craig melvin: that's all for this edition of dateline. i'm craig melvin. thank you for watching. ♪ welcome to "street signs." i'm karen tso with silvia amaro in brussels. these are your headlines. the bottom of the stoxx 600 as president xi warns there are no winners. rachel reeves becomes the first chancellor to meet with the eu finance ministers and

pledges a stronger trade relationship. >> what i was aiming to do today was to begin to rebuild the bonds of trust that have been fractured in last few years under the previous government. the ftse lags in early european trade after it issues a proper warning and talks about relocating the primary listing to new york. the delivery hero confirms the talabat on the dubai stock exchange. the ceo walks cnbc through the move. >> is there a right time for us to really open up our company to open up to international investors? a strong demand in the space and to see for investors.

let's take a look at the european trading market action this morning because it has been somewhat downbeat since we kicked off trade. we had about eight straight days of positivity and that is now given way to red ink. so, the streak where we are melting up trying to catch up with the u.s. markets seems to be over now as we give back .13%. don't forget the chinese news and data that the export/import picture is weaker than anticipated even though authorities are trying to guide on monetary and fiscal policy stimulating the market and the economy. it seems the market has run out of steam. it is giving back territory. it is running across different territories. take a look at the ards. the ftse is moving down. don't forget it was one of the

spots yesterday that actually broke the winning streak early, so it gave back .20%. peeling back from the ecord high. the french markets down .6% and italian names giving up .13%. the sectors gainers and losers. healthcare and travel and leisure are slim and green on the boards. that is it in terms of the upside. the sector losers is the china story. some early euphoria yesterday giving way to early selling. household goods and luxury names that bounced off yesterday is down .10%. some of the other weak arms of the market today. there will be no winners in tariff wars or trade wars or tech wars according to chinese president xi jinping speaking this morning after export growth slowed in november at 6.7% higher on the year.

that is less than expected and just over half october's reading. imports unexpectedly fell down 3.9%. chinese equities closed as the markets react to the news of monetary loose policy. the ten-year bond hit another record low this morning. we have the senior asset strategist from bnp paribas. there have been a lot of developments in the chinese market in recent days and it seems as though there is a preemptive strike trying to shore up confidence ahead of the incoming trump administration. if we keep going back a couple of weeks, it feels as you had front loading on orders and china getting around tariffs and china trying to stim ulate in september. what do you see with the incoming threats? >> i think we are taking

preemptive measures to go against trump in case there are tariffs which are hawkish. there are external forces that could come next year. in terms of external forces, which is a bit worrying with the confidence, that is quite low. so, the need and they realize they are now at the turning point and they definitely need to boost it. prices are stabilizing and not rising enough. there is a quick way to boost consumer confidence at this point is to boost markets. >> we don't have too much selling taking place today. if you look at the shanghai market, we had a huge bounce in september. we have gone back down and come back up again. it seems some in the market are backing chinese authorities to get this right. how possible is it to stimulate domestic demand in a context

where there is not much social security still. that is a big measure. we had a tiny measure to stimulate consumption and issues for many people who invested in property trying to weather. >> we have seen a shift yesterday with the property side as well as the investment side have been priority so far. i think next year is much more focused on consumption with the external forces that i mentioned. if you look at like domestic stocks and consumer driven stocks, they have been on a down slide for the past two or three years. i think there's a sense of urgency to basically boost consumer confidence. i'm quite confident they will be able to do that and one way is to do that through the equity market. if you look at the wealth effect, china has 70% of the

wealth in the property prices. the rest you can assume 10% or 15% is on equity markets. actually actually, if you look at the opening of the asia acts, it hits a 2015 high just before the announcement. i think there is everything in there to point towards like policymakers trying to boost chinese wealth effect through the equity markets. >> how much of that touches european equities? if you look at the french market, we know that there's been a lot of pressure on some of the luxury names. they have spiked off the lows that we saw from november and so it lifted into december, but should there be more to come if consumption is generally going to work? will it help luxury stocks. >> it depends on european luxury. between the rest of the world, it is stretching levels at this point. in terms of european equities at

