out of being that person to control your last breath. he should never get out because i don't care how old he is, he will hurt somebody else. ♪♪ -- captions by vitac -- hello. welcome to "street signs." i'm rosanna lockwood the stalemate with the u.s. and russia spook investors and a warning that a russian invasion to be imminent.

we are live in kyiv. and shares sink to the bottom of the stoxx 600 over account irregularitirregularitis it is a sea of red on this valentine's day monday in europe we are seeing the stoxx 600 around 3% lower at the moment. all sectors in the red several stocks in the green. we will come back to travel in a

moment let's look at how europe markets are shaping up to start the week it looks like this the ftse 100 was an out performer despite the weakness not so much the case this morning. still holding up you look at the cac and that is down 3.5%. ftse mib down 4% political tensions in the ukraine crisis is weighing on the markets and the usual fedex pec fedexpectation it is what is driving a lot of uncertainty out there. let's look at some of the sectors and how they're behaving it is interesting with banks doing badly. commerce bacnk is a story in itself down 4.5%. auto doing badly as well as

travel stocks. you are looking at travel and l leisure down 5%. plenty to digest in terms of what is happening and keeping our eyes on the airports covid restrictions eased and border restrictions eased. it is holiday. plenty of people skiing. travel and leisure down. oil and gas is down 3% oil hit new highs over the weekend. let's look at russia oil stocks. bp is down 2%. shell down 1.5%. we will keep our eyes on these let's look at some of the travel and leisure stocks in detail it's is interesting. lufthansa down like i said, despite the easing

of romicron restrictions, it is down 9% in the session so far. u.s. president joe biden told his russian counterpart he will react swiftly in the case of the russian invasion this came after the tension with washington claiming russia was prepared to invade anytime and could act before the end of the olympics this week diplomatic efforts seem to have fallen flat despite biden and emmanuel macron holding separate phone calls with president vladimir putin aimed at deescalation washington adviser jake sullivan believes they will launch an attack and the placement of forces is imminent russian officials are saying the u.s. is quote causing hysteria

pleased to say nbc's erin mclaughlin is live on the ground in kyiv. so much of this is dominance over communication and communication strategy from both sides at the moment. >> reporter: it is that back drop that chancellor sholz is expected here in kyiv. he is expected to meet with president zelensky and expected to have a press conference later in the day ukrainians have been critical of the german response so far critical that germany has declined to send aid to the country and critical of the nord stream 2 project that the chancellor has been refused to draw on in case of the invasion.

the fact that the pipeline bypasses ukraine and straight to germany, ukraine would lose $1 billion of transfer fees and ukrainian officials believe it gives an influence to the kremlin over what happens in germany. president biden in the united states under sholz's visit there, the project would not do ahead in the invasion. we can expect at the meeting today that the pipeline would come up and the diplomatic push to avert an all-out war. the ukrainian counterpart continued to downplay the crisis rosanna. >> it is all about the differing

assessments. thank you, erin. now we want to bring otur viewers the information on the g7 they will act swiftly to support the ukrainian economy and support the efforts to identify diplomatic path toward deescalation and any further aggression will be met with swift response and consequences for the russian economy. the g7 finance ministers saying they are prepared to impose economic sanctions, quote, wihih will have a massive effect we will hear from countries and organizations about what they will do to help or deescalator react to measures by the

invasion and scholz is expected to travel for a meeting with volodymyr zelensky he will head to moscow come to talk to vladimir putin anetta is joining us to talk about it more. germany is now firmly in the debate whereas, before, talks of them not involved enough. >> reporter: there have been talks that scholz disappeared a couple of weeks from the international stage. he actually is back and not only was seen when meeting with president biden, but this was met with a lot of criticism domestically as well referring to refusal to name nord stream 2 as the project at that meeting the same will probably hold true today when he meets his ukrainian counterpart. what the ukraine wants is

weapons and ammunition that is something that scholz will not bring he will insist on financial aid. germany has donated 2 billion euro in aid to the economy and that is what scholz might refer to again and there might be more for the ukrainians in termsof financial aid. germany will shy away from delivering weapons into the country. when he goes on to meeting vladimir putin tomorrow in moscow, his message will be clear. he will bring that message of tough sanctions ahead for the russians in case vladimir putin decides to invade ukraine once again. perhaps we will listen to what he said over the weekend regarding sanctions. >> translator: it's necessary to be clear in the event of

