the cheat if they had quit early on, but they believed they would never get caught, and the money was just too good. >> as with all criminals, they got greedy. that's where all criminals go wrong. good morning welcome to "street signs." i'm joumanna bercetche these are your headlines european equities start on the front foot with the stoxx 600 with the best monthly performance since november of 2020. hsbc shares jump to the top of stoxx 600 and the lender

raises its return guidance. heineken brews a profit with the dutch beermaker hiking dividends, but warning of an uncertain outlook. >> the kind of pricing we are taking are, you know, incidental we want to be cautious in the near term. demand weakness hits china's manufacturing sector as factory shrinks in july. good morning happy monday to everybody watching the show. we are getting the final pmi numbers for the month of july. we had them at the single country level in the last half hour now the aggregate number at 49.8

versus 49.62 a significant decline from where we were back in june at 52.1 this is at a eurozone level, but on an individual level, declines in each country. germany and france mainly leading the declines in manufacturing. notably to point out we are now below that 50 level which typically indicates contracting territory and one signal for a declining economic activity in the coming months. the pmi manufacturing numbers coming in slightly lower than the flash reads. we are starting off august with a positive tone. all of the indi all of the indices in the green. the bank of england on thursday

hiking which would be the highest in 25 years. germany up .40 fairly focused on the economic data coming in the pmi numbers we spoke about were disappointing a lot of that is depending on what happens with the european gas imports coming from russia cac up .30%. eye t italian index up as well as for the u.s. markets. we have all of the three majors pointing to a negative open. this coming off after strong month of july with s&p up 7 percentage points. nasdaq up 12 percentage points

we had a lot to digest which is why we are moving negatively. it is the first of the month and we go and take a look back at the indices in the prior month. let's get to it. stoxx 600 in europe. for the month of july up 7.6%. really strong rally as far as july is concerned. the first half of the year was negative for the most part a lot of concerns on recession fears and monetary tightening. that changed in july we did see a cyclical bounce this is individual index performance. to ftse 100 up in july. very strong month for the french index. cac up 9percentage points. the ftse 100 was the best in

europe it is commodities focused. it did well in the first half of the year ftse 100 out performed that turned in july and became a relative under performer this is the picture for the indices in the month of july in the u.s. the dow up 5.6%. nasdaq, that tech heavy index, up 11% the tech stocks hit in the first half of the year with growth concerns and higher interest rates which when you bet are growth, you are discounting higher interest rate to hit the tech stocks. july was a good recovery month let's switch over with the greenback. the theme of the year has been one of dollar strength

the dollar was interesting up until the middle of the month or the first ten trading days of the month, we continued with the upward trend all of a sudden, things declined for the month as a whole, the dollar was up 1 percentage point. the last few weeks, we started softer some people are saying we may have reached peek u.s. dollar. we will get into the show with the next guest coming up as for the dollar, it was an exciting month we almost broke through parity we rebounded back up to 1.02 for the whole for the month, euro down 2.5 percentage points. we got close mark.

of course, there is more bullishness priced in. one reason the euro bounced. i want to take a look at fixed income yields. u.s. treasuries. you can see that right at the beginning of the month, we got as high as 3.5 we dropped quite a lot since then down to 2.7. that does seem a little 40 basis points or so this was the best month for the u.s. treasury since march of 2020 quite a stellar performance for u.s. fixed income. in the month where the fed hiked 75 basis points. that tells you about interest rate expectation and moving to the italian spread

and ten-year space we saw a lot of volatility italian politics coming to the floor with the resignation with prime minister mario draghi and new elections on september 25th. this is playing into the spread with the two it is not obvious here essentially we saw a big wi widening for the month that's what is going on there in fixed income i want to bring in the first guess with ing great to have you with us. so much to talk about with you i want to start off with the dollar that seems to be the focus of the first half of the year which the dollar was on a tear things are beginning to change we have seen a softening of the

dollar compared to the yen where do you see the greenback going from here? >> i think high probability we are close to the peak in the dollar this neotion has become more dev relevant in the market i think from now on, we need to differentiate how currencies will perform against the dollar. in a way, we are expecting the dollar to reach its peak and start depreciating a bit we don't expect it to be a fast depreciation we don't expect it to be across the board. there will be some currencies that will be able to out perform the dollar for example, as you were mentioning which is looking at lower yields globally and that is a bullish factor for the yen,

