ay look up bryan rein when you get there, and ask him who killed him, because that's the only way we are ever going to know who killed bryan rein. >> very good morning, everyone. >> welcome to street signs. i'm sylvia marrero, and here are your headlines. european equities are on track for a strong finish to a largely positive week, as investors shrug off signs of ongoing weakness in pmi prints out of france and germany. we'll break the eurozone prints in just a moment. burberry shares flying off the shelf after quarterly sales fall less than expected, pushing peers into luxury space

sharply higher. president trump takes aim at the federal reserve, pushing the s&p 500 to a record high as he calls for borrowing costs to be swiftly lowered, claiming he knows more about interest rates than jerome powell. >> i'll demand that interest rates drop immediately, and likewise, they should be dropping all over the world. interest rates should follow us all over. the progress that you're seeing is happening because of our historic victory in a recent presidential election. >> the bank of japan lifts rates to their highest level since 2008, and signals further hikes are in play. good morning everyone and happy friday. we start today's show looking at the latest pmi figures for the eurozone. let me

share those with you. the composite flash pmi figure for the eurozone came in at 50.2 for the month of june. that's actually higher than what analysts were expecting going into the release today. and let's break it down between services and manufacturing, starting with services. the reading has come in at 51.4. that was just marginally lower in terms of what economists had priced in. but indeed, it is still a positive reading above that 50 threshold. when you think about manufacturing. however, we know this has been the part of the economy that has struggled in recent times. the pmi figure came in at 46.1. so in contraction territory. still nonetheless also a slight improvement here from in terms of what economists had expected going into the release. so all in all, the summary from the key takeaway really from these pmi figures is that we are seeing the eurozone business activity

in positive territory driven by services, but nonetheless a little bit more of momentum for manufacturing compared to what economists had expected. now, the latest pmi data out of france shows ongoing weakness in the economy, with services and manufacturing prints both in contraction territory but some respite in germany, with private sector activity showing signs of expansion for the first time for the in six months. so a different perspective there in terms of what we are seeing in france and germany. and of course, this is important to keep in mind because they are the largest economies in the eurozone. what happens there? driven drives a lot of the momentum. also for the broader 20 country region. now that we have these pmi figures, i want to show you how european bourses are trading today. we are looking at a positive start to the trading day. when you think about these early deals, we have

the benchmark currently up about 3/10 of a percent. continuing that positive note really that we have witnessed for pretty much the whole of this week. but let me show you the different bourses so we get a better idea of what's happening on the continent today. off the back of these pmi readings, we have green for the european bourses. we have the extra dax up about 3/10 of a percent more pronounced moves over in france, with the hunt up about 1%. however, here in the uk the ftse 100 just trading below the flat line. i want to show you the week to date performance because it is. friday is always a good moment to really assess what has been driving equity performance. looking at these numbers, it's very clear on your screen. we are on track to end the week higher. looking, for instance, at the ftse, we are on track to end up about 7/10 of a percent. over in italy, in germany, i should say we actually are on track to see the market there end the week more up by more

than 2.5% at this stage. so strong gains here. that was also driven by a lot of the earnings really that we have received this week. so in the minds of investors really we have the earnings season. they're still focused on that. but of course investors still very much keeping an eye on what donald trump is telling us. and on top of that, the economic data. so let's return to our top story at this stage. let's discuss the latest pmi figures with chris williamson, chief business economist at s&p global market intelligence. chris, always great to have the chance to speak with you off the back of these results. perhaps just to guide us. really, why are we seeing a little bit of an improvement for the overall performance for the eurozone compared to what economists had expected going into today's release? >> good morning. yeah, the big surprise really is manufacturing, where the numbers have lifted quite significantly, especially in germany as well as in france. i mean, there have

been very subdued late last year. so we're coming up from a low base, but it is quite a marked improvement in terms of the rate of decline easing. so there's quite a lot going on in manufacturing, as we know around the world at the moment. and what's most interesting here, i think, is the extent to which not necessarily those current activity indicators improve, but business expectations about the year ahead. they they leapt in germany. we've seen future output expectations now at the highest for nearly three years. this is really quite a big move. and companies are reporting that they're they're perhaps not as wary of the outlook as they were a few months ago. i think there's some political stability coming through in terms of their decision making, believe it or not, with the tariff threats and so forth, they haven't come through as much as they feared. there's also in germany hopes that the new government coming in will add some stability. and on the back of that we've got

