him? no. for his family? no. not at all. after we went through? no. happen to him because he was greedy. good morning welcome to "street signs." i'm joumanna bercetche >> i'm julianna tatelbaum. these are your headlines >> european markets look past recession fears and start the week on firm footing investors are cautious ahead of the ecb meeting when the central bank is winding a decade of ultra loose policy. and haleon debuts in london. the ceo tells cnbc the company

is poised to prosper >> with inflation and other things happening in the world and we are uniquely positioned in categories that really matter with great brands to do well in any environment. president biden faces criticism over interactions over crown prince mohammed bin salman he hails increased cooperation, but leaves the kingdom with no progress on oil prices >> we will not walk away and leave a vacuum to be filled by china, russia or iran. we will seek to build on this moment with active principal american leadership. and boeing forecasts stable aircraft demand as they look to secure orders and sustain rivalry airbus at the air show

good morning welcome to "street signs." we're kicking off another week of trading a lot of green on the board. good for asia and japan closed for the holiday. the hang seng is positive in the overnight session. we are heading into the fed blackout period. we have less comments from the u.s. with monetary policy. not the case in europe this week we have the huge meeting coming up on thursday ecb is expected to hike rates for the first time in 11 years that is major and market moving for a lot of the different indices. something to watch another major event to watch for in europe. this week we are getting prime minister draghi addressing parliament if you were following coverage last week, a catalyst for italian politics what draghi

will do on if he will stay on as prime minister or step down and leading to snap elections which could set the tone for the trading week two events to watch out for in europe you see the stoxx 600 is up 1% in early trading still down, of course, over the last couple months down 9% in the last three months so far, july has been positive for the stoxx 600. in terms of the breakdown of european markets ftse 100 in the uk, up 85 points 1.2% higher. one stock we are watching for today is haleon. we will talk about it more on the show spinout has listed on the ftse 100 and expected to be the top company in the uk. a big development in the ftse 100. cac 40 and dax all watching for the ecb meeting.

ftse mib italy fireworks in last couple trading sessions, but today is up .80% the news over the weekend was a little bit more support in prime minister draghi's intent to stay on as prime minister wednesday is crucial for the direction of the italian politics let's move to the sectors and check the heat map for individual sectors you see every single sector trading in positive territory. at the top, oil and gas up 3.1%. perhaps digesting the news over the weekend with president biden's trip to the middle east and saudi arabia it did not yield a lot of results with energy output that may be constricting analysis of how much production can come to the table from the back of the trip, if any basic resources up 3.1%.

banks up about 2%. let's look at european yields a big week for european markets. of course, fixed income is very much in the eye of the storm given the ecb will look to hike interest rates france is up 1.82% france and germany up 5 basis points today a lot of focus on the 10-year treasury which is up 3.46% points the selloff to the end of the week last week which was up 20 basis points today some stabilization today we will keep an eye on this with the ecb with the anti-fragmentation tool on thursday julianna. we have been closely following the uniper story i want to bring you the latest uniper has drawn down 2 billion

euro under the credit facility with kfw banking group using the facility in full this has been taken to continue the disruption of russian gas. fresh line out of uniper drawn down 2 billion euro from the credit facility. as joumanna mentioned at the wall, this is a big week for energy markets on thursday maintenance on the nord stream is due to end. what will happen with gas supplies resuming or close them? a major moment to watch on thursday i want to turn attention to h h haleon it debuted on the london stock

exchange unilever rejected the bid for the business in january. as for gsk, this is the picture and what we are looking at for gsk. holding steady as the company comes to market as the demerger enters the final stage the ceo says he sees strong growth ahead >> gsk shareholders, for every share, they get one share of haleon that is a different way to come to market than ipo this is a great business we're in health care and health matters. it is a volatile environment with inflation and other things in the world we are uniquely positioned and in categories that matter with great brands to do well and any environment. so feel good about the business and feel great about listing it

today. >> i wonder where some of the pandemic trends are still fading from the product portfolio as we talk about pain relief and certain sensitive teeth products i wonder if we have seen the best of it short-term. can you comment on that? >> yes, we saw volatility over the last few years with quarter by quarter depending on consumer behavior overall, we see consumers shift in how they think about every day health and pro-actively managing their health. we feel like the portfolio we have and the business we have are positioned really well for the short-term and medium and long term and deliver on those needs. what we have seen from the pandemic perspective in consumer behavior, perspective has continued on we expect to continue on in the future. >> brian, one of the concerns that some market participants have short-term is debt.

