that's all for this edition of "dateline." i'm andrea canning. thank you for watching. good morning and welcome to "street signs. i'm joumanna bercetche. >> and i'm sylvia amao and here are your headlines. investors cheer a soft upi prynnet and now see a first rate cut in may. see shares are higher.

>> i think it's really, really important that people understand this is not cash and this is not state aid or anything like this, so i think there was a lot of misperception around this package. it is important to continue the growth. and renault sets more than a $10 billion revenue market for its ev unit and pair pas its ipo for the first half of in next year if market conditions are right. uk inflation calls more than expected in october, lifting the ftse 100 and sending sterling and gilt yields sharply lower. the chancellor says they're winning the fight on rising prices. good morning, everybody, and a warm welcome to "street

signs. we want to kick off the show with a look at markets because yesterday was an extraordinary ka day in terms of trade. we saw a remarkable rally. it was a small down joid surprise but enough to get things going that the fed is done hiking interest rates and instead is now going to turn their attention to cutting interest rates we saw a massive rally in stocks at the same time we saw bond yields come down since the banking turmoil back in h march. this is where futures stand right now. we're looking at continued gains. the dow jones looking to gain about 1 to points in this early hour, the nasdaq about 85 and the s&p 500 about 17 in terms of where we left things on wall street, all three of the majors ended sharply higher than nasdaq, about 2.4% really strong gains in the tech sector, the s&p about 9% the dow jones added nearly 500

points worth noting that a lot came from short squeezes, investors covering their shorts given about what they believe to be a changing narrative in terms of where the fed goes from here what does it mean for european trade? we're higher this morning and pretty broad based the ftse 100 is out in front the contact france is up to come back to the fotse 100 we got a similar sign so it's really turning into this global narrative that central banks perhaps have inflation coming urned control now, from a sector perspective in europe, this is where we stand, technology in front, mirrors the outperformance we had on wall street that basket of stocks up 1.8%. retail up 1.6. basic resources also trading very well this morning so a very cyclical tilt. on the downside you have more

sectors, telecoms and insurance the only two in the red. as for asian markets, the hang sang was the real outperformer in hong kong that market up nearly 4%. so really strong risk on sentiment coming through after that downside surprise from the cpi prints in the u.s. a little bit more muted for the shanghai composite and the mainland, up about 0.6%. i mentioned the move in treasury markets you've got the 2-year trading around 4.8%, the 10-year around 4.4% as i said, we saw a major decline in treasury yields yesterday, the biggest daily decline since back in march. a huge day for markets yesterday, sylvia. >> huge day. actually i'm wondering at this stage if markets are perhaps overreacting to one single piece of data because actually that was one of the messages from the ceo of jpmorgan.

jamie dimon said people are overreacting to short-term numbers, and in his opinion they should stop doing that, and he's also of the opinion we could actually see the federal reserve hiking again in the future in his opinion, we're not done yet when it comes to the rate hiking cycle of course, when we look at the market reaction over the last 24 hours, that's clearly not what the markets are pricing in clearly at this stage, most market players seem to be expecting that the fed is pausing this rate-hiking cycle also important that yesterday we also heard from home depot, and their message was actually very much in tone with this data on cpi from the u.s home depot also said that it's seeing inflationary pressures receding, and, of course, the markets were also happy to hear that. >> it does feel like the market in the last 24 hours or so has really taken hold of this idea that the u.s. economy is

approaching what appears to be a soft landing, what many thought was impossible at many stages here inflation coming down to the fed ultimately doing its job while a recession is not here and the u.s. economy remains pretty resilient. so that seems to be the market narrative that's taking off, and it's holding so far today. i want to take you to breaking news we're receiving from the german constitutional court. according to the latest breaking news, it says the german constitutional court rules the transfer of any used pans dimmick fund into the fund illegal. this is important because it could impact the way the german government will be spending going forward. one analyst has made the comment we have yet to see the full details from this decision, but

