that's all for this edition of "dateline." i'm craig melvin. thank you for watching. ♪ good morning welcome to "street signs." i'm julianna tatelbaum >> i'm arabile gumede. these are your headlines bp quarterly profit sinks 760% on the back of energy prices, but boosts dividends with a buyback the ceo explains the reasoning to cnbc. >> because of the confidence the board has and performance of the company, the outlook for the company and importantly, the

reduced share count, we also announced we would increase our dividend by 10%. hsbc first half net profit tops $18 billion more than doubling on the year before sending shares to the top of the stoxx 600 ceo noel quinn says they will gain from the performance. >> if all goes to plan this year, we should be above the pre-pandemic level we are paying a flat 10 cents. investors in high spirits as diageo posts a beat in full sales and operating profit the ceo says double digit net sales in beguinness is a driver for the group. >> people love guinness right

now. and daimler helps offset pressure with the bullish guidance for the trucking sector we will hear from the ceo martin daum this hour we certainly have been following the busiest weeks for earnings across europe bmw released their numbers for the full year outlook. updating the full year outlook the margin is at 12.6% for the first half of 2023 also saying that it is 11.3% when one just takes a look at the three months of the second quarter for 2023 so far. supply chains set to be a head

d wind in the second half of the year the autos delivers of 10.6% in the first half against the 9.2% which is seen in the third quarter alone of 2023. now, it always said that the group performance from bmw yielded a group, but the segment delivering to customers expected to see solid growth of a prior year level slight growth is what was previously anticipated now they expect solid growth the company expects positive momentum in the second half of the year and updating the full-year outlook as noted there. shares, however, are down 3% falling in the session as those supply chain issues continue to be a headwind for the second

half of the year the headwinds are from a product pipeline and higher material and raw material costs those costs adding to the strain for bmw so far saying the group average is the headline number at 12.6% for the first half of the year 11.3% for the second quarter julianna. >> fascinating release from bmw. investors surprised by what they have seen given the sharp negative reaction in bmw shares as you saw on the screen a moment ago it is a big day for earnings let's focus this morning on the chemicals sector we heard a number of negative surprises from the heavyweights in the space the chemicals company did confirm guidance and you could say a lot of bad news around the chemical sector is priced in

a lot of chemical stock seeing resilience with the negative headlines and covestro the stock is flat on the morning. in the drinks space, the stock is trading 2% higher this morning. the company beat expectations. dhl group with the company raising the lower end of the full-year guidance down 3.9%. daimler truck is down 2% daimler following an upgrade in july we got good news less than a month ago from the company this morning, nothing incremental to drive the shares higher from here hsbc earlier today, overnight, delivered a strong set of results hiking guidance and delivering a really impressive profit for the quarter shares up 2.7% bp also performing well this

morning. let's dive into the oil major. bp has boosted the dividend by 10% and launching a share buyback of $1.5 billion. the energy giant saw second quarter profit fall 70% from a year ago amid fuel prices. ceo bernard looney spoke to cnbc >> that is correct that is what we are doing. what we said we will do this year is return 60% of our surplus cash to shareholders through buybacks that's what we did today by announcing a $1.5 billion buyback program for the second quarter. additionally, because of the confidence that the board has in the performance of the company, the outlook for the company and importantly, the reduced share count, we also announced we

would increase our dividend by 10%. that's our dividend over 30% now from just a few years ago. it is a very, very strong distribution story this morning. $1.5 billion buyback at the same time, a 10% increase in our dividend. we bought back roughly 15% now of the company shares in the last 18 to 24 months this is a strong story of returning distributions to the shareholders and while we continue to invest and growing in the company >> we will be digging deeper into the bp numbers later this hour when we speak to pauk sankey with sankek research. back to earnings hsbc the bank hiked guidance and now forecasting net interest income above $35 billion after the profits surged twofold to $21.7

