that's all for this edition of "dateline." i'm andrea canning. thank you for watching. good morning welcome to "street signs." i'm julianna tatelbaum and these are your headlines finding the right blend. dsm finds a merger with a swiss firm taking a key step to being a key play in the health sector. >> this will be made of four clear businesses of which food and beverage and taste will come

together and that's how most of the magic happens. cheers for ben & jerry the consumer giant puts nelson peltz on its board credit suisse slumps after rejecting the report to bolster the balance sheet after a series of losses. and oil extending gains as eu leaders strike a deal on the russian oil embargo carving out crude for pipelines after a prolonged standoff led by hungary. >> show unity and takes a long time to discuss and agree. the effort of the last days has been global wide a very warm welcome to "street signs.

we're tracking stock market movers with m & a driving momentum let's kickoff with dsm shares up 7.6% the firm will merge with firmenich in the first half of next year. the combined company expects sales growth in the mid single digits post merger alongside pre-tax synergy of 350 million euro this is a transform deal for dsm and puts it on scale for 40 million euro speaking to cnbc are the ceos which said this will create fresh value. >> because of the capabilities, there will be a synergy value that is coming from the uplift top line of $500 million and adjusted $350 million. when you put the two strong

companies and synergy value together, you see the new company and excluding the materials and businesses, will be double digit creative compared to dsm of today minus materials. so to compare a like for like. >> our shareholders are extremely excited about this merger they have endorsed this merger he they are committed to be long-term investors and shareholders in dsm. >> this deal has implications not only for dsm and other flavor companies dsm is streamlining business which is now seen as a pure play nutrition company and they will take firmenich's flavors company. both stocks are trading off the prospect of more competition

givaudan down 3% symrise is down 2% these two have under performed now it will would be a pure play and the idea is it will see relating and margin profile improve as a result of the deal. it is not just the names in the chemical sector. german company will have a joint venture with advent in a nearly $4 billion deal. as part of the story as dsm, they are getting rid of the rest of the plastics business and engineering business and selling to lanxess investors seem to like what they are hearing. lanxess shares are the best performing in the stoxx 600 up 10%. and shares in unilever is

putting investor nelson peltz on the board from july. this after his fund management took a 1.5% stake in dove soap and ben & jerry's ice cream. unilever held discussions with peltz who is known for revitalizing p&g unilever has come under criticism accusing the giant be obsessed with the green credentials at the expense of business speaking to cnbc on stage at the world economic forum, the u unilever ceo said it made sound commercial sense >> we are finding more evidence on three axis. consumers, particularly young people, are making brand choices

based on environmental impact. our sustainable brands that perform are growing faster than the rest of the portfolio. secondly, we have to get out of the thought that sustainable business is more costly. it is some places which we saved $1.2 billion euro by getting on the efficiency early and then the town proposition. try to attraction people to join your company if you don't believe what you stand for we are staying the course on sustainable business part of that is reportingon financial metrics. we think it makes good sound business sense >> bruno montaun is joining us to talk about unilever bruno, you helped us along the way over what is happening at the company and investors.

does unilever have a problem how will nelson peltz help them? >> so, good morning. referring back to the last clip unilever doesn't have a problem with esg the problem with unilever is the financial performance. if you look at the growth of the performance, it has been lack lackluster the main problem is the consumers. what is selling is falling out of favor deodorant or whatever is not what consumers are willing to spend their money on they need to turn around their business and in the efforts to do so for the consumer health business, the management has been losing credibility and hopes to turn the business around today's event is the return of credibility. amazing with previous companies. p&g being one of them. the board and management team is

getting advice to turn around the business. >> what will it take to turn around the business? how do you become more relevant with consumers are we going to see management change at unilever >> yes, well, the note sounds positive and the view of many investors i talked to believe it will require a change to the board and management team because they lost credibility. above the management treateam, e second thing is time they rarely work you are talking about a long period of change it is gradually changing the categories and buying and attracting new businesses. unilever is a very big business and gradually selling the weaker part of the business there will not be a silver bullet one major question of it is too big and spread out

