to keep the legacy true. if i don't make it right now, my girls will grow up and their dad's art will go by the wayside and what could have been the dream that he had will never and what could have been the dream that he had will never happen. good morning. these are your headlines, top 600 as the company is aborting out. u.s. affairs sinking after the german government taking a stake in the regulations with

the gap forced target. first quarterly net profits in three years. new covid variants later this year and they cannot get any further guidance. the wall health organization formally declares monkeypox a global pandemic. we will speak to the senior emergency officer doctor catherine small word coming up. good morning and welcome to very busy show. let's bring you some numbers coming out of germany. it has come in much lower than expectations at 88.6 for the month of july. forecast at 90.5. current conditions coming in at 99 or other 97 points seven

versus the june number of 99 point for. so company evaluations have actually dropped from june as well. going to 97.7. the expectations are high as this gives you a strong sign of what companies are thinking about going into the second half of the year. that has also dropped with the expectations coming in at 80.3 for july versus the consensus forecast at any .3 and of major decline from where we were back in june. the june number was 85.5. those are the expectations we have a mess from where the numbers were in june. this does come on with the same numbers out of germany. indicating a broad base close down in manufacturing and services.

what is interesting about this is there is no manufacturing that has been on the decline because of the august issues and logistics. but also on the services side are beginning to see quite the decline across these countries as well as the cost of living and inflation factored in for those purchasing. >> this is an important component. also in the u.s. where we saw a retraced yield lower in both locations given that we had growth concerns returned to the forefront in particular we found major disappointment stateside as well. feels as if the market narrative has shifted to the impact they have on monetary policies. germany and italy over the past

week are both in the center of this because they were dependent on the russian gas. there are a lot of questions on where we go from here it is contingent on what we are looking at. partial good news on thursday and friday because we saw the pipeline reopened after that incidents coming in at 40% which is kind of what the market was looking at. if there is any further motion on that front there is relief coming in toward the end of the week. that being said businesses clearly are looking ahead at the current situation and saying things are not good and the expectation is that it will not look much better in the second half of the year either. with that we are happy to bring in this report. good morning. talk us through these numbers.

we were just hashing out how dire this is looking for the german economy. but it seems that they are disappointed in the current situation but also nervous about what is to come ahead as well? >> i would even say this is a primary concern about what is coming so we see expectations really falling significantly. and this is across the board in all sectors of the economy that there saying things are getting difficult. particularly energy crisis across the gap rationing risks but also a mere increase in prices with the rising costs coming down. is that your expectation for a dip in the economy?

it cannot be excluded given the information coming in now. currently we expect something like stagnation but there is a recessional costs and a lot depends on what happens in the area of gas. there is a significant risk of a recession coming up. >> you mentioned gas rationing playing a huge part with concerns for the future. we know that they've already brought support from the government. which sectors are most risk if we see gas rationing and can we see more companies looking to the german government to support them in the coming months? >> in particular with the german economy the trouble is there

may be some effective small arm key parts that will be needed later in the value change. so the expectation is that the gas rationing could lead to disruptions across the chain then affecting other sectors like the ministry as well. >> do you see more bailouts coming? >> probably yes. this depends on the delivery but there could be more bailouts coming they are more costly in the government is also taking measures to pass on the costs to consumer households. but that is politically difficult with energy prices that are rising already burdening households already including those that are very controversial. what is being introduced now is

the idea of a levy on all households with the purchase gap. so this money would be used to finance that bailout. >> it's interesting that you bring up that committee with the post unit bailout. that as of october first of this year companies will be able to start passing on the higher inflation cost on to consumers. this has not factored in the possibility of there being significant higher prices from october on word. how has that become likely to affect the coming months? >> i think that would be a matter of how this is organized. i think this has been discovered for some time now. it's even a contract that can currently be changed with long

term contracts. we currently do not have so many problems on the demand side. this probably would not have a large impact on the economy because there is too much demand anyway and prices are rising. for them indeed it's not just the rationing rate. there are rising costs that are making things difficult. we asked hether or not they are able to pass on those price increases and not all companies are able to do so. it squeezes those margins and if more is passed on to companies it will increase costs for some of these out of the market.

