goes on to win the championship 69% of the time. that means it's looking good for that man there in the middle. cooper webb with the biggest smile after being annoyed earlier in the day with those falls. he's come back to be the man here in indianapolis. >> welcome to squawk box. it's 8 a.m. here in london 9 a.m. ct. and stock markets across europe are opening up for trade. last week we saw some gains across. on the european markets. the benchmark was a little bit weaker as we rounded out the trading week. but dax stocks german names up to the tune of more than 2% in a week, where europe us peers actually shed 2 to 3.5%. so there was some european exceptionalism in the trade last week, thanks to big fiscal spending package from the germans around defense and

infrastructure. that certainly moved the needle on german stocks last week and helped put a prop underneath europe as well. so as we get going this morning, you can see there is more appetite. big money certainly moved across to european assets last week at the expense of some of the big us names. so you can see this morning we bounced another 4/10 of a percent. let's take a look at the various different sectors supporting some of the gains this morning to see how we are positioned and just how defensive versus cyclical this gain is. it's travel, leisure, pure cyclical trade that is up 1.3%. very strong bounce there this morning. oil and gas is stronger 7/10 of resources chemicals media. it is a cyclical trade that we're watching this morning as all of these names bounce. take a look at the sector losers areas left behind at the start of this trading session this morning. just one patch of red around telecoms. it was a very large week around mobile world congress last week. so perhaps a little bit of fatigue setting into that space. but elsewhere we are stronger across the board from food and beverage to healthcare names. the european

bourses this morning. this is how they've opened up. the ftse is ahead 2/10 of a percent, just shy of 8700 points. stocks out of germany. we're waiting. >> for a trade there. >> on the back of that 2% pop over the course of the week. stocks out of france ahead by more than 6/10. almost 7/10 on stocks out of italy. so it is a decent start we're seeing on the continent this morning. let's take a look at the smaller boards. and what we're seeing are dispersed across the rest of the european markets the smi we're not seeing a trade there. the ibex out of spain up a 10th, the asx ahead by about a quarter of 1%. and the portuguese market also modestly firmer. so we're watching patches of green and you can see the smi just joining the party in firmly firmer territory. >> sylvia let's. >> look at some. >> stock specific. >> moves. starting. with the gainers. >> at the stage. >> a little bit of a lacking. >> of a concrete narrative. >> at this. stage we. >> have bridgepoint. >> up 4.6%. leading the. >> gains. >> at this stage.

>> i would highlight, however, that we do have. >> some defense names posting. >> concrete gains. >> at this stage. >> rheinmetall up. >> 3%. telus in france up. >> 3% as well. so we. >> continue to. >> see a lot. >> of. >> interest in. >> some of those european defense. >> names as. >> we see the continent spending. >> more on. >> defense. >> no doubt. >> but of course, the outlook here is very bullish for some of these names. >> let's take a look at the. >> other side of this equation and. >> take. >> a. >> look at. which companies are. >> the worst performing movers at. >> this stage. >> we have. >> alstom at the bottom there down. >> 2%. continuing some of that pressure. >> that we had already witnessed last. >> week. >> but is. >> crafted here. >> in the uk, that it. is leading the losses. >> down almost. 3% at this stage. in terms of some of the data that. >> we have. >> been getting so far today, let me get you up to speed on that. chinese consumer prices fell. more than. expected in the month of february. the consumer price index fell 0.7%. >> year on year. >> that was the first. >> decline in.

>> more than a year. >> core cpi also sank for the first. time since january 2021. meanwhile, producer prices extended their declines down for. the 29th straight month. >> so let's. >> get a check. >> on luxury names. >> we have. >> seen a significant. >> amounts of pressure on. >> friday for this. >> part of. >> the market. let's get a check on what's happening today. however. less pressure. >> as we're starting this. >> new trading week. lvmh is marginally higher. >> kering is. >> up more than 1%. >> hermes also tracking higher. we're also. seeing a little bit of pressure for richemont at. >> this stage. >> in terms of. >> other. >> developments. >> the us commerce. >> secretary, howard. >> lutnick, says. >> steel and aluminum tariffs will take effect on. wednesday as planned. >> administration officials. >> say the policy. >> aims to stop countries including china. >> and russia. >> avoiding existing levies. >> us steel. makers urge trump. >> not to. >> delay the measures. after the president's decision to. exempt a significant number of goods.

