i get my strength from my mother. that's all for this edition of "dateline." i'm craig melvin. thank you for watching. ♪ good morning welcome to "street signs." i'm joumanna bercetche >> and i'm julianna tatelbaum. these are your headlines >> ubs and credit suisse will operate independently under consolidated banking group as a management shake up joins ubs executive board as well as a change of cfo. saudia aramoc with

performance link payouts. and vladimir putin hits out at the west in the red square address pledging to stand with the troops and claiming statehood is at risk. and president biden is welcoming congressional leaders to the white house in a bid to break the deadlock as janet yellen warns of catastrophe. >> the only option that leaves our economy in good shape is raising the debt ceiling and making clear that congress stands behind the basic principle that america pays its bills. good morning i was going to say happy monday. it is not. bank holiday. >> you had the day off

yesterday. >> you put in the hard work yesterday. so much going on in markets. we are coming to the end of the bank earning season. we are looking ahead to the central bank meeting this week another bumper week. >> absolutely after the week last we're we -- week we will see what the ecb does thursday >> with that, let's look at the markets and how they are faring. all of the indices are treading under water. we are in the red for the majors ftse 100 is down .10%. julianna and i were saying it was a bank holiday yesterday we will focus on the bank meeting. we are seeing a recovery in the banking names of nat west at the top of the index it is all negative cac 40 in france is trade in the red. dax is shy of 16,000 one name we are watching is

daimler truck. we will spec tak to the ceo in a half hour on the program we have travel and leisure at the top and oil and gas also continuing to struggle continuing to not find a bid despite the opec plus cut as we have talked about the last couple weeks commodities continuing under pressure >> we have a few more earnings and i read a piece from morgan stanley so far this quarter. what they have reported or tracked is 62% of companies have reported so far and q1 numbers with the biggest beat in over 15 years. companies in europe have been able it push on the inflation pressure in the form of higher prices and in terms of the breakdown, large cap stocks are

still leading the pack despite the strong numbers, underperformance in cyclical names. a recap so far this earnings season. >> what is interesting is the stoxx 600 has done well in general with the ex-tception of today. we are not yet through the high we reached in march which is where they went before the scare with the regional banks and credit suisse and ubs. we are moving in the right direction, but not out of the woods yet. speaking of ubs and credit suisse, the ceo will join the ubs leadership board once the takeover is complete ubs says it will operate as a consolidated banking group with credit suisse alongside ubs and its business divisions under ubs

group. ubs agreed to buy the rival and it will reevaluate all of the swiss business lots to talk about here. happy to say mattias hein is joining us good morning to you, mattias >> good morning. >> let me ask you about the decision to keep the banks running for the time being as two independent units. is that the right course of action >> i think it is the needed course of action it is all about stabilizing the business at this point of the takeover that means maintaining the level of service and do not interrupt customers. they need the same people they speak to and processes they are facing you want to stabilize the client base >> what about the decision to

app app appoint chief executive to the board? is that an olive branch extended to the credit suisse ceo >> he knows both banks well. it does make sense especially to have somebody on the board who has been with credit suisse and knows the bank well that does make sense at this point in time. if you look at the broader picture, it is clear ubs is in charge and this will be a ubs-led situation. where most of the businesses will be integrated the swiss bank is the standout piece where it puts the other strategic options, including a spinoff, which is very likely. >> talk us through the ogss for the swiss bank and what would a spinoff mean for the new combined entity? >> first, the swiss bank is a

profitable unit. a very decent business mainly serves customers in switzerland and private customers and enterprise customers. they have the need to bank with certainly institutions i think at this point given its sound cash flows and high return on equity, this is a very good asset which it can spin out and list on the market just look at the simple back on the envelope calculation, this could turn the deal profitable for ubs if you list or spin out the credit suisse bank at some

point. >> what is a realistic timeframe for the spinout? it could be a really attractive piece of the equity story for ubs. >> yeah. it will be an attractive piece for ubs investors. i think time-wise, everything we heard today is about stabilizing the operational side at some point, credit suisse has to attract new clients, not just make an effort of not losing clients. attracting new clients in the current situation is difficult they have incentive to move swiftly, maybe within a year or two years time to provide a road map for a strategic option for the swiss bank then the bank should be able to do business and attract new clients. >> matias, you talked about the challenge of attracting new clients.

