t the prison that derek alldred is in is no four seasons? [laughs] exactly. ♪ good morning and welcome to "street signs." i'm silvia amaro and these are your headlines. disappointing data. uk chancellor rachel reeves reacts to the disappointing figures showing the economy shrinking on the month. a positive open despite the hotter producer prices print raising concerns for the fed. president-elect donald trump tells cnbc he is optimistic for

the future. >> a lot of incentives will be given. you saw yesterday $1 billion investment with fast approvals. no one has come up with that one yet. president macron is prepared to name a new prime minister as he looks to avoid another damaging no confidence vote. and dmytro kuleba is tells cnbc he is fighting on the field and at home as ukraine deals with the energy sector. >> we have to deal with the enemy and we also have to engage in skirmishes with our own partners trying to find solutions and to ensure decisions which would help us stabilize the situation.

good morning, everybody one. let's start the show with how we are moving across the equity space. looking at the stoxx 600, it is just below the flat line. however, when you think about what is on the table, there is a lot for investors out there to digest. we got the ecb meeting yesterday. the ecb cutting rates by 25-basis points, but investors at this stage asking the question what is going to happen in early 2025 and how much of a problem is the growth outlook because we did see the central bank ading the forecast for the next three years. i want to take you to the different bourses across the european continent this morning. looking at the different bourses, however, we have pockets of green across all of them, but however, when you look at the numbers, we are looking at marginal moves at this stage. indeed, highlighting this

cautious approach at the friday trade on top of the monetary policy and let's not forget the news out of china this morning. investors were wondering whether we will get a little bit more detail on the fiscal stimulus and they did not obtain that. a little bit of disappointment with the lack of stimulus from china is also translating into some of the moves we are seeing in europe. however, it is friday and i want to show you the eek to date performance. some interesting moves here. when you think about the cac, it is down marginally on the week to date performance. when you compare that with the other bourses across the european continent, it is a different story. the dax is up .20%. i also had a chance to look at the numbers on an annual basis and when you think about it thus far and we still have a couple more days of trading in 2024, it is interesting the pressure we have seen for the cac.

when you think about it, of course, there have been several moments of political uncertainty in the country. the cac had shown a little resilience to the political turmoil. however, when you look at the numbers available thus far the annual basis, the cac 40 is down 1.6%. we will continue to see what is happening there. no doubt, we are looking at the new political scene and we will get a name of the new prime minister in a short while. we will find out. investors are reacting to economic data here in the uk where gdp fell 0.1% on the month in october missing expectations for modest growth as manufacturing and construction output declined. uk chancellor rachel reeves describinged it as disappointing.

let's catch up on all of the monetary policy we have witnessed in the last 24 hours. we saw two key decisions from the central bank. the smb delivered a bumper 50-point rate cut with inflation coming in below the forecast. the chairman told cnbc the bumper cut reduces the odds of the negative rates in the future. >> with this rate cut that it is today, we managed to stabilize inflation forecast which means that with this cut, negative interest rates have become less likely in the future. >> if you were to move back into negative rates and i assume you are still not ruling this out, correct? you are not ruling this out? >> at the moment, inflation is in the range of price stability and forecast is in the range of price stability. of course, we cannot rule any measures out in the future.

the ecb delivered the rate cut. christine lagarde told cnbc, however, that a larger move was, indeed, discussed. >> inflation was really on track in terms of reaching our 2% target in the medium term. that gave us a level of confidence to actually decide a cut and to decide the appropriate cut which was in our view 25-basis points. that proposal was agreed by all members of the governing council. there were some discussions with some proposals to consider possibly 50 basis points, but the overall agreement to which everybody rallied was that 25 basis points was actually the right decision. >> let's discuss this with the portfolio manager at pimco. good morning. good to have you on the show. i would like to get your

thoughts on the discussion of the 50-basis point cut. of course, christine lagarde was clear that ultimately discussed it that everyone agreed with the 25-basis point move. what is the fact that we know they discussed it mean to you as you think about 2025? >> good morning. the market was pricing little bit more, so there was a chance before the meeting they would do 50. there was more concern around growth these days given inflation is closer to target and policy was still restrictive. it is quite understandable they discuss 25 or 50. given you are closer to neutral now and inching closer to neutral and 25 basis points was a reasonable decision at the end. >> interesting you bring up the neutral. where do you think the neutral is given you think they are approaching it? >> i think the reason why the market took the decision which

