to an arrest and conviction. that's all for this edition of "dateline." i'm andrea canning. thank you for watching. good morning and welcome to "street signs. i'm joumanna bercetche, and these are your headlines. the stock is trading lower the company reporting a stagnating core income growth for 2022, but they have put out mid-single-digit outlook for 2023, so that's the expectations here there's also the spin-off of the

generics unit. semin says plans for that are well advanced. >> we expect to have the financials later this quarter. we'll start to do our capital markets, activity, to really educate the shareholder base all is on track step by step, but we really think right now the best will be a 100% spin to our shareholders. bbva reports a net quarter profit thanks to strong growth we're told the lenders' long-term strategy is paying dividends. >> this is what 2022 has been about as well as the year before, but 2022 really accelerating. and european equities look to continue their outperformance over wall street heading into february, while investors stateside are poised ahead of today's rate decision from the

fed. digital ads struggle with shares plunging in extended trade, driving down meta ahead of the fourth quarter report card that's out later today. et ♪ . we've continued to note our busier week. it certainly has been, even on the earnings front, but even on the data's front we do have eurozone pmi final numbers coming on today, and with regard to that number, the final manufacturing number, 48.8, so coming in line with that initial flash number. so that is the figure coming out then for manufacturing, 48.8 if we take a continued look, of course, at the final numbers as

well then versus the 47.8 that we saw as well in the month of december when it comes to that manufacturing number, that does point to thinks headed toward that midpoint then, of course, between contraction and expansion, but for now, still in contraction retail territory but improving if it is ever so slightly, 48.8 the finally manufacturing number pmi for the final era. >> maybe the worst is over for now. we've got to watch out for that. also on the heels of yesterday's gdp numbers, looking back, gdps are backward karats, be so far eurozone growth has been moderating and is not in that con con contract here are some of the key names

we've reported so far in europe. bbva, the spanish bank up about 0.72%. we're going to go through these. let's start off with some of novartis the pharmaceutical company posted $16.7 billion for its operating year income. it expects its core profits to grow in single digits. jeff, 2022 was a restructuring for novartis they were foe could on cutting costs as well as the other unit. what stood out to you from today's report card as to where the trajectory is going forward. >> drugs, i think, joumanna, is the headline as far as this business is concerned.

that's where marnlt is focused right now, how to get growth through execution. if we put this business under the microscope, there are two things investors need to think about. one is the things the company can control. we'll get on that in a moment. and the other is the growing environment in which the health care business is operating in. that's health care systems around the world, grappling to recover from the pandemic and to refocus on noninfectious diseases we've also got legislative changes coming in the united states and in europe around drug pricing and how these businesses operate in the public health services some of that's the kind of moving target if you'd like for novartis that's something they and other companies in the space are going to have to deal with coming back to what the company itself can do, as you pointed

out, the ceo took the scalpel to the business last year, carved out jobs as part of the restructures, announced the spin-off of the unit, which will probably take place in the second half of this year we'll get more details in the second quarter, i would imagine, as we get earnings announced for 2023, but there's also this focus on innovative drugs in areas like cancer treatment, breast cancer treatment, prostate cancer treatment, and those noninfect out areas that have somewhat been neglected by public health care systems in recent years some of as i say, 2023 will be a year of delivery for this business, and the ceo is optimistic they can grow mid-single digits over the course of the year let's listen in to our first cnbc conversation withes have

narasimhan our heart medicine continues to grow we have a drug for multiple sclerosis that's doing well. we've got exciting guideline recommendations yesterday. we have an amazing drug for prostate cancer which is blowing out our own expectations and the external world's expectations. have a lot of work going, and that's going to be the key focus. we have a bunch of launches ongoing, a bunch of launches coming up, and we need to deliver in the coming quarters. >> what's happening in the pipeline as far as the early year is concerned? can you tell us about what new drugs you're expecting to take through the trial process? >> a couple.