lower interest rates coming through. we've got easing cost of living crisis as well as some some weakening of the euro. so manufacturers are looking at quite a few tailwinds, it seems, going into 2025, which are already helping lift the numbers out of the contraction debt that they were in, but also showing some signs of life. >> it is interesting because i believe we haven't seen a positive reading for the eurozone for several months now, so it seems that the mood is changing. as you highlighted there. the question i have at this stage, though, is whether this is sustained. is it here to stay, given all of the uncertainties that we also have on the table? most importantly, perhaps potential terrorists from the united states? what is the outlook? what are you hearing in terms of business sentiment going forward? >> well, there doesn't seem to be a lot of fear about those tariffs coming through these numbers at the moment. it's more to do with domestic political situations. the contrast between france and germany is quite marked in these numbers. france still in decline across the

board. and the big difference here is the service sectors, german service sector returning into some sort of reasonable growth territory, france still struggling. and companies are reporting that in france, the political environment still still very uncertain, potentially a big headwind to their growth prospects in the year ahead, contrasting with a better outlook, as we mentioned in germany. so i think this is overriding that sort of us politics to some extent looking closer to home and how much domestic demand will be stimulated or not by by the political environments at home. >> interesting how they're more focused on the domestic dynamics here. so my question going forward though, is what are businesses saying regarding potential fiscal policy here? because thinking about france, though, we have seen a lot of political uncertainty there, we still don't really know what are the fiscal plans going forward. he is not the perhaps the biggest concern for french business in more detail when you

think about the outlook here. >> yeah, absolutely. that's it. and the potential need for some fiscal retrenchment coming through quite, quite clearly in terms of those those future expectations. there is though, on the other hand, indications that companies in in europe are looking more towards monetary policy rather than fiscal policy as a driver of their growth, with lower interest rates helping especially in financial services. so there is some offsetting factor there. so i think the focus is on on the monetary policy outlook, lower interest rates helping drive growth as we go through 2025. >> i would also like to get your thoughts in terms of perhaps a change in perspective here, because when we talk about the ecb, there is a narrative now suggesting that rather than looking at inflation, the central bank is a lot more focused on the lack of growth really across the bloc. when you think about how businesses are

also feeling about the outlook here, do you also notice a change from their top concerns rather than having to face higher prices? are they also concerned, perhaps even more concerned, about the lack of growth in the region? >> the inflation environment is fairly benign. i mean, these numbers showed price pressures actually picking up a bit. we've we've had an increase in inflation for prices charged for goods and services for four months now, but it's from a low base, and it's still at a level that's broadly consistent with the ecb's 2% inflation target. so even though you're getting some some better price pressures coming through, which is of course helpful for some businesses in terms of their their profits, it's not endangering the ecb's target. according to our, our historical, the historical relationship between the pmi price gauges and cpi inflation. so inflation looks to be contained. so it should pave the way for the ecb to be more focused on that growth environment and pushing growth

forward with with looser policy. so we do have a number of rate cuts, about one and a half, sorry, 125 basis points of cuts penciled in for this year is the ecb takes the view that it should be more focused on driving growth and less worried about inflation, which these numbers you've got today are broadly consistent with. >> all right. and we'll also get to hear from the ecb in a couple of days time chris we appreciate your time today. chris williamson chief business economist at s&p global market intelligence. now, the us president donald trump, has criticized the trade relationship between the eu and the united states, saying the bloc treats his country, quote, very, very unfairly, very badly. speaking in his virtual davos address, trump vowed to take action on what he sees as an unequal relationship, echoing his comments in december that the eu would face tariffs. stéphane séjourné, the european commission's executive vice president for prosperity and

industrial strategy, admits europe needs to change its mindset if it wants to become more competitive, adding that he has made it his duty to help foster a more pro-business environment. séjourné sat down with karen at the world economic forum in davos and discussed the eu's competitiveness in the fields of ai, international investment and first green technology. >> sur la. >> sarre peut. >> avoir un effet. >> in the. short term, this. >> could have an impact. >> on the economy, but in the long. >> term it's a political mistake, first of all, because it won't boost businesses involved in the transition, which have already embarked on in ten years time. europe could be proud having clean industry and services and businesses at the cutting edge of technology, thanks to their ambitious targets. i don't want to deregulate, i really want to simplify things, so we're going to keep our climate targets, but we're going to streamline red tape and administrative frameworks. that means removing certain management, reporting and standards and organizing the

