that's all for this edition of "dateline." i'm craig melvin. thank you for watching. [theme music playing] good morning welcome to "street signs." i'm julianna tatelbaum >> i'm joumanna bercetche. these are your headlines uniper shares rebound from monday's near 30% plunge after reports the german government is preparing to bail out the struggling utility firm. oil and gas workers in norway officially start the strike with energy output set to

decline. the push for higher wages is necessary. >> these members cannot achieve a better income through local negotiations later on. the union opted to go on strike before it knows the final settlement that is strange. scandinavian airline files for chapter 11 bankruptcy in the united states as a pilot strike is the final straw for the loss on the carrier. rebound on u.s. services data janet yellen holds talks with beijing there at u.s. will cut tariffs in a bid to ease inflation. good morning warm welcome to "street signs. the biggest news of the day is joumanna is back. >> it feels like i have not

missed much with news. what happened in the nine months i've been off? >> a quiet nine months >> it is great to be back. i'm happy to be back on set with you and in person. we haven't done that in a long time it gives me a break from all of the nappy changing in the last nine months. i need a break. >> nice to be back together and around the set i'm looking forward to the next weeks and months and maybe longer >> a lot to talk about >> there is. including this morning big news from uniper shares trading to the top of stoxx 600. rebounding after monday's 30% plunge the price drop was after the report of the 9 billion bailout package for uniper rather than passing on higher gas prices they are not allowing a clause spike prices, but working on

options for a state bailout which is involved with a cabinet injection. they are set to ratify it by friday uniper, the largest buyer of russian gas is receiving 40% of normal volume. this, joumanna, is a major story. uniper is the biggest utility company. germany's biggest buyer of russian gas. they are being forced as a result of russia cutting back supplies into the country and forced to buy volumes on the open market which is incredibly costly the options now are pass on the costs to consumers which they cannot do for the german government offers bailout funds. berlin seems to opt for the bailout route. >> the stock is not faring well. down 75% to date down 30% yesterday

lot of talk about the government stake in the company the question is the numbers circulating around is about 9 billion euro there are a couple of things to flag here. number one is the size of the losses uniper had already warned they were looking at a very uncomfortable couple months ahead. obviously now this is a necessity bailout. 9 billion euro is a big sum. the second thing is there may be more bailouts to come or ask for help in the future of they had a stake in nord stream ii they are faced with the question of timing. the original nord stream pipeline is closed for maintenance until july 21st. it is unclear where this gas will resume and that is a decision that we'll find out in

a couple weeks time. if the gas doesn't fully return, this could get worse >> you mentioned july 21st the sharp negative reaction was overdone on the assumption we see gas repricing. he said that is unlikely to happen until july 21st it could happen sooner that is something to watch as of last week argue to the ubs analyst. that could ease the burden on uniper uniper is a major urgent concern and the german economy is vulnerable of the gas situation and if it deteriorates further >> at the end of the day, somebody has to pay the price. it is the government or how will the government finances work there may be a windfall on taxes for consumers. it may be higher gas prices or rationing or tax to support all of the potential bailouts yet to

come a reflection of how times have changed since i was last on the set almost a year ago. >> a lot has changed we will push on and talk about the energy market. wti crude futures extending gains as norwegian energy workers start the strike according to the group representing the industrial action it cuts output by 89 barrels a barrel norway's minister is following this closely and could intervene under exceptional circumstances. let's look at european markets. u.s. markets were closed for a holiday yesterday. it has been mixed from asia of the positive services from china. the best numbers in the last 13 months positive numbers from japan. you can see the heat map over here is mostly green trending in the right direction. the stoxx 600 is up .4%.

