and hopefully not with anybody ever again. that's all for this edition of "dateline." i'm craig melvin. thank you for watching. [theme music] good morning welcome to "street signs." i'm julianna tatelbaum these are your headlines two-speed recovery german and manufacturing falls and contracted in september amid increasing virus cases across europe remote return. some of the biggest banks in britain tell thousands of employees to work from home after the prime minister imposes new restrictions

>> if we follow simple rules together, we'll get through this winter together. there are unquestionable winter months to come and the fight against covid is by no means over >> shares in adidas and puma raced forward boosting the sports wear sector tesla shares in frankfurt hit reverse after the ceo said plans to scale up battery production will be extremely difficult. >> a warm welcome to "street signs. let's kick off the show with fresh data just off the wires. this is the eurozone composite for the month of september according to this flash estimate, 50.1, that is the slow

down from the growth rate in august the services sector has fallen into kraks 47.6 down from 50.5 in august. the manufacturing sector holding up better. 53.7 that was ahead of consensus in 53.9 so a very, very clear trend as we look at the overall eurozone numbers as well as the german and french numbers as well as there is a two-speed recovery taking place continuing to strengthen on the back of demand services sector struggling this trend prominent in france let's bring in charlotte with more looking at the commentary coming out of the market paints a pretty troubling picture

august data already pointed to a slow down. but now the path of coronavirus levels has gone into reverse >> you are right after this august numbers, the question is what direction would things go in september the reverse of the situation, in august, services on the expansion side and manufacturing was on the kraks side. with services down and manufacturing is in expansion at 50.9 so a little better than expected services did miss expectations there is a question of what does that mean going forward as we see thisgrowing in france.

more than 10,000 and a peak of 13,000 new cases on saturday we've had these restrictions put in place we expect new restrictions to be announced specifically among some of the measures and people that could come together and be capped at 10 and services and alcohol will be sold only until 8:00 p.m. we have a weekly update by the health minister. this evening, we started doing the briefings in the start of the summer they are restarting them now and will get an update on these new restrictions to be announced for paris. that goes after some restrictions in other cities in

madrid that come into place at the beginning of the week. there is a sentiment where we can go for consumers that want to invest now whether they want to sit tight or spend. at the same time, where we see the pmi numbers, this is gathered in the pace at 1.7%. >> this shounld be a surprise we are seeing services pick up. is there anything surprising in the numbers today other than the magnitude in the down turn in

services >> yeah. that's a good summary. two-speed recovery as you said, consumer and manufacturing, they are still feeling the pain they had a little lift in the summer months. good he weather. getting us all out that rebound is fading all too quickly. we had talked of the stronger euro as that is more competitive. you are seeing very good export growth it looks like that stronger euro is not doing the damage many

feared what you are seeing there is global trade, generally is picking up we've seen good growth out of the u.s., china in particular. that provided some boost to the manufacturing sector the big question going into the fourth quarter, is that grow going to grow and offset what is going to be further weakness in that service sector. >> on that point, if you look at the german numbers that come through. is it feesable to see the numbers come through driven by the improvement and domestic situation deteriorates is there a limit how divergent those two can be >> there is a limit as to how much manufacturing can offset the weakness there is a smaller sector in

services that's going to limit the boost that it can provide. it depends on the drag and is looking like with the further containment measures coming through portrayed where they will need to be. they'll be headed through in the fourth quarter that will really start to curb that growth. i'm doubtful we'll continue to accelerate it is hard to see how they can accelerate much further. they are at peaky levels it looks like you've got the best of the boost come through now filtering through. it will be an easing trend and being looing like a bigger drag. big risk if you like the double

deck >> looking through the detail of the french report. it surprised me to see the report ended on a some what positive note. for now, things remain optimistic on the out look what is giving the french firms the level of optimism. services is looking pretty grim. >> i think the question asked what do you think your own output will be in a year's time? the majority of companies are saying, look, in a year's time, we'll be in a different place. sovaccines by then, in which case we are out of the woods in terms of the infection numbers and not drag from there the virus. it doesn't mean they are up beat about the next few months.

