that's all for this edition of "dateline." i'm andrea canning. thank you for watching. good morning and welcome to street signs. >> these are your headlines. >> european markets bounced back with recouping from a few days losses. .1% of total assets. sparking fears for he global economy and keeping pressure on beijing to step up

stimulus support. sony posts a 30% drop in first-quarter profits. the conglomerate targets a high score from playstation saying it aims to sell 25 million consoles. investors are awaiting the latest numbers out of disney. the ceo says he may want to do away with the groups no growth businesses. it is a bit of a turnaround in sentiment for markets.

we are almost up 1% in the early hours of trade today. it is a sharp move versus yesterday. yesterday's session was a downbeat and that continued into the u.s. markets closing. the focus for investors was the downgrade of several regional banks. the banking index yesterday in the u.s. finished the session down 1 .3%. china is confirming the country is experiencing deflation. we will talk out that later on the show. the mood as i said is more positive today. up 9/10 of a percent. let's get further insight on the breakdown. i want to start with the

italian index. this after a extreme day of selling yesterday after the government decided to introduce a windfall tax on the banks. they are backtracking on the overall impact that the tax will have on the sector. as a consequence we are seeing a rebound at some of the banks today. that is the main driver of some of the positivity today. still a far cry from the all time high levels. moving in the right irection again. we are seeing a bit of a rebound and some of the more cyclical names. up 7/10 of a percent also seeing a rebound in some of the mining names which is interesting given the news out

of china. this morning we have basic resources, minor is doing quite well and technology up one and a half percent, interesting given the chipmakers were the worst performing assets yesterday. we are seeing a turnaround in sentiment there. the only sector trading in the red is down half a percent. let me tell you more about what is going on in italy. it is driving a lot of the discussion in europe. the italian government said it will limit the impact of its newly announced windfall tax on tanks. it comes after european bancshares tumbled on tuesday on the surprise news that there would be a 40% levy on access profits. the finance ministry says the tax will be capped at a fifth of the level estimated by

analysts yesterday. so we are seeing a bit of a rebound. we have not fully at recuperated the losses from yesterday. at some point the stocks were down 8-9%. they recuperated a third of the losses with more to come. this is one of the best performing sectors in europe. yesterday could be perceived as a dent but over the course of the year the stocks are up. we spoke about the impact the italian banking decision would have on the sector. today in light of the rebound, the italian banks are saying a rebound in other banks as well. a lot more positivity today. >> it certainly is.

let's look at u.s. futures. we have a little bit of a bounce back taking place in the futures market stateside. all three majors are trading higher now. if i can take you to the u.s. markets and the action we saw yesterday. this is how u.s. equities closed in terms of trade yesterday. all three majors and it lower. the s&p is down 2% on the month so far. a combination of factors driving that sentiment. we trade data out of china and the negative highlights here in the italian banking's sector and the u.s. banking sector had its own highlights. moody's saying it was considering more institutions. the u.s. bank stock fell on the news and commerce bancshares

dropping 2% after being downgraded by the credit rating service. let me welcome the head of equities. jim, thank you for joining us. a lot to talk about and we want to get your take on the italian bank action. it feels like over the last few sessions then headlines have skewed negative. it feels perhaps there is capitulation among those that were bullish in the market the last few days. is that a care fair estimation? >> i think so. the market underestimated the risks related to the global

market condition. in particular in europe and china. there was a underestimation of the said reduction which is draining liquidity in the system. overall i would agree with you. there was too much optimism. we will see the data soon. there are several factors which could determine further corrections in the market. >> there was a lot of concern in march around the u.s. banking sector but over the last few months the concern has been washed away. i was surprised to see the negative reaction yesterday when moody's came out with the

downgrades. why did the downgrade cause a concern among investors? >> the situation in the u.s. banking system is less under control compared to the european markets. if you look at the liquidity for the bank and different ratios, they are looser than they are in europe with acp stress tests, the situation is more under control. i think this paired with what we have seen before, the drainage of liquidity in the u.s. system and money markets is creating some concerns. >> i want to take you to what

happened at the italian banks yesterday. all of us were caught off guard. we are seeing a rebound this morning. it seems like the italian government is backtracking on some of the terms of the banking tax. do you think the sentiment toward the banking system will be permanently damaged after what the government decided to do? >> i do not think so, it was a badly communicated fiscal measure. i think what happened is the government did not make the right calculations. initially, after the announcement on monday the government iterated they are expecting to raise ,3 billion in tax but then they realize and the market relies that the

