e' trying to do with einride is really to shape the future. for cnbc, i'm julia boorstin. to learn more about the companies on our disruptor 50 list, scan this qr code and head over to cnbc.com. thanks for watching. ♪ welcome to "street signs." on this monday morning. i'm silvia amaro and here are your headlines. european equities kick off the week lower with france and germany remaining in contraction territory, but better than expected. moody's slashes the credit rating in the blow of france who

tries to seek compromise in the divided parliament. >> translator: if i may, i will try to serve the country. luxury stocks dip from the china consumer with retail sales missing expectations putting pressure on beijing to boost domestic demand. and shares make the london debut after the spinoff of vivendi. the ceo tells cnbc what motivated the de-merger. >> when you look at the value of vivendi, it was less than 10 million euro. the sum of the parts was lower. to unlock the assets enhances greatly. very good morning, everyone.

we start the show looking at the latest pmi in the eurozone. let's see what they are telling us at the moment. we have the composite flash pmi coming in at 49.5. that is actually above what economists had priced in, but indeed, it is still below the 50 threshold. all in all, the overall business activity still in contraction territory for the eurozone. if we break it down into manufacturing and services, this is what we got. manufacturing flash pmi came in at 45.2. that is just marginally, marginally lower compared to what economists priced in. in terms of services pmi, the flash figure comes in at 51.4. that's actually slightly higher from what analysts were expecting. this figure, however, is above that 50 number, that 50 threshold. therefore, we are seeing an

improvement in services slightly above contraction territory. that is a positive when you think about the overall business activity for the eurozone. nonetheless, we are still seeing a lot of pressure on the manufacturing sector. this is not really new. we knew from the numbers we got earlier today from france and germany that manufacturing is still the sector that we are seeing a lot of pressure at this stage. so, no improvements there for the time being. but indeed when you put it all into context, we heard from the ecb president this morning. ecb president christine lagarde saying rates will decline further if data confirms the inflation on track. we know that the ecb lowered their economic forecast for the eurozone last week. they highlighted indeed they are concerned about the lack of growth we are seeing across the bloc. indeed, that could have ramifications for how the ecb is going to change rates in the future. more importantly, when you digest the pmis, that pressure

on the eurozone economy is still very clear from today's numbers. now, let's dig deeper into another important announcement over the weekend. this time in relation to france. moody's downgraded france to aa 3 citing political instability and warning a low probability the new government will be able to tackle the country's debt. the downgrade comes a day after president emmanuel macron named a new prime minister. charlotte is joining us from paris. charlotte, explain to us how surprising this announcement is from moody's and is it putting pressure on the french assembly to come together and change policies in order to bring down the huge levels of debt and deficit. >> reporter: well, moody's downgraded the outlook for france from negative to stable in october.

this downgrade was surprising on saturday hours after the new prime minister took office and we know if he ever needed a reminder of priorities should be, that was it really. surely he remembers that. his predecessor, michel barnier, was ousted three months into the job because of the budget for 2025 and the measures he was putting in the budget and including some spending cuts and tax hikes to try to tackle the deficit that would be above 6% this year. he was trying to bring it back to 5% next year. the national attempt bring decided to topple that government. moody's mentioned the fragmentation in government to take measures to address the public finance situation difficult. what we heard on friday from the fourth prime minister of emmanuel macron this year is he was very aware of the difficulties ahead of him. >> translator: i know that the chance the difficulty are

greater than the chances of success. i'm aware of the difficulties that lie before us. the first is budgetary and political and the breakdown of society where we're in. >> reporter: so, he is very aware in the ceremony that addressing the debt in particular was a moral issue and maybe he is the man for the situation. someone that's been talking about this for a very long time. he made his own presidential run in 2007 and in 2012 with the question of debt at the top of the manifesto at the time. that was not something in the headlines. maybe you should not be campaigning on. he was someone who said that was something that needed to be tackled. in 2007, when he was talking about that debt-to-gdp, 60%. that stands at 112%. maybe he will be the man to deal with it. he is starting to meet the

