craig melvin: that's all for this edition of "dateline." i'm craig melvin. thank you for watching. [music playing]

electrification with oil demand. also china is set to account for 70% of global oil demand gains that is on the back of the better economic stance for china. that economy continues to see some sense of recovery economic recovery according to the iaea in china is losing steam after a bounce in the year they expect that to continue sliding. russian oil export is 600,000 barrels a day. that's the lowest since march 2021

so that's the oil price. wti is just below the $76 a bab bark -- mark we will look at the last 24 hours. the u.s. cpi numbers came in better than anticipated. 3% on the year on year basis for the headline cpi number. 3.8% or 4% those numbers are interesting with the core cpi print as well for the u.s. a .50% is the stoxx 600. let's check on the european

market and sectors in particular the market, as you can tell is flat for the ibex 35 it has been flat most of the morning. it has moved higher. .50% for the ftse mib and the italian market the cpi yesterday with the fall in the gdp in the uk is one to note the ftse 100 is .20% stronger. we had seen the tech sector manage to gain .60% in early trade. now it is pushed up to more than 1% positive stance basic resources up on the back of data from china as we noted with the trade numbers out in china in particular. the trade surplus for june at $76.2 billion. less than the expected signal of

7 74.8 there better than that figure, but not better than the number expected for that month down goes construction and material, however, when one takes a look at the sector the u.s. futures with the ppi numbers from the united states following the cpi print. what does it mean for the u.s. economy? does that mean that the fed's job is done? we unpack that across the show, but it is positive toward the market open is what we are anticipati anticipating it follows on from the s&p 500 and the nasdaq which hit the highest closing levels since april of 2022. let's get into the chinese numbers. exports slumping since the onset of the pandemic as they strumbl with weak demand

imports contracted both imports and exports are far worse than expected. we have just been speak bengal t -- speaking about the resources and it is a broad based rally. you are seeing positive numbers for anglo american good to the 1.3% on to the chip makers. the tech counter is interesting following through the trade number and trade data. specifics put out which has been interesting. china is finalizing the first of the kind ruling with the governing generative a.i. services like chatgpt. what does it mean for europe's semiconductor market most of those with asmi up 3%

stronger some other equity news basf put out the full year guidance which has been hit by sluggish global demand from china. german industrial giant expects 4 4.4 billion euro it is down from a nearly 7 billion figure a year ago. annette joins us with this one we thought the market would be strong it is down .75%. this guidance is one to look at and being a little concerned >> reporter: yes, it was actually expected that this would be a choppy ride for the shares if you look at the year to date

performance, for ekexample, bas is down 20%. the market has priced in the need for the cut in guidance and outlook for some point in time like many of the other chemical producers came out of capping guidance with the international players. the world's biggest chemical pro producer it is no wonder they have to follow suit. this is not as violent as the pre-market had suggested let me flash out what basf is saying they are seeing slumping in demand across the sector and regions. that has been mirrored in the very weak quarterly set of numbers for the second quarter they pre-released parts of the

earnings late yesterday. we have a very weak second quarter. what they are saying and that is perhaps on top of the share price development is that they are not seeing a further deceleration of further slump in demand going into the second half of the year because many of the clients have stocks central already. they are still saying they think consumer demand products will not come back as strongly as previously expected. one reason as well why they are cutting guidance dramatically, by 10%, with the guidance, is the uncertain outlook. it is a bellwether for the global economy and that doesn't actually tell us anything good about the economic outlook if

basf is concerned about demand for the product going into the second half of the year. to sum it up, they are cutting guidance and, of course, investors are concerned about what that whole thing means for the dividend outlook there is, perhaps, some silver lining on the horizon of the restocking in the second half of the year for chemical products analysts are divided about what that means some analysts like jpmorgan chase, for example, are putting the shares are buy now given that violent market reaction which we had already in the past i think the jury is still out whether wite have seen the bottm of the share price with basf with the cutting of guidance >> annette, thank you for the reporting. those numbers are ones to look out for in the second half of the year anticipated from basf.