markets did not had a. during yesterday's session analysts started to make their own calculations and realized if the measure was to be fully impacted, the proceeds for the tying government would be well in excess of 4-5 billion. the backtrack as you mentioned happened toward the end of the session. the government realized to obtain the 3 billion, they can just tax .1% of the assets in terms of extra profits and they put the cap on it. this reduces the impact on 2023 earnings for italian banks. under the initial government conditions, we would have between 20 -25% impact and between 8-15% for the larger

banks. with this change we are now talking about numbers that are less considerable and more under control. we are talking about 10-12% for small or middle sized banks. nothing aiming for for the large banks, 3-5%. that is the reason behind today's partial recovery. i would like to reiterate we are talking about the 2022-2023 calendar earnings. obviously the market is looking ahead. the 2024 earnings should not be impacted. >> it is good that you state the numbers for us. it looks like this will have a negligible impact on some of the larger banks. to what extent do you think it

will impact the distribution plans? i have been covering the sector's for a while now and one of the appeals is these very generous buyback plans the banks have. to what extent do you think that will be affected by all of the decisions by the government the last couple of days? >> this is the main factor i think behind the correction yesterday. on one hand as i said, the impact on earnings, there was little impact on capital requirements and this probably did not trigger any opposition. the main concern from yesterday is what you said. today the italian banking system shows there in the area of 11-

12%. if you include dividends and buybacks. clearly yesterday that was under scrutiny. after the adjustment last night and the cap from what i have seen early this morning, most of the banks are confirming -- given their more diversified business model, i would say by in large, the distribution policies should be safe for 2023. >> thank you for joining us and sharing your analysis. >> that is quite reassuring for anybody investing in the italian banking sector. >> when i was discussing the italian tanks before the show i made the comment i feel bad for

the investors that sold out of stocks yesterday. they rallied a long way. >> it is tough to see anybody having a tough day on their portfolio. >> a small pullback relatively speaking. we will take a break but before that, if you want to get involved in the conversation you can access it directly. should we stick with that? coming up, china's economy dips into deflation territory. we dive into the data next.

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yes! that's what i'm talking about. [ cheers ] running up and down that field looks tough. it's a pitch. get way more into what you're into when you stream on the xfinity 10g network. welcome back, china's economy has dipped into deflation for the first time in within two years. the index fell by .3% year on year but still marked the first

decline since 2021. now china's consumer price index has reported a steady decline with the economy failing to take off. it will likely lead to further government stimulus. meanwhile annual producer prices sink falling by 4 .4%. >> duncan it is great to have you with us. let's start with the inflation numbers. now the cpi is in negative territory. cpi continues to be in deflation territory. do you expect to stay in the deflation environment in china? >> i think we will see it bobbing around zero for the

rest of the year. we can get fixated on the technical details. import prices dragging things down but big picture is that consumer demand is very weak. much weaker than expected. when china reopened. there is headwinds to sentiment. people are worried about jobs. the property market continues to suffer. >> they seem to be downplaying the significance, is it because they are not worried or is it the messaging? they do not want to give the impression that they are getting panicked behind the scenes. >> it is a bit of both. sentiment is weak so there is a natural impulse to talk things up and put it brave face on what is happening. also, the chinese authorities

are taking a different approach to this downturn. in the past you would have seen a big stimulus. a lot of people in the markets were expecting that this year. that is clearly not happening and there are reasons. the chinese government learned their lesson from last time. they had a huge debt, spent the pandemic short sorting that out. they are attempting to nurture a healthy recovery driven by consumption and private business investments. the reality is, that is struggling and everybody realizes it. the central bank had a press conference. they said look around the world, these recoveries tend to take at least a year. it is clear to me that policymakers in china, they record nice this choice of a

limited stimulus path has consequences. it will be a uneven and difficult recovery. >> in the absence of a stimulus package, how impactful are these measures likely to be, the more targeted and limited once you described. >> i think it will take a while. they have been doing things around the edges as you alluded to in the intro. the tax cuts are significant. that is smaller than this time last year. less than half the size of the tax rescue package last year. we have not seen much at all. there has been small measures. usually on the supply side. what we do not see in china is