i wonder about the challenge of retaining existing talent within the new combined entity, but con the s-- con dsolidated banking group. how do they retain the best talent here? >> the first step, it is natural that everything freezes. people wait and see. that is what we see at the moment it is a wait-and-see approach. that is what i mean by stabilizing. the stakeholders not just the clients stabilize your talent in the firm going forward, as you have to give clients a road map, you have to give your employees and people which make the firm, a road map and where this entity is about to go i think in that respect, i repeat what i said earlier you have to move swiftly rather than late providing a road map

to avoid talent leaving the firm and attract new clients. >> lockioking at ubs and it is trading at 17.54 right now what is the appropriate value for ubs shares >> that is a very difficult question of question valuation is impacted by the market overall ubs trades where it has been before the announcement of credit suisse. this is probably a price which is right for the moment. going forward, i would not be too conservative, especially as i think this acquisition of credit suisse is potentially a great value to the ubs shareholder base i would be too conservative. >> mathias, you sound slightly

positive mathias heim, thank you. >> thank you. the california and financial regulator failed to address the silicon valley bank problems before march. the head of the state regulator said they did not resolve the problems this comes as the fed admitted poor oversight contributed to silicon valley bank's failure. janet yellen says they are in a better position to protect comm customers. >> is raising the debt ceiling and making clear that congress stands behind the basic principle that america pays its

bills. we have french comments from the german regulator the global financial system is stable it is unclear if this difficult phase is behind us, but the global financial system is sable. bafin is dealing with a number of small institutes closely and we see no systemic risk. there are no reasons for a liquidity crisis at germany institutions interesting comments there suggesting that fundamentally, the german banking system is stable it doesn't rule out issues down the line i want to point out we will hear from bafin president mark branson at 12:00 p.m. cet. switching to the energy

space. saudi aramco with an annual decline of 19% in the first quarter. the oil and gas is critical of the energy mix for the foreseeable future dan filed this report. >> despite a fall in oil prices and chemical margins through the first part of the year net income fell to $31.8 billion. that's down from 39$39.47 billin from last year representing a 20% drop. aramco said that was offset by lower taxes and higher finance free cash flow rose to $39.6 billion. up from $38.2 billion. the ceo said the company is moving forward with the capacity expansion and long-term outlookd we believe oil and gas is credit al for the foreseeable future.

aramco will pay a dividend in addition to what it pays to the saudi government goal is to deliver shareholders. that dividend will target 50% to 7 70% of the free cash flow based on performance dan murphy, cnbc, dubai. >> that was aramco. chinese exports grew 5.5% in april. topping expectexpectations imports dropped down 7% and missing estimates. sam filed this report. >> a mixed bag of trade data from china pointing to troubling signs for the second biggest economy. imports were the big miss falling 7.9% in april. in another sign that domestic

demand is weak softer global demand for the material brought into the country is re-exported outbound shipments was higher than the market was expecting back to single digit after the 14% jump in march. that widened the trade balance to $90.2 billion the trade surplus with the u.s. grew to $29.76 billion there are questions of how sustainable this is with other economies slowing down and geopolitical tensions continuing to weigh there is a domestic issue if the government is able to pick up the slack. economists say we can expect

weaker inflation data out on thursday as demand remains patchy and fragmented. so far, it is the services sector that is doing the heavy lifting while manufacturing is struggling to keep up with the rebound on the consumption side. in singapore, i'm sam baddas back to you. >> it is interesting to pick out of play the data and the fact that exports held up because of the re-exports the import number is what people are focused on i put up a chart on twitter before the show that despite the reopening of the economy, imports have really not picked up to the level you would expect i think it is in line with what sam was saying the manufacturing sector within china continues to struggle. >> right manufacturing struck struggling.

putting it together is a mixed picture. is that enough to spur a policy response from the chinese government that is the question when we look at the china data is it weak enough or not strong enough for more support from the chinese government it is interesting to see you are seeing a pull back in luxury names in europe fairly contained we are seeing a pullback across european luxury. coming up on "street signs," vladimir putin lashes out at the y.st as he celebrates victory da we will have details next.

