that's all for this edition of "dateline." i'm andrea canning. thank you for watching. [theme music] >> good morning, and welcome to. >> street signs. >> i'm julianna. >> tatelbaum, and these are your headlines. the dax. dominates set for. >> its biggest daily. surge since november. >> 2022. >> as the. >> country loosens its fiscal straitjacket, with chancellor toby friedrich. announcing a. defense spending boost and plans to ease the debt brake.

>> we're counting. >> on the united states of america to. >> stand by our mutual alliance commitments in the future. >> as well. but we also. >> know that the. >> funding for. >> the. defense of our country in alliance. >> must now. >> be expanded significantly. >> we'll digest the details. >> with florian schuster. >> johnson. >> senior. >> economist at. >> zukunft, next. >> u.s. stocks. look set to open in the green after trump's tariff announcement wipes out post-election gains. but the president shows no sign of backing down as. he touts. >> his. >> economic policies in congress. >> america great again. >> and it's. >> happening, and it will happen rather quickly. there'll be a little disturbance, but we're okay with that. >> china's national people's congress warns of changes unseen in a century. as the world's second largest economy targets a growth rate of around 5% amid the prospect of another trade war. and adidas stock

disappoints after the sportswear giant guides towards slightly lower sales this year, having offloaded the last of its yeezy inventory in the fourth quarter. very good morning to you. welcome to the program. we got some massive news out of. germany last night. news that, to many, has changed the game for. >> germany and. >> potentially for europe. german chancellor in waiting friedrich merit struck a deal with his expected coalition partner, the social democratic party, to create a ■k7500 billin infrastructure fund and reform to the country's debt brake rules. the bill will be presented to parliament next week. now this is critical news at a critical time. friedrich merit was working against the clock to get agreement in place while the old parliament was still sitting. the old parliament, which is which consists of the mainstream parties where he can get support

for this deal. that is the expectation. this is being seen as a bazooka by the market. you can see here the xetra dax up 2.5% in early trade, the euro trading up by about 7/10 of a percent versus the dollar. the bund ten year bond trading at 2.6%. cdu leader friedrich merit said the country needed to take matters into its own hands when it. >> came to defense. >> thanks. in view of increasing threats. >> it's clear to us that europe. >> and along with europe. >> the federal republic. >> of germany must now very quickly. make very big efforts to strengthen the defense capability of our country. >> and the. >> european continent. >> we're counting. on the. >> united states. >> of america. >> to stand by our mutual alliance commitments in the future as well. but we also know that the funding for the defense of our country in alliance. >> must now. >> be expanded significantly. >> well, it is all systems go in europe on the back of that major breakthrough in germany yesterday, the stoxx 600 here up

more than 1% this morning, despite the heavy selling that we saw on wall street yesterday, what was a really volatile session there with so much uncertainty around tariffs. the xetra dax up 2.6% this morning. the exuberance is spreading beyond germany though. you've got the cac40 up 1.7% in italy that benchmark up 1.5% ftse 100 up half a percent today. when you look at the gainers, those leading the rally in germany, you've got construction names, the banking sector also doing really well. deutsche bank shares up 8.5% this morning. siemens energy up about 8% basf the chemicals giant, also doing extremely well. so it's not just defense. names that are rallying on the back of this announcement. you've got names that will support the build out of infrastructure. this is an enormous deal. >> for germany. >> i think looking at the analyst commentary, you really can't overstate what an enormous sea change this is. some of the standout comments from the street today is maga the new

mega that is make europe great again. going to take the place of make america great again has what has the pressure that has come from washington actually catalyzed these changes in europe and is mega going to catch on now? that's something that i've seen across my inbox from various analysts today. germany announced a whatever it takes plan. this is above even our positive expectations. that's out of deutsche bank, which was already quite bullish on what we would hear out of germany. jorge avalos coming out saying that he's now outright bullish on euro dollar as a result of what we heard from. the incoming chancellor last night. in terms of berenberg, another analyst who has come out with some extremely positive commentary on the back of this deal. a really big bazooka. the title of holger schmieding is note a major loosening of germany's fiscal straitjacket, a fiscal sea change. merritt seems to be a very fast learner. why is that? well, at the during the campaign, merritt was talking down the prospects of reforming

the. >> debt brake. >> but my oh my, that is not the case. now let's get out to anita with more detail on what we heard from friedrich. >> last night. >> and anita to that point from berenberg. what a change from the incoming chancellor. >> yes, totally. >> i mean, if you read between the lines. >> that was. never actually against. >> changing that. >> so-called straitjacket. >> of public finance. >> the debt brake. >> but he never stepped out. >> openly and said, yes, that's. >> what i'm going to do, because. >> he also. >> doesn't want to. lose some of. >> the voters who actually. >> think that this is. >> crucial, that germany. >> keeps its straitjacket. >> but in all these conversations. we had throughout the years, he was always clear about the fact that there needs to be more spending in infrastructure. and that is one thing, and that is how he actually brought the spd firmly into his camp. so a very clever compromise bill that. and at the same time he said this

