and i thought it would just be a nice retirement, and it's not. now i have to worry about trying to find work. >> you know, instead of having the fancy lifestyle, we always saved and put away and, you know, came back to that all that saving we put away was worthless. it's all gone just like worthless. it's all gone just like [snaps fingers] that. good morning welcome to "street signs." i'm joumanna bercetche >> i'm julianna tatelbaum. here are your headlines. investors brace for more job tightening u.s. futures point to more weakness on wall street. a selloff in tech stocks brings the nikkei into the red

german utility giant uniper falls to the bottom of the stoxx 600 after the bailout application and fears rise france's finance minister tells cnbc the block must take precautions. >> you have to take all options into account that getting gas from russia is one of the key options. and elon musk mocks twitter on twitter taking to the platform to blame inaccurate user data for his attempt to terminate the $44 billion deal sending shares sharply lower in frankfurt. good morning happy monday welcome to "street signs." let's get to the data on friday. all of the action dominated from

the non-farm payrolls which came in higher. 372,000 which in a way was a bit of bad news for markets. they priced in a more aggressive fed tightening cycle we'll talk more about that on the show as far as the week is concerned, a positive week for equities not so much the case today a whole sea of red behind me all of the stoxx 600 is in the negative territory you see that behind me the basket as a whole, the index is down 1% in the early hours of trading. up 2% on the week last week. down .50% in the first hour of trading. many things on the agenda today. of course, we focus on the weak handover from chinese equities we will get to that in a moment. a tech crackdown there fears about the growth prospects and many of the eurozone economies particularly as we head to the closure for nord

stream i as far as european markets are concerned, every one of the indices is trading in the negative ftse 100 is under pressure today. the focus from the political perspective is obviously what will happen with the leadership election in the next couple weeks. many conservative candidates have put their names forward we should start the process of whittling them down this week. we will talk about that as well. cac is down .60% dak is down 1.3% a lot of red on the board today. erasing the gains we had at the end of the week. this is the breakdown of sectors. every sector in the red. the big names on the back foot

autos are down 2% points basic resources very much a big component of the uk index down 2.7% health care down 2%. you tilele see utilities down 3% i want to take you to another stock we are watching in europe. that is twitter. elon musk has said he wants to back out of the $44 billion deal to buy twitter under three months on from launching the bid for the social media platform you can see that the stock has been trading down about 7% as the frankfurt listing of $33 the bid, at $54.20.

elon musk is now trying to back away from the deal it will go to the courts it will take a long time to resolve. we will talk about that on the show one of the stocks we are keeping an eye on today. we mentioned this as well. we had a weak hangover from asia the nikkei up 1.1% upper house elections there. good victory for ldp hang seng and shanghai are deeply in the red with some major develop pments over there let's get to jp ong with the chinese markets. good morning, jp >> good morning, joumanna. we have to qualify there is still about 13 minutes before the hang seng wraps up in hong kong currently the hang seng is down 3% this monday out in hong kong.

a lot of stocks are pulling back it is a bit surprising because a number of analysts we have spoken to have said the worst may be over. maybe now is the time to start buying a day like this can shake sentiment up at the drop of a hat. the hang seng has four members in the green everybody else is selling off in varying degrees. we are not sure what really triggered this there are a few usual suspects to highlight we know later on china is set to release the second quarter gdp many are expecting the lockdowns from the covid lockdowns in march and may will start to show up in the report speaking of covid, the ba.5 variant is felt in china there are rising covid cases which sparked worries that we may see more lockdowns or social

restrictions suddenly reenact and weigh on the asian economy if you look at sectors, a handful of things i want to point out. real estate has been tested. the most indebted property developer with $300 billion on the balance sheet said creditors have turned down a proposed delay in the next interest payment. on top of that, another property development has defaulted. this is raising worries for this sector the hang seng tech index bleeding today alibaba has once again faced fines from chinese regulators because of the disclosure lapses they had to make to regulators this weighing on sentiment already fragile for a sector in china. another sector that is really feeling the brunt of the selloff

