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tv   Street Signs  CNBC  November 29, 2022 4:00am-5:00am EST

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ioof "dateline." i'm craig melvin. thank you for watching. good morning welcome to "street signs." i'm joumanna bercetche these are your headlines chinese authorities vow to ramp up vaccination policies. european markets track asia higher led by basic resources and u.s. futures rise as developments from china boost investors sentiment.
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crude prices rebound on hopes of a pickup in chinese demand and opec is prepaying for a policy shift this week a stark warning for energy markets. >> it might change a little bit, the pattern, but we are looking at one or two years of extreme volatility in the energy markets. blockfi files for bankruptcy receiving 100,000 creditors on the hook after ftx's dramatic collapse good morning we are keeping a close eye on
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the developments in china. this as chinese authorities have announced they will step up efforts to vaccinate the elderly. targeting a shorter gap with vaccinations and booster shots chinese authorities said any rights andfreedoms had to be exercised within the framework of the law officials will fine tune the policy to reduce the impact on the economy and society. this all comes as regulators announce a listing on the property sector removing a ban to issue shares to buy assets and generate capital and payoff debt this last one is important for markets because we have seen quite the rebound overnight in chinese equities and across the complex. you see the hang seng ended the session up 5.2%. led by consumer stocks and
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property stocks on expectations that not just the easing of the property regulations, but also on a potential back tracking on some of the zero covid measures. so far, all we have is encouragement of the elderly population to get vaccinations no mandate or other alterations in the zero covid measures shanghai is up 70 points to 2.3% in terms of the tech sector, this is the picture here let's walk over here hang seng is up 5.2% hang seng tech sector up 7.7%. we are seeing a bit of a bounce here because so much pessimism had been priced in on the loosening of the regulatory requirements and market expectations that the authorities may have to wind back some of the lockdown measures
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we have seen a bounce in the stocks which have mainly been unloved for the last couple months you see over the three-month horizon, the hang seng tech is down 14%. moving to commodities. oil prices are rebounding after sliding to 11-month lows this is amid speculation of additional production cuts for opec and hopes that china may ease policies. we have been following thepric of oil very, very closely. remarkable that brent is trading at $85 lower than where it was at the inception of the russia/ukraine war and close to the lowest levels over the past year. remember, it wasn't so long ago in september that opec plus decided to go for a surprising 2 million barrel per day cut of production that led to a bit of
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support to the market, but since, we have been dropping on concerns of demand outlook on the continuing restrictions that we're seeing in china with the european economy which leads people to think going into the opec plus meeting next week we may see another production cut as well. that is the picture for commodities today. higher capital costs and uncertainty of the future of green policy are two of the main culprits behind the energy crisis that is according to goldman sachs. bringing together ceos to discuss security and affordability in the sector. steve spoke to the ceo this morning and asked if he thinks the eu will agree on a gas price cap. >> i think they need to happen and i eventually think they will with happen because it is so much of a waste for europe not to have a cap on gas
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it is so much of a pain that you can avoid if you put one and finally the last people that are skeptics about this will be convinced. as always in europe, it takes longer than you wish, but it will eventually happen i'm confident logic will prevail. that's it. it's a cap on an incredibly high price. today we are saying gas is three times what it was before >> the mechanics are ridiculous. it had to be there for a certain number of days it was nonsense. >> that was a way of not putting the cap. >> did you tell your minister? >> he agreed he said it was the same idea i think he repeated that during the meeting. we all see this is a process that needs to go through a lot of people. at the end of the day, logic
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will prevail it will still be expensiexpensi. can europe afford gas three or four times what the rest of the world? >> we will hear more from steve at the conference. very interesting to note that there is still a lot of criticism directed at europe over the proposed gas price cap and if it will have legs in the future is a big one for policymakers and a major driver for gas prices trading let's go back to what is happening in china this has been a big focus for the stock market this as chinese authorities announce stepping up efforts to vaccinate the elderly targeting a shorter gap between shots and boosters authorities on monday clamped down on fresh protests