military aggression against ukraine, that will lead to tough responses and sanctions that we have carefully prepared and make effective immediately. together with allies in europe and in nato. >> reporter: so scholz has been preparing that meeting detailed. especially he has met with angela merkel, the former chancellor, who has known to be close or known to be close to vladimir putin and could tell him a little bit more about the motivations of vladimir putin and what his thinking is like. i think that's the biggest question among the new german government how does he think and what does he want? vladimir putin has a lot of maximum demands which are unlikely to be met by the west the key question is how can the

diplomatic solution look like and there might be some movement on that issue when scholz is meeting vladimir putin in moscow it seems it is a last-ditch effort to avoid a military escalation nobody wants it. the key question is whether scholz is with it or not is too little too late and what he can achieve with that initiative >> anetta. thank you. absolutely our next guest is the senior policy fellow on foreign relations. great to have you with us. can we start by following on from what anetta was saying. what is your assessment of how germany handled this crisis so far? >> i think germany needed some time to settle in.

the new chancellor did not have communication channels open with putin the way america had. it has taken a while to fight their feet i think overall, we are doing or we will be doing okay. >> in terms -- >> it is not that germany has fundamentally changed. >> understood. in terms of the other negotiations, it has been on after the other. we have seen johnson and macron and putin all heading over in quick succession to ukraine and try to tamp this down. how is this helping versus deescalating the tensions? >> i think this concerns scholz and macron they are engaged and trying to deescalate as to how much it actually works

is a question because first and foremost, president putin is looking for agreement with president biden. the europeans can only maybe be helpful as long as the minsk agreements are part of the package of agreements. and that's where france and germany play a role. >> in terms of what we heard out of the u.s. over the weekend, late friday night, the comments from jake sullivan talking about the threat of imminent invasion by russia. we had various countries talking about pulling diplomats and citizens out of ukraine. what did you make of the comments what is the chance it could stoke tensions >> well, obviously the u.s. has decided to make the most of what

they see in intelligence russian troopes escalation, et cetera and that is their way to try to prevent war. let us see if that works i have always been in the camp that sees the escalation as more of diplomacy rather than attempt to go to war of course, none ever uof us reay know knows. >> absolutely. so putin and the kremlin and on the other side, national intelligence in the u.s. back down from this without appearing to seem weak >> i don't think that is a problem. that escalation is putin's creation that means he is free to step up he wouldn't look weak over

someone else likewise for the americans they will always have liberty to claim it is their policy and diplomacy that prevented war >> thank you it is great to have you with us. still to come on "street signs. commerce bank shares rattled after the change in the government relationship with the le lender we'll be back with more.

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age before beauty? why not both? visibly diminish wrinkled skin in... crepe corrector lotion... only from gold bond. welcome back to "street signs. giving you another look on the monday session it's a sell-off. the cac extending with losses of 3% the ftse mib and down more than that the ftse 100 was an index that

held up. resilient recently despite european weakness last week it is down 1.75% this is red, but across the board, this has a lot to do with the political tensions plenty of concerns with the comments by jake sullivan over the launch of ukraine. this sparked ed fears in the market this is the first reaction we have seen here in europe inheriting negative from asia and could hand over to a lead state side let's look at the sectors. oil and gas are one of the only positive stories out there again, down 1.5% that is because oil prices rallying to years high highest in seven years over the weekend.

no big surprise there. analysts saying we could pop up $100 a barrel mark can we look through that banks and autos down heavily today in today's trade we are going give you a look at commerzbank shortly, but look at the company shares at clariant after the company delayed release of the earnings report after the allegations of irregulariti irregularities the swiss firm saying there is no evidence that former management was involved in the issues we will stay on that story for you. clariant shares down 18% the german finance minister saying the government will not hold the commerzbank stake for the long run the government acquired a 15% stake after the bailout during

the financial crisis you see commerzbank shares downs 5% deutsche bank down 6%. anetta comes back to us and she will talk about commerzbank. this is quite big news, anetta >> reporter: it is quite big news it was widely anticipated. it is surprising it is bringing a big swing in both stocks from the liberals, who was outspoken and he thinks it is not in germany's big interest to hold the stake in private companies. especially commerzbank the key question is will he be okay to also face the big loss for the taxpayers? commerzbank shares are nowhere close to the levels when the german government started or

entered engagement in the lender essentially they would need a share price higher than 18 euro to actually not realize a huge loss a couple billion euro in terms of losses for the taxpayer at the same time, they could need the money to fill the various projects that the german finance minister is facing the neutrality target of the economy. i guess during the term of the current government, we see germany exiting the commerzbank stake. the key question is how. whether it is a sale to strategic investors or whether an outright share of sales that would have triggered a market reaction, positive or negative, i assume at the same time, we should not

forget that also the interest rates are weighing on the shares of the german lenders this monday which had a very good run in recent weeks. >> we will then be watching, anetta, how they exit that thank you for walking us through the story. on the equity side, goldman sachs lowered the forecast for the stock returns. more aggressive monetary tightening peter oppenheimer of goldman sachs joins us now peter, i was going to ask you what impact you thought the ukraine crisis would play out this morning any big surprises for you? >> not really in the sense that it is a great uncertainty of what would happen next and the impact of that would be.