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let's pretend for a second that you didn't let down your entire family. what would that reality look like? well i guess i would've gotten us xfinity... and we'd have a better view. do you need mulch? what, we have a ton of mulch. russia has launched its largest road attack in months. targeting kyiv and odesa it hit a food warehouse in odesa. russia is making a renewed push

in bhakmut a real war is waged against the country according to vladimir putin. putin said the troops fighting in ukraine and claiming the country's future is depending on them we have chris granville at ts a lumbard. we have been reading through putin's address there morning and this feels similar to what we heard from the russian president before has anything surprised you from the comments this morning? >> julianna, people look forward to being surprised by something at the annual set piece victory day parade speech. last year, joumanna, you were just saying, he mentioned the war as a preemptive strike before ukraine was going to attack donbas. this year, that wasn't much. this year, not much either

that highlight i would pick out is a strain of rhetoric out through the foreign ministry in recent weeks it was there today in the speech namely, russia does not have foreign enemies. doesn't consider any countries unpr unfr unfriendly the idea that russia is occupying what it considers to be its territories and the rest of the world considers it to be illegally annexed territories. the russian vision of the po post-war order, but it is not acceptable to the united states or ukraine which will continue to fight to regain territory. >> in the lead-up to victory day today, we had a drone attack on the kremlin last week. the cause of the explosion is still unknown. kremlin pointed to kyiv with the

backing of washington and both reject or deny involvement it could have been russian security forces behind it. has it had a rally around the flag effect in russia? >> good question lots of serious studies being done on russian opinion to the extent that is possible and main source of the uncensored telegram those, not myself, butdiligent people follow that closely i look at their findings and the answer is basically no i guess there would be a natural surge of patriotic feeling any case of this time of year with the victory day anniversary.

remember, the attacks behind the lines, not only drones, but cruise missile and hypersonic missile the going to the ukrainian cities ukrainian forces have more limited means, but they are attacking behind the russian lines almost every day in the build up to the expected counter an fence sif -- counter offensive. that including railroads and electric in russian territory on the western border line. it is all, i'm saying in a long-winded way, it is difficult to see a big change of cause since you asked, i'll mention one thing which you just referred to and it is worth picking up for the last 10 to 11 months, there has been a bloody fight

for industrial town in the eastern donbas region of bhakmut. startling scenes that looks like that town is about to fall after terrible conflict to the russians. >> i want to pick up on bhakmut. a lot of the war is waged with the forces which is a mercenary group on behalf of russia. they have been complaining of the lack of russian ammunition arriving in time what is going on there is that displaying vul nnerables >> why would the russian leader be comfortable with a semi detached arms length force which

ca can go off message and reveal in an awkward way weaknesses and logistic supply and taking serious losses in this really ferocious combat i think the answer is interesting and important. i think it is socially and politically russia cannot afford the level of casualties of this type of stalin-type of force the defense is always less costly than offense. it is outsourced to the mercenary storm troopers and fighters whose heavy casualties do not fight back and the same way if it were in the tens of thousands of ordinary people the last autumn doing this fighting.

i think that is why they have to outsource it ukrainians are fighting for their land and taking, by all accounts, serious casualties >> let's talk about why the speculated counter offensive a lot of people are saying it would happen in spring it hasn't happened yet you understand why they are keeping under wraps for security and intelligence reasons what is the goal of the ukrainian counter offensive? what is the best c-case scenario here >> a lot of people claim to be experts in military affairs and that is a trap i am fafcareful to fall into myself. i would suggest the key goal for the ukrainian armed forces is to push to the black sea coast. somewhere in the middle of the occupied territory along the

south from the eastern region of donbas through ukraine to the northern land of the crimean peninsula. if they cut off the land corridor to crimea, then they have defeated one of the key strategic goals which they have to secure crimea with the land corridor they have damaged russia's supply lines and that would be, if they can achieve it, a major success. it is a big if >> christopher, we will leave it there. thousand thank you for coming on the show to talk about the situation that is playing out in ukraine and russia christopher granville. managing director from ts lombard. also coming up on the show, d daimler truck sees large demand,

but shares fall in frankfurt we will have the first on cnbc interview witheo c jochen goetz coming up next when we started selling my health products online our shipping process was painfully slow. then we found shipstation. now we're shipping out orders 5 times faster and we're saving a ton. go to shipstation.com /tv and get 2 months free.