trump-zelensky press conference last friday is a sea change in transatlantic relations. we can't rely on the us anymore and that needs to trigger serious actions. and here. >> we. >> are with a defense spending target, which actually has no limits. anything which goes above 1% of gdp has no limits, will not count into the debt rules of the maastricht treaty as well. remains to be seen how that all is feasible. >> but for. >> now, of course. >> it is. >> a huge sea change when it comes to the spending and also the narrative. so germany will go, will go very bold on defense spending, which is most likely mainly benefiting european defense values that this what we have seen as well in recent weeks that us companies didn't benefit a lot from that surge in spending in europe. it will be. mainly spent in europe. as much

as it's possible, that is one thing. and of course, the other thing is the infrastructure bill, which is much needed. we have that ailing infrastructure here in the country because there wasn't enough money to be spent for all. these years, and also not too much interest. ever since the debt crisis, there was this mantra around that balanced budget, but this is over. germany is going to spend, and if they do it, it seems that they are spending it bold. and it will go to parliament next week and most likely will get the full backing by the green party as well, which is needed to get a majority in parliament. >> annette, we will continue the conversation and pick up exactly where you left off in just a moment. let me just give viewers a look at some key german assets. it's fascinating to track these german assets this morning. you've got infrastructure names performing extremely well. the construction sector heidelberg up about 11%. keon group up 14%. bilfinger putting in its best day at the

moment since 2008. that stock up 17%. what is wild is, is the fact that the market had been talking about this happening. they've been talking about increased spending from germany, but it looks as though the market was not pricing in the speed of the change. and perhaps the magnitude, just how much power we would get from merits before he's even taken his position as chancellor. in terms of bunds, we've also seen a lot of action in the bund market, with investors saying that this marks a sea change for the bund market as well. bund yields soaring this morning after this decision to exempt defense spending from fiscal rules. so there's a picture for you of how the yield curve is looking. the two year around 2.13%, the 30 year just under 3%. but we are higher across the board. this morning. florian schuster johnson joins me now senior economist at zukunft. florian, thank you so much for being with us on this historic morning. i want to pick up where my colleague anita left off. and that is just simply around the

execution from here. friedrich merit still needs to get this proposal through parliament, the old parliament. do you see any problem there, or are the. is the coalition in place going to allow these changes to pass? >> yeah. >> thank you. and good morning and thank. >> you for having me. >> so i. >> believe that actually across the board of political parties. >> in. >> germany, the. >> agreement and. >> the insight is there that we need to do more for both defense. >> and infrastructure. so i. >> don't think that any party in particular, the greens. >> can now. >> sort of not do. >> what they. >> said they would do. >> before the election. >> and so i do believe, actually, that there's a good chance to get this passed in the bundestag. >> and it seems like for the greens, which, you know, we don't have a confirmation yet of their support for this deal, but given the infrastructure piece, they should get behind it. how does the deal itself compare to what you were expecting? i think it's pretty astonishing the market reaction we've seen, and i'm just wondering whether it's because the market just wasn't fully pricing in this outcome, because they weren't expecting

the speed of it, or if there's actually a surprise when it comes to the magnitude of the spending here. >> well, i think the surprise refers to both because the. bottom line. >> is germany. >> is back. >> and germany. >> is funded. >> and that. >> was much needed. >> because we have massive. >> problems both with growth. >> and with a society and an economy unfit. for taking care. >> of. >> our own security. and actually, this move we've seen last night is really remarkable. you know, germans sometimes move late and sometimes delayed when big step steps are needed. however, this is a big step. and when they take it, they do it so very radically. and i think this is what we've seen. and this is not surprising for the markets and for the people in germany too. >> let's talk about the infrastructure piece specifically. it looks like they're prepared to spend on a whole range of assets and really upgrade germany's domestic infrastructure. talk to us about the impact that's going to have on the economy. >> well, i think. >> we can expect an actual boost to growth, which is much needed

because we have been like basically stagnating or even in a recession for two years in a row now. so that is what we can expect. i think in the short term, this will just boost domestic demand, obviously, because there will be a lot of demand for people building these new infrastructures and companies that are getting new government orders now. but there will also be a long term effect, because in particular, the defense spending will lead to creation of new productive capacities in the defense sector, and they can long term permanently be used also for civil uses afterwards. so i think we do see some long term, some permanent effect here. and i think that is what exactly what germany needs. >> have you. >> been modeling yet in terms. >> of. >> the numbers themselves, what this is going to do to germany's growth prospects? >> well. >> no. >> we haven't been modeling and calculating that yet. but i do believe that we can actually get our growth estimates higher. i mean, we are at like about like zero a little bit higher, zero higher, above zero, like at the end of the year maybe. but i

think we can go and move towards 1% after a while. so this is really an important stimulus. >> you know, you you opened by saying that germany is back and germany is funded. i think from a geopolitical perspective, germany has been largely absent from the european leadership team. just when you think back to the events of the last couple of weeks, it was macron who made his trip to washington. germany was not part of those diplomatic efforts. do you think that this is an indication of broader leadership style, the fact that he's come out all guns blazing to really try to power ahead and put germany back on the map? >> well, i. >> absolutely believe that what we've seen last night is a very strong signal to europe and to the world that germany wants to take its affairs in its own hands again, both when it comes to growth and when it comes to its own security. so i do think this will have implications on the global level. so i think given this money and given now a