this point, i think markets have been a bit wrong trying to look at tariffs as the biggest negative factor on european equities. i think what matters much more for european equities and especially some sectors such as luxury, materials as well as energy, it is much more china. if you look at the earnings growth downgrade we got since the start of the year, it's been all china driven. so, tariffs at some point is more sentiment driven. if you look at in terms of revenue exposure to the u.s., and in europe, 25% of the earnings originated in the u.s. if you look at actually how much is really impacted by tariffs, it is one fifth by it. china is a much more important driver if you want to look at european drivers. >> i had an inkling with the

european market. it feels as they we have been grinding day after day with regard highs. yesterday was a down beat day. what is the record with the caution on the u.s. market with still bulls out there let's face it, thinking we can grind higher to the s&p 500 handle. >> i think is really priced to perfection now. if you look at priced growth for this year and next year and '26, the market is expect the chunky growth already. the contribution from the mag seven in terms of growth is declining. you've got year on year for the mag seven at 40%, 50%. it's merely going to be around 20% next year. less heavy lifting from the tech stocks. you need the rest of the market to contribute. to the point where in terms of the impact from fiscal policies a lot is priced in. on the banking sector but the

extension is neutral. it is not going to boost your eps growth. if you look at corporate tax growth, how much and when will it be implemented at a time where the economy, u.s. economy is slowing down? >> you started out research talking about the trump bump expressed for the dollar. there certainly has been a dollar is king unfolding. how much is the trade with the central bank action to still to play out? can the dollar remain king? >> i think so. two weeks go, the dollar had a 4% premium with the trump election. it was the same amount we saw in 2016. i think at this point, unless we had the super hawkish in terms of tariffs with the 60% on china and 20% universal, i think the

dollar could remain strong, but seeing more from the dollar from here is a bit stretch. >> those are some of the pairs. dollar/yen is what they are talking about. the boj may have to be hawkish with monetary policy. they did that and the market was roiled by the unwind of the carry trade. what do we see now going into 2025? how reactive could the boj be? >> i'm quite bullish on yen. it is good to hold in the portfolio given a lot of good news has been priced so far especially on the u.s. side. i think on the yen side, one thing to consider is the bank of japan doesn't need a weak dollar. in terms of real weight growth and the labor market, it is already on a cycle. you don't need a weaker yen to

have higher inflation expectation. at this point, you will have this at 160 before the bank of japan intervenes. it is definitely going on dollar/yen back to 130 or 120. >> that would generally be a decent move. thank you very much for joining us to give us ideas. senior cross asset strategist at paribas. rachel reeves is the first chancellor to attend the finance ministers in the eu since the exit from the european union. reeves described the trip as a first step to resetting eu relations and improved trade ties to boost the trade across the continent. let's get to silvia. silvia, how does the chancellor being there talking to like minded ministers with the reset

of relations could be generally positive for the uk? >> reporter: no doubt this is a symbolic moment and indeed, it is about having the uk chancellor for the first time here post brexit. for a while, we had seen the relationship between both sides of the english channel facing the tumultuous phase, but for the first time in several years, we are witnessing a new chapter here and we are hearing warmer words from both sides and i have to say being in the room yesterday with the press conference with rachel reeves and the euro group, there was a little bit of excitement in the room. that marks a huge changes from what we had witnessed over the last couple of years. however, it is important to keep in mind what we are seeing here is not a negotiation. no one is trying to reopen the brexit accord, however, there is an aim here to actually build

trust after these years and try to have a stronger trade relationship. here's rachel reeves, the chancellor of uk, outlining her aim for yesterday's meeting. >> i did not come here today to start a negotiation or to lay down a set of demands. those conversations about the reset and negotiations will begin in the new year, but what i was aiming to do today was to begin to rebuild those bonds of trust that have been fractured in the last few years under the previous government and to show our friends, neighbors and al allies in the european union that we want a reset of the relationships. >> reporter: so we don't know how this is going to evolve. there is speculation that the uk would like some sort of agreement when it comes to agricultural products, perhaps also on pharma goods. ultimately, we don't know what

could happen here. the eu has been very clear there is no cherry picking here. they are not going do any sort of sectorial deals. let's see how these conversations will unfold. one thing is clear. there is a realization between both sides of the english channel amid the fragmented world that it is in the best interests to work together. there is one where they will try to do that is over defense spending. this, however s a , is a compli topic because ome of them believe they don't have enough fiscal leeway to spend more. i spoke to the hungarian prime minister and asked if they have any plans to step up the depp defense spending and if there is room to do so at the eu level.