is hawkish, is, a, she poured cold water on the 50 basis points from here and she indicated the neutral range mighting a little bit higher than the market expecting. we see it around 2% or slightly below and she has a midpoint. she gave a midpoint slightly above two. the market was slightly disappointed by that. i think slightly below 2% strikes me as reasonable. >> when are we going to see the ecb, perhaps, pausing this cutting cycle? >> they are 3% now. i think they can keep cutting 25 basis points in the next couple meetings. let's see what the market says. currently pricing 1.75 as a terminal rate which is fair. >> what will change the dynamics here? the data so far has been so far disappointing. it has been known with the ecb with latest numbers. the growth numbers is not rosy.

what will be the event that could actually tip the probability here of seeing the ecb actually cutting by more than 25 basis points? >> so if you look at market pricing and the market pricing the ecb terminal range in the neutral range which indicates a soft-landing scenario. we indeed think the sks were higher across the u.s. elections. the euro area economy is not growing much and it does and take much to tip you into recession and the tariff discussion has flared up and created to downside risk to european growth. our growth outlook for next year is below consensus. we can easily see a scenario where the ecb will cut more than what's priced in. i think the growth risks are elevated and growth will continue to disappoint compared to what the ecb is expecting. >> give us a little bit more color where the ecb looks.

where is the growth going to be? >> well, the euro economists are export. eurozone runs a large trade surplus with the u.s. the west indicated they are not happy about and want to do something about it. the growth risks for example for germany might be higher than they currently are going forward which could lead to growth. that is the largest euro area economy. we see growth below 1% for next year and depending on the nature of the tariffs, what is implemented can be closer to zero or recession. i think risks are quite, quite elevated from here. >> talk to us how you are reading the narrative in terms of fiscal policy because you have the debate in germany whether it is time to end or reform the debt brake.

there is no way to correct their finances as well. are you expecting looser fiscal policy in the eurozone going forward and how could that actually impact the role of the ecb? >> i don't expect much from fiscal next year. the pressure is high and for fiscal policy to do more. in germany, we expect the debt brake to be loosened to some extent. you have the stability and growth pact that still applies. you don't expect germany to lose on fiscal. a little bit looser than currently. overall, we think growth -- so fiscal will try to do what it can to support growth, but the initial conditions are not great. you have a pretty strict firm in europe. we don't expect a lot of fiscal from there. there will be areas where they will try to do more common issuance and tackle that with the discussions around defense. we still think fiscal should do

more than they can probably do. >> perhaps a bit muted there. what i would like to understand also is how are you pricing in the potential risks from the united states here in terms of tariffs because when i look at the inflation forecast from the ecb, i'm wondering what is the biggest risk to the numbers? is it trade conflict? is it perhaps more fiscal stim sflus ulous. what is the key driver for the narrative around the dynamics? >> i think the risks to the growth outlook next year stem from the tariffs discussions. if you look at productivity, profits and wages, they are broadly developing in line with expectations. wages look to come down fairly quickly. productivity looks to pick up. we don't expect much. there may be more on wages to do the heavy lifting with inflation. when you look at the outlook,

the ecb looks at 1.1% growth for next year for the euro area and we think the biggest risks with the jut look step from the tariffs discussion. >> interesting. i guess we have to wait for details from the united states to understand the full impact. we appreciate your discussion this morning. coming up on the show, a hotter than expected ppi print fails to deter bets on the fed rate cut. we'll bring you the details after this 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. think about it, we've seen technological advancements in every other aspect of our lives. but the beverage industry has been stuck in the past. until now. meet cirkul, the beverage platform of the future. transforming water into your favorite beverage. cirkul - your water, your