working financial framework, the new government will be able to achieve a lot. and that obviously would would come along with a greater and maybe more active role on the global stage. >> florian. florian, clearly, the reaction from the market and from the economic community is very positive so far this morning. when we look at the headlines here, where could we run into snags in terms of this, this increasingly bullish story? >> well. >> i think one main criticism that many people have already put forward after the decision last night is obviously that this is also a threat to public finances. but actually my answer to that would be keep calm, because the main risk to debt sustainability in germany is currently too low growth, not too high debt. and i think this new funding that we have available now will actually boost growth. and hence i don't think there's actually any risk that we're committing here. >> and in terms of the growth impact, when are we likely to see this impact start to come

through? >> well, that all depends on the question of how quickly we will be able to get this money on the road to say it that way. so how quickly will we be able to build these new infrastructures and to extend productive capacities in the defense sector? i think in particular when it comes to infrastructure investment, this boost can actually be seen quite fast. i think if we start this year to actually spend this money, then there might even be a positive impact for the 2025 growth estimates, but obviously it will build up over the long term. so the long term effect will be higher. >> and when we have spoken to various leaders at the start of the year about what they wanted to see out of. germany and where they saw as the biggest constraints, obviously spending, infrastructure, defense were key elements there. but you also had high labor costs, high energy costs. to what extent do does this new deal help with those issues, or are those those going to continue to be weights over

the german economic picture? >> i mean, there's some additional challenges we have to master. first of all, as you mentioned, high energy costs. the thing is that this funding agreement now creates some additional budget space in the federal budget, which means there will be some leeway actually to do something also to lower electricity costs, for example. so there's some things i can do in the budget. and actually we're not only talking about money because what the next government will have to do is also to implement a set of reforms, in particular when it comes to the tax and transfer system that will help us to get more people in the labor market to increase productivity. so these things, they don't necessarily cost money in the first place, but they will make sure that there will be the people to actually use that money and build the infrastructure that that comes along with it. so i think there's more that has to be done. >> florian, appreciate your thoughts. florian schuster johnson, senior economist at zukunft. coming up on the program, president trump doubles down on his economic policies in

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>> 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. president trump used his first address to a joint session of congress since his return to the white house to double down on his economic policies, saying tariffs would, quote, make america rich again. nbc's jay gray has more. >> president trump walks into the house chamber with a raised fist. >> usa. >> beginning his address with a bold declaration. >> america is back. >> he describes his return. >> to the. >> oval office. >> as a mandate. >> from that moment on. >> it has been nothing but. >> swift and. >> unrelenting action. >> that met. >> with loud. >> protest from democrats.

>> members are. directed to uphold and maintain. >> decorum in the. >> house and to cease any further disruptions. >> texas representative. al green. >> refusing to. >> sit down and. ultimately led out. >> of the capitol. >> democratic lawmakers. >> holding signs, wearing pink jackets and. yellow and. blue in support. >> of ukraine. many sitting with. >> recently fired. >> federal employees. >> as the president celebrates his initiative to. slash the cost. >> size and scope of the federal government. that cost many. >> their jobs. i have. >> created the brand new. department of government efficiency gauche, which. >> is. >> headed by elon musk, who. >> is in the gallery tonight. >> he defends 25%. >> tariffs taking effect today on imports. >> from canada. >> and mexico, and doubling. >> the 10% tariff on goods from china. despite significant. >> drops in. >> the. >> markets amid. >> concerns of a trade war and continuing inflation and price hikes. >> tariffs are about making america rich again and making.

>> america great again. >> and it's happening. >> and it will happen rather quickly. >> there'll be. >> a little disturbance. >> the president. >> pledging to. >> end the war in ukraine, announcing. president zelensky. >> has reached out. >> i'm also. >> working tirelessly to. >> end the savage conflict. >> in ukraine. >> and he's asking for additional funding from congress for border security. >> and deportations. >> promising the lightning pace of. >> change that's marked. >> his return to the white house. >> we'll continue. now, the. >> white house says that president trump will not tour the. country promoting the agenda he discussed tonight, like many presidents. >> do after the address. and he did during his first term. >> instead, advisers say he. >> can be. much more effective pushing. >> for change. >> from the oval office. jay gray. >> nbc news, washington. >> u.s. commerce secretary howard lutnick says the trump administration could announce a compromise on tariffs with mexico and canada later today. speaking to fox business, lutnick said he thinks president

trump will, quote, work something out, saying the two countries are offering to do more to address the president's concerns. speaking to cnbc yesterday, lutnick suggested that the two countries could face further levies as part of the administration's planned reciprocal tariffs early next month. >> canada and mexico had an invitation to trade with the amazing economy of the united states of america, and they have abused that invitation, and the president is going to reset that. but that's april 2nd. that's not today. today's opioids april 2nd. i'll be here talking to you about how trade policy is going to change, and we're going to make it fair to americans. >> well, yesterday was quite a volatile day on wall street. and those comments from lutnick around the possibility that trump could roll back some portion of the tariffs on mexico and canada, drove a late rally in the day. ultimately, though, we did see the dow, the s&p and the nasdaq all close lower. right now we're looking at a significant bounce back in the dow. more than 250 points at

