and greed. lying to people who you are taking money from for the sole purpose of promoting your ego and promoting your sociopathic lifestyle -- that's the definition of greed. good morning welcome to "street signs." i'm joumanna bercetche >> i'm julianna tatelbaum. these are the headlines. >> equities push higher as investors continue to review the risk defying u.s. jobs report. softbank with a net loss of 3.1 trillion yen with almost three quarters of that in the division fund arm as the group confirms it exited uber.

shares in siemens slump with a quarterly loss it reviews the russia business no technical justification behind the cuts. >> we have no major announcement from the breakdown of operations this is why i cannot reconcile a technical reason for the supply of gas. and moody's cuts the italy outlook to negative with the political volatility in rome the center level is falling apart ahead of the key general election good morning welcome to another trading week. european markets digesting the strong payroll report of

528,000. almost double what the market considered very strong number the unemployment rate also lower. coming in lower heexpectations a recession defying number that reaction so far across markets has been positive. stoxx 600 today is all trading in the green as far as the heat map is concerned the index is up 5 percentage points the week as a whole, the stoxx 600, down .60% starting off on a better foot. this is the breakdown. the toftse 100 is higher today despite the gloomy economic outlook from the bank of england.

cac in france up .73%. they sold uk assets and we are seeing a bit of positive reaction in the waste management company. xetra dax in germany the german energy regulators warning consumers need to reduce consumption by 1/5 as we head tto the winter months. and the ftse mib is up .23%. the political situation continues to be the number one focus for italian stocks going forward. as for sectors, you can see it is a positive day. every sector trading in the green. utilities are 1.1% higher. one spot of red on the board with banks trading below he the

flat line. we had a strong reaction after the non-farm payroll on friday today, things are bouncing back. 10-year france is trading at 1.43 italy as well. just around the 3 percentage points key psychological levels fixed income has started to come back we traced about 10% or 20% of the sell off on friday julianna let's turn to equities in the u.s. we had the sell off in tre treasuries in the 2-year treasury and 10-year treasury jumping. in terms of stocks this morning, all three stateside are pointing stronger dow jones industrial average is looking to rally over 100 points s&p and nasdaq looking to gain ground last week, we saw significant

outperformance of the nasdaq which gained 2%. stronger for the dow and s&p let's talk about that and the payroll report non-farm payrolls rising 528,000. more than double than estimate unemployment rate topping forecast at 3.5% and average hourly earnings jumped 0 .5% this will likely force the federal reserve to continue hiking aggressively to cool the economy and bring down inflation. goldman sachs economist told cnbc the july payroll numbers could force the fed to act, but other releases like the inflation figures on wednesday will determine how aggressive it will be come september >> this was a hawkish report as far as policies are concerned.

it is not surprising this market is selling off on this information. it does increase the possibility the fed will have to do more our expectation is the 50 basis point move at the next meeting this increases the risk of 75. the market moved in the direction of 75. there are reports and two cpis before the fmoc meeting. we will see what happens >> we have the cio who is joining us right now let's kickoff with thenfp numbers are friday clearly the market reacted strongly to the report we saw the spike in yields stateside. did the numbers with the report on friday do anything to change your view for the path forward for the federal reserve? >> we had a lot in the turn

around by the monetary policy by the end of the year. you could think it was feasible. you think the change of course of monetary policy will be rapid. in terms of numbers, i totally agree with the recent speaker. it increased the chance we will have a 75 basis point in september, but it is not a done deal. >> what does it mean for equity performance in the coming months the rally we have seen in equities in mid-july was driven by the weaker expectations and the fed would not hike aggr aggressively do you think that still stands should you be chasing the rally? >> certainly not this is not the view the rally has been strong, but the fact you had reaction on the bond market on friday and we

will check this week what will happen with the number and cpi one key factors that supported the rally was the strong bond market in the months of july and disappeared to a certain extent. second, we still have the key issue looming. how much will history advise the earnings numbers for the third quarter? for the time being, earnings season has been good the forecast or perspective not being that strong. we considered that the two elements that can support further rally on the equity market are not clearly there the bond market rallied and earnings is not yet -- the earnings season is good. the earnings revision could come it is better not to chase the rally on the equity for the coming months. >> i want to ask about the shape of the yield curve we have yields flashed up right now. a lot of people are talking about the yield curve inversion