i don't need to remind everyone, but it was a tough start to the year for the global indexes. stoxx 600 down 20% in the first six months of the year we are up a fragment today, but not back to raising the losses this year. let's break it down by individual boards. this is a picture for today. you see the bit of negative is the ftse 100 in the uk this is down .3% this is driven by oil and gas. the ftse 100 is a commodities index. with oil coming off, that is weighing on the ftse 100 we will talk more on the show about the sales update earlier in the morning cac is dipping in negative territory. in germany, we were just talking about uniper and so many other ailments

facing the german economy in months to come up .10%. in terms of sectors, this is what we are seeing at the top, defensive. real estate is up 1.5%. food and beverage up .9% we have the top of the ftse 100 tech sector doing well with a boost .10% basic resources is down .90% again, it seems as there are a few covid cases emerging that is dampening the sentiment. oil and gas is down .80% let's talk more about what is happening in the oil and gas space. there is a norwegian worker strike set to start today. you would think that would put somewhat of a floor under the

price of oil today that is not so much the case it seems as though some of the macro concerns and outlook for the year is weighing on how people see the sector. here is the picture for the oil majors bp down 1% similar for others in the uk repsol down .70% the theme for energy is constructive and very positive given the output constraints and ongoing russia and ukraine war for now, things are taking a backseat let's talk about airlines and travel this sector is fascinating and not to mention volatile because of the disruption. we see a lot of flight cancellations. yesterday, the coo of easy jet stepped down focused on 1.5%. i want to draw attention to sas. the scandinavian airline

it had to file for chapter 11 bankruptcy in the u.s. we are seeing ramifications on the stock down 20% today one of the first casualties of what is happening in the last couple months. casualty with the energy crisis as well. one of the questions, julianna, is there more to follow? >> we will have more andalysis later in the program i want to bring you the numbers for the pmi. the eurozone pmi at 53 a touch better than the flashes estimate of 52.8 in terms of the composite for june, 52 versus 51.9 as expected in terms of the detail, the s&p global, the sharp decline in the rate of the business activity raises the risk of the region slipping in economic decline in

the third quarter. the manufacturing sector in decline. the services sector suffering a market loss of growth momentum in the cost of living crisis the cost of living crisis is central to the economic outlook moving forward we are in expansion territory looking at pmi >> with that, let's bring in the founder and chief economist of macro advisers pleasure to have you on the show with us. let's talk about the pmi numbers. they are dropping and indicate broad based declines we are still above the expansion line of 50 not yet in contraction territory. does this tell you the eurozone may be able to skirt the potential recession that everyone is talking about and that we're looking at a slow of growth rather than decline in growth >> i think this slowdown would be substantial for ratings in

the second quarter we are talking about the third quarter here with the data i think third quarter would be much weaker. pmi show that companies are now feeling the pain of the much weaker consumer spending consumers are feeling the squeeze of disposable income due to the cost of living crisis companies are now realizing this is going to get real and will slow manufacturing and business activity substantially going to the third quarter. i think most likely we will see a negative gdp data in the third quarter in europe. some countries may recall a negative number in the second quarter this year. the eurozone and more broadly,

europe, is going into recession. >> very strong words there let's talk about the other part of the equation which is inflation. we had the eurozone numbers coming out that inflation is at a 40-year high these are numbers i never thought i would see in the eurozone here we are. how do you see things panning out there? it seems to me a lot of the up part uptick in inflation is the jump in food and energy prices. those headwinds should subside in coming months >> it should however, there's a big question mark related to how the war in ukraine will unfold and how russia will, you know, provide gas to europe. if we are going toward rationing as it looks like, then there would be farther increases in energy costs that will feed through the rest

of the consumption basket. keeping in mind that there are some items within inflation that feel the pain of higher energy prices with a lag. typically, if you see raising gas price was the lag, you see the increase in fertilizer and then another lag with food prices if we have reached the peak in terms of energy prices, there are a number of items that will have a negative factor therefore, my feeling is inflation will stay pretty high and probably go higher between now and the end of the year the decline of inflation is the story of next year meaning we will see farther peaks in inflation before we see a down turn. >> lorenzo, if this economic

situation evolves and we see eur eurozone slip in decline in the third quarter, they will hike interest rates has the ecb missed the window to raise rates? >> i would not think so. the ecb is doing the right things for right reasons having said that, the inflation is moving higher and the ecb would have no choice in europe, keep in mind, it is supply side. the ecb can do nothing to really reduce the cost of energy, but the ecb has a duty to prevent a sharp increase in wages and sharp increase in price expectations they have to do something. probably they won't increase rates as fast and substantial as the fed. they still have to increase rates at some point. you know, july has been