>> 2% criteria of the nato country. i think it is a national situation for the part of the national budget and, of course, if you think about how we can organize the efforts in the european union, this is a discussion for the next meeting. perhaps it will be the topic on the agenda. >> reporter: so, let's see within the eu how this conversation around how to spend more on defense will evolve. more broadly, just a final point to say what we witnessed yesterday, was indeed, an important moment with the eu and uk with the chancellor in brussels. let's wait for details and see how they will dry to try to deve closer trade ties.

>> silvia, the last few years, we have been talking about china for the country to deal with and see howdisrupting. the ball has shifted to what trump can do and combating any trump policies. is that the right characterization or is china dominant as we look to close out the year? >> reporter: i would say it's both. of course, with the arrival of donald trump once again in the white house, there is obviously a little bit more focus on that now because it is not that the difficulties are new. these have been here for a long time as you highlighted there. now they are faced with another obstacle with donald trump arriving in the white house and promising tariffs on the eu as well. when you hear conversations among european officials and i spoke to a few in the last 24

hours, there is a sense here in the context of having closer relationships with the uk, that is also important as they prepare to see donald trump arriving in the white house. one eu official told me those words. what they are trying to achieve in the uk is not trying to do with china, but globally. the eu has realized in the context it is also important to work with the uk. that comes, no doubt, with the arrival of donald trump at the white house. >> silvia, thank you very much for bringing us the latest from brussels. coming up on the show, nvidia closes in the red as chinese authorities launch a probe into suspected violations on the country's anti-monopoly law. we'll bring you the latest.

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nvidia closed in the red after china launched a probe over suspected violations of the country's anti-monopoly law. china said the investigation is linked to the 2019 acquisition. nvidia said it is happy to answer any questions. a look at how nvidia is trading in pre-market and expected to face, perhaps, another dip, but a small pull back to the tune of 1%. let's get to arjun with more on this. arjun, nvidia is immune to the threat for the a.i. chips. now as it could widen again with the probe launched.

we are talking 20% of the chips for china. >> nvidia's issue with china is not coming from the chinese side. it's come from the u.s. putting restrictions on what nvidia can and cannot ship to china. as we have seen a more recent escalation of the broader tech war with the u.s. and china and facing more restrictions on chinese and technology, you are seeing a sign of almost tit-for-tat from china. the minerals that go into the semiconductors recently. they opened the investigation on the anti-monopoly laws. based on the investigation that nvidia did in 2019. they are bringing up some of those and some of the conditions around that saying they may, we suspect particular violations. i think there is a lot to be hard to detach this from the geopolitical situation.

china has to walk a fine line with nvidia. it still needs the nvidia chips. there is no equivalent for it china or ally for what nvidia does. they may scrutinize the suspected anti-monopoly practices which it requires for its own companies to advance. >> you see it in the market regulator allowing the deal to go through with the uninterrupted supply of gpus and not working equipment to the country. as you pointed out, this is thwarted by u.s. authorities. we don't know if it will get worse with the trump administration. will lawyers get wrapped up in legal warfare? what unfolds from here? >> nvidia says it is happy to work with the chinese authorities. one of the things we have seen when it comes to sort of the chinese authorities and anti-monopoly investigations, they are not always quite clear

on what they're looking at in this point in time. you look at the 2020 agreement with the chinese government and nvidia over the acquisition. you look at the uninterrupted supply of gpus and nvidia should not tie in to use other vendors. >> that is a bit european. >> some of the conditions that were put on that deal from the chinese side aren't unusual in many regards because these are some of the issues the european and even the u.s. regulators looked at companies across the board around the bundling deals, et cetera. we don't know exactly what part of the deal the chinese government are looking at at this point. it does feel we will see a situation where nvidia is banned from the chinese market. >> it does feel like a sitting duck. i can't think of another company selling to china and others that