billion. the lender announced a buyback program forvealing the payout ratio will be 50% noel quinn spoke with our asia colleagues and gave us an outlook for china. >> all experienced challenges out of covid mainland china is coming out of covid and we are in the first section months strong rebound in q1. i think it is fair to say the economic recovery is patchy. some parts are recovering well and others are more challenged let's not lose sight of the fact in the first two quarters gdp growth in excess of 5% we believe there is more to come we are very committed to helping mainland china and hong kong and

all countries around the world as they come out of covid to help rebound the economy and get back on a stable footing i have confidence in china it will rebound it will be a patchy rebound. there is a place for more stimulus, particularly where consumers are reluctant to spend. i think that is an area worthy of consideration >> let's talk banking. victor york is the global head of equities at bnbp paribas. victor, thank you for joining us one would think a bad play is bad loans. that increasing risk is the one that they are looking at when does that shoe drop before falling for these banks? >> i think it can be quite some time until we get there.

i think one of the key themes coming out of the earnings season is the degree of consistency in banks earnings. this has been a fairly mixed earnings season for corporates in u.s. and europe in the banking space, this is the third consecutive quarter where the markets actually revise earnings expectations higher for the banks as they come out and report. i think we are some time away from the asset quality problems. >> you made a note that banks may need a soft landing to perform. that's why, perhaps, it is so cheap at these levels. how close are we to seeing that soft landing in the is sector? >> i think we are at it. there are a number of really quite remarkable themes emerging from the banking sector right now. one is the profits

you know, this used to be a sector in europe which generated around $190 billion of pay provision profits per year that looks to grow to $290 billion by 2025. that's a pretty decent uptick for a sector that trades around the same type of levels equity wise that they did five years ago. another theme also is a big change is the core versus periphery theme. you could argue that now the periphery is the new core. if you look at earnings, you mentioned uk, you have problems with the peak net interest margins and buildings that i'm worried about and reporting increasing in the arrears in the mortgage portfolios.

germany, some concerns of commercial real estate exposexpe go down south to italy and the biggest banks are reporting return on tangible equities in the mid to high teens which is remarkable for that space. with no sign of asset quality issues emerging so far you know, the periphery is the place which actually is seeing the resilience right now with european banks the problems, if there are problems, are emerging further up north >> you talk about peak net interest margins already being seen in some of the regions like the uk when do you expect to see peak net interest margins in the periphery? >> that may be, you know, toward the back half of the year if you take companies like unicredit.

they have been calling for peak net interest income growth around the middle of the year. they keep pushing that further out suggesting that they still feel they are pretty good with momentum that should still happen some time toward the back half of the year if you look at the bank lending surveys, the yuan is calling and reporting a fairly sharp decline in loan demand it does make sense the tailwind should abate somewhere i think where historically back to your point about the hard or soft landing, where you sea the p -- where you see the peaks, you see the acceleration and the pretty hard fall now given the bigger resilience in earnings momentum and the

work that's been done in shoring up capital and reducing, the fall is much more likely to be shallow when we get there. that, i think, is why the market is unlikely to fall when that happens. >> what is the catalyst? i take your point about the support there for the banks from the performance perspective, but what will get investors investing at these levels? >> for banks, i think it has to be consistency there is no magic story like you see in the tech space and so forth. this is the bullish story here which is back to the old normal and generate those kind of profits. that's what is happening it takes consistency to deliver this quarter after quarter after quarter at a time whether growth slows. one thing which also has changed

is the regulator approach. the ecb used to be the bear which did stress tests and identifying banks which needed to raise more capital and highlighting the fact that, you know, most banks were under capitalized. we are no longer undercapitalized and no legacy epls the ecb has actually become the bull using the stress tests and another one last week to essentially sanction higher and higher capital returns and share buybacks and hsbc was another one today. that capital return to shareholders also cushions the downside for the sector as growth slows down. i think consistency and this realization that the downside is fairly limited compared to the past those will be the factors that

bring in new investors over time. >> viktor, i appreciate the time interesting thoughts thank you for joining us here in studio viktor, the global head of credit and equity and derivative strategy at bnp paribas. and on to the alcohol space. diageo has a full operating profit for here at over 17 billion pounds the british drinks giant expects cost pressures to continue to 2024, but net sales will accelerate in the second half with the challenging environment. the ceo told cnbc consumers are continuing to spend despite high prices >> we see this as a strong set of results our organic net sales were up 6% organic operating profit up 7%. both of the numbers are within the medium term guidance i'm especially excited about our three largest categories