there are fears short-term that macy constrain you with paying dividends. especially in this market. what is the outlook with paying dividends to investors >> on the four times leverage, we made a commitment below three times by the end of 2024 this is a high cash flow business and strong cash flow business it is not unreasonable to have that level of debt given we have two of the largest transactions in history in the last seven years. div dividends, we said we would be on the low end which was announced in 2018. i feel good about where we are and ability to pay down the debt and provide dividends to share ho holders. >> joumanna, this is a huge deal for the uk and health care sector 31 billion pound business coming to market as a stand alone

company. a fascinating one to watch as for haleon and the questions for the new stock, there are two major concerns or things investors are thinking about one is the overhang from gsk and pfizer will hold a stake in the business and the amount of debt haleon has that the ceo touched on in that conversation. >> a couple of interesting points and you covered this when i was away on maternity leave. they attempted a takeover worth 50 billion pounds. now coming to the market at 30 billion pounds they left 20 billion pounds on the table which is interesting from gsk we were chatting offline i guess the difference is gsk and pfizer has a stake combined about 46% retention of haleon if unilever takeover deal would

have removed them from the equation the leverage point is interesting. i think the ceo did say to our colleagues they plan to bring that down to three times in over a year's time. you have to wonder if how they will continue to grow at these rates they set they set a target growth rate of 4% to 6% how can they grow and pay down debt >> they have a challenge i think your point of unilever with interest is important there is a lot of debate if haleon will remain a stand alone company or takeover target now it has the clean break from gsk. certainly the expectation is not un unilever to come back. shareholders were against the

deal could rekkit be interested we have reports that nestle was potentially interested in the company. could we see a buyer come in >> they make a lot of really well known brands. i was researching over the weekend. a lot of these every day consumer goods we use. i would not have known were manufactured by haleon. >> for gsk, new gsk, they no longer have to manage brands like those they can focus on the bio-pharma and specialty medicines. >> one thing about gsk and this is an area you have been covering closely, julianna, my understanding is gsk has been under performing its peer group because of the debt overhang they had going ahead with the deal, they are getting dividends back from

haleon they heare planning to use that funding go ahead with r&d and m&a. >> one of the big headwinds or tension points for gsk is pipeline investors in the health care space want to see more confidence and be more confident in gsk one gripe they had is leadership at gsk the head of gsk doesn't come from the scientific background could this pave the way for more deals and gsk going further down the specialty track. >> very big day for the british index. moving to france now edf employees are preparing to sue the government over nationalizing the utility giant. the decision goesagainst the interest of the company and minority shareholders. shareholders holds an 84% stake.

the french government is expected to announce plans by tomorrow. and boeing has cut demanded forecast for the next 20 years estimates airlines will need 41,000 aircrafts the plane maker says it expects deliveries to remain stable. and sticking to the airline space, sas and pilot unions will resume negotiations after failing to reach a collective agreement over the weekend this as both sides continue to spar over pay and working conditions while the airline tries to renegotiate the plan. pilots employed by the scan today naf yan airline agreed to wage cuts. sas says the con skconcessions o be enough. we will have more live from the air show later in the show

today. phil lebeau will have an inn it after view with joeben bevirt. and key corporates in focus. in europe, the biggest fashion retailer h&m will find out operations in russia they will reopen physical stores for a limited period of time to sell down inventory in russia. h here is an interesting story. deliveroo slashed guidance blaming worsening economic conditions the full year growth transaction is now expected to be in the range of 4% to 12% interestingly, you are seeing resilience in shares from a moment ago. >> people will stop ordering

food it is expensive. >> the price of food going up and people returning to the normal way of life this was always a big question through the pandemic how much would we continue staying home ordering food now we have options. >> my waistline is thankful. >> same hear let's talk twitter we are following the multipronged saga. elon musk filing a complaint forcing the deal according to filings, he suspected the trial start earlier. coming up, rescue talks for uniper is continuing as it is forced to draw on the storage facility we will discuss what is ahead for the german energy group next flowers are fighters. that's why the alzheimer's association walk to end alzheimer's is full of them. because flowers find a way to break through.