different political parties today. he is really receiving marine le pen with the biggest party with the mps in parliament to find the red lines. he wants to return to the center left which is something michel barnier did not do. he may have to undo some of the reforms that have been done so far by emmanuel macron. it will be interesting to see what happens there. the talks are transforming his government and the challenge is the 2025 budget early next year. that should be a pretty difficult one. >> we will see what happens, no doubt. let's discuss the outlook for france and the eurozone in particular with callam. great to see you. i like the latest on the pmi. the services figure coming in above what was expected and above positive territory. is this a good snien. >> i wonder what is driving this. is this a confidence rebound

post-u.s. election. european consumers know about the prospect of the trade war. the first signs we have from the trump administration is there hasn't been a u.s., preliminary escalation. also we hear from christine lagarde, head of the ecb, similar key figures in europe that maybe europe is likely to do a deal rather than escalate like in 2018. if i'm a consumer in europe, i'm less afraid of a trade war. that may push up the number. >> we will see what is the final reading. this is the flash pmi. in the meantime, let's look at the ecb. from the meeting last week, there is concern about the growth outlook here. explain to us what you are expecting in terms of rates for next year and is there pressure on the ecb to actually cut by a lot in 2025? >> if i were the ecb, i would look to send a big signal. economic logic argues for

50-basis point moves. i don't think they will go 50. the base case is 100 over the course of next year front loaded with the risk of doing more. i find the ecb tone too hawkish. if you think of how central banks are reacting to macroeconomics conditions. the source of the inflation the last two years was negative supply shocks. now i look at the politics in germany and france and weak pmi. you have demand problems now. if you have inflation that is sticky, you doubt it will be sticky six months from now. you could front load rate cuts. >> what are you pricing in? you think the argument is 50. where do you think we will be? >> i think we are down over the next six months with the hope they pull up a bit and go 50 basis points in the next meeting. that would be the next signal to consumers and markets. >> let's look at france. you are highlighting every day

we are talking about what's going on in france at this stage. how are you looking at the downgrade from moody's ? will they come to the deal to correct the finances? >> i think in a haphazard way they will come up with a deal to get to a sustainable path. the question is what political agreements need to be made? will we see refund reversal? france's problem is it's the weak economy across the private sector. it is an economy with lots of debt. macron might be the most unlucky leader we seen in the western world probably for the past decade because when he first became president, he had the right policies. deregulation of the french economy, get fiscal policy on sustainable path which initially made people poorer and factories

made people poorer or reforms in germany made people poorer. with that additional competitiveness, the economy grows, but he was hit by covid and the russian invasion of ukraine and now french said we took the pain, but economic conditions have not improved. that is what we see with the disenchantment we see in france. that will be difficult to build p up the willingness to go through the reform cycle. it is difficult to be optimistic about france. >> do you think the markets should be concerned at this stage? when you look at the spread historically speaking we are at a red signal moment or red signal levels at this stage really. what could spark a change within the sentiment in bond investors? >> i think hopefully for france, the conditions improve. what's the course of the geopolitical risks we see in the world? can we get something like a cease-fire with ukraine? that would be positive for

european sentiment. let's see what the outcome is of the german elections and can we get a physician al stimulus in germany? i think it is difficult to cook the domestic policy on a long-run sustainable path. the issue with france, the bond market is not exaggerated. it is whether or not the current ies are high have not been met. france needs reform reversal and the risk is reform is going in the wrong direction. >> let's talk about germany then. are you expecting significant changes to fiscal policy? when i hear the comments from the leader who could be the next chancellor, he seems to suggest that changes to debt brake, yes, but ot massive changes. are we going to see fiscal stimulus from germany? >> again, we have a contradiction in europe of what needs to be done and what the

politics produces. this is a real problem. in some respects, germany has an easier situation than france. why? debt is lower. lots of fiscal space. labor markets are well regulated. even though in core germany has been weak. you still have a very healthy industry there. what germany desperately needs is a fiscal stimulus. if you can get a big enough majority between let's say the spd and in the greens, even if within say the first three-to-six months of the new administration, you don't get changes to the debt brake, if they have a big enough majority, eventually economic conditions will force them to accept reality that they need a fiscal stimulus. the moment you get fiscal stimulus in germany, i think a lot of things start to look a lot better. let's see what the relationship between the eu and u.s. looks like next year. i don't think europe has the