we have to file this one medicine that treats kidney disorders. this will be additional filings in the first part of next year delivering on all of those, we hope will allow the medicine to be a multi-billion-dollar medicine and forpluvicto, we're watching t that, and the other is the medicine for the breast cancer. >> we're rearview-casing on the numbers. we're well into the beginning of the year can you tell us how this year looks different from the trends we saw last year obviously the world continues to emerge from the pandemic. >> it's incredible you had a year of the pandemic, the war in ukraine kicking off

we had a lot of challenges and headwinds last year. now we're starting to see things stabilize. we're seeing china start to stabilize, and we expect a second half rebound in china all of those are important tailwinds for a business like ours i think the year is off too a good start, and we feel confident with the targets we outlined this morning. >> you're focused on the u.s., but you have a number of key markets, but those markets have a shift taking place i.r.a. is going to have a shift. we have shifts in the legislative framework going on in europe. could you talk a little to those and what you think they may mean for pricing for you and for margin. >> so first in the u.s., our guidance assumes for 2027, assumes the u.s. i.r.a.s, so

we're fully prepared to offset the impacts of i.r.a they are there, but we think we can offset them. in the near term we have to look at how they may impact the kinds of medicines we develop. wily are distortions that don't make sense we hope there are legislators to fix it europe is a different story. we do see all stairty measures coming in. we saw problematic actions in the uk, problematic actions in the continent itself, and we really think, i think, european governments to rededicate themselves in health care, investing, we need euro pain emissions, and that's something we need to be focused on this year, creating a better system in europe where we're a better pharmaceutical company. >> it's interesting the shares are trading down here. going back to the sandals story,

it's difficult to get any information from vas at this point what he thinks it's work and what the kickbacks could be as a result of the spin-off at this stage i did ask about future m & a prospects this year. and he said valuations haven't come down enough, and quite often when you do due diligence under these companies and look under the hood, you actually find out what they're promising doesn't match the expectations his view sit could be a slow year for m & a early on in the telt care space just because there's this issue of valuation and whether it actually matches the new environmental we're moving into where clearly there is a positive cost to capital, joumanna. >> very interesting. thank you for bringing that interview to us. that's one of many stocks that

have reported earnings today overall you can see behind me the heat map is heading toward the green. it should be said that european markets really started this year off in very, very strong steps, strong footing we had most of these european indices outperform their u.s. counterparts, so we really are starting out the year in green as i mentioned today, we're focused very much on some of the european earnings that have been coming out we have it down about seven basis points the ftse up 4% it was up to 12% cac in france, we're keeping eye an demonstrations taking there in protest of macron's pension

reform one stock we're watching at the bottom of the ftse 100 is volta phones that's something we're keeping an eye on as well as actions taking place across the country. you see up at the top, real estate up 1% today keeping good focus and i haven't mentioned this because i've been talking for two minutes. on that fed meeting later dord, they're expecting a two basis points hike and that's going to be really active to sectors such as real estate insurance is down 0.4% and telecoms trading down 0.3% and

volta foephone. spain's second largest bank was boosted by strong performance in the mexican market and higher interest rates in europe the bbva chair said the lenders growth strategy is paying dividends. >> we posted our highest profit in history which led to a rise which also led to an increase in earnings per share, which translates into a great dividend, great pay jouchlt taking everything together we announced this morning an introduction of $3 billion plus a share buyback included that of $422 million and all of that included means a payout increase on a per-share basis, which is more than 60%. and this is, as you said, on the back of a very strong performance in mexico and growth

throughout we committed or announced back in november 18 -- november '21, our strategies are accelerating profitable growth and this is what 2022 has been about. let's continue with the earnings numbers vodafone reporting growth slowing 1.8% compared to 2.5% in the previous quarter you had declines in germany, italy, and spain, which dragged down overall growth, but there was strong performance in tu k which did boost revenues, the ceo saying they can do better, really maintaining their guideline as they have before and saying things could actually be a lot more, that share price going down 2.1%. gst with profits going up.