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officers gathered at the bridge in the northern part of the city where protesters called on xi jinping to be deposed. in shanghai, police were looking for foreign apps and vpns. our reporter evelyn joins us with more from beijing evelyn, it is great to have you with us to provide more context of what is going on there. i'm curious to hear your take from the press conference given this morning by chinese health authorities. what are the major standouts from the conference? >> reporter: thank you the press conference in beijing today emphasized they are sticking to the zero covid policy they are talking about making measures targeted and precise. they said the more extreme measures you hear in the news are wrong. they said xi jinping calling for
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the lockdowns that seem to go on forever and have the psychological impact is something that should not be done what is interesting is in the push for vaccination, they pulled out a data stat that said people in china over age 80 has been boosted at 65% yesterday. to me, that is a big jump. two weeks ago on november 11th, they said that rate was 40%. two weeks before to now is a significant increase in sf vaccinations analysts say this is important for china to rethink about opening and having more population protected against covid. some of the official comments coming out today is also talking a bit more about how the latest wave of omicron is less severe than previous covid waves and overall talking about stories of how people have been affected
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with covid and got through it. all of this is different from the message we may have been hearing a couple months ago. so, certainly no big changes in the policy front baby steps in an encouraging direction. back to you. >> evelyn, thank you for bringing us that latest comments no major changes from china. we are getting baby steps in the sense that people are encouraged.ncouraged to get vaccination. let's look at the oil complex. some of the positivity from the asian markets is putting a floor on the markets today brent back at $85. wti at $79 let's get out to steve now who joins us from the carbon forum the ceo that we both know well, steve, one thing we talked about is how well italy has done in
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identifying the sources away from russia. >> reporter: if only it were the carbonara forum, i would eat all day. sam, good to see you >> good morning, steve >> joumanna and i were in rome for the election one of the fears was this government was untried and tested it would lead to chaos in terms of policy. according to the ceo, he said this is a government who is listening and the continuity from the draghi government is encouraging. >> i do agree with what was said s said in the first few weeks, we move with the form of government. everything is working well
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>> when i spoke to draghi, he was confident about the position italy found itself in with storage. how are we >> we stand well in the sense that storage is still fulfilled at 90% that is 2% to 3% more average than the last five years that is result of actions we have put in place. of course, it is partly due to demand and autumn we had to preserve the storage and now we are just below 11 bcm of gas. that is comforting for winter. >> we care about italy for the moment this is not just a crisis until january. this crisis can last several years until other infrastructure is in place to negate the problems with russian suppliers. how does the new year look >> the new year is looking a little bit more complicated than
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the one that is now we are going through. the point is that we were able to tackle some of the usissues the short-term as you were saying, we need the infrastructure to put us in better position. >> that is a multiyear project a series of projects >> it is if you look at italy, we have the first floating vessel in operation next year. then we have to work for the second one the following year. we have to strengthen capacity from south to north because all of the sources and new flows of gas are coming south to north. we need additional capacity. it takes time. it takes planning and execution over the years >> this conference and i'll crudely put it is about getting capital in the right place for the transition that's my very crude interpretation as well there are very young markets whether it be hydrogen with strange market mechanisms or
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don't have a market mechanism at the moment we need those to have the capital to find the right end point. >> we need to design the new market for a time being, hydrogen is in a pilot place and situation. we need to design soon how it has to be structured what part will be regulated and not duplicate investment and what is left as a free market for the different companies switching from gas to hydrogen and fossil to green. >> and how extraordinary that can be for renewables in the states the problem is europe doesn't have that and doesn't have a version of that anytime soon >> we hope so. we need to unlock the resources that europe is keeping at central level. we need to deploy this new investment for making this new
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businesses like hydrogen to take off. >> this is the problem i'm a proud european i love your country as you know. we are so slow the americans have done it the act has passed the money is going through we are still trying to work out with cmu and capital markets let alone this why are we so shlow? >> i think because we were engaged in solving the short-term policies. we have to move to long view we have to work on solving and sorting out the situation to make more secure next couple winters. at the same time, we have to restart working on long-term perspective. that means new energy transition businesses and transition in itself of course, the experience we have done in the last few months, of course, has to be capitalized and should pass to redesign the transition phase to more physical way.
