and you will be prosecuted, and you will go to jail. we will keep coming because the e rule of law requires that. we have to hold pepeople accountable. -- captionsns by vit -- good morning welcome to "street signs." i'm julianna tatelbaum here are your headlines. u.s. futures turn positive real recovering turning hawkish. and a u.s. private equity firm rejects a $5.5 million takeover attempt

hsb shares suffer after a $2.3 billion hit on the french retail bank. selling the troubled unit for 1 euro. and prosus posts a 49% rise in trading profits the group's ceo tells cnbc the market has gone peak spac saying there are better options for start ups. >> it might be good for companies. in terms of long-term growth and getting the best, they are not doing anything welcome to "street signs." we're an hour into the first trading session of the week. it has been a packed hour in terms of trade stoxx 600 trading at the flat line

we saw decent losses in the early moments of trade investors have put money back to work and selling has halted. this session comes after quite the week last week u.s. equities turn lower wall street posting the worst week since october the stoxx 600 fell 1.6%. global investors weighing the prospect of tighter monetary policy after the federal reserve shift in policy expectation. this morning, we are seeing stabilization. turning to markets the individual regions the italian market charging 0.24%. this comes as italy is moving in a less restrictive market. we saw italy impose a five-day

quarantine on travelers from uk. and losses coming through for the ibex in spain. from a sector perspective. a mixed picture. chemicals at the top up .8%. media and real estate and utilities. banks down .60%. and basic resources and travel and leisure. if we look at uk grocers and see how they are trading mo mo morissons trading higher after the takeover bid note we are seeing a rise across the uk grocers on the back of the news on morrison's

and i mentioned the federal reserve firmly in focus in the u.s. the dow jones industrial average is 1.6% lower. s&p is 1.3% lower and the nasdaq is .92%. and u.s. futures have turned positive the selling will cease dow jones industrial average set to open 60 points higher nasdaq and s&p 500 as well back to the federal reserve. the central bank could hike rates as soon as 2022 as inflation picks up that is according to st. louis fed james bullard. his comments come days after the first rate hikes would be projected in 2023. the fed would be cautious when it decides to slow the pace of asset purchases. >> i know from past discussions

on the committee , it is a complicated thing you have mbs versus treasury when do you start? how contingent is the taper? these are all key factors here in the 2013 and 2014 taper, we went on automatic pilot and didn't do much we said we would react to incoming data. to be fair, we didn't have to in 2014 this time around, look at the data look how out sized the numbers are and volatile everything has been i think we will have to be contingent than in the past. the committee has a regular review of the state of froth or the idea that there might be market excesses. we have gotten better with that over the last decade before the

financial global crisis. we have regular discussions. it has been a perennial topic ever since the speech in 1996. i do think we have our eye on this >> let's bring in the first guest this morning mark warner. great to have you with us on such a significant time for markets. big moves last week. the yield curve flattening by the end of the week. do those moves in bond markets make sense given what we heard from the fed last week >> i think it makes sense when you take use account where we're coming from. we are on an inflation rate for last six months and the pivot that the fed did state last thursday if you think of unwinding, that

is the move that we see. the question is how far will that go and it might prove to be tran transitory at the time, we are in a volatile market. >> have you changed your market narrative as a result of what we saw last week? >> that's a very good question we have been in the camp of the investors who would bet on the transitory inflation and at the same time, we have kept down on our equity exposure for a few weeks. from that angle, there was not much need to do so and at the moment, we will still be in the camp of transitory inflation we were looking closely about the inflation in the coming months like most other market participants that might shift the pivot for

the time being and i'm fine. >> you cut down on equity exposure where are you looking to put that money >> we have growth -- i'm sorry, on the value trade versus growth this is rewinding as well. we also had some exposure to the sector at the moment, we cut down the exposures because of the volatile market period from now, we are waiting for a better entry point to get back into the markets at this point, it doesn't make sense to expose yourself from that active risk the theme across the commodity sector is wait and see let's wait for a better entry moment >> how do you think about the opportunity in europe versus the u.s. it seems clear the ecb is behind

the federal reserve at this point. what does that mean with your investing strategy >> the ecb is lacking in various terms. in inflation trends are below target all of these points are more important going forward in the coming months. so that's the timeline we have what we do think is that growth would be strong in europe and inflation will be picking up not be as strongly as the u.s. from that angle, higher yields in the u.s. and also in europe will be most likely toward the end of the year. the question is only when do you entry into that trait. >> in addition to the inflation outlook of the driver of investment decisions, it is also

