her name in my car and cry. [theme music] ♪ good morning welcome to "street signs." i'm joumanna bercetche >> i'm julianna tatelbaum and these are your headlines g7 leaders reaffirm financial aid for ukraine as a top ukrainian official reports that volodymyr zelenskyy will attend the summit in person. a u.s. debt ceiling bill could be put to vote as early as next week in hopes the white

house and congress will come up with a deal. outflows in washington and leaving stocks higher and nikkei closes at its highest level since 1990. and alibaba sinks after missing expectations after the concern of the health of the chinese consumer. stateside, walmart has a stellar first quarter and increases guidance good morning welcome to "street signs." it is the last day of the week and i'm not on going to tell anyone that julianna and i happen to see beyonce. i said i'll not mention it we will not talk about it. we'll talk about how markets are faring stoxx 600 sending up .50% higher

on the day this is after much more positive hando over session from the u.s tech stocks up more than 2%. a 20% year to date climb that optimism is spilling over in markets a lot of focus on the debt ceiling discussions and it feels the daylight with the two sides is closing in. we could be in for a deal next week the g7 summit is taking place as well the stoxx 600 is up .50% let's switch over and start with the german index dax is up .50% 74 points higher on the day. we are inching closer to the all-time close high of 16,290. we are 40 points away from that. very, very close to the all-time high for the german index.

keeps going from strength to strength with resilience with the macro economy. cac 40 is up .50% and the ftse 100 up .75%. it is worth pointing out the basic resources stocks are coming through this morning. in terms of sectors, this is the leadership at the top, financial services up 1.6%. basic resources on the down side telco is down .30% this is after poor price action in the likes of vodafone and bt this week. banks down .80% julianna. let's talk about the g7. a statement from the group is tightening sanctions on russia to choke off supplies to the kremlin military

ukrainian president volodymyr zelenskyy will attend the summit in person this weekend according to multiple reports. we are very lucky to have martin on the ground for us in hiroshima covering this g7 marty, it is wonderful to see you. set the terms in top of the agenda for the summit and what would make it a success? >> reporter: jules and jou, good morning. i want to get to the story about volodymyr zelenskyy coming in person to the summit in hiroshima. we have been talking about this since early today. on multiple media outlets is this report. now we can layer on and this is the source to the nbc news freelance producer in the capital of east who listened to and translated on ukrainian state television on the defense

council secretary. he said we are sure that our president, volodymyr zelenskyy, would be where ukraine needed him in any part of the world to solve the issue of stall bility our country. very important decisions will be made there which is why the physical presence, my stress, physical presence is important regarding the events taking place on the territory of the country. physical presence, my stress, is there. we don't know the context. we have not seen the full translation of the interview if the question would be do you think volodymyr zelenskyy being anywhere in the world, would that include hiroshima and the g7 if that was the context and imply was there, that is more support in confirmation that

volodymyr zelenskyy will show up we understand that it could be sunday of the summit in addition to that, we have more information on the pop e - possible i coagenda he is on the way from saudi arabia from there, he will fly on to hiroshima and the g7 summit on the french government plane. this is according to reuters and support continuing to layer on and build. if this does come to pass, of course, it would lend, i think, a lot of celebrity or star power to the event which until yesterday had mostly hinged on whether or not president biden would show up here reports that he could have

bailed or canceled on attending the summit because of the debt crisis situation in the united states which is ongoing. in the event, he showed up he turned up we have to note and don't forget, he canceled the second leg of his trip after the g sdsg7, he would have gone to australia and guinea if you are keeping score, it seems it is reading china 3 and u.s. 0 i say that because xi jinping personally has visited the pacific island states three times in the last few years. no sitting president has done the same so far. although, the senior u.s.