and clearly it's an uncertainty. it could impact europe in lots of ways. we don't know how long this volatility will continue if we look at some of the recent episodes, if we look at annexation of crimea, it brings the risk up by 20 basis points which had us at 5% impact on the market this would be bigger the moves we are seeing, adjustment between 20 and 40 basis points, that could reduce the market by a little more than 5% it seems quite reasonable. on the other hand, we could see higher energy prices energy has a high weight in the index. that would offset the earnings a bit. >> it is tough i have seen a few analysis pieces out, peter, of people making the same analysis of

annexation of crimea in 2014 this is such a big issue and crisis we don't really know how it will play out we are seeing a sell off this morning. in terms of the macro picture, goldman sachs adjusted its forecast with regards to equity returns in 2022. how clear and confident are you about the aggressiveness of the tightening monetary schedule >> the consensus is moving dramatically in the expectations for the interest rates for this year in particular bear in mind only as recently and june of last year, the market was pricing no rises this year in the market maybe one or two at the end of next year. now expecting seven rate rises the market is close to that and more through next year as well we have already seen the markets absorb a dramatic shift in

monetary policy. overall, what we have seen is the more rational. the u.s. in particular and especially the long duringation tech companies then, in combination of that, inflation expectations increased and we see more of a rotation of value which i think makes sense. some markets, you mentioned earlier, the uk is defensive in this context it has a lot of energy banks and value oriented parts of the market and it is cheap i think the moves we have seen vis-a-vis with the interest rates are rational so far. >> if you look at the global conviction list, there is stocks that have been selected. you have everything in there from airbus to the chinese battery maker. is there any particular theme that unites these stocks or is

there an individual story for each >> we have been arguing for a long time this cycle is likely to be different from the last one. the last one was a very strong cycle where falling rates pushed valuation and markets higher it was dominated by factors. growth out performing value. as a consequence of that, it out performed in europe. there it is morre rotation to value. the aggregate will be lower. we think it will be more eclectic in time, it will be much more about alpha than beta. there is an opportunity for growth and value across the variety of industries now. technology really broadens out in terms of its influence on

other industries also at the same time, embark on dec decarbonization that will create opportunities in the market that have been negligected in the la few years. >> sun setting is according to the analysts here in asia weighing heavy on the big names like meta. is the sun setting on those? >> no, i don't think so. i don't think this is about a move away from tech dominance of the we market we think it is changing in its nature it is dominant with technology with the challenge of evolving

regulations that make it tougher to grow at the same pace or they become victim of disruption. we have seen that in the past. i would not be negative on technology at all. i think it is accelerating and changing its form and there are other growth areas in the tech space and other industries that are really ramping up to employ technology to enhance c competitive position we should mention among the dominant companies, we see a difference a widespread of returns which comes back to the point we have been discussing about the dispersion and even within dominant sectors like technology sdp technology >> no one is immune from inflation. today we barely mentioned it do youthink the fed has a

strong enough handle on inflation and other central banks? ecb as well. >> the dramatic changes with guidance and attention to tighten policy is an admission that inflation is holding up it needs more aggressive act action they are getting on top of that now. the greater thing that the market is worried about at this stage is not so much where interest rates go because the adjustment in those expectations is well established, but what will be the growth impact of this you mentioned a very good point about margins. the last cycle they were focused on revenue growth. growth was scarce. people paid a high premium for top line growth particularly with close to zero interest rates. as we move forward with pricing pressure becoming a more dominant feature as well as

sustainable growth is, people will focus a lot more on margins and relative winners in terms of holding on or expanding margins across the market and within the same sector. >> peter oppenheimer at goldman sachs. always great to have you on. thank you. still to come on the show, french conservative hopeful holds her first rally. we will have the latest on that after this break