announced and september we will see another higher increase in rates. then, i think, by the end of the year, there will be a post or there would be a reconsideration about the situation and see whether the economy is strong enough to withstand another increase in rates. >> we will leave the conversation there lorenzo of lc macro indiviindividuals advisers. and china's liu and janet yellen has held constructive talks about macroeconomics policy and discuss the u.s. trade tariffs on chinese goods the u.s. treasury department said the talks were candid and made no mention of tariffs

u.s. president biden is set to announce rollbacks on the tariffs. the announcement could come as soon as this week. however, lifting the tariffs on the $300 billion of chinese imports implemented during the trump administration has split the biden administration janet yellen said this would be key to bringing down inflation the tariffs representative leverage >> amazing to see how that story evolves. coming up on "street signs." turbulence at sas as the walkouts forced the carrier to file bankruptcy in the u.s that is coming up next stay with us

welcome back some breaking news sas has filed for chapter 11 bankruptcy in the u.s. warning the striking by pilots has forced the position. the strike started yesterday after talks broke down will see 50% of the scheduled flights

canceled impacting 30,000 passengers a day. earlier this year, the carrier launched plans to cut costs by 7.5 bill crona as it struggles with cash and debt i'm bringing in the research sector and head of transport for hsbc thank you for joining us, andrew talk about the announcement by sas. they filed for chapter 11 in the u.s. what does that mean for the rest of the units and why specifically in the u.s. and what are the ramifications for the continent itself >> sas in the last set of results were very clear. the management was absolutely committed to the sas forward plan which requires them to restructure and take a lot of cost out the ceo was absolutely straight forward it was looking to

negotiate the cost reduction measures with unions and aircraft leasors he said if he was not able to do it with the negotiations, he is doing it with the courts he is doing that with the support of the board to drive the cost structure through a bankruptcy court >> it's clearly been a challenging time for the airline industry so much volatility in the space. i wonder whether or not you think there will be others who will follow in the suit of sas and go down the similar path of filing bankruptcy or chapter 11? >> so, i mean what we saw through the pandemic was two sets of strategies companies in europe were generally supported by their governments and given significant cash to restructure

and then those companies that did that are now trying to repay that debt and restructure their balance sheets as we saw with the rights issues with lufthansa and dws france to be fair, sas was doing that they got cash to survive from the governments. they need to find a path to get rid of the debt and replace with equity to do that, they need to have a viable equity story to sell to investors. that means lower costs they were not able to negotiate it they are going down the bankruptcy filing road elsewhere in the world, in latin america, the governments did not bailout the airlines and they went straight to bankruptcy restructuring in the course of the pandemic they rewrote the contracts and they're on the road and coming out of bankruptcy across latin

america. so, you know, it is certainly likely as we come into the coming winter that it will be a challenging environment for airlines as fuel hedges roll off and economic conditions are challenging. we wiould not be surprised to se more m & a and more start-up airlines that we saw that popped up through the pandemic. we expect to see rationalization of those names we don't expect to see a wall of people following sas down the bankruptcy filing. that was done early in the pandemic by many other companies. otherwise, many companies restructuring and working through the debt at the moment with new equity raises. >> andrew, we have a couple of minutes left in this part of the program. two questions for you. one, will it this restructuring give sas an equity story and

what do you make of the easy jet story yesterday with the coo leaving the company? >> sas itself sits in scanned and scandinavia in a rich market there is scope for a successful airline in the in nordics. as the moment, it is turbulent with the start-ups in covid. it is unstable it is deaffinitely a placed for successful nordic airline. with the right cost base, they could build that story over at the easy yjet, the chang in the coo, it was a bit of a surprise to the capital markets. capital markets did appreciate he is the voice of cost cutting

at easy jet. our take is the easy jet needs calm industrial relations to stabilize operations at the moment it did not have very calm industrial relations admittedly the industry has challenges with industrial relations they need to cool the reelalati with staff that will give them a calmer footing against the operations stabilized frankly where we are just now in this strange post-pandemic situation, the best way to get the unit costs down is have a stable operating environment ironically, having better relations with labor should be a path to get costs down to have a more stable operation. that's the game plan >> fascinating industrial relations is key. andrew, thank you for joining us this morning andrew lobbenberg at hsbc.