stomach for a trade war like in 2018. you had record high industrial production and a lot of issues with brexit and you have strong demand from china. today, the situation looks different on all those accounts. the faster europe can settle with the u.s., if that means buying more defense equipment or whatever it s is, i think the environment improves and you can work through. problems. i think get in the way of economic policy, it is hard to be constructive. >> you touched on the point that i have been raising recently because you hear ministers across the bloc suggesting that, yes, we need to do more, but when you actually look at what they are doing, they are not, you know, putting their words into action, i should say. what is the outlook for the eurozone here? do you expect after the draghi report and so on that there is a realization they actually need to do actually what they are

saying? >> draghi gets it absolutely right. you need a more competitive approach to the landscape. that also applies in the uk in many respects as well. not just the eurozone. i'm talking about europe more broadly. base case is the gradual upswing in the next two years in the eurozone with growth which is in the low ones with the huge two-sided risks. the risks come from german fiscal reform, ecb goes a little bit faster, global geopolitics settle and you don't get an escalating trade war. down side, let's watch the germany election and trade wars. >> i guess we well all be busy next year. kallum, thank you. in another country we have not discussed this morning, italy's government is looking to finalize the budget plans with the december 31st deadline. italy was placed under the eu

deficit proceedings earlier this year after hitting 7.2% in 2023. parliament features tax cuts this week. let's put all this together and see how we are moving so far this monday morning across the equity markets across european continent. the xx 600, the benchmark, down .2%. overall, with investors digesting latest out of china and trying to figure out what is going to happen this week amid all of the activity we have on central bank front. i also want to take you to the european bourses and see how we moving across the european continent. looking at the bourses, we have the cac 40 down by more than .50%. in germany, the dax down .3%. the ftse, which is margin ally lower at this stage.

let's look at the sectors and understand the corporate dynamics this morning. we have banks, best performing sector at the moment, up .50%. it is an interesting time to follow the banking space amid the consolidation. we hard from unicredit ceo making comments about the deal they made for one of the italian banks was the right amount, the right level. we will see what will happen on that front and whether they will manage to finish that deal before doing a little bit more on consolidation front with commerzbank. we have food and beverage down 1.2%. also pressure for the auto sector down by more than 1%. this we actually heard also several news in recent times around what's happening in the space. it seems there is further pressure for that part of the market. i also want to take you to other developments we are monitoring

this morning. i mentioned we are looking at vanal plus. shares are lower after spinning off from vivendi. the chancellor rachel reeves says this is a vote of confidence. caused discipline especially when it comes to sports rights. >> every company we have seen in our business that has really died is because they overspent on sports. we have a strong division. if we believe sports are too expensive and doesn't bring the money, we will not buy it. we decided to pass because we believe the value for money was not there. we are not dependent on any piece of contest. we have the broad proposition with cinema and the sports. we can pass on the rights when we believe they are too

expensive. >> meanwhile, citigroup allowsed takeover with royal mail to more forward. it will allow the requirements for as long as they own royal mail which they say is legally binding. and coming up on the show, chinese data disappoints yet again. we will have details 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.

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"popular! you're gonna be pop-uuuu-larrr!" can you do defying gravity?! yeah, get my harness. buy one line of unlimited, get one free for a year with xfinity mobile. and see “wicked,” in theaters now. welcome back to the show. let's take a look at some of the data we obtained from china this morning. factories cranked up a little in november as industrial production came in ahead of forecast. retail sales s disappointed.

keeping the pressure on beijing to increase stimulus measures ahead of the tariffs from the white house next year. i want to take you to developments from vw. workers are having conversations with the company. we just obtained comments from the vw counsel chief saying we don't want to go into christmas holiday with fear. we want a compromise for workers and the company. a vw union representative saying there can be no plant closures nor mass redundancies. workers fearing the concern about the outlook for their lives and positions. we know has been clear about what they are facing at this stage. let's see what the compromise will be between the workers and the company, if there will be any, really. i want to take you to what could happen in the healthcare sector.