and the difference with the 2-year treasury and 10-year treasury is minus 40 typically the curve has never been this inverted without recession coming on. is it your view this time could be different or are we just sitting here waiting for that recession to actually hit. >> that's a very good question i wouldn't say this time is different. you know, it is early to say this time is different we need to understand the cycle is very particular because in the sense you have the credit and ukraine crisis and all of the elements that come together. it is really difficult to have a lot of visibly issues in the economy cycle. you sneed to review month by month and the market is priced in recession since june. do we have recession i don't know i am not able to answer this question for the time being. i consider that for example the

speech of janet yellen has been good in the sense of yes, you can speak about recession and market fear recession, but the numbers are not telling you there is recession we need to be nimble and check what is happening week by week and month by month we should have more visibility by the early fall in the u.s. in particular >> it just feels like an impossibly difficult time to put your money into the market because of the macro headwinds and the volatility we're seeing in stock markets and you look at the results of berkshire hathaway, the greatest investor of all time, warren buffett saying this is the best quarter. the tech invest or tycoon with those months where do you put this money knowing there is a recession and you are faced with high

inflation pressure and the fed hellbent on tightening it? >> i say at the end of the day, the key decision is the markets are volatility and you stick with your guns and i think that is what we did it was very difficult, as you mentioned, it is a difficult market environment i think equities have the potential if we think in terms of the next 12 months. you need to think about how you invest and you need to observe the numbers coming i think cash for the time being gives you the flexibility is interesting to have cash you know, everything is possible in this environment. we could have recession, but you could also get a satisfactory rate in the coming 12 months i think on the bond side, we know it is difficult to make money on the bond side i would not chase the bond rally

that we speexperienced the lasto months you need to have some hedge funds or equal strategy for your portfolio to keep investment equities because those are the place to migrate and that is going to protect you against inflation partially. we have certain names in the asset allocation this is the way to move forward, i think. >> excellent thank you for that response. francois, thank you for joining us today softbank vision fund posted a loss of 2 trillion yen in the second quarter after bets on tech firms failed to pay off losing the company 3.16otal. argen, give us a reason why they are falling and sustained so

many losses and continuing down the path which is investing in nacent start-up companies that lose cash and hope to ipo and gain profit from >> there are a few things at play, joumanna we have seen flinflation and central banks deal with that it has put pressure on the public market. softbank says the losses in the south korean firm and doordash with stocks hit hard in the second quarter that negative sentiment in tech stocks has filtered through to the private market we are seeing valuations now come down quite significantly. it is also led to a lack of ipos softbank relied on the ipo

market to get companies to the market and make their money off that and reinvest it into other companies as well. that's also dried up somewhat as well which put pressure on it we have seen the regulatory tightening in china for the domestic technology which hurt share prices masioshi son has given a good view in the world. he gave a candid view at the press conference listen in. >> this quarter, 3 trillion yen loss previous quarter, 2 trillion loss in total, i said 6 trillion yen earlier. actually, it is 5 trillion yen loss previous year, we made 5 trillion yen gain. so at the same level of the

amount has been lost so, when we record the big gain, i actually was very proud, myself, and when i look back, i'm a bit embarrassed and i heard a lesson so the factors of loss are two things one is the global stock market tur turmoil and the other is the rapid fall of yen. >> he said he will play defense. it made $10 billion on prepaid forward contracts of alibaba shares in the quarter. it sold off its uber stake as well so it looks like softbank is bolstering the balance sheet to give investors confidence. you have seen in last few minutes the company announce a 400 billion yen share buyback amounts to 6.3% of its shares as

well to shore up some confidence in the company guys >> argen, in terms of the investor sentiment around softbank, it has been a volatile ride to your extent with investors in the space, do you think the measures will go far enough in terms of restoring confidence in masioshi son >> they need discipline from softbank at this point one thing that softbank has done in the past is being very aggressive on investment and the creiticism of the company is it hasn't looked at quality when it comes to investment. we know wework for example it was good when the tech market was going off high valuations. now they come under significant pressure

masioshi son is making investment not just for the sake of it, but in companies that it does believe has a future and has strong balance sheet and has a big market to address as well. that's not necessarily the case with the investment that softbank has made. >> argen, great to have you thi morning. sticking with the tech space. elon musk challenged the twitter ceo to a public debate he asks if the spam account numbers were accurate. musk said if confirming the number of accounts is accurate, he should go ahead a source close to the company told cnbc a debate is not happening outside of the pending trial in october. and coming up, pointing the

finger at russia to reinstall a key turbine to boost gas fwslo to europe. his thoughts next.