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welcome back to "street signs. i'm rosanna lockwood the stalemate with russia and the u.s. spooks investors. tensions enter another week after a warning of russia invasion could be imminent ukraine risk the market pushing oil prices toward $100 a

barrel threatening try drive inflation higher. and the conservative candidate pecresse is ramping up her bid to be the first female president of france. >> she has a very different way to govern than emmanuel macron she is not alone on her island doing stuff. she does things with people. it's a very big difference we have been talking about a sea of red the red sea. still across the europe. the ftse 100 extending losses. the out performer. the cac is popping back above 3% the ftse mib is down 3%. a heavy day. a lotof this to do with the

tensions over the ukraine crisis, of course. plenty of statements over the weekend. agriculture and oil markets hit seven year highs prices over the weekend have helped prop up the sector. brent crude topping $94 a barrel some analysts saying we will hit $100 a barrel in the coming week some say we will pop above that. the question is can we see through that and what does it add to the inflation narrative the energy criesis is what we ae watching let's give a look at u.s. futures. a long way from the wall street open important to note we will likely open lower no big surprises there we have inherited a weak lead from asia. dow jones industrial average off 250 points nasdaq is tech heavy and down

150 points s&p is down 40 points. u.s. president joe biden has told volodymyr zelensky he will respond swiftly in the case of the russian invasion this came after the weekend of heightened tension after russia now prepared to invade anytime and could act before the end of the olympics this week and diplomatic efforts are falling flat despite biden and emmanuel macron holding separate phone calls with vladimir putin aimed at deescalation. kyiv's ambassador to the uk has been forced to clarify remarks he made about the nato membership sylvia is joining us from london you managed to speak to him? >> reporter: exactly

there has been conflicting messages earlier this morning, rosanna, if ukraine was ready to drop intentions of joining nato. actually i asked the ambassador to the uk and he did clarify that it is still his country's ambition to join the defense alliance let's take a look. >> the suggestion was we had nato constitutions that is the course for us. right now, what we have to do because we are not a member, we cannot expect it we are flexible enough to look for other arrangements what we have and trying to build with britain or poland or with the united states. something to allow us to survive. when people are saying there is war in ukraine, we have to try everything every avenue should be explored. >> does your intel tell you that

the invasion could happen? >> it is possible. sometimes this intel is made public to tell the public we know about the plans that is because the public already knew there was a plot against. it maybe not wednesday, but regardless, the ukrainians are pushed not to panic. money is strong by investors not anybody coming to help in support. that is why we are going and talking to you and trying to raise awareness. if it is war, we have to do something. we are not threatening anybody we need help and understanding >> i also know you asked on sunday to have a meeting with russian and european countries for russia to explain the military build up. have you received a message from russia they are willing to meet up and discuss this?

>> not yet that is not the only way we're trying to get understanding with russians sometimes we talk a little bit we have our own negotiations we are not relying on what the west is doing. this process is difficult and unfair we believe. this concession which we took six or seven years ago and we are still doing it new government came to power we are still going along and trying to find a way and how we can diplomatically move with the negotiations this has been recseven years. >> now chancellor scholz is going to ukraine what did you think he can do >> i think there is a chance where we can tell putin sanctions which are already on the table. it is not like before when the actions of the west were after anything he has done again and again. this time the west is saying

there are sanctions. you can avoid it diffuse the situation. go back. if you tell them this exercise and it is time to get back. >> what concessions are ukraine doing at the moment? you explain joining nato is still your ambition. is there room for maneuver from your side to meet russia as well >> the most of the concessions are written in the minsk agreements most of the leaders met a couple of days ago. it was not on the papers so people don't know what we are trying to achieve. what the concessions could be to recognize specific status of the region and finally have the political resolution with russia to have elections and when security and other conditions are met. again, we don't believe it is

fair to us because we had to sign them when they have the gun against our head and it was seven years ago. we are still trying to find a way how we can go without losing our self and identified ty >> united kingdom has said people in ukraine should leave the country. how do you feel about that >> frankly quite bad no many people can leave my family and brothers are there. and friends. we feel abandoned. maybe this is a harsh word that is how they have been treated. we want to remind everybody, but we are not starting this war we don't want this war it can work. there is united position that's what we need right now. >> you have meetings planned with the uk government >> i'm having more meetings with

uk there are meeting which are planned. i hope in the middle of this craziness, they will find a way how to support and discuss something. i was in kyiv with boris johnson. we had discussion with the president of how we can help it is not like we are telling russians, your people are on the line if you come to ukraine, ukrainians will resist you will get as many back. be careful it is not a walk in thepark. >> finally, do you think prime minister boris johnson will help given the pressure he has currently at home? >> you know, frankly, ukrainians do not see what is maphappeningn london people don't understand what is happening in kyiv. what they see that uk's government and the leadership of the prime minister whose name is boris john and his secretary,

they are among the most active and you don't have to explain. people sing god save the queen at embassy there >> reporter: and so the ambassador saying his country feels abandoned after different nations asked nationals to leave ukraine. rosanna, let's see what happens if these diplomatic efforts will solve this impasse that we're se seeing. >> silvia, thank you. and still to docome, the french hopeful will hold her first rally. we'll have the latest after the break.