this stage. the nasdaq looking to add back about 185 points. and the s&p also looking to open higher after ten out of 11 sectors. finished the day lower yesterday, led by a 3.5% pullback in financials. so to say that markets are glued to what happens on the tariff front i think would be an understatement. let's welcome daniel morris to the show. chief market strategist, bnp paribas asset management daniel, it's so hard to know where to start. i'm just going to go for germany because this is our top story this morning. i think for the european investor, this is absolutely huge news. the deal that we heard announced from friedrich fritz yesterday. what's your take from a market perspective? >> well, for european. >> equities you. >> thought at the beginning. >> of the year. >> initially i think most. >> people were quite cautious. >> most people underweight. >> i don't think too many. >> would have. >> predicted at. >> this point that european equities would have outperformed. >> but when you. >> try to. >> make that supportive. >> case, a lot of it was around russia, ukraine and. >> fiscal support. so you're getting that potentially. >> in spades. so certainly. >> it's going to be supportive should offset the. negative

impacts from. from the tariffs. >> and we really will just. >> need to see one the details. >> and then to. >> how much when who exactly. but you know generally certainly a positive momentum. >> i mean you you talk about the rally we've seen year to date. and we were speaking a few weeks back about europe's outperformance versus the us. now this morning, my inbox has been full of messages to the tune of is this going to make europe great again? mega taking, you know, taking the center stage here. do you think that europe has more to go? is there more in this rally? and what's going to determine whether we see further gains from here? >> well, if you think. >> about what's. >> going to drive it over the medium term as. >> opposed to the outperformance. >> we've. >> had year to. >> date, you know, are people really changing their longer term allocations for europe? i think probably not. >> because certainly. >> on one hand fiscal stimulus helps. >> let's not forget. >> though. >> that that's going to mean higher interest. >> rates, more likely, like we. >> had seen at times in the us. so that's going to offset some of that fiscal stimulus. number two, i think. for foreign investors, if you will, when

they. >> look at allocating. >> to european equities, what they think. >> about. >> you know, is. deregulation and so on. so in terms of making america great, that's a key part of trump's strategy. there's more talk about that in europe. >> again, it's going to come down to the actual implementation. >> looking at the market reaction today in equities, we're obviously seeing a major rally in german equities across various sectors. you're also seeing a push higher in bond yields. how should we think about the impact of all this additional spending on germany's bond market. >> well good and. >> bad i guess. >> so certainly from a investors point of view, probably pretty much all bad. the reason it's maybe not quite so terrible. i think it's worth to think about what happened in. >> the us. >> you know, from the beginning of the biden administration, when you. >> had the 1.9. >> trillion. >> stimulus for. >> covid. >> you had also the inflation reduction act. >> all that fiscal. >> spending had a massive impact. >> because that's where us. >> growth has. been so strong. >> but again, higher. >> bond yields. >> the difference. >> is that. >> us debt. >> levels going into that were already pretty high. you know, the. advantage that germany is.

going to have is because of that previous fiscal restraint. >> absolute debt levels are low. >> and people have. been saying for a long time. >> there's room for them. >> to go higher. >> and a really important distinction, i think when you look at the, the, the starting point for germany's fiscal situation versus the us, you and i were just speaking off camera about, you know, what are the different paths from here. and you raised a really interesting question as to what happens if we see a peace deal on ukraine. tell us more about how that might impact what we just heard out of germany last night. >> well, certainly you get the impression trump is rethinking. >> us relations. >> with the rest of the world. europe. >> i think, has got that message. >> and, you know, one. >> would anticipate there. >> is. going to be more. >> defense spending probably across europe. >> how quickly that happens and where the. >> money. >> comes from is going to ultimately be critical. and if you do have an. agreement in ukraine and russia. >> you would. >> imagine that. >> reduces some of the urgency. >> so i think that could offset a bit of the enthusiasm we've seen. we know markets tend to go to extremes, but i think that

also. >> will be a. >> factor in the months. >> definitely something that's important to flag and bear in mind, because it sounds like we may get news on that in the coming days, would be a really important point to watch. let me take you to us markets. we saw some major swings yesterday. i sort of felt for anybody who was invested in the us market, it seemed like an incredibly difficult place to be invested at the moment. and my question to you is, what is the biggest driver of us markets here? is it tariffs? is it, you know, the health of the us economy and all the data we're getting around the us consumer. looking a little bit soft. the soft data anyway. is it tech. >> well you. >> head. >> in all of them. >> so i think. >> the first thing to point out though on tariffs, at least the returns they had. yesterday is even though the us market clearly was down. >> it outperformed. >> europe, it outperformed canada. >> it outperformed. >> mexico in dollar terms. so that initial view. >> again post-election none of the tariffs you know none of this is a surprise. >> we knew trump was. >> going. >> to do this. >> and the view was okay. we don't think it's good, but it's. >> worth for us. >> trading partners in.