welcome back to the program. german residents reduce energy by 1/5 to avoid a gas shortage this year. muller told a german newspaper it would be legitimate to introduce austerity measures to save jobs. a third quarter net loss of 533 million euro and expects losses to exceed those of last year the company is counting the cost of restructuring the russia business and poor performance. siemens energy remain deadlocks of the delivery of the turbine for the pipeline it was unclear when the turbine would arrive in russia. >> it is one of the most world famous turbines. why it is needed

it is a normal cause of maintenance what we are doing here you have six units installed and five are operating and you have a spare to continue with the maintenance and operations that is a unit which is waiting for and it sits in germany we prepared all import paper to russia we obviously do need certain import information from the russian client which has not taken place yet. we are in daily discussion was them it has not been cleared yet. obviously, there are other units to be operated as we have said and underline it, we cannot reconcile the direct consequences of the one spare turbine and the cuts in gas supply it is really something up to ga gazprom as a customer. >> christian, pulling this together and three other

turbines and russians say need major overhauls, how pessimistic should we be about the supply through nord stream 1? >> as i said before, i cannot see necessarily this is technical reasons. this overhaul is scheduled overhaul this turbine, which is currently in the discussion, was supposed to be exchanged this september so there is nothing in terms of delay yet. there is obviously other turbines expected to be overhauled we still have no major announcement of any breakdown from the operations. this is why i cannot reconcile a technical reason to the supply of gas there could be other reasons and i cannot comment on. >> christian, being at the front of this and what transpiring with the turbine, are you saying the russians are using mai

maintenance as an excuse >> these turbines are more than ten years old. we get called when maintenance is warranted all of the day-to-day operation is under control of the russian customer i cannot judge on it i can only judge on what i get every day. in this regard, we are trying our most and the rest is up to the russian customer on what is possible and not possible. meanwhile, chinese exports continuing to rise in july despite the slowing global demand rise of 18% for the fastest gain this year as china struggles to recover from the covid slump >> as one set of chinese military drills were set to wrap up, another kicked off beijing started drills in the

yellow sea on saturday which will continue until the middle of august. another military operation kick o ed on sunday china announced the war games in the wake of u.s. house speaker nancy pelosi's visit to taiwan where she said the ironclad support of democracy continues. and italy and moody's cut the rating from negative to stable they cited unknown political futures as the downgrade despite the headwinds, data shows the economy grew 1% in the second quarter which was actually stronger than expected. on the political side of things, a conservative alliance led by the italy far right brothers party is topping opinion polls ahead of the

election next month. the party formed a conservative alliance with liga. left alliance brokedown with the centrist party instead trying up a separate alliance. italians will vote in the snap general election on september 25th we are watching closely. a quick word, julianna, the left is in disarray right now italy cannot get the coalition group together the more political in-fighting, the more the left and right is benefitting. >> this is going to be a tough time for the markets to ignore if it continues. coming up, how lenders are faring with the hike in central bank rates we will discuss next

welcome back to "street signs. i'm julianna tatelbaum >> i'm joumanna bercetche. these are your headlines >> equities push higher with

majors kicking off in the green as investors continue to gauge the recession defying u.s. jobs report. softbank posts a loss of 3.1 trillion yen with most coming from the vision fund arm the company confirms the exit in uber. thequarterly net loss of 500 billion euro for siemens ceo tells cnbc he sees no justify jin justice justification of the turbines. >> this is why i cannot reconcile the technical reason of gas a big p win for president biden as senate democrats pass the $740 billion economic bill dubbed the inflation reduction

