n "dateline." i'm craig melvin. thank you for watching. [theme music] good morning welcome to "street signs." i'm joumanna bercetche >> i'm julianna tatelbaum. these are your headlines >> eu hits a price cap on russian oil exports and a ceiling on gas prices split the bloc the energy commissioner says the deal is possible >> so far, all of the different positions in the end have been allowing us to reach agreements

on previous proposals. i do have hope that they will not be different. the bank spikes rates and warning more monetary tightening may be necessary to stem rising inflation. china tightens covid restrictions as the cases high temperature a record high. and sinking to the bottom of the stoxx 600 as the drinksmaker warns of slower growth in the second half. a very warm welcome to "street signs. great to be back in the studio >> great to have you back.

>> we have fresh information out. for the month of november, the ifo has come in at 86.3 of the slightly better than expected. of course well below the 100 level. in terms of the breakdown, the current conditions index at 93.1 the expectation is 80. that is a weak number in comparison just to put it out for october. the ifo expectation index at 75.9 things have improved, but we are looking at weak numbers. >> coming off the low base it does show similarly to the pmi numbers that came out yesterday. the flash pmi numbers across th eurozone countries still most of the data is pointing to recession, but it is not getting worse. we obviously have an expert to talk about this with us. it does feel german business

morale has risen for the month of november. >> that is really interesting. i'm keen to hear what the head of ifo institute for research. klaus, this was not the headline many expected. the german economy is sending signals of hope. tell us more >> correct i think the main piece of good news is that a gas rationing scenario is becoming a lot less likely storage is full and lng terminals are being built. the likelihood of a gas rationing which is the risk for the german economy and the likelihood has declined. at the same time, we see consumers spending more than one might expect despite the higher energy bills that has a positive impact on retail and seems to lift the

mood generally >> that is fascinating certainly reasons to be optimistic even if we avoid a worst-case scenario which is gas rationing in germany, energy prices are extremely high and the government has support measures to help businesses and households deal with the higher costs. what can we expect with price rises and productivity as the companies grapple with the high are energy price environment >> it continues to be a very challenging environment. the government has provided a lot of support or plans to provide a lot of support that may explain the resilience of the consumer spending and optimism of businesses a lot of us are going to businesses and will help them come through the winter. at the same time, we see in the energy intensive sectors,

chemicals, glass, ceramics we see rising uncertainty here we see the stress here this is only part of the german economy. the overall picture is brightening a little. >> clemens, to what extent is the drop in energy on gas and oil is factored into the sentiment that is expressed today in the ifo data? >> yes, i think that's part of the reason we see this positive shift in sentiment at the same time, i think people are aware that the decline in gas prices will only be transitory because temperatures were so high in october and november so relatively high through the winter, gas prices will rise again. i think most people do not see this as a permanent decline. it may be different for oil where prices are more moderate

>> i want to ask you about something that we have been talking about every time you come on and we speak about this. in the context of supply bottlenecks. i thought it was interesting to hear that 59.3% of companies surveyed are complaining about supply bottlenecks that compares to 53.1 in october. given the supply pressures are easing, what does that say for output in the coming months? >> historically, the supply is significant. in the last decade, the maximum we opbserved was 20% of companis reporting problems almost 60% is very high. we do observe reduction. there is some easing of supply chain, but not as much as one might hoped.

we know freight costs for container shipping are falling rapidly. that will help overall, it's still a massive problem and doesn't seem to go away easily. >> clemens, the chinese economy clearly important for germany and we're watching covid cases rise before our eyes hitting record levels now. there had been some hope that china would be heading for reopening which would ease pressure on supply chains. how are german business leaders thinking about china and how does it factor into that outlook? >> that certainly is one of the major worries next to the gas supply situation what our surveys show is 49% of all manufacturing companies are telling us they get critical supplies from china. that's an enormous number. almost half of the german companies depend in one form or another on parts imported from