policy uncertainty has created a generational valuation opportunity in healthcare according to tema etfs with the discount of 22% to the s&p 500. it says the nomination of robert f. kennedy jr. as negative and other appointments offer a as you will ver silver lining. i'm pleased to say we have our guest joining us this morning. pleased to have you here this morning. i would like to understand the outlook for healthcare. actually, when you think of the performance of the annual basis, we are still up for the year. although it might not be a huge performance, it's still positive. so, what does that mean going into 2025? >> absolutely. healthcare is up about 5% as of close on friday, but this is the second year where it under performed the s&p 500 by 20%. actually 24%. we think that this has created a

fantastic valuation opportunity. there was a selloff after the nomination of robert kennedy which created a discount. that discount is very similar to other policy led health dislocations we have seen in the market the last two decades. we think those are great buying opportunities in the sector. the key bit, the heart beat of healthcare is innovation which will continue next year and years into the future. >> would you say the policy uncertainties is likely to have an impact on innovation or is there, perhaps, a moment where companies actually have to be selective where they put their money given they don't know for how long or if they will have any sort of policy backing going forward? >> absolutely. uncertainty is also a bad thing in the market. that's why the shares kind of sell off. the market wants to shoot first and figure out what happens. all we know so far is we had the nomination of the health secretary. we had some silver lining nominations as the fda commissioner and also the

department of government efficiency with vivek ramaswamy. we think these forces are going to counter balance the negative policy. as we go into next year and into the appointment conversations in the senate, we are likely to see more of the uncertainty lift and the healthcare perform. fundamentally, they are pro regulation and we think that will be a driving for force companies that are prepared to put down the capital to invest in the future of health care. >> i also would like to get your thoughts on how would you explain the performance throughout 2024 because the healthcare has been an interesting sector to monitor with the conversations with obesity and so on. perhaps before we get forward looking for the performance for obesity drugs, why did we see the performance this way? why are we up 3%? >> it is a complicated picture

in healthcare. we had little m&a. m&a is on track to be the worst in a decade. you also had some dislocation in certain areas. fantastic performance in the ity space, but that has been given back with the supply line. 2025 is an exciting year for the obesity space with the oral drugs and new companies. we think it is a balanced picture with positives, but offset with negatives over the space. another big part of the market is managed care which is under pressure all year as well. it is particularly cheap sector. there's interesting area and opportunities there as well. we think broadly what you want to be doing is backing innovation and companies delivering change. eventually those will get acquired. the truth is large pharma companies need to acquire to

drive their pipelines forward. >> i guess going into 2025, you are looking for developments with obesity-related investigations and more m&a. tell us what exactly you are looking for with obesity developments? we know a lot of these companies are looking how to use the drugs they have right now for other purposes. are we going to see that? >> yeah, absolutely. the glp-1 space is incredible as a drug. we have seen the last couple of years a lot of clinical evidence showing benefits outside of weight loss. whether it is cardiovascular or kidney disease. we have a readout on novo nordisk on glp-1 on alzheimer's. other exciting areas are the molecule that eli lilly is developing. we will see if we will have an oral, a small molecule to create glp-1 targeted. that is possibly the way to unlock the supply and get drugs

to patients out there. >> before we finish up, i like clarification there. how much do you think could we see the boost for novo nordisk and the healthcare if they come up with good developments on that? >> i think, look, as supply unlocks, it is there. i think novo nordisk specifically has important reality in 2024 for the drug that is greening. we will see that any day now. that will be exciting for novo nordisk. the space will benefit from the innovation and new use cases for glp-1s. >> we await for the announcements. that was the cio at tema. coming up on the show, german chancellor olof scholz is preparing for a no-confidence vote as they look ahead to the likely election in february. we'll have details after this break.

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woman welcome to "street signs." i'm amaro amaro.silvia amaro. here are your headlines. moody's slashes the france credit rating with the new prime minister who seeks compromise in the parliament. >> translator: if i may, in my turn, i will erve the wreck as you will reconciliation. xury stocks dip with

pressure on beijing to boost domestic demand. and shares of canal plus fall after the spinoff from vivendi. >> vivendi suffered from the discount. when you look at the value, it was less than 10 billion euro. the estimate of the sum of the parts was much greater than that. to unlock that value potential of each of the assets. welcome back to the show. time now for the latest uk pmi data. let me share that with you. the flash composite came in at 50.5. that is actually marginally lower from what analysts were expecting. let's break it down into manufacturing and versuses. starting with services, we are seeing a reading of 51.4.

