sherri dally could not do-- get out alive. [theme music] >> good morning and happy thursday. welcome to street signs. i'm julianna tatelbaum, and these are your headlines. deutsche bank. falls toward the bottom of the stoxx 600. after a larger than expected drop in fourth quarter profit, as litigation costs continue to weigh, cfo james von moltke tells cnbc the worst of the risk is over. >> in a sense, the only good news the thing you can say about it, it's behind us. and importantly, therefore, the risk profile of the company is

dramatically changed as we go into 25. >> roche raises. >> its dividend after a top and bottom line beat for the full year, the swiss pharma giant ceo tells cnbc he is confident about the impact new obesity drugs can have. >> we see. signs that you can reduce the rate. >> of. >> alzheimer's and you can probably reduce the rate. >> of cancer, you can. >> reduce the rate of other diseases there. i think more than 100 different. >> diseases that are linked. >> to obesity. >> and that's why this. >> is. >> not only an. >> obesity question. >> it's a question around. >> overall health. >> and shell launches a $3.5 billion buyback despite adjusted. earnings falling more than expected, the energy giant ceo tells us the company is. weighing where to direct new investment. >> we're looking. >> for. >> most. >> importantly. >> a conducive investment environment. and secondly. >> we want to look for. >> stability in the overall investment climate. i think this is one of the key things we will look at. >> whether it's here in the uk. >> or beyond, and therefore. >> the allocation.

>> of that. >> capital will go into. >> the most. >> attractive areas. >> and tesla shares whipsaw rebounding as ceo elon musk sounds a bullish note on the coming year. elsewhere, microsoft falls in extended trade while meta catches a bid despite softer than expected guidance. we got a very warm welcome to street signs. it is a mega. earnings day. but before we dive into the corporate numbers, i want to bring you some fresh gdp figures out. >> of germany. >> these figures are worse than expected. so you do want to listen up here. the german preliminary seasonally adjusted q4 figure has come in 0.2% quarter on quarter contraction. the expectation was for a 0.1% contraction. in terms of the calendar adjusted figure, q4 gdp down 0.2% versus a forecast of flat. so overall, these numbers are worse than expected. the q3

figures also revised lower. we are now looking at q3 gdp growth of 0.1% from 0.2% originally. so the german economy contracting 0.2% in the fourth quarter. that's the takeaway for you. it is a slightly worse or slightly stronger contraction than expected. it has been a difficult period for germany, to say the least, the economy essentially. >> stagnant for the. >> last two years. and the more forward looking. surveys suggest that things are not going to improve materially from here. the latest ifo report saying that. almost all branches of industry in germany want to reduce headcount further. that report just coming out this morning. so those figures to keep in mind as we look through the earnings today and listen out for what the german corporate leaders are saying now in terms of earnings. here's a picture. altogether stoxx. 600 up 0.5% this morning in the green. the benchmark hitting another fresh record high. this after a soggy session on wall street yesterday as investors really prepared for the mag

seven to begin reporting breaking the session down by a region. >> let's look at the. >> bourses in europe this morning. we have got the ftse 100 slightly higher, 0.1%. the xetra dax holding on to early gains up 0.2%. we are seeing some big. movers to the downside though within germany. we'll get into those in a moment. cac40 in france up 0.3% and the ftse mib in italy trading marginally lower this morning. now today's big earners are a number of companies. >> in. >> focus a mega earnings day here in europe. there you have some of the big movers. deutsche bank down more than 4%. you have on the flip side, sanofi gaining some ground on the back of a decent set of numbers, up 1.6%. roche also moving higher in the pharma space, and bbva, one of the better performers in the market, up more than 2%. let's dive straight into deutsche. >> bank though one. >> of the worst performers in the market this morning, the company has booked a full year pretax profit of ■k75.3 billion. that's down 7% on the year due

to litigation and settlement costs related to. a long running claim over its postbank takeover. revenue, meanwhile, came in at just over ■k730 billion, in line with guidance. anita joins us now with more. well, anita. >> i spent nearly a decade at. deutsche bank. i started. >> there in 2012. >> we were talking about the postbank takeover then and the legacy litigation. >> costs for years after. here we are. >> you know, over a decade later. >> and we're still talking about these legacy issues. to what. extent were these costs that we heard announced today, flagged to investors, and to what extent were there any surprises in the numbers? the share. price reaction would suggest what they heard today is worse than expected. >> yes, exactly. >> i think. >> the. >> top line is actually in line. >> or. >> even a. >> little. >> bit better than expected. but what. >> deutsche bank. >> didn't manage to actually. >> keep the money. >> and keep. >> the market informed about the cost situation. so the one off costs have been higher than expected, instead of ■k75.8

billion in net profit, we have that ■k75.2 billion number. andf course with deutsche bank in the past, it was always about like a lack in cost discipline. the management now seem to be actually on a much better track, but this time it seems that they have really under delivered. and that's why we're seeing that violent market reaction. one reason for that could also be that the shares actually had a tremendous rally year to date, already up by more than 16%. so perhaps there's also some sort of profit taking. and the key question, of course, is whether they might be able to reach that 10% return on equity target they have in place for the end of 2025. and here they are quite confident. perhaps we listen in whether james, the cfo, james von moltke, does share the optimism which has been displayed by the big us banks on