commission around business support and not just regulation, as was the case before. >> i want to bring up the massive. investment that is coming stateside. stargate. it's been called $500 billion in investment over four years to build out ai infrastructure in the united states. if we weigh up how much is being attracted to europe at this stage, how much has been pledged by the european commission, it doesn't feel like it's anywhere near what the us is targeting. how far behind is europe when it comes to ai infrastructure? >> well. >> not an. >> objective, no. >> we have a target which can be found in the draghi report to invest 800 billion into the european economy to catch up with the us in competitiveness and productivity. in reality, ai and tech are tools of productivity for our businesses. we'll catch up with a certain unicorns and companies at the cutting edge of technology here in europe. we have to help them to grow, to scale up, which is a real problem in europe. and so

we're going to create a european competitive edge, which will allow all the businesses to have a regulatory environment and appropriate financing to stay in the race on a global level. i met the ceo of mistral just now, who has very bold ambitions on both a european and a global level. these are the types of business we have to help grow and also to protect in europe. so it will be a case of europe first for ai, and we won't be abandoning this promising sector, which is the industry of the future. >> if we're talking about technology names, is it right for europe to think about a different mindset, almost a mark zuckerberg like mindset, to go fast and break things. >> impossible mindset. >> the european mindset has already changed a great deal with this new commission. so we obviously want this simplified regulatory environment. but we also wish for europe to be an attractive region for the international investment and for the global tech. for that to

happen. we have certainly simplified things, but we've also provided visibility. europe has a competitive factor today due to the rule of law, stability, predictability, and it provides an environment which businesses appreciate, such as quality universities, workforce and a high quality of life. so to keep our competitive edge, we have to change the mindset of europeans and those politicians responsible for this. at the commission. i'm one of those really pushing for a more pro-business environment. >> and coming up on the show, from interest rates to oil prices to defense, president trump's davos address had several key themes. we'll have more after this break. >> explain 17 years of. >> outperformance in 30s. >> it can't be done. we can. >> tell you that. >> we founded.

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>> welcome back to the show. now, donald trump delivered a pugilistic video address to davos. covering topics ranging from interest rates to european regulation. in his first major appearance at an international event since his return to the presidency. trump targeted fed president jerome powell, saying he will demand that interest rates drop immediately. he also doubled down on threats to impose tariffs, and said his administration would do something about america's trade deficit with the european union. also under fire the price of oil, with trump saying he would ask opec to bring it down and defense spending, which the president said nato countries should hike to 5% of gdp. at a forum known for its focus on globalization, trump emphasized his administration's shift to trade protectionism. >> my message to every business in the world is very simple come make your product in america and we will give you among the

lowest taxes of any nation on earth. we're bringing them down very substantially, even from the original trump tax cuts. but if you don't make your product in america, which is your prerogative, then very simply you will have to pay a tariff, differing amounts, but a tariff which will direct hundreds of billions of dollars and even trillions of dollars into our treasury to strengthen our economy and pay down debt. under the trump administration, there will be no better place on earth to create jobs, build factories, or grow a company than right here in the good old usa. >> charles myers, founder and chairman at signum global advisors, is joining us today. charles, it has been four days, four days since donald trump arrived at the white house for his second term. but there's been a lot going on. he has announced a lot of things over the last four, four days, i should say. so what have we learned from this? basically first week in office? charles, i

hope you can hear me. my question was around what we have learned so far from donald trump. the fact that he is only at the white house for his second mandate for four days, really. but so many announcements have actually come through. what i would like to understand is what is the biggest takeaway? what have we learned from all of these announcements this week? i believe we have a little bit of issues connecting with charles, but nonetheless, perhaps we can return to that conversation later just because it is important to understand what this all means. all of these announcements from donald trump and speaking really, of all of these announcements from donald trump, there's more when you think about also what he's trying to do on the tech front, whether that's tariffs on the european union or china. let's perhaps return to the conversation with charles. charles, i hope you can hear me

now. >> yes i can. >> good to be here. and i'm just trying to understand what is the biggest lesson really that we can take thus far from this trump 2.0? it has been only four days in office, but so many announcements have been made over these past few days. what is the biggest lesson thus far? >> yeah. >> look. >> it's really been shock and awe for the last four days in terms of, you know, how quickly president trump and his team have hit the ground running. and it's in so many areas, i think, for the markets and for the economy, the really strongest message is they're going to push for all of the tax cut extensions, possibly a new corporate tax cut. secondly, very far reaching transformational deregulation in the energy sector and in financial services. this is going to be the most pro-growth, pro-innovation, regulatory regulation lite us administration in modern history. it's great news for the economy and very, very good news