today are casino stocks. macau is about to go into more social restrictions. casinos have been shutdown because of covid cases rising in that territory the likes of galaxy is among the biggest losers when you look at the hang seng, there is nowhere to run or hide. this selloff will keep them in the red for this day let's hope this is a temporary one. sentiment is fragile in china over the last couple days. joumanna and julianna, thank you. >> jp, thank you thank you for breaking that down the negative sentiment is an impact on u.s. markets as of right now with the down start for all three. dow down 200 points and nasdaq retrieving at the open and s&p is a pull back in what is poised to be a week for earnings and data we have consumer inflation data

due out and start of q2 earnings season. and we will see non-farm payroll. on it rose 372,000 by june over the concerns of recession. education led the gains. unemployment rate stabilized and hourly earnings grew on a monthly basis. u.s. markets posted the second positive week in a row. we also saw strong performance for tech stocks in particular. nasdaq logged five positive days in a row a strong week for u.s. equities. as for fixed income mashrkets, e 10-year treasury trading at

3.05%. we are in inverted territory at 3.07%. let's look at where the dollar stands today as we head into the week for consumer inflation data and corporate earnings the euro is trading on the back foot versus the dollar continued to strengthen. similar for the sterling of course, we have our own stories in the uk to drive that trade. let's welcome richard kelly to the program. head of td securities. richard, great to have you on the program with the week of potential catalysts. let's start with the non-farm payroll on friday. does this do anything to change the calculation at the fed >> change the calculation in the markets to get more built into the pricing disappointment the fed is engrossed that 75

points is locked in and payrolls was not changing that. >> we got the big inflation print due out this week as well. consumer price inflation for the u.s. how market moving do you think this report could be and could this be something to change the calculus at the fed? >> it is one of the key releases this pivoted the fed last time it is upgrading the expectations from out vir view, it could comn at a core higher it is well too hot for where the fed is going i don't think anything in that release is likely to tip them out of the 75 base camp i think the hurdle to get them to go faster than 75 is not going to happen. the issue here is you have food and energy prices putting pressure on the headline prices

here you have 30% of that which makes up shelter and rent. that is locked in for the next 12 months at .5. the other half of cpi is wages that is running hot. it puts pressure on the core fl inflation. it is going to be very difficult to get cpi lower over the coming months >> i actually want to ask a follow-up question about cpi and what you think we are close to seeing peak. from what you are saying, your view is it is unlikely because of the persistent pressure if you remove the components of energy and food. you talk about shelter and wage pressure where do we land on the inflation numbers? >> that is it. you have to pivot your eyes away from the headline member headline numbers peak and slowly decelerate over time the concern for the fed and what

is really push markets is the month over month figure. when you have core inflation at .5 or .6 on the annual basis, that is 5% or 6% inflation over the course of the next 12 months you put on top of that food and energy is coming in faster, it is adding more pressure. this is the pivot in the fed in the last meeting where powell went out of his way and he is concerned of headline inflation. that is what people send in normal times that you use as an anchor we are outside of that and they he need to look at overall inflation. t that is putting pressure on the households and businesses. the month over month figures over the next three to six months will be difficult to get back down that the fed wants to see before they pull back and say they don't want to hike anymore. >> we were saying about powell

and very much focused on bringing the headline inflation back to target they said core inflation is what they are looking at. the tide has turned and external pressure on policymakers right now. in terms of where you see the fed going with the rate hikes, you are expecting 75 at the next meeting. more hikes to come after that. at what cost and the reason i ask is so many people talk about the tradeoff between hiking rates and taming inflation and on the other hand, dipping the economy into a slow council and potentially a recession. do you see that happening? >> i don't think it is a potential. this is part of what the fed has to do. they need to slow down the economy. ideally, they would not like to slip into a recession. the fact of the matter is given the volatility and heights inflation is running and the

need to get back down to target to anchor over the medium term, they will likely have to pull the economy into the recession it is greater than 50% you can look right now at the discussions in the second quarter contract the domestic provide is resilient. that is recessionary we have not hit the lags from gas prices and fed hikes will not hit until the end of the year i think that is where the near term peak risk for u.s. recession sits now if you get past that, the slowing as we get into the middle or back half of 2023. you have three shots of recession in the u.s. economy. that is a necessary part of slowing the economy down and pushing that unemployment rate back up so we can get inflation anchored to not deal with longer term costs down the road this is baked into fed policy to

get the economy anchored back to where it needs to be. >> richard, interesting conve conversation richard kelly with td securities. as we discussed, it is a busy week with data and earnings inflation print from the u.s. and the start of the q2 earnings season for more, check out cnbc.com. and coming up, uniper asks for a bailout. this will lead to significant losses we will discuss next