the other big driver is surely the central bank with the prospect of higher interest rates. how are businesses feeling about this new higher interest rate environment that is said to come their way? it came too late. generally german businesses are already feeling the impact of higher market interest rates. they are only confirming this. german companies to feel in particular in construction in this level. were seeing projects being canceled because of financing costs that have tripled from around 1% or more to 3%. and that drives a lot of households out of the market. and we see that in construction. so it is mostly construction is affected but it will have an effect on other businesses as well. >> on the public side of things

has this impacted german companies? >> it certainly has. what we are hearing is that the business especially in the u.s. is doing very well. the u.s. is the primary export market at the moment. in that market is working well. there's also rising concerns about the recession in the west. because the monetary policies have to put the brakes on the economy. so even there i would say that that's what were looking at. >> we did have those disappointing numbers both on the current index out of those german companies. this morning we're treating marginally lower at 16 base points. what is important is to take stock of where we ended last week. which was around a narrative that growth concerns in a week

environment could potentially lead to an easier path for monetary policies. there were some very disappointing reports on both sides of the atlantic with some concerning claims data putting it all together the end of last week we saw a massive drop in yields moving lower but at the same time equity has moved higher. that is very ended last week. now turning to the federal reserve this week it is a major week for corporate earnings. we will have a number of tech giants reporting from microsoft to apple and even to amazon. we are also going to be seeing some key data for the arizona economies and fresh inflation data at a europe. another major week for markets starting out at 17 base points lower. from a region perspective you have a mixed picture i come back

trending about a quarter of a percent higher. four times a percent lower and down about 12 paces. mixed picture but is under a little bit of ceiling pressure. banks are outperforming this morning up more than 1%. on the downside were seeing a pullback of oil and gas down one .2%. big news out of the auto sector this morning. volts wagon has ousted their cdot ceo. they voted unanimously to get rid of him late on friday falling for years at the helm. we're joined now. what are these details? what exactly happened here? >> this was not something that was not expected. they have seen a lot of

discussions inside the economy. he fell short of the report they've always backed him but in the end you can see these problems which they did not get under control nobody actually knows what triggered them to vote him out before the summer break. it's days before they present their second quarter results. things have been in the making. they are taking on a new job there bringing the company public in the making of that fourth quarter taking on the job giving away some of the

operational facilities. they have the current cfo who is also taking on that role. the goal is quite clear to get the company back into peaceful consideration between the labor and the capital side. they are very influential they did not get this relation right. not only once but on a couple of occasions by presenting loads of jobs before actually talking to them and et cetera. that should be the history now pledging to bring things back with unity. the way forward i think will stay like this. he completely agrees that electrifying the fleet and the company is the only way forward.

that was his mission to change that conglomerate into an electrified car producer. but of course this issue is crucial to whether or not this one comes forward. electric vehicle needs to have very good software and they are planning on producing that on their own. he said to stick to that plan but there needs to be much more in order to be competitive in big markets like china and north america. thank you for bringing us this story. sticking with germany they agreed to bail them out with a ,■5 billion rescue package taking a 30% take in the utility giants and 56% stake. we share more on the gas situation in europe speaking to

the vp of global gas and lng research coming up at 10:30. to common themes over the last few shows. first of all is airlines and the inflation situation. on that note to the german union is calling for the ground staff to walk out this wednesday. they have demanded a 9.5% pay rise or ,■50 more for 20,000 workers including in those different segments. so that is an interesting one. more pressure for industrial action which is why the airline situation in europe has been so turbulent as of late. ryan ayres has posted his first report falling short of expectations.

they posted a net profit of 174 million in this quarter but declined to provide guidance for the upcoming financial year saying they still face too many unknowns and what they describe as a strong but planned out recovery. the sunset airport tell us about these earnings. because i thought it was interesting that they were giving any guidance about the months ahead? >> it has gotten a bit better now it was raining earlier and i think that indicates the downpour that has been here this morning. the upcoming figure as you know at 174 million euros. and the first profit in three years. things are looking better but it is still below the figure

that they had that was estimated for this number. and that is because of the summer of strife. particularly in the months of may and june you seen quite a few happen particularly in france and belgium. and now even in spain we have around nine cities in and around spain that are expected to be on strike levels. as well as valencia and barcelona and madrid just to give a few names. workers say we took a 20% pay cut in the month where we were dealing with that covid 19 impacted proceedings but things have now gone back to normal according to the airline activity around 115% of 2019 activity. so things are somewhat back to normal. surely salaries should go back to normality.