let's get into economic data jeremy hunt, the uk chancellor, says economic growth is still hampered after gdp data showed falling 0.1% in may. that figure is better than the 0.3% contraction that analysts expected and the extra bank holiday to mark king charles' coronation on the other side, there will be fewer homes built over the year with the price pressures and mortgage pressures hitting demand it sees 400,000 completions this year which is down sharply from 17,000 over the last 12 months that development down 4.8% we will get into the discussion

then and the deputy head of economics at kepler is joining us to unpack this market move more it has been one of those where the market picture has been one to really focus a lot more on the interest rate market as well the value in the market as well. where would one look right now >> hello thank you for the invitation clearly, the market remains focused on the central bank stance this is one of the most unexpected market values i have seen in the last 25 years in my career investors have and are nor normalizing the low base and in the short earning season is key on the guidance from companies we have the outlook from the 7th of this year this will be the key market in the short-term in europe in the

u.s. after that, inflation remains key. we think inflation will continue to come down and basically china will remain the niche market the focus on the recovery is something to follow for the rest of the year. >> this turnaround to the bull market, where does that come from is that a sense of we are through the worst now. recession is unlikely, it seems, and it is, perhaps, time to pile in what about a sense of valuations are still fairly high? particularly when one goes into the tech or semiconductor sector >> clearly, valuations are rich. we are back a couple of years ago in terms of valuation. they are a bit stretched there is some potential loss early, but you know that

analysts are looking for the earnings season. we are in q2 there is earning expectation in europe, this is less the case we see valuation for european equities in the u.s., the market is stretched. >> if you go into europe, then, is there a particular sector you are looking at within this time or this is area where the growth could be looking toward? >> in europe, we are overweight for the sector you discussed earlier. we feel the process and values are behind us. we are overweight on the sector. we think it needs to be exposed to the energy and we see the transition we are overweight in the energy

sector and we feel banks are overweight net margined are elevated. we probably come down a bit. a high to support the earnings picture of banks in europe banks, energy, chemicals we are positive on the transportation sector. we think global will weaken after the first half of the year there are a few sectors we see this year. >> what happened to the bond market would you climb in to take advantage of the higher yields right now to secure them as much as possible? they anticipate to go higher with more work in europe opposed to u.s do you still continue to pile

into theon the bond market >> with the sharp rise of bonds in june up to 50 basis points, we look at the slide in bond yield and especially ahead of the inflation picture that is coming into play we feel it is interesting to take advantage of the whole year we look at the credit market and some higher rates. we feel this is historical after the sharp contraction in both prices last year the first half was disappointing for fixed income equity because of the higher pressure on bond yields >> one thing is for sure is that the volatility has dropped off

considerably despite the economic stance. one looks at the vix and sees the low levels why is there so much less volatility considering we don't know the path when it comes to interest rate hikes in particular and what inflation may do moving on although there is a set path everyone wants to go across? when one looks at the other side, you have macro economic factors at play here and those could move things along quite indifferently at this point. should there be a lot more volatility in the market for the second half of the year? >> clearly, volatility is low. this is related to the overall economic conditions. remember last year, everyone was concerned about the european crisis and the recession things have turned out to be much better than feared.

we know markets are volatile by nature things will be secure at some point in the second half we think the growth is priced in today after the volatility in the market in the first half we are overweight equities we have been overweight since the beginning of 2022. we feel this is a catalyst for the upside visibility remains low and we think that now is the time to increase the path this year. >> thank you for the time. that is interesting. that conversation is one we can track back to other conver conversations and see. thank you for the time deputy head of economics and cross assets strategy at kepler. still company news casino has set a new deadline

for rescue bids. all offers must be received by friday afternoon that is tomorrow the 14th. the czech billionaire led by the evntrepreneur are looking over t take the debt of 6.4 billion euro casino posted a decline in sales in the second quarter and warned full year core e wwould be weak than expected. that stock down 4.7%. swatch net income jumped 55% from last year to 498 million swiss francs sales rose on an annual basis with double digit growth in all watch and jewelry sectors despite a negative currency impact of 242 million swiss

francs meanwhile, watches of switzerland performed guidance for 2024 after full year revenue of 1.5 billion pounds. that is up 19% on the year on current prices operating profit did manage to rise 26% on the annual basis to 179 million pounds swatch is up 6.5%. 10.3% higher for watches of switzerland. coming up on the show, the g7 is promising long-term security support for ukraine, but what does it mean in practical tes?rm we'll discuss after the break.

