tv Street Signs CNBC September 7, 2021 4:00am-5:00am EDT
and she's going to live this way for the rest of her life. that's all for this edition of "dateline." i'm craig melvin. thank you for watching. good morning welcome to "street signs." i'm julianna tatelbaum with joumanna bercetche these are the headlines european markets comeback after the economic strength and the german industrial output rebounds and chinese exports soar the japanese conglomerate
agree not to sell before 2024. the ceo of the german automaker daimler is seeing strength across the product line despite challenges that the group hopes ease liater this year. >> we hope q3 is the quarter that is most significantly effected by this with the shutdowns due to covid in malaysia and other places. we hope that in the fourth quarter that we will start coming back up again. porsche is feeling the chip squeeze. the ceo says it is causing production line delays >> we have the situation with the semiconductors therefore, the waiting time is longer than normal it could be the customer waits half a year or more.
good morning welcome to "street signs." let's kick off the show with positive data overnight from china. exports came in ahead of forecast rising 25.6%s from august over a year ago that is well above expectations and above 19% from last month. a bit of a positive reactionin stock markets across the board you see we are seeing a rebound in chinese equity. chinese composite is up. the hang seng is heavily scrutinized the last couple weeks with the regulation drive also managing to climb higher today. up .8% interesting we are seeing strong
macro data from china given what we discussed with the rise in commodity prices and bottlenecks in the key terminals that the data as far as the export numbers are concerned have been positive julianna >> thank you we have strong numbers from germany adding to the mpositive macro picture. rising in july after three monthly drops. this is after a surge of industrial orders for july as well it would appear that some of the supply bottlenecks are easing in global supply chains, but early days european investors taking all this in stride stoxx 600 opening down 11 basis points this comes after a strong start to the week. yesterday, the stoxx 600 rallied about 0.7% closing just shy of the all-time closing high the gains were broad based
we saw the interest in tech stock. the shift to tech focused stocks continue we have seen it in u.s. and europe as well let's look at the regions. the european market is trading lower with the exception of the spanish market the cac 40 is flat on the day and the german index down 17 basis points modest pull back in the early hour of trade. let's see what the split looks like a mixed picture here no major moves in either direction. we have retail out performing .50%. retail, travel and less yisure. we have media reporting the losses with chemicals. joumanna, it has been a shift into more growth defensive parts of the market out of the
cyclical trades which had done well earlier in the year one thing to bear in mind, we are on the brink of getting insight into what is happening into u.s. labor markets. that is because this week the jobless benefits are due to rollover for 7.5 million americans. this is a big open question. what happens when those jobless benefits roll off? what happens to the labor market that is the question after the disappointing jobs report on friday >> this is not a surprise, julianna, but the take away from friday's labor report is that it simply was not strong enough for the fed to go ahead with a september announcement of tapering perhaps they could look to pave the way, but the announcement will not come in september they probably need a few more months of positive employment
numbers before the tapering route. from the timing perspective, this environment of what many started to call goldilocks will continue longer. you have the sectors hit by the pandemic recovering quickly which is why that recovered well in the first half of the year. now you are not looking at any of these enjoying the stimulus starting with the fed, we had the ecb this week. maybe at the end of the day, the ecb will be accommodatiaccommod. maybe the bank of england. what it comes down to, julianna, is the central banks and what they are saying and all of them are keeping the foot on the accelerator, on the gas accelerator. >> that is fair, joumanna, and
tying it to what corporates are doing. i think one of the key questions is also will companies be able to sustain the high margins we saw in the first half of the year if we see companies forced to pay up an increased wages, to what extent will that eat into corporate earnings a lot to think about from the corporate perspective, but a lot starts with the central banks and what they do from here on out. you will go through that with the ecb this week and the federal reserve later this month. >> you mentioned corporate activity we did get corporate news from europe let's bring that to our viewers attention. softbank and deutsche telekom will become a strategic partner in the german group. agreeing not to sell before 2024 it will acquire 45 million
shares in t-mobile with the intention of getting 20 million. it will sell the dutch unit to the private equity consortium in the deal of $5.1 billion the subsidiary was joined by lots of players in the deal. bottom line is that a major deal in the telecom space then there is the softbank angle. seeing them expand in the european players. >> thank you, joumanna i want to turn your attention to what is happening in doha. secretary of state antony blinken arrived in doha to seek the evacuation of americans in afghanistan. let's see what he has to say >> many thousands of u.s.