for the us equity market. >> well, let's understand what this actually means for the economy because and actually, we prepared the chart to show to our viewers as well. i was taking a look at the imports that the us actually has from russia. is this in the context, after we heard donald trump saying that the us could actually impose tariffs also on russia, with the view to end the war in ukraine? but the trade level, though, seems very uncertain really. and the levels are one month going up, one month falling down. what is the trend here? and ultimately, how could these tariffs actually put pressure on russia? is the trade that we see from the united states out of russia significant enough to put pressure on moscow to actually end this war? >> no, i don't think that, you know, the levels of trade between russia and the united states is de minimis since the war. so i don't think that's going to be effective. but but

in addition to what i just laid out on for the us economy, meaning being very positive. another positive is this i think president trump is a game changer in helping to end the war in ukraine, or bring it to a more rapid ceasefire or conclusion. he's also going to help stabilize the middle east. to your question on russia, though, what the us can do is impose higher oil sanctions and or secondary sanctions to make it harder for russia to sell more oil. i think that's what he's threatening to do, to try to get russia to the table to negotiate a ceasefire. >> but on sanctions, though, charles, if we take a step back and we assess what has been happening since russia started this invasion, sanctions don't seem to really work because the war is still ongoing. so can that actually be a measure that would actually make a difference here? can sanctions actually make a difference if thus far they haven't really ended this war? >> yeah, you're absolutely right. i mean, sanctions have somewhat limited impact. but but

i think that what president trump is trying to do with russia on this issue is hit them a little bit harder, as president biden just did last week with additional sanctions. but but do that as a way to try to then get them to the table, because when they get to the table, i think what's on offer is they're going to get russia will get 20% of ukraine, pretty much what they occupy already in terms of territory. in addition, they will get sanctions relief, oil services, financial services, commercial aviation, maybe the oil price cap. i think all of that's on the table for russia. and i think those are the carrots or the incentives that will be offered to try to get russia to settle. >> right. let's talk about defense spending as well. we heard the president trump suggesting that the 5% should be the new target, really, for nato countries in terms of how much they spend on defense out of their gdp. we actually prepared also a chart showing the top five spenders on defense within the nato community. even when

you look at the countries that are spending the most on defense here, thinking about greece, for instance, we're only at about 3% of gdp. yes, that's above what nato, the nato threshold says at the moment. but is it even realistic to actually project nato achieving a 5% of defense spending going forward, given all of the fiscal pressures that we see, for instance, in germany, in france and others? >> no, i think it is unrealistic. and president trump knows that. i think what he's doing on this issue is what he often does, which is, you know, throw out his maximum negotiating either target or position going maximalist by saying 5% of gdp, knowing or ultimately expecting to get to the 3%, which is the minimum requirement to join nato. so or be a nato member. so my position on the five is it's really an opening negotiating position, and he's just going to try to force europe to spend more on

its own defense to get to the 3% target. >> right. let's see what these conversations will bring us later this year. for the time being, though, we appreciate your time today. charles myers, founder and chairman at signum global advisors. and coming up on the show, we've had the latest business activity. prints from the continent will bring you the flash pmi figure out of the uk after this break. 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. call coventry direct to learn more. we thought we had planned carefully for our

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>> welcome back to the street signs i'm sylvia mariner. and here are your headlines. european equities on track for a strong finish to a largely positive week as investors shrug off signs of ongoing weakness in pmi prints out of france and germany. we'll also discuss the eurozone prints in just a moment. burberry shares flying off the shelf after quarterly sales fall less than expected, pushing peers in the luxury space sharply higher. president trump takes aim at the federal reserve, pushing the s&p 500 to a record high as he calls for borrowing costs to be swiftly lowered, claiming he knows more about interest rates than jerome powell. >> i'll demand that interest rates drop immediately, and likewise, they should be dropping all over the world. interest rates should follow us all over. the progress that you're seeing is happening because of our historic victory in a recent presidential election. >> the bank of japan lifts rates to their highest level since