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well, french conservative candidate pecresse held her first rally. pecresse promising to take a hard stance on immigration and

pension reform for workers and families the candidate also warned voters not to give in to far right candidates and extremists. >> translator: i want to bring a new hope a new france we want to build. the extremists are lying to you. don't let anger or fear win. i embody with you. they are the disorder. i embody the force of the national unity they are the unity against this extremism, choose a fair hand. s >> let's bring in the economist to discuss this more guido, in terms of pecresse, what would a economy look like under her leadership >> first, good morning and thanks for having me

we see france not moving away from the current path of reforms under pecresse if something might be a slight difference in mostly details, again, what macron is doing now, pecresse has not signalled she wants to undo any labor reforms that macron passed so far. if something, she will be slightly less ambitious when it comes to the pension reform as the bulk of the electorate lies in older demographic in general, we don't really see

a pecresse victory as breaking the path that french economy is currently on on the idea that france needs to cut taxes and foster private investment initiative, i think she is the well aligned with macron some differences might actually arise when it comes actually with immigration tans which she looks more tough line than the current much president overall, they are not that far, macron and pecresse, views >> not far from views, but terms of polling, macron is not doing so badly as with all presidenpresidenciee faces a rise in cost of living how could this hamper his chance of re-election >> fuel prices are soaring for

macron and that is an issue for him. they invoke old governhosts. if you look at 2018 and the increase of fuel taxes was met by violent protests. you recall the yellow vest movement it became quickly violent. that was the moment in which the confidence in macron by the general french public increased. as you said, in terms of polls, macron is polling way ahead of any challenger, either pecresse or le pen or at least ten points

behind macron. the idea is that it continues a hike in energy prices to which french electorate and french workers are sensible and might actually curb the support macron has in his leadership. >> understood it is a sensitive issue with macron with the history. has his government done enough to help citizens in france with the surge of energy prices we are halfway through winter. the ukraine situation with the tension simmering. >> there are two things to say the government is not enough most of government initiative were passed in november and october. they frozen the gas bills for

the regulated gas bills. they put a cap on the possible freeze of electricity prices on fuel, it is unlikely we will see a government intervention mostly because macron is actually placing himself as a rather strong candidate on reducing france emissions. to subsidize fossil fuel will come as a backlash he has seen early on in the previous summer. on ukraine, we really see this event can actually be problematic. if there is a russian invasion that we don't see it as a baseline case, but let's say if we really see russian invasion of ukraine, prices can be pushed further and this can come to a

certain problem for macron in the sense that even if the winter is almost over, the elections are right after the winter and the timing is not perfect for the french president. >> we have even macron try to take a front foot in the negotiations with putin over the crisis let's talk about the french voters those who will cast ballots. how healthy are they in the recovery from the pandemic in terms of household savings and in terms of jobs >> french households are actually doing very well after the pandemic despite the increasing cost of energy that might be a sensitive issue in the sense it will reduce sanctions in the short-term french households accumulated $170 billion in savings.

according to bank of france, they will spend over the next two years, but still have a solid balance sheet in the next two or three years as you mentioned, the french unemployment is continuing to go down there is a booming labor market in france and also contributing to a very solid situation for french households with a low prospect of unemployment and they have solid balance sheets >> all factors to take into account as we move to the elections. guido, thank you for your ins insight. we will have more on what to expect with the french elections with michel barnier. you can catch that interview tomorrow you don't want to miss that. let's give you a look at the europe markets

the ftse mib extending declines. the cac on the flat line a lot of negativity. much to do with the tensions playing out in ukraine u.s. futures could also open lower. no big surprises 300 points dow jones industrial average f it were to open now. really pretty flat at the moment as we see yields heading lower as well. you see flat since april 2020. that is it for the show. stay with us here on cnbc. "worldwide exchange" is up next.

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swift, severe, decisive. key words from president biden after a weekend of high stakes diplomacy. the president speaking with vladimir putin and ukraine's president. reiterating america's commitment to a free and sovereign ukraine. diplomatic efforts doubles down for calls on the russian invasion of ukraine that could happen any day and the risk of russia action as wall street comes off the recession move on friday stock futures