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welcome back to "street signs. the nord stream i gas pipeline will go through ten days of maintenance starting today officials in germany fear they in russia could keep it shut off longer russia cited delay of service equipment for the closure.

they granted an exemption to the package to allow the turbines to be shipped back to russia. and germany's uniper asked for a bailout and they could face losses of $10 billion in euro this year spot gas prices in europe have surged 150% since the turn of the year ane annette joins us now what precedent does it set for other utility companies in germany? >> what i hear from advisers is the german economy ministry has started to decide last friday.

they have a blueprint already. i'm hear the bailout package is modelled along the lines for lufthansa during the pandemic. it could be similar which is the bulk of the bailout package and capital increase for the german government which would own a potential steak in the company at uniper. that could be 30% or reach 40% it depends on the deal outline this needs to happen because uniper is burning 40 million euro of cash each day becaus they have to buy the gas on the market and sell to clients according to the contract. of course, the contracts have a lower price as they are currently having on the spot

market this is going ahead. the key question is when will it happen of course, under when you terms. that is why we are seeing it trading lower. it will mean a substantial watering down effect on the existing shareholders. that is the current status, i would say, surrounding uniper and the government is concerned after july 31st with the maintenance work which will officially come to an end. >> annette, thank you for keeping us up to speed the french government is says edf will not lead to a surge of house electricity bills. this is as they take on full ownership of the company the government announced it would take on the remaining 16% stake which it does not yet own

as it looks to prop up financing for the nuclear strategy speaking to charlotte, the french finance minister says this process will take several months >> it will take months it will be an operation that will be fulfilled in the days and weeks or months. i would provide all of the necessary provisions in the coming weeks, but not right now. >> you said the most probable scenario is russia will cut gas to europe. is that the baseline scenario? >> i think this is one of the key scenario and we have to prepare all options. that is the risk of all politicians to take into account the geopolitical situation we have to take into account that getting gas from russia is one of the key options >> charlotte was speaking to

bruno le marie charlotte, france's situation is different from germany's as you outlined many times before flush out for us what the overall messaging and vibe was like when it comes to energy security at this event in france >> as you said, the making of the french energy system is different. they rely on nuclear at edf. 75% of french electricity comes from this. they have heavy issues and half of the reactors are shutdown with repairs and corrosion issues they have huge debt. 45 billion euro. with the issues and war in ukraine and sovereignty and the government says they own 84% and they should nationalize the group all together and address the issues and control the

energy prices. all of the talk at the summit there and the question offi eneg prices and the cost of living is the consequence of this. i asked bruno in what spirit he was approaching the debate on the cost of living package they announced in cabinet they lost majority they he ave to convince the oth side and how well they are prepared for compromise. >> we are ready for come promis with opposition. i met with several on the households and wages i think we could work on that basis. so i'm presented i for compromise i also want those compromises to be adopted in a framework that is clear we need to be cautious on public spending we need to make all that is

necessary to provide better wages to the people, especially the poorest people in france there is a political framework within that framework, of course, i'm convinced we could find compromises >> i did catch up with another member of government, one that worked closely with bruno. the budget minister and now the new labor minister it is a very important job in france one that is facing unioni negotiations he is the one that would lead the negotiations for the pension reform which is a tricky issue we talked about cost of living and salaries and package presented by the government last week to the cabinet. he responded to criticism. there are too many blanket