>> from tariffs. >> against canada and. >> mexico in. >> the past week. speaking to. >> nbc's meet the press, lutnick said he is. confident that president trump's tariff policies will support americans. >> donald trump is going to try to balance. >> the. >> budget in the united states of america. and when you balance the budget in the united states of america, you drive interest rates down. 150 basis points, 1.5%. you're going to have. >> mortgages come. >> smashing down. the cost of your home will come smashing down. >> we're going. >> to. >> drill. >> baby, drill and drive down the price of energy that's coming down. >> so these two. >> massive moves are going to happen. and you know who's going to pay for that tariffs. and outside countries who just leech off of us, lean on us, earn money off of us. they've got to start to pay. i want president trump wants the american people to start to understand the external revenue service should start to pay. >> yes. >> some products that are made foreign might be more expensive,

but american products. will get cheaper. and that's the point. by american made by great americans. >> i highlighted earlier how at least two european defense stock names were among the top gainers. but i. >> want to. >> show you the whole sector because look at this. we have green across all of these companies at this stage. i would highlight how leonardo shares are up 2%, similar moves for mattel and thales. so this really highlights that the investment community is still very much bullish on defense names. they have had an incredible run, but that karen seems to continue to be the case. amid more comments from european governments on how they intend to spend more on defense. and that clearly is having an impact also for the outlook for these companies. >> and let's get to gary. >> evans, chief global asset allocation strategist, bca research. and we were going to ask you about markets. but let's start with canada because you just come over from montreal. and of course we're talking about mark carney here, how he may be able to have some

negotiating power with trump. that is the broad hope. how are. >> you perceiving. >> the politics. >> at home. >> yeah. >> it's been very interesting because. two months. ago the. >> conservatives in canada were. >> 20% ahead in the polls. it was almost certain that. pierre poilievre, the head of the conservatives, would be. >> the. >> next prime minister. >> and trump. >> has changed everything. there's this sudden patriotic feeling in canada where i live. so carney. is obviously not a politician. >> you know, he's. >> a technocrat. it'd be interesting. >> to see. how he gets on. i mean, trump. >> really hated trudeau. >> that was pretty obvious. the relationship. >> between carney. >> and trump. >> will be very. >> important for canada going forward. >> the interesting. >> part. for me. >> is a broader conversation, too, on markets and where tariffs go, because the narrative has been that trump has all of the chips. but the reality is we've seen reactions in canada now. we've seen the europeans the other week also step up their own programs. doesn't feel as though trump does actually hold all the power at this stage. do you agree with that? and what does that mean for the ramification of

inflation stateside and how tariffs land on the us economy? >> i think there's. >> a strong argument that the. >> us would be very. >> badly hurt. by tariffs, too. i think the imf did some work. >> suggesting that the. >> impact obviously, we don't know exactly what the. >> tariffs are going to be, but could. >> be to reduce. >> us gdp by as much as 1%. >> but obviously for other countries it's important to. in canada. >> 80% of canada's exports go to the us. so if. >> there is 25%. >> if there were 25% tariffs on all of canadian exports, that's clearly. >> very. >> negative for the canadian. >> economy, too. >> i mean, from an economist point of view, tariffs are. >> not a good. >> thing for global growth. and they're also a risk for inflation. >> i mean, higher. >> inflation and lower. >> growth doesn't. >> sound like a great economic environment. >> let's broaden out the conversation to other parts of the world. i saw in a recent note how you were saying by the museum, by european companies, tell us how you're why you think that's the case despite these conversations around trade conflicts. >> yeah. >> so it's partly a. >> valuation story. >> i mean, the problem in the us is. >> not just the economic

uncertainty, but. >> that the. >> stock market. >> is on. >> a forward. >> p e of. >> 23 times. europe has obviously picked up a little. >> bit. >> but still only on 14 times. so that's. >> sort. of the way. >> markets work. >> it's not. >> whether the environment is good or bad, it's what it is compared to what was expected. >> and i think there also are. >> some. arguments that europe has structurally. >> improved as well. >> the banking system. is crucial in europe. and if you look at the return on equity of us banks and european banks, they're about the same. >> but the us. banks are on a price to. >> book ratio. >> of 2.5. >> and europe. >> is on about one. >> so europe's a real bargain. >> compared to the us. >> and there are some risks. >> europe is more cyclical. if there is a global recession, europe. >> will. >> be hurt by that. >> but i think we're probably getting to the end of the era of. >> us exceptionalism. >> where for. >> 30 years us stocks. >> have just done nothing. >> but outperform. >> as an. >> investor. >> you need, i think, to be. >> much more diversified. >> now, and europe should. >> be a big part. >> of that diversification. >> beyond banks, what other sectors would you highlight as key opportunities in the european market at.

>> this stage? >> well. >> defense is something we've. >> liked for a long while. that's obviously. already gone up a lot, but that has to be with the increase of defense spending in europe, something you'd want to look at. europe's classical strengths. >> are in. >> things like capital goods. >> you know, and that's. >> an area. >> i think. >> capex at some point. >> structurally should improve. luxury goods is. >> obviously. >> a european strength as well. >> but also there's some little. >> pockets of technology. if you look at tech plus, luxury goods is now quite a bigger proportion of. >> the european. >> market than it. >> was. >> say, ten years ago. so it's a. >> bit. >> less dependent on the sort of old economy. sort of cyclical sectors than than it was in the past. >> let me. >> ask you about the us trade, though, because every time we get a pullback in the states, it's just another reentry point for investors. and let's face it, a lot of people have missed out on the eye trade. they're not positioned around as much as they would like to be. nasdaq is pretty much in correction territory between friends, where 9.94% remdesivir added up to 10%, the s&p 500 has come off 6%. i know the money has come over this way, but if you follow