we are looking at all currencies the canadian dollar and from the rebound and you look at euro currency and the swedish corona. >> i will get into more detail i want to go back to dollar/yen. we know it was a huge risk off environment. that changed in july as i have been recapping with individual equity performance where do you see the dollar/yen go from here will it break to the down side >> possibly it will break below 1.30 we are expecting 1.30 to be tested within the next couple weeks. the reason for that is relating to a call yield decline. rate strategy team is bullish on

bonds at the moment. we expect u.s. yields to continue dropping and that is a pos positive for the yen we expect this to continue supporting the yen for now we think levels between 125 and 130 could be the range heading into september >> i want to turn to europe now. we had the eurozone gdp numbers come out on friday they came out better than people feared particularly led by france, italy and spain with the tourism effect not the case for germany are we in a situation where things europe are not as bad as people had been worrying about >> the problem with the eurozone is the big tail risk coming from the gas supply story and i think in a way if you look at e

euro/ euro/dollar, it is trading below value. and looking at the gas shutdown from russia which is a tangible ri ri risk even if it was supportive of the sentiment, it is not enough to mitigate the concerns of the markets which are reasonable and that boils down to the the eu and russia supply. >> euro has been supported around par we briefly touched it. we rebounded straightaway. there weas some really strong support. what is going on there do you expect us to breakthrough to the down side as well >> yeah. it was probably about party. this is true if you look at the one month performance against the dollar,

the euro is the only currency that can climb and appreciate against the dollar i think you can say we're not at levels -- we don't have enough down side risk to the eurozone trading below parity at the moment although the risk to the sound side which is tangible at the same time, we think markets are still reluctant to jump back into long euro dollar positions especially because of those down side risks from external factors in geopolitics. >> when i looked at the markets in july, we looked at the difference in the spread with the bond market. to what extent do you think political risk fragmentation risk will be a key deciding

factor for the euro goes here versus traditional monetary policy and interest rate hikes >> i think it will become more relevant especially in september. the 25th of september with the election in italy. i think markets are holding a bit of an optimistic approach. they have comforted by news of the french and calls in italy that they will respect eu budget rules. at the same time, we will see how they react with the elections. that could be toward the end of september which could spread and widening which could put a lid on the euro. >> and we have a big week coming up in the uk bank of england may go for the

50 basis point hike. what does that do to the pound ser versus the dollar and euro as well >> i think 50 basis points are now in the price what will matter is how markets see future rate hikes with the bank of england. excluding something from the fed and eu did switching to a meeting by meeting and fully data dependent approach we don't expect too much volatility for the pound we think it will be up to the upcoming data where the pound will go. when it comes to cable, we could see a return to 120 or 121 for now with the dollar regaining momentum the week after. it euro/sterling, 84 is the line

in the coming weeks. >> excellent thank you for those targets. we will watch that closely strategist from ing. and turning to earnings. hsbc lifted the profitability target after the first half earnings beat. the lender returned the rate on target at least from 12% from next year. profit fell in the first half, but still came in better than expected emily filed this report. >> reporter: hsbc filed a profit across the first half. $9.2 billion down 15% on year. for the second quarter, pre-tax profit coming in at $5 billion which is better than expected. revenue in the second quarter up 2% to $12.8 billion. margin of 1.35%.

return on average of 9.8%. the common equity tier 1 is 13.6%. they approved a dividend of 9 cents per share. they expect a payout ratio of 50% for 2023 and 2024. hsbc will resume paying quarterly dividends in 2023 to return to pre-covid levels as soon as possible share buybacks are unlikely in 2022 after anthe $1 billion buyback. hsbc exiting businesses in the west and reallocating that capital to areas of growth in asia and the middle east it is on track to complete the sale of the french retail business next year it is a more international business with strong domestic franchises in hong kong and the

uk they will meet with investors tomorrow with the first meeting in three years since covid the bank defended itself with the calling on the exploration of options like spinning off the asian business to unlike greater shareholder value. that move would make it less effective. since april, the proposal has gained backing from investors. disgruntled after the meeting canceled in 2020 reporting in hong kong, i'm emily tan. >> hsbc is up today. one of the top three stocks in the stoxx 600. heineken with a 23.3% jump in first half profit boosted by growth of beer volume. the dutch brewer maintained