2008, and signals further hikes are in play. welcome back to the show now. we started today's show looking at the pmi figures for the eurozone. they actually came in higher than what economists had expected. and now we're getting the numbers for the united kingdom. so let me share those with you as well. so we get an idea also about how businesses are feeling here in the uk. flash services pmi came in at 51.2. that was also higher from what economists had anticipated. manufacturing also came in higher but still in contraction territory at 48.2. and the overall reading the composite pmi figure came in at 50.9. so just marginally above that 50

threshold and indeed slightly higher. also in terms of what analysts were expecting. so at this stage, though, we are also taking a look at sterling versus us dollar, seeing how currency markets are reacting to these latest figures. we have sterling up about 7/10 of a percent against the greenback at 1.24. overall, though, we have seen weakness for the dollar in recent times as well. so it's important to keep that in mind. obviously, as investors have been digesting the comments from donald trump. but nonetheless, though we are seeing further strength here for sterling. let's see how other uk assets will be digesting these figures. but for the time being, i want to take a broader look at how the equity session is going. thus far, european equities have been trading for just over an hour and a half thus far, and we're still seeing green across the board. really. we have the benchmark up 3/10 of a percent. continuing that positive tone that we had witnessed yesterday. and for pretty much the whole of

this week, really let me show you the different bourses too. so we see what is happening across the european continent in more detail, the ftse 100. it is trading lower by almost 3/10 of a percent. this despite the figures in terms of pmi figures. but looking at the continent, we have green across all of the three major bourses there. the dax, the hunt and the ftse all trading in the green. in terms of the sectoral breakdown, this is what we have at this stage, starting with the best performing sectors. we have basic resources at the top. we are up 2.6%, autos also performing well, up about 1.7%. investors here digesting the fact that thus far we haven't really heard any sort of details in terms of potential us sanctions or tariffs, i should say, on european companies in terms of the worst performing sectors. let's get a check on that too. we have telecoms at the bottom. we are down 1.5%. oil and gas also under pressure in terms of some of the corporate stories we are

monitoring this morning. let me share the latest with you. in terms of burberry earnings, the company reports reported third quarter sales to the upside coming in 4% lower on the year. that's against expectations for a 12% slide. so let's get a check on how the whole luxury sector is trading at this stage. after burberry reported we have basically green for all of these luxury names. burberry shares were up by more than 12%. so let's digest these reactions with charlotte. she has been looking at the earnings from burberry. investors so far are very happy with these figures. tell us what else are they looking at. well you remember last week richemont reported. >> numbers are better than. >> expected, particularly thanks to. >> the appetite from the american consumer. >> for luxury. and that is exactly a similar story here. the americas up 4%. in q3 for burberry to give them a little bit of a festive boost there. and of course, in burberry, there's also the problem. >> of the. >> reliance that they have. >> on china. we know they've been.

>> suffering from the slowdown. >> in that region and. >> they're things are still a little bit tricky. >> down 9% in asia pacific. but compared to q2, it was down 28% at the time. so it looks like things may be stabilizing in that region. and that. >> is what the. >> cfo was saying this morning on the call, saying that there are. >> signs of. >> stabilization for demand from the chinese consumer there. europe down 2%. but again, that comes from down 10% in q2. >> so overall. maybe signs that there is a bit of a. >> recovery when it comes to luxury demand. but also what's interesting at burberry is of course, it is a turnaround story. they brought in a new management over the summer to change the strategy. they went very fast and very strongly on the elevation strategy, putting putting their prices up very aggressively. now this is a bit of a change of strategy there. they brought in joshua schulman, the ceo that used to be at michael kors and coach previously. so he knows the us market very well that now is leading the company. there's a change of strategy to focus on outerwear in particular. that also is one of the strong segments for the brand they're focusing on on scarves as well. so they had these new campaigns during christmas with it's

always burberry whether or wrapped in burberry, and that seems to be working. so they're very much focusing on the british heritage as well and focusing on this segment there. they have some virtual trials for scarves, for example. they have scarf bars where you can do a tailor, make your own scarf. and so they're pushing into that segment. and that seems looking at these numbers that maybe there's a first signs of a turnaround is working there. so the brands the shares have been doing very well actually in the past six months since the new ceo has come on board. and so with the reaction this morning as well, very strong reaction to those numbers with on one side maybe luxury doing better and the turnaround working sending them higher. so they're up almost 65% over the past six months. >> it's actually interesting you brought up the issue of the personalization, because yesterday i was taking a look at their website in preparation for today's earnings. and i noticed that there is a specific section where you can actually choose the items to personalize. and clearly that is one of the trends for retailers to. >> it's a fight to get those luxury consumers, you know, so anything that can make them want

to come to your shop, then if it's personalization, it's worth a try. >> let's see what will happen. but indeed a little bit more momentum there. for luxury names. i want to share some of the latest news as well out of china with you. we're just seeing flashes suggesting that china industry industry body has filed a challenge to the european court on behalf of chinese firms over the eu's additional tariffs on chinese evs. so another development here in this saga, really after the eu decided to challenge the subsidies that the eu believes china is giving to automakers in the ev space as well. now, the chinese firms taking this to the next level, and indeed asking the court to assess this, because obviously, in their minds and their opinions, they do not believe that this is the right approach. let's see how this story will continue to unfold. in the meantime, i want to take you to the latest news out of italian banking. monte dei paschi has launched a