wall street. >> we do. >> at least in the part of our business that's in the. >> united states. and but but. >> also thinking about europe and. >> especially germany, we also share. >> the frustration. >> i think is pretty pervasive in europe. that that growth has been relatively stagnant over the last couple of years, as europe has worked through a transition on a number of items energy costs, inflation, interest rate cycle and what. >> have you. >> and we again here share the views of our clients. we'd like to see a policy mix that that focuses on growth and competitiveness in europe. i think that's possible. and i think what's encouraging is that the political will seems to be there to a greater extent, but we absolutely need that in europe. and so the optimist in me says that. >> the. >> sort of competitive spur. coming from the united states can, can potentially lead to some positive change in europe. >> do you also think that this is going to happen in germany itself? i mean, we're heading into a new elections. there's a

lot of momentum. i think the pressure is really high on on the acting personnel to change something. but the question is whether this is going to happen. >> the pressure is high and in a sense it's up to the voters, therefore, to deliver a mandate for change and for the parties to articulate programs for which they can seek and win a mandate. so it is it's an exciting time in germany to see how this plays out. i think there's some uncertainty as to what the composition of the new government will be. and, and, but but there certainly is an opportunity to deliver a strong mandate for change and talking to clients and, and, you know, around the country there's a strong will if you like pressure and, and interest in seeing sort of decisive policy change in, in germany. that can also be a sort of a change or a leadership opportunity for, for europe as well. so i'm cautiously optimistic about that.

>> so the optimist in me would say that after the election there could be much more momentum also for the german economy. but whether this is going to happen remains to be seen. it's all about coalition building as well. and what we're currently seeing is just a lot of infighting in berlin. there's no such a thing as finding a compromise. so the question is whether this is going to change after the general election and that would, of course, be also very positive for germany's biggest lender, deutsche bank, because clearly their clients currently are still holding back when it comes to investment or do the investments abroad. but there is a reluctancy of capital expenditure in the country. we've seen that for last year, for example, being down by more than 5%. so a sheer contraction of economic activity, if that's going to change, that should be a positive sign as well for deutsche bank and potentially also the share price. other than

that, they do what they can to please investors. they have announced another round of share buybacks, pretty much bang in line with what has been expected. but they try what they can do to actually massage the share price a little bit to yeah, the upside. >> to some success and that the shares have bounced off the lows of the. >> morning certainly. >> stabilizing at the very least. thanks so much for breaking it. >> down and. >> for the interview. great stuff there. now moving on to roche. the pharma giant says it's aiming for a high single digit percentage increase in adjusted eps this year, after core operating profit came in at just under 21 billion chf. that was just shy of expectations. total sales came in at 60.5 billion francs, with strong demand for pharmaceuticals and diagnostic products making up for a more than 1 billion franc decline in covid related sales and another 1 billion franc impact from the loss of exclusivity in some drugs. >> now. >> carolyn has been speaking to the ceo and joins us now from basel. caroline. carolyn, the.

story the investment case around roche has long centered on the question of can they offset the impact of competition from biosimilars with new drugs in the pipeline? how confident did the. ceo sound to you today? that's a brilliant question. >> and i put. >> that question to. >> the ceo this morning. >> he was pretty relaxed. and juliana, you've covered this stock many times. and when you take a look at the drug. >> pipeline, there are two things. two markets that roche. really wants in on. the first one is obesity. obviously that's all the rage now. they want to bring one of the their. obesity drugs to the market. >> but it won't be hitting. >> the market. >> up until 2829. is that. >> too late to reap some of the benefits? that's one of the key questions out there. the other one is alzheimer's. they had. some setbacks here when it comes to previous clinical trials. trials. they're waiting for a new one. which should be out this year. and this is. >> expected to be. a $13 billion market. >> by 2030. giuliani.

>> the other. >> big question out there in the. >> market, the. >> other big unknown, is what does trump 2.0 mean for the pharma sector? i got the chance. >> to talk to thomas seneca, the. >> ceo of roche, about this. and again, he seemed pretty sanguine. >> we're at least well positioned. we have 25,000 employees in the us, so. >> we have more employees in the us than we have in switzerland or germany. we have invested. >> over the last ten. >> years, 11. >> billion. >> chf in manufacturing other buildings. and we are one of the biggest tax. payers in the us, and we'll continue to invest in the us. >> and why? >> because for us, the us is our biggest market. it makes sense to put manufacturing where the. >> new patients are, so. >> that you don't. >> have to transport. >> goods around the world. it's also good for sustainability. by the way, if you have manufacturing close. >> to the markets. >> and this is not new. >> to us. >> this is what we've done over. >> the last years. >> and as you said. >> we've worked well with the trump administration.

>> in the first term. he even praised. >> us twice. >> in everything that we did. >> in the covid pandemic. >> now. >> i believe we can also work with this current administration to. >> make sure that. >> patients get the medicines that they need. >> thomas, quick. >> final question. >> under trump 2.0, there's also the expectations that the animal. spirits when it comes to m&a will be unleashed. you're promising a slightly higher dividend. why not put more money into m&a? >> we are. >> diligent in what we do. we look at hundreds of companies. >> every year. >> and as we look at these companies. >> we look at the signs. >> we make sure we look. >> at the. >> financial terms and it has to make sense. and if you look at the kind of deals we did over the last two years, i think we've been quite smart about it. i mean, if you look at the acquisition with the obesity assets nowadays, we would have to pay a lot more for those. so also, i think the acquisition for cell therapy, which is very promising, not only in oncology but also autoimmune diseases, which potentially could lead to