according to them, this could lead to the deficit spending plans by 40 billion euros for 2024 and then by a lower amount for the following years. this is also coming at an interesting time, jjulianna, because we know the german government has been trying to spend more, particularly on the defense, and this is one of their main policy targets going ahead. >> let me take a step back and put this into context what this court ruling is all about. essentially opposition politician attorneys have accused the government of violating the debt break essentially they suspended the debt break during the pandemic but allocated too much they had leftover money. they put some money into the government's initiatives toward the green transition and this is wrc it's taken us to this constitutional court decision. the court has ruled with the

opposition and against the government and this is where the implications come in what does this mean for government spipding in germany moving forward, what does it mean for the coalition ruling parties. >> absolutely. and it comes at a tricky moment for the german economy because they're expected to see a contracted growth this year. i wanted to discuss this with our next guest, the chief european kbeconomist at citi. thank you for joining us let's get to the main crux of this court ruling that essentially says the reaction of the government was illegal what does this mean for government spending going forward? >> well, that is the big question at the moment we know it's not really unexpected that the court is not happy with what the government did at the time, this taking of $60 billion which was supposed

to be spend on corona measures and rededicate them to other purposes and more importantly allowing the government to spend money outside the constitutional debt break in future years because alongside the shift there was a change in accounting rules for when exactly spending accounts against the debt rule also in 2021 now, of course, that means the $60 billion are now at risk. i say at risk because we don't know whether the court now says retroactively that spending has to be reversed i would expect not because otherwise the court should have granted an injunction, so the question is how much of that has not been spent my calculation ahead of the decision, and we'll have to see the devil in the details, that could potentially be 20, 25 billion euros. and now the question is then how

quickly does the government have to essentially take that out of spending in the worst case they have to suspend it in 2024 by that arjtmount against gdp. tomorrow the budget committee will convene to finalize the budget so really if this is the consequence, this could be a major short-term headache for the government it's also possible the government could argue all the money has been spent and, therefore, there are no short-term consequences. then, of course, there are consequences for the medium and long-term fiscal policy as well, and that's where we're going to have to see where the court wants to go with that. >> i want to turn to some of the dynamics within the government coalition, christian of course, we have the finance minister who's a huge supporter of the debt break.

how difficult do you think this ruling could actually be for himself and his party and ultimately for the dynamics within this governing coalition? >> i think if he had not been part of the group, he could have taken the government to court on this he'll essentially be proven right. he and his party believe the constitutional debt break is good for long-term finances and so on in germany even in cases of emergency, germany's fulfilling that as well and so on of course, some major headache for him in the short run, but he's been pushing for fiscal discipline anyway and this just backs him up i think from his point of view, it's good. of course, for the rest, they have issues with the constitutional debt break, but the government has

really used the kind of tricks that they could have used to the full extent, and that's why, you know, whatever they have to recover of the $60 billion, the short-term impact on fiscal policy may not be that large, depending on how large the court has ruled and what the interpretations could be in the coming days and weeks. >> christian, what are you assuming about the medium to long-term consequences you alluded to this being the wig outstanding question and prance we need to learn what this court has ruled to make a strong conclusion, but what's your initial take? >> the german constitutional debt break is very, very strict. it's essentially what bienlts german fiscal policy and not the european rules the tricks, if you'd like, that the government created in the wake of the pandemic, this

creation of entitlements inside of the debt break and spending it later was supposed to soften the rule somewhat so that at least the government could address long-term consequences of the crisis outside of the debt break in the long run what the court's doing is basically telling the government that the way this rule with 2009 after the global financial crisis was to heed a balance budget rule, a very strict rule. it's going to force german governments to reduce the debt piles over the long run, which i think in the long run is going to be somewhere 10 to 20% of gdp. i think that's the kind of level we're heading for in the very long run very perspective rule. i think the ruling today is the greater the chances that politicians in germany across the political divide are going