china. as long as the chinese don't use the western vaccines, it seems the difficulties will continue and that's certainly a worry if the supply situation becomes worse, that will have a negative impact on output and that is not evenntirely factored into the survey. >> clemens, we had a lot of analysts coming on the show in the last month they talk about margin compression for the companies coming forward and passing on prices to consumers. how do they feel about the ability to pass on prices at this point >> especially companies operating in international markets. exposed to global competition have problems passing on energy prices energy prices in europe are rising much faster than other parts of the world companiesexposed to international competition have

g greater difficults y passing on the pricing. the large automotive companies and luxury producers, for them, it is easier to pass on prices because of supply chain reducing quantities people are waiting longer for bmw or mercedes-benz that drives up prices a little it is easy for companies domestically it is less difficult to pass on prices. >> very interesting between the companies internationally exposed versus domestically. clemens, thank you for joining us on "street signs. president of ifo institute for research. let's see how markets are faring we had a dovish leaning after the fed minutes yesterday which provided a positive boost to market sentiment wall street and asian markets

overnight. perhaps going on and looking ahead. the fed won't have to be as aggressive that was one major theme for the markets. of course, over here in europe, we continue focus on data an the european energy minister meeting in brussels of we will talk more about that on the show with sylvia we are la we are learning toward green on thanksgiving in addition to the pmi data yesterday which did not show deterioration in conditions which i think is interesting and something that we need to focus on with respect to germany cac 40 up .50% we are watching the gucci owner confirmed yesterday that the creative director will be leaving. that stock is lagging a little bit bit. ftse 100 in uk, the under performer. treading around the flat line.

we had a couple of earnings with king fisher and warning about the current quarter. that is the picture for european markets. leaning more green today in terms of sectors, this is the breakdown. real estate really leading the charge up 3.2% perhaps because we are beginning to see a rally in fixed income which is help alleviate pressure on bottom, commodities down .80% and healthcare trading in the flat line. and yields we are seeing a rally. every single one of the bonds ral rallying 10-year bund it is something that we have been watching also closely in the context of the european risk france 10-year at 2.3%

and keep a close eye on the 2/10 year german yield curve. the flatest since 1992 the flattening in germany is gathering speed. in terms of oil majors these are the names we are looking at today a mixed bag. spot oil is lower on the proposals out of the eu potentially for a price cap in the $70 to $75 range which is higher than people anticipated still european leaders need to agree on the proper osproposal uniper said the cost of the bailout in the german state will reach more than 51 billion euro. 25 billion new funding after germany scrapped a gas levy allowing firms to pass on higher

costs. the funding is needed to cover the losses from the russian gas cuts the german economy minister said it will be available if it can show a need for capital. eu kun countries are set to resume talks for the price cap of russian oil this all amid disagreement over the future some people the cap is too high and allow russia to make too much of a profit and some countries think the level is too low. eu members are split on the natural gas on the 275 mega watt price cap for gas. this is all set to be discussed today in brussels. sylvia now joins us from where that very meeting is sylvia, the proposal for the gas cap has been controversial within the eu. yesterday, my sense was the main

controversy is now around the level with many countries saying it is too high what is the point of a cap if it is never going to be used? give us a sense of what to expect from the meeting and if ministers are likely to agree on the proposal >> reporter: there are a lot of things at stake here julianna. you are right saying one of the sticking points is the level 2 275. poland and spain saying this is a joke they say it is unlikely to will be triggered they are pushing for a threshold lower than that. other countries such as germany and netherlands want to see from the proposal that is on the table is more reassurance and guarantees this is not going to create any uninstability in the market they are concerned this could increase the demand and consumption across the block and they concerned about the overall

security of plysupply when it cs to further supplying next winter this is a tricky balance here for the energy ministers to bridge the gaps really i spoke with the dutch minister earlier today. i asked him what it will take for the netherlands to actually say yes to the proposal. >> i'm just looking at all of the experts that are warning us the market is proposing today and can be harmful for the security of supply in europe and harmful for liquidity and financial stability on the trading platforms. we have to take that in mind discussing the proposal. >> what will it take for you >> more homework to be done and check any proper osal on the security of supply i think there will be more homework for the european commission after the meeting today.