>> the us. >> so that's clearly a factor. i think. arguably more important though is as you pointed out, what's the underlying. trend for growth for inflation in the us. and you could argue that even though. >> it seems. >> like quite long, six weeks since trump's. >> been in office, you know, really that kind of economic. >> momentum was was there before. and you could argue it would have been there regardless of who won. and recently the data is not good. and you've seen that really in treasury yields since the beginning of the year, which. were going down, i think, reflecting that poor growth outlook. on one hand, maybe we're getting that soft landing, maybe that us exceptionalism, regardless, was going away. and if, let's say the tariffs. >> were reversed tomorrow. >> that potential slowdown. >> could still be there. and i think that's. >> really what we need to assess. >> so it sounds like you don't necessarily think stagflation fears are overdone. >> well it's. >> certainly a surprise is more on the inflation front because when you talked about soft landing it was slower growth, lower inflation, lower fed funds. >> wonderful. >> we're getting slower growth. we're not getting lower fed funds at least because of inflation having spiked honestly over the last few months. and

again one of these surprises, i think most people are going to feel that shouldn't continue. but they also. >> didn't think. >> it was supposed to. >> happen in the. >> first place. so unfortunately, we're a bit back to. data dependency. >> well, we've got some hard data finally coming through at the end of this week, so we'll see if it matches some of the softness we've seen in the soft data. daniel, we'll have to leave it there. daniel morris, chief market strategist, bnp paribas asset management. china has also been in the news in the last 24 hours, announcing further fiscal stimulus this morning, setting its sights on around 5% gdp growth. it comes as the country's premier, li chang, warned of changes unseen in a century amid a burgeoning trade war. this, after the world's second largest economy, announced retaliatory tariffs against the us tuesday and filed a lawsuit against the levies with the world trade organization. also high on the agenda consumption, as the country looks to stave off the deflationary pressures that have hit the economy in recent months. coming up on street signs, ai is in focus at the mobile world congress in barcelona. we'll get more from

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powerful women transforming and redefining leadership in the world of business. request an invite at cnbc events. >> for. >> welcome back to street signs. i'm juliana tattenbaum. >> and. >> these are your headlines. the dax dominates, set for its biggest daily surge since november 2022, as the country loosens its fiscal straitjacket, with chancellor toby friedrich announcing a defense spending boost and plans to ease the debt brake. >> we're counting on the united states. >> of america. >> to stand by our mutual alliance. >> commitments in the future as well. >> but we. >> also know that. >> the funding for the defense. >> of our country in alliance must now be expanded significantly. >> us stocks look set to open in the green after trump's tariff announcement wipes out post-election gains. but the president shows no sign of backing down as he touts his

economic policies in congress. >> tariffs are. >> about making america rich. >> again and making. >> america great again. and it's happening. >> and it will happen rather quickly. there will be a little disturbance, but we're okay with that. >> china's national people's congress warns of changes unseen in a century. as the world's second largest economy targets a growth rate of around 5% amid the prospect of another trade war. and adidas stock disappoints after the sportswear giant guides towards slightly lower sales this year, having offloaded the last of its yeezys inventory in the fourth quarter.

well it is. all systems go here in europe as investors react to that mammoth spending deal announced last week. by last night, excuse me? by friedrich mertz, the incoming chancellor in germany. massive spending plans now for defense and infrastructure. if they can get it through the old parliament, which the economic and political communities say is likely to happen. so we're looking at a radical shift in fiscal policy from germany. the dax is up 3.4% right now. so really strong gains. and it is not just one sector within the german market. we're seeing a massive rally in chemicals, names, industrials, construction, defense. so many parts of the german market are rallying on this because not only will this directly support names in the infrastructure and defense space, but it will also clear some room for germany to address other issues in the economy, clear some some space. given the changes around the debt break that are also in store. so there's a look for you. the xetra dax up 3.4%. the

dax is up over 6%. so massive rally in germany. and as you just saw on your screens a moment ago, you're seeing that jubilant spread to broader europe as well. as far as us futures go. we're also looking at a rebound there. the dow jones looking to add back about 280 points at this stage. the nasdaq about 200 points. this is as the commerce secretary suggested, that we could see a tariff compromise between the us, mexico and canada. so investors seem to be encouraged by those comments. we did see a major turnaround yesterday when those comments came out. a very volatile session, though never the less in terms of the tech space in europe today we are eyeing up asml. the company says macroeconomic uncertainty as well as export controls were the key factor weighing on consumer demand last year. in its latest report, the dutch chip equipment maker said a large number of entities in china, which accounted for more than a third of sales last year, are now subject to restrictions and it

expects to see a continued risk to its operations. this after president trump used his speech in front of the joint session of congress to announce his desire to scrap the biden administration's chips act. >> your chips act is a. >> horrible. horrible thing. we give. hundreds of. >> billions of dollars and it. >> doesn't mean a thing. >> they take our money. >> and they don't spend it. >> you should get. >> rid of the chip. >> act and. whatever is. >> left over. >> mr. speaker, you. >> should use it to reduce. >> debt or any other reason. >> you want to. >> let's get out to our tech man. arjun. i'm not sure where you are. arjun. at mobile world congress. tell us, what are we looking at right here? >> well, i'm. >> on a. >> screen on. >> one of samsung's. >> tablets, but i'm actually looking into to. >> one of their. >> phones. and we're. on samsung stand here. >> at mobile. >> world congress in barcelona. samsung look, always one of the biggest players here at the conference. >> and they've made a. big show. >> on. >> the s. >> 25 of talking about their ai features. but something.