the money, are you going to be behind the trade? is it better to think about being ahead of the trade and looking at the entry points again in the united states? >> i think. >> it depends. >> on your time horizon. i mean, europe. >> has run up a lot, and if you look at the euro, it's. >> gone. >> from 101.03 to 1.08. so, you know. >> that could quieten. >> down a bit in the short term. >> a lot of it really. >> does come down to what you think about ai stocks. >> so i'm a massive supporter. >> of ai. you know bca research. we're using it in. >> our research all the. >> time now to make our reports easier to digest. et cetera. et cetera. but when you look at it, those stocks are very highly valued. >> i mean, i was taught in. >> basic economics that if you make a supernormal profit, people come in and compete that away. nvidia is making a supernormal profit. its margins are above 50%. that is just not sustainable. and the valuations, therefore, that the magnificent seven has. and still have to a degree to me a not valid. so the. analogy i would give, it's a bit like railroads in the 19th century. >> there are more. >> than. >> seven stocks. >> on the nasdaq.

>> oh sure. >> so would a play like that where you look for some breadth and technology names make sense. >> so i mean. >> selectively that's true. but if. >> you look at, for example, last year. half. >> of the rise in the s&p 500 was just those seven stocks. so they have dominated everything. yeah. if you've got a company that is now creating ai chips that are competitive with nvidia, that certainly would be worth buying. but finding those is obviously very difficult. and still it's those seven stocks. >> and look. >> at. what's happened to nvidia since it's announced its results. they were very good. they weren't just quite as blowing the roof off as they have been in the past. and that stock's down quite significantly on the back of that. >> you're basically highlighting that we've come to some extent to an end of us exceptionalism narrative. and you've also highlighted how european valuations are still attractive. but i'm wondering about whether there's a limit to this expansion of. european stocks and therefore what other alternatives are out there. what other parts of the market are you looking at? >> yeah, so certainly. >> if we have. >> a global recession, europe is

cyclical. the key question is how defensive would us stocks be in a recession? they typically are. but maybe not this time. so where else could you look i think that china actually in the short term is still a. >> very cheap. >> market pe of about ten. the chinese government hasn't done much stimulus yet. if we do have a trade war, the chinese economy suffers. they have got plenty of dry powder. fundamentally, i don't really like china. it's an economy where the government controls everything, including private sector companies. but for this year it could end up in a recession being quite resilient. and then you have japan, where basically the play there is the yen. the yen is dramatically undervalued. the purchasing power parity ppe fair value for the yen against the dollar is 91. so it's like 60% undervalued. now you could buy japanese stocks which are in yen and you benefit from that. but of course if the yen were to rise, that would hurt the earnings of japanese companies as well. so i would be buying the yen. and that has some significant if the yen really does continue to rise because

japanese flows are so important, that would have big consequences for the rest of the world as well. >> just revisit the idea of a recession, because i think we dismissed it after the first hour of the show. we got past it after speaking to economists saying, look, the figures we got from the gdp now from the atlanta fed, from the federal reserve of atlanta were effectively distorted because you had the front loading which drove up imports, which took away from gdp. so if we do see some contraction, it does sound like a distorted figure that we're going to get. so we were sort of parking the recession idea. are you still saying a recession is a genuine prospect for the united states this year? >> i would say that the probability is higher than the market is pricing in at the moment. so that atlanta gdp fed, they actually put out a blog or a tweet last week saying there was a distortion from gold imports. so there were some technical things going on. but if you look below the surface, so that distorted the net export number there. but private consumer expenditure for q1 is up only 0.4. so consumption is clearly starting to weaken. if you look at things like layoffs

because of doge in the government sector, if you look at consumer confidence, if you look at business confidence, you know, our capex forward indicator, all those things are showing some signs of weakness. so, you know, ultimately uncertainty is a big problem. you know, when tariffs are on one day off the next day, you know, if you imagine if you're a us car parts importer and you don't know what parts are going to what the tariff is going to be, you know, you're holding back on your decision. you're probably going to hold back on your capex decision. so i don't think it's inevitable we're going to get a recession this year, but the probability is probably over 50% now, i would say. >> so. tell us what your thoughts are. >> on credit. >> is that perhaps, you know, an alternative if we do get that recession in the united states. >> no, partly because of valuations. so if you look both at investment grade and high yield, debt spreads in the us are close to record low levels. so you're just not being rewarded for that. i mean, the investment grade universe, you're talking about 80 something basis points over

treasuries in a recession. that spread will go up to 200 basis points. and we still have quite high interest rates. i mean, what we've forgotten is that the fed's cut rates by 100 basis points, ten year bond yields have come down a bit but they're still high. and actually if you're worrying about europe that's something you would worry about as well. i mean this unprecedented rise in german bond yields last week, they haven't risen by that much in a week since 1990. that's starting to tighten financial conditions for europe as well. but i think this is not a world. you know, if the valuations were cheaper in credit i would buy them. but they're very unattractive at the moment. >> you did look like a pendulum shift didn't it, on bunds last week. gary, thank you so much for joining us. we do appreciate the time. gary evans with us, chief global asset allocation strategist, bca research, porsche's holding company, porsche se, expects to report a 2024 full year loss of around ■k720 billion after tax owing to previously disclosed impairments on its holding in volkswagen. the holding company is due to