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reliable 5g, plus wifi speeds up to a gig where you need it most. xfinity mobile. xfinity internet customers, ask how to get a free 5g phone and a second unlimited line free for a year. welcome back to the show. time now to recap the latest economic data from the united states where producer prices rose 3% on the year in november. for the biggest annual gain since february of 2023. that was ahead of economists

expectations for a 2.6% gain. prices are showing a 95% chance of a 25-point rate cut from the fed next week. meanwhile, president-elect trump became the first sitting or former president since ronald reagan to ring the bell on the new york stock exchange. he was named "time" person of the year for the second time. he was quote with you all the way as he pledged substantial tax cuts. speaking to cnbc's jim cramer on the new york stock exchange floor, trump gave this message to investors. >> you will see some very good days ahead. a lot of incentives are going to be given. you saw yesterday $1 billion investment that we will get very fast approvals. no one has come up with that one yet, although it seems pretty simple. i think you will have great days ahead. we have to conclude a couple of

bad wars and a lot of bad things going on. we'll get them done. meanwhile over here in france, i should say, the french president macron is set to name a new prime minister this morning after the national assembly voted no confidence in michel barnier. we will look at the stocks as we await the name of the next prime minister of france. looking at the bond market, the yield on the ten-year o.a.t. is moving higher at almost 3%. in terms of the equity space, we have the cac 40 higher today. looking at the euro/dollar, no moves at the moment. basically flat on the greenback with the investors thinking about what the ecb told us yesterday. i want to return to the focus on the political scene and discuss with charlotte what is happening. charlotte, we are all looking at the wires and the french media trying to understand the name.

where is this name? there was a deadline to announce it yesterday. it was pushed. are we going to get the name this morning? >> it looks like we are getting close. preparations are starting to happen in the prime minister rolling out the red carpet. there could be a handover ceremony soon. we did pass the deadline the 48 hours, so beyond that, the meeting happening at the moment at the palace with macron and the candidate. the name in the front run potential as the next prime minister. we have to wait and see. we know all this week the president has been holding talks with different political groups, particularly the socialists which broke away from the far-left group agreeing to discuss having agreement of no confidence allowing the government to carry on until the next snap election which would be the middle of next year. we have to see if the name becomes confirmed or pleases the

political group. the 73-year-old has been a lawyer supporter of emmanuel macron. in 2017, he supported emmanuel macron. that was seen as a decisive moment for macron's run as president and then he went to win this election. so, he has been a loyal supporter of macron. they have a lot of disagreements. he is a veteran of french politics. he was in favor of pension reform. he disagreed with the pension reform proposed. he is a strong political operator. whether he can play with the center right or center left, probably. he supported before macron, he supported the socialists candidate in the presidential election. he has some connection there is as well. he is someone that won control closely with macron because he has all of the political experience behind him. he is 73 years old and you think

maybe, you know, he can take the job without thinking of his own political career going forward. a lot of candidates, especially in macron's camp don't want to be prime minister. here again, we keep refreshing emails to see if we get the news. a lot of big things to deal with, the budget in particular, with the emergency law to rollover the key elements. things keep running. in 2025, the first thing the prime minister has to deal with is the budget. >> a huge task and the clock is ticking for brexit as we used to say, but here now who will try to correct french finances. i want to show you how things are moving at this stage in u.s. futures. a positive start to the trading day on wall street after what was another interesting day stateside. major indices were lower on the day.

indeed, when you think about the dow, for instance, it posted its sixth straight negative session for the first time since april. perhaps we are seeing wall street giving back a few of the gains we have seen in recent times, but overall, though, we are still looking at the strong performance for this year for wall street and it remains to be seen whether that's going to continue in 2025. geopolitical tensions and protectionism are pictured to intensify next year as former president trump returns to the white house. there will be significant opportunities for positive change according to our next guest. manuel manuella at unicredit. good morning. explain to us your main narrative for 2025 as we are looking at potentially more protectionism from the united states. >> i think one of the main assumptions that we have is that

the trump 2.0 administration as a higher probability of executing the program that they presented during the campaign with respect to the trump 1.0. the reason why we believe this is because we think that the republican party now supports trump more than before. if we see the people he has appointed, actually are going to be approved, then i think that most of the measure that is announced will be delivered. if you take them all together, you know, they are pretty pro-growth. one of the assumptions that we make is gdp in '25 in the united states could again surprise on the upside even a little bit more than 2%. and, of course, the other side is maybe inflation is not going to top 2% of the level of the