>> reporter: so the energy minister jetten summed this up more homework for the european commission in the coming days. it is unlikely we will see any breakthrough at this meeting of course, markets are watching for the comments that come out of the meeting that has just began. i had a chance to speak to the german representative here he is of the opinion there needs to be more rean assurances and guarantees because germany doesn't want to see restrict restrictions. >> we need to move forward faster on renewables of the if you want to correct the balance in the market, you have to get the fundamentals right that is why the package of the renewals is so important

you have really to understand. don't get diverted by this cap issue because that's not what is really a game changer. >> reporter: so giegold is representing germany at this meeting. this is not a game changer you heard him there. we need to keep in mind we are unlikely to see a breakthrough on the natural gas crisis. i have to say when it comes to the other cap we have been talking about, the g7 with russian oil, that on the other hand could get detail after that ambassador meeting yesterday they could not reach agreement on that yesterday. perhaps that could come this evening. a lot of attention on what the eu is doing on the energy front. >> sylvia, thank you for the breakdown. it is a lot to keep track of with the price caps.

let's talk monetary policy sweden's central bank hiked rates by 75 basis points raising the policy to 2.5% inflation remains far too high and at risk of entrenched. the bank will discuss again and look to 3% >> and the swedish krona tells you the market was expecting this in the light of the fmoc minutes yesterday, dovish comments and there is one central bank sticking to its guns that is one interesting take for markets. coming up on "street signs." officials are tightening restrictions across china amid the record levels of covid we'll have all of the details coming up next

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chinese covid cases hit a record high with data showing 31,000 people testing positive in the last 24 hours. authorities in large cities are tightening with restrictions shanghai putting additional restrictions on people entering the city central bank could cut the requirements to support the economy. authorities increased issues in zhengzhou. protests broke out at the foxconn after they denied the bonuses before working on the assembly line. foxconn said an error had occurred and now the guarantee is happening as agreed let's look at the market and how it is reacting up 1.1% for oil and gas. investors in the rattled by the

rising covid cases turning to the luxury sector for chinese names. it is mixed. there is a little bit more happening driving the luxury stocks than the chinese story. we will get to that in a minute with charlotte. a 27% jump in first half operating profit for remy due to the cognac in china and the u.s. the spirits maker says it will moderate in the second half of the year the group maintains the fuel year guidance. scharlotte joins us around the desk talk about remy. a lot of people are locked up, but still drinking >> the cocktail trend is benefitting from theis as well with results and operating profit up 27%. that was above expectation and

they rely on the premium brand and they increase prices more than others. like beer makers they have morley more leeway they carry on the normalization. they are still looking at the full year guidance we see the shares negative on this slightly. >> it is all about being able to defend your margins. another story, confirmed the departure of the creative director of gucci. kering has been at the helm of the brand since 2015 he said it is time to part ways with different perspectives. surprised with the fashionistas. s>> the creative director at gucci. it is three quarters of the

operating profit it is a huge success without michele at the helm. he has been there seven years as creative director. there is a slowdown recently some say this is brand fatigue the brand in q3 and the brand gucci was negative in china they are se have seen. the analysts are looking at the departure as a bit of an unknown. we don't know who will replace him and when certainly a sign that kering is rebranding the gucci brand they are talking about the strategies here and looking at the heritage side of the brand and more emphasis on leather and men's wear the change of director is a sign they are taking it seriously.

>> how much of a struggle at gucci is down to macro factors china and the slowdown there and the brand specific that perhaps would have had more control? >> they rely on chinese consumer heavily on gucci it has been important for gucci. chinese consumer is one of the first to pick up on the gucci fashion and taste seven years ago. they are getting tired of it now. we see the lag on the piece with lmvh >> charlotte, i know this is a sector you following closely one story that came up with the lvmh and tom ford. that was a surprise to the people out there este lauder and tom ford my apologize

what types of moves within the luxury space and joining of the traditional fashion house with beauty products or men's wear? is there a potential for that type of action to tayke place >> they have been very open about it they rely on gucci they will take time. they have been building up the other brands in the portfolio with huge success. they are doing well. they are looking at acquisitions they are one name looking to buy tom ford they lost against este lauder. one thing kering is different from the others is they don't have a lot of jewelry and leather which has bigger margins. one area they may look at acquisitions certainly looking at diversifying the portfolio they have been doing smaller

acquisitions, but focusing on gucci turn around. >> nothing like management or leadership change to coincide with corporate action. charlotte, thank you for joining us around set. coming up on the show. the fed signals it will slow the pace of rate hikes boosting wall street we'll have details next.