officials have and we understand biden is cancelling the second leg of the trip, secretary of state antony blinken is there to sign two deals with defense cooperation and one on maritime security of course, pacific islands are very important for both the u.s. and china because they form the second island chain. this is important for the u.s. as well as china because the second island chain with the solomon and papa neu guinea is where they can inject power and contain and deny china access into the western pacific that's why this is important

that is why both sides are fighting, figuratively, i mean, in diplomatic and foreign i investment and an infrastructure to get them on side. that is a little bit we are covering here. back to you. >> marty, i'm loving the background information and certainly a lot of viewers would not have known the information i want to come back to what you were saying about china. it is one of the topics that will come up with g7 the word of economic coercion in framing china's ambition with the economy. what will be the likely response from g7? the approach the u.s. is pushing for is a lot more hardened than the europeans. >> reporter: that's a very, very good point i think it will be interesting

to see what happens next month when germany has their summit with china germany is a leading industrial power where you are in europe. as well, germany is a real case study. a lot of people think and germans have admitted during the merkel years, they bet on cheap energy to fuel and look where it landed them after the war broke out with russia invading ukraine. they don't want to depend on china again. it is going to be very tricky for germany. you know, i think it speaks to maybe not so much the lack of unity, but lack of consensus in the eu on the common approach to china. we have talked about macron's visit to china and it raised

eyebrows saying we don't need to be on the u.s. lackey. that is a fight for the u.s. and china to take on europe has not skin in this game raising eyebrows and macron had to backtrack on that with lack of consensus with the european approach to china contrasted with the clear u.s. approach to china which includes and we talked about this earlier about a ban on china exports and foreign direct investment in china. on the former, ban on exports, no consensus yet eu is not on board with this china is not on board with this. restrictions on fdi is in what is allowing china access to u.s.

sensitive technology and could be expanded to rare earth materials and that is part of the battleground that u.s. and china are fighting on as they continue to struggle for dominance of the technologies of the future back to you. >> marty, it is poignant that the summit is held in hiroshima. you are standing by the peace memorial museum. that is designed to serve as a reminder of the danger and devastation brought on by nuclear war. can you talk about the significant nce of holding the summit there >> reporter: the unesco world heritage site which is a grim reminder of the atrocities of the nuclear warfare. if i can step out of frame so my

cameraman can zoom in on that. it is known as the atomic dome it is a skeletal structure of what is left of a very nice european building built in the european style back in the day where hiroshima used to display export wares goods made in hiroshima and for sale in other parts of japan to the outside world. that is literally ground zero. that is where impact was first felt in hiroshima on august 6th, 1945 three days after that, on august 9th, nagasaki, is where it was felt why is that structure still standing there is steel and reinforced

concrete the pillars which is the skeleton which is what is left of the building. let me step back into frame here everything within a five-mile radius of that dome was flattened and levelled and obliterated. the death toll hit hiroshima and nagasaki hit close to 250,000 people who died here this is the host country of japan here with g7. we will see the further moves to get consensus of the g7 member nations to do with not so much denucle denuclearization, but deescalation of weapons build up as well as intensification of nonproliferation with material

and technology to other rogue countries to allow them to build nuclear weapons. this is all part of the derisking russia and china we know vladimir putin has already publicly said he is threatening to use theater tactical weapons in ukraine. closer to home here in japan, you have the issue of north korea which is more be belliget with its nuclear weapons program. and it is derisking china. china is a nuclear state it is building up its nuclear ars arsenal. no one knows what they will do with it. i'm not sure the g7 is waiting to find out. back to you. >> thank you, marty. it shows the significance. that was marty live from

hiroshima. the eu charles michelle elaborated on the plan of the diamond exports in the move that could disrupt the global jewelry market for more, check out cnbc.com. coming up, baba on the back foot rising revenue, but the stock sees red we will unravel it when we return

millions have made the switch from the big three to the best kept secret in wireless: xfinity mobile. that means millions are saving hundreds a year

with the fastest mobile service. and now, get the best price for two lines of unlimited. just $30 per line. there are millions of happy campers out there. and this is the perfect time to join them... save hundreds a year over t-mobile, at&t and verizon. and get the best price for 2 lines of unlimted. visit xfinitymobile.com today. bridgett is here. she has no clue that i'm here. she has no clue who's in the helmet. are you ready? -i'm ready! alright. xfinity rewards creates experiences big and small, and once-in-a-lifetime.