an election year you are looking into the german elections. how are you positioned for the german elections and what should investors be thinking about here >> there are two angles you can have a look at when it comes to the german election. first of all, we need to make a call on what is the most likely outcome. the polls suggest that combination of the conservatives and green party is the most likely outcome also our view. if that really happens, you can do two things. you should bet on all of the green topics that are already in the market you can do it on a sector base or invest on stocks with a high gc score that makes sense what i like more is the bigger context. we are now in a period of 15 to 17 months where we do not only have the election in germany, but france and mid-term

elections in the u.s we will see whether the hole progressive agenda will finally dominate at the end of next year as well. that is a far more interesting question >> to what extent does the virus or will the virus evolution dictate the outcome of the elections? >> the outcome of the election is most likely to be highly dependent on where we stand on the 26th of september respect to the virus. we have seen over the past few months already that the approval rates of the government has been highly correlated with the approval rates of the virus. there were moments of frustration when the rollout was not quickly. now the situation is relaxing and the polls are supporting the governing city from that angle, it is highly

dependent. now the delta variant is spreading and the issue is will we see the next wave what extent is the next wave in germany? that will determine the outcome to the large extent. >> marco, thank you. marco willner we did see heeheequities clw back the stoxx 600 is down 0.21%. let's go out to matt in singapore with the latest. >> reporter: julianna, it was a rough start to the trading week for asia pacific i'll have more on the japanese market in a moment to the closing numbers

hong kong managed to pull off the lows of the session. interestingly, given that turn around in the u.s. futures picture. it was rough across the board. japan down 3%. australian down 1.8% south korean market down 1% or so interestingly, the chinese market and mainland market managed to close up with a gain of four points we had the loan prime rate setting in china left unchanged. as widely expected that is the 14th consecutive month the lpr unchanged. let's give you the closing numbers. down 3.3%. at one point, the japanese market was off 4% or 1,000 points we had the yen strengthening we have been trading in the 110 range. now in the 109 level

that is not help the markets risk off with investors. i mentioned hong kong. the market is down 312 points or over 1% at the close of trade. we are watching shares of hsbc closely. we did get that news that hsbc was selling off the french retail business for just 1 euro. we did see hsbc shares under pr pressure in the session. that is down 3% of that is off the lows of the session. we were down morning that earlier in the session julianna, back to you. thank you. coming up on "street signs." mo morrison's is set up for a retail takeover. we will have the details coming up next.

welcome back let's get into corporate stories in focus this morning. hsbc shares under pressure after

the lender will take a $1.2 billion loss on the french retail unit. emily tan filed this report. >> reporter: shares are getting punished on news the bank is finally selling the retail bank for 1 euro that's $1.19 the deal is expected to close in the first half of 2023 hsbc taking on a loss of $3.2 billion on the sale and $700 million goodwill write down. they acquired the french retailer as the bank is refocusing on growth in asia and after the sale of the u.s. retail banking operations to citizens bank and cafe bank. it will take on 244 french branches and 499 employees and reestablish the credit i'm emily tan in hong kong

back to you. in other corporate news, bill ackman's spac will buy the universal music group for $4 billion. the acquisition is the first of the kind for blank check company. his company will distribute shares to the shareholders later this month speaking to cnbc early this month after reports of his third stake built growth in the company. >> we have a strategy which is designed to unlock the umg this is a great asset outside of the existing business. what is proposed by the company

is inefficient for the pluarity of the investor. >> vivendi will hold umg tomorrow where shareholders are voting on the remaining 60% of shares that meeting starts at 10:00 cet tomorrow. coming back to the story in the uk a takeover of the uk supermarket chain of morrison. that is after the rebuffed approach over the week the u.s. firm made a cash offer of 5.5 billion pounds which morrison's deemed to be under valued susanna streeter is with us.

what do you make of the news and what do you make of the rational of the private equity going after morrison's >> the market sector has seen big growth over the past year due to the shift to online shopping we witnessed. that is really what enticed the first suitor along there could be more. we hear reports this one private equity company may come back with a better offer. there could be more also sniffing around. what they are interested in is the fact that sky rocketing online sales are really morrison's biggest opportunity over the last quarter, digital sales were up 13%. morrison's has a smaller piece

of the pie compared to tesco it is the enormous growth opportunity that i think is of real interest because these private equity firms and others are potentially looking at morrison's and if you can see the huge growth as tesco which is past 1.5 million a week in the uk, there is anything opportunity for morrison's has it come in too late because it is behind the curve. >> susannah, shares are up more than 30% were investors caught off guard by the story over the weekend? is it short covering how do you explain that significant move higher? >> the rejected offer value at