have don't have access to china. google over the years. this is an easy win for the regulators who want to send a message about big tech companies in the states. >> there is no other company which has become so critical to the modern infrastructure or tech companies want to produce and make at this point in tum.i. there are a handful like tesla, apple, for example. no one with that fundamental critical technologies of the likes of nvidia is producing at this point. >> i guess they didn't add the gpus that arrived through the back door with the black market. we heard from the chips arriving from various parts. thank you very much, arjun. let's look at oracle pre-market. this is how they are setting up for trade. 8.5% lower on the back of the second quarter revenue miss. strong reacts ion is expected.

ashton group may move the primary listing from london to the united states. the equipment rental firm will discuss the shareholders. the warning came with the profits will miss expectations. that say is a handy . speaking of delivery, shares of delivery hero are lower. the ipo is the biggest listing this year. speaking earlier to cnbc, talabat ceo spoke about the rationale behind the listing. >> we believe this is the right time to open up to local and inter nation national investors. we got a strong demand on the local space and international investors which is tech specific

investors and testament to that is we have a lot of demand. we had to up size our offering from 15% to 20%. and won the financial times and schroders business book of the year. speaking to cnbc, olson said lessons had been learned on regulation. >> we have learned a lot from what happened with social media. it was framed and pitched to connect the world and make our lives better, but it brought on mental health issues for teenagers and political silos that people found themselves in because the way people were opt myselfed to stay on the greens for long as possible. we are seeing similar with a.i., but not the social regulation. now it is coming and there are several big laws. digital services act and a.i. act. three substantial laws coming from the eu in the next one to

two years which will kick in and i think that will make a difference. coming up on the show, vivendi shareholders approve of the four-way split of the french empire. we will tell you what it means for the london's ipo market after the break. at betmgm, everyone gets a welcome offer. so whether you're courtside trying to hit the over... or up here trying to hit the under. whew! or, hitting that win with your crew. ohhh! yes, see defense! or way up here with a same game parlay. yaw! betmgm's got your back. get your welcome offer. and play with the sportsbook born in vegas. all these seats. really? get up to a $1500 new customer offer in bonus bets when you sign up now. betmgm. download and bet today.

welcome to "street signs." i'm karen tso and these are your headlines. president xi warns there are no winners in a trade war and imports fall at the steepest pace in over a year. rachel reeves is the first chancellor to attend the eu ministers conference. she spoke about the bloc. >> what i was aiming to do is

rebuild the bonds of trust which have been fractured in the last few years under the previous government. meantime, the ftse lags in early european trade weighed down by ashtead and proposes the primary listing relocation to new york. delivery hero plunges to the bottom of the stoxx 600 with the talabat stock exchange. the ceo walks us through the move. >> is the right time for us to open up our table to local and international investors. we have a very, very strong demand on the local space and international space with the tech specific investors. let's take a look at the european market action about an

hour and a half into the trading day. so far, we are seeing red on the boards. we popped up weaker. a .25% on the stoxx 600. this comes on the back of a fairly long winning streak for the european markets. we had about eight straight positive sessions before today. the -ception as the dow that snapped that yesterday. today, we have give back for the ftse down .50%. french stocks down by a similar note. dax down less than .10%. there is some momentum and that is just led us to a stall speed for that german stock market. the big catalyst at play is the concerns over the state of the chinese market. yesterday, we had a lot of noise from authorities about changing monetary policy and perhaps

delving re into the fiscal consumption. giving way to the cold hard facts and telling us that there's still challenges in the data. let me show you the sectors because there is a fairly broad sweep into the red. a handful of green patches. autos, healthcare and banks inches into the green. basic resources today. down more than 1% in the basket since we started off the trade. down 1.1% plus. household goods. the luxury goods are trying to bounce off december. the question marks remain if any endeavors to stimulate consumption move the needle on luxury. you see the sector down. financial services and real estate rounding out the under