release its full year results on the 26th of march, with both automakers set to announce their own numbers this week. and on the deal front, bain and wpp are reportedly set to ditch plans to list market research firm kantar in favor of breaking it up for sale. that's according to the financial times, which cites a person close to the process as saying a sale would be a quicker way to raise money rather than waiting for a favorable ipo. market conditions isn't the ftse trading higher? i mean, what sort of market conditions are they waiting for now? all this after one of the year's largest european debuts, hb group, tanked on its first day, dropping as much as 11%. >> and coming up on the show, we'll be looking at germany, where two largest parties put the country's ailing economy front and center as they begin talks to form a new governing coalition. we'll have the details after this break.

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into your xfinity voice remote. store, android and m taylor. >> com 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 upbeat. note for europe's largest economy, industrial output topped expectations in the first month of the year. this, of course, as we continue to monitor what's happening on the political front. the leaders of germany's christian democrats and social

democrats will formally begin coalition talks after the parties agreed on a range of common policies over the weekend. on the menu for the economy, lower energy prices and tax relief, providing a boost for several key industries. at a weekend press conference, the party leaders outlined the agreements reached so far and stressed the importance of alignment on the key issues facing germany. >> an industry standard. >> we want to remain an industrial location. for example, we will reduce energy costs. a first step will be to reduce them by around $0.05 per kilowatt hour. we will create sensible investment incentives. we will have to discuss the details in the coalition talks. and we will start with a corporate tax reform. wir nach der bundestag. >> if. >> shortly after the bundestag elections. the cdu, csu and spd managed to agree on such fundamental, important issues of german national. european and international politics. if we manage to build bridges together, despite very different.

>> principles. points of. >> view. >> opinions and also different. >> characters. >> then this can also succeed elsewhere in. >> the country. >> and then at the is joining us with more and just walk us through the next steps. what happens after this weekend's talks? >> well, on. >> thursday there. >> will be the official launch. >> of coalition talks. and of course, in the meantime. >> there's a lot of political horse trading taking place. >> in berlin. >> because clearly, to change the. >> constitution. >> which would be needed. >> for the. >> debt brake change. >> a two. >> thirds majority. >> is needed. so we have. >> a first hearing. in parliament as well on. >> thursday on. >> that potential. >> reform of. >> the debt brake. >> and then. >> we. have a vote. >> on. it next tuesday. >> and then. >> finally. the upper house. >> the bundesrat, needs to consent to. >> it as well. >> so that's. >> when we. >> talk about the. >> massive fiscal spending plan. when it comes. >> to the. >> trajectory. >> of course. >> a lot depends on the greens and they want to have.

>> more room for investment. >> for the. >> communal level. and also. >> they. >> want to know that. >> the money will. >> won't be. >> used for consumption. >> only. >> and but for. >> investment. >> currently that paper on the table. >> lacks details. >> and. >> lacks also clarity. >> how they want to spend. and this needs to happen until. >> the greens. will be. >> on board and also other cdu members. so it's still not clear. >> whether they get. >> a two. >> thirds majority. >> there's a tail. >> risk, some. say 20%. >> that this. debt deal might actually. >> fall apart. >> when it comes. >> to coalition. >> building, all seems pretty smooth. >> the spd. >> and the. >> cdu seems. >> to be. >> able to compromise. >> each other. >> are, for. >> example, the. >> cdu gets the military spending. >> boost and lower. >> taxes. >> the spd gets higher minimum. >> wages and also. >> more. yeah, sort. >> of. >> support for low income.

that's the. >> timeline, as i said. >> next thursday. >> or this coming thursday is the first parliament. >> of the. potential debt break. >> or discussion. and then next tuesday will. >> be crucial to. see how. >> lawmakers are actually voting or not. >> right. anita, thank you for that. meanwhile, i want to take you to some other developments looking at the european economy. jp morgan is now expecting a boost to the euro area's economic growth this year as germany loosens its fiscal reforms. the lender sees growth of 0.8% this year and 1.2% next year. that's up 30 basis points. and back at the event i attended on friday, the bank of portugal's conference on transmission and the labor market policy on friday asked ecb governing council member mario centeno why he is worried about the european economy. >> when you look at the european. >> economy. >> we. >> see two. >> quite different realities.