29% premium to that offer price before the announcement. that has to do with this in the expectation that a future offer will come in higher. i do think that has a lot to do with it. i think it did actually catch the market off guard in a similar way as the purchase by the brothers last year from walmart. it took the industry by surprise to some extent certainly those industry watchers did not expect that to come through quite so quickly. it does show there has been appetite in the supermarket sector, particularly during the pandemic for those reasons as i outlined because of the accelerated shift to digital which th

uk grocery market in a substantial way. could they step in and make a bid for morrison's >> already morrison's sells on amazon that accounts for the online growth we have seen. for example, morrison's on amazon is rolled out across the country. stores that are taking part -- their sales account for 10% from those stores which are due to orders through amazon and being delivered in those local areas already morrisson's is part of the amazon empire. if this relationship continues, it is likely to continue to

bring good opportunities already, of course, amazon has it's own fresh line and morrison's is stocking its store in west london as well i think that partnership is just lick l of the bids is successful, that relationship may change there is a chance that amazon could be looking at this already having quite a good established relationship with morrison's >> do you think the industry in the uk is at play? could others enter the mix with private equity looking to make an acquisition >> that is very difficult to say. tesco can stand ahead of the pack because of the extent of investment that has been online on its platform.

i really don't know. there are firms who believe there could be opportunity ahead. obviously, we have to remember that there could have been a pandemic effect with the accelerated shift. whether that will continue is not clear at all you look at retail sales for may and grocery sales and food sales fell 5.7%. they had been climbing consistently over the past year. clearly people are going out to restaurants and not ordering in so much. although the sector is still forecast to grow, but it is an uncertain path ahead we don't know exactly how shopper habits are going to settle down. there is uncertainty which may cause suit ors are going to han on >> susannah streeter, senior investment and markets analyst

and prosus has surged 20% over $28 billion that result was driven from the stake in tencent speaking to the group ceo, shareholders should be assured by the group's positioning >> the results today, particularly with the commerce portfolio are hard to ignore we grew revenue on ecommerce side 54% year on year. that is an acceleration from 51% in the first half and double the growth rate from last year if you look at them, add value of the ecommerce assets. we asked an independent company to tell you of $40 billion it is really difficult to ignore >> we have fresh news out of the tokyo 2020 olympics committee. we have a statement from the

organizers the 2020 olympics is to cap domestic spectators up to 50% capacity the coronavirus situation will be monitored in japan and abroad including variants and all necessary action to be taken promptly the olympic spectator numbers could be restricted based on content of any state of emergency after july 12th. it is an evolving situation. tokyo olympics meeting will be held to consider further measures in the rapid change of medical system the parlympics to be implemented to monitor the status of infli infe infections some fresh lines we have been waiting for the details because, of course, this has wide ranging implications

because the number of spectators is capped. the 2020 olympics is to cap domestic spectators up to 50%. we will keep more eyes on that over the next hour. coming up, the leader of the far right party warns of disaster as low voter turnouts comes for regional elections

welcome back to "street signs. i'm julianna tatelbaum these are your headlines european equity comes off session lows and u.s. futures positive recovering after the fed's hawkish shift after selling across asia. sales of morrison's surges after the group rejects the $5.5 billion takeover attempt hsbc shares suffer after the largest lender takes a hit on the sale of the french retail bank selling the unit for 1 euro.

dutch internet group prosus with a 49% rise from trading profits. the group's ceo says the market has gone peak spac saying there are better growth options for tech start ups >> i think they can bring a company to market quickly. if that is a good idea, it might be good for companies. in terms of long-term growth, i'm doing the best of companies. let's get a check on european markets it has been a choppy session we turned negative than the start of the program we have red on the board for the ftse 100 the ftse mib was trading in positive territory now down on the session. about 0.17%. contained, but we have given up some of the bounce back take

place 20 minutes ago the german index up .20% dropping 1.6% in the wake of the federal reserve policy that drove a lot of the action. turning to currency. we have the euro trading firmly versus the dollar. 0.24% to 1 contin.1888. we have sterling trading versus the dollar 0.2% u.s. futures let's look at wall street. we have green on the board dow is looking to now open more than 100 points higher if the levels hold. last week, the dow fell 3.5% the s&p 500 dropped.