package. we are about an hour and a half into the first trading session of the week. beside me you see it is green across the board european equities reacting to the payroll report on friday the aftermath is the fact that the market seems to be thinking the u.s. not headed straight for recession the way there have been fears before the strong report came out. it is a big week for data. we could get more clues as the u.s. economy is doing. that will effect trade in europe the cpi coming out on wednesday is the key one to watch. that is not all. the u.s. ppi coming out and eurozone industrial production numbers and uk data on friday. a lot more to come this week as of now, european equities

hi higher in terms of currency, the dollar trading on the back foot dollar index down 17 basis points euro is trading firm against the dollar fixed income markets are stronger as joumanna talked about it higher move in treasury. 2-year treasury gaining 18 basis points the 10-year treasury gaining 14 points we saw sovereign bonds take a beating on friday. this morning, italian 10-year treasury is trading with 3.02% we have the german bund trading with the yield of 88 basis points joumanna let's look at european banks are trading this morning we tend to watch these from time to time. deutsche bank down a bit and hsbc trading about .10% firmer

ubs in switzerland up 1.9 percentage points. some of the largest banks have been speaking to cnbc this earnings season about the monetary tightening cycle and how they are managing the risk. >> we are looking at tough circumstances in terms of where this is all going. whether it is in the u.s. or in asia hon honestly, i'm more positive to the end of the third quarter and the fourth quarter >> we have countries which are already at the end of the cycle. particularly latin america the outlook there is clearer it is more uncertain in europe we are well positioned with the diversi diversification. we are well positioned to weather any uncertainty in the coming months. >> we are an all-weather bank. we will continue to serve our clients if the economy grows

fast or slower or falls into a technical recession. that is why we feel confident and comfortable that our risk is below the 40 basis points we guided that is what we see. i don't have a crystal ball to tell you what it will be but bnp paribas is in good position >> we are in risk management which is paramount when you are in the uncertain markets our concern is to remain focused on clients and ensure we're helping them navigate markets as well >> let's bring in seb walker it is great to have you on the show looking back on the performance of the bank index in europe, the first six months have been tricky although we are looking at higher interest rates and that is a positive going forward. it feels the hurdle is very high for some of the stocks to

receive a bit of investor love what is the take away from the quarter and also where we go from here? >> so, last quarter was good with fixed income trading. banks performing strongly barclays is the standout bang with a super quarter investment those looking to really do well on that fee based income suffered a lot the other standout is highlighted for universal banks like bnp or bank of america were more on the transaction banking. the cinderella with the industry that also performed strongly we have headwinds coming ahead largely due to political uncertainty. >> interesting let's pick up on the political uncertainty. i wasn't going to go there, but

you left us with the cliff hanger what are you talking about are you talking about british banks and the looming political risk in the uk or the italian banks? >> i think the real challenge comes in the number of forms firstly, if we look at the situation in europe. there is as we come into the winter, continued problems with the situation in ukraine if we look at the challenge that brings to the german tindustry and reliance on gas. that will be bad news for the german banks and others that play strongly in that market you mentioned the uk that is a challenge. we have a political knife edge in terms of the next prime minister in the uk and certainly where both candidates are apiecing their core party member

suggests that the ongoing problems of brexit will continue that is more of a challenge than the uk banks as they try to bridge the continent the biggest risk we see is in asia hsbc and standard charter. here, the biggest uncertainty is what we see in terms of the china and u.s. relationship. if that takes a turn for the worse, significant impacts on those banks. >> seb let's drill into the last point you made with the political risk in asia do you think that we need to see a discreet escalation in tensions with the u.s. and china or tension around taiwan in order for conditions deteriorate for the banks or is the risk enough to prevent those banks from performing well in the coming months?

>> yeah. i think firstly the chinese approach to covid where we are still seeing lockdowns that take place there and that is stifling the chinese economy which has a knock on impact in asia. that is the underlying base case if we see more tension in taiwan, we have seen recently where the people's republic put a blockade around taiwan the implications are significant. almost for a bank like hsbc, they have to pick to be an asian center bank or key role in the u.s. dollar market that is the decision the other thing which possibly isn't as obvious, they have a lot of head counts in china. hsbc have been 12,000 staff there. jpmorgan chase have 3,000 head count there.