takeover bid for the italian investment bank mediobanca, potentially completing a deal by the third quarter of this year. and this is a very important story because it is important from a background in terms of monte dei paschi di siena, but also in the context of the consolidation, the active consolidation efforts we are witnessing in italy in terms of monte dei paschi, it is important to keep in mind that not too long ago, this was the troubled bank in italy. it went through a bailout program back in 2017, and now there's a bit of a turnaround story where they're actually making an offer to another bank to become even bigger in the italian banking sector. and from a consolidation perspective, this is just another episode in this very active moment that we are witnessing and potential consolidation for italian banking. we have, let's not forget, bpm increasing their stake in monte dei paschi late last year. we have, of course,

unicredit. that who has also made a bid for bpm as well. so let's see how this will continue to unfold for the time being. it is unclear really how the latest announcement from monte dei paschi could actually impact unicredit as well. so of course we'll continue to digest these details. we'll continue to monitor for any sort of potential regulatory approval as well, to really understand what is the new italian landscape for banks. in the meantime, i want to take you to other corporate stories. ericsson fourth quarter adjusted ebitda came in weaker than expected, even as sales narrowly topped expectations. the swedish telecom equipment maker warned restructuring charges are likely to remain at elevated levels this year, but also reported strong growth in north america. the ceo of börje ekholm pointed to ai as a key driver for the future. >> ai is front. >> and center, no doubt about that. >> and that. >> will rely on what i call the digital stack.

>> you know, think about it as compute. >> edge, compute public cloud. >> but one very important part is going to be the connectivity layer. and actually here i'm starting to become very optimistic because we need to connect everything on the planet. and that will rely on reliable, secure, high performance connectivity. and here 5g is front and center. so we need and have a major opportunity here by investing in the in the programable networks, that actually allows us to create the network that is optimized for ai. and i think that's actually a major opportunity for us. it's not impacting global traffic yet in the networks, but over the next few years, that will be one of the key drivers of the need to invest in networks for the future. >> elsewhere, signify posted ■k76.1 billion in sales for 202, with operational profitability at just under 10%. the lighting

firm launched a share buyback program and announced the ceo, eric ranola, will step down after this year's annual general meeting. the outgoing ceo, eric carondolet, told cnbc that the business has experienced with tariffs and is confident it can compensate for duties again. >> so first, we've. >> been trained because we went through a first wave of tariffs, you know, a few years ago and we know how to do it. you know when those tariffs were put in place we could mitigate all the impact with two major actions footprint on one hand and increasing prices. now when i look at the china imports on our us market is basically less than 20%. so if tariffs are voted, we're going to be able to compensate. we are pretty confident that we're going to be able to mitigate, you know, whatever tariffs are being put in place with footprint adjustment and optimizations and potentially also price increases.

>> and then posted a beat in full year sales rising over 12% on a like for like basis to 7.4 billion chf. the flavor and fragrance maker says it's on track to exceed the upper end of its five year growth target. the ceo told us he is not too concerned about the potential impact of u.s. tariffs on the business as they manufacture in america. some ingredients are sourced internationally and therefore could be at risk. >> we depend on ingredients and those ingredients are supplied around the world, in the us, but also around the world. you don't obviously don't find jasmine and patchouli in the us. so you have you are dependent on many natural resources that we have to source around the world. but we are making our point as an industry to make sure that tariffs, you know, would not apply to them as much as possible. so that would the potential risk is obviously tariffs applied on ingredients,

but the financial effect is mild. >> let's get a check on us futures. so we get a better idea of what's likely to happen stateside later today. futures actually suggest a negative start to the trading day on wall street. this after another strong day for us equities. on thursday, we actually saw the s&p hitting a fresh all time intraday high. let's see what will happen later today as investors continue to monitor what donald trump is saying and therefore doing as well. on top of that, we're still following the earnings season with american express and hca healthcare reporting later today. and in terms of economic data, we'll also get the latest pmi figures, figures for the united states as well as consumer sentiment numbers. let's see how investors will react to all of that. but thus far, futures suggests it could be a negative start to the trading day. coming up on the show. the bank of japan hikes rates like it's 2008. we'll look at the latest move after this

