

hitting the region in a span of a couple of days of each other marco made land fall a little after 6:00 central time near the mississippi river but it has greatly weakened all eyes across the gulf coast are watching laura coming behind it, possibly wednesday to thursday governors are cross the area are urging people in low lying areas to evacuate because there will not be as much places in shelters because of covid-19 shelters have to keep people socially distanced which means less room. for those getting prepared alabama, louisiana, texas, they are buying food, water and filg up cars with gas and getting sand bags. laura could strike as a cat 2

hurricane. the governor is urging people to get out from low-lying areas not widespread just yet as we continue to watch the track of laura. now back to you. novavax has started recruiting for the second face of one of the covid-19 trials broadening the age range of participants for adults between 60 to 84 nears making up nearly 50%. moderna is close to reaching a deal with european union to supply up to 160 million doses of the potential coronavirus vaccine. the deal would provide an initial 80 million doses with an option to produce more at a later date cases in spain have topped 400,000 as the country battles

the worst spike in infections since late march local authorities are now bringing back restrictions to combat the rise in cases south korea will announce schools will close as the country fights a resurgence in cases and had over 300 infections in the past days. hong kong has reported the first case of coronavirus reinfection. the man in the 30's contracted the disease for the second time more than four months after he recovered. the director of university of oxford research is saying they may seek approval this year the group could have enough data to make a full assessment. president trump has reported considering astrazeneca's

vaccine to make it available to americans before the election but it is warned that rushing to the development may harm trust in the drugs i want to talk to you about the hong kong patient that has shown to be reinfected >> caller: i think it is a really interesting request and difficult to know how to interpret so far it is clear the person did have a second infection and it appears that it is not quite the same virus, although coronavirus, it is not quite the same as they had the first time around the implication of this is will a vaccines that been prepared against the first virus still protect against the second, the

probability is yes but we don't know that that is the right answer we have to wait until we are able to test the second virus against vaccines >> when it comes to the appropriate, highly political when we talk about the treatments and the vaccines. the president clearly wants to go back to voters having made progress and suggestions that he may fast track this vaccine developed by astrazeneca and oxford university. is that the right end to put in that fast track. >> everybody is wanting to get vaccines developed as quickly as possible we need to know we are safe and effective and we need to know how long they are going to be effective for. you can't answer those questions overnight and without enough people having been studied

just because you go fast doesn't mean you don't go security as long as there are enough people in the studies and some of the u.s. studies are talking about 30,000 people, that's the size of studies normally for vaccines the fact that you've done it quickly doesn't mean you've cut corners. if you do cut corners and you don't have enough people in your study to show safety and you don't have enough people to show effectiveness, then i think you are in a dangerous position and public trust could be lot of because people would worry that vaccine they have been given has not been tested for safety or effectiveness. >> professor on that point, the poles suggest that the people who are nervous about taking a vaccine given the progress in

the united states and britain and other parts of the world as well what percentage of the population needs to be vaccinated in order for the vaccine to have a desired affect >> first, you want to protect the people who are most vulnerable that is older people and people with medical risk conditions you want to get as many of those as possible to protect them individually the second issue is when do we have enough people protected to stop the virus from spreading. we don't know what the effectiveness of the vaccine is and we don't know how many will be protected if you have a vaccine that is 80% protected and you only vaccinate 50% and you'll only have 40% protected, that won't be enough to stop infection. the older people and the people

with medical risk conditions will be easier to vaccinate. i worry more about the younger people who we would need to vaccinate to stop transmission whoalready don't wear face masks and avoid social distancing in order to stop transmission to keep everybody safe, we have to vaccinate large numbers of people >> understood. if i look at a lot of the development, a lot of companies are using unproven techniques. moderna using messenger rna. viral vector techniques being used by the university of oxford this is new. if one of these new techniques ends up yielding a winner, should we feel confident in the safety of these given that they'll be the first of their kind >> i think as long as they have

satisfied the requirements of the regulators in the u.s., that's the fda. they've tested the safety and effectiveness. we should go ahead and what remains really important is that they continue to be studied until after they are put into routine use. it is only then that we have enough people vaccinated in order to see rare adverse events happening. we'll follow the usual path of putting a vaccine into use the fact that we are doing it quickly is the expression of the urgency we face. it doesn't mean we are taking short cuts or compromising safety >> thank you very much associate fellow, global health

fellow we've seen a contraction near on 10% of the quarter the latest reading on the economic fortunes and reached an agreement oven a freeze of the insol insolven insolvency filings germans are forced to report on those early on in the process. that is significant to those companies that may be challenged also, the digital taxation of the digital economy on course at the oacd that is all for today's show thank you for watching "worldwide exchange" is coming your way next. you say that customers make their own rules.

let's talk data. only xfinity mobile lets you switch up your wireless data whenever. i accept! 5g, everybody's talking about it. how do i get it? everyone gets 5g with our new data options at no extra cost. that's good. next item: corner offices for everyone.

just have to make more corners in this building. chad. your wireless. your rules. only with xfinity mobile. now that's simple, easy, awesome. switch and save up to $400 a year on your wireless bill. plus, get $400 off when you buy the new samsung galaxy note20 ultra 5g.

it is 5:00 at cnbc 4:00 at houston, texas you can't keep a good market down stocks look to extend this rally come pandemics, fires or storms. one huge role the stock is playing in recent weeks. forget 2020, please. time to party like it is 2013. the brains behind the dow average do something for the first time in years. bracing for impact in the wake of marco's