cure in lupus nephritis or multiple sclerosis. so these kind of deals, i think, make a lot of sense to us where we can really change the standard of care, and we are also diligent with the money that we spend. >> juliana. >> that was. >> thomas seneca. >> the. >> ceo of roche, talking. >> to me a short while ago. and if you take a look at. >> the share price today, currently. >> up by 0.8%. >> we did see potentially some profit taking early in the morning. shares have had a pretty good run up so far this year, up by roughly 10%. >> year to date. >> the numbers today yes, there were solid, no major surprises. the guidance was confirmed, though some analysts argue, hey, there were even a little too conservative when it comes to the guidance, given some of the very positive commentary. but by and large, giuliana, no. bitter swill to swallow. >> see what i did there? carolina did. very impressive and really, really great to hear from the ceo. he sounds pretty clear in terms of the strategy. i guess that's why investors are pretty comfortable with the stock. solid day so far. moving on to abb, the company has

reported a beat on the bottom line, citing strong appetite for electrical products used by ai data centers. the swiss industrial tech firm posted an 8% rise in operational. ebitda in the fourth quarter, which. >> came in. >> at $1.43 billion. shell has announced a share buyback of $3.5 billion, the energy giant's 13th consecutive quarter with at least $3 billion of buybacks. this despite fourth quarter profit. >> falling more. >> than expected, coming in at $3.66 billion amid low refining margins and lower lng trading, ceo. >> wael. >> sawan told cnbc there will be lots of uncertainty in the year ahead. >> we're looking. >> for. >> most importantly, a conducive investment. >> environment and secondly, we. want to look for. >> stability in the. overall investment climate. >> i think this is one of the key things we. >> will look. >> at. >> whether it's here in the uk or. >> beyond. >> and therefore the allocation of that capital will go into the most attractive areas. the us. >> has been one. >> of those in. >> recent years because. >> of some of the incentives

that we are seeing and a lot of the support and the encouragement we are seeing at the moment as well, from the incoming administration around some of the enabling regulatory environment as well as the tax support. >> well. >> hi, it's karen. >> jumping in. >> i want to ask you about the demand. picture from a couple of aspects. >> we know. >> china was somewhat of a. >> missing. >> arm last year. now as we look ahead. >> to. >> 2025. >> the. >> world bank is saying roughly 4.5% could be the. >> growth rate for the chinese economy. in addition to. >> that, we've. got evs. of course. >> that's been impacting the overall picture for a number of years now, even with slightly disappointing demand for ev adoption. what do you see as the big. drivers for 2025 on demand, and how different. >> will that look to last year? >> i think. >> you've touched. >> on one of the big. >> ones. which is. >> of. >> course. >> what happens in china if i just look back for a moment at 2024. i mean, it was a remarkably resilient year despite a number of headwinds, whether that was a number of major wars, trade arteries being blocked, half of the world going

into elections. so quite some some question marks around new governments coming in as we look into 2025, what we see is potentially uncertainty and volatility, the threat of sanctions, the threat of tariffs and what what might play out there, sticky inflation. and so all of that is sort of weighing on our mind in terms of where that goes over the coming 12 months. >> shifting back to the banking. >> sector, bbva. posted an 18%. >> jump in net. >> profit for the fourth quarter. >> compared to. >> the same period in 2023, boosted by a strong performance in spain. the bank reported a net profit of ■k72.43 billion i. >> the. >> september to december period. charlotte joins us now with more. charlotte shares are up nearly 2%. very different picture to what we're seeing in deutsche bank this morning. elaborate for us on the numbers. >> yeah. well you said this record numbers for profit for the. full year net profit was up 25% to a record. >> ■k710 billion. >> of course, they said they're still benefiting from higher. net interest income, especially in the first half. of course we saw the activity in.

>> their. >> home market, spain. then net profit was. up 44% in the fourth quarter. of course, we know the dynamic and the health of the spanish economy still very much roaring. the latest quarterly numbers for gdp up 0.8%. >> so compare and. >> contrast what we heard just from. >> france and germany today. and they are. >> benefiting from this. certainly that helps them offset some of the weakness that we've seen in the mexican market. there were net profit was down 7%. that's partly due to the depreciation. >> of. >> the mexican peso, because they had some extra concerns into 25 in that market. >> with potential. >> tariffs from the trump administration and the impact this could have on the economy. but certainly they. >> want to. >> keep on benefiting of the spanish economy. boom. we know they're in the middle of a takeover battle with their competitor sabadell. they're still in the process of getting their regulatory approval. so that will drag well into 2025. so we'll have to wait and see on that front. but certainly strong. results there from bbva. they announced his new share buyback of ■k7983 million. overall, again, the strength return on tangible equity 19.7%.

so again, compared with other european banks. and they see. this number to stay at around that level in 2025. so again, we see the reaction very positive reaction on the shares this morning on the back of this. >> you know it's really interesting looking at this juxtaposed to deutsche bank and what you said about the different speed of the economies there, germany versus spain. >> and just. >> highlights the difficult job that the ecb. has today and in the months ahead, the diverging pace of recovery in the different european economies. charlotte, thank you so much for breaking down those numbers for us. you can keep up to. >> date with all. >> the latest market action and c-suite interviews on the live blog@cnbc.com. coming up on the show, we'll round up the broader market action on a packed day for european earnings. we'll be right back.

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>> for thoughtful. >> living, therma. >> for me. >> squawk box. >> is. breakfast with the most. interesting people in the world. >> it's a. >> privilege to get. >> to talk to them. >> every day. >> it's more entertaining than any other morning show, but you might get some useful information. >> squawk box weekday mornings, 6 a.m. eastern. cnbc. >> welcome back to the program.