>> interesting is. happening right now in the world of smartphones. you've got. >> apple with apple. >> intelligence and its. >> ios ecosystem. >> but then you've got these swathe. >> of other android. >> players samsung. >> xiaomi, honor, oppo. >> all of. >> these companies. are relying on. google's ai, google, gemini. >> and. >> that creates a lot. >> of challenges. how as an. >> android player, do you. >> differentiate from the competition? if you're all. using very similar ai tools on your devices, how do you tell that story. to consumers? that was one of the big questions i had for samsung executives. executive vice. president patrick schmidt when i sat down with him yesterday to discuss samsung's ai strategy. let's just listen in. >> we have a long partnership with google, and we it's fair to say we see ourselves as we have a mission, which is to democratize. this ai functionality. we are we believe we are leading the android ecosystem for a long. >> time, and. >> that's the way the partnership works. so we innovate in the ecosystem, and it's fine that there is competition and companies will use android and that's okay. >> so our. >> differentiation point,

however, is constantly innovating. we've been the first with s24 with circle to search within, the first with like on the foldable device with screen continuity. so we are innovating a lot of functions for the ecosystem with. google as a partner, and we'll continue to do so. >> patrick showed. >> me. >> that really saying that samsung's. >> strategy is to work. >> with google to bring ai features first before the. >> other. >> smartphone makers, in the hopes that that really drives. consumers to the smartphone. so very interesting there. and what's happening here. the real smartphone battle in. ai seems to not be between apple and samsung and others, but right now between apple and google. gemini. let's switch stories for a moment. sticking with samsung. >> though. >> on to a brand new product from the company, codename. >> project moon. >> now this is a collaboration between samsung, qualcomm, and google into what they call extended reality. you can think of this a. >> bit as a. >> challenger to apple's 3500 dollar vision pro product as well. you can see on the device.

>> here, there's multiple. >> cameras in the in the lens there, and it will give people ability, i think. >> to use. >> gesture control with their fingers, for example. to control it. >> but also it's. >> integrating google gemini, google's voice assistant in there so that users will be able to request things from the digital assistant in order to use some of the functionality of the device. there's not a lot of detail as of yet on that device, but a samsung spokesperson did tell me that it's planning to launch this this year. so all eyes, i think, will be on the specs on what it can do. and most importantly, i think the price point. apple vision pro, as i mentioned, is priced at 3500 dollars. it's not a product for the everyday consumer, and it'll be interesting to see if the partnership between samsung, qualcomm and google will perhaps be able to put a product onto the market at a slightly cheaper price point, which may appeal to a broader array of consumers. giuliana. >> our really great to get the color of what's happening on the ground there. really loved your opening shot. now let's stick

with the tech sector. tiktok owner bytedance has reportedly seen its valuation rise as a result of a new employee share buyback. that's according to a report from reuters, citing sources, which says the program could value the firm at just shy of $315 billion. private equity buyout firms managed $4.7 trillion in assets as of june last year, according to data from bain and company. that is a 2% slide from 2023 levels. in the first annual decline since bain began tracking the data two decades ago. fascinating. i wonder to what extent that's because private equity hasn't been offloading or exiting a lot of their positions, to the extent that many had been hoping. let's put the question to sanjay mauli, partner at north zone. sanjay, great to have you with us. very keen to dive into what's been happening in private markets. and let me, you know, open with the what what's been happening in the ipo world. because at the start of the year, we spoke to bankers, we spoke to private equity

managers who said 2025 is going to be a blockbuster year for ipos. so far, it hasn't been the case. why is that? >> yeah. look, i mean, i think some of it is sort of a fundamental shift in equity markets. i would say in the last decade or so there's a there's been a massive proliferation, as you know, as you were reading out of private markets, i think there's this almost quasi public, late stage private market that's developed in the last decade, which is, you know, which can write large checks is fairly permanent in the form of. crossover and evergreen funds and provides liquidity to your point. so, you know, there's a lot of secondary sales or employees, founders and even early stage investors are getting exits through these sort of late stage capital rounds. and i think that's kind of spilling over into what you see in public markets. what used to take 6 to 8 years for a venture funded company to go public, i think google went public in six years, is now up to 12, 13, 15 years in some cases, and the bar is much higher. it used to be 100 to 200 million in revenue. now it's above, i'd say half a billion or thereabouts.

>> and as a result, the companies that we have seen come to market tend to be so much bigger. they've already grown so tremendously by the time they come. what are the sort of implications of that? >> look. >> the implications of that are a what i said private markets grow a lot because there has to be some funding that powers that that scale. so that's one. second, i think ironically the access to innovation for the for a retail investor has gone down because, you know, most of this innovation is still private. if you look at the large language models, 6 or 8 of them, however you count them, majority of them are still private despite making billions in revenue. so i think the implications are quite far reaching. >> is it going to change anytime soon? you know, i just read that that that line there that around private equity and the assets under management declining actually for the first time in ages. and i wonder to what extent that's because they are just stuffed already. they they are not exiting the way many had anticipated they would. so is that are they under pressure to

try to come to market with some of these companies? >> yeah. short answer. yes. there's about 1400 unicorns globally, tech companies valued over a billion at the peak of the cycle. there was about 50 that went public a year peak of the cycle. so that if you do the math, is about a 20 to 30 year backlog. so all of those companies will not go public. so you have to find other ways of exiting. and i think m&a is probably one big one. it's been 70% of exits traditionally. what's lacking is the ipos are traditionally the bigger forms of exit. so 60% of value actually still comes from ipos. and to your point that's missing. there's this logjam of ipos. >> what's your expectation for m&a for 2025. i mean what is going to catalyze that exit route. >> yeah. so i would say some of it is macro. there has been a regime change in in the us, which seems a little bit more favorable to m&a and generally the corporate sector. i do think it will start with smaller m&a. so my prediction would likely be more frequent, smaller m&a, which isn't bad. it kind of

