that's all for this edition of "dateline." i'm craig melvin. thank you for watching. [music playing] good morning welcome to "street signs." i'm joumanna bercetche with arabile gumede we are live in london and warsaw as ukraine marks the one-year anniversary of the invasion. these are your headlines the largest economy expanding in ten months for germany and the french pmi topped the highest mark since october. u.s. president biden set to

make a pivotal speech in poland after the historic visit to kyiv yesterday. this was, at the same time, as vladimir putin was set to give his annual address to the russian people in the next hour. and quarterly profits at hsbc doubles as whchina reopens. the outlook remains positive >>national franchise and go growth prospects and wealth management to be confident of 12% growth in 2023 and 2024 and beyond. the bhp shares are lower in london after the slump prompting the miner to slash the dividend, but a positive outlook is growing for china. >> we expect toward the back of

the calendar year with steel or iron demand. we also have the supply side and everybody, like bhp, is chasing after more reliable partners good morning welcome to "street signs." we have a lot going on from politics to earnings and the pmi numbers from europe. we just got the eurozone flash composite pmi for february that has come in at 52.3 versus 50.3 in january. a two point improvement on the aggregate. we got a services flash pmi at 53 which is a significant improvement for january. it was 50.8. now up to 53 on the manufacturing side, however, we are seeing a little

bit of a dip versus the number in january today, the flash number at 48.5 for manufacturing. it is worth pointing out this is reflecting what we see in germany and france this morning. both numbers surprised on the upside, but showed continued weakness on the manufacturing side because new orders have come in weaker than expected that is something to watch out for. we he initially saw a pop in the euro with the french pmi numbers. we have come down on the german and eurozone numbers on back of the weakness we are seeing in manufacturing. overall, it is worth pointing out that the numbers are now at a nine-month high and still being supported by services with the weakness and industrial output persists. we have other news we are awaiting russian president putin who is expected to deliver a major speech to

russia's elite with his analysis of the international situation and assessment of what he calls the special military operation that is happening, of course, in ukraine. putin's address comes after a number of high stake diplomats have made moves in speeches of late of course, we had u.s. president joe biden visiting kyiv to visit president volodymyr zelenskyy. shi china's top dippolomat as well. we will have that for you as it comes to the floor we will await the speech the u.s. president joe biden has made a surprise trip to kyiv the first visit by sitting u.s. president to ukraine in almost 15 years and the first time in

modern history a u.s. leader has entered a war zone without an active u.s. military presence. biden expressed solidarity with ukraine and promising additional $500 million of aid and a new package of sanctions targeting the russian elite. speaking at the conference with president volodymyr zelenskyy, biden reiterated his support. >> democracy stands. america stands with you and the world stands with you. kyiv has captured a part of my heart, i must say. i have come here six times as vice president and once as president. >> the u.s. president made his way from kyiv to warsaw. steve is in warsaw historic moment, steve, the first time the u.s. president visited a country with a non-u.s. military presence in a long time. very symbol lic from the u.s.

president? >> reporter: it was very important. as a man, he lost his heart to the country as well. he has been there many times as vice president as well, but not since the start of the hostilities on the 24th of february last year i can tell you up until the last moment, nobody had a clue that the u.s. president was going to be in kyiv as well he did take the train from the town where we reported from very close to the poland and ukraine border he made the 10-hour journey to kyiv and stayed there from 8:00 a.m. before 1:090 0 p.m. and goo the same train and arrived in wa warsaw itwas meticulous timing.

vladimir putin was lminformed ta the u.s. president would be in kyiv to avoid any mishap weapons being fired and lead to escalation of events a very interesting issue there interesting if vladimir putin references this. we know it has been spun in russia as the russians gave permission for the president to visit kyiv we will visit to the english translation of what vladimir putin is saying and we will come back to say what the u.s. president is saying later on here in warsaw >> translator: hatred from the kyiv regime. they waited and believed russia would come to their help you know this very well that we did everything possible. indeed everything possible to

resolve this problem in a peaceful way we were patient in our negotiations to come out of this horrible conflict. however, behind our backs, a completely different scenario was prepared the assurances from the western leaders to ensure peace in donbas turned out to be a lie. they were dragging time and they were trying to close their eyes to the political killings and the kyiv regime and abuse of religious and an terrorist acts in donbas. in western academies and training centers, they were training soldiers and weapons. it was before the special