welcome back to "street signs. i'm julianna tatelbaum >> and i'm joumanna bercetche and these are your headlines >> ubs and credit suisse operate independently as the management shakeup sees koerner join the executive board as well as a change of cfo. saudi aramco beats expectations as they boost dividend with performance linked payouts. vladimir putin hits out at the west in the defiant red square address pledging to stand with his troops and claiming the statehood is at risk. and president biden welcomes congressional leaders to the white house in the bid to break the debt ceiling deadlock as janet yellen warns of catastrophe. >> the only option that really

leaves our economy in good shape is and our financial system is raising the debt ceiling and making clear congress stands behind the basic principle that america pays its bills some more earnings to get through. daimler truck revenue jumped 25% in the first quarter with operating up to $1.16 billion euro stabilizing supply chains means the adjustmented return on sales rose despite that, we are seeing reverse action in truck shares the stock is down 3.5% happy to say that joining us right now is jochen goetz. ceo of daimler truck good to you have here. i want to start out with the price action we are seeing

down 3.62% what are investors missing you did come out with positive results. >> first of all, you named it already. we had a good start in the first quarter. we could deliver on the expectation of the capital market the overall sentiment is uncertainty in the stock market about industrial goods and truck. it is all about the demand in the second half and how we continue in 2024 that is our assumption why the stock price is under pressure where it specifically swung in q1 we do not expect that is the reason for the reduced stock price. >> in the press release this morning, you talked about demand to carry on out pacing supply through the second half of the year should we read that as supply chain issues not normalized fully yet?

that's true. we have seen a good development in the first quarter as far as the supply is concerned. there was also one of the reasons we were able to increase volumes significantly compared to a year ago. however, we expect for the remainder of the year we still see problems with the supply chain. one is we see more and more cyber attacks on the supply side the other one is over the last few years, we brought the pipeline to safeguard production of volume and rebuild the pipeline that will be the challenge for the remainder of the year we expect another year with demand being stronger than supply >> when will you reach the turning point where you are able to meet the demand that is out there? >> well, two elements to that. one element is pent-up demand in the market

in 2020, volume was low. as well as 2021. in 2024, it might be in a balance. the pent-up demand will be reduced in the months to come. on the other hand, the industry is working to further stabilize the supply chain and working to remove the bottlenecks the industry has at the moment probably 2024 is the point where demand and supply is first time in balance again. >> clear thank you for breaking it down like that. very helpful i know investors are keen on tracking the profitability improvement at mercedes. can you give us a sense of what you have seen with the latest quarter and what's on the horizon for the rest of 2023 >> we are very pleased with the development on the mercedes

segment in the first quarter it is especially the case if you think about mercedes market which is down after the implementation of the u.s. regulation in the beginning of january this year. a weak market in u.s strong demand in europe. strong demand for products we were able to increase prices we have an increase share revenue on parts and maintenance. there is demand for the products as well. we continuously work on our cost base and optimize our spending profile. more heavy duty business which is the highest margin business in the industry. these are the ingredients which made q1 a success. if we continue on that in the remainder of the year as we discussed earlier where we

expect demand to be strong and pricing of raw materials was a cost burn in the last year and now more on a stable level that's the way we think about the rest of the year with that, we expect a further good development on the mercedes segment. >> i want to talk asia it continues to lag other continents they are up 4.2% for the quarter. coming from a low basis at 2.6% last year. talk us through the challenges you are seeing within asia and that specific part of the world. why is there so much pressure on your margins >> let me talk about asia and we have to understand three business models in asia. the japanese international business model which is our