measures they need to target. some of the measures are feeding inflation. this is what he said >> translator: the question of spiraling salaries is always there in periods of inflation. several have been put to task during covid they should not lose purchasing power. they should be treated like employees. in the private sector, the salaries are increasing. we have systems in place if inflation goes up by more than usual, the minimum salary is revised upwards. between may 1st and may 2022, the average level of salaries increased by around that same figure we need to face up to inflation. the cost of living package we will present is a project that helps french people and companies to deal with inflation

which is caused by many factors. mainly through energy. what is essential is to renew the price cap. for example, the price of electricity did not increase by 4% between 2021 and 2022 the price of gas capped at the price of october of 2021 this is the most protective system in europe french people need to be shielded from inflation. it doesn't mean what the cost continues. we need to kick start the economy and the rebound in 2021, despite the difficulties of 2022, still produces revenue this allows us to produce extra protections without worsening the debt >> that was the french labor minister speaking from the summit in france you know, in summer, things get quiet in france. not this year. as we discussed before, we have

the terms of the rationalization to be presented in the coming weeks. they are looking for a new ceo of the group and the cost of living package is debated in the national assembly. that is a tricky moment for the government which lost absolute majority it could be tricky for them. guys >> charlotte, thank you very much for bringing us that latest from the summit. also coming up on "street signs. the race to replace uk prime minister boris johnson heats up with conservative contenders crowding for the position. we'll be right back.

welcome back to "street signs. i'm julianna tatelbaum >> i'm joumanna bercetche. these are the headlines. >> european equities in the red as investors are looking for aggressive fed tightens on the jobs report and inflation reading. u.s. futures point to weakness on wall street a selloff in tech stocks

drags the hang seng lower with tencent and alibaba with anti-trust related fines. and germany's uniper falls to the bottom of the stoxx 600 with the bailout application france's finance minister tells cnbc the block must take precautions. >> we have to take into account that getting gas from russia is one of the key options and elon musk mocks twitter on twitter taking to the platform to blame inaccurate user data for the attempt to terminate the $44 billion deal sending shares sharply lower in frankfurt.

we are about an hour and a half into the trading session. we're still trading in negative territory. we hhave pared back some losses. stoxx 600 is down .8% following the weak session on asia the situation in china from a covid perspective is weighing on sentiment to some degree as they deal with the spread of more transmissible variant in the world. also, a big week coming up the u.s. cpi that will take focus and the start of q2 earnings season stateside. a number of banks reporting and delta airlines as well with the travel chaos around the world in the last weeks turning to currency markets. the dollar this morning. this is the look at the tech names in asia. we saw heavy selling in the stocks overnight now we have currencies for you we have sterling on the back

foot versus the do llar 11 1. 1. 1.1976 a week start to trade on wall street. all three majors are pointing lower. dow jones industrial average down 175 points. nasdaq down 90 points. we are in for a weak start to trade after the strong trade on wall street last week. well, 11 contenders have come forward in the race to replace prime minister boris johnson. leading the field with more than 25 endorsements so far from his fellow mps the conservative back bench mps is due to decide the leadership table this evening with the number of candidates

expected to be whittled down to two before parliament breaks next friday. tory parliament members will vote before november let's get to steve sedgwick for latest steve, so many have thrown their hats in the ring they were on the sunday news shows with not a lot of detail now we know there are 11 to replace boris johnson. talk about the timeline to get down to two by summer recess >> reporter: good morning, julianna and joumanna. priti patel will announce. priti painting herself as an authen auth auth authentic brexiteer. when we did get the 1922

committee rules, they he could be more strenuous. you only needed eight mps to back you this time around, it could be a higher bar of 10% of the party which would take 30 members backing. a lot of the names are not going to get past the first hurdle likely between 18 and 20 of mps needing to back you to move on you whittle down quickly someone will come out every single time there is a ballot held among parliament. for viewers, it is not always the name you think or heard of that is the one that is a victor the history is littered with popular conservative candidates who just did not manage to get through past the tape at the end as the winning candidate the most famous is michael hess