plus the fact that michael o'leary has said that we face a time where covid-19 can still rear its head and you can still see another variance that could impact things. and that will impact the price of fuel for airlines plus other environmental costs as well impacting the city moving forward. in order to remain competitive cost is going to go up for airlines with an airline average of ,40 flight. the costs are bound to be heavy. now sitting around ,12 and 88 as well.

the situation is not necessarily beneficial for the business. where do they go from here? the structure will have to change with higher costs being a thing but will we get higher revenues? >> so i was looking for some last-minute flights from the governors. it is impossible to find anything cheaper. flights are so expensive right now. >> raising flights some of the good dream scenario. more corporate news, 2 1/2% growth in the first quarter with service revenue and they are on track for the full year in line with guidance despite the economic challenges. a target of four-year between 15 and 15 1/2 billion euros. and phillips has reported a 7% fall worst than what was expected.

the spikes include locks down in china with production in several factories extended. they cut estimates between one and 3%. you tell us us is in the british tier 1 w. over potential oil share measures. this is the second biggest shareholder with the 20% take allowing a strengthened physician for low orbit satellites completing with star link and project waiver. if you haven't checked out his twitter we have been very entertained. you can also check out us on twitter if you have any travel tips we are in the market. we want to hear from you. coming of the who is declaring it a public health

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welcome back. the world health organization has now activated the highest alert level for the monkeypox outbreak. declaring it a public health emergency of international concern. they said they are increasingly concerned by rising infection numbers and the risk of international spread. the european commission has approved a vaccine following a recommendation from the european companies. they say this is the only monkeypox a vaccine that is approved by the u.s. and canada and it is already used to treat smallpox. welcome catherine smallwood here to the program. senior emergency health operator. thank you for spinning this session with us. how did you decide to declare monkeypox a global health emergency?

>> it was the decision of the director general. he takes into account several different factors including information coming from other countries directly and other conditions under international health regulations. the advice coming from the emergency committee which was one that was brought together with the express purpose to meet in july but also input from other academic groups and scientific organizations. together with the who based on all of that they took the decision on saturday to issue the highest level of alert possible for the international health regulations. >> what are the implications of doing it this designation? how will the response change as a result? >> that is a great question. it will change the response in

several ways. first of all it has already sharpen the focus. there's a lot of work that has already been done. of course we have other sitting idly while it's been spreading. but it will help to shorten that. secondly it will really help globalize additional resources including medical counsel and coordination with the countermeasures coming effectively at a global level making sure that they are coming through firmly. and finally for those member states the resort of observing this outbreak this is an extremely strong signal. that all countries around the world need to be seeing this urgently and to expect to prepare for or respond to cases. >> i have a question on the criteria for naming a virus or a sickness as a global health emergency.

the last time they did this was for covid-19. the ramifications were very clear my understanding is that monkeypox is quite different? particular to a certain group of people and not as severe as covid-19 was in its initial stages? what is the criteria to see that this is deemed a global health emergency? >> in terms of the severity of the disease it does not seem to be on par with covid-19. but that is not the only criteria here fundamentally yes this is something that is spreading very quickly around the world. that is one thing that really has to be looked at. in countries that have not seen this virus before their 75

countries approximately in two months that have recently reported cases. and many of those are in european regions about 36 countries in europe that have never seen monkeypox cases before at a scale like is being seen now. and we are seeing a progression of emerging virus and a spread in a particular population. at the moment cases continue to be reported among men who have sex with men. for the most part. but we should not expect that to remain such. it may be that this particular group and it starts with one group and then it can spread. this may be the canary in the minds that is just alerting a new disease threat that could spread to other groups and if it spreads to other groups particularly those who are vulnerable to severe monkeypox which we know there are some who are privy to more severe

illness we can see a big impact. >> when it was declared a worldwide health emergency the other issue is that there are vaccines available to deal with monkeypox. how efficient would you say they are and what they need modifications? >> the actual issue is that we don't have the full information on how effective or efficacious these vaccines are against monks monkeypox. will we do have available to us that was developed for smallpox we assume that they are effective against monkeypox because we know so from the animal models. and that's why we are using them and why they have listed some of those vaccines is usable for monkeypox. but we need more information.