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full prescription-strength. reduces inflammation. don't touch my piano. kick pain in the aspercreme. welcome back to "street signs. let's get a check on oil brent and wti trading higher this morning

brent 2.5% higher. the energy majors also trading higher this morning. this as president biden concluded the visit to the middle east promising to keep relations with the region open, but failed to find a deal on oil or commitments to include israel a big reason oil is higher this morning. biden said the u.s. will continue cooperation high highlighting many areas of potential improvement. >> the united states will remain a partner in the middle east as the world grows more competitive and the challenges we face more complex is only becoming clear to me that how closely interwoven america's interests are with the successes of the middle east we will not walk away and leave a vacuum to be filled by china, russia or iran we'll seek to build on this

moment with active american leadership let's talk about uniper. they have drawn down the credit he from the state bank kfw the move was taken to the ongoing supply disruption with russia a reminder to viewers. nord stream one is closed for maintenance and has been the last couple days it is expected to reopen this thursday that is a big indicator for what happens to gas and as gas moves forward particularly with germany. let's bring in our next guest. karen, good morning to you thank you for coming on "street signs. i want to ask a broad gas storage question about germany the country has committed to having or achieving a gas storage target by november they are sitting at 65%.

how are they going to make up for the shortfall? especially with a disruption of russian gas. >> if there is full disruption in the medium and long term, it will be hard reaching 90%. especially at the moment with uniper starting using its gas storage because it cannot supply the contractual obligations of gas with the current suppliers at current prices. >> fair enough that is the interpretation of the market people are bearish on germany and country's ability to source alternative energy sources on that question and i know this is a huge topic within germany, but the reason i bring it up is over the weekend, japan said they are restarting nuclear reactors france is high reliant on nuclear energy and energy source the uk as well do you expect nuclear energy to

be a no-go zone for the german economy? >> it is really hard to say. one has to remember that electricity production accounts only for about 12% of our gas use. only 6% produced by nuclear power at the moment. whether we use nuclear power or not is an interesting question, but it will not solve the bigger issue of the gas supply if russia stops delivering for a longer time. >> dr. pattel, to continue down that path and thinking of the countries with the different energy mixes and germany is exposed to relative to other countries like france. there is no gas sharing agreement across europe. do you think there is hope would could see that come through? >> i hope so european cooperation is

esse essential. we do see bilateral agreement with individual states and it is a hope that this is going to actually scale up on the european level >> when it comes to the german economy and impact of potential cutoff of russian gas into germany, how severe would that impact be in your view and can you give us a sense of what industries are most vulnerable if we move to rationing scenario >> if we really move to rationing scenario and that is not given, i have to say that, but of course, those companies that use gas extensively, chemical and food productions is exposed. one-third of our gas is used to heat private homes that is a big question do we ration that or say, okay,

households, secure with gas use? >> how high do you think gas prices could go for consumers if we enter one of the downside scenarios? >> estimates so far that doubling or even triplings gas p prices for consumers within the realm of possibility we have seen in recent weeks more than a doubling actually of the gasprices at the exchange. the question is does that go any further? how much do the markets already anticipate that there might not be a restoration of the deliveries from russia that is something we cannot answer at the moment given the history, it is fair to assume the fair share is priced in already. >> thank you for sharing your analysis with us i appreciate you joining us. karen pattel now europe is in the group

of the hottest summers on record with wildfires in france, spain and greece portugal reporting deaths in the hundreds britain is expected to increase to 40 degrees today and tomorrow, an unprecedented figure we are keeping cool in the studio, but outside it is heating up charlotte has more on the impact of the heat wave for france and spain. good morning, charlotte. >> reporter: good morning, julianna several countries impacted around the mediterranean zooming in on spain. you had record temperatures of 47.5 degrees celsius tryiggering fires 24 still uncontrolled. 20,000 hecatares burned.