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welcome back g7 countries signed a declaration outlining a lo long-term security agreement for ukraine for technical and financial support. nations pledged to help ukraine adopt reforms to move closer to nato membership ambitions.

se steve sedgwick asked about the issue from lithuania yesterday let's listen in. >> reporter: president zelenskyy, security guarantees have been in place for the last 20 years they did not prevent 2014 in crimea or 2022 what is it about security guarantees that will make a difference this time, sir, for yourself and your country, but to vladimir putin who looked to previous security guarantees and he ignored them and invaded anyway >> translator: i can tell you one thing, i don't believe this was a security guarantee i don't understand the responsibility memo. there were no specifics but ukraine was left with the document and left alone with it. as for the new document, it

should remain valid. we understand the best guarantees to ukraine and ukrainians is to be in nato. this is clear because there are already examples i would like to underline once again again, we don't see member nation dying and defending their own country. that's why we understand the best guarantee for ukraine is to be in nato on the way to nato membership, we like the security guarantees and make them permanent to make our relationship with other countries more powerful of we like the document not based on personal relationships, but written. the security guarantees will open up the possibility to be strong bilateral ties. >> chris is joining us now chris, thank you for the time. what do long-term security support actually look like for ukraine in a time where it has

been reaping the benefits without the responsibility somewhat >> well, i guess the key difference is the guarantees, once they kick in, might imply that western nations would be more inclined to, you know, to deploy forces and personnel and not just equipment i think the view is so long as the war is continuing as it is, then really nato cannot admit ukraine. i think everybody understands that despite what president zelenskyy is saying. we are looking at the situation and what happens after the cease-fire, if you like, or the fighting stops then a strengthening of the security guarantees. much stronger about budapest

not just now with equipment and support, but deployment of forces to support ukrainian forces that is what people are looking at here, but not expects it to come in play so long as the current conflict is happening. >> russia looks at this and thinks if that is the case, we need to continue to ensure that we are in conflict with ukraine as far as and as long as possible to ensure ukraine doesn't get to nato, right does that become the issue where with ukraine has to suffer for an extent ded period of time >> that is the view to look at it, for sure, ukraine cannot enter nato as long as the fighting continues we heard that from the germans and french and other member states obviously, this is more can't

continue indefinitely. it is draining resources and effecting the economy and people are dying on the frontline you can't keep it up indefinitely in order to delay the admission into nato. what moscow has been talking about is part of any solution or negotiations that happens after the cease-fire would have to include some agreement that ukraine is not admitted to nato or there are some other guarantees that would protect russia's western borders there are issues there i don't think there is any issue where we look at the war dragging on indefinitely to prevent ukraine joining nato moscow wants guarantees from nato as part of the peace process. what that would be we have to wait and see. for sure, the war and conflict,

whatever you call it, is draining it is not something moscow can keep up indefinitely any more than ukraine. >> is there a way, perhaps, nato, or ukraine takes advantage of the fact there may have been the small revolt from the wagner group which did vladimir putin's leadership, per se does that put a chink in his armor and does that expose to get to a cease-fire quicker rather than at a later stage >> i don't think so. the wagner episode really is now over it is past there is a considerable amount of speculation as how it arose and progressed to who knew what and supported them, et cetera. there is no question in moscow

over the authority of president putin or that he is firmly in control. that is not an issue and nobody is talking about that. i don't think that really presents an opportunity for nato or ukraine the feeling is that this needs to play out. ukraine received a significant amount of commitment from nato d donors over the last year. that equipment has to be used. the hope is it be used successfully and ukraine take territory. so far, that will be very s slowly the view is this offensive, if you like, is stalling. it may not succeed we may still have another offensive with more equipment later in the year or next spring then, only if that were to always stall, then i think the issue is we are more likely to move to some political process

or cease-fire and start of negotiations the view, i think, from both sides of the border is the offensive has to take place and it has to show a result or fail. only after that can we consider moving to the next phase it has to play out >> it is now time to walk the walk chris, ceo at macro-advisory thank you for the time this morning. coming up on the show, signs of price pressures cooling in the united states. another key inflation print due out today. we will have all of the details after this

welcome back to "street signs. i'm arabile gumede these are your headlines european equity markets push to keep the rally going after investors cheer the u.s. cpi print hitting the lowest level in two next, but in the uk, inflation continues to drag as the economy sinks. sorry, i meant shrink.