indian business and our china joint venture. we have take chinese partner if you look under chinese market, the chinese market is depressed after the covid. it is slowly recovering. it is a burden for profitability in asia. over the last three years, in india and japan, we restricted volume because of the shipping shortage that is now getting better and that is why you see the improved profitability. another element which is important to understand while in europe and north america, we increased pricing which was not possible in japan because by law you are not allowed to increase prices if a truck is already in the auto backlog price increases will come later and we expect it in the second half of the year with all of that, we see a

significant improvement going forward and we can also close the margin gap to other areas of the world. >> again, super clear. really helpful details with margins in asia. just on the pricing point, you have been able to achieve better pricing in north america are you able to hang on to the prices or is further pricing to be expected in the months ahead? do you see further price hikes in the pipeline? >> so, first of all, we expect to see a stable pricing for the remainder of the year, but we are careful on the development of raw material costs and energy costs and also inflation tendency it may be needed to adjust further. that is what we did last year. we adjusted prices for trucks on the backlog. our target is stable prices and

not to go back to the customer for additional pricing. >> jochen, thank you jochen goetz ceo of daimler truck. nintendo expects to sell 15 million switch consoles this year that is down from almost 18 million in the previous period full year operating profit beat estimates at $3.7 billion. arjun joins us at the desk arjun, investors were prepared for a not so great earnings report it wasn't as bad as feared what is happening at nintendo? >> we are looking at a story where nintendo in the current generation with the switch console past its peak.

it has been on the market for six years. 15 million for the current year for the switch sales which is under 18 in the last fiscal year and 23 million in the previous year there is the downward trend. it is an aging console it is reflect in the forecast. nintendo looking at net profit down 21% they are looking at revenue down about 9% in the current fiscal year with switch sales down. software sales down 15% which is the forecast for the fiscal year that reflects a reduction in hardware the key for nine tendo is how d they monetize the users for nintendo with the consoles with the switch titles? it is concerning a drop in software sales because nintendo has the breadth of games mario and pokemon and zelda.

if they are not able to continue with the big hits over the software base, it marks a question where does growth come from is it a new console? in the current cycle, it reached its peak. >> it is a company living off a system that worked well two decades ago or one decade ago. now the way gaming evolved suggests they have to move in cloud-based gaming away from hardware. >> for nintendo, it is not a unified strategy in cloud gaming we saw a few years back when mobile gaming took off nintendo was slow to move into the category its solution was to bring mobile games which did well, but the switch was such an innovation. it crossed over console gaming

with the ability to take it portable at the moment with cloud gaming, it is unclear. it is similar for sony microsoft appears to have pinned future to cloud gaming at this point with that activision deal part of that at this point, nintendo is not clear. >> have you seen the "super mario" movie >> it's fantastic. this is the kid inside me. the company was saying it has done better than expected. it hasn't, i don't think, added meaningfully to sales. nintendo sees the intellectual property more broadly and take the big characters which have been around for years and put them acrossdifferent platforms movies as one part of that in order to hopefully bring in a generation of users into their core business which is gaming,

which is switch, so far it has done better than expected, but at this point it will not have the impact on sales it hoped >> disney excels my children want all of the merch. >> wondering if they can get into the gaming. we are talking about nintendo. arjun, we have an indication, while you are here, the tech companies poised to trade this morning. we are looking at a substantial pull back. alibaba is down 3% we were looking at a further loss pre-market just moments baidu looking down 3%. bilbili down 3%. tencent is down pre-market we had some mixed trade data from china overnight arjun, does that have something

to do with what we are seeing here >> investors are looking to the tech companies reporting this month. you have tencent and alibaba coming in the next few weeks there is bearish sentiment we have seen china opening up. we saw a bump for the chinese tech companies early on. the excitement faded away as the reality set in that is still a difficult market for the tech companies look at the ecommerce front. not the revival in the chinese consumer spending. they are spending on travel. look at the apple numbers. the expectation was there as well you think about alibaba and are the chinese spending on ecommerce? the ad market is still tough that will impact the likes of baidu and tencent as well and the regulatory environment has eased, but still remains a concern. i think that initial excitement

of the opening up of china faded away we have seen that in the way that the chinese tech stocks traded >> arjun, thank you for coming on the show and telling us what is going on not just with nintendo, but stocks coming up on the show, the debt ceiling deadlock weighs on the sentiment as janet yellen erves a warning over what lies ov the cliff's edge. we'll be right back.