welcome back to "street signs. i'm julianna tatelbaum >> i'm joumanna bercetche and these are your headlines >> the states hit the block on the energy prices, but a deal is still possible >> so far, all of the different positions in the end have been allowing us to reach agreement on proper osals.

i hope it will be different. business across germany recovering and ifo says they expect recession to be less ce severe than expected. >> it is challenging the government has provided a lot of support or plans to provide a lot of support that may explain the resilience of consumer spending and also the optimism of businesses the risk bank hikes rates 75 basis points and warning of more monetary policy tightening to stem rising inflation. and sinking to the bottom of the stoxx 600 despite the first half beat as the drink maker warns of slower growth in the second half.

it is turning to be a decent thanksgiving morning here in europe european equities trading higher after wall street yesterday. s&p closed 0.6% higher with the strong gains in the cyclical part of the market a lot from the fed minutes which many investors took as dovish if you had to put a label on it perhaps that is why we are seeing green across the board in europe here is the picture for foreign exchange pound trading firmly on the greenback. up .20%. euro holding firm against the dollar different story with the data yesterday. we saw euro pmi pointing to stabilization in the region. the ifo survey on germany pointing to a brighter outlook a different picture than what we

saw from the u.s. data yesterday, joumanna. speaking of the u.s. it is thanksgiving today. no futures today u.s. weekly jobless claims rose to 240,000 last week the number of americans filing for claims justmped 17,000. the data is volatile around the start of the holiday season. business activity contracted for the fisk5th consecutive month. this was a miss on expectations with a slump weighing on the economy. fed officials expect to see smaller rate hikes ahead according to the fmoc late minutes. the fed hiked by 75 basis points this month the fourth straight such hike.

the minutes come after u.s. inflation eased to 7.7% in october. now estimating more for november we are happy to bring in the head of global ftx good morning, morganne if you think markets are right to price in 50 rather than 75 at the next meeting >> surely the minutes lean toward a downshift from 75 points to 55 in december now the real question is what happens after that what would be the pace in the new year the lower than expected pmi yesterday shows interest rates are starting to result in a slower activity.

the job market is still strong i would say that as we look forward to the next year and see what the fed is going to do, i think it is not impossible to see the fed downshifting further in the first quarter because now that real interest rates are above 1% and have been above 1% since mid-september, the impact of tightening financial conditions are starting to feel it as well as corporate. this is why the fed might continue to downshift in the first quarter. that not saying the terminal rate hasn't changed. if anything and what we take away from the minutes yesterday, the terminal funds rate could be higher than 5%. >> slower for longer, essentially. keep hiking, but hike at a lower pace there is a finance analyst which

says sell the fat. so many market participants are looking from the clues from the fed and watches data closely for signs the fed may slow down hiking cycle that would be a positive signal to markets that the fed have reached the peak or getting close to the peak. when do you think it is time for investors to start pricing in and trading on back of the possibility of the fed stopping? >> well, i think job markets and data coming off the market is one the key inputs another one is to look at how the real interest rates across the u.s. yield curve are evolving so we are now around 1.5%. this starts to be meaningful i would say that when these real interest rates come closer to the fed funds rate or closer to