a real attempt to boost consumption demand. the u.s. example of handing over local money, nothing like that. >> that created its own problems in the u.s. this week, many are expecting president biden to sign a executive order restricting u.s. investment in china. part of the legislation could involve private equity and venture capital to disclose investment into the country and the idea is to not incentivize investing in the country. how much does beijing care about foreign investment? >> these were rumored to come

out for quite a while now. i think we are already seeing some foreign businesses changing their investment plans in china. there is no doubt u.s. companies and other companies involved in tech sectors have been shifting at additional investment out of china. i would say on the other hand that many foreign companies have more of a focus on china's consumption market. looking at the long-term potential. maintaining the investment or even increasing it. so it is a mixed bag. when it comes to beijing they very much care about foreign investments. the new premier has a track record from previously managing shanghai where he brought in the tesla plant which is a signature success for him.

you have a pro-business reputation. he was instrumental in bringing back jack to china and moving the rehabilitation process forward. >> i want to ask you something else that is also quite significant and happening now. yesterday country garden, the biggest private property developer missed interest in bond payments. another company missed it and it sparked a wave of defaults in the property sector. what are the ramifications of this company missing out on this one payment. what does it tell you about how challenging the residential property market is now? >> the residential property

market has had full starts. it seems to be cooling off again. home sales are falling. country garden seemed like it was going to weather the storm and it came to me as a surprise that it is now getting into potential that. what it tells you is, homebuyers in china are waiting on the sidelines. there could be a couple of things going on. in the list of cities and the stronger markets, people are holding off. saying, will we get roperty easing in the next few months following the recent signals from beijing. some of that could be used. if you are potential buyer

ready to spend a substantial sum of money and a down payment of 400 thousand, or the equivalent. a large part of the ongoing costs are interest rates. of course you would hold off now until interest rates >> look forward to our next conversation. you can hear more about china on our website. he came on and talked to us about china and taiwan relations and he does not expect good things. coming up, coming within striking distance of taking the crown. ominnek at the companies prisg w weight drug

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welcome back to street signs. >> these are your headlines. >> european markets bounced

back, after round backtracks, deciding to cap the levy to .1% of total assets. the chinese economy dips into deflation for the first time in two years keeping pressure on beijing to step up stimulus support. the box office and financial units of sony disappoint. they aim to sell 25 million playstations this year. investors are awaiting the latest numbers out of disney. the ceo signals he may be willing to do away with the groups no growth businesses.

let's get a check on european market action. we have recovery underway. every major european region is trading up. the italians in front, 2%. the bounce back coming as the italian government backtracks on the major surprise levy that was being pushed on italian banks. decent green on the board for the french market. the spanish market up 1 point to. this is the wall street open, green across the board. all three of the majors looking to regain ground. 8-11 sectors negative in the session led by materials.

two stocks that shined bright yesterday, norman and eli, pharmaceutical behemoths. here is the reason why. new data from a late stage trial shows the drug reduces the risk of stroke and heart attack by 20%. the company has been testing at in a trial lasting five years and involving 75,000 participants. they are now filing for a expansion in the u.s. and europe later this year. if you're following the story, this was the big catalyst that investors and analysts were waiting for. the results of the select study. why is it important? we know that the obesity drugs are successful in helping people lose weight but we did not know if the people who lost weight had less of a chance of

developing cardiac ailments. we are learning that so far the drugs to reduce the likelihood of cardiovascular events. if the company can show that patients are less inclined to need medical help later, insurers will cover the cost and that can be revolutionary. yesterday we saw shares rise 18%. eli lilly also rose yesterday. they have a competitor drug and they also reported their own results. the chart you see on the screen is norman's performance. you can see it has been a massive out performer of 300% over the last five years. for investors now the question is not is it a major milestone

but if it is already priced into the shares. >> it is remarkable. if you look at the stock, based on the fortunes of this one drug they came out with and it is a blockbuster drug. it is close to becoming the biggest mart market cap and europe. there is still some way to go. it is by and large becoming one of the most important stocks to watch. >> one more point i would apply before moving on and talk about it in more detail, yesterday was not just the two companies that benefited or reacted to the news. we also saw a sell off in the food companies in the u.s. campbell's sold off and hershey's sold off, the idea

being, in the future people will not be as hungry. we also saw a selloff on some technology companies. companies that handle hip replacement. if people are more healthy they will not need hip replacement. the implications are far and wide. peter joins us now. it is a pleasure to have you. if you watched the video we put together earlier in the year, peter made it clear that the select trial is the catalyst to watch. how does it compare to the bullish expectations for the drugs? >> these maxed out but more importantly the doctors we spoke to in the u.s., you saw the sharepoint reaction.