citizens and at-risk afghans who we successfully evacuated have left aboard charter flights. now, others are working to arrange more such flights. we're working around the clock with ngos, members of congress and advocacy groups providing any and all information and doing all to clear road blocks they identified to make sure that charter flights carrying americans to whom we have a special responsibility to depart afghanistan safely without personnel on the ground, we cannot confirm identifieds or security protocols this is a challenge, but one we are determined to work through we are working through diplomacy on this as we speak. we have been engaged with the taliban on this topic, including in recent hours. they said they will let people with travel documents freely de depart we will hold them to that.
so will dozens of other countries. the international community is watching to see if the taliban will live up to their commitments. there will be more work to do together our countries will coordinate as we have for the past several weeks to keep the relocation efforts moving forward as smoothly and swiftly as possible this is a complex operation. as complex as any in recent memory i have every confidence we will succeed because the partnership between qatar and the united states has never been stronger we will have a long range of issues and dialogue and cooperation like trade, investment, human rights, culture exchange and humanitarian aid we accept continued efforts to bring our partners in the region closer together. the strongest relationship we
have and we in qatar have built through the evacuation and relocation efforts, i know will pay dividends across these areas and other areas in the months and years ahead. what qatar has done here for americans and afghans and citizens of many other countries will be remembered for a long, long time. so, on behalf of the american people, thank you. >> thank you let me add i'm glad to be here >> that was the secretary of state of the u.s. antony blinken speaking in doha speaking about the evacuation efforts and the lengths they have gone to to get people out the country and the explosive situation with many people have views on how the evacuation process actually took place. over the weekend, we know steve
spoke to the italian minister for family and equal opportunities during the forum that women's freedoms must be preserved in afghanistan >> translator: draghi put out a message on women's empowerment undermining the g20 nations must address and take responsibility to ensure women's rights globally, especially in afghanistan in this moment we must preserve the women's freedoms and ability to participate in all social elements italy, the current president of the g20, is working on these issues at the moment >> we will cut to a quick break. when we come back, we will bring you more coverage from the motor show in munich we will speak to the ceo of skoda when we return we'll be right back.
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it is not just the cars that dominated discussions, but the chips as the semiconductor shortage hits the makers we have the ceo from skoda on what it means for the demand >> we have the best we ever had. even going in before covid really hit the whole situation, we were feeling that demand was creeping up. now it is for the whole portfolio. >> it is interesting because we were discussing who is actually going to buy a combustion engine if you don't know what to do with the car after ten years >> this is a transformation of the auto industry. it is not something where you push a button from one day to another everything changes it is a transformation where we intend to make the biggest leap in the decade and prepare for
full electrictrification >> i look at the share price and compare to the one at volkswagen it is telling that vw is up more than daimler is there still a misunderstanding of the market >> we had a tremendous run of stock since the covid down of the market last year which affected all industries. and we feel there is more potential to come. as you know, we're splitting into two companies at the end of the year both businesses, luxury, plus passenger car business, and global leading player in the commercial vehicle side have potential for market cap growth. >> let's talk about the demand situation especially in china. we have seen pmi in china being below 50 for the first time in
many, many months. are you feeling a cooling off of any demand in china? >> as far as mercedes-benz is concerned, not really. we had a quick rebound and strong growth of the market last year after china came out of the first covid lockdowns. kind of 75% of the year was incredible that continued in the first half of the year. the only thing affecting us is production and supply constraints. not demand in china at this point. >> supply is effecting the industry when you see this happen, is this in the next quarter or later? >> we hope q3 is the quarter that is most significantly affected by this with the shutdowns due to covid in malaysia and other places. we hope that in the fourth quarter that we will start coming back up again there is a level of uncertainty
we have to deal with in the production system that needs to stay flexible. >> europe promising margins stay high because you cut costs how can that be if electric vehicles have lower margins? >> it is our goal throughout the transformation that the robust business model we're enjoying today that we will have the same robust business model at the other side of transformation also fund this transformation with our own cash flows. we have to be our own venture capitalist we have to work on the efficiency side and investing at record levels at the same time let's get out to anetta now joined by another important guest. take it away >> thank you, joumanna i'm joined by thomas schafer,
the ceo of skoda we are just hearing from oleg that the demand is record high for daimler's product. how are things with skoda? >> we are very happy demand is incredible on the electric vehicles and on thehe i.c.e. sie very happy about that sdplchlt >> it is an interesting thing. >> the people. really, we see our customer base is traditional buyers. we have people which are functional we have good offer in the entry segments we see still an incredible demand in the combustion engine space. electric vehicle space is growing.