>> let's get a check. >> on european markets. we already went through some of the. big earners, the. big companies delivering. earnings at the start of the program. here's a look at how it's all coming together in terms of market action. >> stoxx 600. >> hitting a fresh record high yet again today. you've got ftse 100 up 2/10 of a percent. the xetra dax up 3/10 of a percent. the cac40 in france also moving higher a little bit of red on the board for italy but really nothing much. so a positive session once again. and this comes after a fairly. soggy session on wall street yesterday. as for the us market today, here's what futures look like. we're looking at a bump. the nasdaq looking to gain about 150 points at this stage. >> the dow jones also. >> looking to add quite heavily. investors now having had some time to digest those tech figures which came out after the closing bell yesterday, we heard from tesla microsoft meta. we'll dive into the detail on those later in the program. but overall, investors now putting more money back into the market after hearing from three of the big seven. let's welcome chris wiley to the program cio of conor bradley wealth management. chris, great to have you with us. i mentioned the.

>> earnings, but that wasn't the. >> whole story. yesterday we. >> also heard. >> from the fed. >> the. >> first meeting of the year, the first meeting since president. >> trump came into office. and they essentially. >> told markets, we're in wait and see mode. it seems sensible when you look at the economy. the economy is healthy, the jobs market pretty healthy, inflation under control. you know, that's to be expected. it seems like it's all about fiscal policy here. am i wrong? >> yeah. well i think. >> it's interesting. >> isn't it. >> that as you say. >> it's so far down the news agenda. you know. >> we. >> have an. fomc meeting and it's a long way down the. >> list, which i think. >> shows that. >> the fed certainly isn't making. >> the news at the moment. i would say that the evidence is that they're still a bit behind the curve. generally. i put it harshly in the past saying that they've been behaving a bit like a bad fund manager, sort of being very reacting to data as it's coming in rather than anticipating it. so they were pretty late starting. >> to cut. >> and. >> they. >> went jumbo cut in september. and now just 4 or 5 months later, they're going on hold, which is rather inconsistent

with that first jumbo cut. but the market got there before them, which is why we had such a soggy december. i think it was that adjustment in bond yields that had to take place to, to price this in. and however they're there now. is it the right stance i think obviously you know the us economy is still growing at around 3%. inflation has stopped falling. we've got real yields of call it one and a half to 2%. is that the right level of real yields. nobody really knows in this post zero interest rate policy world. but as a guess it's fair. so i think they've got to where they need to be. what we can now look forward to, of course, is all these crosswinds from the political dimension and the pressure being put on them to cut rates, which aren't justified on the basis of current data. but will that undermine, undermine, fed credibility and start to impinge on bond yields and other alternative asset classes? we'll just have to wait and see. >> how do they avoid falling

behind the curve again, given how much. >> is dependent. >> on fiscal policy at this point? and, you know, we have a sense of what the trump administration wants to impose from a fiscal perspective. but we really don't have much detail. we really don't understand how. >> it's going to happen, let alone. >> what the inflationary impact of such policies might be. so how can the fed avoid falling behind again? >> do they. >> have any choice? >> good question. >> i mean. >> it's a really tough job now isn't it. because you've got all this political flak. plus the data is confusing plus the political policy variables. and even if you know what the policies are. so let's take tariffs. you know, there's this big debate are they inflationary or not. now obviously the trump administration is you know, we had lunch yesterday saying very assertively that they're not. but the answer is they are and they aren't actually they are in the short term inevitably, because they're an input to consumer prices. right. so of

course they are short term. but long term there is a strong argument to say, just like with oil price increases, they're actually deflationary because they sap consumer spending. so that's even if you knew the tariff outcome, that would be difficult for the fed to judge. and then you've got this problem that then their heads, they're going to be worried about the fact that they were behind the curve last time. so i don't think they will want to make that same mistake twice. so the risk of policy, in other words, i think that they will probably have to put up rates if they see inflation going up in the short term, even if they suspect that that might be transient this time because they made that mistake last time. wrap it all up. and really what you're saying is the risk of policy error now is high. >> yeah. and not just for the fed because there's also going to be ripple effects if we do see some of these policies come to fruition for europe. and we got the ecb meeting today. and we don't need to go into detail on what's going to happen today, but it just highlights how much uncertainty there is from a policy perspective and in turn

from an economic perspective. so what do you do as an investor, as a cio, how do you position in this kind of uncertain environment? >> yeah. >> so i mean we look at lots of inputs. we have traffic lights, which look at a combination of growth and momentum, sentiment and monetary conditions. now monetary conditions which have % are tightening up a touch now, not in a dangerous way, i don't think, but in an appropriate way. momentum is still very strong. growth is actually okay. i mean, something to watch this year is what can europe, can europe start to find its way out of this morass? and likewise with china. you know, they're like siamese twins, aren't they? they're linked in both cases. now you've got policy push. and it might be that the market underestimates the normal lags with that. so it's quite straightforward. in europe it's not growing. but policy is being is becoming more supportive. and that starts to build up a bit of momentum i would say. >> suggests it's becoming more supportive. i think it's. >> still an open question how much europe. >> can actually get through on the policy front.

>> yes. >> i mean, the monetary policy is relatively straightforward, but the obviously the political side of things is much, much harder. but it does normally work in the end, actually. and china actually, china will be pivotal in that. so look, i would say that at the moment you've got to say we're still sort of positive risk on that's what our traffic lights are telling us okay. >> risk on equities. >> but we would. yes. but we'll be watching bond yields very closely because they'll be the canary in the coal mine if things start to get a bit more tricky. >> all right. well you heard it here chris. >> thank you so. >> much for joining us. >> chris wiley. >> ceo of connor bradley wealth management. we are going to take a quick break. but when we come back, we're going to look ahead to the ecb's first rate decision of 2025. with watchers eyeing a steady series of rate cuts into the summer straightforward. that's what chris told us. we'll discuss next. >> hello. welcome to t-town. like men over 40 everywhere.