scotch, tequila and guinness are up double bidigits guinness having a stellar year i'm pleased we expanded our operatin investing in the business. our advertising is up 6% as well i think the set of results shows we can consistentlydeliver in the difficult macro environment. >> diageo coming out saying things are bound to be positive and consumers are premium-tizing it they are saying the vietnamese business is struggling for heineken and they are downgrading for the full year.

a contrast where you look at the growth way lie and it really does look like the spirits game is hot as the ceo pointed toward particularly guinness and look at that beer space they have gone into non-alcohol beer, diageo, and that investment means they have seen more growth as people think more about what they are drinking and not drink in high volumes. volumes are down. >> it isis similar to heineken heineken is seeing the premium trend outside of vietnam which is a key weak spot for them. i was listening to the conversation with "squawk box" hosts and heineken is known as an em play massive investment and focus on emerging markets they asked the question of

disadvantage or advantage right now to be an em play in beverage long term is seen as an advantage. clearly right now, the emerging markets are the source of the problems for heineken. >> one can't forget the grain deal is one to look out for especially with heineken who will be impacted by the -- if it goes the way it goes -- wheat prices yes, a lot cheaper than before, but could still remain at a level that isn't necessarily wanted for the likes of heineken even diageo to a certain extent could be suffering interesting. we will take a look at this and have a drink on it later >> i look forward to it, arabile. let's turn to the chemical sectors. covestro net profit fell in the second quarter along with the 20% drop of sales.

the german chemicals company said results would be in the lower half of the range for metrics among the challenging environment. the ceo told cnbc it is important to look at the overall picture. >> we particularly looked at the second half year on year numbers and advantage of the decreasing raw material prices and maybe not to a large extent, but we were able to keep prices in some segments and particularly our solutions and segments stable or slightly increase prices at specific customers that has helped us deliver results that we have delivered in the range of the died guidanr the second quarter on the other hand, in the commodities segments, those are in the days and weeks depending on which we play for the customers depends on the supply and demand situation currently, the situation is the

weak demand situation in some of our key industries to put this in perspective, the auto industry has possible sif si tive -- positive signs we see the electronic sectors and the construction sector still showing negative growth rates. >> i think the chemical sector is fascinating to watch in the course of the earnings season. i'm bias coming from the chemicals space. it is interesting because the chemical companies have delivered disappointing results. covestro no exception with the shares trading flat after the disappointing results. kpi expected in the lower half of the guidance range. i would say covestro in contrast to the chemical companies following the similar trend is void by the hopes of a takeover by abu dhabi investment group.

covestro rejected the initial offer, but maybe another offer is coming through. that's why the shares have performed well up 27%. this is a complex story for the chemicals giant. coming up on the show, sylvia will join us from the port to talk trade right after this

welcome back to "street signs. chinese investment in metals and mining is set to hit a record this year ago to the "financial times. investments topped $10 billion in the first half of the year. that is more than the entirety of 2022. sylvia is joining us where the container traffic dropped 6.6% in the first quarter sy sylvia, talk about why you went

to this port to talk about trade in china >> reporter: it is a fascinating case, julianna let's focus on the trade aspect. we did see a drop in volumes in the first half of the year compared to the same period a year ago looking forward, there is a lot of uncertainty about how these trade volumes will develop that is the main message from the vp for international network of ports he said this stage means it is unclear for how they will move through the year >> it is a difficult situation to look at the first six months, we had a reduction of 5.5% on the top of volumes and the minus 6% exchange. it is not all doom and gloom if you compare us to the other ports. if you do that, we gained 1% of