welcome back to "street signs. eu industry chief says tiktok has a lot to do to comply with eu regulations several member states have banned the social media site walt disney is pulling the plug on the investment in florida amid a row with the governor of the state ron desantis this is cancelling a plan to build a corporate campus and relocate 2,000 staff the company cited new leadership and changing business conditions. disney is set to remove the

shows from the streaming service according to bloomberg this is designed to stop writers and actors from receiving residual fees. on the earnings call last week, the cfo said disney will write off $1 billion of programming this year with the goal of disney plus reaching profitability by 2024. netflix jumped 9% in thursday's trade after 5 million monthly users on the tier. the streaming service says 1 in 4 have signed up for the service where it is available. shares in bte and vodafone has seen heavy cuts this week on the back of hits to cash flow. bt will cut up to 55,000 jobs by 2030 which would represent 30% of the work force. vodafone warned of the cash flow

hit to its business and announcing to cut 11,000 jobs. the partner of e research joins us at the desk we were talking about a big week for telcos what is going on we see huge announcements from bt and vodafone with large job cuts what is prompting the decisions? >> sure. i think what we're seeing here is the telco of bt going nearly back to privatization times which often come from having bloated cost bases we think they have huge scopes for simplification of the cost bases. you have a slightly different story with the two bt right now is engaged in a very large fiber deployment

program in the uk. that program will naturally come to an end toward the end of the decade at that point, as networks move toward fiber networks, these businesses will need fewer employees as they have more efficient businesses for bt, there is a tangible driver behind the job reductions for vodafone, for them, they are coming from a slightly weaker position they have been struggling on the top line as you alluded to with problems in germany. they need to work hard to try to simplify theird for a long time to sell the story to investors of benefits of being a european player and they need to deliver on that. >> what about the macro here you talked about the fact many of the telco companies have huge spending plans a lot of that is financed by

raising bonds or debt issuance in a rising interest rate environment, what does it do for cash flow? >> we think the impact on the telco in the near term is minimal. the telcos over the past five to ten years have done a good job refinancing the bilalance sheet. in the next few years, this is easily manageable and interest costs are a small portion of the cash flow. if interest rates stay where they are over the longer term, will this catch up to them yes, it will bt might actually help them in the near term. one of the competitors is an a lot of alternative carriers. those types of operators are more directly exposed to higher

interest rates if anything, these higher interest rates in the near term might make the competitive dynamic slightly more appealing. >> looking at the earnings numbers from vodafone and bt, it looks like investors were disappointed in free cash flow guidance is there cause for concern in your view for the telcos >> i think for -- let me step back you are absolutely right it is not just bt and vodafone, but it started with at&t and earnings a few weeks ago right now, a lot of the telcos have seen pressure with working capital issues and investors are punishing telcos for missing on the number for bt, less so. they were some smaller one-time issues effecting their free cash

flow and right now as they spend a lot on fiber, their free cash flow is depressed. small changes in free cash flow. right now it makes a big impact on the percentage number however, longer term, their free cash flow outlook is visible vodafone, on the other hand, are seeing some more structural problems within their business i think they have made operational misstep in germany they now need to show they can turn that around they have to show they can execute on that and that's the area where i think investors feel it isn't visibility right now. >> given the uncertainty with vodafone and outlook with a new ceo and a lot of questions around the new ceo what it will do with the business is the dividend safe >> that is notnotable.

they were not willing to give commitment to the dividend beyond this year at last report. i think it can be funded the last two or three years. it is tight. they will keep the leverage stable they will return all access free cash flow to shareholders which for vodafone is something they should be doing. it is a very high payout ratio if there is any further slippage on the operational plan, they are facing strong competition from deutsche in germany the market is telling you with a 9% yield and they clearly think there is a risk and the company is not willing to give formal commitment >> james, thank you so much for giving us a little more color about what is happening in the telco space. coming up on the show, as

one group of nations gather, we focus on another looking to expand influence with arabile waiting in the wings

welcome back to "street signs. i'm julianna tatelbaum >> and i'm joumanna bercetche and these are your headlines >> g7 pledges to target russian exports as the top ukrainian official hints at confirmation that volodymyr zelenskyy will attend the summit. a vote to come next week as the hopes grow for the white house and congress strike a deal before the june 1st deadline. and outlook into the european equities with the dax near record high levels and in asia, the nikkei closes at a 33-year peak. alibaba sinks after sales,