and this is another reason for the call of the global emergency and developing the evidence and data that we need to be able to be confidence that the countermeasures are acceptable. scaled up and that we have the knowledge that we need to be confidence on this level. >> doctor smallwood i would like to round out this information were seen the cases rise across many developed countries right now. the u.s. has seen a surge and many parts of europe have also seen a surge. what is the winter likely to look like from a covid-19 perspective? >> that's a great question. we've been talking a lot about a resurgence at the moment across europe and other parts of the world. we are confident that there will be another resurgence and there will be a period where people go back to school in the cold weather will bring more

here. there was an autumn and winter strategy for covid-19 just issued last week. not focusing on the return to the cost down but looking at what needs to be in place to avoid it and how we can really prepare not just for covid-19 but also potentially the return of the seasonal flu and other respiratory diseases because what we have is a situation where a lot of countries have lifted pretty much all of their social measures that were in place. >> thank you for your time this morning. investors give little wrist bite as it continues to follow the german government bailout.d

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welcome back.

we have your headlines now. shares toward the bottom of the stocks. herbert giese is pushed out. all of her bloom is set to take over. unit for shares continue to sink even after they agreed to take a 30% stake in the utility. they tell cnbc that more companies could lose their support. there could be more bailouts coming. they are costly and the government is also taking measures to pass on the cost to consumer households. >> expectations as they post their first net profit in three years. but they warn that more variance could be coming later this year. storm with the world health organization formally declares monkeypox a global health issue.

and there is now a call to action. let's talk about the latest in the gas regulations. they say the country is now back on track to reach the gas storage target by the beginning of september. russia resumes more going with the utility unit for withdrawing from the storage facilities. shares fell after the german government agreed to bail out the company with a 15 billion euro package. they will take a 30% stake in the giants with a 56% share. so help us to understand why shares are down 10% this morning. how does this compare to

expectations? >> what was widely expected was business getting a capital increase. but the amount was not clear and i think people are speculating what convertible bonds may eventually mean. because they can lose those shares even further at some point in time with the convertible bond. there are reports that the german government could increase their stake to up to 50%. there is a load of insurgency behind the share prices and the quality of that shareprice from this level. as it stands now the government as you are saying will take on a minority block at 30% plus the kdfw state on bank with the issue of of 29 billion euro

with that hybrid capital instrument which will then be installed in the company when it is ready and then the lows would then be repaid. there are considerations that completely depend on whether or not russia keeps that spending gap. at the moment they will stuff this altogether but this situation could deteriorate further because there is a mismatch between purchasing gas on the stock market and the very high prices and delivering to clients because of contractual obligations that will stay in place and there are long-term contracts that they are not getting out of one month from another in one year to another. and that is what they are saying. they are trying to take the business model but that will take time. >> a complicated path forward. thank you for breaking this

down for us. continuing this discussion mackenzie joins us now. thank you for being with us. what is your expectation in the coming months? >> that is a million-dollar question. they've gone back to 40% of the stream. prices of only come down slightly compared to what they've seen just a few weeks ago. and this is how much the market is concerned. and how it still maintains a high risk premium on this level it's hard to think that they would just let go and get that european markets to rebalance and leverage storage for the

winter without getting anything else here. >> massimo in terms of the russian side of things may be an impossible question but from the current perspective they can't go without oil experts but gas makes up 2% of the gdp. what is to stop him from cutting off the tap from here and what would the cost be to do that? it feels as though this is a serious risk. russia has been very successful in reducing the flow but at the very same time their process is very high making about ,50

billion so yes of course the damage to the european economy is noted here. if russia was going to stop the flows altogether there is certainly demand getting it to europe you don't want this to be part of the economy. and there's definitely a fraction here. it's the best of two worlds putting the pressure in europe and keeping it to be motivated. you can continue to reduce this level so that will be the most