you but it is looking quite a long way given the big concern for the next few months is how many companies will be able to ride through the second wave especially in those consumer facing restrictions in the economy. >> let's move from the demand side and talk about costs and reveal what they are talking about in terms of output prices and what all this means for employment moving forward. the question is what happens to employment in the coming months? >> yes it is quite a trend in terms of inflation. the cost side, the pipeline is rising modestly. in manufacturing, you've got higher input costs for some as this rebound occurs feeding

through. in service, you've got higher ppe costs. the cost of dealing with this ongoing pandemic so they are pushing up a cost quite a bit seeing that insufficient demand for the prices that trend has picked up in september costs are rising and charges are calling for more pressure on the margins. naturally, there is going to be pressure to cut costs over head and that will be felt in the numbers. as we've seen job losses mod rate in manufacturing services it is still one of the fastest

rates. a lot of pressure to produce head count we are perhaps over the worst of it but they look like more job cuts will go through it. those rates will only accelerate >> thank you for sharing the detail chief business economist, ihs market german finance minister proposes taking on nearly 100 billion new debt germany could exceed the man dated limits for 2021 to fight the economic fallout from coronavirus. annette now with the story it feels like we've become used to talking about german fiscal support. sounds like we'll hear more of that today

>> exactly he's from the social democrats they've never been too much against the spending he made pretty clear since the crisis started that we'll have a big bang approach to fighting that crisis. that we are seeing as well in the new proposal in the budget for next year, which sees another almost 100 billion euro of new debt coming on top of germany's new debt of 2017 already by the end of this year, the debt to gdp ratio will rise. this is clearly a huge deviation from what germany is aiming for before meaning a balanced budget he was quoted as saying after these two years of extreme spending, we should go back to try to reach a balanced budget

once again why do we need all the money social spending is going through the roof short-term working scheme costs a lot of money we have an affluent social system when it comes to unemployment benefits. this is costing more man than previously anticipated tax revenues are dwindling they are 25% down and most likely next year will not look a lot better this is what happens today, the german cabinet will not likely improve the plan even though the discussion is started whether they should raise taxes. we are not badly affected by the crisis also to cut more spending.

for now, the plan stays in tact and another boost for the economy will be seen from that also, as i was saying. the taxes will not rise -- will rather be lower and the special solidarity surcharge will be scrapped on that, back to you >> i don't think interest rates will be rising either. a digital boost for nike european competitors trade higher off the back of the news. more after the break offers investors a broader view. ♪ we see companies protecting the bottom line by putting people first. we see a bright future, still hungry for the ingenuity of those ready for the next challenge.

today, we are translating decades of experience into strategies for the road ahead. we are morgan stanley.

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welcome back to "street signs. let's look at european market which have opened on quite strong footing extending gains from yesterday where we have seen the main benchmark. posted a slight recovery after monday which posted the worst day in three months.

as you can see, we've got strong gains in the ftse and that has come alongside some weakness in sterling that is providing support for equities the cac 40 up about 1.6. the euro is trading lower than the dollars. the pmis came through. the services sector struggling to recover investors digesting another round of rebounds from boris johnson in the united kingdom. nike shares have shot up over 13% after exceeding revenue and profits for the first fiscal quarter. shares would open at an all-time high in today's session. strong numbers out of nike that is providing sup pport you can see a dida shares up

about 6.5% and huma up 4.7%. the real kicker here, digital sales jumping 82%. investors excited about what that might mean for other sports wear makers. looking at wall street we did see a rebound with the s&psnapping a four-day losing streak we are looking at more green on the board for the dow jones looking at 130 points higher we've got time before wall street opens the death toll in america has now topped 200,000 cases rise across more than half of the country's states. surge almost 20% compared to a week ago