you look at output and the output is really not picking up. >> you know why? >> this is. >> because, in my view, mostly because investment is. >> really lagging behind. monetary policy is intended precisely to slow down. the economy via demand. >> and in. >> the case of europe, this is showing. extremely clearly in. >> the. >> in the investment side. right. not not as much in consumption. this is the sixth time we revised down our forecast for gdp six times in a row, mainly because of investment. this time also because of exports. >> but that's. >> understandable given the deceleration of global growth

ahead of us. and that's the big question mark. >> and that's. >> why it worries me. if i had an answer, i. >> would. >> be less worried, believe me. >> and the latvian central bank governor, martins kazaks, also gave me his thoughts on the outlook for europe. >> the fiscal response to. this geopolitical shift, for instance, german. policy decision, politicians decision. to push for more defense and on. >> a european. >> level. >> the same, i think. of course, this is all very necessary. but we don't know how is this going to play out, how much of this is going to be fixed through structural things that will improve or increase the demand side and outcome. in terms of growth, or how much of this will spill over into price increases? so it's like a layer cake. there is no one shock that hits you. and then it works through the system and everybody. >> knows what's going on. >> you know, there is one shock

on the top of the other. and those supply and demand shocks may turn into different types of shocks. so uncertainty is still there. >> so i. >> had the central bank of brazil, latvia, portugal and the fed represented in that panel. and even though they're these three central banks are in completely different moments of their monetary policy, hiking, cutting and on hold. they all use the word uncertainty. they are highlighting how their jobs at this stage is much harder to do than in the past. on top of that, also very interesting how geopolitics ended up dominating the conversation, karen, because obviously at this stage with europe spending more on defense and so on, the conversation ended up going there just naturally really. and central banks are monitoring this very closely. despite the increase in government bond yields last week. kazakh governor kazakh was telling me that this is a positive shock. this is good that we're going in this direction. >> and this is a man who's been

a hawk for a while in europe. so did that make a difference, do you think, to his thinking about the potential for further ecb rate cuts, because europe is going to be spending more. >> but that's where i was going to go with the conversation. i was asking, is this a positive or a negative for monetary policy? because you cannot forget that it could actually boost economic growth. and that would then be a positive, right? but they don't know at this stage. they all say that the stage is too early to tell. and even though this is going to increase, you know, fiscal positioning of countries in the eurozone and of course, government markets showed a little bit of concern in terms of that. they don't see that as a concern for the time being. and mario santana suggested, you know, one way to actually keep the markets not concerned about the fact that governments are spending more on defense is doing this together, having perhaps considerations here around joint borrowing at this stage, that's not on the table of the finance ministers, but it's important to consider what considerations are there for monetary policy going forward. and lagarde said last week, you

know, the uncertainty is here and we don't know what we're going to do next. >> i was just somewhat amusing because there's not been a lot of forward guidance from the ecb anyway. so you add in, you plug in something that is seen as much further down the track. of course, we're not going to get any more forward guidance from the central bank as to where we're heading. they're going to wait for those macroeconomic forecasts to come out and then respond. so i think it's going to be up to the economists and markets trying to tell us where we're going in the medium term around the defense and infrastructure spending. >> but there are pressures there, right? and they all saying, you know, fiscal policy is an is a huge question mark for the for the central banks at this stage. but they say, you know, monetary policy cannot be the only responsible member in the equation. we also need the fiscal positions to be, you know, in then in a sustained way as well. so they continue with that message to governments across the bloc. i'm wondering what this is going to mean for monetary policy going forward. they did say it is a bit too early to assess that, but there will be implications here. >> yeah, let's park that there

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powering the engine of modern business. comcast business expectations. as negotiators from the us and ukraine prepare to meet in saudi arabia, and president trump repeats his calls for quick progress in talks. >> we want to do anything. >> we can. >> to get. >> ukraine to be serious. >> about getting something done. what you have to do is. >> you have to make a. deal and. >> you have. >> to stop. >> the killing.

>> it's a senseless war. and we're going to get it stopped. >> european steelmakers fall as us commerce secretary howard lutnick dashes hopes of softening of tariffs due wednesday, as president trump says he can't rule out a recession. >> there is a. >> period of. transition because what we're doing is very big. we're bringing wealth back to america. >> that's a big thing. >> mark carney wins the race to become canada's next prime minister in a landslide victory as tariff tensions escalate with its closest neighbor. >> he's attacking. >> canadian families, workers. >> and businesses. >> and we cannot let. >> him succeed. >> and we won't. >> and german coalition talks will formally begin after the cdu and spd agree on a series of initial policies, including cheaper energy prices and tax reforms, in a bid to boost the country's ailing economy. >> we will create sensible

investment incentives. we will have to discuss the details in the coalition talks, and we will start with a corporate tax reform. >> let's take a look at european stock markets and how we're traveling. about 30 minutes into the trading session, we've got green. after some modest downbeat action on some of the boards. the ftse still there down a third of a percent. the dax is firmer. i can tell you that stocks like ing rheinmetall, bayer vonovia driving the board forward. but the german stocks which were certainly the big gainer last week in europe, now outpaced by french stocks, up about a 10th of a percent. and you can see a very slim action on the italian stock market. so at this point, a bit of a mixed board. we're watching to the sectors. we did see a cyclical gains out of the gates this morning. and currently the big gainers it's real estate. that's where there's some momentum now up more than 8/10 of a percent. oil