market share we are on the decline of 5.5% in volumes. if you look at the causes, it helps you understand the future with the difficult geopolitical situation. the invasion of russia into ukraine is an important element in building trust and confidence for consumers all over europe. it has a tremendous impact on energy prices. if you bring all that together, the uncertainty is not good for international trade. if you look at the figures, the second quarter was better than the first quarter. that's a positive sign for us with the port gaining 1% market share. that is a positive development let's not all be negative. it will depend on what happens in the energy market it will, of course, rely on the big part of what happens in ukraine. is that going to escalate

furtheror calm down? will we come to a solution this is an uncertain element why do i stress this it impacts the energy prices especially in europe and the port, the chemical sector is competitive to us. to remain competitive in europe against the chemical complexes around the world, the price of energy is important. the price of energy, which is now relates to the confidence in the european scene, that will, to a large extent, define whether we will see further growth or decline in chemical production in this part of the world. >> reporter: plenty of un uncertainty. >> absolutely. >> reporter: i wonder if you felt pressure from the european politicians to reduce the importance china has for the port >> first of all, we are the port

authority, but we do not make policy we have to comply with policy. we want to comply with the eu and belgium legislation. what wi what, we as a port, as a public player, would not want to be too dependent on one we have in the covid period seen largely reliance on production in china if you add the disruption with the supply chains that we were confronted with the need to rethink our independence. >> reporter: you hesard luc arnout talk about that inn independence this is what others are stepping up with the chinese investment

across the region and the idea that the continent needs a different relationship with china. 20% of the container terminals here belong to chinese firms china plays a critical role with trade volumes. going forward, you heard luc saying he does not feel pressure from european politics, but he d acknowledge the trade connections and that is something we are hearing across the continent. >> sylvia, thank you for the report out of the port of antruge. coming up, revenue revs up

at daimler trucking as we talk to the ceo martin daum stay tuned for that. it's a first on cnbc ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com.

welcome back to "street signs. i'm julianna tatelbaum. >> and i'm arabile gumede. these are your headlines >> and bp still boosts dif vided and announces a $1.5 billion buyback. ceo bernard looney speaks out. >> because of the performance of the ompany, the outlook for th company and the reduced share count, we announced we would increase our dividend by 10%. hsbc first half net profit tops $18 billion more than doubling on the year before sending shares to the top of the stoxx 600 ceo noel quinn tells cnbc shareholders will gain from the lenders outperformance.

>> we should be above our pre-pandemic dividend level. at the moment, on the interim, we are paying a flat 10 cents. bmw shares slide after the surprise guidance update lifting sales, but warning supply chain issues will persist. and daimler hits record returns after offsetting cost pressure and the ceo will speak out with us next let's kickoff with the interview. daimler truck reported revenue of 13.9 billion euro in the second quarter up 15% from the year before. the ceo of daimler martin daum

has joined us. martin, thank you for the time recording strong performance net profit is only marginally better than a year ago cost factors in the underlying business or is this a volume game here? >> no, first of all, we increased sales by 10% we increased revenue by 15%. we increased significantly our profitability ebit by 40%. for the very first time now in our history and that reaches back 100 years, we have double digit return on the quarter. we are proud of what we could have delivered this quarter. >> what is the key factor here with profits being slightly better off than a year ago is that really just cost

pressures hitting the business at the same time, we have seen a drop off of group orders year on year is this a slight concern amid the higher interest rates in the market and tougher financial circumstances? >> two aspects first is looking back. we are doing better than the prior year i would say for three reasons. number one, we improve our efficiency this is a tough task that we took on a couple of years ago. we are in the middle of the successful path. second, our service income is growing significantly and third, suddenly, the sales with higher prices and strong sales at higher pricing helps the bottom line those factors, each of 1/3, counts for good results in the quarter.