they credit the shingles vaccine and the spin-off of its consumers unit saying it's now focusing purely on specialty medicines as well as vaccines. u.s. colleagues will speak to emma walmsley. that's happening at 1430, half past 2:00. novo posted 17.1 danish crowns that's happening in 2023 the fed is expected to hike interest rates by 25 points. more focus will be on thepath of rate hikes going forward. can see the three majors are trading slightly in the red

going into this event, but this after a strong day yesterday and a very, very strong month of january. so let's just take a wlooc back at how some key markets faired in january, starting with our european markets here you can see the major outperformer was the italian index. ftse was up. very strong returns. cac index up and the ftse 100 up 1.3. interesting because the ftse 100 was actually the outperformer in 2022 given its commodities focus, but some of that has reversed the ftse 100 being the really active underperformer. let's go across the states you'll see big gains for the s&p 500, more than 5%. the nasdaq has been really interesting. the last time it rose tprobably

in the first month of the year was 2001 that brought back scary memories of the dot-com bubble. by the end of the year, it fell back 30% it doesn't bode to wo well for e nasdaq a lot of that led by the tech stocks you are seeing the likes of apple gaining 11%. a 2% gain for the likes of amazon and nvidia gaining. it's very interesting how this will fair for the remainder of the year companies to look out for, microsoft, which did gain 3% in january. the cloud business which is slowing may begin to hurt intel, snap all of those noting that as well. >> worth pointing out we get meta results today as well as apple tomorrow lots more coming up in the tech

earnings space. coming up on "street signs," we're going to be hearing from liam condon as johnson matthey announces the production of hydrogen margin. we'll be right back.

johnson mathey announces a plug power partnership. it comes with a u.s. investment to capitalize on the inflation reduction act. the ceo of johnson mathey join us tell us about this. >> this is a long-term partnership. plug is the tesla of green hydrogen they were looking for technology and a manufacturing partner who could help them continue the business it's a really long-term thing.

>> i see the two of you will be investing in new hydrogen fuel plans for 2025 that's something exciting to watch for in the near term how confident are you? i've had a lot of chats with people there's a lot of excitement about this product, but there is a concern about the ability to scale given the prohibitive cost. >> this has been the challenge to date. tech know logically it's been possible for quite some time the problem has been the cost and the ability to scale, and with the act in u.s. the fundamentals have changed. now with us coming together with plug power, we have the ability to scale at an industrial level and we can finally meet the demand that's there. the bottleneck has been on the supply side, the ability to

scale up at an industrial level. >> you mentioned the inflation reduction act and how that's pretty much changed the economics for you. does that mean you'll be looking for a few more deals like that, and is that also to say you may not have gone into this deal had that i.r.a. not been in place? >> before we move onto other stuff, we've got to make this work the plant will be up and running in 2025, but, of course, this involves a lot of work between now and then i think going forward, the investment and demand situation in the u.s. is going to be very dyn dynamic, and so we would expect the market to continuously grow, and we do have other market partners we will look in a very agile fashion how to invest going foofrmd but i think the market will continue to grow very

significant. >> that begs the question, should regulators be looking at this saying you may not like the i.r.a., inflation reduction act, but clearly you have to look at something in europe that will be helpful in this context, because, otherwise, business heads across the pond is that it? >> very much so. i think there was a lot of complaints particularly on the european side, partially on the uk side how unfair the inflation reduction act is at the end of the day, the world has been complaining for many years that in the states they haven't been taking it seriously. and now in typical american fashion they're going all in, going really big, and they've put together the world's biggest innocent i havization plan i think they've taken a leadership step here and it's something that also raises the

bar from an innocentivization sense. >> do you sense there's a plan to go down a similar path to create greener took technologies but in a way that it commits money to it? since brexit, uk has been trying to go solo >> i think it's a good idea. there has been support from the uk government from a research and development point of view and a manufacturing point of view i think what's happened is the u.s. has raised the gain so there's an opportunity to increase i think there's an opportunity to align more with europe, get a bigger bang for the buck in essence. whether the political wheel is there or not, that's a different question. >> can i ask you about the

business more generally? what sort of cost pressures are you seeing we spent a big part of the last months with inflation anding input costs. what do you see in your space? >> it's tough. energy is the biggest cost factor for us. what we can see is labor costs going up, input costs in general. so inflation across the board is a challenge. we try to manage that by on the one side passing on pricing to our customers, and then the other side, we very to be more efficient from a productivity point of view, but it is a tough environment, i think, for every company out there just as it is for consumers. >> does that mean that r & d that you now are going to have to spend is only the kind of efficiencies in the long run, things like the partnership? does that mean you have to put forward those kind of, you know, high r & ds into those

particular sectors, for example, too? >> yes so we're pretty clear that we focus r & d on growth areas. that's where the main focus for us overall is. when we talk about deficiencies and cost savings, we're typically looking at things like functionally, real estate. >> not job cuts. >> not job cuts. sl a lot of office space we don't have a lot of people in them we don't need all the real estate procurement, and i.t., there are functional areas where we think we can do a better job from an efficiency point of view. >> it's definitely a time when things seem to be shifting a lot in this space. do you find that you're always playing catch-up, or do you still feel ahead of the curve here as a chemicals company you kind of feel there's always something that needs to be heeded.