there is still a balance. >> how is the situation in emerging markets electrified product vehicles are more popular as more mature markets? >> not yet partly because of the subsidy and support structures these countries have not yet we see already in india, we see tremendous actions going into that space it is not that they are not doing anything it hasn't come through yet. >> one of the biggest markets is china. we see in china that the chinese electric manufacturers also displaying products. it is competition getting fiercer there? >> it is you see new products and new brands we have not heard from before competition is getting tougher globally >> how is the market situation for you for skoda in china i read it wasn't that easy in the past. >> at the moment, it is actually
overshadowed by the chip shortage that we have globally especially in china. we have had production stoppages for last couple weeks that we were unable to resupply. we also have our new product that we launched which is perfectly done for china let's hope the chip shortage will be over soon so we can push through again. >> let's look a little bit in the future clearly the crisis has mainly affected the middle class segment or lower income people or households which could be one of your clients. are you concerned there will be less demand going forward? >> we don't see that yet actually not visible i guess, you know, there is always a growing middle class. we can supply that very well i'm not worried about that to be honest. >> the volume market for electrified vehicles is the future
when we will see that really kicking off in terms of electrified vehicles on the road >> we all workday and night at the moment to get new products on the road. i think policy will push this over the edge quickly. the eu-7 regulations coming into play in the middle of the decade we will see the demand for electric vehicles jump for sure. it will help maybe getting away from subsidy or diesel and petrol cars. we have seen demannd now. >> will europe be the best performing market for electrified vehicles for the foreseeable future >> europe and china for us is very important that is our focus to ramp up electric vehicles for now. as i said, india has policy in
the making to support electric vehicles you can see the growth coming through with tremendous opportunities elsewhere. for now, the focus is europe and china for now. >> and the semiconductor is a problem for the industry what is your estimate? when will that be over >> at the moment, we are all fighting with the malaysia bubble coming through the supply chain. we have semiconductors specifically because of covid closure in factories in malaysia that is affecting the supply chain tremendously once this is done, hopefully in the next four or five weeks, after that, there is still a basic shortage that will probably last into 2022 until it's resolved. >> is it also with your electric vehicles that you need more chips than with the combustion engines?
>> yeah, and growing that is a jump also within that space, year by year, the amount of chips with the systems that the vehicles have and thing s are growing. >> you are seeing more demand for chips in the next years? >> all of the functions customers demand security systems on board. convenience systems that demand chips that are faster. more chips that will raise the demand automatically >> are you concerned about a dip when it comes to economic growth in the coming years when we were off all these support measures which the economy is still operating? >> remains to be seen. it is not unified across europe and the world. you have certain countries with subsi subsidy. others take it away again. we see a rising curve. >> thank you very much, thomas >> pleasure.