gui guidance speaking to cnbc, the ceo explained why we was cautious on the guidance >> so far consumers are resilient as volumes are testimonial, but the pricing we are taking with orders is unprec unprecedented. we will be cautious in the near term and that is the outlook as we shared it and pearson with profits growing in the first half. the structure is bearing soft savings results. up 6.7% points today the ceo said the company results. >> we are seeing a new normal in terms of life lopg learning. i mentioned assessment to the

qualification business that is certifications that are coming through particularly in the i.t. and tech area that we do on behalf of google and microsoft to name a few. we acquired a company which is a credentialing company. they are acting about 50,000 new certifications a week. that is a scale in terms of the past with higher education was defined by university and college. going forward, we are seeing more and more furthering their education while working. that is a trend that is here to stay. and german chemical cut the forecast for the year amid the surging costs. evita is between 1.7 to 2.2

billion euro that is below analyst ex expec expectation. and coming up on "street signs. china struggles as covid waves continue we'll have more on that in a few moments. we'll be right back.

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welcome back to "street signs. chinese manufacturing output contracts in july as covid lockdowns weighed on demand. a separate survey showed factory slo slowing. we have seen cuts in demand and output from the numbers. let's look at how the picture is for the key minors with the strong association to how chinese economic activity is playing out. the picture is muted today you have a lot of the names like

glencore here you can see a mixed fortune here with infineon down .20% ams is closed with the holiday in switzerland asml is up a bit a mixed bag with the chip makers demand in china is the driver for the auto outlook. the picture is mixed mostly positive for the french names like renault and stellantis our colleague filed this report about the numbers. all right. we will bring that to you in a short while. just to reiterate the numbers from china are having reverb rations. people are beginning to look at growth for the second half of the year particularly as china's

largest economy is still undergoing a covid lockdown. zero policy covid. a marginal reopening, but some of the issues with respect to supply chain and logistics and with overall demand are still beginning to plague the economy. you can see overnight positive reaction in markets. shanghai up 2% shenzhen is up almost 1% the economic picture is south for the second half of the year. speaking of china, house speaker nancy pelosi will visit south korea and japan. there is not ovfficial visit to

ta taiwan any advice it visit would be frowned about to taiwan. >> reporter: xi jinping warned president biden about the u.s. meddling in the territory. with chinese officials communicating, those who play with fire will perrish by it a source close to the speaker, tells nbc news the stop is considered tentative >> i don't talk about my travel because it is a security issue >> reporter: if pelosi visits, she is the first to touch down in taiwan since 1997 when newt gingrich visited beijing flexing its military might with drills in the south

china sea over the weekend the "uss ronald reagan" ready to respond. the u.s. looking to talk about covid and climate change the biden administration has been clear that u.s. policy has not changed. >> the united states strongly opposes any unilateral efforts to change the status quo or undermine stability across the strait. coming up, all the late evi st on the u.s. and ukraine grain deal as the first shipment leaves odesa

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. good morning welcome to "street signs." i'm joumanna bercetche these are the headlines. struggling off the pmi data with factory shrinking in the biggest economies. hsbc shares jumped to the

top of the stoxx 600 as investors dismiss a 15% jump in the first half and raises the guidance. heineken with a 22% rise of net profit with the dutch beermaker hiking the dividend, but warning of the outlook the ceo talks about the inflation strategy. >> the orders are unprecedented. we want to be cautious and v vigilant. and the first shipment from ukraine bound for lebanon under a deal brokered by turkey. getting more final pmi numbers for the month of july. this time for the uk it has come in for 52.1.

that is lower than the fl flash estimate of 52.2 the pmi manufacturing members in the uk showing decline from where we were last month, but not a significant drop from eurozone this is the picture for the pound today. trading at 122 .30% firmer. of course, because there is not much difference, we are not seeing a lot of movement now it does show that the manufacturing sector in the uk held up well versus the eurozone let's talk more about european markets as a hole. ftse 100 up .50% big week with the bank of england meeting on thursday. xetra dax up .30%. we have more results coming

through today. slightly weaker on the dax cac up .40%. strong from the automakers with renault up 2 points today. ftse mib up .90% for the first trading day of august. as for oil, let's look at the oil picture. trading at $96 weaker on the session. brent up 102.70. the theme is one of the china pmi numbers coming through indicating we may be in for a turn in growth and demand of oil in the second half of the year remember, the oil market is a push and pull with what is on the demand side and output side with opec plus meeting this week