in 1990. then ken clark tried three times. some of the viewers may remember him, a popular conservative party. he failed in 2001 despite coming first in the initial ballot. it doesn't mean to say you can win. that was e.w. smith in 2001. another example of not succeeding when you think the most popular candidate is boris johnson. in 2016, he was backed by m michael gove he withdrew support at the end a andrea leadsom stood aside next thursday is the recess

period a host of names. a battleground at the moment is rishi sunak. the one man of economic policy and he hasn't n't been in the j that long and hasn't had his own budget to stand the tory rules and taxation that budget is not due until november rishi sunak is criticizing rivals they have been offering tax cuts and delayed rises and delayed fuel rises and delayed corporate taxes. mr. sunak says you can only have economic growth and then after the tax cuts it is a bitter battle already as our next guest knows >> absolutely, steve certainly as i think our next guest says a short and bloody

contest indeed that was steve from abington green. let's bring in rod dacombe at king's college in london rod, good morning. you heard steve talking about the context and what we can expect the next couple weeks it does seem to be the case that tax cuts are front and center. it will be the north carolina one economic issues that all of the tory contenders have been talking about. all except rishi sunak have been talking. who are they trying to play for here is it because they want to get the support from within the conservative party and that's what the conservative party wants to see or is this a sweetener they are throwing out to the public? >> there are two stages. the first is appeal to the conservative mps

the second is to the wider conservative membership. the focus on tax cuts and economic concerns is very much aims at conservative mps you have a crowded field at the moment we simply don't know who will lead out there is no frontrunner in regards to rishi sunak over the weekend. they are trying to get grounds among conservative mps watch for the change of focus after july 25th when it goes to the broader membership you can expect more on social issues. >> are there fiscal hawks left in the conservative party? it feels the party has gone through a massive sea change this used to be a party that was about balanced budgets and responsible spending now the thing is tax cuts and tax cuts and tax cuts. >> the conservative party does, the parliamentary party leans

further to the right economically than the wider party membership i think this is the message that you are seeing it is an attempt to gain support of conservative mps who may be concerned about their electoral position it may happen in the election run-up to 2024 >> rod, there has been a lot of debate around whether change at the helm of the tory party can actually fix the problems the party is facing. i'm curious your stance on that front and if you can gather anything from the 11 who have put their name forward so far about the direction of travel for the conservative party is there anything among the duties candidates that unites them as joumanna outlined? >> that is the driving force behind the election.

the conservatives do not look good the question he is how much is that tied to boris johnson the critical thing these candidates will try to use to position themselves is not economics necessarily. it will be the relations in context of leadership. you will see people who are insiders like sajid javid to put himself forward and people with experience and with a steady hand equally candidates like jeremy hunt which is anti-boris johnson. which ever way the conservative party chooses is really important in framing the next general election >> boris johnson, the relationship with him, is front and center in how they shape

their own chaampaigns how is england's relationship with brussels? >> it is hard to say this will not play a huge part in the leadership election as far as we have seen. it may emerge later on with campaigning to conservative party members at large it is a much more period of timement ipertinent issue to them i expect it is focusing on social issues. fundamentally, how do they stand in relation to boris johnson is the background >> rod, very interesting here with tax leveling up at the end of the day, given the fact the erg had the meeting last night and getting the final two to the top it is the same conservative party with the european divide

which is the normal? >> i suspect it is one of the things that is important to the membership at large. i think it will be an issue that will win votes positioning yourself against the eu will do well with the party membership that is in contrast to a lot of or large number of mps expect to see a change in emphasis after the 21st of july. >> rod, thank you for joining us rod dacombe with king's college london steve, thank you excellent coverage as always. now shifting gears to japan with the ruling coalition set to secure a firm number of seats in the upper house elections. according to polls by nhk, the liberal democratic party and coalition partner are projected

to win between 69 of 83 over the 125 seats. this took place following the assassination of the former leader shinzo abe. he was the longest serving prime minister who was shot dead during a campaign speech in nara on friday. the shooting was an attack on democracy according to newspapers also coming up on the show, elon musk pulls out of the twitter deal find out what is expected to unfold in the courts as a result coming up next

welcome back to "street signs. shares of twitter down 9% in p pre-market trade stateside as elon musk tries to back out of the deal to buy twitter. three months on from the offer to buy the platform. his leader team filed with the