many businesses out of food and home care and beauty it is interesting to see if peltz wants to breakdown the company. that is the issue with p&g the issue of breaking units. that may be one element to allow change to happen >> does unilever have the right mix when it comes to the business units i take your advice about the product portfolio. what about the business unit mix? >> unilever has categories that are exciting from two decades ago. quite something has happened nestle was a premium coffee and same with premium beauty they are not terrible categories, but missed the opportunity with the premiums. that is across the board and

portfolio. even what the assets they bought premium beauty should be great five or seven years later, they are still stuck. unilever want to buy high on assets and scaling them up ac across the world that pace of moving is a big element of what needs to change. >> we are seeing a really strong share price reaction today unilever in the top three best in the stoxx 600 based on your conversations with investors in the space and your access to market data, what's driving the share price higher today? is this actual fundamental long buying of the story or is it short covering >> two elements. unilever was lacking credibility. shares have been hard for so many years in a row. the management lacked credibility. what you get is a return of credibility. that will make changes across

the board. probably half the share price increase is the credibility that the company knows where to go or where to get better. and quite a few people are negative on the european consumer i share sympathy more down trading. companies like unilever are not positioned like that if you get to that event, that is where you cover your short as the event is bigger than the overall negative consumer position >> bruno, thank you for jumping on and sharing your advice senior analyst at bernstein. let's talk about the wider markets. the final day of trading for the month of may stoxx 600 is down .25% we have bounced off the lows of the morning. a shift in sentiment versus what we have seen recently. yesterday, european stocks extended gains a positive week for the european

markets last week. not like the u.s., but positive. it was buoyed by what happened in china relaxes the co- covid restrictis and investors are playing close attention to inflation data. german inflation data. spanish inn exflation both to t upside. and we are seeing out performance in the ftse 100. unilever performing well in the uk market. up 0.4% for the ftse 100 it is red outside of the uk. dax down .50%. french market down .60%. we are seeing out performance in oil and gas. we have seen a surge in the price of oil we will dive into the details around the european energy story

in a moment. household goods catching a bit this morning up 0.9%. food up 0.4% autos performing well. on the down side, travel is down .9% in the financial sector, credit situation has denied a report is weighing options for cash injection to boost the balance sheet. it is capitalized with i tier one ratio. the statement comes in response to the reuters report which suggests the lender reported losses and is looking to sell shares or offload a business to raise more than $1 billion in swiss francs let's get a check of u.s. futurese s futures. first day of trade after the close for memorial day yesterday. we will have a bit of a pull

back at the open all three majors lower we have a big meeting with president biden and jay powell set to take place today. on to the energy story the eu has laid the ground work for the deal on the sanctions package which has been weeks in the making under the deal, russian oil will be banned. a temporary exemption will be gr granted for oil after hungary won a concession which guarantees supply if pipeline deliveries are cutoff. germany and poland will bring the pipeline imports to a halt by the end of the year leaving hungary and the czech republic as the two looking for crude oil.

>> we need political leadership against the extraordinary times. we know that we need it a few weeks before we were able to make the decision. the recent hours and days had speculation about the risk for lack of unity of european unity and i think it is more than ever it is important to show we are able to be strong and firm and we are able to be tough and we are able to defend our values and our interests. i would like to regret my gratitude for the colleagues to express united message toward ukraine and russia and the european union citizens and also the world. >> rosanna has been all over it in brussels. rosanna, what did it take to get the deal across the line >> reporter: a lot of carve

outs you mentioned it, julianna, the eu leaders are proud of this you heard charles michel right there. it leads to a 90% cut of russian imports to the eu by the end of the year hungary was pblocking this. 25 days later they did not have the deal on the sixth round of sanctions against russia the reason is hungary is reliant on russian oil through the pipeline, the friendship pipeline it was surprising to hear western leaders and including the netherlands who understands the issues for hungary if you cut off that pipeline immediately, they have no oil imports into the country hungary has a huge carve out 2/3 by ship and 1/3 by pipeline. in the carve out, hungary can

get oil from shipments as well hungary has carved out quite a deal at 1:00 a.m. in the morning, we've done it. it is not just hungary, but other landlocked countries like czech republic and slovakia. we heard from many of them on the way in focused on security and foreign policy and this is what the minister said about the deal. >> i think it is a reason able way out of the discussion. you know, this weekend, we have been engaging in long and difficult diplomatic discussions with the ministers and finally we raised the issues on the oil ban and think also on three more important bans.