>> president trump has again accused china of causing the pandemic trump urged the international community to rally against china. >> as we pursue this bright future, we must hold accountable the nation which unleashed this plague on the world. china. in the early days, china locked down travel domestically while allowing flights to leave and infect the world they canceled domestic flights and locked citizens in their home the chinese government and world health organization, which is virtually run by china, falsely declared there was no evidence of human to human transmission and falsely said people without symptoms would not spread the

skeez. the united nation must hold china accountable for their actions. >> china's xi jinping sought a more conciliatory. >> translator: we have no desire to fight a cold war or hot one with any country we will continue to narrow differences and dialogue meanwhile, senator romney says he will back a vote on senator trump's nominee. the move increases the likelihood of republicans confirming the appointment before the november elections. we have more >> reporter: from mid-romney, the only senate republican who voted to impeach president trump likely to cement the legacy on the supreme court. solidifying the conservative majority

>> my liberal friends have gotten used to a liberal court that is not writen in the stars. >> romney agreeing to support a vote for the pick to replace the late ruth bader ginsburg if a nominee reaches the floor, i'll vote on the qualifications of that nominee. >> senator mcconnell blasting democrats for what he calls their outrage and hysteria >> what could threaten our sit teem is if one of our two major parties pretends the system is automatically illiterate if they lose >> after denying obama pick nearly eight months before the election >> leader mcconnell has defiled the senate like no one in this generation leader mcconnell may very well destroy it

>> joe biden arguing voters should decide. >> by the time that vote comes up, there will be close to 40% of people already voted. it is a violations of the spirit of the constitution. >> president trump is saying he'll reveal it this weekend he favors a quick confirm operation. lindsay graham already declaring the outcome before even knowing the pick >> we've got the votes to confirm the judge, the justice on the floor before the election >> president trump appears to be zeroing in on two top contenders privately interviewing amy coney barrett. and will meet with lagoa >> barrett is a mother of seven.

and lagoa could appeal to spanish voters in florida. let's come back to markets and see how we are trading here. we've got travel and leisure on too much the board here. a healthy rebound under way. up 2.25% travel and leisure amid concerns around the rising number of virus cases in europe and what that might mean for restrictions delivering the new package for the uk nothing directly affecting the sector yes, concern around consumer confidence we are looking at a more dispointing situation. we are seeing resilience come through. media and banks. for worst performers, we've only got one sector trading in the

red. real estate, oil and gas and chemicals. investors digesting the pmi numbers confirming that the services sector has been struggling amid the coronavirus while manufacturing has gathered some steam >> coming up, we'll get the latest insight to the uk as the latest restrictions are introduced

>> welcome to "street signs. i'm julianna tatelbaum these are your headlines two-speed recovery manufacturing remains in growth territory. supporting a rally across european stocks. remote returns britain tells thousands to return home after the prime minister boris johnson imposes new restrictions >> if we follow these simple

rules, we'll get through the winter together. there are difficult months to come and the fight against covid is by no means over. shares in adidas and puma race toward the top of the stoxx 600 after reporting an 82% jump boosting the sports wear sector. tesla shares hit reverse after the ceo says a plan to scale up battery production will be extremelydifficult. the kmosity pmi is down from august the breakdown comes in at 55.1 in august, it registered 58.8.

manufacturing 54.3, a touch lighter than 55.2 we've seen in august the overall message that post lockdown uk recovery has lost some steam as household demand weakens businesses said they were reducing staff and went poorly when government support themes went poorly we speak just before the break saying unemployment is likely to soon start rising sharply, which raises fears saying britain

faces an unquestionable winter unveiled new virus restrictions revealing a new 10:00 p.m. curfew on restaurants and pubs and did not rule out tougher rules in the future. he called to summon the discipline and resolve to get through the winter >> we have to acknowledge that this is a great and freedom loving country the vast majority have complied with the rules, there have been too many breeches and opportunities for our invisible enemy to slip through. the virus has started to spin again. infections are up, hospital admissions are climbing. >> johnson emphasizes the government has more fire power should cases begin to rise

>> i set out a package early closing for pubs, bars table services expanding the use of face coverings. fines for those who fail to comply asking office workers to work from home if they can, while enforcing the rule of six in doors and outdoors a tougher package of national measures, combined with tougher local restrictions in areas already in lockdown. >> barclays and lloyds of london encourage employees to work from home goldman sach has told us the office remains open to essential workers but masks must be worn joining us now, robert great to

you have with us let's talk about the pmi confirming the recovery. what do you make of the continuing numbers this is before the pmi learn about new restrictions the potential will last for several months and potentially be scaled up if cases don't slow one might also ask how brexit would move in here the second thing is that pmis have been poor measures of growth we peaked out 58-59.