military operation they were negotiating the supply of heavy military equipment and planes and anti-aircraft defense systems. they were publicly talking about the supply of nuclear weapons. nato and western countries were setting their military bases on our borders and laboratories and they were training on the future theater of military actions. today, they recognized this. they publicly recognized this without without shying away. they were talking about minsk agreements and be to be a show or spectacle and when russia --

i would like to emphasize -- when russia sincerely tried to find the peaceful solution, they were playing with lives of people and they were playing a dirty game this repulsive lie and behavior, two-fac two-faced behavior, was seen in iraq and syria they will never been able to wash away that shame >> reporter: you have been listening to the delayed annual address of vladimir putin speaking in moscow clearly focused on the events in ukraine and what he is calling the special military operation interesting, i'm sure it will get wry smiles in the west saying they tried to resolve the donbas problem peacefully. that was the invasion by russian

fo forces the response from the west that is the speech we're hearing from vladimir putin now. just to say the speech will, perhaps, garner attention internationally. it will take place behind me later on today the u.s. president joe biden will speak to the polish people and western nations and allies and russians and the big ga gambit is they will tire of support of the ukraine people. mr. biden's speech will be no. whatever happens is we are in for the long haul and his presidency will be giving longer-term support to ukraine of course, we have seen hints of that this week as well

in addition to the tens of billions of dollars committed by the u.s. to support the economic and military stance of the ukrainians, they announced another $500 million this week with further announcements to come about what weaponry and support the u.s. will be giving. it is a message from mr. biden for nato allies and it is very important he is making the speech in poland because of the nato allies which are hawkish to the russians which is the poe l -- polish they are not just waiting for the spending and support, but one of the first nations to offer leopard tanks to the ukrainians also, upping their military aggressively in germany from 2.4% of gdp which is above the state commitment of 2% then upping 4% with the armed

forces as well as trying to work with mr. putin to get a greater nato presence and u.s. presence in this country as well. i have seen evidence of that, of course, when i saw the pop-up air base when i was here back in march as well. it is also a message for nato allies like france and germany who are trying hard especially with mr. macron to find an end to the conflict. mr. volodymyr zelenskyy said the russians don't want to give back land they annexed. this is not just about kherson, but it is about crimea that is where the log-jam gets difficult. afternoo of all of the people the president is speaking to, one is the chinese, who has antagonistic issues with the u.s. it is interesting to see what

language mr. biden has for the chinese. and the dmomestic audience in th u.s. needs to get behind the spending support generally for the u.s. stance with ukraine remains robust in the u.s. it has eroded as the year has gone on and the war has gone on. this could be a key plank of foreign policy stance and geopolitical stance that mr. biden is making ahead with the potential second term. announcement on that could be coming in the days and weeks it could be an important part of his policies for a second presidential term. there are many allies and foes and russians and ukrainians and nato allies and domestic u.s. audience which will be important for the speech today and important points for the future and where mr. biden sees the

west and western alliance going next back to you. >> steve, thank you for that we will chat with you later on as the developments continue on as russian president vladimir putin continues to make his address as it is happening right now. coming up on the show, hsbc pre-tax profit doubles with the china reopening and higher interest rates we will bring you more from the ceo noel quinn after the break

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welcome back hsbc has reported fourth quarter tax of $5.2 billion. revenue at europe's largest bank increased by 24% in the three months to december that was supported by rising interest rates around the world. it will return to paying a quarterly dividend while considering a payout after the completion of the canadian sale. dan murphy spoke with hsbc ceo

noel quinn >> clearly the opening up of china post covid will have an impact on the economy. it will positive impact the demand curve for commercial real estate within china. now we didn't know that good news at the time we struck the balance sheets on the 31st of december much of the announcements were made in early january. then our commercial real estate saw policy changes that took place in early january that will be a benefit on the supply side. the supply of liquidity to the banking sector is stronger in january than december and q3 of 2022 more liquidity has come in from the china banking system into the commercial real estate sector and, importantly, not just onshore, but offshore that is where the majority of exposure at risk of the offshore