performers. u.s. futures. a third negative session in a row for the dow. there has been give back. salesforce is the under performer. we have a probe that's been unfolding there now and nvidia has been the worst performing stock for the s&p and nasdaq that also turned tail and pushed off the their record. today, we are seeking more down side. you see that is across the board. slim range. you can see the tone before the start of the session. let's push on. around half of the world's largest sovereigns will grow with the pre-pandemic averages next year thanks to easing monetary conditions according to moddy's rating agency which 20% of sovereigns are subject to very high credit risk. let's get to the managing director of global sovereign risk at moody's ratings. we are trying to get a gauge of next year. give us take away messages from

your research. >> thank you for having me. this is this time of year where indeed we look ahead the drivers of sovereign credit of 2025. we are at a very interesting juncture because the starting conditions are relatively constructive with growth stabilizing and inflation coming down. most sovereigns should increase slightly. that is what we put in our forecast. at the same time, of course, there are a range of disruption or shocks that may materialize in the course of the year. whether it is ongoing geopolitical risks in various parts of the world or whether it is a shift toward more tariffs and potentially tit-for-tat measures around trade areas or

social tensions that remain quite significant in different countries. as a baseline, we see constructive conditions. we do see also some range of risks. >> i want to pick up on those points you mentioned geopolitics and trade tensions and the market is debating those. the one that's really jumped out in recent weeks is social unrest. we have seen that really expressed through the lens of different countries from the south korean market with politics at play to even in syria with a government overthrown to here in europe with a swing to various different far-left or far-right parts of the political landscape. how do you see that social unrest as a potential negative for credit ratings next year? >> i think it is important to cast back on the past year. it has been a year of elections

in a number of countries. there is a common theme through the lectoral campaigns with the candidates promising or describing a vision of better economic conditions and better living standards. now governments are happily elected and in the position and it's upon them to deliver on these promises. it is likely that in some cases, the delivery will not meet the expectations. we have seen in the case of 2024, social unrest erupting in countries like bangladesh or kenya for instance. you mentioned korea. we will see what happens with the situation resolved. that depends how long it lasts and the economic conditions. it has a negative impact on the sovereign credit to the extent it can curtail the ability of governments to implement reforms that would have led to more

secure credit footing. >> marie, south korea is a great way of conducting this discussion because we're talking about the political situation that's been incredibly difficult for the country. i think frankly was enjoying a fairly smooth ride. a lot of international investors liked the tech story there. counter weight to china and decent economy. now we've got to the pressure on top from tariffs and incoming president-elect trump has suggested he will impose tariffs on mexico and canada, but also on china. this as blow back for the south korea market. what impact does a tariff regime, if it does come into force, have on nations that are already battling existing problems domestically? >> so, korea being trade reliant economy would be effected by significant tariffs either directly on korean exports into

the u.s. or indirectly imposed on korea trade partners and slowing trade flows around the -- around the world. and it is as you said coming at a point where social tensions, we've seen social debate and demand rise over a number of years in countries like south korea with perception or actual developments that have enhanced or exacerbated, rather, inequality and that leading to demand for governments in place at different points to really address those. so, governments are moving away from the crisis period of the pandemic and then the commodity and price drops related to russia's invasion of ukraine, but they are still now need to deal with the domestic situations where demands are

high for more equality and better living standards. having to deal with that in the context of the global environment or tariffs or other concerns will be challenging, certainly. >> marie, i want to ask about the markets as we get set up for another rerun of america first, i feel there could be an international retreat. what does that mean for frontier markets? for your line, liquidity risk will remain high with limited buffers. that sounds like they are in a tenuous position any way. if we see any retreat, that could have consequences for the liquidity buffers. >> certainly. these are the relatively smaller economies with less than capital mashlths markets that rely on external financing. over the last few years, it has been extremely challenging to access financing at affordable costs. we have seen the pressure