this does not give the indication or the wrong indication we are sold out for this year. we have not opened the order books for next year in europe starting from the second quarter or north america or the japanese markets. i expect the moment we open the order books next year that we see a surge of orders. i'm not concerned at all all of the vibes we get from customers is positive for next year no reason p for me and my team worry. >> martin, you upgraded your guidance in july and announced a share buyback program. shares are reacting in a lackluster way to the full update for the market. what changed between your july upgrade and today which is worth noting for investors >> nothing changed we are fulfilling and proving

what we announced two weeks ago that the markets are positive. reacted to what we announced with the share buyback this morning's directions of the market is not a direct reaction of the announcement. i would say that is a technical reaction we fulfilled all expectations and over-fulfilled exppecexpects >> thank you for the color shares are up nearly 12% in the last three months. useful context for sure. martin, let me dig into your capital allocation policy and shareholder return policy. you did announce share buyback two weeks ago. at the same time, clearly, you have robust demand in the pipeline how do you go about deciding

what to do with excess capital why is this return to shareholders rather than reinvest in the business >> first of all, we reinvest in business we have investment program that amounts to $3 billion every year in the years to come we have a lot of checks in the pipeline we launched a lot of exciting product in a record pace we are an extremely sound and solid company. we have no net debt. we have a really good liquidity. we have high income and cash conversion rate from ebit. if you are solid and sound and healthy company, everyone can benefit. our people, some might remember, we set out a record bonus to every worker in germany of the

-- germany. we have a good dividend in may and we start the share buyback this is what a healthy company can and will do. >> martin, quickly, you cited asia as part of the business of the -- business. despite china with the comeback post-covid-19. >> you are right one market that concerns us is the chinese market it still continues in the second year in the record low we have a feeling it will continue for some time fortunately, china is not the big market for us. it is rather small it is a joint venture with the chinese partner. a little bit farther away from the company. not a lot of concern >> sir, thank you for taking our

questions as always. martin daum, ceo of daimler truck. coming up, bp's ceo bernard l looney welcomes the decision to rngshein the north sea, but wain t transition must be rapid. we'll have more next

the uk government announced it will grant hundreds of new licenses for oil and gas extraction in the north sea with the first permits due to be issued this autumn this will boost energy security and reduce dependence on foreign powers the decision has faced criticism over the climate impact. the mp chris skidmore said issuing the licenses was quote the wrong decision at precisely the wrong time prime minister rishi sunak told sky news that the move is consistent with the government climate goals. >> even in 2025 at net zero, it is forecast at a quarter of the

energy needs will come from oil and gas. that is why technology like carbon capture is important. what is important is the oil and gas at home. not relying on foreign dictators and creates jobs here in scotland which is better for the climate. if we need it, better to have it here at home rather than ships from halfway around the world with two or three times of the carbon emissions against the emissions we have here at home it is consistent here at home. >> bernard loone yy gave his comments to t"squawk box. >> we're supportive of policies

with the transition being rapid and orderly. we have to invest in the gas and oil system in uk, that means investing in the north sea. we hahave a five well campaign n the north sarea we need to invest in the transition in the uk, there is no better example than the energy strategy of any company we are investing here in the uk in solar and offshore wind and hydrogen and ev charging and lng right across the energy sp spectrum supportive of policies which encourage the responsible development of today's energy

system here in the north sea and at the same time, accelerating the energy transition. >> bp shares are putting in a solid start to the trading day up 1.2%. other energy majors generally trading higher, but not the same ex extent bp is a outperformer this morning. let's welcome paul sankey from sa sankey research. paul, welcome. thank you for waking up early for us from new york i would love to get your take on bp's results what did you make of the numbers? >> i think the volumes, obviously, look pretty good. it is impressive to see how they have grown in the u.s. a lot of that is natural gas which is low price the market is focusing on the buyback program which was maintained and necessary it is a relief rally in the

stock here that bp is maintaining a decent cash return to shareholders which it needs to keep up with exxon and chevron and shell reporting last week. >> so many competing opportunities for bp to put its money. in terms of the strategy, he bernard looney made clear it was and and not or with the transition what do you think of their targets and does bernard looney have the balance right it is not until 2030 until they transition >> to be honest, we don't like the zig zagging and you uturns y have done. two years later, they announced

they didn't want to be an oil and gas company and they wanted renewables and the market thate it why would they be good at renewables that defeats the u.s. investors. if you look at the promised returns, which are never delivered from renewables, that is a poor return over the gulf of mexico investment or the north sea where we expect a 25% return you know, we're not fans of the strategy we think they should stick to oil and gas. >> paul, does that mean the dividend hike which has now happened for a fourth time seeing it decline during covid-19 particularly. is that reward enough to keep investors interested in the stock here >> to be honest, here i heard the u.s. investors talk about