hong kong real estate book we are talking about additional provisions in q4 we think we are well provided and we have good cover. let's check in on markets. u.s. markets closed yesterday for presidents day the hand over was pweak the red on the board this morning. the stoxx 600 is down .70% for you focused on macro and in addition to the geopolitical tension in warsaw and kyiv with the surprise visit from u.s. president over to those countries. we will talk more about that on the show as for now, the markets are digesting the flash pmi data in the last half hour it was better than expected. the headline composite number came in better than the flashes estimate showing an improvement from january. if you dig beneath the surface,

we are seeing the divergent on the services side which is better and manufacturing which still remains quite low and subdued levels that is something to watch in any case, the stoxx 600 is trading on the weak side today in terms of the individual markets, this is what we have in terms of breakdowns. the ftse 100 is below 8,000. that is the key level we have been watching the last couple weeks. conti down by .50% disappointing profits for the year for hsb that is impacting glencore cac 40 is down .90%. one stock that is doing well is at the top which is engie. at the top of the cac 40 after better than expected results dax is down .90% a risk off day with the pmi numbers. in terms of sectors, utilities

up .70%. engie is leading the gains health care is flalt. minors are down .10%. now one stock in particular that we are focused on is credit suisse you see the stock is down 5.3% today. why? the swiss financial regulator is reviewing comments made by the credit suisse chairman to see if they were misleading that is according to reuters which says the investigation relates to lehman's. statements that contradict the bank's results we are seeing a reversion impact on the stock you see a big decline as of a couple of weeks ago. it hasn't helped with the latest news overnight from the swiss

regulator. let's go to the market action and get a sense of where things are faring. freddy light is here with us thank you for the time i want to kick things off with the pmi numbers which have come out with a better beat and number still firmly above the expansionary point how much positivity does this add to the outlook and how much worry do manufacturing numbers mean on the economy side >> good morning. it is really interesting at the moment, markets can't make up their minds as to what they are looking for strong economic data and spending many ta-- maintains th sense. it sows the seeds of problems down the road. we are dammed if we do and dammed if we don't at the moment, we see strong

numbers on the economic side and strong numbers from the consumer it is our view in the next three-to-nine months, you will see that tail off and excess savings from the pandemic will run out and you will be left with employment looking worse and manufacturing is getting worse at the same time and rates are still higher than we are used >> you are painting a picture here of what doesn't necessarily look like the softest of landings is that the base case? >> i think it is hard to thread that needle and get a soft landing. i do believe underlining gdp growth in the u.s. and europe will be lower than the last few years. inflation is still the wild card inflation expectations is led by energy prices. we see over the next 12 months we see a resurgence of energy prices and the stronger the

economic background, the more likely we see that demand meeting and constraint supply sooner rather than later in a volatile inflation environment in the face of slowing economic growth with maintained steadily high rates even if they the fall a little bit doesn't look like a good picture with a soft landing. >> freddie, the market is coming aroundto the view that inflation is a little sticky than what they had anticipated at tbeginning of the year, i was surprised at the beginning of january and so many investors were talking about the possibility of rate cuts later in the year. it feels the language has shifted with the hawkish comments from the central bank community. in your view, have we entered into a new inflation paradigm? the e witnessing now

are likely to be with us for a long time? core inflation will stay sticky? >> we are int a new yera withou any changes. that was an interesting time to invest in markets and the inflation and bubbles that caused we are in a more inflation volatility situation central banks are doing all they can to avoid that. we will sea levels in the next three-to-five years and we will see high single digits or 10% again. it is the volatility and that change that people have to contend with and the increased risk that we enter a regime of more sustained high inflation which needs dealing with interest rates.

>> one other characteristic of the higher interest rate environment that goes along with it there is most on dispersion. what does that mean for a stock picker environment right now what are the types of stocks that you are looking at right now? >> i think it is a fascinating time to pick single stocks uncertainty and equity markets will not make much headway in the next three-to-five years they will be volatile. the changes between that and stock picking will go on and it will be meaningful there are two ways to do it. you can trade the mini cycles. inflation is hot inflation is cold. people are trading a lot of china sentiment of chinese reopening. that is one way to do it it is not our style. we think the best opportunity will come from the businesses that you can hold durably