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tomorrow. >> i'm looking to talk. >> to all investors, sophisticated investors, beginning investors. i'm always learning. >> closing bell over time for eastern cnbc. >> welcome back. as we approach the end of the show, here are the four things to get you up to speed ahead of the open on wall street. on the data front, investors will be looking at the latest pmi readings as well as consumer sentiment figures. in terms of earnings, we'll get the numbers from american express as well as ca healthcare. in covid announcements, openai introduced its operator, web agent, a collaboration with companies like ebay and doordash. many of these stocks pop on the news, and cnbc's sara eisen is still up in the mountains in davos, where she'll be moderating the global economic outlook panel. speaking of which, on a programing note, we'll be bringing you sara eisen's panel

in full live on cnbc. she'll be joined by the ecb president, christine lagarde, the president of singapore, the imf's managing director and the chairman and ceo of blackrock, larry fink as well. that's coming up at 11 cet. staying in davos, then, has been speaking to business leaders about how they see the impact of trump's election. take a listen. >> the big. >> thing is trump, trump. >> trump and then i. >> so those are the big themes. >> i think. >> but you know, i think i. >> meet. >> a lot of the ceos from different businesses around the world. and the optimism is something which, you know, having come here a few years now, you really get a good feel about the optimism of where the world economy is going. >> we are between. >> orders and it's clear that the old. >> world order. >> has come to an end. what the new world order will look like, we don't know yet. we're in between, so we have to live with some unpredictability. unpredictability. we've seen some things happening where.

>> business and. >> government is. >> getting closer. together and clearly. >> but the interesting. >> thing about. trump is he does. >> his accessible. he does listen. >> he's obviously extremely. smart in many. >> respects, and. >> he does. >> respond. >> now, the bank of japan has hiked rates by 25 basis points, lifting the benchmark rate to 0.5%. that's the highest level since 2008. let's get a check on how japanese markets have been reacting to these developments. we are seeing further strength for the japanese yen. thinking about the nikkei 225, we actually ended the session just below the flat line. this of course as a higher japanese yen, a stronger japanese yen puts pressure on the equity market. but nonetheless, though the main message from the bank of japan being that there could be further hikes further down the

line, and our very own lynn lynn filed this report, the boj has. >> increased the benchmark. >> rate as. >> widely expected by. 25 basis points to 0.5%. the board signaled that. >> economic activity and prices are developing in line with. >> that outlook, and the 2% inflation target. they also signaled optimism around wage. >> growth. >> saying many. >> firms have. >> indicated that they will continue to increase wages steadily in this year's annual talks. the boj made no change to its guidance on future policy, and also noted that real rates remain low and conditions are accommodative. they did, though, remove a phrase stressing the need to scrutinize risks surrounding overseas economies and markets. the yen. has strengthened since the decision, and jgb yields, especially on

the short end, have risen. some economists have told cnbc that the japanese central bank was motivated to move this month because of concerns around rising inflation, especially in the face of a yen which had weakened back around 158 to the dollar just a couple of weeks ago. the december cpi print, which was also released earlier today, saw core inflation rise to 3% annualized. and in the quarterly outlook report, cpi expectations were revised higher for fy 25 and 26 as well. lynn lynn for cnbc business news. >> and seijiro takashima, professor of management at the university of shizuoka, is joining us to discuss this in more detail. seiji, great to have you on the show. first and foremost, i would like to understand whether perhaps the bank of japan actually learned a

lesson from the past from last year when they increased interest rates. markets were really not expecting that, but it seems that this time around there was a lot more preparation for today's move. is this a sign that they are basically trying to avoid any sort of huge swings in the markets? >> absolutely. only 30%. >> of market participants. expected a rate rise in july, but this time around, over 90% knew it was coming. i think they learned. very much from the fed's, you know, eloquent methodology of verbal, you know, intervention almost. and i think for that reason, the market swing had been very low, but also from the fundamental reason as well. i think many people know that although mr. ueda made a very hawkish, you know, words like you just pointed out, that said, we also know that, you know, interest rate deviations in the united states may not shrink as much as they think. so those are the factors, i think,

of why, you know, the yen didn't almost swing at all. i mean, it moved to 154 from 156. but now as we speak, it's back to 150 5.5. so i think there is also a fundamental factor, doubts that are still lingering as well. >> what i would like to understand and that they spoke about potential further rate hikes down the line, but i'm trying to understand is whether perhaps today is a rate hike and a pause to see what happens to the global economy. or are you of the opinion that further rate hikes are definitely coming this year? >> no, i don't think it's definitely coming. as you pointed out earlier, i'd say that there's a lot of, i'd say, obstacle for bank of japan to actually conduct what they said, partly because from political factors, we've got, you know, upper house election coming this summer, and also due to the fact that, you know, bank of japan do not really have the deep pocket