federal reserve. we are moderately optimistic with the united states with growth thanks to the pro-growth measure the administration is going to implement. you know, we have to be careful about the fact that the federal reserve that we don't think they want to cut too much to find themselves on the wrong foot during next summer. >> right. what does that mean with the outlook for european equities? we heard yesterday with the ecb the growth outlooking a challenge. when you think about how to position the portfolio going into 2025, european equities versus u.s. equities. what's your choice? >> to be honest with you, we continue to prefer american vis-a-vis european. this has been in our portfolio for quite a number of years. i think that is from the structural point of view. unfofrt rtunately for us, our gh is much lower than the u.s.

growth because if you look at fiscal policy in the past, just look at the past ten years, it has been much more pro-growth in the united states. if you compared it to the fiscal policy that we have been allowed to implement in the eurozone. now, we all hope that, you know, with the new government in germany, let's say fixation about more deficit and small debt is going to be overcome given the size of the challenges that we have to face. but, you know, to be honest with you, we prefer at the beginning of 2025 to keep our overweight u.s. versus european and wait for europe to change, i would say, mind set about, you know, investments. >> interesting. does that mean you are not concerned about the high level of valuations for u.s. stocks? are they not too expensive when you think what europe is offered despite the growth challenges

year to date? i was looking at the stoxx 600 which is up almost 9%. not as big in the u.s., but it is a bit of a gain. >> to be honest with you, of course, if you look at the valuation on average, they are much more expensive in the united states. now f now, if you look at the past 20 years, the valuation and good driver of the strategy, i'm not sure if you just base your portfolio on valuation, you will make, you know, a better return with the benchmark. i think if you were a u.s. investor at the moment, you would just put your money in the u.s. there is really not much attractiveness outside also given the uncertainties that, you know, tariffs represent for other countries and companies that basically export to the united states. having said that, i think there are very good opportunities also in europe, but you have to be

selective at the moment. >> let's talk about being selective at the moment. we have a sector we have monitored this year, no doubt, is the auto sector. you are based in italy. explain to us what is the outlook for the auto sector here amid all of the challenges we have seen this year, are you pricing in any sort of good news in 2025? >> rtunately not. the auto sector is important for germany and italy and unicredit is a big bank in those countries. first of all, the auto sector is cyclical. if we didn't have the problem we had, i would be very careful in that sector. i think, you know, it is europe that must decide what to do about, you know, electrical vehicles and more in general about, you know, the transition towards a different type of energy.

i think that the way we have approached this issue has not really been, you know, very logical from a long-term point of view especially considering that, you know, we have the united states that more and more will probably be totally not regarding as a center of the issue and then on the other side, we compete with china. you know, the last problem that china wants to take is the transition toward sustainable energy. >> right. >> we really have to look at things from long-term perspective and how do we want to compete, you know, with the united states on one side and china on the other. i think we haven't made our mind up on this topic. >> manuela , thank you. coming up on the show, former ukrainian foreign minister dmytro le tel kubals

cnbc his country must fight on. we'll bring you the conversation after this break.

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welcome o "street signs." i'm silvia amaro and her are your headlines. disappointing data and rachel reeves showing the economy is shrinking on demand. and u.s. pointing to a positive open despite the hotter than expected producer prices. president-elect donald trump tells cnbc he is optimistic about the future. >> you will see incentives given. you saw yesterday $1 billion investment that we get very fast approvals. nobody's come up with that one yet. president macron prepares to name a new prime minister as soon as this morning as he looks

to avoid another damaging no confidence vote. and former ukrainian foreign minister dmytro kuleba says his country is fighting on the battle field and at home as ukraine reports a massive attack on its energy sector. >> while we have to fight the battles with the enemy, we also have to engage in skirmishes with our own partners trying to find solutions and to ensure decisions which would help us stabilize the situation. welcome back to the show. let's look at how we are moving so far across the european markets. looking at the benchmark stoxx 600, we are marginal will he lo start the friday trade. a lot of investors reacts ing what we her ard from the ecb an

trying to understand how the narratives from the central banks could impact rates in 2025. also thinking about the stimulus measures out of china with investors showing disappointment this morning in terms of the lack of details thus far in terms of what the authorities in beijing want to do on the fiscal front or the policy front. let me show you the european bourses at this stage. we are awaiting the prime minister in france. we have the cac 40 in france marginally higher. looking at germany, however, we are seeing more pronounced moves to the upside. similar moves in italy with the ftse mib up as well about .3%. i want to take you to one of the more relevant developments this morning. i was highlighting it earlier. let me bring it to you now.