that something to watch. starting today, eu member states are beginning voluntary reduction of natural gas demand of 15% the block is beginning the move ahead of winter. some member states will be able to apply for exemption if they are not connected to other country gas networks this is including ireland and malta and cyprus some companies are moving to disht hodifferent hours. some supermarkets will preserve electricity. earlier this month, president macron is looking to help save energy ahead of winter. russia cut off gas supplies to latvia accusing them of

violating supply conditions. the latvian government says this move will have little impact on the country supplies the executive has accused them of not fulfilling the maintenance contract russia cited issues with the turbine. the they have not fixed 55% of the issues raised by engineers. ukrainian president volodymyr zelenskyy has urged all living in the donestk area to evacuate. it has been hit heavily during the invasion of ukraine. many still live in the unoccupied areas with officials warning they face a winter will heat or light if they refused to

leave. and the attack on the port city has killed the owner of the country's grain exporters. one of the wealthy was killed along with his wife. volodymyr zelenskyy said the death marks a major loss for ukraine, but said they will remain a key supplier. >> it took the life of the founder of the agriculture companies and a hero of ukraine. my sincere condolences to the friends and family people like them are guaranteed the world a food source. >> the first shipments from ukraine in months has departed from odesa it was in jeopardy when a

missile hit the city i'm very happy to bring in carlos here. great to have you with us on the show talk us through the significance of the wheat corridor through the port of odesa and what it means for the global wheat supply going forward >> it a gis a great achievement leaving the ukraine border of odesa. ukraine will export 80% of grain and crops through the ports on the black sea. so after discussions for months, now we see the first vessel

leaving. i have to say we might see 16 vessels leaving soon that will be the first phase of the deal it will be difficult to bring new vessels in it will be difficult bringing in commercial vessels we need government support vessels chartering and maybe the u.n. getting grain out of ukraine. just for context, ukraine will export enough grain to feed 400 million people these exports are key. we need to get money to ukrainian farmers. >> back in may, the news journal headlined with the food can

catastrophe. what is your view of the world food shortage right now? >> we have seen record prices. pricing have been coming down from the peak because we have good crops in other places, especially on the wheat side record crop in russia which means more countries are dependent on russian wheat as opposed to ukrainian grain if this export is successful, we need an extension and by going p forward, we see the ukrainian destruction if the war continues. i think 1.7 billion people will have lack of calories from grain spread out from countries. suddenly we are looking at the

poorest countries suffering the most >> what about the yield on the russian side that increased and with sanctions, it difficult for them to find markets to get the grains what is your view on the russian side of the equation >> suddenly, man's say sanctiono russian banks. they are not direct sanctions on russian exports or fertilizer exports. those are being exported it is anyone's guess if it reaches the export given the size of the crop we have to wait and see. normally the peak of exports are over the next three months. >> if we turn this back to market, we look at the indices

it's other driver is food inflation. what is the issue with peak food inflation with the indivisces? >> it is difficult to say. when we look at commodities with the recession fears, we will continue to keep ahead on prices and especially on wheat and beans. we will see grain which will be different grain. wearing going to see prices going back up once this corridor is over. we may see more price increases going forward. i have to say normally this is a delay with the price rise of

commodity. it is three months to six months or nine months the supermarket shelves will see further increases. the increases we have seen in commodities has not been fully passed on to consumers >> one other angle a price of protectionism with countries banning exports of wheat and grain to helpful fill the demand of their council popupown population fooz is this a new situation? >> it is new we saw it with the vaccine supply chain these are limited and governments do one way or the other not elegantly. they try to secure their own supply in the fight against food

inflation or banning exports with beef in argentina we are looking at the largest export of palm oil this creates a lot of trouble across the supply chain. is it is not good for the country everybody is looking for supplies we saw that in many countries. we will continue to see that for as long as food security is at stake. >> carlos, thank you very much for joining us today and discussing this important topic for the world. 1.6 billion people at risk of hunger because of a lack of wheat and grain. carlos, head of the agriculture research at rabobank.

moving on. the emerging markets fears of global recession and rising are rates have hit emerging markets hard. oversea investors withdrawn for five straight months the ief says the worst of the selloff may be behind us really interesting about the data from the aef. we are getting strong outflowing this is an impact on the borrowing issues more than one-third of emerging market borrowers, sovereign countries and bonds are trading at 10 percentage points. high interest rates especially when it comes to the public finance needs. for many countries, they have to resort to imf bailout or world

bank restructuring one of the lesser talked about things coming out of the year. of course, for many, the interest rates are very privative. also coming up on "street signs. more earnings out as investors worry about inflation. we will have more in a few moments.