the price of hate. when does it get excessive when does bp get too cheap it exceeds the equity value and you can buy it we have been at that level the stock is heavily discounted. the results are decent you know, i see the opportunity to narrow the gap in terms of valuation. it is hardto put back the strategy u-turns and dividend cut inside the toothpaste tube it is water under the bridge nevertheless, it damages the outlook and increases the risk for the future outlook that is a problem for the company. >> what is the way back? what does the path look like here you point out how difficult it is with the genie out of the bottle now oil prices have rallied 16% in july, but nowhere near where

it was with bp making those profits a while ago. what does the path look like do they get back to stability or are we in contraction territory for a while? >> as you know, they announced diffic divestments. these companies should orderly l liquidate. what we believe they should do is shrink and focus on oil and gas and maximize returns in the case of bp and shell, they should relocate they should be in houston or middle east. they are not welcome in the uk why hang around? go to the area such as houston or a country in the u.s. where you will be able to operate and

do what you do without being menaced and increase valuation because you have a strategy u.s. investors want if you are not interested in the u.s. shareholders, then keep doing what you are doing it is up to you. >> fascinating to hear what u.s. shareholders are thinking in the evolution of appetite for the oil and gas majors to transition or not to that point, who has it right? which company, according to u.s. share shareholders, have the mix correct and poised to deliver returns over the coming years? >> one of the biggest concerns is inventory that is to say how much oil and gas they have left to develop. in that regard, exxon is the winner with the best future oil development in the world that inventory question is pretty high on people's agenda

in terms of concerns essentially, the recognition that the world needs oil and gas and the fact that the matter is you should pursue that theme, particularly natural gas the investors like names in the saudi arabia of natural gas of pennsylvania and around that area that also speaks to inventory. ultimately, if you look at exxon and chevron and multiples they achieved, the market is not loving oil, but preferring those because they both repeat and won't invest in renewables unless that is compatible with the portfolio. exxon, it is clear they are pursuing carbon capture. that is liked by u.s. investors if they are done and the returns are in an appropriate matter.

>> paul, oil ripped in july as arabile alluded. does that continue >> two views here. one is we are in summer and you have maximum pressure from saudi on the market and it will stay strong for summer and we typically fall away after labor day and the things could get weak in the u.s. economy in the following six months which will probably weaken the rest of the world. the answer to your question is no the alternative view is the market is structurally tightened here this run will continue into the second half. you could throw on a continued dollar weakness story and you can get to a price that's strong in the second half that's on balance the consensus. there are a few of us out there worried about oil as we get to the end of the year for sure. >> paul, thank you i appreciate the time. thank you for joining us on the show the president and lead analyst at sankey research

interesting thoughts on the oil and chemical space quick look at the u.s. futures and where we lie right now. below the flat line is where we are as we wait for corporate earnings from uber and starbucks and murkerck and pfizer. 80% posting an earnings beat thus far certainly a positive tilt for the s&p 500 so far. >> another jam packed day. >> it doesn't stop that's it for the show i'm arabile gumede >> i'm julianna tatelbaum. thank you for joining us this hour "worldwide exchange" is up next.

s deserves a great deal. that's why comcast business is launching the mobile made free event. with our business internet, new and existing customers can get one year of unlimited mobile for free. it's our best internet. powered by the next generation 10g network and with 99.9% reliability.

plus one line of free mobile for an entire year. it's the mobile made free event-happening now. get started for just $49.99 a month. plus, ask how to get one free line of unlimited mobile. comcast business, powering possibilities.

it is 5:00 a.m. here at cnbc global headquarters. here is the "five@5. we begin with one for the record books. stocks doing something for the first time since 1975 has wall street kicks off a new month of trading. earnings season rolls on chips, drinks and tractors and more and why the reports could dictate the market's next move. we still with earnings and painting a mixed picture with consumer spending. we discuss with with the former vice chairman jerr