to come together and talk about a reform that will potentially loosen the rule somewhat so the less flexibility there is, and it looks like there's not much, i think the greater the chances that not immediately but over the coming years we are going to see a reform of this, which is going to approximate the german rules more than the other ones. >> can i specifically ask you what the implications are since so many of these funds were dedicated toward climate goals >> indeed. if the climate transition fund is impacted by the cuts mostly, then what we're going to see is a reduction mainly in public investment over the coming years, public investments, for instance, in railroads, for renewables investments, to support households, transition to electric vehicles could be at

risk so these are the spending measures most at risk in the short run. what i don't expect to see is cutbacks in welfare or things that are more relevant to consumption. so i think this is probably more an investment in germany than consumption in germany. >> thank you so much thanks for digesting this court ruling from germany. that was christian schulz. coming up on the show, siemens secures a $15 billion rescue deal. we'll discuss next 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

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now, siemens energy has secu secured money from the german government as part of a broad deal with bank and other stakeholders to help the company fill its order book. the company this morning posted a net loss of 4.6 billion euros

for the full year and said it's reviewing its structure as it looks to get the struggling unit to break even within the next two years. now the ceo told cnbc there should be no misconceptions of the guarantee as part of this rescue package. >> these guarantees are meant to secure customers in terms of prepayments, execution of contracts, and so forth. so it's a relatively usual instrument in the industry however, because of the size of our order book, obviously we are so big that obviously for the financial market, they look on it and have a concern. this is why this package was needed, and we're very grateful for the government of structuring it together with the bank and siemens' support. it's also really, really important it's not cash and this is also under a european order,

not state aid or anything like this i think there was a lot of misperception around this package. it was important to continue the growth and the guarantees will largely go to the great business and the other businesses to secure this enormous growth which comes with the energy transition. >> now, we know that some of the challenges that siemens has faced has to do with the wind power unit and actually i can't help but digesting some of the recent earnings that we had from other companies in this space. for instance, orsted has announced they're struggling they've canceled two offshore businesses and they took time off the year and more broadly when thinking about what's at stake for the wind power sector, i also have to remind our viewers there's constant iterations of looking at chinese

state aid in this sector so there's a lot of challenges here, julianna, when it comes to the future of power generation from wind and also important to keep in mind that we actually heard from shell not too long ago saying that they're actually investing and looking more at the core business, the oil production side of it, and not so much the future, sustainable arm of the business. when putting all of these recent comments, corporates together, i'm wondering what's the future here not just for wind but for the renewable sector more broadly. >> there's certain will i been more question about the wind generation and the wind part of the energy the past few months coming back to the energy today, i think the focus was much more on the rescue package than the earnings itself. on the front, the key piece analysts have latched onto, as

part of the rescue deal, siemens of india has thought about buying it. it could also be sold to siemens energy the full separation remains the goal that's key for investors lastly, looking through some of the come men day, deutsche bank says now that we see no urgent need it was indicated a capital assessment could be announced to support transformation and growth nothing is off the table but part of the reason the shares are performing so well is it looks like a capital increase is not going to be needed at this stage. let's look at other corporate news at this stage alstom has announced 1.5,000 job

cuts they saw last company's market cap take a hair cut of around 30%. separately the firm is looking to make up to 1 billion euros in asset sales and says it will very a capital increase. elsewhere renault saysite gaertsing revenue at its ev unit and pair by 2025 and aims to take the company public by the first half of next year. that is, of course, if market conditions are favorable it comes as part of renault's capital markets day. and we have charlotte with us. >> they have been losing a bit of steam and market shares with big competitors like tesla and chinese competitors coming into

the european market. so this is a fightback from renault when they announced back in 2022 they want to cover, they have an ipo for their ev unit called ampere. they announced it will be spring of 2024 they'll be looking at it, sylvia, if market conditions allow. it was supposed to be the second half of 2023, so it's already delayed. they're waiting and seeing they're looking to raise between 7 and 10 billion, according to reports. that's what they want. ampere would be fully funded they have been fishing out targets for ampere they want to more than double the revenue from 20 to 25 with an operating margin from above