that is also marginally higher from economists priced in at 51. in terms of manufacturing figures, the flash reading came in at 47.3. that's actually lower from what economists had forecast. however, the take away at this stage is we are seeing a little bit more momentum for services sector in comparison with manufacturing. still a lot of concerns and question marks where about the k for manufacturing. we obtained a similar story from the eurozone pmi this morning as well. what is interesting here is also the performance for the services sector. if you look at the latest flash phi reading for services, it is actually higher from what we had obtained in the prior month. so, let's see how markets will react to this, but so far, these flash figures coming in a little bit higher than expected for services.

let's look at the benchmark stoxx 600 is moving at this moment. we have european equity markets open an hour and a half so far. the benchmark is marginally lower with investors struggling to take a clear direction in terms of how to position their portfolios and amid concerns of what is happening in france and the weak update from china and trying to put all of that together amid the activity that we are going to see also on central bank policy this week. let's take a look at the different individual bourses at this moment. we see continued pressure over in france for the cac 40 down .60% after the moody's downgrade. over in germany, we have the dax down .30% as we await for the no confidence vote happening later today as well. indeed, we know the snap election is due to take place in february, but overall, it is

important to monitor what politicians are saying in the outlook for fiscal policy in germany. let me take you to the different sectors to get a better idea of what is happening on the corporate front. the banks are up .70%. healthcare is up .4%. i want to take you to the worst performing sector because that is relevant. we see the declines in the auto sector ifying now. the auto sector down 1.3%. we know, obviously, this is also quite interesting in the context of the outlook for the german economy as well. speaking of germany, the chancellor olof scholz is expected to lose the confidence vote called by the parliament today. that will move the elections in february. the far right party is second in

national polls ahead of the election. the deputy leader told cnbc what the party's top priorities will be. >> reduce illegal migration to germany and get those people out of germany who are here without permission, who are illegally in germany or who came from a country where there is no longer a war. this is a very clear program. this is clear to everybody, but not for the german voters. the second thing which is of main importance of the upcoming election is the economy. our economy is on the brink and the main question for our economy are energy prices. energy prices are too high, so our economy is losing its competitiveness. >> and annette is joining us for more on the election.

what i would like to understand, annette, what does it mean for the outlook for fiscal policy seeing the afd at the moment polling second? >> reporter: that's not really clear, i have to say. it is a icated matter. the afd and the far left might reach a bloc minority, one-third of all seats in parliament, then, of course, a constitutional change to the debt brake might be in danger. that's the big elephant in the room going into these new elections because clearly there are fears gaining popularity in the east. they will come in first almost everywhere. in the west, they also are gaining momentum and in the polls. on on average, national average,

they stand at 20%. if the bsw is successful as she has proven to be, that is quite a realistic step. the debt brake means it needs a majority in parliament. one-third is a blocking minority. here is the danger we might not free up fiscal space by changing and modernizing a debt brake. that would be a real problem for the new government because currently it is seen that the cdu might actually rethink that very firm commitment of that debt brake perhaps exempting enhancements and schooling structure. we have to wait and see what the new elections will have as a result when they will happen on the rd of february. currently, it seems there is

some movement in the approval ratings of the various parties, especially some tailwind for the social democrats in recent days where they ined attraction. greens have gained attraction with the female voters and that is what is currently also happening when it comes to the polls. as i said, some weeks ago, we thought the cdu might actually even gain some 25 or 35 or 38% this euphoria is currently over, but we only see now the real start of the election campaign and we'll get to know more of what the parties are actually promising for the next four years if they would win the vote on february 23rd. >> annette, stay with us. we'll discuss in detail with lucas koller, the mp for the

fvp. lucas, good to have you on the show as we try to understand what could happen in europe's largest economy. looking at the figures, we have a public debt just above 62% for germany. why are you opposing the idea of a larger fiscal policy changes to debt brake when clearly germany has the fiscal room to do it? >> well, first of all, we see what debt can do to state as we look at france for example. they are clutched in the system where they can't freely spend the money. they have to pay for the debts. that's one concern that we have. the other thing, the debt brake, at the moment currently withholds more spending on for example social welfare state. that's something we don't need spending on at the moment.