this is not high enough. 55 on the pmi is below trend this is significant slowing. >> let's talk about the economic cost before we came out to you, i was flagging the different banks in london who already changed the policies to working from home. we are now looking at the hospital at how much of an impact will that make in the

growth recovery? >>. >> one-third has come from growth in retail about 3.8% growth contribution last month from those sectors. this is not an inconsiderable restriction here the broader point that we need to keep in mind is that it is not the incentives itself but people's reaction to those while it remains open. it sees more demand drop more than you might think based on instructions

working from home means less transport and city services around work places and people will use other things. it gets quite complex. what we know is that if people become more concerned about consumer resources, that impact can be quite large >> you've made an important point about how much comes down to how the uk consumer will act according to what the government tells them to do what is your take at this point about the way the uk population is thinking about government policy are we at a point where the stronger response, the more trust this breeds or are we not at that point. >> at bank of america, we run a consumer survey where we ask questions to get underneath

this people have become more comfortable eating out and working as normal. through the summer, that seemed to top out to help out and the scheme ended we've seen consumer confidence improve. i'd say it is trending up. it remains really quite weak notable also is fear of unemployment which remains very elevated in showing few signs are coming down, which talks of the end of the furlough scheme we've had a better than expected recovery better than i expected gdp is still well down from where it started unemployment is likely to go up sharply. absent some really significant government measures. for me, i step back and there is a big picture.

is the uk economy likely to expand if the restrictions on activity are increasing rather than decreasing. the fiscal stimulus is falling it seems a real challenge to continue growing here. there isn't a whole lot in consumer confidence that would make me feel that's the wrong judgement. >> the point you make about the wind down as we look towards october. there was a report suggesting the chancellor was considering something to come in as the surlow scheme winds down we don't have confirmation but do you think this could happen or what is the economic outlook here >> that is something i'm baking into my numbers. you are only seeing reports just

now looking more likely. if we get some sectors entirely shut at some point in the next few months, we should maybe expect something like a furlough scheme much better than doing nothing, so we shouldn't be negative on it and wages to keep people working is a good idea for me, looking at the whole economy, the point i would highlight is these evolve much, much less than the furlough scheme it probably would prevent unemployment from rising but will not stop it entirely. we face an economy where gdp is now probably pushing on 10% below where it started

this major scheme is going to be ended. >> we'll have to leave it therele still plenty more to talk about chief economist merle lynch. >> let's look at the uk markets. we've green across the board so travel and leisure rebounding strongly >> safe sectors are seeing less strong gains and the majority are trading higher we did see a rebound and it looks as though gains will continue on wall street as well with the 180-point jump. about 10 points higher and the nasdaq about six points hire tesla outlines the plan to cut the cost of producing its

batteries in half and looks at plans to roll out a cheaper electric vehicle in just three years.

welcome back the luxury automaker is beginning to see signs of a pick up in demand he told me some of the markets are continuing to struggle >> a different picture in different parts of the world we did see demand as we go you through march, april that affected people coming to terms with what is happening we've seen demand pick up. it picked up ahead of our ability to build cars. we locked down the factory many of our suppliers were closed we saw the used market being very healthy. >> we started our factories up

again in june and in july. lower volume we've been building sense. asia is recovering quickly europe is coming back. the u.s. is a little behind as well that isn't something we can take for granted. >> saying they plan to focus on creating hybrid vehicles >> we've the 2025 date as a pivot point. we are moving ahead of hybridization while they can work well with commuter cars doesn't really work and what

we'll do today hybridization offers a solution. we bring down our co 2 emissions. ee deliver significant range and retain the come busson and electric engine. musk warned scaling up batteries will be extremely difficult. he said to have the cost reduced of making batteries. >> holding the annual share holder meeting in fremont in a parking lot to maintain social distance saying three things that got a fair amount of attention first of all, the company after four consecutive profitable quarters is likely to stay on that trop