s.e.c. saying twitter failed to comply with the terms of the deal to buy the company. chairman bret taylor says they are prepared to close the deal at the agreed price. twitter shares in frankfurt are lower in early trade and sharply lower in pre-market. you can see to the tune of 7% points what is interesting story, julianna, from the very beginning. a lot of people were asking if elon musk was actually serious about this venture even before they went for the $54.20 merger payment price. clearly he was at the time and sortsented himself as a harbinger of free speech he seems to back away and appears to lose focus and the big announcement on friday that

he is looking to exit the agreement. unfortunately, there are legal agreements and these are binding. under the terms of the agreement, if he walks away, he has to pay a $1 billion penalty fee. what is emerging on friday, especially with the response of twitter and chairman of the board of twitter saying we will take this to court he could be on the line for the full amount of $54.20 he pledged to buy the company there is an argument out there saying this is for the courts to decide he could be paying that full amount which is where investors thought he would come in and buy the company. >> i don't think it is clear what musk has wanted as he walked back from his commitment to the deal. yes, he decided he didn't actually want it in the first place and didn't want twitter and trying to find a way out or

try to get it at a better price. if you look at $54.20 which is what he agreed to pay in april shares closed friday at $36.81 you can argue a lot priced into that around him walking away already. we have also seen a selloff in tech stocks broadly. is the offer that he put forth back in april too much now the world has changed? the macro back drop changed. and dan ives said he thinks fair value for twitter is now $30 and there is a case for $25. >> you have to think of the prospects for both companies the second elon musk got involved in twitter, tesla stocks were under pressure where is he getting the funding from with most of the wealth

tied in the crown jewel tesla stock. actually for tesla investors, it may come as a relief that he would no longer look to pursue the deal equally, if he is on the hook for a significant sum, that weighs on that stock we have twitter. none of this is good for twitter. it was under significant pressure before this whole elon musk issue came to the floor now we're looking at a protracted legal conversation going on and not to mention employee morale and the fact that elon musk is vocal. criticizing twitter on twitter. >> protracting is the key word here speaking again here to dan ives, legal drama will be nasty and take many months protracted is a key word here with what happens next for twitter. consumer inflation data and second quarter earnings in the u.s. june inflation is expected to

rise above 8.6% in may on the corporate side, we are expecting earnings from pepsi out tomorrow and followed by delta airlines on wednesday. major lenders jpmorgan chase and morgan stanley are due on thursday joumanna, i think the earnings this week will be interesting. you made this point last week when you came back after nine months away. youlooked at earnings expectation and said they don't look too pessimistic is that a positive sign? that is the perfect starting point for earnings >> the questions are the trajectory this will turn and from the profitability standpoint, it is interesting to see how it all comes out with the supply chain and potential recession fears plays into not just earnings now, but also the

companies jutoutlets. >> the point of not too gloomy is a perfect starting point. we could be in for significant downgrades if companies come out warning and downgrading guidance, that could be a difficult back drop >> when has the market paid attention to valuations this year this is all like a whholistic mv and pull back for stock markets. it is a broad based selloff to the equity markets at this point. you have to think that looking ahead, the macro and what eventually ends up happening to the world growth prospects is determined for investors >> you can argue what is driving markets most right now you are right. it is macro. that is what is creating a

difficult environment for the corporates it is hard to plan inventory and supply chain and decisions let's look at u.s. futures before we hand you over to our colleagues dow jones industrial average at 175 points lower nasdaq looking to drop 99 points a big week for earnings and data on the back of the stronger than expected non-farm payroll reports. that's it for the show i'm julianna tatelbaum >> same joumanna bercetche "worldwide exchange" is coming up next.

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it is 5:00 a.m. at cnbc. here is the top five at 5:00 stocks kicking off the week on a sour note. history suggests that pull back could be short lived. blue chip make elon musk is pulling back on the deal to buy twitter. and china stocks sink as covid and crackdowns give investors reasons to worry president biden defending his decision to visit saudi arabia all this as oil stays above $100 later on, europe