the patient should like it given the benefits we saw. >> what does it mean for your expectation for peak sales? is the good news baked into the share price? >> you have to see the woods through the trees. we have a situation where we have a diabetes market. it is already a $30 billion market. it is a two player market. that does not look like it will change. data like this will fuel the patient demand for the drugs. most importantly, the willingness to reimburse. >> we talked to them at the last earnings and one of the things that came up is they were having supply-chain issues with manufacturing.

is this something that can be easily rectified? >> they are both working night and day to ramp up capacity as quickly as they can. as you mentioned the problem is they are doing so but they cannot match demand. it is not a quick fix. lilly said the same thing. when you think about them in the last 10 years they spent 11 billion. next year they will spend more. they are stepping up to meet demand. >> what you think about the side effects? i am hearing about the class action lawsuits that will be filed. mainly they talk about stomach paralysis. >> when a class of drugs gets this much media attention and awareness.

things about the stomach paralysis will come out of the woodwork. some of the issues you talked about, the warnings are on the label. when you counter that with the benefits you will see not just on weight loss but proven outcome benefits. 20% risk reduction. i think every drug has a benefit risk profile. >> let's assume things continue to progress positively. what is the patent situation? is that a concern investors should be thinking about? >> more so for nova. they still have a few tricks. one is the follow-up product.

it has a extra mechanism on top. they have free data but the end of next year. this drug could be in the market as early as 26-27. my second response would be, nova knows they have multiple patents to deal with in the next 10 months 15 years. you will see them step up are in the investment considerably. they are planning for that. there will be a top spender. they are planning to make sure they do not find themselves with nothing in the cupboards in the next decade. >> are there any other lecturers of obesity drugs we should be watching out for? any others we should be watching out for

>> as you might imagine, given the class of drugs, every man woman and dog are trying to get involved. how do you bring somebody to the table that will be better. what they announced, what they have in their hands are drugs that are providing 25% weight loss. they are entrenched in the world of diabetes commercially. it is a real tall order to knock these two off their perch. unless there is a unexpected side effect that will merge.

>> right now it is not even a growth start, it is producing too much now. that study opens up for nova. the idea is, public health organizations may start covering the drugs which will make them more accessible to the public. put it in simple terms. does it mean that the german public health system and private insurers will start covering these? >> there is 100 million of these people will >> what we are seeing is the willingness to reimburse the drugs is improving and that happened before yesterday's select. not just in the u.s. when nova

had 40 million lives covered. you are seeing it in the uk, not that trajectory. that will open up further access. when you think about what is priced in, there will be millions on the drug but there could be will hundreds of millions on the drug. the volume opportunity is significant. >> thank you for coming back and joining us. for more on the obesity treatments you can check out my digital explainer. you can learn all about how the drugs -- coming up, how much magic is left in the kingdom? will bob and his urnaround

plan pay off? we will be right back.

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welcome back to street signs. is and they were safe for your money? these are some of the questions you're exploring with the manager of the aquamarine fund available on the premium service. give us a taste of what you will ask. >> let me run you through his credibility. he has been in the markets for decades. he is very respected. he got the warren buffett lunch for $600. it turned out to be a investment. it went for $90 million. 600 thousand for 90 million. clearly that worked well for

him. we talk about individual stocks and what is valuable in this market. alphabet, bank of america. for rory, mastercard. all of that will be discussed. that discussion as at 12:00. >> i am a cnbc fan being part of cnbc. >> i am a subscriber. >> these are unique and a little bit different from the typical programming. they are actionable. you are walking away with ideas. >> 12:00 is the time. amazon is joining the ranks

of other tech firms looking to cash in with soft banks arm ipo. the british design company has been courting several high profile cornerstone investors. that is ahead of the planned nasdaq listing. the market cap is topping 60 million which will make it the world's biggest ipo so far this year. sony has reported a 40% drop in line with estimates. the firm is targeting record and you will demand for the playstation, forecasting selling 25 alien consoles this year. disney's shares, analysts are expecting the house of mass to

see a rise in quarterly revenue and investors are looking out for subscriber numbers in the streaming service which are expected to fall by 3 million. box office performance and tv disruptions are expected to weigh down the earnings. we have more on what to expect. >> a lot to unpack out of these numbers. there is so many aspects of the business that bob has wanted to shift. really noting cost-cutting being a key component. streaming and the cable tv network needs to be looked after. when one looks at streaming in particular they are looking to add to the portfolio. they are adding a 33% stake owned by comcast.