>> yeah, yeah, yeah. so our strategy is all about what we call a plan to win as opposed to a plan not to lose, which is a very different game and a lot of it is about shaping the markets that we're in. so if it's green hydrogen as an example, we are a pioneer. we have been in the space for several decades. it's only starting to take off now. we've got a lot of skperchls i wouldn't like to think of us as catching up but rather trying to set the tone for the rest of the market going forward. >> cani ask how brexit has affected your business if at all? >> right now it's hard to tell what was the brexit impact, covid impact, other impacts. i would have to say overall clearly it has been helpful across multiple fronts bureaucracy has, of course, increased, getting access to

talented labor, we just have less people around so i think on multiple fronts it definitely hasn't helped hopefully through better political plans going forward we can try to utilize now the fact that tu k is alone outside of europe and there is a possibility then to set regulations that are different from some of the more stifling european regulations there's an opportunity there, but it needs to be grasped. >> we're going to leave it there, ian thanks so much for joining us around the desk and congratulations on the new partnership. liam condon, the ceo of john sons mathey. we have been talking about a busy data week the final number for uk coming out at 47 is the final figure there versus the flash of 46.7

so still headed in the right dire direction. not necessarily still hitting that expansion that would bode well. >> to add fuel to the fire yesterday, i was on the row, but i was looking at the imf forecasts that i know you were talking about extensively on the show, and the uk stood out for the wrong reasons, one of the only major economies having a more negative performer. >> worse than russia and germany. >> sort of just vindicates that. all right, we're going to be talking a lot more about the uk, but we are also going to be talking about the feds we're going to be discussing what to expect out of the f1 c after this break

welcome to "street signs." i'm arabile gumede. >> and i'm joumanna bercetche, and these are your headlines.

novartis drops down. the spin-off of its generics unit is moving forward as expected. >> we expect to have the financials really ready later this quarter we'll start to do our capital markets, activities, to show how active it is we really think right now the best option is going to be a 100% spin to our shareholders. spanish lender bbva banks a fourth quarter net profit of over 1.5 billion euros thanks to its strong growth market the chair tells cnbc the long-term strategy is paying dividends. >> it's accelerating around profitable growth and this is what 2022 has been about really accelerated. the european equities

continue on wall street while investors stateside are poised ahead of today's rate division ahead of the federal reserve shears are plunged in extended trade, dragging down meta ahead of the fourth quarter report card later today so it's a fairly mixed picture across the board when we take a look at the european market all eyes, of course, will be on the feds, who i expect to put up a 25-point basis hike in interest rate. what exactly happens from here, does it mean we're seeing perhaps a rest at some stage will they begin to pause when it comes to interest rate hikes, or does this just mean they'll continue at 25 basis points and

the fight against inflation said to continue? for now, a pretty mixed board across the th market piz the ftse going up 0.4, just above the flat line for others in the black with ibx also a half a percent stronger. the dollar having firmed of late is certainly what the picture had been showing today pretty much a mixed one with a little bit of strength for the euro at 108, still on the mark 123 is part of the dollar picture. these are interesting to note. going into the red as we look ahead to the meeting, the s&p 500 having capped what was once its best january since 2019, the markets there looking to move into the negative there with the dow jones set to get a sense of

negativity from its trading pic picture. and as we've noted, it's decision day for the feds which is expected to you by a quarter percentage point it would be the smallest of eight increases in the federal funds target rate range since the first hike of the cycle last month. the decision was due at 8:00 p.m. that's going to be cet, of course now, the ceo of capital pal says joins us to unpack. dan, do you think in some ways this could be the start, although very, very early of the fight against inflation for the fed? >> i don't think it's the end of the cycle, arabile i think we're getting a lot of