coming up, people shop for cheaper food prices as the tetailers are taking a higher bi out of prices we look at the prices next

welcome back to "street signs. i'm joumanna bercetche >> i'm julianna tatelbaum. here are your headlines. the german government is preparing to bail out the struggling utility firm uniper and energy output cuts are set to deepen in the next two days the push for higher wages is necessary according to cnbc. >> the union has opted to go on strike before it knows what the final settlement will be that's very strange. scanndscandinavia's largest

airline files for bankruptcy in the united states as wage talks collapse and the pilot strike is the final straw for the carrier. u.s. futures lower after the long weekend as janet yellen holds talks with beijing amid growing speculation washington will cut tariffs in the bid to ease inflation we are just getting the final june pmi numbers from the uk we had them from the eurozone a half our ago 53.7 t that is higher than the flash reading of 53.1. that is showing an improvement there. in terms of the services reading at 53.3 versus 53.4. both cases, we are seeing the

final number has come in higher than the flash reading of course, this is reflected of the fact that firms are picking up in activity the number one fear and concern right now as we continue to talk about is rising inflation which is hitting consumers and retailers. uk retailers are feeling the squeeze of the cost of living crisis shoppers are cutting down. sainsbury is ending the month for june 25th lower. tesco is warning that brits are buying less. and the partner and cpg of retail and logistics is joining us now thank you for being with us this morning. it feels like retailers in the uk and elsewhere are really stuck between a rock and hard place. facing higher input costs and supply chain issues and normally that would lead to price

increases. this is all happening at a time when consumers are pinched elsewhere. how are the retailers negotiating the decision of how much to pass on? >> good morning. very good question i think passing the cost of inflation is easier for manufacturing firms. we have seen the increase in prices and what it means they have to pay more and the stores have to charge more. it is not easy for retailers it is obvious if they are increasing prices for a retailer they don't want to risk that market share i think sainsbury groceries are doing something interesting. they are investing in pricing and promotions that's one way to ease the pain. secondly, they are negotiating higher with businesses and not passing on the hikes

there is a shift happening that's an important shift as we move forward and i think there is still a lot of pandemic issues this will hit clothing again and going into the travel is still doing okay in september and october, we may have another difficult period. and i think we will see that. >> there was hope earlier in the year that large retailers would fare better. walmart and target in the u.s. because they have more control over vendors and pricing we have seen a lot of the giants struggle with inventory and struggles to predict consumer behavior how do you think small retailers and large retailers will deal with these pressures >> i think obviously those two

fared well if you see there is competition and people are slightly changing shopping habits. they go to different labels. there is a shift particularly with change of share i think in the last five or than it ten years, the price with the club card pricing. i think they are trying to retain the market share. walmart sees coming out of the pandemic and the forecast has historic rates you don't know what is happening and i think the new pricing

issues are a concern it is very important that analysis needs to be first as the consumer shopping habits hit. that is happening in all sectors. >> i want to rewind back a little bit it seems to me you are implying a big chunk of retailers are trying to absorb the rising costs and not pass on to consumers. what does that do to overall gross margins from here and what does that mean for the ultimate business model if they keep trying to absorb the extra costs, clearly the margins are going to get squeezed. how do they balance between keeping consumers happy and running a viable business in the future

>> i think if we see all of the costs, they can operate at 4% or 5% these are operational numbers. when you get the core basket back to 30% with the milk and bread. it is a significant shift. i don't think the retailer can absorb full cost they will try as much as they can. in short-term, we will be in a high inflation period. the margins will be difficult. i think more than before it will drop faster and change the mix of the store and manage the cost base as the shopping and business shifts. you have to opt myimize the cos where you can.