but stateside, walmart increases guidance after the stellar first quarter. european markets are off to a decent start friday morning. we have green across the board and broad based gains. swiss market is leading at 1%. cac 40 is up as well keep an eye on hiroshima and the g7 and listen for any further aid to ukraine and in particular any agreement around the western stance toward china in particular we are keeping an eye on the debt ceiling with optimism building in the last 24 hours which is part of the reason the sentiment is positive in europe. in terms of the fx markets, the dollar index on the rise we will keep an eye on the dollar as well as the other key

currencies we hope to get a check on it let's flag this action in gilt markets yesterday. jim reid noting this was highest since liz truss was pm kme comments from the deputy governor they may increase sterling is holding steady against the dollar at 124.25 we have come up from where we were euro is trading firmly up 14 basis points at 107.84 against the dollar dollar weakness against the yuan and yen. we have green on the board for all three majors similar to what we see here in europe this morning. yesterday, we saw all three of the u.s. markets gain ground nasdaq gained 1.5% tech in the s&p gaining 2% yesterday. utilities were the laggard

keep an eye on the debt ceiling negotiations >> we will have comments from jay powell and christine lagarde. they will be speaking on panels this morning there are more signs at the fed with dallas fed president lori logan voted to skip action at the july meeting if the data trends that way. on the opposite end of the scale, phil jefferson said a year is not the full-year impact hinting at a reluctance to take further action it has been over a year since the fed started the hiking cycle and the economic effects have been felt across all over the world. arabile is joining us to look at the impact on five countries in particular the brics. >> joumanna, we thought we should take a look at this considering we have the g7

summit in hiroshima in japan south africa not invited and this time around, the g7 invited the african union chair to the conversation perhaps brics, including the situation we have seen with the western nations and advanced economies may be facing a bit of a difficult time with regards to the discussions on the growth of the economies. what has happened since the hikes have come into play? it has been 14 months since the fed in the u.s. hiked. 500 basis points is how much they have decided to hike. high inflation impacted the emerging markets post covid-19 and invasion of ukraine by russia brazil with the new president

coming to the floor with de silva. russia moved in the opposite direction. now they do have that invasion of ukraine and that meant they hoarded cash as well in the economy and managed to drop off when it comes to the interest rate changes since the fed started. south africa and india managed to inch up or head higher with the interest rate cycle while china has moved slightly lower what does it mean for growth the brics nations, the economies meant to lead the world, when it comes to gdp growth and expansion and economic terms that is true to some extent that the advanced economies not necessarily seeing growth levels that are too high above the 2% margin you tell there has been a major change this is gdp change in the fourth quarter of 2022 versus 2021

fourth quarter numbers across the board, they generally have been a sense of improvement there with perhaps russia, of course, mosquving in the opposie direction. trade between these countries increased the last couple years, particularly last couple months. china has taken on more corn from south africa. that is the first time they are looking to diversify corn intake. taking in less from the united states and china and india with a higher oil export reaching record levels post war that is as well. you can tell from this board of the intrabrics trade the revenue that china gets from brazil and russia and india is massive numbers in the u.s.

dollar in the billions and if you rival the west, let's all do it in unison. it is more of the emerging market nations with argentina and likes of egypt and nigeria part of that even out in indonesia. we have seeing that graphic expansion. could they be part of the growth when it comes to the overall expansion? we see changes in the currency and that has also been very, very important to note guys >> arabile, fascinating stuff. particularly the trade relationship with all of the brics countries. interesting to see russia and china and the numbers behind it and how substantial that trade be relationship is especially with the g7 in focus arabile, thank you alibaba sank in u.s. trade and closed lower in hong kong. q4 revenue was short of the expectations and it announced plans to spin off the cloudy

vi - clouddivision. and on the back of the blockbuster first quarter with walmart with an increased in sales and grocery business offsetting the weakness clothing and electronics. the company beat on expectations for first quarter revenue posting $152 billion courtney reagan filed this report >> re >> reporter: the retailer shifted to profitability rather than scale and reported revenue up 17% the walmart is increasing the guidance full year with the first quarter beat and that raise is less bullish. sales up 76% well stronger than other retailers we have seen so far for the first quarter. transaction as and average tickt