2%, this is when really the financial conditions will have a significant impact i think that would be another key input for fed decision looking forward, i think if we see a declining trending inflation and continues slowing of the economic activity, then these are really good news that the fed might pivot to a dovish stance that is probably to expect on the second half of next year even late 2023 i think the fed will still pose terminal fed funds rate for a quarter or two >> let's tie this to markets yesterday, the negative signals that we got out of the u.s. data seemed to fuel the prospect of a dovish fed and in turn we saw u.s. equities rally. are we firmly in a bad data is

good for markets regime? >> well, they must have importers of the data signal a turning point. we are starting to see economic data in the u.s. coming slower be expected. in the past few months, we have been surprised by the resilience of the economic data in the u.s. this is really marking a turning point. i think it is too early to say that inflation data is trending lower. if only now we are starting to see some cracks, but i do think the market is hoping for a rebound. fairly because expectations at this slower rate hike next year is probably right. i do think the markets and investors are going back to growth stocks on the expectation and the fact that the dollar is slower and it should continue to

depreciate over the next few months that is positive for equities. at the same time, because inflation is embedded in core data with strong stock market, it will take time to get to a dovish sense next year >> morgane, let me shift to geo the politics we had the bali summit with president biden and president xi there were hopes that china would be a bigger feature in the second half of this year and next because of the potentially easing stance toward covid now the headlines look negative on the covid front how are you feeling about the china story and chinese equities as an investment opportunity

>> first, the meeting with presidents biden and xi is positive from the geopolitical risk standpoint. i think we can expect next year declining geopolitical risk and return to more normal market driven by economy. on china specifically with covid-19, policies should expect a stop and go approach driven by the new waves of covid cases that doesn't mean that it changes the sense of chinese authorities to kind of reopen the economy to reduce the economic negative impact of the covid zero policy. therefore, this is positive. i think because of the waves of covid cases, we could expect the stop and go and therefore

ability in chinese equities. i think because of the geopolitical context is more now stable and i would say looking at the low valuations and lower dollar definitely adds to the appetite for chinese equities. >> we will leave the conversation there head of investment strategy at global x etf well, we're continuing to watch closely the fallout in cryptocurrency this is how some of the major cryptocurrencies are trading today. we will bring that up in a moment so you can see. bitcoin is now trading below $17,000. it feels like we're getting to a floor within the 15,000 to 16,000 range the last couple

days you see ethereum also trading at $1,200 the pull back has been violent to say the least ftx founder sam bankman-fried outlined how he osteofroze up i pressure in the letter to employees. the now former ceo said his irrational decisions came as customers rapidly withdrew funds from the company amid a drop in investor confidence. a current ftx employee said the letter is too little too late. and galaxy digital ceo mike novogratz hit out at sam bankman-fried in the interview with cnbc. >> nobody who participated with that exchange signed a contract that sam could take your coins and run a hedge fund with them you know, that's fraud all the investment capital moved in crypto has come from

centralized companies. that played an important role in the ecosystem. they need to build trust with clients by being transparent and do things the right way and risk management we had lehman brothers which was regulated and blew up because they did stupid things this is not really an indictment of crypto. it is an indictment of ftx and other companies poorly run or fraudulently run. >> it is interesting to listen to the bitcoin analysts saying this is a problem with ftx and not bitcoin or cryptocurrency. the reputation of cryptocurrency and bitcoin has been damaged with this incident the other thing which is interesting is we are real-time witnessing a story unfold in front of our eyes as it plays out on twitter sbf protagonist.

he is trying to clear his name, but in doing that, he is opening up a can of worms. because of that, he is getting in trouble this situation is almost always better to say nothing and let the lawyers deal with it. >> it was fascinating on that sunday after the collapse. he did an interview with "the new york times." and necethey were criticized by being hard enough. he was handicapped by not being able to speak with the legal issues we see the massive decline in crypto with the flaws in the technology or is this ftx and one man? >> we had arjun on the set earlier. he said you have hackers coming in and taking advantage of holes in the system. it is feeding on the negative feedback where people are taking advantage of the fact there were holes in the exchange system and

using it to money launder bitcoin out of the exchange now. there have been a lot of reverberations and contagion within the crypto community. one thing which is interesting from a cnbc perspective, we will have a conversation with andrew ross sorkin. that conversation is still happening. i'm sure andrew will have a lot of questions to ask. >> if you had seen that interview andrew did with adam newman a couple of years ago certainly one to watch out for this time around we will take a quick break coming up on the show. it is thanksgiving for many that means celebrations and turkey and travel. we will have more on the travel rush when this show returns.