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>> welcome back to street signs i'm julianna tatelbaum and these are your headlines. deutsche bank falls toward the bottom of the stoxx 600 after a larger than expected drop in fourth quarter profit, as litigation costs continue to weigh, cfo james von moltke tells cnbc the worst of the risk is over. >> in a sense, the. >> only good news thing you can say about it. >> it's behind us. and importantly, therefore, the risk. >> profile of the company. is dramatically changed as. >> we go into 25. >> roche raises its dividend after a top and bottom line beat the full year. the swiss pharma giant ceo tells cnbc he's confident about the impact new obesity drugs can have. >> we see. >> signs that you can use the rate of alzheimer's. you can. >> probably reduce. >> the rate of cancer, you can reduce the rate of other diseases. there are, i think, more than 100 different diseases that are linked to obesity. and that's why this is not only an obesity question, it's a

question around overall health. >> shell launches a $3.5 billion buyback despite adjusted earnings. falling more than expected. the energy giant ceo tells us the company is weighing where to direct new investment. >> we're looking. >> for, most. >> importantly. >> a conducive investment environment. and secondly, we. >> want to look. >> for stability in the overall investment climate. i think this is. one of the. key things we will look at, whether it's here in the uk or beyond, and therefore the allocation of that capital will go into the most attractive areas. >> and tesla shares whipsaw rebounding as ceo elon musk sounds a bullish note on the coming year. elsewhere, microsoft falls in extended trade while meta catches a bid despite softer than expected guidance. we're about an hour and a half. >> into the european trading. >> session, and it's a positive start to trade here in europe as

investors digest a raft of corporate earnings. the main benchmark stoxx 600, up half a percent, hitting a fresh record high. so it's been a good run for europe despite. >> what has been a volatile. few weeks on. >> wall street or a couple of weeks for that matter, as deep sea really threw. >> a spanner. >> into the works for a lot of. >> investors yesterday. >> a soggy session on wall street, but it doesn't seem to be translating into trade. today, it's also not translating into trade in terms of us futures. we'll get to those in just a moment for now. european markets. here's how the bourses are looking. the individual regions xetra dax up a third of a percent. ftse 100 up 2/10 of a percent or so. the french and italian markets also trading in the green, with the dax hitting a new record as well. spanish stocks also hitting highs not seen since 2008. bbva movers in spain now on to the us market. here's what futures look like. all three of the majors looking to open higher. the nasdaq looking to gain about 130 points after investors have had some time to digest the numbers out

from tesla, microsoft and meta and brace for the rest of the mag seven to report in the coming days. wait and see. that's the message from jerome powell, who spoke after the fed pressed pause. >> in its. >> latest policy decision, keeping its target rate unchanged at 4.25 to 4.5%. powell said the central bank needs to see the impact of president trump's policy changes before it can even begin to make a plausible assessment on what the implications for the economy will be. in a move reflecting uncertainty over the policy horizon, the fomc cut a line from its post-meeting statement that had previously said it had made progress toward its 2% inflation goal. us president donald trump. trump lashed out at the fed following its decision, saying because powell had failed to stop the problem of inflation, he would. powell addressed the president's comments at the post-decision presser. >> the public should. >> be confident that we will. continue to do our work. >> as we always have.

>> focusing on using our tools to achieve our. goals and. really keeping our heads down and doing our work. and that's how we best. >> serve the public. >> can you. >> just comment on whether he's physically communicated his demand to you? >> i've had no contact. >> meanwhile, the european central bank is widely expected to cut rates by a 25 basis point again later today, bringing the deposit rate down to 2.75%. europe's lenders see today's likely cut as the first of several this year, with. >> the. >> latest poll by reuters forecasting the ecb's key rate will be down to 2% by the middle of this year. karen spoke to ecb president christine lagarde in davos last week, and asked whether she agreed with those on the governing council pushing for further cuts by the summer. take a listen. >> i leave. >> it to them. >> to. sort of anticipate. >> and play that game of, you know, so many. >> at which space. >> and. >> blah. >> blah, blah. >> you know. >> we have a methodology. and my job as president. >> of. >> the. >> ecb is to make sure that. >> we apply the. >> methodology properly. >> that we.

>> project as. >> well as we can. >> that we. take into. >> account empirical data as well, that we. >> use our judgment. >> and we have to. >> be very attentive to the rest of the world. i'll be attentive myself to the price of energy. i think that one of the what probably we have, we have not. >> yet. >> anticipated is. >> the decline in energy prices. and we'll see. >> how that pans out and what impact it has on us. so i would. >> refrain from, you know, 4 or 3 or. >> you know, over. >> the course of what time and when do we get to two, or. >> is it going to be 225. >> or, you know, let's. >> take. >> things one step. >> at a time. >> so madame lagarde is watching energy prices yesterday, one. >> of. >> the big stories in the market, in addition to everything happening. happening in the earnings space and with the fed, was natural gas prices. we saw a pickup in natural gas prices, futures up more than 6% to the highest level since october 2023, partly because of supply issues in norway. cooler weather that's forecast in the days ahead. that was the explanation given by deutsche bank this morning, but certainly