the nasdaq dropped 0.3% on the week proving more resilient than the dow and s&p 500. if these levels hold, we are in for a positive start turning back to what is happening in europe. politics in focus over the weekend. france's labour party has come out ahead. marie le pen's party is second the runoff will be held next weekend. macron's party told cnbc he worried over the consequences if the far right wins the regional contests. >> first, they are not such issues with the local election and general election next year

definitely if there is a win from the extreme right next week, then this would be really worrying that's why we are committed to campaign for that not to happen. i do think this would be a big problem with the extreme right rising all around the world. especially europe. we want to fight that to happen. >> charlotte joins us now with more on the early election results. charlotte, interesting that both president macron and marie le pen's parties fail to make gains in the early elections what should we take away from the results? >> it is interesting the last large election results was an opportunity to take the temperature in the country and

see the trend ahead of the crucial election next year when the far-right party was polling and doing well and gaining momentum for the crucial race, they actually did much worse than expected. that was the surprise of the night. they came ahead in six regions in the last election in 2015 they came ahead in one region this time around it is unknown if they can win in the second round of the election next weekend it was really a setback for marie le pen's party that was a surprise. the center right party held well and a few contenders for the presidential election have done good scores in their regions we have three names floating around the region. we will hear more because they

will be positioned with the race hitting this week and could be a center right candidate in the election as you said, macron's party did very poorly. that is not a surprise they have done poorly locally. the latest movement is the traditional parties to have done poorly in the election although president macron is still popular. 40% positive opinion that is higher than his predecessors at this point in the presidency finally, one of the concerning results last night with a low turnout. an bbove 30% why such a low turnout is hard to really read the result and draw conclusions for the presidential election which is a turnout of 80% you can see some surprises

there. the most likely scenario for the presidential election is marie le pen against emmanuel macron they did battle in the region election it is not a foregone conclusion. t they could get a chance. things are complicated for macron and le pen. julianna >> thank you for navigating what is happening in france. back in the uk, the prime minister says the country is piloting a system to remove quarantine rules the system is currently tested and the country is not ready to be able to take that step yet. italy is imposing a five-day quarantine from travelers from the uk due to the delta variant. this comes into effect today as every italian region, but one, enters the white zone. lowest pandemic risk desig

designation. a series of crucial data released in europe this week highlighted by wednesday's flash pmi numbers. looking for signs the continent is lifting out of the recession and on the look out for signs of inflation. they don't look to exceed 1.5% they will keep the stance longer than the fed we have ari with us now to talk about that what do you think of the fed's signal of an earlier policy shift means for the ecb? >> i think the government council should be more confident to start to reduce the purchases later in the year as it has seen

the first part of the recovery we do think it will step down at the september meeting and going into q4. at the same time, we don't think there is much in terms of the fed signaling for the ecb. there is still moreslack in th euro area than u.s fiscal policy is less support in europe and underlying pressure. we don't think the government council is in a rush to follow the fed to exit the timetable. we have the ecb on hold with the policy rate in 2025. >> we have become accustomed to synchronized policy from the advanced economies what does this trans atlantic policy divergence mean for investors and what should we think about the growth outlook

in europe versus the u.s.? >> first of all, it should support the european growth outlook where we are seeing very encouraging signs. the data is picking up going into summer as restrictions are lifted all at the same time the growth in the u.s. has moved past its peak growth is still strong, but sequentially growth in the u.s. is slowing in the euro area, the growth is picking up and peaking we think that in terms of asset price implications, there is still lopsided in europe the shift in the fed's messaging and the signals from earlier tightening make that case less clear cut in the near term >> with the reopening under way across the euro area, what is

the potential for price pressure to build here? >> we think we are going to be near-term price pressures. we have seen that to some extent in the euro area and headline inflation at 2%. we have seen it more clearly in the u.s. where inflation has picked up more we we do think headline inflation over the next few months will rise more. the most eye catching is headline inflation in germany will hit 4% in november. we think these price increases are transitory and driven by the number of things that we think are one-off. reopening effect, effect of commodity prices and technical changes underlining pressure in the u.s. are subdued look at wage growth and the slack in the labor market is keeping lines subdued.

we think spiking later in the year will slow again in 2022 and firm gradually over the next few years. >> when it comes to the labor market, many were caught off guard by the extent of the shortages in labor in the u.s. now as economies reopen, what is your take away from the data and what we hear from companies on getting people back to work in the industries that need labor >> clearly there is some short-term supply bottlenecks. we are seeing that in europe when look at the pmi and delivery and supply times. you see that is more a transitory issue because it takes time for supply to come fully on board as workers are returning to work as labor markets are normalizing when

restrictions are ifted clearly some short-term bottle nbo bottlenecks. >> jari, a pretty big week for data pmi is set to be published this week what should investors look for in the surveys >> i think more strength the indications we have for june are good the early surveys, and current conditions, moved up a lot mobility scores look encouraging in june because reopening has continued. we think the pmi will move up significantly more in june we think the compposiite area wl move up ahead of expectation the source of the up side surprise will come from germany

and german services. we think they are lagging behind france saw significant increase in the pmi in may. in germany, it was delayed that will drive the up side surprise with regard to the flash pmi. >> jari, it feels like the last few weeks the near-term outlook for the uk is more grim with the rise of cases of the delta variant. we are seeing the last stage of the reopening pushed back by four weeks to what extent could this grim outlook for the uk weigh on european growth near term? >> it is clearly a risk. the cases, as you say in the uk, have risen again the delta variant is now responsible for the majority of the new cases in the uk and it is also starting to presspread the euro area.