china reaffirmed the policy shifts in the high level economic planning meeting that wrapped up thursday. beijing pledged to increase its budget deficit, loosen monetary policy by lowering rates and issuing more ultra long bonds. emily tan filed this report. >> reporter: the readout largely matching the tone from the meeting readout earlier this had month. policymakers concluding the two-day closed-door meeting and reiterated the stance. this fell short of expectations. china has pledged to obtain the growth target with economic growth remaining stable. analysts s seeing this as a determination of 5% growth for 2025. the forecast will be announced at the npc in march. removing the phrase fiscal discipline as it issued more treasury bonds and cutting

interest rates and triple r. expecting a 40-point basis cut next year. they will maintain the exchange rate to keep it at a reasonable equilibrium. the next key dates to keep an eye on is the level two sessions in january to february and the national two sessions in march for key macro policy catalysts. i'm emily tan in hong kong. back to you. this as president-elect trump gave mixed signals on the approach to the world's second largest economy. >> we have a lot of talks with china. we have a good relationship with china. now when the covid came in, i cut it off. that was a step too far. that was a bridge too far. we have been talking and discussing with president xi and

other world leaders. i think we will do well all around. we have been abused as a country. we have been badly abused from the economic standpoint, i think. even militarily. we put up all the money and they put up nothing and they abuse us on the economy. we just can't let that happen. we will not let that happen. broadcom shares extended in trade after it is developing custom a.i. chips with three large cloud customers. fourth quarter revenue from the artificial intelligence business soared 220% to $12.2 billion. meanwhile, apple is reducing reliance on broadcom as it will switch to an inhouse chip according to bloomberg which apple's chip which has been in development for several years will be introduced to products next year.

as donald trump prepares to return to the white house, questions remain over the presidency on tech. joining us now is marcus. good to you have on the show. good to discuss quantum. i want to start first and foremost with the political implications here. you were at mar-a-lago in late november after the election of donald trump. what can you tell us in terms of the conversations that you had both with the president-elect and elon musk? >> i really had the honor to be invited to r-a-lago. it is, of course, an interesting place to be these days. a lot of interesting conversations. my read on it, really is we can expect really a boost in tech and also in deep check and quantum technologies. i think there is such a positive sentiment to move forward with these technologies. so i expect very good days ahead

for deep tech. >> any sort of concrete measures? concrete signs from the president-elect in terms of what he's actually going to do on that front? how are you feeling that way? did you get any concrete reassurances or a broad line suggesting that he is going to be there for the sector? >> i think it was more general remarks. very specifically, we work already for the u.s. air force. we follow all of the standardization efforts and i see couldn't nunt ntinuity on t. a company like terra quantum, which is a european company, it is important to make deeper inroads in the u.s. because we will see less regulation in europe. >> are you changing some of your business plans to vest more in the united states as a result of

the election of president trump? >> yes. we want to see the technology will grow stronger than it will in europe and that's why we'll do that, yes. >> are you reconsidering europe at all or investing more in the u.s.? i would like to understand there when you think about the outlook for europe, a lot of companies are looking to the united states as the future more so than in europe. >> quantum is a global product and global market so you have to be successful ll over the globe. >> let's discuss some of the latest developments in quantum space. we saw the announcement from google, willol.w. i would like to get your thoughts on how meaningful this announcement is from google. is this the chatgpt moment but for quantum? >> that's a very good one. yes, i think we come closer really to the inflection point where quantum technologies will