through the period not just thinking of consumer goods companies. industrial companies, health care companies can grow through the era. you can use that opportunity the semiconductor stocks are cyclical all trading up 20% this year i don't know where they go in the next few months. it is likely we will see another 30% down turn in the next couple years. choose your moments to invent for the long term. it should be and we always say this, but it should be a good environment for active stock pickers. >> interesting you say that. nvidia seeing the love with the a.i. story regenerating. i want to shift gears a bit. i had a look at the top holdings in the portfolio jpmorgan chase and goldman sachs

are goboth there the banking sector is interesting. on the one hand, the raising interest rate environment is a positive thing for the space on the flip side, you have talks about the recession that hasn't hit yet. we continue to talk about it and the fact that capital market activity has dried up. what is the thesis for holding these banks? >> there has been a lot of, you know, a lot of people trading italian banks in particular and european banks on the interest rate sensitivity jpmorgan chase has ben pefbenefd goldman sachs not so much. the thing with those businesses, both have managed to grow. the core building block is the capital. they both have grown that 10% to 15% for the last 15 years. most are flat or down. their ability to react and grow and lend position globally than

any of the international peers than the american banks. that is the capital and growth opportunity as well as inv inve investment the second side is asset quality. there will be a credit cycle and recession. we don't disagree with that. we think the businesses are so well capitalized, nearly three times the level of capital and liquidity on the ratio basis compared to pre-financial crisis, and the average fico scoring for the mortgages and lending book is really improved dramatically we don't see a credit cycle coming in the recession scenario freddie, we have to leave it there. thank you for joining us the founder and ceo of last taug --

latitude investment. and we have compo composite numbers coming up. 53.0 versuses 48.5 and 47 in january on the manufacturing side strong pmi numbers coming from the uk that is welcome when the local pros press is dominated by the recession. these pmi numbers are a welcome surprise to the upside one thing that is different from the eurozone is that the uk numbers are seeing strength on services and manufacturing and in europe, manufacturing continues to lag versus services that is something of note. a strong surprise out of uk pmi coming up, passenger car

registration resis 10%, but we have other issues arising. more after the break why are 93% of sleep number sleepers very satisfied with their bed? maybe it's because you can gently raise your partner's head to help relieve snoring. so, you can both stay comfortable all night. and now, save 50% on the sleep number 360 limited edition smart bed. ends monday.

welcome to "street signs." i'm arabile gumede with joumanna bercetche. we are live in london and warsaw these are your headlines russian president putin delivers the annual state of the nation address hitting back at ukraine allies and warning trillions of dollars are at stake for the west >> translator: we were open for dialogue with the west and insisting on europe and the rest of the world to have an equal system of defense and equal system of security the u.s. president joe biden makes a pivotal speech in warsaw this afternoon after the historic visit to kyiv this after the visit to kyiv to mark the one-year anniversary which is approaching of the russian invasion of ukraine.

business in the eurozone hits a nine-month high as recession fears fade. quarterly profit at hsbc doubless as china reopens the ceo noel quinn says the outlook is positive. >> we see international franchise with good growth prospects in international w wholesale banking. that allows us to grow in 2023 and 2024 and beyond. all right. we turn attention to the market picture which has been negative today. this following the choppy trade from yesterday with slight gains. today, we go lower across the board. ftse 100 is .25% weaker. we have earnings news from bhp

out in asia and then hsbc getting into that profit number. that profit before tax number $5.2 billion still disappointing the market and that heading lower pmi numbers have been of keen interest in europe with the composite numbers high for germany as well as france and the eurozone the manufacturing numbers seems to be lagging. that is going a little lower out of the uk, we saw increases as we pointed out not long ago sentiment of negativity with the market we saw the dollar lose momentum as of late today, though, you are seeing a little bit of a mixed picture when you look at the swiss f

franc. you see strength on that side. the dollar has edged lower against the euro with business activity recording a surprise growth number there. we saw u.s. business activity shrink for the seven month in a row out on that front. to the u.s. picture. we have got the data to recover from presidents day yesterday. this is what the u.s. market will open this morning big drops coming out for the dow jones industrial average and nasdaq still in earnings season let's take a deeper dive european auto sales jumped in january. renault and volkswagen sales out performed. to help us make sense of it all, we have the managing director of auto research from bernstein thank you for joining our show looking at the numbers, the car