welcome back to "street signs. it is europe day the german chancellor olof scholz is delivering a speech in strasbourg let me bring you the highlights of what scholz has been saying eu will not be intimidated by the russian power play at the victory day parade we were talking about the speech that putin gave in red square marking victory day which, of

course, is the day when the west defeated nazi germany. on the back of that, you got propaganda lines from the russian president. you have the response from olof scholz saying they will not be intimidated by the power plays he is also saying that eu must deepen and accelerate joint procurement of emission for ukraine and improve air defense. ahead of the ukrainian councter offensive which is set to take place in the next couple weeks eu must coordinate more closely and build integrated defense and economy and also adding on proposed russian sanctions to include chinese companies. we are always working to improve sanctions regime and the next will with not be the last. >> that line sticks out most to me given one of the things the war lasts is the support that

china continues to give russia directly or indirectly if we see the europeans to broaden the regime to include chinese companies or take a harder stance to china which europe has been divided on in the past than russia and ukraine. that can have an impact on the direction of travel from here. let's turn back to markets there is a picture of u.s. futures. dow jones industrial average is looking to open down about 107 points s&p and nasdaq also looking at a pull back. yesterday was a muted session. s&p ended flat the dow inched higher and nasdaq slipped marginally lower today, the direction is a little more clear and it is down. u.s. president joe biden is expected to meet congressional leaders at the white house today to discuss the debt default. leaders must take action janet yellen warned the u.s.

could reach the debt ceiling by june 1st if congress does not act. she says congressional leaders know the right course of action. >> the only option that really leaves our economy in good shape and our financial system is raising the debt ceiling and making clear that congress stands behind the basic principle that america pays its bills. we're not a deadbeat country >> brinksmanship until the last minute what is interesting here is there is a big group of republicans, 43 in the senate, will oppose any bill that raises the debt ceiling so long as it doesn't include provisions about attacking government spending. i have spoken to equity analysts and i feel this is an issue that

comes up over and over again the debt ceiling gets resolved in the last second it doesn't mean to say the markets don't react into it and many equity analysts are saying there may be opportunities in and around that june 1st soft deadline you will see stocks that have exposure to government direct financing and we have a pro article about this >> we have seen reaction in t-bills last week around the june 1st deadline. one thing i picked up on that ian bremmer pointed out that what pushes congressional leaders over the line is when it impacts their constituents it comes down to voting and if it impacts support. >> check out the cnbc pro article. it lists the stocks most exposed in the run-up to the deadline.

data is in focus this week and tomorrow's read on inflation in the u.s. which is expecting to show price pressure increasing in april against the march at 0.1% gain producer price is expected to push higher and the surprise yet again another busy week ago we said at the beginning of the show bank of england numbers. >> you will be outside of bank of england >> it is raining again always raining for anyone who doesn't believe us, if you watched the coronation >> it was the most quintessential british day fitting for the coronation >> absolutely. a quick look of the markets before we close out. the weaker chinese import numbers coming through overnight and having an impact and some of the weaker earnings

are weighing on the performance here a lot of the cyclical sectors are the ones trading in the red. >> similar picture for u.s. futures. it is red across the board dow jones industrial average looking to pull back more than 100 points in terms of the forecacus is the debt ceiling as joumanna mentioned, bank of england on thursday. plenty to point out this week after last week. that is it for "street signs." i'm julianna tatelbaum. >> i'm joumanna bercetche. "worldwide exchange" is coming up next.

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it is 5:00 a.m. here at cnbc headquarters here is the "five@5. we begin p trying to break the dead ceiling deadlock. we are live in washington with the preview. ahead of the meeting, janet yellen is sounding the alarm to the private sector over the debt crisis as she warns of a coming economic catastrophe spikie speaking of crisis, the banking turmoil and how that to