really pick up. the willow chip is a great step forward. it doesn't come as a complete surprise. those road maps steadily evolve and we come nearer. so the train has left the station t. station. it is not a question if quantum comes. it is how fast do we ride that curve of the exponential technology. that is one step further with google's improvement. it is along the line of what we expect. >> not yet the chatgpt moment for quantum? >> if you look deeper into it, the hybrid techniques, you can unleash substantial performance enhancements for our corporate clients with hyundai and hsbc and unilever and partner with nvidia. what we see is those separate waves, classical a.i. wave and

quantum wave merge together with hybrid techniques. while we wait on the hardware to mature, we simulate it on classic cpus and gpus and run the platform to run quantum soft software on it already today. >> i saw the announcement from google that some are suggesting the problem is it will still take several years before quantum has a solution here for a wide range of real problems and they also raised the question of cash saying billions of dollars are also still needed to see meaningful progress in quantum. would you agree with that? could you also give us a timeline in terms of the differential in terms of years when we will see a lot of progress here? >> yeah, really lead us in the quantum space. expect to have quantum advantage. that means a quantum chip which

outperforms a classical chip in a few years. down to two to three years. i think that is not too far away and again with hybrid techniques, you can unleash that potential today. i would be more positive on when actually that chatgpt moment is coming and don't forget the other dimension of quantum is the security dimension. corporates or organizations have to prepare for the q-day. this is bigger, much bigger than y2k. it needs prepare time. this recently reported the first standards and that definitely is a call for action for the industries to move towards the quantum age. >> it was exactly where i was going to go next. understanding the angle here on security because i actually understand your company is trying to do something on that

front. there are concerns that at one point quantum could actually have some sort of involvement and understand what is happening in our banking apps for instances or on whatsapp. putting an end to encryption. how far are we to protect users going forward? >> yes, but it needs action now. so, to pick you up, every classical encryption we got, your credit card, your messenger service or crypto wallet will be hacked by a quantum computer sooner or later if we don't migrate the security or protocols to the quantum secure standard. so, that will definitely happen. so, everything which is moving data or stored data has to be secured. quantum secured.

the first step is post quantum crytography. they move toward these standards now. the u.s. authorities estimate that the quantum threat will kick in around 2030. that is still a few years down, but there is more and more malicious actor s who try to harvest and steal encryption data and store them with the future quantum chip. if you loose mission critical data, you are more or less vulnerable in the quantum age. that's why you have to protect the systems now before the quantum chips are there. there is protection. missed movement is the right first step and we come to distribution. we have the solutions in place.

corporates have to act and prepare for it now. >> let's see what regulators are going to do. if they will also step up presence in the space. we appreciate your time and insight. marcus fletch. president-elect donald trump has criticized ukraine's views of the u.s. supplied missiles to strike inside russia trump said he want to reach agreement to end the war and not abandon ukraine. ukraine's foreign minister dmytro kuleba told cnbc he won't back down from protecting land from russia. >> i believe the strategy remains unchange d. you are right. tactics seem to have changed and the ukrainian leadership is

signals constructiveness to the new president-elect of the united states and willingness to engage in cooperation in negotiations which is a good strategy per se. but as i said and it is very important to be clear about it. no one ever said that ukraine is willing or is ready to legally recognize that the territory occupied by russia will stay with them forever and legally transferred to them. this is a very important point. >> the news flow overnight suggests that trump criticized the use of the u.s. missiles to attack deep into russia. we know the strategy has been to take the fight behind enemy lines. is there a red line crossed here? should ukraine avoid using the missiles now to attack russia? >> well, let me put it this way, when you are being hit on a

daily basis with a barrage of missiles, when the enemy is throwing more and more cannon fodder into the battle to get more villages and grab for kilometers of your land, there is nothing bad in ing back. so, if russia keeps escalating, ukraine cannot sit on its hands and observe how it's being destroyed. ukraine has to escalate back. this logic of let's not escalate will lead to where we currently are and to worse conclusions and consequences. we have been suffering from the non-escalation logic for two and a half years. let's drop this political -- politically appealing words of non-escalation and do everything

to help ukraine stabilize the situation against the enemy who keeps escalating all the time. it defeats the goal. coming up on the show, coffee prices are at the highest they have been for decades. we'll discuss why after this 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.