china grapples with weakens global demand. the international energy agency trims the oil demand forecast for the first time this year citing economic headwinds and tougher interest rate environment. basf cuts guidance on the weak of demand and slowdown in china. let's check in on the european markets it has been a positive day that rally is continuing across the board. we did see positive numbers across the session even with the stoxx 600 with the fourth

possiitive session. the ftse 100 is up .20% today. for the week, it is up 2%. that would be the second positive week in three some gains .75% here for the ftse mib which is up 2% this week the cac 40 is up at the highest margin week to date. 3% to the good today, it is managing to gain .40%. on the currency market it has been a bruised dollar so far which has managed to lower the trading. slower cpi numbers are seen as a signal that rate increases will all be finished in a few months. the dollar had the worst session overnight falling 1% against the euro you see round .30% stronger against the euro weakness in the dollar so, too, against the sterling.

that key 130 mark is the one that has been hit there. last time it hit that mark was april of 2022. getting some strength in the pound there against the dollar also, just the euro hitting a fresh 15-month high of 111.41 early on in this day's trading on to the u.s. futures board this is the u.s. market which will go to the open and we are looking forward to the ppi number that is another key inflation reading ahead of the fed's interest rate decision later this month 25th and 26th is when that is anticipating with the futures moving higher in overnight trade. u.s. inflation cooled last month. it slowed to 3% from june a year ago. that is down from 4% in may and a pullback from the 9.1% a year ago. core inflation stripping out

food and energy rose to 4.8% the smallest year on year gain since october of 2021. breaking this down by sector is shelter which accounts for 70% cpi. that managed to rise 7.8% on the area there other breakdowns with food down and energy down 16% used vehicles dropping off more than 5%. as we noted, another piece of data coming out today on the data front will get jobless claims and factory prices and producer prices are expecting to show a 0.4% increase on the year that's the lowest level since september of 2020. core ppi is seen falling to 2.6% year on year so sir christopher periedes is

from the london school of economics and nobel laureate of economics. has the inflation reading changed the task for the fed can they, perhaps, claim their job is almost done >> i would think so given the recent increases it takes time for this to take full effect. inflation is moving in the right direction. i would wait and see what happens next i don't expect anything to happen pto make them want to increase interest rates more. >> do you see one or two more hikes? close to the peak?

how close is the question? is it one or two s >> i don't see it. inflation is coming down the labor market is not getting tighter. i don't think there will be inflationary pressures coming from that direction. i don't think there would be a need for further hikes europe might be so >> i mean, the numbers have dropped off. the way they pointed out and according to the data and the cme tool from the fed, there is a 92% chance they will hike at the end of the month does this help for a softer landing? can we say there will be a

softer landing and writeoff the chance of the full recession >> obviously, there is the probability things will be different. if i was there, i would wait i think there would be a soft landing based on what i see now. i wouldn't do it from what you said, i'm going against the majority of economists that's what i would do if i were there. >> it is also about the final push to 2% if one is trying to do a pushback, you see the initial push is the one that gets harder we could see the same for inflation. they got to 3% the hardest part is dropping off to the 2% mark is it that reason that they will

keep looking at tightening i know you have a contrary view, but could that be the primary reason >> it could be you see here is where you need more patience. you need to be more disciplined than the beginning the problem is that it is not likely to cause problems with 3% and not 2% of course, be patient. businesses will react and things will eventually get there. they will have longer-term investment plans

you could say we are seeing a softer landing coming and seeing delays back to 2%. we are doing well so far let the economy play out >> does the yield curve begin to, you know, dis-invert from here we have looked at the numbers. they still have a marginal gap with the 2/10-year do you see that big drawdown in the inflation number >> i would think that depends on the expectations usually on expectations are what we are seeing now and i expect that to work out. >> sir, thank you for that we will continue with you. do stay with us. we will continue our

conversation with you in a little bit after this break. sir christopher pisseriedes at london school of economics we will have a chat with him after the break. that is coming up. we will talk about how the uk is struggling to create new and better jobs with the world of work what is happening next we will unpack that after this also, start your day with all of the latest market moving headlines directly in your inbox. cnbc newsletter "the daily open." subscribe to cnbc.com/dailyopen or hit the qr code on your screen now