it will blow a deal to the russian economy and the world. this is another step further and another show of unity. it takes a long time to discuss and degree and requires unanimity. the last few days have been worldwide. >> reporter: mr. borrell summarizing what they are saying the unity for the eu they managed to get six rounds of sanctions in quick success is a unity we have not seen for a long time. they are talking about economically freezing and isolating russia i spoke to the lithuanian president and the latvian prime minister as well

mr. pborrell talking about the lifting of the payment system. the that's what the talks are focused on today we had the success overnight, but where do we go from here? a seventh round of sanctions and if gas is included that is the next big hurdle as we consider the netherlands and denmark expected to be cut off from russian gas today reports that denmark has been this morning this is the refusal over the ruble payment system they will be busy today. consider it a success overnight. >> rosanna, thank you for the comprehensive coverage coming up on the show, french inflation rises and puts pressure on the ecb. we'll discuss that next.

welcome back to "street signs.

fresh data from italy. the final q 1 gdp numbers. 0.1% quarter on quarter growth the preliminary numbers suggest 0.2% contraction in terms of the component, growth was based on strong rise in investments which contributed 0.8% with consumer spending and negative impact of trade inflation is firmly in focus today. french inflation hit the highest level since 1985 according to figures. annual prices rose above forecast germany also delivered fresh numbers. german consumer inflation risen to a near half century high. preliminary cpi came in 7.9% year over year in may versus

7.4% last month. the hicp was 8.7%. above expectations germany last saw inflation readings at these levels in 1973 and 1974 during the crude oil crisis euro is trading lower against the dollar to 1.0739. we have george from deutsche bank with us george, what is the take on the inflation readings and do they change the picture for the european central bank? >> the latest inflation readings is the ecb has to do more. if you think about the fed, we spent all of the first quarter worrying they are behind the curve and rate cycle anha accelerated. we are doing the same for the

ecb. if you look back at the inflation numbers, they look as worrying as the u.s. the trim measures which try to strip out energy they are up at 4% or 5% which is just as high as the u.s. i think the risk is the market keeps repricing the ecb with the pace also critically in terms of terminal rates the market is reluctant to assume the ecb will go above 1%. i think the market is too pessimistic in that pricing. >> why doesn't the ecb see it that way why don't they see the inflation problem as severe as stateside >> i think they are. it is an evolution as it was for the fed. you have seen it from the le garde blog they are not ruling it out even the chief economist phillip

lane also the gradualism word which they keep using. it is watered down as the weeks progress as we go into the summer months and autumn, the risk is very much tilted toward even 50 basis points of rate hikes which should be supported off the euro >> what do you think the euro does in the event we get a 50 basis point rate hike in july and another one in september what does it do if we only get 25 >> the market is sensitive to the near term rate hikes priced in if the accelerates, it should be supportive for me, the key medium term driver of the euro is how high can the ecb go the markets priced for 1.5 we think the risk is they go to 2% or higher than that

that's going to be a key medium term driver of the positive euro forecast into the end of the year >> george, you have been focal over the last few months over the euro/dollar trade. the weakness in the euro has come from the dollar side of the trade and strong demand for the greenback. how muchhoarding has there bee of the u.s. dollar and how has that compared to the previous dollar strength? >> if you look at the market, it has been focused on euro negative drivers the euro out performed many currencies even against the swiss franc, the euro was up a few ew week a. it has been the broad based rally. when we look at the data, the single most important driver of that has been a safe haven effect the market has been a flight to

quality and move to the dollar a huge amount of hoarding, so to speak, dollar cash when you look at the size of the hoarding, it was as big as the covid stress and the trump trade war and lehman our thesis is the market is pricing in a premium on the dollar too high risk as soon as you get small positive news as we saw in the european pmi and better china pmi today in the reopening you see the sharp reversal weak on the dollar because of the price risk aversion. >> george, what about the euro/sterling trade? one of your peers is saying sterling is an emerging market currency at this stage how do you see the dollar/and se sterling >> we see the optimism on