10%, 2030 onwards. so one key aspect that i've been talking about in the release this morning how they want to de demde m demock rah tiez. they want to crack into the market and make the evs cheaper. they want to reach a parity by 2027 or 2028 they have different models they're going to present they'll have seven vehicles by 2031 including a new one they just announced today called legend, below 20,000 euros that's what they're targeting. they want to make the ev cheaper. they'll flood out some of the details. they want to attract some u.s. investors as well in the market. so they're giving more details here according to a note from

je jefferies this morning it's a wait-and-see situation. the market is waiting for more details from management. >> it's more of a challenge from ev makers to try to bring down prices and cover the margins gilt markets are opening for wednesday trade after uk's cpi came in at a lower than expected 4.6% in the year in october. prime minister richie ta'u knack said he would keep it down sylvia, this is going to be welcome news to the prime minister, of course, the bank of england, who's arguably been doing the work when it come to addressing the monetary issue. the prime minister came out banging away from the get-go that his goal was to have inflation by year en

that has happened. i have to think in the context of what's going on in the last 48 hours, this is going to be a real welcome development for downing street. >> i wonder if this unrest we're seeing in the uk, inflation, is actually more related to the fact that energy prices have come down also. >> definitely. >> that will be important to understand what the government has to say when it comes to that of course, they're actually trying to take credit here for some of this improvement in inflation. >> of course. >> let's see what's going to be the reaction from the bank of englanding because they have said they're nowhere near considering rate cuts at this stage. but coming up on this show, we'll hear from the leaders of the christian democrat union that's a cnbc exclusive coming up next.

i'm silvia amaro. >> and i'm julianna tatelbaum.

>> the investors cheer a soft u.s. cpi print and now see a first red rate cut in may. germany's constitutional court rules berlin violated their set break in reallocating 60 billion euros in unused covid funds toward its renewal programs raising questions over its upcoming budget and fiscal policy. shares in siemens energy are propelled higher despite a deeper than expected loss as the group secures a rescue package by the government. >> it's really, really important it's not karen and this is not state aid or anything like this, so i think there was a lot of misperception around this package. it is important to continue the growth. and uk inflation cooled by more than expected in october, lifting the ftse 100 and sending sterling and gilt yields sharply lower. the chancellor says the country is winning the fight on rising

prices let's turn our attention back to germany. it's in focus this morning after the cost constitutional court rules the transfer of the pandemic fund is illegal friedrich merz has told cnbc the country's not where it should be and is falling behind. let's join annette who has more. >> reporter: yes, it's a difficult situation the current government is in with that verdict from the constitutional court because literally they have $60 billion missing from the climate fund which is of utmost important by friday the batch for 2024 should be ready, and i think as of now until friday there needs

to be loads of discussions and negotiations between all three parties how to rea.m. indicate parts of the budget that we can make sure that the investments are done into that green transition so it's a blow to the government to be fair so at the same time, while the verdict was coming out, i was speaking with others and the front-runner for the chancellory in two years i asked what he thinks of the verdict of the international market that germany is the sick man in terms of europe's economic growth. take a listen. >> the german economy is still actually lacking behind. the international development over the past years, we're still not yet at that level, which we had before corona. all the other states in the world, industrial-producing

states, are again back on this level. germany's lagging behind this is a question of our competitiveness, and there are four main factors. in one, in germany, labor costs are too high bureaucracy is too intensive third, our energy costs are too high and fourth is our tax burden is too high. >> if the cdu wins the next race, the most prominent party, what does that prove >> we prove we're been able to win. we've won four out of six. the government is losing these elections in a row, so the opinion polls show that we are far ahead of all the others. our prospectus for the next federal elections are pretty well, but we have to work on that they are, for now, in two years.