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some company news. disney shares are higher after they announced they will extend bob iger's contract through two years.

the house of mouse is looking to firm up plans during the two-year extension period. in february, he told cnbc he had no intention to stay past 2024 on a programming note, our u.s. colleague will speak to iger later today. that is happening at 1:00 p.m. cet. now the u.s. federal trade commission said it will file an appeal to block microsoft's $69 billion takeover of activision-blizzard a day the regulator rejected the deal. the latest road block in the m & a story when they announced they will buy the developer arjun is here with us to talk about the story. this doesn't stop everything, arjun, but it says we think this

should not go ahead and instead, the judge said we could see increased access to gains as opposed to decreased competition. what legs does the ftc have to stand on >> arabile, this is a surprise move from the s.e.c. they have not traditionally, once an injunction has been blocked, appealed it they feel strongly about this and where it is expected over the next couple days and what the ftc will argue the crux of the argument thus far has been about a couple of things they say this is likely to reduce competition in the gaming market in console and future which is cloud gaming. one issue they have is microsoft could take the games like "call of duty" and make them exclusive to the microsoft fplatform

microsoft said they will not do that and signed a number of deals to bring that game and other games to the rival platforms to it allay the fears it is not known what the s.e.c. will do differently. they must feel they have strong enough evidence to say this is reducing competition this is not about the console market this is about the future the next five to ten years in cloud gaming netflix-style streaming for games and what happens there in terms of who becomes the dominant player. that is what is at stake >> this is one to look out for it is not over pause is what we have right now. we will continue to check on it. arjun, thank you we will continue pto check on th st story. meta shares are up on the news that the social media is launching a new a.i. model the report says the open source

software will be trained on data sets to allow for image and code generation in addition to text elon musk announced the launch of the artificial intelligence company. x-a.i. it was reported in april amid the musk fears that other a.i. tools were too politically correct leading him to acquire thousands of processes with the potential to create distinct language model more information is said to be shared in a twitter spaces live on friday. sir christopher pissereides is the nobel laureate joining us this morning from the london school of economics. thank you for joining us and your time. the growth in the a.i. market is dramatic over the last year or so there is always the big question

of the economic and social impact where do you stand on this one how this effects job creation and innovation as well >> i'm optimistic of what it can do to jobs there is no doubt that some jobs would be replaced by a.i we are not there yet because many mistakes in chatgpt and all that i think it is not reliable enough to be adopted fully sooner or later, some jobs will be replaced. i think there is the prospect of creating more jobs and there will be those companies which adopt them with economic activity and more money and you send more and there is more demand for services.

there are many services that require the human touch. it is a personal service they don't like like it is taking over by a.i. in the future of course, one caveat, if you like, a.i. does have the potential to do damage if we use it in that direction we have to be very careful not to venture in that avenue with that tool. you need sense for the development of tit >> you have to luook at the quality of life. a four-day workweek and other entities how viable is that in the world

of a.i. and does it make for a very productive society, you think? >> that's very realistic, i think, and we are going in that direction. i think we will increase and be able to use a.i. in the health sector to improve standards and have more time we will be able to have more working fewer hours. how do we take those hours and one hour left every day or do we take an extra half day at the end of the week or afternoon or whole day? those are issues for us to decide i would think most people would prefer a four-day week you can get more out of life

more enjoyment >> i can promise you now there are people in the world rooting for that idea. sir, thank you for the time. we hope to continue to chat again very soon. sir christopher pissarides professor at the london school of economics and nobel laureate of economics do not his our u.s. colleagues interview with the san francisco fed president mary daly. that is the coming up at 5:00 cet. exclusively on cnbc. we are looking forward to the ppi numbers from the united states we will continue to check in on those for you tomorrow for now, that it is today. i'm arabile gumede " "worldwide exchange" is coming up next. stay tuned to cnbc

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it is 5:00 a.m. here at cnbc global headquarters. here is the "five@5. stocks trying on the back of the gains from the better than expected inflation report. and not so fast. disney's board of directors extending the contract to bob iger for two more years. the federal government is not giving up ton the fight for the activision-blizzard deal for