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welcome back to "street signs. it is the time of year to be thankful for family, friends and food and not stuck in the queue

at the airports. more people spend at the airport in the run-up to thanksgiving which is today than in 2019. uk black friday sales jumped more than a quarter last year according to barclays. we have christi for joining us from barclays. happy thanksgiving, if you celebrate. talk about the key trends that you are watching this year and what we can expect from black friday >> thank you forego ha having me good morning exciting time of the retail c cal calendar the bright spot that is black friday we have been monitoring and like to release stats during the day on the actual day. what i can tell you, hot off the

press, already is positive lead indicators up to close of business tuesday, year over year, that looks leading week with an increase by 3.7 3.78% over last year which was a bumpy year. >> to be clear, which regions are you talking about with the positive trends? >> we process around one-third of the uk transactions across the whole of uk is monitored. this is a high level indicator we like to release the data as quickly as possible and post event we look to sectors and regions. >> how is the split between physical sales and online sales holding up we have been talking about the shift toward more online shopping at these events i'm curious to see how expectations are shaping up into the next couple days

>> i think our expectations is the current trends will hold during the black friday season what we saw last year was a huge increase on the prior year because the prior year had been online only event because of covid-19 we saw the boost because people wanted to go back into the shops. we see the leveling slightly people are happy to get back into the shops some online habits start to drdrop slightly i don't think we are seeing a difference in the lead-up to black friday. >> what items do you think consumers are looking to purchase this time around? what are the leading categories? >> i think black friday is associated with electronics. that is where we see the significant discounts on the

day. that is always something consumers are looking at i know i can speak personally. this week i had promotional emails around jewelry. i got my daughters for christmas. an ev wall charger i'm not sure we would dissect the data and look at the sub sectors to see what is interesting that sticks out. i think generally the general retail industry with electronics and clothing and brands. i think we expect to see exciting activity. >> kristy, as an american living in london, i'm surprised how much of a thing black friday is here ultimately in the u.s., it is the day after thanksgiving and most americans, if they are, are off that day and have time to shop different story here in the uk and europe how far can black friday go? what is the ceiling here ultimately people aren't off on this day outside of america.

>> yeah, i know. that's a great question. i think the four years we have been monitoring the trends, we have seen a few things i think it is a bright spot for retailers in the challenging macro economy behind them. something you can focus and pinpoint activity around what we have seen is the black friday trend spread. i mentioned and i have been shopping myself. we have seen that spread across the week and further into the month. i think some of it is around potentially bringing forward some of that christmas shopping with cost of living and consumers being more savvy of how they spend for christmas we could see that shift in consumer behavior. i think who knows what black friday can be. i think retailers feel optimistic about it. that's a good thing. >> i'm impressed

it is not 10:00 a.m. and you are shopping >> i'm pulling up my phone. >> i think joumanna and i know what we are doing after the show you inspired us. >> tapping into our shopping animal spirits >> we can't help it. >> >> kristy, thank you for giving us the information as we were speaking to kristy, we also have lines coming through from the bank of england. dave ramsden he says my advice is tightening. it depends on the economy. he says i'm not optimistic that the pressures from the increased costs and pressures are starting to ease. he says the impact of higher interest rates could still come through and have an impact many autumn measures will not

take effect until 2025 we have a view on the three-year v view it is likely inflation will p c come down in 2023. he is strongly indicating they will go for further interest rate hikes. >> especially since yesterday the suggeignals the fed would t dovish turn in the months ahead. that is it for "street signs." thank you for joining us especially if you are gearing up for thanksgiving lunch or dinner we wish you all the best i'm julianna tatelbaum. >> i'm joumanna bercetche. i'm off to q gardens that's my thanksgiving >> i can't wait to hear about it tomorrow >> thanks for watching

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