grew from higher income households gross margins fell 23% due to the higher percentage of lower margin sales like grocery. net digital sales were 27% that is a quarter over quarter acceleration and contrast to target which saw a decline in digital sales. growth ad revenue grew 30% walmart connect ad sales grew 40% in the u.s i spoke to the chief financial officer who said there is strain on the consumer, but the resilience surprised us. personal balance sheets are stronger than pre-pandemic he did say consumers are trading down to smaller pack sizes and when it comes to discretionary spend on electronics and tvs and home and clothing, they are more selective and waiting for sale items as more incomes going to

gro grocery. whilecandance was strong, some was tied to s.n.a.p. be benefits expiring. courtney reagan, cnbc business n news. >> let's get to the senior portfolio manager ben emons. it seems a couple of trends popped up this week in a sense that ecommerce and retail is an out performer. spending on big ticket items which is less pronounced from previous years putting it all together, what does this tell you about the health of the u.s. consumer right now? >> the health is holding in because the consumer has

opportunities to substitute. that is why we are not seeing the broad p weakness coming through. as courtney is highlighting the specifics of walmart earnings and if people are able to still spend on ecommerce and food and make a substitution or decisions in non discretionary items, the picture doesn't change that is what the retail sales numbers show on tuesday. it is the health of the consumers that we talk about and we are worrying about savings shrinking. that theme is not playing out here what we see from walmart and target is the u.s. economy is not in recession at all. in fact, it is growing >> yeah. that is certainly appearing to be the take away if you think of it as a snapshot looking ahead are there other

signs of concern or anything that has come out of the report cards that make you think there are a few signals flashing red on the horizon that we need to watch? >> the consumer survey shows inflation is a real issue for many consumers because as the earnings show, people have to buy essentials that is what they put their weight on. that goes that far that means at some point the substitution that we are seeing and that shows results and sales will start to bite into the performance of the companies if food inflation doesn't ease and in addition the health care costs are rising and rents are not easing and that is the worry with the consumer gets weakened. i think the surveys are indicating that is the biggest struggle consumers have and they

are not deterred from spending, but that is ahead of us. i would watch that carefully as consumers worried about the debt ceiling that seems to be resolved shortly >> ben, part of the reason that a lot of the retailers reported better than expected numbers is because they managed to raise prices in many categories. if we see inflation come off, to what extent are retailers hanging on to higher prices? >> that is a good point, julianna one of the ways of recession that happens is rapid decline of prices and there is indication that discounts of retailers are growing. apparel is one example the weakest link in the retail performance so far this year s&p apparel index is down. other indices are up i think that indicates that idea that we have to continue to discount with inventory that you

cannot work off well enough, most of all the margins shrink and what happens with inflation and the economy turns disinflationary. that is the case if you add on the federal reserve which will continue to tighten and that accumulation of tightening financial and credit >> ben, given you don't believe we are in a recession in the u.s., what kind of retailers would you advise holding on to here does it mean you don't want to hold walmart which tends to perform better in a downturn and opt for something like a target? >> in both cases there is value opportunities. walmart trades slightly to the peer group with multiples about 6%

target is more like a discount of about 20% discount in relative terms in multiples. the difference between the two is on the apparel side and some of the specific items that really came through in earnings. it seems walmart is a stronger company at the moment and can hold on to performance given the die naynamics of pricing >> ben, thank you so much for your analysis. ben emons at newedge wealth. let's get back to the g7 summit in japan. the arrival of the indonesian president arriving expected to step off the plane shortly as leaders gather and to

discuss everything from russia to china and climate change at the summit this weekend. of course, the indonesians were the host of the g20 summit in bali last year. >> and to underline how beyond the direct countries involved in g7, the focus is the global south and not just the west. global south dealing with climate change and high debt and supply chain issues and raising interest rates and knock-on effect on the economies. it is interesting to see the global south incorporate in the summit >> great point this week, i want to mention we are marking mental health awareness week the focus this year is supported by the organizations and businesses around the world which is anxiety tanya breyer caught up with the brand on the sidelines of advertising week in europe and asked if he had advice for those

struggling >> hang in there i think my whole thing is if your family doesn't love or support you or you don't have friends to love or support you, find a community people should start up if you are scared to follow accounts. follow a bunch of individuals that make you feel seen. whether it is a trevor project with resources be able to build a community around you and if it is safe enough to do so. try to metet other individuals lining -- like yourself. find whatever is the safest means to build the support system for yourself and if that has to be online or in person, in person are ideal. i know it is difficult to do so in certain countries

fi find a way tofeel loved. it is lonely and hard. i remember so many years i had no friends frank god i had a supportive mother and father to be there as much as they could building that community is so important. >> you can catch tanya's interview with harris reed on the cnbc conversation. coming up on "street signs," debt ceiling negotiations satappear to near the end. will they sign a deal by the deadline we will have more after this break.