welcome back to the show u.s. set for another big earnings week with more than 20% of s&p companies reporting pinterest and uber among those reporting this week. last week, tech stocks under performing meta posted the first ever revenue decline. alphabet missed revenue and profit investments

walmart cut guidance for the year as inflation pressure hit customers. despite challenges, u.s. earnings so far are still up over 7% on this time last year and 5% above expectations with revenue boosted 12% year on year and just 1% above forecast you have all of the information. let's see what this means for trading and investing. dan veru here with capital management thank you for coming on the show i think back in june, you spoke to a colleague on the show, and told them you expect the market to be set up for a bear market rally into the earnings season because expectations were so low going into the earnings season here we are at the market which rallied well in july led by the tech sector. is it your view this is a bear market rally or do you think it has legs

>> it is a bear market rally bear market rallies can be powerful as we witness riing ri now. it is interesting to note that half of the companies reported so far have actually beat theesmentthe estimates out there. there wasn't a day that did not go by that we are not observing target price cuts and revenue and earnings cuts. you got expectations very low. valuations are reasonable. that sets up the perfect ingredients for the rally we are seeing right now it may not be over yet >> i was just talking about the retailers like walmart which was one that sent the markets into a tail spin with the outlook for the year the second profit guidance marked lower in the space of ten weeks. what is your read across from

some of the guidance that we're getting from the key companies that reported last week? >> retailers have so many things thrown at them right now there's been a shift away from consuming goods to services. having right merchandise in the stores has been very problematic. i think that what will bode well for many of the retailers is the back to school season which early indications are showing that is running ahead of expectation. >> let me ask you a macro question we have the gdp numbers on friday showing that we were in a second negative consecutive quarter of gdp technical recession, but not formal recession depend wing wh you ask. how will that play out for the

stock market for the year? >> as we get to the fall, the higher interest rates and high inflation is probably going to create greater uncertainty for third quarter earnings i was never really concerned with the second quarter because interest rates rose during the course of the quarter. inflationary pressuring pricing. the full effect will be felt in the third quarter. i was somewhat heartened about the guidance companies gave. we will see. it is early now. we will see what happens my sense is the fall is always a time for volatility. we will see a rise in the rally. a setback or give up all or some of the recent gains. that sets the stage well for what i believe will be a fourth

quarter rally into the new year. >> one other thing i was looking at with earnings season and i listened to the banks calls. when it comes to the corporate sector, things are still looking okay corporate defaults are still at all-time lows and not seeing a pick up in terms of delinquencies and et set cetera how does that play into the view that third quarter we see a dip and then fourth with a bounce back >> we monitor high yield bonds closely. they were elevated they are really not flashing signs of risk of default i think many corporations borrowed heavily when interest rates were quite, quite low. that puts them in a position as the publicly traded bonds weakened we are seeing many companies

going into the market and repurchasing the debt at a deep discount with the rising interest rate environment. i think corporate balance sheets are in sound shape i don't see much signs of stress that there's any big wave of default coming that is a positive and probably puts some sort of bottom as equities pause based off the broader economic conditions and outlook for earnings. >> dan, i have been a minute left let me ask you what sectors you like buying here in this environment. >> i think it is time to add to energy holdings. energy has taken a pause and pull back. i feel like the dollar has likely peaked in the near term that probably bodes well for the materials space and many of the commodity companies.

we think industrial stocks look good as well valuations are more attractive in that space. the outlook looks quite good i also focused on health care. the defensive characteristics around the demand side there >> excellent dan, thank you so much for joining us on "street signs. dan veru a quick look at the u.s. pictures s&p down and nasdaq opening in negative territory dow is down 66 lower as we talked about in the show, july was a very strong month for all of the indices that is it for "street signs." i'm joumanna bercetche "worldwide exchange" is coming up next.

it is 5:00 a.m. on wall street here is the top five at 5:00 can stocks keeping this month going after posting the best month in two next? futures may say no. bulls are in charge for big tech how much investors sentiment showing concern? and boeing workers back to the floor after the 11th hour strike avoidance. and no signs of slowing down as countries get ready to drop thei