these are significant offshore operations some banks have put on mainland china. if we see a rise in tensions, that will be a big question for how they continue some of the operations. >> an interesting point. a risk to look out for seb can i turn your attention to the u.s. you highlighted a lot of risks that are fairly unique to europe and centering around the energy crisis u.s. is in no way as dependent on russia in the way that europe is what does that mean from the banking perspective? do you think the u.s. banks look more attractive than the european ones given the more favorable back drop in the energy perspective >> looking ahead, a lot of consensus that the u.s. would like to do better in the economic challenges. u.s. will not tip into a recession and that is probably great news for banks likek of aa strong retail in the u.s. and

most of the revenue comes from the u.s. i should mention it is good for barclays with a transatlantic strategy with a presence in europe they are likely to do better >> another question on credit he provisions that obviously is a key focus as well investors looking to clues given by the ceos on whether or not they see things turning worse in the coming months. from the credit perspective, it looks things are panning out better than what investors were pricing in talk about how you see that thing playing out in the next six months >> i think the last ten years have been a good lesson for banks with managing risk the approach to managing credit risk and other risks the banks have has gotten better in the last few years

a lot of staff devoted to us now. when we look at the provision that people are taking and it has generally been on the cautious side, there are a few banks that are less cautious overall, you know, certainly for the main u.s. banks and european banks, we see solid provisioning there. aside from the unknown risks that might be out there, by and large, on the credit side, they are good at risk. >> seb how do you see credit risk here? inflationary pressure is here and bankers are knocking down the doors of the bosses looking for more money >> we have seen a move way from pre-financial crisis with the big bonuses. a lot more is spread out a lot more is conditional on performance. having said all that, you know, recent quarter is not a good place to be if you are in the

investment banking world with coverage and markets where we have seen that collapse in the fee revenue there. you are looking at credit suisse which was down 7.4% in terms of revenue. that's likely to be a challenging area having said that, if you are a fixed income trader and macro side, it is looking good for you. as we see the volatility continue, those in that side of the business are likely to do well looking at other aspects of the banks, that is, i think, going to be challenging and the other dynamic there is a lot of the banks are pushing forward the information and great use of ai and machine learning longer term, that will lead to reduction of head counts and lower paid jobs and process driven jobs actually losing out to kcomputers.

>> seb thank you for joining us. seb walker. warren buffett is trying to reassure after berkshire had a write down on investment in the second quarter net earnings per share can be misl misleading posted $9.3 billion, but still came in with a loss of $43 billion. joumanna, one stand out from the update from berkshire was they were a net buyer of equities in the quarter. that is interesting because it is not clear who has actually been benefitting from the rally we have seen in stocks recently in terms of positioning. if berkshire is a net buyer, they doid not have money in the game to begin. >> they are sitting on a ton of cash that tipped a little bit in the

quarter. still, they are hitting on historically huge amount of fire power. one of the takeaways is there is not that much value to get involved in. i think the biggest ownings in the energy space the energy stocks in the last quarter have had an amazing time reaping in record profit chevron is one of the names they own. obje occidental as well you look at the name berkshire and we put out a report on cnbc.com saying 70% of the holdings are concentrated in five stocks. that tells you about the big concentrated bets. warren buffett goes into something with a strong view of how it plays out not over quarter to quarter posting the accounting, but the next

three-to-five years sdp. >> a huge time horizon this is interesting. the broader question that i have right now in the market is who has been benefitting from the rally? they heare sitting with huge amounts of cash. that was the view of many investors. there wasn't enough value in q2 to put the money to work with the macro back drop. the stock has rallied. is it the algorithms benefitting here i think the trade higher we have seen in equities has been painful for a lot of investors it seems berkshire is one of the investment groups and fund managers which suffered. >> it is interesting that the rally actually started to turn in july. after many of these companies would have reported the quarterly earnings that is a positive thing heading into the third and fourth quarter. the same issues --

>> should they invest? >> there it is that and the inflation pressure that has come up as well they are talking about rising operating costs and rising inflation pressure because wages are increasing as well it is interesting to see how the value investor like warren buffett can see through the noise and hold on to the stocks in the environment with inflation pressure and possible recession risks as well. coming up, premier league football is back and more expensive than ever. we'll find out how rising costs are hittg infans' pockets coming up next.

with a short summer break and women's euro, football never went away. now the premier league is back stadiums are packed as opening weekend kicked off fans are struggling to get their hands on replica kits.

supply chain problems are adding to the mix only 44 of the 92 teams had home and away kits on sale a week before the football league started. speaking to cnbc last week, the ceo said the supply chain was challenging and would be for a while yet. >> we don't think the freight rate will go down. we will not see easing of that and we will see inflation in the manufacturing. we are not seeing an easing of that >> we have the new reporter outside the stadium talking about p football this is all factored into the cost of living crisis that is something we have been covering. tell us how football is more expensiive now.