the fed's work in terms of tightening conditions and raising rates. they my be a little too optimistic maybe the pivot is to stop raising rates and loosening conditions i think the way we define it, they're stopping rates for a period of time we're closer to that point, but we're not there yet. i do expect more rate increases this year before they pause, and perhaps what is not factors into the marketed right now is they're going to stay with higher rates for a much longer period of time than perhaps the markets adjusting to it at this point. >> dan, the fed has also said as much, that they're actually going to continue with these rate hieks for some time, albeit at a lower rate at the 25 point

basis market level while is the market not believing the fed then >> that's a very good question i think you have a lot of counterbalancing events going on we've never engaged, for example, in quantitative tightening in any sort of way. the fed's beginning the process of reducing its size in the balance sheet. i think that rateswhere they are now is measured by 10-year treasuries and the 3.5% rate that yield is likely going to rise when you think about it, you've taken out the biggest buyers of treasury bonds now china is no longer buying as much japan is no longer buying as much of course, the biggest buyer, the u.s., is not buying as much. the one that has emerged more recently has been the treasury department they've been engaging in essentially some quantitative

easing to perhaps blunt and offset some of the restrict irv moves that have gone on by the federal reserve at this point. that seems to me like a shorter term issue while the u.s. is sorting out the debt ceiling and other budget negotiations that are going to be ongoing over the next several months. we've got this low period. earnings are, i would say, just okay the amount of companies beating is by a lower percentage than we've seen more recently i just think it's the fact the landscape is slowing the u.s. is slowing. what they're terrified of is the sticking component of inflation wages. >> it's interesting because we spend a lot of time analyzing what the fed's next move is going to be. is it going to be 25 basis

points, 50 basis points? perhaps one or two more. but we don't perhaps talk enough about how long rates are going to stay at that terminal rate, right? where do they get to in the cycle, and more importantly, how long do you think they're going to stay there for? >> it's a great question, joumanna it's a great question to know how long they're going to stay there. it depends on how economic conditions evolve. i'll point out gold is giving some sort of signal there might be a higher base level of inflation. it's interesting to note that the market low in the u.s. -- gold has outperformed the s&p off of that october bottom for stocks and had a strong month in january. of course, what the market seems to be pricing in, you had very

high data stocks rally the most during the month of january, and you see that in the nasdaq being the leadership equity benchmark followed by the know, you don' of valuation there you need to have companies that are priced well, have moderate price earnings, multiples, but equally important are generating a lot of free cash flow and have strong balance sheet strength because this is not an environment where i think companies are going to have free access to capital in the capital markets whether they be the debt markets or equity markets. >> just to round up the discussion, we were taking a look at how they performed during the month of january. nasdaq, a great start of the year up ten percentage points, its best january since 2001. i wonder if you think this

performance in the tech sector actually has legs and will continue. >> you know, if you -- i don't i think that valuations are simply too high in the tech sector they're pricing in some sort of a rebound, and i think the environmental is just getting tougher, whether it's cloud computing industry it depends what market share you're addressing, some strength, some weakness, and software valuations are simply too high by contrast, when we look at more of the industrial materials, they're much more compelling, particularly when you're looking at small caps stocks where the earnings are low earnings by contrast the s&p multiple still around 18 times. seems fully priced givenen the economic landscape that we see right now. >> thank you so much for coming

on our show today. dan vero of palisadi capital. snap dragged the wider tech basket lower the social media giant is expected to post its third straight quarter with its fourth quarter seeing around 6% down on the year now, rising headwinds from the downturn in ad-spend, issues surrounding apple's previous measures and fear caused them to lose almost two-thirds of their stock last year. this is amid more than a 50% rally so that 11,000 employees went last year lots of people are saying meta, the growth story isn't really there, but from a valuation perspective, the company does look quite attractive. another company we're watching very closely out in india, just

to let you know we are seeing first losses in companies related to the group and here you can see several of the three listed companies as part of the adani group today. adani green down 53. adani transm down 34 the short seller put out accusing adani group of engaging in fraudulent behavior, which was subsequently denied by adani. they managed to get through this share sale by speaking to various business tycoons that mr. adani had contact with they managed to get through the shares, which is impressive. if you look at the stock price action, still we are

experiencing a huge devaluation and also fear in the market as to whether it has some legs. >> you continue have to pointed out a few of those losses we had continued to see ada inni ports as well lost some the ports down 25% adani enterprises, that 30% in total there as well. they have other companies owned by them. there's something that was down 20% as of early this morning really it's a lot of money being -- you can tell that the market is really spooked by a lot of this with fair republican, i spoe suppose, with questions being asked. the indian company is saying to itself, well, this is a systematic attack. we'll see what clarity we get on this one. we is v a bit coming up on

the show the uk facing the biggest strikes as things intensify across europe coming up.