european growth against the u.s. and uk as well as the potential non lineal effects as the ecb goes back to positive rates. if you look at what was happening with the uk in flows, they were side ways. you saw a big acceleration of the uk purchase of gild. it is a reluctant tightening the euro should still be higher. we see it moving above 90 pence next year. >> george, always great to hear from you global head of research at deutsche bank. coming up, crude compromise. eu leaders bow to hungary demands, but agree a sixth sanctions package. we cross bactoruelnek bsss xt

welcome back to "street

signs. i'm julianna tatelbaum here are the headlines shares in unilever rally after the giant puts nelson peltz on its board citing the construction investment. finding the right blend. dsm is merging with firmenich. >> this 40 billion merger will be made up of four very clear businesses of which are food and beverage and taste and firmenich will come together credit suisse slumps after the lender rejects the report to bolster the balance sheet after the series of losses. and oil extending gains as eu leaders strike a deal on the oil embargo. striking out an exemption after the standoff by hungary.

>> this is another step further and show of unity which takes a long time in europe to discuss and agree because we require unanimity. the effort of the last days has been worldwide let's get a check on oil prices crude is extending gains after eu leaders came to a compromise on banning russian oil laying the ground work for sanctions which charles michel said he will immediately hit 75% of russian imports ru russia's vladimir putin told sabrinerdely recep tayyip erdogan he is ready to collaborate as the food crisis caused by the war is pushed higher with russia and ukraine responsible for 29% of global wheat exports

rosanna is in brussels and joined now by a special guest. rosanna. >> reporter: good morning, julianna still here on the ground day two of the special meeting of the european council discussing ukraine and relating to defense and security and energy we got that late in the day deal overnight. it was the 4th of may that they were calling for a complete ban on the oil imports we had czech republic and hungary and slovakia saying we are too dependent on the pipeline they agreed on overnight, the 27 leaders has a carve out. meantime, what will happen is you get 90% less reliance on russian oil in europe by the end of the year. once poland and romania stop using the pipeline 2/3 of shipments come in by

boat this is being considered a trial period and considered a victory of oil ban i am joined by a special guest jacob with the marshall fund gra great to see you would you agree this is a successful deal? >> i think it is it is a compromise i wish viktor orban was not as immediate. it will have a significant effect in the medium term. it will help keep russia in a permanently weakened economic state which means whenever this war is over, russia is not going to be able to do these things in the future. >> and in terms of that, the layers of pressure on the

russian economy, many are turning to gas we have netherlands and denmark cut off from the russian gas supplies overnight they are not usually reliant on it o it it is symbolic some say they have to put gas in the seventh round of sanctions and others say it is not possible >> we are seeing a gas embargo others have refused to play along with vladimir putin's pay in rubles and securkirting the sanctions. that is what the netherlands and danish have been doing they have been cut off it is a voluntary decision, if you like on the other hand, it is clear that europe needs to be ready for russian retaliation. i wouldn't be surprised if there comes a point in time where vladimir putin says, i'm going to lose some further gas

revenue, but i'll inflict more pain on the european economy by cutting off gas immediately. i'm going to do that given that i know my gas exports to europe are time limited into the not too distant future >> you mentioned the voluntary it reminds me of the bulgarian prime minister we are leading the way they weaned off 95% reliance on russian gas to 0% in two weeks they said they are taking a stand to do that what do you think this says about the unity within the eu in the way the other leaders look at it like hungary >> viktor orban is isolated. this is 26 against 1 i think if you look at the prospects for viktor orban to find allies and even in his

group and traditional friend and ally in the polish government which protected him from other poli political sanctions over the years, i think those are coming to an nd to some extent, his willingness to do this deal, although he got a lot if not most of everything he wanted. his willingness to do a deal at all knows he is isolated and he cannot afford to lose the poles. he can get into problems with article vii sanctions. >> i was surprised when i spoke to the dutch prime minister. he said he can understand where orban is coming from they have reliance and don't have sea access. it was a diplomatic front from the netherlands. we have to think about all of the other members of the union and pressuring they face >> i think this is a compromise deal there is no doubt that hungary