and gas is stronger. chemicals travel leisure. that was the top gainer at the start. just slipping a little bit. still firmer though at this point in the trading session to some of the losers. we had just one patch of red as we started out and that is now growing. as you can see, banks are closing the gap with some of the us peers that lost steam last week. now down 9/10 of a percent. we're talking a lot about recession and whether this is truly a prospect for the united states. and that's not helping some areas of the market. technology trades down resources. also getting back some territory after a brighter start, sylvia. >> and this is a point we've raised earlier in the show. one of the perhaps most important market stories this week is the ongoing conflicts around trade. and the us commerce secretary, howard lutnick, says that steel and aluminum tariffs will take effect on wednesday as planned. the administration says that the policy aims to stop countries, including china and russia, avoiding existing levies. us steelmakers urged trump not to delay the measures after the

president's decision to exempt a significant number of goods from tariffs against canada and mexico in the past week. let's get a check on how european steel makers are moving. there's anticipation. anticipation here ahead of that wednesday deadline that could impact european steel makers too. we have arcelormittal down more than 1% and in germany, sells to twitter is also down. at this stage. president trump did not rule out a recession amid escalating trade tensions, telling fox news that his plan to boost the economy would take time. >> i hate to predict things like that. >> there is. >> a period. >> of transition. >> because what we're doing is. >> very big. >> we're bringing wealth back to america. that's a big thing. and there are always. >> periods of. it takes a little time. it takes. >> a little time. >> treasury secretary scott bessent also said he expects a period of transition as the

trump administration enacts its policies, but told cnbc he's confident interest rates will fall. >> we're trying to get rates. >> down and. >> you know, could we be. seeing that the this economy that we inherited starting to roll a bit? sure. >> and look, there's going to. >> be a natural. >> adjustment as. >> we move away. from public spending to. >> private spending. >> the market. >> and. >> the economy have just become hooked. if we become addicted to this government. spending and there's going to be a. >> detox period. >> speaking to cnbc this morning, holger schmieding, chief economist at berenberg, said he doesn't see the us falling into recession in the near term but warned trump will cause pain for the us beyond 2026 if he sticks to his policies. >> the us economy is resilient, i would say largely. >> despite donald trump. >> trump is an agent. >> of chaos and confusion. >> his zigzagging. >> on tariffs.

>> shows that he. >> has little. >> idea of the. >> potential consequences. >> of his tariff policies. >> but us. consumers have. money to spend. >> they probably will. >> the labor market. >> in the. >> us remains. >> reasonably firm. >> and with energy prices coming down a bit and probably some tax cuts. >> and deregulation. >> coming, i don't think there is an imminent. >> recession risk. >> but what is. becoming ever clearer in the. >> long run? >> trump is hurting us. >> trend growth. >> that is growth. >> in the years beyond 2026. and he stands. >> for higher prices. >> for us. >> consumers. >> which means. >> in my view. >> the fed. >> has no. >> reason to. cut rates with. >> trump as president and. >> trump sowing chaos. >> and confusion. >> and speaking of the economy, the chinese commerce ministry has announced tariffs against a number of canadian food and agricultural products in retaliation for ottawa's tariffs on chinese evs and metals as well. canada's trade minister described the levies as

unjustified. let's put all of that into context with our next guest, tan sri nazir razak, founding partner at ikhlas capital, is joining us this morning. great to have you on on the show. first and foremost, i'd just like to get your thoughts on all of these moving pieces. in the geopolitical front. we have china announcing retaliation measures against canada just highlighted that, but against the us as well. what do you make of this and what is the best positioning as a result? >> well. >> i speak on behalf of asean. >> we have. >> maintained strategic neutrality for. >> the longest time. >> and i think. >> we should we must persevere with that. we have. been actually a. >> beneficiary of the. >> us china distancing for. >> the. past few years. >> you've seen the level. of foreign direct investment in asean, and asean is an exciting place to be. we are 700 million people. we are. 3.8 trillion in terms of. our size and one of the fastest growing. >> i you. >> know, we. don't like what's going on, and we have to

strategically position. ourselves in the best possible way. >> frankly. >> asean hasn't. >> quite gotten onto. donald trump's. >> radar yet. so there's uncertainty, of course. >> but are you worried that that might change? >> of course. it's something to worry about. he's quite unpredictable. so asean must. >> take the. >> right strategies. it must be agile. >> i think it. >> needs to. reinforce asean centrality. we mustn't let checkbooks divide us. i think we need to strengthen our relationships. >> with other parts of the world. including the. >> middle east. >> and elsewhere. and i think this. >> year. >> under malaysia's chairmanship, we're looking to finalize our free trade agreements with canada. with europe. we're looking to host the first asean gcc china summit in kuala lumpur in may. so these are the right strategies in the face of this new emerging order. >> there are a couple of neutral countries in europe until recently as well that got dragged into the geopolitics. so neutrality may you you may want