materialize and that leading to weighting down or default by some sovereigns. recently, we had seen maybe a bit of thawing with the low rating sovereigns tapping markets with new issuances. now, in the course of 2025, if we see as a result of rious policies and a strengthening and that leading to capital flows out of emerging and frontier markets in particular, then these countries will be vulnerable to yet another year of tight financing conditions. that would really make it difficult for these countries to balance their budget. >> marie, thank you very much for joining us today. we do appreciate you sharing your report with us. managing director of global sovereign risk at moody's ratings. a couple of corporate stories. vivendi shareholders approved

the split. it can now halve with the group and spun off in london and amsterdam and paris respectively. the split was approved by 90% of the votes despite the protest. coming up on the show, we discuss the space economy with the operators of communications. that conversation after the break. for nearly 200 years, big beverage companies have been selling us billions of single-use sugary drinks. using the same old one size fits all playbook. until now. meet cirkul, the beverage platform of the future. these fully adjustable flavor cartridges let you customize your water with the exact amount of flavor you prefer. transforming water into your favorite beverage. finally, water is your favorite beverage. cirkul - your water, your

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real concerns around the chinese import/export situation. abu dhabi finance speakers are bringing together a slew of global leaders in finance. dan murphy asked how the money manager is running the portfolios amid a period of elevated risk. >> two things i would pick up in the conference. one is everybody feels risk is elevated. geopolitical risk and risk to changes and administrations. yeah, yet volatility is very low. you see risk everywhere except in the volatility measures which is an interesting piece. the second thing is people say it's a good time to invest because they do believe that maybe the u.s. economy and other places, you know, are heading for a soft landing. and yet, dan, everything is expensive. you could say your plan is for a

soft landing, but you are not getting paid to take the risks. we are actually running our portfolios at half their risk budgets at the moment, not because they think bad things will happen, but you are not paid for the upside. >> let's get to dan for more. dan, give us a sense what you glean from the conversation and what's important for investors to think about now as we head toward 2025. >> right. so david hunt highlighting a key number of issues. first among them is where they are moving forward with private credit where pgim has a growing business. the other highlight is the risks on the horizon. the first is government debt, particularly in the united states if we see donald trump moving forward with the tax cut plans. and the investment decisions moving forward. what we also see happening on the sidelines is the

conversation around cryptocurrency. we see the president's son eric trump and steve wittkoff coming to speak to investors and enthusiasts about the incoming administration's plans to call the united states the crypto capital of the planet. i spoke to him in the studios in abu dhabi and asked the role of the key players like elon musk will have in shaping the u.s. crypto policy moving forward. >> is the modern day albert einstein. he has a brilliant mind. he sees efficiency with spacex and so many companies. what's the common denominator? he is trying to get to space efficiently to get there cost effectively. that's been the biggest problem with space. he looks at the u.s. government. 6% of people work a 40 hour workweek. it's less than 1% if you take out maintenance personnel and

security officers. that's a real problem. this quarter alone, you reported the numbers well. the u.s. government hired 50,000 government workers. in america, 17,000 construction workers. tell me that's not backward. we want to see efficiency and a productive society. i think we want to see relate innovation and get the government get the hell out of the way of great business. let businesses thrive. let capitalism work. let the reatest democracy do what it does. it hasn't done that in the last four years. it will return to that. i think elon will take a major role in making sure that happens. >> eric trump speaking to us exclusively yesterday. this comes at an inflection point for the industry. bitcoin up 140% year to date. we have seen, of course, prices dip below the six-figure level. this comes as we see renewed

optimism in the sector and in this industry after we saw president-elect donald trump announcing these plans to nominate paul atkins as chair of the s.e.c. ing outgoing pat gelsinger who is seen as a villain in the sector. i asked how donald trump will change the cryptocurrency policies in the united states and what tory measures we can see. he says it looks to be more transparent, but did not add more details on the landscape moving forward. karen. >> dan, thank you very much for that. elon musk playing a key role away from d.c. with one of his many companies spacex. join us with more on the satellite and space industries is a man who worked with mosque in the past. matt, thank you so much for joining us. >> glad to be here.