has been receiving oil through the pipeline since the 1960s this is a deep-rooted relationship countries are different. obviously the netherlands have big and great ports and oil facilities and sea oil it is different. i think it is a pragmatic issue. this time it is about oil. they got a deal. they needed a deal it is clear there are other big political problems relative to the rule of law and treatment of minorities in hungary. obviously over the years they have been explicit and outspoken. there is a degree of compo compartmentalization here. >> another sensitive issue is the fact that mr. scholz and mr. macron had a call with putin 18

minutes long on saturday to talk about unblocking the ukrainian ports to allow exports to get through and some eastern leaders saying that is inappropriate you are emboldening putin. what do you think? >> i think there is a fine balance to be had. you should always talk as much as you can will you talk with aggressive i am imperialist like putin? you did have a deal to evacuate fighters from mariupol that involved some degrees of talks with the russian government. you know, if you really want to have better access in the very short run for ukrainian grain, maybe you can get it was it worth it? i would say yes. does it mean that both, you know, mr. scholz and mr. macron shouldn't be sending heavy

weapons to ukraine as we speak and as they speak to vladimir putin? of course they should. i think it is a matter that we need to talk, but about specific issues and, of course, not about cease-fires. that is for the ukrainians to decide also, they cannot take away from the fast that ukraine needs weapons. that is the focus from the political leaders relative to ukraine at this moment >> that is the hope for the talks. zelenskyy saying we need more funding for weapons and tougher sanctions against moscow you heard it again and again mr. borrell has been defensive on this. do you think they will be able to agree on much more increased spending in europe >> i think in the short run, they will. it will be incremental $500 million here and $500 million there.

it adds up it will not win the war for ukraine. the big decision on eu fund for ukraine will come later with reinst reconstruction and we building for ukraine. that cannot happen unless the economy is fully rebuilt i think the commission proper p proposal highlights that this is not feasible to do without more common european funding. that is where the big fiscal integration long-term element. that fight is still to be had. it will be interesting to see the hawkish eastern europeans will say t are they willing to forego that to be a democratic country and

member of the eu i hope so. >> jacob, thank you so much for your thoughts this morning back to you, julianna, with plenty more for the leaders to be discussing today. >> rosanna, thank you for bringing that interview. still ahead on the show, a month to forget of we will discuss may's memorable trading days next.

welcome back to the program. we made it to the final trading day of the month of may. let's take stock of the last 31 days ftse 100 is up for the month of may. the dax is a strong performer up more than 3% right now on the month. the spanish market performing well for may 3.9% up. swiss market down 3.5% for may for that market the cac 40 in france is hovering around the flatline.

we will see if they can releras the monthly loss over in the u.s., the s&p and nasdaq with a positive day to the trading session after the long weekend dow jones industrial average is looking at a slight slodrop at open worth noting, the momentum has turned positive over the course of the morning let's step back and look at u.s. markets month to date. nasdaq down 1.6% for the month despite the gains last week. it was a strong week for u.s. markets. all three majors gained, but not enough to erase the losses for the month. s&p is 0.6% on the month and dow jones industrial average up 0.7% the last week's strong moves did a lot for the indices. tech stocks. why are we still seeing red?

here is a key tech stock here. those are some of the key ones levels to watch. apple at $150 a share. microsoft at 273 pue$273 a share let's welcome rupert thompson. rupert, great to have you on the program. things looked rosy last week we saw strong gains for all three major u.s. indices what do you think? have we seen the bottom? >> i think the bounce in a way, which is easy to say with hindsight, is overdue. we had close to two months of relentless declines. markets have got eveten oversold it is a tiny bit surprising with no major shift in the economic news to justify the bounce