we have a lot of investment into infrastructure. we invested in the exemption high manner in the last few years into streets and bridges. we don't see the need for a debt brake exemption at the moment. we see the need for restructuring of the household as we have seen that about half of our current fiscal policy goes into the social welfare that we can't touch and we can't use. the state can't spend the money on. we see at the moment when not only we look at the german policy, but also the european policy with big debts and big states like france and spain. the german fiscal policy is what keeps the euro alive. that's second edition to the very, very necessity ty o keep the debt brake. >> lukas, brussels and mario

draghi would say something similar. you can still afford spend in the short-term and correct finances going forward. when you hear what is happening in the manufacturing sector and when you hear what vw workers are concerned about going forward, aren't you of the opinion that the german economy is at a crossroads and you need more fiscal stimulus to support growth in the near future if you don't want to lose the global race? >> so, i do think we have to split policies between spending more money on the economy and getting enough to consume for example in the market and aging our vectors that prohibit companies that invest in new hod els. on the second part, we don't have the big issues. we don't have the problem of the current german market and

consumers not spending enough money. that is a secondary issue in the future, maybe. at the moment, we need reforms on taxes and we need big reforms on the way we treat our companies with bureaucratic rules. we need low energy prices very quickly. we need to -- we need more work force and people working longer hours. all of that is not achievable by spending more money, but by reforms which is what germany was lacking in the last ten years. those reforms are necessary and those reforms that we proposed while being in government that were not possible with the more left parties such as the greens or social democrats, those reforms are required now to sort of take off the brakes of the german economy. >> it sounds easy we need lower energy prices, but it has been

also an evolution with the high energy prices. if your party will make it into the next parliament and you might work together with the government, what are real steps actually you would advocate to reduce the energy prices? >> you just said it is an evolution. evolution is something that happens by chance, but the energy market is not by chance, it's by design, right? what we need to do first of all is realign the energy market. use the energy market to enhance for example flexibility. using more storage space. using the flexible way to store and produce energy that is more dependent on the actual current part. the second thing we would change immediately is we need investment in new power plants, specifically gas power plants. we also need to be more open for nuclear power and we need laws

set and technology. nuclear power is nothing that will get the market going in two to three to five to ten years. it's a long shot, but i think we need more openness. power plant investment is essential for the market. >> i just would like to understand before we let you go whether there's -- the fact that the collapse of the government came from the divergence of opinion with the fdp. do you regret that when you think about at the moment the poor performance in opinion polls? >> oh, no. i don't think opinion polls should be a matter of how you rule the state. i do believe our responsibility was and is to do what's best for germany. we are still last government. the greens and social democrats was not possible to get the

very, very necessary reforms going and it's -- germany needs reforms. it's not the case that we can just go on with business as usual. it was our responsibility to, to, to give the government a choice. to say you can do those reforms with us or we let the people in germany decide who should do those reforms. >> well, let's see what will happen. hopefully we can have another conversation as we approach the vote. we appreciate your time this morning. that was lukas kohler from the fdp. coming up on the show, bitcoin touches $106,000 mark as president-elect donald trump floats new crypto plans. we'll have more details after this break.

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welcome back to the show. bitcoin surged to new highs above $106,000 in asian trade after president-elect trump announced he plans to create a u.s. bitcoin strategic reserve similar to oil. the world's largest cryptocurrency has jumped 50% since the november election and just marginally lower to what we have seen in the asian trade at $104,000. in terms of the policy, we are gearing up for central bank action with the rate decisions in the u.s., uk, japan, sweden and norway. the fed is all but certain to cut rates despite last week's slight rise in inflation data. economic projections and dot plots are in projection next year.