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welcome back to "street signs." time now for the moment of the week. coffee futures hit a record high of $3.48 per pound on tuesday surpassing records scenes een i 1970s. even though you easily are paying four pounds, $5, for a small cappuccino in london,

prices may soon go up again. why? there are reasons leading to the surge in prices. poor weather in brazil and vietnam. likely less work on the trees during the pandemic and disruption in shipping. in addition, up coming deforestation in europe is clouding the outlook. let's discuss in detail with our next guest. stefan. good morning, stefan. good to have you on the show. we have mentioned a couple of reasons why we have seen coffee prices go up in recent times. i would like to understand the outlook here. are we approaching peak prices or is there more pain coming for consumers? >> unfortunately, i don't think we probably hit the peak as of

yet. as you alluded to, there are structure issues with demand and supply. demand continues to increase. supply across brazil and vietnam is struggling over last couple of years with deficits in crops. it doesn't look like it is going to go away any time soon, unfortunately. the other elements you need to factor into it is the amount of speculation in the markets as well. these are not people physically trading coffee, but speculating on the price. there is a large amount of people expecting higher prices. and in the last couple of weeks, actually, we have seen it is much more volatile. i think if you wanted to get an idea of how coffee could continue to trade, you have to look at what happened in the cocoa markets, albeit earlier on in the year where prices have spiked over the last few months

and liquidity dries up which produces the producers to raise prices. they own the coffee and haven't taken delivery yet and have to deal with margin costs. there are a lot of factors at play. ultimately, the consumer won't see the benefit of lower prices any time soon. >> i would like to see how demand is shifting at this stage. consumers in europe and america have dealt with the cost of living prices. how are you seeing things changing? >> i think what you will find is people will not be prepared to pay for the highest specialty coffees and what may occur, basically, what will have to happen now is either the cost will be passed on to the consumer or potentially the

quality will drop. what you have is specialty coffees versus commercial and i think what you probably will be seeing more and more is people paying the same prices now for lower quality coffee. >> i have to say, stephen, the news you are sharing with us this morning is very painful for a newsroom with a very early shift. lower quality and higher prices. any outlook where things could improve for consume consumers going forward? >> the market will be focused on the crop in central america. think of colombia and costa rica. the harvest season has just began and in vietnam, people will monitor that very closely. i think the weather is of particular issue in vietnam with the typhoons in october and

november and particularly now and it's delayed the harvesting. it doesn't look like that will i hope improve the situation. it is a bit too early to tell. i think we could be another year or two of prices where we are right now. >> i know you mentioned this earlier, but i would like to get a little more color, really, in terms of how you compare what we have seen in coffee and what we have seen as well in the cocoa market. how are these linked and, you know, are the pressures are one the same pressures we are seeing on the other? >> geographically, they are in different locations. cocoa is predominant in west africa. there is, there is -- it's more granular where the locations are. coffee, there are other markets across the globe trying to grow coffee. it is a sturdier plant and less

susceptible to disease compared to cocoa. the problem is the demand is coming from south and asia in particular for, you know, these items. the demand won't go away any time soon. the supply has to catch up. that will be down to improvements in the weather. >> i'm afraid we have to leave it there. hopefully next time we speak we will have better dynamics and better news for coffee consumers. thank you for your time. stephen butler. as we approach the end of the show. four things to get you up to speed ahead of the open on wall street. it's been a heavy week on the economic data front with traders today eyeing import prices. meanwhile, the nasdaq is in focus as after dropping below the 20,000 mark yet. in the corporate world, costco reported higher sales in latest quarter, but split customer base. and broadcom shares are surging

pre-market amid the boom in demand for the a.i. chips. let's get a check of the markets this friday. european bourses this stage marginally higher. more upside moves for germany with the dax up .3%. thinking about italy, we are also seeing similar moves there. all in all, we know investors at this stage are trying to position their portfolios for the next year trying to understand what is the best approach amid all of the recent commentary from central banks. that is it for today's show. i'm silvia amaro. stay with cnbc. "worldwide exchange" is coming 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." president-elect donald trump at the new york stock exchange as stocks look to cap off a wild week. broadcom is helping in a big way. lifting the chip sector higher and out with a bang. the ipo market getting an 11th hour boost as shares of servicetitan surge. and dock work ers