especially procuring the stuff that would be more to ration the costs. those things come into play. >> and the larger retailers. a question about online shopping clearly a lot of that moved to shopping online during the pandemic and that new behavior has stuck with us. what is that do to the overall landscape especially in this day and age where it is easy go online and compare retailer to retailer rather than being in the store and at the whim of what is available in the store >> i think somebody asked the question how did the shift happen to digital? we are moving faster the pandemic fast tracked it that will stay on. i think near term, i really

think people want to go out and visit stores there is a softening online. offline will pick up here is a time for high street to provide the customer service and experience and personalization. that brings the customers back and potentially there is room for an increase. you can excel with the pricing promotions online probably will continue for a year or two. i think the high street has to pick up. >> all right we will leave it there thank you for coming on the show and sharing your thoughts. the partner of retail logistics at emphasis consulting look at europe markets we are trading in the red across the board. yesterday, we saw the stoxx 600

gain 0.5%. very different story this morning. you have the german index down .80%. cac 40 pulling back 1% in france ftse 100 down .90% the swiss market down 0.6% ftse mib down. investors bracing for key labor market stateside a lead up to the payroll report due out friday and a ton of moment in the euro down .90%. it is a two h-decade low versus the dollar the feature in currency markets this morning we are trading lower in sterling over the dollar. 0.4%. stay with us coming up on the show, u.s. futures turning lower as markets stateside return from the long weekend. probably a beer and hot dogs

i don't know julianna, you tell me. we'll talk about that in a few moments.

welcome back to "street signs. at least six people killed and dozens injured in chicago during the fourth of july parade. the suspect is now in police custody. nbc's dan scheneman files the report >> reporter: shots fired in downtown highland park. >> the sound i never heard before ten seconds later, people screaming. bodies down. everyone scatters. >> reporter: police say the shooter was on top of the building six lives lost others taken to the hospitals. >> the 26 showing up here at highland park hospitals, they did sustain gunshot injuries some minor and some more severe. some patients were in critical condition. >> reporter: authorities warmed

the scene and recovered a rifle and then a person of interest. robert crimo iii >> a brief pursuit went on ultimately they were able to get the subject stopped at wesley and 41 and lake forest he was taken into custody. >> reporter: the investigation is ongoing the community's healing process just started dan scheneman, nbc news. fresh news from sas. the struggling airline which filed for chapter 11 bankruptcy in the united states the news, the cabin crew on furlough as of tuesday as we discussed with the analyst at the start of the program, he made the point that this restructuring of chapter 11 bankruptcy from sas group was

very much in line with expectation. they had the transformation plan they telegraphed to markets. to follow through, take the costs outs and renegotiate the costs that weighed down the company, they needed to go down the route. interesting it is reacting negatively today >> given the analysts anticipated this this is surprising to see the dramatic drop of shares. down 20% again, reflection of what some of the airlines have had to do to adjust to the new environment of higher energy prices and higher inflation now we're seeing strikes take place across many sectors. not just in airline space. obviously in oil this morning with the norwegian oil workers going on strike. people demanding higher wages and companies reacting >> this is what andrew said with regards to easy jet.

coo stepping down yesterday. he is stepping down because relations with the company and industrial groups had soured he said that's actually negative in order to move forward with the predictable cost base, it will work in the airlines favor with the industrial groups and unions and from the cost perspective, that is most important to pre-ddict costs gog forward. >> this is the intersection of macro meeting micro. we talked about macro and higher inflation. it started off as pandemic shock and then ukraine and russia war shock. on the back of that, higher interest rates on the back of that, we have seen many of these companies had to devalue and also reassess their business structure because employees are taking note and saying there is a cost of living crisis taking place. i can't afford my weekly shop.

i need come senpensated higher o keep ticking along you see reverberations. >> i don't know if you caught it while away, joumanna, the bank of england governor ridiculed that uk workers don't ask for pay increases. saying the situation will get worse. >> awful >> he had to walk those comments back people are trying to deal with the cost of living crisis and they will ask for higher wages that dynamic is central to the inflation and economic picture moving forward the reserve bank of australia hiked key interest rate by 50 basis points. it is doing what is necessary to bring down inflation they expect consumer prices to peak before declines back to the target of 2% and 3% next year.