so there's a lot of things in between, a lot of time in between. we have to work on the program, and we do it. >> the recent federal election now see an interesting coalition building with the greens being pushed out is that the way going forward because of migrate fwrags? >> this is my view is not a blueprint for the next federal elections. this is a decision made on the state level by the christian democrats there. we had it in berlin in february. we had it two years ago. the prime minister decided not to take the greens into the government, but this is something decided on the local level. we'll decide on the federal level after the next election provided we are the strongest parliament, and my personal view is i would like to have options at least two for our coalition partners, and this provides we will become the strongest p

parliamentary group in parliament and we're so strong nobody can be formed out of the middle of our parliament that's the goal for our elections. >> the rest of the world is watching jaermt as well and the rise of afd and that's a concern as well for the investors because they clearly have a question mark over whether germany is actually a stable place to invest. so what are you doing about the rise >> this is a problem for all of us, a big challenge, not just for christian democrats but all other parties as well. we had it in summer of 2018, roughly the same pulse for that party. the reason for that was exactly the same the results of migration problems we have to resolve migration issue. and as soon as we are seeing lower numbers of migration, my conviction is that this party will go down again, but we have

to resolve this single real big problem in our country, and we are ready to give support to the government, especially in terms of bringing the numbers down of those who are coming and bringing the numbers up of eviction from germany. we have to bring these people back to their countries if they do not have a real reason for taking asylum in our country. >> the other concern is an enterprise what can we do about this in your view? >> well, the german government took a decision which was in our view absolutely wrong. a strategic mistake to get out we had nuclear plants until the beginning of this year three of the world's best plants they made it -- it came to an end with these power plants in germany. we have now to open our view 360 to use all and to utilize all

energy sources which are available and not just to focus on wind and solar. this is, again, a mistake of the government the energy supply for this country, for our industry, is decisive for our competitiveness, and that's the reason why we are saying please open your view 360 there is no reason to focus just on wind and solar. we have to open our mind for all energy sources which are available. >> if you don't get that tackled, is there a risk that companies are moving their capacities abroad? >> we are seeing an outflow of investments. the biggest ever in the last decades. and if we wanted to stop that, we have to be attractive enough for investments, and being attractive for investments means low energy costs and energy costs in germany are still too high. >> reporter: the christian democrats with an astonishing

comeback when we look at the opinion polls right now because clearly the last election lost big time against social democrats, but now they're really firmly sitting well ahead of the social democrats, well ahead of the greens, not talking about the liberal. so if nothing goes so to say wrong for the cdu, they most likely will be the winning party in two years' time, but as friedrich merz was pointing out, these next two years will be also crucial for the economic development of the country, be it energy price, residential market there's so many challenges right now, which the government needs to tackle, and at the same time, now we have that verdict from -- the ruling from the constitutional court there's not much money left actually to play around with in terms of subsidies, in terms of investment from the government so it will be a tricky road

ahead. >> annette, thank you so much for bringing that interview. fascinating to hear what merz had to say. turning to the tech sector, wikipedia founder jimmy whales has criticized x following the takeover by billionaire elon musk he said the platform has been overrun by trolls and lunatics. >> it's a huge problem and i think a lot of people are fleeing twitter, a lot of thoughtful and serious people are fleeing twitter. i've launched the trust cafe which is still a pilot program it's how to create a community of trustworthy people who can rate things and trust things and so forth i don't know if i've got the answers, but i'm trying. i think, you know, it's a real problem. twitter was and now x is sort of in a way the default public square for the world, and if it's being controlled by trolls and lunatics, it's not good for

any of us. >> arjun joins us live with a special guest. good morning, arj. >> reporter: good morning, julianna firing worlds from jimmy wales that's been the talk, the state of social media and what ai does to the equation. just to discuss that more, i'm joined now by andrew mack mcafee what is the geekway? what is the premise of the book? >> i'm making the point that a butch of geeks have figured o it a flat better way to run a company and that's why they're disrespecting industry after industry it's not because they know how to run ai. they've got better ways to run a company. >> there was a narrative that airbnb would kill hotels, amazon