worth noting that we have seen an uptick in natural gas prices. and now we're also keeping an eye, of course, on the macro data. france's economy contracted slightly in the fourth quarter as the effect of the paris olympics dwindled, preliminary data showed. germany also saw a decline, reigniting recession fears after flash data showed a 0.2% contraction. the italian print completed a disappointing round of growth data, stagnating on the flat line for the second quarter running. elsewhere, spanish preliminary inflation ticked higher than forecast, with the harmonized print rising by 2.9% on an annual basis. well, thankfully we've got someone here to help us make sense of all this data has saleem, head of european rates research at bank of america global research. safiya, great to see you this morning. firstly, on today's ecb. >> meeting. >> it seems, you know, widely. expected that we are going to get a cut from the central bank. what are you going to be watching for today? >> yeah, absolutely. i think. >> a cut is a done deal. >> so we will be watching more

about any potential changes to the statement. >> but more. >> importantly. the press. >> conference with in. >> particular any. comments on. how the ecb looks at. >> the recent rise in energy prices? >> indeed. >> oil is down now. but gas. >> prices remain. >> elevated. >> and also how they react to the uncertainty around tariffs. that is. >> the second point. >> we do. >> think that they will look through the energy. >> price shock. >> at this stage, because it is ultimately going. >> to. >> be representing. downside when it comes to consumer purchasing. >> power. >> and it's. >> really on. >> consumers that. >> we're relying. >> this year in terms. >> of the. >> additional pickup. >> in growth. so yes, a. cautious ecb highlighting uncertainty. >> but so far looking through that energy price. >> so i mean much like the fed the ecb's job is so difficult right now because they are dependent on factors that, you

know, we just don't know how they're going to manifest yet. we have a sense of what's going to come out of the trump administration, but we really have no detail, let alone the ability to understand what the implications of that policy is going to be. we don't know what the policies are yet. so from a rates perspective, how do investors position? >> yes. >> so we've seen a. >> lot of caution. i think that straight. >> after the. >> results of the us election, it became quite clear for everyone that actually we will see bigger divergence between the us and europe. >> because that. >> uncertainty could. >> ultimately be ending. up positive. >> for the. >> us, where. >> we have some policies that support. >> us growth. >> but the. >> impact for europe was quite clearly negative. the issue is that since then. >> we had. >> this energy. price shock that. >> ignited against. >> concerns around inflation. >> in the euro area. >> and when.

>> positioning was long. >> this actually affected. >> significantly bond yields. >> so at. >> this stage. >> i think that investors. >> are a lot more cautious. they do. believe still in the divergence trade. >> but they. >> are watchful for potential. still additional sell off in bond yields. >> in the near term. given those concerns around. >> inflation in particular. >> and then we have the fiscal picture in europe to add another layer to the debate. and people eyeing germany in particular. i saw european lending. excuse me, european fund managers survey showing that fiscal stimulus from germany is seen as perhaps the most likely driver of growth in europe this year. if we get it, we've got the election coming up in february. how might that affect european rates? >> absolutely. that is the other. >> uncertain factor for. >> bond yields. >> and investors seem to. >> be quite hopeful. >> so and. >> also our fx. >> and rate.

>> sentiment survey. >> we found that there was still 60%. >> who expect. a change to. >> the debt brake. >> this is already. >> affecting a little. >> bit how german bond deals actually trade relative to swaps. >> there has been. >> a. >> cheapening in german bonds. >> as a result, but in our view, we. might actually. >> end up having quite a significant. >> period of uncertainty. even beyond. >> the election, because. >> we even if there is a two thirds majority in. >> favor of changing. >> the debt. >> brake. >> it is not sure that. it will be the. >> number one. focus of the government. >> when they start. >> in fact, the. focus can be more on the 2025 budget. how to address. >> the growth shock that we. have seen. >> so far, and maybe. >> progress on a change to that. >> brake will only. >> be a question for 2026. >> if not 2027. so near-term, it represents a bit of an upside

risk to german yields. >> but ultimately we think that there. >> might be some disappointment. and we're looking for. >> ten year yields to decline more. >> significantly by the middle of the year. >> so where are you advising your clients to put money. what are the key trades in your view. >> so we do like expressing the view that the ecb will go a. >> lot lower. than what. >> the. >> market is pricing okay. >> we do expect the. terminal rate at. 1.5 to. >> 2.5 camp. >> exactly. so that is certainly. >> going to. >> be. >> bullish for. >> german yields and euro swap rates. >> in general. >> we also think that the periphery in that. >> context will. >> be quite supported. lower yields. >> lower rates, volatility probably. and an economy that maybe. >> just picks up a little bit. we're not talking about. >> a recessionary. >> scenario here on. >> these three. >> factors are actually quite. >> supportive for. >> peripheral bonds. >> and we're starting to see that come through with spanish data today showing a bright spot

relative to the larger economy. certainly relative to germany. so i will leave the conversation there. thanks for joining us. saleem, head of european rates research at bank of america global research. and as a reminder, for all the latest as we count down to the ecb's rate decision, you can check out our live blog on cnbc.com and be sure to tune in to ecb decision time this afternoon with sylvia. coverage starts from 1 p.m. gmt. that's 2 p.m. cet. you can watch our coverage in full, including president lagarde's press conference on our youtube channel, cnbc international live. coming up on the show. ai dominates as big tech names report will break down those results with arjun after the break. >> some people. >> like doing things. >> the hard. >> way, like doing their finances with a spreadsheet. >> instead of. >> using quicken. quicken pulls

all. >> your financial. >> info together in one place. and updates it automatically. how easy is that? nice, oakley. >> steep. >> where did you. >> get them? >> golf x.com. >> hey, steep! nice boots. where'd you get those? >> golf x.com. >> use it. >> exclusive deals for first responders, military. >> and law enforcement only@gov.com. >> fall asleep. >> to your. >> favorite sounds. >> with better sleep. >> it's the. number one act of falling asleep. for all those making it big out there... ...shouldn't your mobile service be able to keep up with you? get wifi speeds up to a gig at home and on the go. introducing powerboost, only from xfinity mobile. now that's big. xfinity internet customers, cut your mobile bill in half vs. t-mobile, verizon, and at&t for your first year. plus, ask how to get the new samsung galaxy s25+ on us.