it, but it isn't always achievable. and in your own backyard there's lots of stories about saber rattling from china that it's been growing, its military presence, it's been growing its naval presence. and it is aggravating neighbors. how possible is it to have neutrality in your own region when the geopolitics have changed the way the us is now dealing with russia, and some wonder whether this is just emboldening the chinese? >> i think. >> you know, we have maintained this neutrality through the cold war, through the unipolar area. so now we are in. >> this new. >> multipolar area is emerging, and we need to pick the right strategy. as far as i can see, neutrality has been the best and should remain the best. >> obviously it's. >> much more challenging. i agree with you. there's a lot of uncertainty, but you know, we need to be agile. >> the message from europe last week was that europe needs to build its resilience in a big way. that's defense, it's

infrastructure. it's still looking at a single market and just about everything. what does that mean for asean? because it feels as though europe is talking about building its own capabilities, not necessarily about doing more business externally. >> no, i think as i said, we are looking to have a free trade agreement with with europe. i think they will still be looking for partnership in exports, etc. i think. >> we also learn. >> from europe. we are also looking at strengthening the asean economy. as you know, we talk about. >> this single. >> market, but actually we're still relatively fragmented. so this year we're putting together a lot of strategies to bring our economies closer together. >> but so far is it the saudis that are winning? because all we keep hearing from europe is about doing more business with the middle east. so is the middle east winning at the expense of asia at this stage? >> well, i think the middle east has a lot of money. and as you know, we are very well connected with the middle east. so i think we have strong links and i think we will look to take advantage of that as well. >> i would like to get your

thoughts on a p specifically. tell us where the activity is, where perhaps could we see more dealmaking taking place? what parts of the market. >> in southeast asia? yeah, we think there's a lot of opportunity in cross-border deals. there's not enough intra asean investments. so we think that a pe firm like the one i run, which is based right across asean and has deep networks and connections in different markets, these are we are the best facilitators or intermediaries for deals. i think there will be deals in many sectors, including logistics, technology, finance and consumer. those are our four core sectors. >> can i pick up on the technology story? because there's been a ton of innovation out of the region, namely deep sea and what alibaba is up to with these reasoning models, large language models. how is the region forwarding this very cheap technology into the system and creating more opportunities around ai? >> well, i think we have to be realistic about the role asean can play in ai. i think clearly

china is much more advanced and so is the us. so we find our niches. i think data centers is probably the most obvious niche semiconductor, particularly in northern malaysia, is the other niche. so we pick our battles. >> and picking and putting my hand up to do some due diligence in northern malaysia to look at that, that chip build out. thank you so much for joining us. tan sri razak, founding partner at ikhlas capital. well, let's talk about some of the politics. and it's around the canadians over the weekend as mark carney will become canada's new prime minister after being elected leader of the ruling liberal party, the former governor of the bank of canada and bank of england beat three rivals, including former finance minister chrystia freeland, in a landslide win. carney is set to take office in coming days, and is expected to call a fresh election within weeks. carney will take charge with canada in the midst of a trade war with the us. in his victory speech, he described trump's tariffs as an attack on canada's people and

vowed to fight back. >> there's someone. >> who's trying. >> to weaken our economy. >> yeah. >> donald trump. >> donald trump. >> donald trump. >> and donald. >> trump. >> as we. >> know, has. put as the prime minister just. >> said, unjustified. >> tariffs on what. we build. >> on. >> what we sell. >> on how. >> we make. >> a living. >> he's attacking. >> canadian families, workers. >> and businesses. >> and we cannot let him succeed. >> and we won't. >> the canadian government has rightly. retaliated and is rightly. >> retaliating with. >> our own tariffs. >> that will. >> have maximum impact in the united states and minimum impact. >> here in canada. >> and my. >> government. >> will keep. >> our tariffs. >> on until. >> the. >> americans show. >> us respect. >> mark carney will become canada's leader against a backdrop of rising trade

tensions. nbc's jay gray joins us with more from ottawa. jay, thank you so much for joining us. this is a man that we know very well on the channel in his various other roles. tell us about how he's being received in canada and why he's really seen. i saw one description, the man of the moment. >> well received. >> and especially within. >> his party where. >> he won. >> the leadership. >> of the liberal party by. >> a vote. >> of 85.9%. >> from members. an overwhelming. >> endorsement of his candidacy. >> he will be sworn in. >> at. >> some point. >> during this week, we. >> believe, and then. >> we'll quickly. call for. >> an election. >> look. >> canadians have a. >> well-earned reputation. >> of. being kind of being composed, being reserved. >> but we're. >> also quickly. >> learning when. >> america's neighbors to the north. >> feel slighted. >> or feel. >> challenged. >> they are quick.

>> to stand up and push back. >> anxiety, frustration. >> even anger. >> brewing across canada right now. >> it's a very. uneasy feeling. >> with the tug of war over tariffs and president. >> trump suggesting the u.s. could absorb their country. >> as. >> a state. >> it's having a huge ripple effect across the country. >> i mean. >> we're in. >> limbo at the moment. >> it's awful. >> not knowing. >> which direction. >> we're going, which. >> a ripple. >> going into. >> a wave of canadian nationalism. protests outside. >> the u.s. embassy. >> booing the american anthem. >> and as the trade war. >> intensifies, buying things made. >> at home or. >> really anywhere. >> but america. >> mexico. >> government run stores, pulling american wine and. >> liquor from shelves. >> the common thread here.