likely option to look forward to. >> let's go back to the european perspective. there is a gas force target of 80% how likely is it that they get that target assuming it stays where it is at about 40%? if it remains where it is now europe can get to that 80% target. and arguably given how much they regulate and how high those prices are, you can get that storage for these labels is absolutely achievable. and if they get the storage and

treatment for these levels we think the ear will be in a good position seeing as deep level of prices to some extent along the back. but it stays extremely high. it's a sign of how uncertain this situation can be so we've been focusing a lot on the upcoming winter ahead for europe that is the focus of many policy members. how viable is it that this strategy is to divert this away and it will be able to sustain this level in the future? >> inevitably over the next 2

to 4 years coming toward the end of 2025 it's hard to take the change of market. because they are developing additional supplies and even managing demand will take time. over the next 3 to 4 years we think the market is inevitable to remain ties and competing for what it will be until then with additional levels. but then the investment was certain energies are here merging with the other parts and it certainly has the potential to reverse and rebalance this market comprising that level of policies at the

moment. functioning away continuing a process of the next 3 to 4 years. >> thank you for coming on the show today. vp of global gas and lng research at mckinsey. the ukraine is continuing efforts to resume exports from odessa and other black seaports despite a missile attack that threatened to derail the deal. they said it hit a ukrainian worship with high precision weapons. hours after a deal was signed to help ease global food shortages. vladimir zelenski says this is another example of why russia cannot be trusted.

>> today's attack on our port is a cynical one. there also strikes to the political position of russia itself. some kind of agreement is needed to see what is happening. they've destroyed the very possibilities of such statements. disappointing earnings. could this be the canaryn ithe coal mines for the rest of the tech sector? the busiest reporting week of the season is coming up.

and before amazon reports on thursday. the federal reserve will deliver the rate decision with markets widely pricing in with a hike as inflation rockets overnight. they will be focusing on the september meeting with recessions here growing. forecasts arriving as you .3%.

the quick look at u.s. futures and where we are poised to open right now this is such a huge week in terms of what we can expect to learn on both corporate and macro fronts. it is not clear with the bigger driver of the markets will be the policies or tech earnings. and i said in particular because at the end of last week it felt like it was all about the macro story with gross concerns coming in and a re- price level coming from here. >> this is probably the last 75 bit chunk. maybe we can get a few more with another 50 after that. with the expectation is we are nearing that neutral rate in the in point where they are going to get to. i think there will be emphasis on earnings particularly out of those big names.

there was a report this morning with 25% of the company's reportedly getting another 50% this week. 60% have decent sale experts and top burning estimates. it's quite interesting to see that despite the environment you had q1 numbers dipping into negative territory this year. two numbers this week despite this level there still beating that evidence. >> this is something we talked about when you return to the studio. earnings expectations were pretty strong when we see those massive downgrades coming through it feels like that is not happening right now but then you look at the data which you can argue is forward looking. particularly that services data that we had last week. is this just a sequencing issue? but if the environment deteriorates from here others earning downgrades coming through later?

but the stock market is saying so far for the second half the year has been a public disregard despite what we found out coming up at more than 3% for the week. see you are seeing signs of they are willing to get back involved in this market especially when they are still getting those earnings and sales. where we go from here is another big question in the room. whether that sell off continues or the aversion of the curve continues i daresay that we may be reaching a point where the biggest hike is going to be delivered this week and after that it may look to smooth out. >> your point is actually something that is very representative in the market right now at this narrative. the tax seems to drive this

once again with the policy expectations. we've seen a massive drop in yield what is going to be the bigger driver of these stocks? will it be earnings or will it be that policy? let's take a look at those u.s. futures before we head this off to our colleagues stateside. how they performed over the last 12 months you have futures indicating marginally higher in positive territory at the moment. last week or so u.s. equities ending in positive territory in those gross concerns are back. thank you for joining us for today show.

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it's 5:00 a.m., on wall street, and your top five at five. the busiest week of the season is here. 40% of the dow are set to report their numbers this week. among the earnings on deck, big tech, apple, and amazon. after wild swings from netflix, they are on