markets pricing in a 12% of a rate cut according to lseg data. bets on the bank of japan hitting a high after the media reports the central bank would forego a hike this month with markets now seeing an almost 80% chance of a hold. the norges bank is all but certain to hold as well having previously said it will not cut this year. in sweden, the question is how large thursday's cut will be with a two thirds chance of a 50 basis move. that is the summary as we approach all of the rate decision. in the meantime, we have the strategist at bnp pari bas joining us. >> good to see you. >> we are getting a lot of notes over what to expect for 2025. one thing is certain. what do people, i would say the

consensus is, american exceptionalism is here to stay to drive markets in 2025. do you agree with that or is there a chance, perhaps, for lack of a better expression we are in a bubble that could burst? >> bubble is a loaded word. i don't know if i would use that word. i agree. we are overweight u.s. equities. just because everyone has the same view oesn't necessarily mean. everyone seems to have the same trade on. what does that mean? it doesn't mean the trade is wrong, but it means if and when things do go wrong in the future, you might see an outsized reaction. we want to be thinking about what comes next. you talked about american exceptionalism. the question is how long can it last and when will it change because it can't go on forever. that is what we are focusing our attention on. >> when you think about that, what are your thoughts? when do you think it could come to an end and what could propel

that end? >> thinking more about the circumstances as opposed to the timing. the timing is uncertain u.. when you think of how things evolve from here, you worry about too strong growth. trump's successful growth accelerates. then the fed hikes rates next year and doesn't cut as much as the market expect. his is not the base case scenario, but is a scenario. it is something to think about. on the other extreme, if the fed, nonetheless, doesn't cut as much and policies stay in restrictive territory, remember the excess savings from covid are gone and maybe we see a bigger slowdown in the u.s. economy. it is two opposite scenarios. one too much growth, but one you risk and get too little. >> given the uncertainty, what will the dot plot tell us this week and will you ignore it with the uncertainties on the table

real any. >> i would say it is not so much uncertainty. go back to step when he essentially the dot plot was premised on harris winning the election. if you thought that wasn't going to happen and the projections were irrelevant. we know the fed has to operate under what policies we have today. i said they will not speculate what trump might do. he will do something and therefore these projections nice to know, but we appreciate they could not be terribly relevant depending after january 20th. >> when we heard jay powell speaking recently, he did say and he did explain they can't factor in any changes to trade policy because they don't know who is going to be impacted by trade tariffs and how much and whether there was going to be retaliation. when you think about 2025, what

do you think is the biggest challenge for the fed? >> well, on one hand, they are not in such a bad position, at least relative to the ecb. if the fed doesn't cut as much given how strong growth is, not so much a problem. we assume inflation goes down. whereas the ecb is dealing with the situation where inflation is kind of sticky, but growth is weak. for the fed, i think the challenge will be if they wait a bit too long, will we see deceleration in inflation? in the scope of things, not the biggest thing for them to worry about. >> tell us how you read the latest data on inflation? i was reading a deutsche bank note highlighting before we see donald trump ing at the white house, the data shows inflation creeping up for the u.s. economy. are we go to see the fed pausing inevitably as a result of the latest state on inflation? >> before the election, of course, we all had the soft

landing narrative. growth was supposed to slow and inflation fall. inflation hasn't been decelerating. the assumption that monetary policy is forward looking. it certainly is less clear that that's going to happen given what might happen on immigration and what might happen on tariffs and on tax cuts. you are absolutely right. huge degree of uncertainty of how the policies play out and impact on inflation. >> thank you so much for your time. daniel morris at bnp paribas. before we go, i want to share the comments from vw workers. we monitor the workers and the company. we know these are tense issue as this stage. volkswagen and the union are far apart on key themes. no more time can be wasted on a

solution. that is what reuters is reporting at is stage. this is as we are witnessing a fifth round of talks happening today. let's see what will be the developments. indeed, an important moment for the workers and the company trying to figure out what will happen next and what compromise, if any, can be reached. meanwhile, a final look at the european markets. we were struggling a little bit for a clear direction earlier today. looking at the cac 40, we will see a lot of pressure there. the market down .60%. when you think about how investors are digesting the latest moody's downgrade. clearly not very well. that is it for today's show. i'm silvia amaro. stay with cnbc. "worldwide exchange" is coming up next. do you have a life insurance policy you no longer need? now you can sell your policy - even a term policy - for an immediate cash payment. we thought we had planned carefully for our retirement. but we quickly realized we needed a way to supplement our income. if you have $100,000 or more of life

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it's 5:00 a.m. here at cnbc global headquarters. welcome to "worldwide exchange." here's your "five@5." split decision. nasdaq sits near record levels with the dow at the losing streak. futures are big. so is bitcoin by the way surging to the record high crossing the $106,000 level for the first time ever. the big event. jay powell and the central bank looking for the last event of the year as