>> guys, with that, i'm sending it back to you no, i'll bring you more later. i almost forgot about that interview with lamborghini that is it for munich. >> how with you forget about that highlight to come. thank you for the interview you conducted. also all of the interviews you conducted in the last 24 hours illuminating the senior ceos of automakers and how they are thinking about the future and production headwinds we will cut to a quick break when we come back, we will talk cryptocurrency with bitcoin breaking through a fresh barrier as el salvador becomes the first country to accept the crypto asset as a legal currency. we'll be right back. expensive dental procedures can really put a hurting on your wallet, but paying for the dentist doesn't have
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easing back after the best day in six weeks despite signs of economic strength as german industrial output rebounds and chinese exports soar. softbank and deutche agree to a deal. daimler in demand. it is seeing strength across the product line despite the challenges >> we hope q3 seems to be the quarter that will be most significantly affected by this some of the shutdowns with covid as we saw in malaysia and other places and we hope in the fourth quarter we will start coming back up again. porsche feeling the chip squeeze. the ceo tells cnbc it is causing
production line delays. >> we have the situation of the semiconductors and therefore, the waiting time is longer than normal it depends on each segment it could be the customer waits half a year or a bit more. despite that encouraging data from china and germany, european markets are trading on the back foot this morning you see modest losses across the board here this comes after a very strong start to the week. the stoxx 600 yesterday gains about 0.7% closing just shy of its all-time closing high. yesterday, we saw particularly strong demand for tech stocks following the rally we saw in tech stocks in the u.s. last week of course, u.s. markets closed yesterday for labor day. we will look to wall street for how it will open up after that
non-farm payroll report from friday let's look at futures and how wall street is poised to open. no fireworks green across the board dow looking at 6 points and nasdaq and s&p 500 looking at modest gains as investors look to how the u.s. labor market responds to fact that 7.5 million americans are looking to lose pandemic era benefits this week another challenge for the labor market joumanna >> earlier in the show, julianna, we talked about the export data. i want to bring our viewers attention to the property market developments shares in china evergrande have closed 8% lower. extending the losses over the property developer's value wiped out this year alone. the company warned last week it was at risk of defaulting if it
fails to raise cash. restrictions against the use as collateral which saw the bond falling more than 20% year to date juxtaposition with the strong macro data and lending something to keep an eye on. let's talk cryptocurrency. bitcoin broke $52,000 on monday continuing the recent surge after dropping to under $30,000 less than two months ago from today, el salvador, will be the first country to accept bitcoin as legal currency alongside the u.s. dollar. el salvador now owns 400 bitcoin. let's bring in the first guest charles keating.
great to have you with us on the show, giles. let's talk about el salvador and the announcement with bitcoin as legal tender today is the day it will go into circulation. as an outsider watching this first real world example of bitcoin adopted as a legal currency, how long do you think it will take for us to determine whether this has been a success and what are the guidelines that you are looking to to determine the measure of success >> well, i think clearly over the next few months, people will be watching this closely i think you really need to get 12 months perhaps to get a really proper feeling for where it's going interestingly, quite a lot of people in el salvador are saying they are worried about this. they are not sure how it will
work on the other hand, more than 32% do agree with the change that really does sound like a critical mass of people ready to go for it. >> yeah, one of the big debates people have been having for the last couple years is whether or not bitcoin can be used as a valid medium of exchange given how volatile it is, number one and number two, the scaling issues the way it is adopted in el salvador, will this give further conviction if bitcoin is a medium of exchange or primarily the authorities are going to be focused on bitcoin as a means of expediting the remittance back into the country rather than people relying bitcoin to purchase every day items >> well, clearly the remittances are really important thing the president of el salvador stressed $400 million a year
spent by his people paying for remittance if you send -- say you work in the u.s. and you send $100 to a relative in el salvador and you might well pay $15 in exchange fees i think is outrageous. with bitcoin, that would drop to a lower level. i think domestically, a lot will depend on how they arrange it. for example, in a classic definition on the economist basis of legal tender, the government has said it will accept bitcoin for tax payments. that is always one of the classic ways that economists use to say is it a currency. now i'll be very interested and have not seen the details, but supposed government says to people, your payment in taxes which has to be made within the