registration numbers for europe, i would say, are coming in higher than expected no one would have thought with the weak macro back drop, car registrations would be up 11%. what is your take on the auto industry >> good morning. thank you for having me. the key data may not be the individual month registration, but the order backlog. europe still has an order b backlog of six-to-eight months despite weaker macro, we are seeing strong trends. >> interesting on a forward looking basis, it might not be as positive one thing i want to pick up on is renault and volkswagen sales out performed. in your comments, you talked about the fact that 2022 was a

year that favored premium carmakers over mass producers. showing a strong performance for renault and volkswagen, does that change in 2023 >> we favored the oems, but if you look at the stocks, more affordable cars and oems geared to the volume recovery on the other side of the weakness are renault and volkswagen which are more attractive conventities >> let's talk about the inconveni inventory, daniel. did the demand stay up this year >> i think the back drop is europe should have been producing 15 million cars. it is producing 10 million cars a year for the western european markets. that is the key to look at and

the oems to switch and go more direct to consumer sales which give them more control of price. if you want to draw a conclusion, it is the auto sector which is looking at value over volume and driving the price and controlling the price than more volumes out for the sake of volume >> discipline is the key word. it certainly is a sentiment we saw from ford and general motors in the u.s. pointing out discipline do you feel that is the message we need to hear from the automakers >> some have been skeptical of the message. value over volume message. we will see more proof points this year. if you look at the production data, it seems that oems, while january is good, overall on the year, we are expecting a

low-to-mid single digit growth number in the auto sector in europe and globally. it does seem that they are heeding what they have been talking about for the last couple quarters. >> daniel, how does the price cycle differ from the traditional automakers against the ev makers? back in december, we were discussing the price cuts that tesla introduced across the continent and in the u.s. as well how much of a leading indicator is tesla for the ev maker community as a whole and will that have a knock-on effect for the pricing cycle for more traditional automakers >> i do think there will be weakness in the pricing cycle the for the year the economic lows cannot go unnoticed. it is the level we are encouraged by. for tesla, tesla has one pricing tool the sticker price.

every other oem has a bigger area of pricing tool to utilize. that will help other oems to not make drastic price cuts for the year for evs, in china, there is no price premium left the electric vehicle in china, it costs about the same as internal combustion vehicle. we look for that in the u.s. as well over the next couple years. we think that there will be a little bit more pricing headwind on the ev side as the price comes down >> that will hurt profitability and continue to hurt for some time that remains there was some discounting that was put in place which, of course, was perhaps a covid-era

sentiment. does that stay in place medium-to-long term? >> we expect discounting to rise across our models and across the evs. i think on the electric cars, what is most important right now for the traditional oems is the platforms like mercedes-benz and bmw are designing. the platforms are allowing them to be more cost competitive. as you see with the production costs of the evs come down generally and be that will make evs more affordable for people to buy or make the price come down as well. >> daniel, final question. i want to draw back to the macro data we watched the u.s. cpi print closely. few people have been poimnting out that the used car vehicles for the end of 2022 started rapidly dropping in terms of pricing. january saw an uptick in that space. what is the trajectory in your

view for used car prices >> we have never been bearish on used car prices. one thing you need to remember is in august and september last year, the big drop in the u.s. was driven by fleet buyers from avis to hertz. over the past three or four years, the world has produced 20 million to 25 million cars fewer. we are missing a chunk of new cars that need to be produced. those are not just missing in the new car market, but that spirals into the secondhand car market we see that remaining higher than 2019 in the used car market and new car market for years to come >> daniel, we have to leave it there. thank you for your time this

morning. the managing director for auto research at bernstein. bhp has reported a 53% fall in first half net profit on iron and copper prices. revenue fell to $26 billion after the company said inflation cost $1 billion during the period the firm cut dividend to 90 cents. they said china reopening will spur rebound in commodities. the ceo said there are green shoots in china. >> we have no change to the guidance we have in place currently. there was a lag in terms on the way up of inflation, there will be a lag on the way down as well we have seen, you know, the inputs with the highest inflation and now start to ease. it takes a while to come through the results. as we have shown in the past half, we have been able to focus