you are looking at live shots of the president of indonesia arriving in hiroshima. now stepping off his plane and preparing to join the conversation this weekend. as joumanna mentioned before the break, this is a g7 summit, there is a lot of focus on the global south he was involved in the summit in bali making his presence known and indonesia's needs known on the

world stage. those receiving him on the ground in hiroshima. pushing on to the debt ceiling where we are continuing to keep a close eye. kevin mccarthy is optimistic an agreement on raising or suspends the debt ceiling would happen. he refused to give details, but leaders were in a better place than a few days ago. brie jackson has the latest on the twists and turns brie, it looks to take comfort is there reason to be optimistic in your view >> reporter: negotiators are showing signs of progress. they only have two weeks to reach a deal before the nation defaults now there are positive signs, but there are also concerns of concessions. president biden is urging his team to press forward with the bipartisan agreement he is making it clear he wants

to protect essential programs and progress made under his administration one major sticking point is the gop plan to impose stronger work requirements for social safety net programs like food stamps and housing assistance programs. vice president harris stressed that going into default could spark recession and the u.s. could lose millions of jobs and hurt or damage the country's international reputation both sides are really trying to work toward a deal they need to try to come up with a framework this weekend in order to get past the house and senate before that june 1st deadline. >> brie, thank you for the update german producer prices jumped 4.1% year on year on the month, prices rose 0.3% against the decline of 0.5%.

coming in better than expected this is a picture for european trade today. all of the majors are trading nicely in the green. dax in particular focus at 6 6,271. i draw you to that level is because we are close to the all-time high of 290 20 points away from that keep an eye out there. we have been monitoring the german ppi number closely. in the uk, the ftse 100 is doing well up .40%. we are seeing a bounce in some of the mining stocks today a good recovery from earlier in the week the cac 40 is up about .20%. in terms of the weekly performance, this is how the picture looks for most of the week you see the dax had a good one it was up 2.3% good reports out of the industrials and siemens we spoke about early in the week driving that performance

cac 40 is up about 1% for the week the ftse 100 is the relative laggard with the swiss d down .20%. more solid week for european equities as for u.s. markets, this is the picture for the week as a whole. the nasdaq is up 3.3%. yesterday was up 1.5%. the nasdaq is up 20% for the year we read the research piece every day. i thought this fact was interesting. the ten mega cap stocks in the faang index. year to date, that is up 53% large mega cap tech stocks. >> it shows this is not about breadth, but all about the mega caps and if investors change their mind about u.s. tech and stop seeing that as a safe haven and a reliable source of growth

and that could change the dynamics. we have all three of the majors pointing to positive trade this morning the dow jones industrial average looking to open 60 points higher building on the gains yesterday. it was the weaker of the three nasdaq was the top gaining 1.5%. it is looking to build on that gaining another 40 points at the open today s&p is looking to open higher. we have central bank comments in focus and it will be key to how markets trade and g7 summit. the debt ceiling is continuing as well. that is it for today's show. i'm julianna tatelbaum. >> i'm joumanna bercetche. "worldwide exchange" is coming up next.

we moved out of the city so our little sophie could appreciate nature. but then he got us t-mobile home internet. i was just trying to improve our signal, so some of the trees had to go. i might've taken it a step too far. (chainsaw revs) (tree crashes) (chainsaw continues) (daughter screams) 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.

it is 5:00 a.m. here at cnbc global headquarters. here is the "five@5. we are going from the t.i.n.a. to the trade there are all in that natives -- alternatives to the stock. and warren buffett boosts stake in what is the top holding. and over to washington the debt standoff continues as the treasury reports cash holding has been cut in half. and the end of siri? wh