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welcome back to the show the u.s. is planning to send more than 2 mi$2 billion to ukr. meanwhile ukraine continues to call for fighter jets to help with a russian offense issue in the east global advisers partner was asked for his view on the situation in ukraine. >> we're in a very difficult situation basically because this war has gone badly for vladimir putin. he had clearly stipulated he's pursuing three goals with this war, and that was to annex large parts of ukrainian territory, he hasn't succeeded, to sub you gate ukraine, and he haunt done that, and by strengthening russia with use of force

and as he hasn't achieved any of these goals, a fourth goal has come on top of, that and this is vladimir putin now in ukraine fighting for his own political survival back home this explains why he leads this war so brutally and indiscriminately against civilian targets, et cetera. >> and von fritsch explains what it means for global order. >> it's been in transformation already. so major developments, i would assume, will continue with one exception. one man has taken his country out of, this otherwise, across the global south, it continuing to have an interest in a somehow functioning global san diego, which has been to the advantage. the west is standing united with a huge task of keeping this unit, which basically also is a challenge to europeans, to

empower them, embolden themselves to better be in a position to stand on their own, not because nature is a bad idea it's a great idea. great treaty organization, but nobody knows who's going to be in the white house two years from now. >> protests have intensified across france as unions criticize the plans for the pngs system and raise retirement to age 64 unions have called for two more days of strikes and protests next week. to the uk which is expected to see its biggest day of strikes in over a decade today, around half a million workers taking part in industrial action members of unions representing teachers, rail staff and civil servants are among those walking

out as disputes continue over public sector pay deals this has certainly been an interesting one. joumanna, we've been getting word if from the education minister saying the hikes they're asking for is untenable and economically unsustainable a all of that on the back of inflation for a large part of 2022 having hit those double digits numbers, of course, peak at that 11.1% number there's also thele anti-strike poll that has been put forward that a lot of people are going to be striking against as well it puts out how there needs to be a minimum service level even strike days meaning if you're not offering a minimum service level on those days, you could now lose your job even though you voted to strike on those days so a lot of permutations here.

the different kind of sectors here. >> that bill hasn't actually been passed yet. >> new york it hasn't been passed they're protesting it being put in place. >> you've been covering these strikes for the last couple of months we saw a wave in december, january. are the workers demands getting any closer to being satisfied? >> it feels as though nobody is cominging to the table with a different sort of approach actually it feels as though the government has asked for the moist part about efficiency. how do we mack the process more efficient, not necessarily dealing with the issue right now. it feels especially from the workers side that the government has. lent in to actually be part of the conversation the education union saying quite veh vehemently, we wouldn't be here if the government was willing to negotiate. it doesn't look like anybody is actually negotiating. >> which means we're going to

continue to see these types of strikes for the foreseeable future until the confident of living starts coming in. something we'll continue to monitor. all right. it is a big day the u.s. is talking about. the fed meeting is coming up we are expecting a 25 points rate hike. we talk about how high they'll have to go in the future the wall street indices are looking to open up in the negative the dow is 20 points lower, this after a very strong january indeed we've been talking about it ice been the best january since 2019 for the s&p and 2001 for the nasdaq. >> there you go. that's it for the show my name is arabile gumede. >> i'm joumanna bercetche. "worldwide exchange" is coming up next.

it's 5:00 a.m. at your cnbc headquarters and here is your "five@5. the nasdaq does something for the first time in more than 20 years. this could be a good time for the investors and the next 11 months, but it's not all free and clear as the chairman takes center stage and powell delivers your eighth straight rate hike today. it's not just the fed. things are not looking any better at tech land as snapchat deliver as third straight disappointing earnings report. that's