greases the wheels of the private markets. and from there on, as you know, we're living through a time of uncertainty. so depending on how macro goes i think that could be a conduit to better public markets. >> so in terms of those big transformational deals, essentially we're seeing companies hold back because of the uncertainty. from a macro perspective. >> it seems like that. yeah i mean you've seen last week there's been so much turmoil. right, right. from from tariffs to doge and ultimately showing up in the public. >> in the last 12 hours. >> in the last 12 hours. exactly. right. so, so and that uncertainty i think tends to spook bankers and certainly founders and private equity investors. so yes. yes is the answer. yeah. >> we're sitting here in london. and you know, i think london would like to be seen as a center for innovation. and they would like to be seen as a destination for companies looking to come to market. but we really haven't seen it in a big way. what is your kind of outlook for the uk and what's holding it back? >> yeah, look. >> it's tough to call in many ways an index or an exchange rather is the ultimate network effects business. you need great

companies, you need deep capital and you need great coverage from the sell side. and if you don't have that flywheel turning, it's very hard to sort of get that cold start going. and in many ways uk is kind of lost that to the us in the last few years. so hard to say. what will be the catalyst. it could be government reform, things like stamp duties that the uk could change. it could be a, you know, a massive company just taking the leap like a cheyenne or whoever else is coming to the uk. so but it has to be something major like that that i think kind of catalyzes that flywheel. >> it does feel like when it comes to ipos, it's as much about mood and kind of vibe as it is about the numbers themselves. and take seeing one successful ipo, and maybe it's going to be seen to actually catalyze more companies coming to market. would you say that's sort of accurate characterization? >> look, i mean, i think all markets, public or private, are driven by sentiment. i mean, we all know this. warren buffett's spoken about it for decades and right now is no different. but the question is what kind of catalyzes that mood to your point? so yes, i think so. but

but it's very tough to call when and what does that. >> and just one last one given we're all focusing on the news out of germany last night, do you think that this massive spending that we're seeing from germany and this, you know, the appetite for reform is going to impact private markets as well as public? >> i think so, i mean, if you go back to first principles, gdp is cgi, right? and the g in that is government spending. so government spending is a big catalyst for gdp growth, private or public. and in the us you've seen markets decline because doge is ultimately austerity at some level right where they're cutting government spending. and therefore people expect gdp to decline or growth to decline. and in in europe, you've seen this massive announcement which hopefully catalyzes growth. >> all right. we'll look forward to more conversations in the future. partner at northstone back to public markets trainer maker adidas is trading on the back foot after the shoe maker said it expects sales growth to slow in 2025. the company guided for a high single digit increase

in revenue this year, down from 12% growth last year. but with double digit growth still expected in the key north american and chinese markets. adidas also confirmed it has sold its last pair of yeezy sneakers, ending a two year process of cutting ties with controversial rapper ye. coming up on the program, a new report by knight frank suggests real estate investments rose last year, but high end luxury purchases declined. we'll purchases declined. we'll discuss the findings next. (auctioneer) let's start the bidding at 5 million dollars. thank you, sir. (man) these people of privilege... hoarding the financial advantages for far too long. (auctioneer) 7.5 at the back. (man) look at them — unaware that robinhood gold members now enjoy the vip treatment — a 3% ira match on retirement contributions. (auctioneer) 11 million sir. (man) once they discover their privileges are no longer exclusive... their fragile reality

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on the apple app store, android and. >> com how do you see wealth, money in the bank? precious commodities? find financial clarity with cnbc's trusted resources. keep your future in focus. cnbc live ambitiously. >> welcome back to street signs. the number of global high net worth individuals rose by 4.4% last year, mostly led by the us. that's according to a new report by knight frank. the research

also points to an increase in global commercial real estate investment. while karen has been digging into this report and joins me now. karen. good morning. good morning. so tell us, where are these high net worth individuals been investing their money? yeah. >> it's an interesting question. >> so we've seen this real rise in terms of the. wealthy population, those with investable assets of 10 million or above. this led by the us, but also asia and africa, europe actually being the laggard in this sector. >> with the wealth. >> increasing just 1.7%. over the last year. and knight frank suggesting here that the suggestion is that the global economy is motoring. forward and. wealth creation is booming ahead. >> despite some of. >> these headwinds that we're seeing. >> now. >> this also translating into the commercial real estate. >> sector, which. rose 8.8% over 2024. >> this after. >> two. >> years of contraction, and this largely in the industrial sectors as well as residential and offices. >> and again, prime real. >> estate is also seeing modest

gains led by the middle east and parts of asia as well. and this idea that, you know, despite. >> the downturn. >> in these sectors, there. >> is this idea that. >> people are looking for opportunities there. particularly where there has been a little bit of. >> depression in the. >> market and people with cash portfolios looking to make some investments there. what about the alternative investment market? things like collectibles. we've spoken before about things like wine watches. how do those stack up from an investment perspective actually? so that was a sector that saw real declines in 2020 for the sector, contracting 3.3%, and this led by declines for some of those real outliers or, sorry, those ones that were driving ahead during the pandemic. so the likes of whiskey and art and. >> wine. >> but sectors like handbags. and furniture actually seeing a little bit of growth. but the impression is that as investors have been moving away from these sectors after the pandemic. >> they've been moving.