in terms of where we go from here our view is we are not out of the woods yet. it is a sign that the end of the relentless decline, but markets will remain choppy a lot of uncertainty it will not be resolved for a few months. >> rupert, i want to share with viewers the month on to date moves for the tech names the wall working now as you can see there, it has been a tough month for technology stocks despite the rally that we saw last week. what about u.s. tech specifically, rupert where do we stand and how do they fit in the choppy narrative for the months ahead >> tech is, in a way, a poster child of the growth stock which has gotten smashed over the last few months essentially this rotation away from growth into the cheaper

value areas of the market have more to run which means this is not yet the time to dive back into tech. having said that, some of the most egregious overvaluation in the tech area has not been corrected. is it a straight line down for tech no will it be choppy from here? are you getting to bottom? possibly i would not jump in just yet. >> we had been seeing europe out performing for the reasons you cited. the big growth exposure in the u.s. falling out of favor. last week, we saw under performance in europe as u.s. stocks caught up what is the trend you are expecting for the months ahead >> we are slightly surprised europe, as it were, has regained a lot of the under performance you saw earlier in the year.

actually, the war in ukraine still very much going on there's no early end in sight there. in terms of which region is most exposed to ukraine europe even though we do favor the cheaper and more value and cyclical markets like uk and asian emerging markets over the states and europe is one of those, we actually prefer uk, asia rather than europe because they are further away from ukraine. also, you know, which region at the moment is seeing the sharpest shift in monetary policy the ecb. that is a drag and obviously we have the inflation numbers out in a few months times to exceed and further increase on the ecb to rack up rates sharply. >> you make a good point it follows on the conversation i had with george earlier in the show with deutsche bank. the ecb , you argue, is in the

position the fed was in a few months back. the pressure is building and the writing is on the wall that they will turn hawkish. they seem reluctant to do so i'm curious your view on the uk and what you like about the uk market are you talking domestic equities here or international ones the picture is different when you think about what is happening on the ground here in the uk >> we are definitely talking about the international stocks and large cap stocks like ftse 100. given the support measures that the uk will be weaker than elsewhere. growth is slowing or possibly grinding close to a halt that is not a good background for small or midcap. for international stocks, they look cheap uk trades at a 30% discount to the rest of the world. also in terms of the sectors are

the key beneficiaries of what is going on the surge in commodity prices. uk is overweight the ukis pretty well placed. the uk is actually only so far regained a part of the under performance the last few years >> the uk indexed to the commodity sector and the financial sector what do you think about banks here on the one hand, higher rates and the benefit it provides to net interest on other hand, you look at deterioration as the cost of living crisis happens. >> you have the two tensions interest rates going up which is good news. at the same time, still quite a lot of uncertainty with how severe the slowdown will be. for that reason, we are more neutral on the banks not under weight you have support until it is clear that the uk is not heading into recession, you

would not jump into the banks at this point >> not jumping into the banks at this point any view of sterling and where with we go from here to round out the uk discussion? >> in terms of sterling, you shouldn't just focus on sterling you had a nice bounce against the dollar from 121 to 126 that is the fact that the dollar strength has come off the board. the dollar story, if we are now through the worst, in terms of the risk-off move, you expect the dollar to fall back a bit which would mean sterling might gain a bit more. having said that, the k econom is still pretty weak again, i think 126 or 125 is the right place for the next few months we are not expecting a big move. >> rupert, thank you for joining

us rupert thompson at kingswood we want to bring you a story over credit suisse rejecting a report it is scrambling to bolster the balance sheet after the losses we heard from the shareholder saying that given the strength of the balance sheet, we agree that no new equity raise is necessary for credit suisse. shares are down 2.8% paring back the steeper losses. let's look at u.s. futures before we hand you over to the u.s. colleagues. dow jones industrial average is not quite with the positive future i'm julianna tatelbaum nt.congde exchange" is mi upex

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it is 5:00 a.m. at cnbc headquarters here is your top five at 5:00. stocks snapping their losing streak as u.s. markets look to build on last week's big gains futures are facing some pressure after the long holiday weekend here pledging a more hawkish fed to tackle inflation. new comments by one central bank chief making the case for the ongoing rate hikes to cut rates in the future. and president biden out with a pledge promising to back the fed as he and chairman jay pel