>> reporter: you made note of that crisis that we have seen. the cost of living crisis which is impacting consumers around theally for th most part. the favorite pasttime is football and the cost of increasing is because of as you noted. the supply chain issues. you have supply chain issues happening in the far east. you will not have the replica kits headready over here. that means the costs will increase tottenham with the biggest increase with the kit cost as well for the local supporters. that's been quite an impactful issue. there is the issue of covid-19 which is still playing itself out now. massive debt formed by a lot of premier league clubs notwith notwithstanding tottenham which built the massive stadium.

they are expecting to see high rev revenue. match day revenue went down and slump in kit sales that was a chunk of income which had been lost. you have tv rights as well which comes into play. the better your team performs on the field, the better your tv rights issue does become so tottenham not having received a major trophy in quite some time shows the return of investment which hasn't been such we have debt of 589 million pounds that means they need to find a way to make a lot more money coming through to the stadium. it is not just tottenham at risk a lot of other premier league clubs. julianna >> fascinating story you have a couple of good gigs in a row the pub on friday and now at the football stadium today i look forward to see where you

turn up next. let's turn to politics big news overnight u.s. senate approved the president biden flagship package. the climate tax and health care bill passed by a margin of 51-50 with vice president harris casting the breaking vote. we have chris pollone with us. chris, good to have you with us on a monumental day in washington talk about what was approved in the landmark deal. >> reporter: good morning. this is a $700 billion bill. it was dead two weeks ago before revived by eyea couple of senats now the senate democrats say this will include the greatest amount of spending to fight climate change by anyo country i history. other things in the bill cap of $35 on insulin for people on medicare.

also, medicare will be able to negotiate prescription drug prices to hopefully lower the cost for people who have to get prescription drugs on that program. also, a minimum corporate tax of 15% on corporations making more than $1 billion a year what's not in it carried interest tax loophole did not make it in the bill. also, there was a $35 cap on insulin for people with private insurance. that did not make it in the bill as well. president biden is touting this victory saying it will make government work for working families once again. the house of representatives is scheduled to come back from recess on friday to vote on it they have a slim majority of democrats in the house it is expected to pass they will then go to president biden for the signature. the republicans say that this will not fight inflation instead, it will increase inflation. we'll have to see.

an independent analysis says it has little to no effect on inflation. >> what a problem to have. chris, thank you so much for breaking down the details for us. let's look at u.s. markets reacting to news of the approval in the senate. we have all three of the majors pointing to the stronger start if you remember at the start of the program, the dow jones industrial average looking to open more than 100 points higher we paired back the gains with a 60 point rise. nasdaq up 50 s&p looking to open 9 points higher at this stage. a big week for economic data headline inflation figures from the u.s. and china as well as the uk's first reading of the gd gdp. we could get the eia and opec with the monthly oil market reports. and the picture is positive and building from the negative week last week stoxx 600 ended down last week down .60

things are turning positive today. spots of green on the board. you see the cac in france is up .60 that and the spanish index are the leader today we have been talking about the macroeconomics clues to come up later in the week and in the u.s. with the focus of the cpi number on wednesday, building on the non-farm payroll report on friday the more than double market expectation and strong unemployment rate. it puts to bed for now some of the recession fears. >> we will see if that remains the case come wednesday. joumanna and i will be here to walk you through that data and more that is it for today's show. thank you for watching i'm julianna tatelbaum. or i'm joumanna bercetche. "wldwide exchange" is coming up next.

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it is 5:00 a.m. at cnbc. here is your top "five@5." inflation on deck after the job reports and reads on inflation. and marathon weekend, vote-o-rama. we are live in d.c. and what it means for investors. a story developing now chin