disney plus itself is not making a profit. they are expecting to see a operating loss of 760 million dollars. up 100 million from the second quarter. it tells you it is still not helping them. also network tv concerns, unnecessarily making up the core of the business. the box office performance has not gone well as well. the last indiana jones movie did not do well in the box office as well. the question is, have they begun to lack creativity? they are looking at cutting a little bit from both tv networks. those have been crucial and important. it is a espn deal that will hopefully help disney shore up funds as they look to help the

streaming business from losing money. here is what bob had to say in particular, when one takes a look at what it is they need to do to cut cost and be more efficient. >> the transformative work is to make sure our cost structure reflects the economic realities of the business which includes disruption. transformative is dealing with dismisses that are no growth businesses and what to do about them. we are going to look at opportunities there. it is a business that will continue to struggle. >> disney share prices are down 21% when one takes a look at the last year. 50% on a two-year basis. giving you a clear sense at how bad things have been. the expected revenue, when you

compared to the s&p 500 there has been a lake. managing marginal gains in the two-year period were as the disney stock price took a 50% drop. even against peers it is faltering. the job here will be very significant. disney going down in this regard while the rest of the streamers are going a little bit higher. >> i want to pick on your expertise. you have done moonlighting for us. one area investors are interested in is the future of espn. i believe the ceo spoke about the possibility of selling its stake in espn and looking for partners for the sports channel. >> he noted looking for a

strategic partnership. espn has been important. they are looking to get into the wedding world more. espn signed a deal with pen entertainment and they are now changing the sports betting book. espn that's is now what it is called. a deal that they will pay over the next 10 years and that deal could be extended for a further 10 years and that hopefully will bring more money to disney. they are not trying to pay more money. the hulu investment will cost them sick difficultly. getting into espn and making sure it becomes more profitable from here, it will be critical for the business. >> thank you for the break down. so much to look out for. was turn to european

markets, we are seeing a better day than yesterday. they are trading nicely in the green. in the first couple of hours, you will just get a picture in the big focus is the italian index. a rebound after yesterday after the italian government decided to backtrack on the conditions regarding the bank tax. that is positive news for the italian banking stocks. we still have not recuperated the losses we saw yesterday. they ended 8-9% lower and even though we are up today we have not fully compensated for the loss. over all a lot more positive in the european markets. >> also in u.s. futures. what stands out about the rebound is how difficult it is to keep markets down for too long. there seems to be a persistent momentum even though the

headlines have become increasingly negative over the last few days. markets are resilient. investors are relook didn't to position barash lee. >> people have become more cautious, you can see it in the analyst notes coming out. key strategists saying the second half of the year will be more challenging. again we are in for a more positive set up today. sentiment has changed. we will watch the markets closely. >> as we always do. >> that is it for street signs. i am giuliani. >> the robotics changes coming up next. shipstation saves us so much time it makes it really easy and seamless pick an order print everything you need slap the label on ito the box and it's ready to go our cost for shipping, were cut in half just like that go to shipstation/tv and get 2 months free

wow, you get to watch all your favorite stuff. just likit's to die for. and it's all right here. streaming was never this easy, you know. this is the way. you really went all out didn't you?

um, it's called commitment. could you turn down the volume? here, you can try. get way more into what your into when you stream on the xfinity 10g network. nice footwork. man, you're lucky, watching live sports never used to be this easy. now you can stream all your games like it's nothing. yes! that's what i'm talking about. [ cheers ] running up and down that field looks tough. it's a pitch. get way more into what you're into when you stream on the xfinity 10g network.

it is 5:00 a.m. and here is your five at 5 a rough session for wall street yesterday and new concerns over the u.s. banking sector. and a similar picture over in europe. italy backtracks on a historic wind fall tax. also in china, deflation fears front and center with new inflation data coming in worse than expected. plus, disney set to report results after the bell announcing a major sports betting deal with penn entertainment. later in the show, the white house re