on operating excellence and contain the worse of the inflation and you can expect that from bhp. coming up on the show, u.s. president joe biden preparing to give a major speech in poland outlining support in ukraine just days before the anniversary of the invasion. we'll have more after the break. why are 93% of sleep number sleepers very satisfied with their bed? maybe it's because you can adjust your comfort and firmness on either side. your sleep number setting. to help relieve pressure points and keep you both comfortable all night. and now, save 50% on the sleep number 360 limited edition smart bed. ends monday. shipstation saves us so much time it makes it really easy and seamless pick an order print everything you need slap the label on ito the box and it's ready to go our cost for shipping, were cut in half just like that go to shipstation/tv and get 2 months free

quwelcome back to "street signs. russian president vladimir putin is speaking to parliament. he is accused of stoking a global war let me bring you the lines that the russian president put forward. he is saying that the west have provoked price increases and loss of jobs he says the west has staolen our gold their aim is to make people suffer the russian economy is stronger than they thought in the west. the russian economy shrank by 2.1% in 2022 that is actually better than

what people thought it would do for the year as a whole. he is saying we have everything we need to provide security and sustainable development of our country. we have new niches after the withdrawal of western companies. the exchange of the structure of the economy is vital the west has not succeeded in deflating our economy. a lot of these lines directed at the west more so than ukraine friday is the exact one-year invasion against ukraine and since then, there has been an escalation on multiple fronts. we have seen military assistance come through from the west and economic assistance and several rounds of sanctions packages announced by the countries of the west as we spoke about at the munich security conference, it is not just a battle the west is placing emphasis on, but trying

to convince the world and global south that this is a fight worth fighting this is the challenge for the west one of the reasons why the u.s. president has flown to kyiv and now warsaw he will deliver a speech later today. let's get to steve steve is in warsaw steve, i was reading some lines from the russian president giving their perspective on what is happening the big news over the last 24 hours is the surprise visit from the u.s. president to kyiv meeting with president volodymyr zelenskyy and now on to warsaw he is expected to deliver a significant speech later today what is he expected to say >> reporter: many elements of the story. let's pick up on what you said putin's speech is right about one thing. the russian economy so far has been better than many people in the west thought it would given the level of sanctions and

heightened problems the russians have selling wares on the international market interesting the russians blame the west for the food price increases and inflation issues which was caused by the russians blockading that culture capability it is an historic visit from mr. biden to kyiv. we understand the go ahead went on as late as friday in the oval office he took the train from the east of poland through western ukraine to kyiv and stayed five hours. in terms of what the president will say today, he will be on the podium behind me where you see the final preparations made in this secure area in the royal castle here in warsaw. president biden, obviously, will take up the baton thrown to him

by president putin and take on the important issue of is this russia versus ukraine or russia versus the west. if mr. putin wants to make it about russia versus the west, i'm sure mr. biden will say the west is in this for the long term the initial strategy of the russians was to have a lightning war against the ukrainians and displace the government in kyiv and make it what had been in 2014 which was a russian satellite. that did not prove correct now it is a war of attrition now we have seen this frozen conflict in donbas and the annexation of crimea from 2014, not in the latest fighting in 2022 the speech from mr. biden will cover many bases if anything, the key will be the west is in it for the long term. actually to bolster its

allegiance with other nato nations. there is a big meeting with the bucharest nine, the nations from the baltics and slovakia and czechs and pols as well. that is interesting to see what mr. biden attaches to that one order of importance is the speech with the nod toward the u.s. people and to congress. we have a split congress in d.c. now as well. although support at the moment is robust on both sides of the political divide, but the fact is there has been erosion of that at the edges. also in terms of public opinion and if the president does announce soon that he will make a second run for the second term for the u.s. presidency, this will give us ideas of the key planks of the second term would

be under a biden administration and a nod to those who haven't been convinced this is a war -- just war -- with the south and chinese who have their own political aspirations in taiwan as well. important political speech with a lot of people watching and interesting to hear what the president has to say later on today. >> steve, thank you for that great coverage across the day. we will continue to have latest on cnbc of that speech and more. u.s. futures quickly in the negative as the market is set to open later on as we head to the u.s. that is it for the show this morning. m abe you for joining us i'arilgumede >> i'm joumanna bercetche. "worldwide exchange" is coming up next.

it is 5:00 a.m. here at cnbc global p headquarters. here is the top "five@5. the fed risk is as strong as ever. a new note from jpmorgan chase for investors who think the u.s. avoided an economic down turn. and one year since the ukrainian conflict president biden visits ukraine yesterday. we are live with latest. and new insight into spending the cons