>> into the. >> markets and real. >> estate as other areas that, you know, it would make sense given the returns that you've been able to get in the market in different parts of the market. as interest rates have also risen since the pandemic, that, you know, the alternatives are just better now. there's no more tina, when it comes to the collectibles market. karen, really interesting report. great to get the insight. karen gilchrist from our very own team, president trump, he was firmly in focus yesterday while many of us were sleeping. he used his first address to a joint session of congress since his return to the white house to double down on his economic policies, saying tariffs would, quote, make america rich again. let's get out to nbc's alice barr, who joins us now from washington. alice, you gave us a breakdown of what we could expect or what we might expect from president trump. now that we've heard from him. what were the key moments in the address? >> good morning. julianna. yeah. president trump took some. swipes at former president biden. >> at. congressional democrats. >> who held up signs. >> throughout the speech. some

walked. >> out in protest. >> he leaned. >> into culture. >> war issues, and he. >> declared that with his far reaching. >> agenda. >> he said, america is back. >> as you noted, one. >> of the things that he. touted most was his. >> policy on tariffs. >> defending these new tariffs. >> levied against. >> canada, mexico. >> and china. >> he said. >> they're going to make america great again, make america rich again. >> and that comes despite stock. >> market drops. >> amid concerns about a trade. >> war further hiking prices. >> he did. >> acknowledge that. >> there. >> would be. >> a, quote, little disturbance. but he said. >> we're okay. >> with that. >> it won't be much. >> in terms of seeing prices go. >> up. >> at least in the short term. >> he praised elon musk and the department of. >> government efficiency for slashing. >> the size. >> of. >> government. >> even as democratic. lawmakers had invited fired federal. >> workers as their. guests for the speech. the democratic. >> response came from. >> michigan senator. >> elissa slotkin, who. cast cuts. >> to government services. >> as a means to. deliver tax. >> breaks to the wealthy. >> and she pointed out that grocery. >> and.

>> home prices are. >> going up, something that president trump certainly. >> ran on addressing. >> she said he has not laid out a credible plan to do. >> that. >> at this point. there was one texas. >> democrat, al green. >> who was escorted out after vocally. >> objecting to president trump. >> calling his. >> election victory. a mandate. we also heard. the president speak about immigration. >> and that. >> was one spot. >> where he took a. >> swipe at. >> democrats. >> saying that while democrats. >> had wanted legislation. to secure the border. >> he said, it. >> turned out all we really needed was a new president. >> though we. >> did ask congress for more funding for mass deportations. >> and border. >> security, and. >> looking beyond. >> u.s. borders. to russia's. >> war. >> on ukraine. he said that ukrainian president. >> zelensky had. >> reached out following their oval office clash that led to a freeze on military aid to ukraine, said he was working tirelessly to work out. >> and to stop that. >> savage conflict. >> as he called. >> it in ukraine. >> so a wide ranging. >> speech covering a. >> lot. >> of domestic. >> and. >> some. >> foreign policy issues. >> alice, thank you so much for

the breakdown of those key moments. fascinating to hear president trump say america is back. at the same time, one of our guests today said germany is back after the news out of friedrich moritz last night. alice, appreciate your your contribution from dc. turning to european markets, germany is back is certainly the theme dominating the market today. the xetra dax up nearly 4% now. we did get a big pullback in germany yesterday. it dropped about 3.5%. the dax driven by losses in the auto sector as investors priced in the impact of those tariffs on mexico and canada from the united states. so we are seeing a rebound after the selling yesterday. but clearly the signal is positive. investors getting very bullish on europe. this make europe great again is a slogan that is passing through the street this morning. and within the german market. it's not just specifically infrastructure and defense names. we're seeing a widespread rally in german stocks. there are some of the construction names for you. bilfinger up now 20%. it's on

track for its best day since 2008. you've got thyssenkrupp up 14%, heidelberg up 13%. we had a lot of anticipation of this increase in spending. and yet the we are still seeing this massive reaction in markets, the pace, the speed with which the new government has come to the market has certainly impressed many. and investors are taking it as a signal that friedrich moritz is ready to put germany back on the map when it comes to defense, and perhaps when it comes to the european union more broadly. as for us markets, after the volatility yesterday and the down the ultimate downswing that we saw, right now, we're looking at a more than 300 point gain in the dow. do stay tuned. our us colleagues will take you through the market open. but that's it for street signs. worldwide exchange is coming up next. >> price drop alert. stay tuned to get this gotham steel cookware set at our lowest price. plus, get $100 in free cookware. this extra deep square

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with exclusive access to market moving interviews and stock picks. all new investing tools securely linked to your brokerage accounts. plus, cnbc global market news and analysis tailored to your holdings. become a smarter investor with the power of cnbc pro. go to cnbc.com now. >> two days. a 1300 point drop on the dow. the market's also losing all their gains. when we're talking about the s&p since the election in washington. mixed messages as president trump doubles down on his tariff agenda. while a cabinet member hints at a possible trade deal in the next 24 hours. and china goes it alone in the face of a trade war, giving a bullish outlook despite those u.s. tariffs. stock futures pointing to a higher open on this wednesday, march the 5th, 2025. and you're watching worldwide exchange right here on cnbc.