the reopening has been delayed another four weeks this is a risk in the coming months, but at the moment, it is a manageable risk because evidence suggests the vaccines are positive for the delta variant. so, i think as long as we have confidence that the vaccine rollout continues across europe, we think this is a manageable risk for the rebound and the euro area growth outlook. >> jari, let's look longer term. we had more details come through with european countrieswhich are looking to spend the next generation eu funds. how are you thinking about that with the context of the longer term opportunity in europe >> that's a great opportunity. particularly for the southern european countries where the recovery fund is huge in the

terms of size. you are looking at 11% of gdp in italy and spain and 18% in greece the focus, of course, is going to be on how effective that money will be spent and also how ambitious the reforms will be which are paired with that money. our estimate is that the effects are going to be very sizable we expect a boost of 5% to gdp in italy and spain over the next five years and up to 8% in greece they will finalize recovery fund and disbursements will start in july and we will be focused on the efficiency with which this money will be spent in the coming months and years. >> jari, thank you for making the time to join us.

chief european economist for goldman sachs. still ahead on "street signs. shopping extravaganza for amazon with the prime day event with over 2 million deals offered on the plat p form. platform.

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welcome back to "street signs. lawmakers on capitol hill are continuing discussions for a bipartisan infrastructure bill the amount is lower than president biden's proposal of $4 trillion senators from both sides of the aisle are working on the bill. bernie sanders said any proposal would have to be targeted. >> what we have to do in the budgets is address the crises facing the american people it is true our roads and bridges and water systems and waste water plants are crumbling and we need to invest in them. i understand the so-called

bipartisan plan provides 25% of the money that the president asked or about $580 billion. the point goes beyond that the working people of this country understand, chuck, for decades, we have ignored their needs while the very richest people of the country have become richer. amazon kicks off the prime day event today. it will see over 2 million deals available to prime subscribers like amazon products some sellers have warned that supply chain disruption could impact their ability to deliver during the summer sale cnbc's lauren thomas joins us with more. lauren, great to have you with us what are the key things to watch out for this year? >> thank you for having me this morning. it hasn't been a year since amazon's last prime day event.

prime day 2020 was actually pushed into october because of the pandemic now prime day 2021 is happening the earliest we have seen it as long amazon has been holding this mega sale amazon moved prime day up slightly to where it is falling in the second quarter and you look at where amazon was during this period a year ago in the thick of the covid pandemic. it saw a boost to revenue because many people globally were stuck at home and shopping online and amazon was a huge beneficiary because of the trend. prime day could provide $1 billion lift as it is lapping the tough comparisons from a year ago while amazon doesn't actually break out sales of prime day, emarketer is forecasting that worldwide sales on prime day are

up 19% year over year. that is amounting to $17.8 billion. that is what we are looking at here certainly, it is a holiday, shopping holiday, that amazon created in and of itself we start to see companies like target and walmart and bed, bath & beyond and best buy. a lot of retailers looking to grab some of the share and momentum online just as many people are anticipating they will be on the web during this 48-hour period looking for deals. like you mentioned, i think there's an important context here to look at as we see how the supply chains really globally are still being impacted this is something that retailers were working through during the height of the pandemic last year and during the holiday season with the logistics headaches heightened it seems to be getting worse

though amazon, like you said, more than 2 million deals offered this week and that's more than last year. i think i have spoken to a number of business owners that say they are really limited in what they are able to put on sale just given the fact that inventories are tight. there is a continued container shortage, a shortage of truck drivers across the country and longer load times getting product off vessels and through the port that is a headache that many businesses are working through. >> lauren, thank you we'll leave you with a look at u.s. futures that is it for "street signs." "worldwide exchange" is coming up next.

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5:00 a.m. at cnbc global headquarters here are the top five at 5:00. stocks looking to bounce back after the worst week since october. futures are fighting off the pressure this morning. also under pressure. bitcoin and crypto facing steep losses amid crackdowns we are live in beijing. bill ackman getting in the music business that boasts a lineup of lady gaga and drake and many more negotiations over the bipartisan