france will reach a record temperature today and tomorrow above 40 degrees most of the impacted reegions along the atlantic coast you have the fires in the region where you had fires started where emmanuel macron has been visiting there you have firefighters fighting in that area against the fires look, they have red alerts at the moment this the will impact electricity supply this will put on the strain with the air conditioning to fight the heat wave. we see small power cuts at the moment nothing major, but it shows some of the inherent problems with edf. reactors have been shutdown with corrosion issues and maintenance problems they have to deal with. for the first time in a long time, france is importing electricity. this time it is importing, not

like exporting which is usual. they have the issue of the renationalization. we expect to see issues put in place with the opening of the market tomorrow morning. they expect a tough winter with russian gas. there are problems that have triggered the supply in france with the heat wave displacing the issues guys >> charlotte, thank you so much for the coverage coming up, the air show kicks off after a four-year hiatus we are live on the ground next

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have $100,000 or more of life insurance, you may qualify to sell your policy. don't cancel or let your policy lapse without finding out what it's worth. visit coventrydirect.com to find out if your policy qualifies. or call the number on your screen. coventry direct, redefining insurance. welcome back to "street signs. i'm julianna tatelbaum >> i'm joumanna bercetche. these are the headlines. >> starting the week on firm footing, but investors are cautious ahead of the ecb meeting when the central bank is

starting to wind back more than a decade of loose policy. gsk's haleon debuts in london the ceo tells cnbc the company is poised to prosper in any environment. >> a volatile environment with inflation and other things happening in the world i feel we are uniquely positioned in categories that really matter with great p brands to do well in any environment. uniper drawing down as negotiations continue over the b bailout of the german utility group. boeing forecasts stable aircraft demand over the next 20 years as the planemaker looks to sustain orders with the rivalry airbus at the farnborough air show we're about an hour and a

half into the first trading session of the big week. corporate earnings in the u.s. taking investors focus on thursday, a major day in europe as we have discussed throughout the morning we have the european central bank set to raise rates for the first time since 2011. and we are leaving open the big question to see if gas flows to russia remain open despite that, equities are higher a rally taking shape the dax up in germany up 1.5%. similar for the cac 40 broad based rally in it europe the dow jones industrial average is set to open 300 points higher. nasdaq and s&p poised for a

strong start as travel rebounds after the pandemic, aircraft makers are expecting big orders as airlines prepare to update their fleets phil lebeau is joining us from the farnborough air show how is the mood on the ground? >> a lot of optimism i'm sure we'll hear big orders part of that is what we will talk about with our next guest joeben you guys are here. your competitors are here. a lot of discuss of how quickly we are starting to see this develop. when you talk with potential customers, what are you seeing right now? >> this is taking off. f farnborough is where air taxis

come to the front. this is transforming transportation here around the world. here in the uk and in the united states and rest of the world, we are seeing acute congestion for ground transportation and seeing unprecedented demand for air travel. >> you applied for certification with the uk. a big part of the process for full certification beginning commercial service still look at 2024 as the beginning of commercial service? is that in the u.s. or u.s., europe and other parts of the world? >> we see incredible opportunities both in the u.s. and around the world today, we just announced we are applying for uk validation of our an faa certificate this means uk caa is tracking with the faa as we go through the certification. >> moving in tandem? >> exactly

so we can seamlessly bring service to the uk. >> you had in the situation a couple of months ago with the test flights and briefly suspend flight test operations you resumed that now has that set you back or are you on schedule? >> we are on schedule. we have multiple in the test program and we continue that we also see incredible momentum with the faa in our certification. we have more than 80% of compliance agreed. we have more and more asps getting locked down. >> we will talk about billy, the administrator with the faa, later on today he has an interesting perspective. he sees this as the market quickly developing we talked a year ago and one of your concerns was regulators would want to move this market as quickly as it ithas.

is that less of a concern with the faa and other regulators >> absolutely. the faa and billy's team are leaning in and committing a ton of resources to the important new space. sustainability is at the forefront of the global aviation conversation international regulators are leaning in we had great conversations with the caa and asa and with the jcab >> all around the world? >> everybody has this front and center because of the sustainability >> i get this question when i talk about ev itol. is it the trip of 50 to 60 miles or the mileage that alleviates congestion where do you consider the sweet spot >> both of those are amazing