would cokill retail. that hasn't happened. >> where's the growth? are the retail sector continues to exist there's still an incumbent base in america but look at what spacex has done in its 20 years of history it's the only organization america qualified to send astronauts into to space that's the geekway of action. >> what should they do to come back >> innovate, don't plan. they're so fond of it and geeks build things, get feedback, do it again on a fast cadence that's one of the things. >> we've seen the explosion of generative ai in the last year or so. when you throw that into the equation, what does that do? >> it hopes the geek advantage the only way you're going to get good at it is by trying stuff.

companies that are too fond of planning or risk-averse are going to get away. >> the conversation is what does ai do to the power of the large technology companies they're the ones developing these fundamental models, companies like microsoft, like google, like open ai. >> hold on 5i67 ai is not an incumbent they were first introduced in 2015 they introduced chhatgpt before micr microsoft. it's just flat wrong. >> you don't think this boom in ai is going to entrench the power? >> did open ai have power in 2018 no, they were a small company. >> microsoft came in with billions sand said we want a

stake. >> open ai takes investments that's nothing new under the sun. i will say again they say there's no room. research shows that's dead wrong. >> do you see scope at this point in time in this for disruption to come to the tech world? >> absolutely. there's no guarantee of immore tamt here. when i was interviewing the geek way, i asked them over and over again, are the permanent big tech companies on top? they looked at me like i was a moron. it was like, no, that's just a dumb question. leaders can lose their way, get overconfident. all the things that bring down the company, they're not immune. i think they're more aware. >> a lot of companies will look at the big tech companies like amazon, google, et cetera, and what holds them.

are there any companies in stronger positions than others >> it depends on how acute their management is and how aware of the competitive landscape and the threats they are i think these are, in general, very well imagined companies i do not think they're perfect companies, and i don't think they're immune from the problems we've seen take down companies in the past. i look at how much money meta has spent on metaverse and i see a leader with a vision that does not work with reality and they don't pivot away fast enough this is an old story tech giants are not immune from that. just a quick one the debate around ai we've talked about opportunities but we've talked about the the risks, whether it's elon musk talking about humanity, misinformation, et cetera. as you look at ai, do you think some of these arguments are overblown or are they valid at this point >> i think yes and no.

every novel powerful technology, especially if it's deployed in a broadway, if we democratize assets, risks will come, harm will come. this is not new. is there anything categorically new under the generative ai? no bad actors will use it this is not bad news they're muddling through, trying to figure out when to intervene and stop the bad uses. they're going to do a similar job of muddling through. what i don't like is look at all the harms coming to ai and make sure it never happens. that's now how it works. >> thanks for taking the questions. exciting topic that was andrew mcafee and the author of "the geek way. that wraps up our summary here in lisbon. there were plenty of interviews we've done in the past few day

for now, guys, back in the studio. coming up on this show, u.s. fut futures stride in the green after encouraging sign for investors. we'll go through the numbers next 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

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now, it's been an exciting 24 hours for markets less understanding more detail why. in the u.s. consumer prices came in flat on the month, lower than 0.1% figure. the markets have pencilled in. and weighing down on the september's 40e basis-point increase now, when it comes to an annual figure you can see the outcome came in at 3.2%, and that, of course, was also well down on september's reading of 3.7% all of that, if you take into consideration the dynamics in the energy prices, they help keep those figures, those inflation figures down, falling to 2.5% on the month and even sweeping out the