>> a lot. >> of. >> people feel betrayed by our closest ally. >> emma cochrane wildly popular hoodie shirts and caps providing a direct response to the political rhetoric driving a wedge between the countries. >> and this felt like a way. >> that. >> we. >> could participate and just kind of say, we're. >> going to stand up for canada. >> while back at the. >> coffee shop, one. >> of the most requested. >> drinks. >> the americano has. >> a new name. >> and friend came in and said, you know, with everything going on, we. you should change it to canadian. >> so served. >> with a side of canadian resolve and pride. >> yeah. and look, the americano. >> was a. >> big seller at the. >> morning owl. >> but in the week. >> after the. >> name was changed. >> the canadian. >> it sold. >> more. >> than double the. >> amount of. >> drinks as. >> just the week before. >> and so, karen, many. >> are saying that. >> this obviously is another. >> example of. just the.

>> level of commitment canadians have to their country. >> it's a it's. >> quite a. >> difference to see. >> them actively. >> boycotting and. >> really just. >> pushing back on so many of the. >> suggestions from the. >> trump administration. >> jay, thank you so much. terrific coverage there. and of course, we've seen the sovereignty issue, nationalism around other consumption products. the chinese consumer used to be a big one. how they would boycott toyota, for instance, and some of those other goods. but now we're seeing this in a much wider lens. canada, as we talk about products as well. >> but it's resurfacing some sort of nationalist pride. all of these trade tariffs with the united states. and that's seen also here in europe. right. so there's a new momentum here. let's see what that all means for the economy going forward. >> is there a broader question. what product are you most proud of in your own country? what's what's the one product? i mean for australia it's always been vegemite. what about portugal? >> i would say our wine industry. >> oh of course. right. >> i mean that's what i would

go. the producers would agree. yeah. yeah i think that's the biggest one for sure. yeah. and of course it's a, it's an external export item as well. so from a portuguese perspective, definitely the wine industry. but that's also a problem when you think about france and other parts of the european market potentially being caught in these trade tensions with the united states. >> does the director want to weigh in on the on the british version? it's not. is it greg's. >> oh no. >> t o t of course, of course. i mean, that seems so obvious, didn't it? yeah. >> that one. >> was that sabrina carpenter over the weekend. and she was talking about how there are couples. of course it is. t i mean, that was her perception to that t was number one. >> it's always number one t. >> isn't it. coming up on the show, trump hosts crypto leaders as he pledges a bitcoin strategic reserve. we'll bring you the latest after the break and after you have a cuppa.

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on your screen, scan the qr code or go to crape. com and order right now. >> welcome back to the show. now, house republicans have released a stopgap bill to avoid a government shutdown on friday. the continuing resolution would extend overall funding at current levels through september, with a slight boost to defense and cuts to non-defense programs. president trump threw his support behind the bill, calling on republicans to remain united. one republican house member has expressed public opposition to the plan. this means that speaker johnson will need the support of all other gop members to overcome democratic opposition in the chamber. if the bill passes in the house, it will need the support of 60 senators requiring at least seven democratic votes. >> the white house hosted its

first ever crypto summit on friday, with donald trump's goal of establishing a strategic bitcoin reserve a key focus. a look, though, at how crypto stocks are faring today. and you can see coinbase that is down. we've got bitcoin farms losing steam microstrategy to under pressure. so there's been some disappointment really around the crypto trade. a quick look at tesla premarket as well. this is what we've got news in some of the early action suggesting fairly downbeat trade three odd percent down on the back of what has been a losing trade since inauguration. now, to me, what is fascinating is that you've seen now searches around doge eclipse the searches for tesla. it used to always be about googling tesla. so you've seen that is somewhat of a tipping point. and there is a reality that the market is now getting some of the news flow around musk catching up with tesla stock. to me, the other big one is around bitcoin. because you saw recently in the numbers, there was a $600 million mark to market effect around accounting.

changes around the bitcoin holdings at tesla had. so even though we had an earnings miss, the bitcoin numbers really bolstered the company's valuation still. but bitcoin is not catching a beat, even with some help from the trump administration. and one wonders whether elon musk has had a quiet word in trump's ear about bolstering the fortunes of bitcoin. it hasn't worked, and you can see now some 82,000. does that catch up with tesla stock again on the market action today? >> elon musk's company have actually benefited a lot of due to his links to donald trump. but i'm questioning here whether that's actually changing for good, because we have reports from italy suggesting they are reconsidering signing deals for starlink with elon musk exactly because of his comments around nato, and that the us should exit the defense alliance. so i wonder at what point that all of the sentiment, all of the bullishness around some of these talks because of his links to trump are now coming to. >> an end. and, of course, support of far right parties in europe and how people feel about

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