>> 9665 12. >> that's 800. >> 696 6512. every day i'm reading extensively. i'm checking the markets throughout the trading session, working the phones, talking to sources and doing my own reporting to share insights, information and all of the details that you need to be able to make money. welcome back

to the program. tesla shares whipsawed after the bell, initially falling after fourth quarter earnings and revenue missed analyst estimates. operating income fell 23% on the year, with the ev maker citing price cuts across a number of its models. however, the company said it expects a return to growth this year, and ceo elon musk told analysts that tesla is planning an initial launch of its autonomous ride hailing service in texas in june, sounding a bullish note on the overall prospects for 2025. >> 2025 really is a pivotal. >> year for. >> tesla and. >> i. >> and when people look back on 2025 and the launch of unsupervised full. >> self-driving. >> true real world ai. that actually works. >> i think the mayor of london is the biggest. >> year in tesla. >> history. >> maybe even bigger. >> than our. >> first car. >> the roadster. or the. >> model s. >> or the model. >> three or model y. in fact, i think it probably. >> will be viewed. 25 as maybe

the most important year. >> in tesla's history. >> microsoft shares fell almost 5% after hours after revenue at its cloud computing unit grew less than forecast, and the company guided to weaker than expected sales in the current quarter, cfo amy hood said. the company sees capacity constraints in its cloud business continuing through the final two quarters of its fiscal year. microsoft posted capex of $15.8 billion in the quarter, slightly ahead of estimates, but said it expects spending growth to slow in the next fiscal year. meta posted a top and bottom line beat in the fourth quarter, with revenue growing just over 20% on the year. but the tech giant's sales guidance for the current quarter was softer than analysts expected. speaking after the results, ceo mark zuckerberg was bullish on meta's ai prospects, saying he expects the company's ai services to reach 1 billion users this year. >> i continue to think that investing very heavily in capex and infra is going to be a strategic advantage over time. it's possible that we'll learn otherwise at some point, but but

i just think it's way too early to call that. and at this point, i would bet. that the ability. >> to. >> build out that kind of infrastructure is going to be a major advantage for both the quality of the service and being able to serve the scale that we want to. >> arjun joins me around the desk now with more arjun. >> so we. >> finally heard from three of the mag seven. what did they have to say about deep sea specifically? >> yeah, it was really interesting and i just tried to pull across some of the common threads. so going into the earnings reports, there was a lot of questions over the impact of deep sea and the efficiencies it showed on potential capex expenditure and ai usage. and the common view was. this as. if deep sea showing this innovation, this efficiency, and the technology effectively becomes cheaper, it will become more ubiquitous. and actually this should be supportive for computing infrastructure. you're going to need more supporting computing infrastructure to support the growth of ai usage. and that was the view of both

satya nadella of mark zuckerberg as well, which i thought was quite interesting as well. so nadella saying it's all good news as far as i'm concerned. for mark zuckerberg, there's an extra, i guess, part of the puzzle here, and that is meta has its own open source ai model called llama. and so deep sea is now presenting real competition, i think, to llamas open source. and mark zuckerberg sees it in more geopolitical terms, shall we say. he's saying saying that they need. there will be eventually an open source standard globally for models. and zuckerberg wants that to be llama. he did say there were novel things that that actually deep sea was doing that actually llama would look to replicate, which i thought was interesting as well. on the infrastructure spend. again, he thinks that the having that big compute infrastructure, ai infrastructure and the capex to go with that is going to be a competitive advantage in the ai space as it stands going forward versus a disadvantage as well. if you look at tesla, on the other hand, i think, you know,

they're coming at this from a very different angle in terms of ai. they're not there in the model space and in the sort of chat bot space. their ai is all very much related to what they see as a future in autonomy and robotics. that's a very different proposition on the tesla front. >> well, let's. >> talk about tesla and the story there, because as you said, this is sort of tangential. to the tesla investment case at the moment. there's so much more for tesla investors to think about. talk to us about the share price reaction. it feels as though when you look at the numbers themselves, that's what disappointed the investment community. but then you have elon musk using words like ballistic, that the company is going to go ballistic in the years ahead. and that seemed to be enough to get the stock going again. is there anything actually tangible, though, in what he said that's given investors hope? >> i say this slightly and only slightly tongue in cheek, but it was everything but cars is what the market was focused on. the core business itself did not look great. margin pressure across the board is this price war continues. top and bottom line miss. no new cars, but i'd point out maybe four things. and you've got to remember tesla's

investor base is very retail driven, very broad, very focused on the personality of elon musk and some of these things that he says. and we've heard him say these over the years, but there's four things i'd say that probably various parts of the investor tesla investor base picked up on first, the company saying they expect the vehicle business to grow in 2025 versus a decline in 2024. they reiterated that they expect and are on track to deliver a cheaper electric car in the first half of the year. this is something the market's been yearning for. for tesla, it's not really about a new mass market offering in a very long time. so that's a big positive. the third, and i think perhaps what stole the headlines was elon musk saying they're looking to launch an unsupervised driverless car service, i.e. a robo taxi service in austin in june. and they said they will release this also in many other reasons. well, this speaks to this autonomy picture. a lot of the tesla bulls says, yes, it's a car company right now. but the future is in autonomy. it's in robotics, it's in ai. and so that got people very excited.