volatile food and energy sectors, the inflation figures were surprisingly soft with core cpi deepening to 4% on the year. now at this stage, the cmu fed watch tool shows that 94.5% probability that the fed will actually keep rates unchanged at its december meeting that's a mere 25 percentage point jump in the space of just a month, julianna. >> let's get out to joumanna where analysts are digests yesterday's cpi numbers and the implications for the fed jou joumanna, wonderful to see you. >> good morning, ladies. that's right we've been having lots of conversations with the state of the world economy, the u.s. economy, and then, of course, we had that u.s. cpi print come out yesterday afternoon and it seems as though it's been a major event for the markets. what wei saw going into the cpi is about 85 basis points

a surprise to the downside on both headline means the market was very quick to start pricing the possibility of even more rate cuts over the feds next year with the market now pricing it at 110 basis points cumulatively throughout 2024 and essentially dispelling the probability of another rate hike in december. so a major market-moving event luckily i had an opportunity to speak to an economist earlier on, the chief u.s. economist jonathan pingle. i asked him his read on this number and whether, of course, this is a good thing for the fed. let's take a listen. >> it's great news for federal reserve and their request to reserve price stability. they're not out of the woods yet. the year over year rates are still elevated it's pretty clear, you know, that we think there's this disinflationary trend in place, and if they can get the economy

to slow, they're going to make a lot of progress an their inflation mandate over the years. in looking at the details, the components are very persistent much watched seeing those slow was certainly a good news with the path for the inflation lower and certainly the price where we've seen relatively not outsized but risk nominal wage gains still in the u.s. economy that's going to be a key component to watch going forward. >> in a small part of our conversation earlier, of course, it was going to be something to see the lower than expected cpi prints, but the question is what happens next i think there is a perception out there the market is jumping ahead of itself. remember yesterday we spoke to the st. louis head president james bullard, and he was saying we shouldn't underestimate it. we talked about shelter inflation remaining sticky as a core part of cpi but also potential upside surprises. so the market perhaps is all

right starting to price in a change in tone from the fed and this is the same fed a couple of weeks ago the chair, jerome powell, says we're not even thinking about rate cuts the market does not care at this point. one other elem i want to brg in as well, this is not just about price stability. of course, that i have to maximize employment. and throughout the course of my discussion with jonathan pingle, we talked about what could happen to the unemployment rate. they see it ticking up to 4.9% when that happens, the u.s. economy in their view is likely to enter into a mild recession next year. they're looking at three skec tib negative gdp prints. so if you put the two together, the fact that these inflation prints have been dropping quite dramatically and much quicker than the fmc themselves had predicted plus the probability of a recession at some point in the middle of next year means

the fed will have no option but to start cutting rates it is early days markets tend to be forward looking and central banks tend to take more time. the question for markets here onward is how quickly central banks are going to react to the lower than expected inflation printet and what does that mean for the economic outlook is the u.s. going to enter into a recession or be an immaculate disinflation as some people are calling it >> thank you so much we're all looking forward to your interview with the ceo of uvs later on this morning. now, i just want to take a quick look at how european markets are trading. of course, we saw gains during tuesday's sessions the stoxx 600 gained 1.34% of course, over the back of that positive cpi reading you can see also as well we're still seeing the positive momentum continuing with today's equity session.

we were looking at a triple digit increase earlier in the program. now 60 points. it's early in the day. what could drive trade today you've got the u.s. october ppi retail sales as well from a data perspective, and don't forget thee joe politics. you've got president xi and president biden meeting. we'll bring you all the details tomorrow on "street signs. that is it for us. we hope you've enjoyed the coverage today that is it for "street signs." i'm julianna tatelbaum. >> i'm sylilvia amaro, and "worldwide exchange" is up next.

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it's 5:00 a.m. at cnbc global headquarters and here's your "five@5." stocks coming off their best day in month after cooling consumer price data we'll get a read on the producer side later today futures in the green this morning looking to build on yesterday's gains. global stocks following wall street's leads higher helped out by positive economic news from china as well as the uk. retail earnings remain front and center with target set to report in just over an hour we speak with one investor who's long on the stock. plus, getting set for th