that trajectory. he believes they should remain profitable moving forward. also, deliveries for 2020 are on track to hit 500,000 vehicles. remember they delivered 360,000 vehicles last year the target this year is 500,000 vehicles then the autonomous component. there are advancements made when it comes to the technology that will be implemented into the software the next couple of months and tesla owners will notice a difference in their auto pilot cnbc business news from chicago. joining us now, great to have you on the program after this news from tesla yesterday the automaker has gone ahead reaffirming their delivery targets. it feels like the big event around the plans of cutting the cost of batteries and taking this on board themselves to

integrate their supply chain how easy will it be to achieve this this has been the goal of auto and battery makers for years to get the cost down. >> yes he said it is not going to be easy here are plans you can tell are ahead of the industry. not only because of the coming year but what is going on right now. tesla is working hard and creating the economic system and working to keep ahead of the oems in the rest of the world. even though it will be hard, i think it is feasible and where the industry points at in order to make the evs available for everybody. >> is you talk about this

enabling tesla to potentially maintain their lead for the traditional oems we've been watching announcements over the new lines getting ready to hit the public market from various automakers tons of players getting involved now. how far ahead is it at this point and do you consider them to still be a leader in the market >> they are the leaders right now. it is the top selling electric vehicle maker right now. and the most receivable oem at the moment their secret has been working on battery because it is the essence of any electric vehicle. i think they will continue leading but competition is getting tough.

oems like volkswagen, daimler and many chinese are working very fast. so the gap between them will reduce in the coming years that's for sure. >> if we look down the line, 5, 10 years from now. given what they are doing with the cheaper, more efficient batteries. a shift away from building and selling cars and building and selling batteries perhaps to other automakers for example >> yes, absolutely he said he is open for any licensing of this technology or the way they are producing batteries. that's their main advantage they have so why not they could become also a hub for batteries for other carmakers or

other industry why not. not only cars. >> we have seen several automakers get involved. we have the trucking company unit spun out of vw saying they are going to up their goal by producing a fully electric vehicle by 2025. so clearly the incumbents across the space are not resting on their lurrels here they are working on a battery that will result in a $25,000 ev fully autonomous in three years. how significant is this? >> i was a bit surprised in the autonomous futures yes, we are working more on the vehicle. the other thing, the big thing

here is that this driving technology will be available within the next three years. i'm sure the oems will work on that and those big challenges in terms of the legal issues and convenience. the way he's said that is a big thing. we have to take into account this there was a bit of negotiation in their meeting we have to take the announcement on a very good way and understand that it will take longer than what you said. >> one of the major contributions tesla made is bringing electric vehicles into the mainstream and part of that initiative even more to cut the price of the vehicles, to 25,000

makes these more accessible to a wider population what does this mean or tell us about their global strategy? >> that's true thats a break in the industry. his announcement regarding having a 25,000 ev, it is not a new thing. you go to china. you find definitely cheaper cars they are even cheaper than that in europe right now. that's a reality already happening. tesla has focused its reports on more high end products for him, this might be a new thing. for the industry, it is not a new thing or a big thing we've had those cars around

there. it is good to come on board you can already buy an electric car for 20,000 >> we'll leave it there. let's take a look at wall street we saw the s&p 500 snap a four-day losing streak led by a rally from amazon nike in focus after shares rose to an all-time high on track after the sports wear giant reported an 82% spike in online sales. let's take a look at european markets where we've got strong gains on the board green in the region and the ftse 100 up about 2%. the dax up about 1.8

we are in a different position we saw them plunge 3.2%. the worst day in three months. we saw a slight recovery up 3.2% breaking sentiment uncertainty has lifted to a degree given we got the announcement not as severe as the worst case scenario as we've seen for every sector "worldwide exchange" is coming up next.

it is 5:00 at cnbc back on track? stocks higher by nearly 200. under the radar threat what morgan stanley is telling clients about the presidential election that could take stocks on a wild ride battery day bust that stock slides again in the pre-market >> they just did it. nike surging after trounsing estimates for the recent