next three weeks and say they fix that amount in bitcoin and then clearly as it were the volatility in that particular transaction would go away. i think you could see a number of other transactions where people do, as it were, get rid of the volatility by fixing the price measured in bitcoin, not inde indefi indefinitely, but a period of t other technology to leap frog other gains. we have seen this with mobile in africa do you think the governments in developing countries are looking at bitcoin and block chain more broadly through this lens? >> clearly they are. we are seeing a number of other emerging countries looking at
the el salvador experiment with a lot of interest. you have to remember in el salvador, up to now for the last two decades, all transactions have been in dollars it is not like western countries where western countries have control over their own currency. they set interest rates and so on appropriate to their economies. el salvador is not in that happy position, nor are many other countries, including a lot in africa where the dollar is the de d de facto unit. as with anything, as it gets to be used more widely, we may find that extreme volatility does come down somewhat i'm not saying it would
disappear, but ease a bit. >> giles, one of the hurdles to more widespread adoption of bitcoin is the uncertainty around regulation and what has been made clear is the s.e.c.'s g gary gensler is key to markets i wonder if increased regulation could spur more investment down the line given that many institutional and corporates are waiting to see how the regulatory picture plays out >> i think the regulatory picture in the u.s. and in europe and elsewhere is incredibly important i think what we heard out of the s.e.c. in recent months, in my view, very positive for the whole crypto space of course, there is a lot of confusion and in the u.s. with significant debate about which agency is responsible for which
aspects of crypto regulation i think gary gensler has taken the lead in trying to push the s.e.c. forward and bring people together on this janet yellen as well we know it with a lot of institutional investors. they are frustrated because of the mandates from clients. they may not be allowed to hold or trade in crypto that is very frustrating a better regulatory environment will help a lot. >> let's go one step further and talk about a very important topic in the regulation space. this is that of the stable coin which is going through investigation. it has been banned in canada from use on two exchanges. we know the whole world is
waiting for a transparent audit of the balance sheet wil let me ask you the link between the flows that go into tether and the price support that we see in bitcoin >> i think the relationship, not just between tether, but the other u.s. dollar stable coin, but relationship between them on the one hand and bitcoin and ethereum and the other major cryptos, i think it is very important and i think up to now, that is mainly been because investors who want to go into bitcoin or ethereum often use a stable coin like tether as a bridge into that i think there is another reason which in the longer term is potentially in my view more important which is we can look to a kind of ecosystem where the
stable coins, once properly regulated and transparent and many more legal ways like many market funds, i think they can absolutely coexist beside the cryptocurrency i think stable coins will be used for many day-to-day transactions i think the cryptocurrencies will be used like the fuel that drives the underlying block chain and drives the transactions clearly in ethereum with the structurewith gas payments which are a way of putting a price on the computing power needed to do any transaction. that can sit very comfortably alongside the stable coins >> giles, we'll leave it there thank you for joining us on the big day for the cryptocurrency community. giles keating.
if you want to hear more o on el salvador, check out cnbc.com german language app babbel will list on the stock exchange this year. it will raise 180 million euro which will go to new learning experiences and accessing new markets and settling claims. an interview on "squawk box," the ceo spoke about the business. >> we wouldn't be taking the company public if everyone was like that at same time what we do know and what i think is perfectly right is life does happen you break up with your partner and you move cities and change jobs your language learning motivation will change over time that is normal it might have an impact on our business what is really important for us is we actually get you to where
you want to go in your language learning journey the objective you set for yourself what is important to us is our customers, we have a rate of 56% retention rate on the subscription that ishigher than anyone in the industry our customers see we deliver the goods. >> interesting to hear from the babbel ceo coming up, we hear from ernest monez as we continue the countdown to cop26
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the cop26 summit this fall steve sat down with the italian minister for sustainable infrastructure and mobility and asked what a successful cop26 would look like. >> the countries go well beyond the national voluntary commitments. this is, i think, what is being negotiated in the weeks. because the g20 event in naples confirmed the direction. now the cop26 countries have to come and say this is what we are going to do individually more than what they promised in the past s past. >> i guess i'm asking the review has been successful and there are questions about that, but more going forward