and the fourth and final point i think was bitcoin. the company saying it now has about $1 billion worth of bitcoin at the end of 2024. and it's able to say that because of changing rules about how they report their bitcoin holdings. so again, there'll be those who are into digital assets who see tesla potentially partly as a digital asset play as well, who probably took a lot of a lot of heart from that. >> you know, it's just interesting thinking, looking back at the last hour or every topic we've talked. >> about really. >> comes back to the trump administration. those last two points you just highlighted have so much tied to the trump administration's policies, and the hope that investors in this case have that he pushes through policies that support autonomous driving, that support cryptocurrencies. so i guess we'll just continue watching dc. thanks so much for breaking it all down for us. now a search and rescue mission is underway in washington, dc after a plane operated by a subsidiary of american airlines crashed into a u.s. army blackhawk helicopter in mid-air near reagan

washington national airport. more than a dozen bodies have reportedly been recovered, according to an nbc affiliate. multiple sources speaking at a press conference, the mayor of washington, d.c, has confirmed 64 people were on board the plane with three people. three people were on the military helicopter. posting on his truth social network, president donald trump said it had been a terrible night and that the crash looks like it should have been prevented. shares in american airlines are lower in premarket trade. nbc's alice barr joins us now. alice, what a tragic and unusual collision. tell us the detail that you've got. >> breaking first. >> and foremost. >> and it's also puzzling to figure. >> out how. >> this happened. this american airlines plane that. >> was on. >> its way to. >> land, it was probably seconds. >> away from landing. >> and it was on. target with the tarmac.

>> we should note. >> this is. >> considered the. >> busiest runway, in. >> fact, in. >> the country. this runway. that at. >> reagan national airport. but it. >> appeared on track. >> and then there was. >> this collision with. >> a u.s. army. >> blackhawk helicopter. >> and witnesses. >> could see and. we've seen images since. of a. >> fireball in. >> the sky. >> and then. >> both of the. >> aircraft plunged down into. >> the potomac river. and there have been crews out ever since. this happened just before 9:00 eastern time. last night. >> search and rescue crews. >> have been out. >> looking through the water. >> but there. >> have. >> been no. >> one has been. >> recovered alive. >> at this point. our local affiliate here, as you noted, has learned from two sources familiar that at least. >> a dozen bodies. >> more than that we believe, have been. >> pulled out of the water. >> and we did hear. >> from the dc. fire chief. >> said that the water that they're working in there is only about eight feet deep, where the plane and the. >> helicopter actually crash landed. >> after their mid-air collision. >> they're dealing with. very

difficult conditions. >> it's very cold pieces. >> of ice, so. >> it's hard to work as well. but they're doing everything. >> they can. of course, to recover people. >> 64 on board that airplane. >> three on board the helicopter. >> and we. >> also heard from the. >> senators from kansas. >> they were part of this briefing you're showing here, just talking. >> about the grief that everyone is feeling at. >> this moment. >> we'll send it back to you. >> alice, thank you for bringing us the latest on that tragic story. alice barr, nbc news. well, as we approach the end of the show, here are three things to get you up to speed ahead of the open on wall street. it's heavy on the data front, with initial jobless claims pending home sales and real gdp figures due, openai ceo sam altman will demonstrate not yet released technology in washington, dc, amid efforts to fend off deep seek and, of course, earnings. season continues thick and fast, with the likes of comcast and ups set to release numbers. investors will also be focused on apple, the latest of the big tech names to report after the

closing bell. as for european trade, we're now almost two hours into the session and we're holding on to those early gains the ftse 100, the xetra, dax and the cac40 all in positive territory. the ftse has been teetering around the flat line throughout the morning as investors digest the raft of corporate earnings that we've had in europe this morning. u.s. futures are positive. we are off the highs of the morning but still in the green. nevertheless, nasdaq and the dow looking to add over 100 points each. and the s&p 500 looking to bounce back 23 points. that is it for today's show. i'm giuliana tannenbaum. this has been street signs. worldwide exchange is up next. ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or

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the way i approach work post fatherhood, has really trying to understand the generation that we're building devices for. here in the comcast family, we're building an integrated in-home wifi solution for millions of families like my own. in the average household, there are dozens of connected devices. connectivity is a big part of my boys' lives. it brings people together in meaningful ways. >> let's talk ai. >> ai in china versus ai in the united states. >> deep sea. one of the companies within china. it's been reported at least that they have a cluster of 50,000 nvidia

gpus. deep sea. their model is actually the. >> top. >> performing. >> or roughly on par. with the best american models. you can see the. deep sea. >> new model. >> it's super impressive. >> and it's super. >> compute efficient. >> we're not just. >> about managing information. >> we're about supplying digital workers. now we're making this transformation of digital labor. >> tragedy in. >> washington, dc. >> as an american airlines jet carrying. >> 64 people. collides with a black. >> hawk military military. >> helicopter just. >> outside ronald reagan national airport. around 301st responders on the ground searching through the. >> wreckage as the search. >> for survivors. >> it continues. >> good morning, i'm. >> frank holland. welcome to. >> worldwide exchange. >> thank you for being here with us. >> we are going to. >> get. >> to the markets. >> in just. >> a few moments. >> but first. >> we. >> begin with that breaking news, the latest on that mid-air collision between an american airlines regional jet and a u.s. army black hawk helicopter just outside reagan national airport in dc. our eamon javer