a big week stateside non-farm payroll released on friday dow jones industrial average forecasts the u.s. economy of 250,000 added for the month this comes after federal reserv meeting on wednesday hiking .50 points in june i never thought i would see the day where the fed would hike 75 basis points in one goal. things are moving fast exciting week to be back we have the non-farm payroll numbers on friday. i think from everything i read and catching up with things over the last couple days, the big question he is wheis can centras bring down inflation to manageable levels and not tipping the economy to recession. it is a difficult needle to

thread >> that's what the central bankers arethinking right now. what are we doing with this information? to that point, there is the question of are higher rates the answer are higher rates going to tame inflation at all before the question of are higher rates tip the economy into recession given the inflation pressures are supply driven that is the story you flagged this morning around president biden potentially rolling back tariffs on chinese goods if the issues are coming from supply chains and bottlenecks continuing to affect the economy, do we actually need to see more on that side of the equation >> it seems to me governments are trying to do whatever they can right now to get a hand back in control of the cost of living

crisis even if it means dialing back tariffs with the biden administration going to saudi arabia and increase oil supply it is not a good situation for a government to be in. especially with the biden administration midterms are coming up lots of questions there about what higher inflation means for the future of the administr administration let's look at the european markets. now just about two hours into the trading session. we have red across the board losses have been accelerating in recent trade ftse 100 in the uk down 1.1% cac 40 down 1.1% as well dak is down .90% lots of jitters around the economic picture in germany and given germany is the powerhouse in europe. we see germany take a massive

hit and if gas flsupplies from russia, that will have a spillover from the broader economy. uniper in focus this morning around the conversation with the german government steps in to provide financing for the utility company. germany's biggest buyer of russian gas. turning to the sectors of the we have real estate out in front and food and beverage and health care on the down side basics resources is down 1.9%. i say interestingly given we got china data overnight beating expectations it was the services sector strong data from china which is linked to basic resources in europe a down turn in basic resources stocks and oil reserves

bp down 1.6% total down 2%. red across the board for the energy names in europe airlines are clearly a folk t focal point. sas is down. the big news of easy jet coo stepping down. stock down 2.5%. as we were discussing, joumanna said there are tons of pressures and headwinds for the airlines this is not just stock specific stories. >> one thing we vice phaven't td about yet and we talked about an array of topics. i want to step back and see what is happening to global stock market we are starting july which is more positive. major stock indexes are down 20%

on average give or take the question is whether or not investors will feel like central banks are getting ahead of things and able to put a lid on inflation to remove some of the concerns that some of the growth stocks and tech stocks will impact by higher interest rates and inflation in the future so they can get back whole again. it is very interesting because it seems like it is so very sensitive. people really are questioning what central banks can do from here >> absolutely. the debate with the fed ultimately pauses in the autumn is a big one for investors to the point of stock markets. value under performed for a decade we have seen under performance in the growth names. tech stocks. is this the time for value to outperform will investors buy sectors that have not performed well?

>> if you look at the decline in markets, valuation driven decline rather than an earnings driven decline if you look at the eps flow for the second half, it is positive for the european companies and u.s. companies which is surprising given all of the supply shocks that have arisen in the first half of the year. there are, i would say, decent opportunities there. the question is you have to hold your breath and pray that central banks will be able to do the right thing. as i mentioned earlier, it is not easy >> you raise a good point about eps and earnings expectation you could view it is not so bad and should this be confidence boosting and buy now or is this a sign that downgrades are to come and the market is complacent of risks? stateside, we had dire warning

rh came out 28 days after updating the market with the profit warning that shows how quickly things deteriorate. if we expect more down grades? >> we will get more signals in the next couple weeks from the u.s. and the non-farm payroll on friday for anyone watching u.s. markets. let's see how wall street is shaping up all three of the majors pointing to a weaker start. similar sentiment to what we are seeing here in europe. again, this is despite better than expected data out of china. not enough to boost sentiment. that is it for today's show. the first back together in nine months nice to have you back, joumanna. >> wonderful to be back. >> that's it for us. "worldwide exchange" is coming up next. see you tomorrow

it's 5:00 a.m. at cnbc here is the top five at 5:00 markets kicking off on a strong note looking to shake off a losing week. futures are pointing to a lower open. the crypto crush taking the toll on the lender and more customers withdrawing money. and potential trade truce with the u.s. and china. president biden preparing to rollback tariffs