that many people think they do. their current account is almost ¥600 trillion. and, you know, if they keep raising the rates, obviously they'll be shooting their own foot. and also, you know, let's not forget that, you know, rate rise could hurt especially medium or small enterprises in japan, which is very heavily reliant on indirect financing, meaning that, you know, there would be a very unpopular, you know, policy if they continue to make the, you know, rate rise. so i think from these factors, it would be very difficult to continuously conduct, as they announced today. >> when you think about the currency outlook here, i'm just trying to understand what is likely to happen to the japanese yen, because there's a school of thought suggesting that we could actually see a stronger us dollar once again this year. is that the estimate that you have for the pair between the japanese yen and the us dollar? >> well, i'd say that, of course, you know, mr. trump is talking about strong us, but at

the same time, his policies clearly suggest, you know, more inflation to come. you've got you know, these taxation issues and various issues which could, you know, regenerate, you know, inflationary fears, particularly considering that, you know, in the united states, it's not cost push inflation like this, like japan, but it's the demand pull inflation, meaning that it's much more deeper stem than that of japan. so for that reason, you know, there is a possibility that, you know, the rate drop in the states will halt. and at the same time, you know, bank of japan, like i said, you know, they will not be able to maneuver as much as, you know, the fed or the european central bank. so, you know, put putting those things together. i think the interesting deviation may not be narrow as many people think. >> right. what i would like to understand also is the outlook for the banking sector, because we did see shares of the major

japanese banks rising in anticipation of this rate hike, but not so much for the smaller lenders. tell us what's going on and what is the outlook here? >> well, i would say that, you know, for the japanese banks, there needs to be a lot of consolidation continuously because it's definitely an over banking and the economic condition. although we are seeing the revival that's taking place, it's not as strong as many people wish to be because still the corporations have so much cash in their hands. in fact, in fact, they're not taking a lot of risks, though, particularly the larger ones. and for that reason, i'd say that, you know, the circulation of funds in japan isn't as eloquent as many people wish it to be. in other words, the revival trend really can't be felt. you know, amongst the banking sector. for that reason, of course, it's not negative. we're seeing capital expenditure come back, and we're hoping that private consumption will come back to a certain point because of wage rise. but, you know, not

to an extent, you know, that, you know, for example, bank of japan, sorry, the government, you know, giving a very strong estimate for fiscal year 25. i think many people still have doubts about that as well. >> right. i'm afraid we have to leave the conversation there. but thank you for sharing your thoughts with us today. seijiro takashima, professor of management at the university of shizuoka. now, a final check on european markets. how we're moving this friday morning. so far, though, it has been mostly a positive day for european equities. continuing that performance that we have seen so far this week as we ahead of the open today, we were on track to see the stoxx 600 ending the week up by about 1.3%. we are extending those gains at this stage. let's see what will be the final note on these european equity trades. however, though when you think about what is going on, investors very much focused on what companies are telling us, what president donald trump is also announcing stateside. and of course, let's

not forget about the economic data. do we obtained pmi latest for the eurozone and the united kingdom earlier today. and both actually suggested that the numbers were a little bit more positive than what economists had expected. and a final check on us futures too. so we get a better idea of what's likely to happen stateside. despite the strong session we witnessed on thursday, futures suggest it could be a negative start to the trading day. that is it for today's show for our viewers in europe and asia. we'll be bringing you, sarah iceland's panel in full live on cnbc. so of course, stay tuned. we'll have more for you later today. i'm sylvia myrow. stay with cnbc. >> since 2007. >> origin has. >> been focused. >> on the future, a future that. >> helps you build passive. >> income from real estate.

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>> allowed to continue in this country, but there will be a shift in ownership. >> the main. >> thing is not just cutting costs, but getting rid of all the regulations. >> i will. >> very simply put america first. >> the trump impact on business and the economy for the first 100 days and beyond. cnbc. >> it is fabian here at cnbc global headquarters. welcome to worldwide exchange. here is your five at five. futures are pulling back after stocks hit their first record closing high of this year. president trump doubling down on his u.s. first philosophy during his davos keynote. challenging the status quo. the fed and companies that are not making their products here in the u.s. the president also fulfilling a campaign promise. signing a new executive order focused on crypto. plus, the bank of japan does something for the first time since 2008. global investors they are watching. and in davos, blackrock's larry fink, the ecb president christine lagarde and others, th s