>> as the report was saying, we are looking at a renaissance in space. next year could be the most exciting years in 30 years. do you agree? is 2025 a landmark year for the space economy? >> we had ten years. i assume next year will be bigger. there has been a lot of investment in the last 10 to 15 years i've been in it. everything is coming together. space is becoming very important right now. >> we have been having a lot of conversations about people traveling to space. a lot of rockets and spacex all over them. what are people missing about the space race at this point as you talk about satellites and connecting people up. what are people missing about the grand scheme of the space economy? >> space is hard and people forget about that. we have a long history. i've been around almost 30 years now, 25 years in service, it is challenging because it is

capital intensive. there are a lot of ailures out there. clearly spacex is a unicorn and there are good ones as well. carving a path through all that uncertainty with high cap ex costs and becoming profitable some day and generating cash is not easy to do. it has taken us 30 years nd it will take other companies a long time as well. >> the proposition that usk has as well, what do you find is bad with elon musk? >> star link is a brilliant product. very few people can replicate the potential success of star link because not only is there a limited capital, but they have the rockets as well to launch it. we work hard to make sure we

were complementary to star link. investors probably don't completely understand right now which is why we're misvalued. we have a different spectrum and service and we are more about doing the hard things that star link can't do. high mobility. really small devices. protecting gps. tracking airplanes. doing things star link doesn't do. because we're in lower earth orbit, it seems like if they are launches satellites in lower orbit, they are competitive to us, but that's not how it works. >> one of the conversations we had in the past 12 months, a lot of the satellites need to be replaced and they are expensive. i see you are trying to keep some of the satellites in orbit for longer which would impact cap ex. why are we seeing a longer shelf life for the satellites in orbit? >> it used to be all satellites lasted 15 to 20 years. they were large satellites and

geostationary orbit. people started building small satellites in low-earth orbit that were disposable. thinking a three-to-five year cycle could be done. we chose not to do that. we chose a longer cap ex cycle. it is nice to make cash and profitable and return capital to shareholders which we have been doing for last year or two as we returned $1 billion shareholders. it's a different approach to space that some of us have taken and we think our approach is an effective one right now. >> a lot of technologies work in tandem. i have seen it attending technology events. a.i. is clearly the one

everybody is talking about right now. how does it change what you do or the relevance of space and satellites in the future that is very much a.i. driven? >> a.i. is going to be very important to the industry, too. we generate a lot of data. you can imagine all of the data we're collecting at the moment. a.i., we are starting to implement to fly our satellites more effectively. we are using it to provide better service to customers and using it to write software code. it's not the game changer that will change everything in our industry, but it's going to help productivity 10% to 20% in many cases to do things faster and better. that will help the industry. everybody has to move slowly into this. you know u , you got to worry at security issues and letting data out in the public. there are concerns with a.i. and we are moving forward, but we're doing it kind of effectively and

carefully and in a controlled way. >> as you talk about security, space takes on new connotations with the major players with the space race for many years. the russians and chinese with big ambitions as well. what back drop in terms of security in space with the politics not improving at this stage? >> it's a big concern. satellite networks are vulnerable just like any network to attack. protecting them is a critical thing. these days, everyone wants to have their own satellite network. you don't trust everyone else is going to do the same thing. we have been switzerland to provide a service to the whole world especially for safety and security and critical regulatory functions and everything. i think we're kind of a common thread there. everyone is starting to launch their own leo networks. china is launching one. europe is launching one.

we have one web. amazon is launching a network. everybody has a low-earth network for broadband functions. we are not doing that. >> matt, thank you so much for joining us. interesting conversation. matt desch. we are counting you down to the u.s. session later on today. the futures stateside have been weaker which system pacting the european market today. we are on the back foot and some of the data out of the chinese economy today really undermining confidence after an up beat session thanks to authorities yesterday. the futures state side side e a soggy. that's it for our show. i'm karen tso. "worldwide exchange" is up next.

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it's 5:00 a.m. here at cnbc global headquarters. welcome to "worldwide exchange." here's your "five@5." stocks pulling back from all-time highs as investors await tomorrow's big inflation read. chips and banks taking it on the chin. financials coming off their worst day in a month. oracle slides missing wall street's lofty expectations for the cloud computing giant. and a look at the top buyers of bitcoin. and