>> i knew you would say both is one developing faster than the other? >> it is about infrastructure and finding routes with s spectacular infrastructure if there is something today is to engage with infrastructure developers because the markets that will develop first are those with the best infrastructure you have existing markets with amazing infrastructure u.s. is blessed with more than 5,000 small airports you have places like south korea and japan and brazil with existing helipads and new york with helicopter infrastructure we will bring the quiet aircraft to that existing infrastructure to have higher volumes without people knowing we're flying. >> it is tough to ramp up

operations, but especially in the transportation to develop a new vehicle for a new market are you comfortable with what you are seeing with the supply chain as you put this together with manufacturing facilities in northern california? >> absolutely. toyota has been working shoulder to shoulder with us. they have one of the best supply chain teams in the world they have been training our team that has enabled us to front load and order in advance the components for more than a year of forward production. in addition, we are a innovative company and we make many of our systems. this has been hugely valuable because it means with we haven't slowed down with the supply chain. >> you are still on service? >> we are looking forward to bringing service to the customers. >> 2024 or pushed back to 2025

>> whee will be in operations in 2024 >> thank you joeben the boeing and airbus of the world dominate the farnborough back to you. also in the uk, the five candidates vying to replace boris johnson as prime minister have gone head-to-head with the debates. with tax proposals and cost of living dominating. the frontrunner defended his record on taxes which were raised to highs to payoff pandemic relief spending the conservatives must stick to fiscal policy strictly. >> this tax and that tax and other tax. it will be okay.

you know what? it won't there is a cost to these things. cost of higher flaginflation an eroded this something for nothing is not conservative it is socialism. the foreign secretary attacked the bank of england for surging inflation. if elected, she would revisit the mandate and hold it to scrutiny. >> i support the bank of england independence i think we need to look at the best practice around the world the country who has been most successful at controlling inflation. >> very interesting from truss going after the bank of england. politicians everywhere are under pressure because of mounting inflation rates and clearly so are central banks. to sort of go after them and say they are not doing their job properly raises a question about overall central bank

independence which has been a key pillar of the bank of england over the last 20 years and will continue to be so with the ability to control and manage inflation the broader discussion is that of tax cuts and inflation. truss has one of the biggest fiscal plans the note by citi saying her fiscal plans alone amount to 1.2% of gdp. if you go down the tax cut, you have to counter balance it you have the loose fiscal policy with tighter policy mix and hope it is not inflationary >> you have to wonder about the independence moving forward. part of why you highlighted this note this morning. why citi said truss' platform poses the biggest risk joumanna, we were chatting

yesterday trying to read into what we read from the candidates one thing that was interesting is given the opportunity to ask a question, the majority asks sunak a question that highlights his frontrunner status and throughout debate over the weekend, he laid out a lot of fact heavy plans. of course, coming from the position of chancellor he has special insight there that is a feature of the debates. >> the thing about the conservative party is the party of fiscal prudence that is the line that sunak said in the middle of the debate. if you look back at the tax policies over the last few years, the reason the tax burden has gone up is threefold partially to pay back pandemic debt and partially in fiscal prudence they need to show the budget deficit is heading toward zero you have to balance the budget the third is to partially fund

spending on the social security side of things which is a big focus and big central point in all of these debates and frontrunner discussions. from his perspective, tax hikes were actually something that he genuinely believed in. you could also say with the economy strong for the time being and labor market with the unemployment rate at a 50-year low, it is tricky to say that the higher tax rate has actually caused this economy to go into recession. there are other things at play. >> many factors at play. the overarching question here layered on top of the debates and question of who will actually lead the tory party forward. will this player have a mandate to lead or will we see a genera election will we see that for the public to voice support and should that

become a real possibility, which candidate is best placed to win an election on a general scale >> one of the last questions is whether or not any of them would held toward a snap election. they all said no that is one risk less for investors. anything can happen. let's look at how sterling is faring on the back of the debates. to be honest, it is stable since boris johnson submitted his resig resignation. we have the pound at 1.19. a big issue is the dollar side it continues to go strength for strength this is the picture for sterling today. yields we have the 10-year treasury trading at 2.1 the fiscal outlook is important for the uk as well as the bank of england another very big week for european yields. 10-year bund at 1.17%.

big upward move in yields last week with the italian political picture coming into focus again. to that effect, union leaders and employers and politicians have all called on italian prime minister mario draghi to rethink his position to resign this after the president rejected his resignation last week draghi is expected to address parliament on wednesday. a lot of questions, julianna, if he will decide to actually stay on as prime minister or submit resignation without the support of five-star movement. >> wednesday and thursday. ecb has a tall task this week with uncertainty around the political situation and the gas pipeline from russia. let's look at u.s. future as we take the final break of the program. all three point to a positive start. we'll be right back.