does it change any of your plans and put nor pressure on to do certain things >> what will change is the agreement on the fit for 55 package which is the most ambitious plan in the world, i would say. therefore, if we go in the direction, i'm sure european union, europe in general, will pave the way for changes also in other countries. don't forget after the announcement by the european union of the carbonization by 201 2050, south korea and japan and china made the commitment. i hope it will not be only clear, but joined by other parts of the world >> and steve also spoke with
former u.s. energy secretary and asked about global progress toward achieving climate goals. >> i think the accomplishments in paris were, number one, first day was mission innovation established. that was important because it acknowledged the central role of technology to solve the problems even in the united states when the trump administration made a request to slash the budgets, they made an increase. that is on track in a certain sense. the second major accomplishment was that essentially all the countries of the world agreed that there were a shared responsibility in addressing climate. i think that's helped. i think the place where paris
and this is not a critique, really, but where it came short and it is recognized clearly today and came up short was on the ambition so, the major development, i would say, and it has been driven, frankly, by weird weather all over the globe, is that the net zero concept has come forward with so much of the world adopting that net zero ambition the question, i think, at cop26 is how will those upgraded ambition, how will that be framed and what will be done to convince people that there will be action plans to pursue. >> before we upgrade the national determined contributions, don't we have to look back at the failures? how successful have countries been in the round of achieving
the aspiration >> it is clear, first of all, they were not ambitious enough and secondly, those really countries are generally not on track. the united states, for example, is relative to 2005. i'm talking pre-covid. covid, obviously distorts the numbers a little bit the united states has reduced emissions about 10% since 2005 our paris was 27% by 2025 and we're not going to get there our new date is 50% by 2030. it's a lift. we have to fire on all cylinders across all sectors not just electricity to have a
prayer of reaching that 50%. >> possibility of a carbon tax, would that make renewable sources more tracattractive come to hydro carbon? >> i like to say clean energy and not renewable. we need the entire space including carbon capture and hydrogen and nuclear yes, a carbon pricing mechanism would be the more straight forward way of doing two things. one, to shape the playing field assuming the price, frankly, is high enough, but secondly, what carbon pricing would do is create a pool of resources that i would strongly urge be used in a progressive way because simply
raising energy prices would be devastating for the poor i think by creating that pool of money, it provides the policy options to provide a progressive response >> so much to think about in the lead-up to the summit. the cop26 summit this autumn let's turn back now to markets u.s. futures are pointing to a very modestly positive start after the labor day holiday yesterday. the action last week, u.s. markets turned lower on friday after that weaker than expected non-farm payroll report. the week overall, the o outperformance of the nasdaq over the s&p 500 and dow joumanna, whether to chase those growth stocks higher after the recent summer rally or to think about reengaging the cyclical value stocks that have under
performed in the summer months i would highlight morgan stanley says it is time to reengage with cyclical and they like european equities as a way to do that. >> interesting what you are saying about the allocation into growth shock s allocation into growth shtocks s how people are thinking about the macro. a couple of months ago, people were nervous with the higher tech stocks. it feels we moved past that narrative. it feels the investment community by and large are saying yes, we had the high inflation, but beginning to side with the camp of the fed these numbers will be transitory or we have seen peak inflation rates for now. that means the fed will rest on the laurels and not in a rush to
draw on the liquidity. all of that is still quite good for those trades it is interesting to see how positioning is reflective of the macro here. >> translating that into corporates the question is which companies have the most pricing power as a way to get more assurance around where to put your money. a lot in focus we have the ecb meeting where we get more insight later this week into how european central b bankers are thinking that is it for today's show. thanks for watching. i'm julianna tatelbaum with joumanna bercetche "worldwide exchange" is coming up next. we will see you tomorrow do you have a life insurance policy you no longer need? now you can sell your policy, even a term policy, for an immediate cash payment. call coventry direct to learn more. we thought we had planned carefully for our
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it is 5:00 a.m. at cnbc. here is the top five at 5:00 investors saying so long to summer so will the red hot returns continue or will the fall cool off the market's record run? one wall street firm scaling back the forecast for the american economy this year warning of a harder path ahead lawmakers in d.c. gearing up for what can be described as stress-tember as they race to get the economic agenda approved and keep the government running. china's president