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bank earnings are center

stage today with bank of america and goldman sachs due to report before the bell. the market is holding its breath to see if the bank can hold on to momentum. bank of america has an expectation in revenue, but decline in evs we have john with us now great to have you with us. we have a taste into what we can expect from the banks this week with what we heard last week it was a mixed bag how do you see he that >> the banks were on the softer side we were cautious and we had on friday citi and wells fargo with positive results of the back drop of those reporting. >> we are now heading for a higher interest rate environment for the first time in a number

of years given the multitude of factors playing into the banking sector right now, to what extent do you expect the u.s. banks to benefit from higher interest rates >> certainly we have seen net interest income increase by all of the banks reported. wells fargo saying net interest income up 20% this year from mid teens. jpmorgan chase increasing by a couple of billion. that is 4% on the revenue side, it is quite positive in the near term, the danger and concern before we came into the result the fed raise rates too high and put the u.s. in recession. that would be negative >> to follow-up on that, i wasn't going ask about net

interest margin, but the shape of the yield curve and how flat/inverted it is. is that a headwind for banks >> it is a watch of the potential recession coming up. banks are cautious and most increased provisions whereas last year, released reserves on the other hand, a lot of them are correlated to raising interest rates the more the fed raises rates, the more positive it is for income that is at the moment which is offsetting negative as we see with the fed being aggressive with the 75 basis point hikes. potentially talking about 100 basis point hikes at the next meeting. >> the issue is the weakness in the investment bank with jpmorgan chase and morgan

stanley as well. what does the outlook look like for the rest of the year >> they have not looked great. they had a strong 2021 coming off the pandemic a lot of companies refinanced. we went into a lot of advisory people are looking to change direction for the business and make sure they have enough technology you have a strong 2021 we have a more cautious environment now. banks are saying the pipelines and backlogs are still good on the advisory side. the deals are not getting done ceos are more cautious you see that in the surveys. you have advisory down 50% or investment banking down 50% year on year. that is weak for q3 and likely for q4 >> john, what about wealth management and as individuals

deal with the impact of higher inflation? >> you have a couple of divurging factors. on the negative side, revenues correlate to markets and the market has been down 20% in the first half of the year that will feed through to lower revenues in the second half of the year that's somewhat negative the other aspect which hurts a little bit is that you have a lot of deposits people have kept they will likely move that off to higher yielding deposits or money market funds that creating a hold for the wealth managers. in the longer term, they will be fine the net asset held up better than people expecting. >> john, just to round things

up what was the overall sentiment on the earnings calls especially with the outlook for the rest of the year that tends to be a big driver of bank activity. >> the overall number was broadly positive investors are more negative coming into the results. banks were down more than the market than the first half are the year people are concerned about recession. it came through strongly with results. you had guidance increased that tends to be positive. the banks are clear there is no recession in sight as far as they see in the data they say they could be recession in 2023. you have tight employment and tight employment level at 3.6% and you have delinquency rates below pre-pandemic deposit rates above pre-pandemic you put that together and the bank is feeling comfortable.

>> john, thank you for joining us partner of u.s. financials atlantic equities. for more on the quarterly results, head online for the cnbc pro earnings playbook let's get a check of u.s. futures. now about 300 points higher for the dow jones industrial average. nasdaq is looking to open 160 points higher. s&p is looking to open 44 points higher corporate earnings in focus. the fed entering the blackout period we will get key data this week global/pmi on friday the big day on thursday for europe that is for the show i'm julianna tatelbaum >> i'm joumaa beete.nnrcch "worldwide exchange" is coming up next. wh e starte health products online our shipping process was painfully slow. then we found shipstation. now we're shipping out orders 5 times faster

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it is 5:00 a.m. at cnbc global headquarters. here is the top five at 5:00 stocks looking to extend friday gains after doing something for the first time in a month. stock futures are higher this morning. easing off the accelerator a bit. new signals the fed may hold off on the 1 percentage point interest rate hike at next m meeting this month what changed elon musk firing back pushing back on the request for a speedy trial plus, bi