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>> we can't wait for governments to get their acts together what are you doing how are you pushing ahead doing more than you have to do to help out the transition >> we are developing certain new facilities firstly in the production because it is easy to be shipped in the same pipeline we set up a platform with capacity and we are targeting capacity in the next couple years thanks to a new incentive framework that has been released we have a project with ccs and pilot projects in hydrogen this is the menu we are working on for long term >> step back if we may my colleague and i here spent a lot of time a year ago in glasgow. there was good out of glasgow. there was bad out of glasgow what about cop27
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did we make progress >> i think it was a transitory cop27. we are in the middle of the energy crisis and difficult to drive attention on the long-term perspective. i thinkwhat was happening is they have to set up clearly the contribution which we can provide to the rest of the world. we don't have to forget that europe counts for 8% of the emission and 5% of the population in the world. >> transitory meeting. can we afford a transitory meeting? every time i go to a cop, whether cop21 or cop26, it seems we are preparing for the next big thing and we did not do enough to get to the measures. are we moving quickly enough >> i think not quickly enough. as you were saying we need to understand what will
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be the contribution that it will come from and bullish incentives that are on the table from the united states, by the way, is the second emitter in the world. of course, we need to resume some of the actions that we have put aside for a while to tackle the short-term situation there is one thought that is around it. what is the best path we should take not to have too strong implications in the short-term on the gdp level >> they have excellent speakers here and i know for a fact enormous number of attendees the money the men and women want to look at is clear. what is the message to the city of london or new york or whatever financial center that comes in what is the message? >> firstly, we need to regain resilience on the gas system to look at the future in a more let's say, positive and
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pro-active way >> okay. a pleasure seeing you. nice to seeing you in the flesh. hope i see knew the spring and new year on the shores of lake como the ceo of snam. back to you in the studio sdpstudio >> thank you, steve. interesting to hear the perspectives of the european energy ceos and how they think about the transition and challenges the quick look at the markets before we head to break. we started off in positive territory and dipping to the negative cac and dax is falling we will talk about why in a few moments. why are 93% of sleep number sleepers satisfied with their bed? maybe it's because you can gently raise your partner's head to help relieve snoring. so, you can both stay comfortable all night. and now, save $1,000 on select sleep number 360 smart beds and adjustable bases. ends monday.
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welcome back to the show let's get you up to speed on the markets. the investment community is positive with the development out of china we were discussing the hang seng ended up more than 5% which was
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boosted by consumer stocks and property sector. also on hopes out of the investment community that china may look to start easing zero covid policies not so much the case if you listen to the health authorities press conference earlier the only thing that has come out is they are encouraging elderly to go for vaccinations no major policy changes. we did see a bounce in chinese stocks that optimism in the european session, but now started to fizzle out stoxx 600 is up .50% the focus today in europe is actually on inflation data we have preliminary cpi coming from germany in a couple hours time and preliminary numbers from spain these numbers are crucial. we have the ecb meeting next
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week and investment community is split with the ecb will go for 50 or 75 basis point hike. inflation is on everyone's radar today. in the break down in indexes, the only major bit of green in the ftse 100 in the uk up .70%. namely because of the commodities and basic resources and minors doing really well today on the back of the jump of chinese stocks overnight that is helping the uk index cac in france is trading flat. germany did have the nrw numbers come in earlier which were weaker which led to a rally in fixed income all eyes on that headline print in a few hours time. the ftse mib is down as well we have leadership out of commodities. basic resources up 2.25%
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oil and gas is seeing a floor out of optimism from china overnight. 1.2% that spot oil price. brent and wti are close to the lows of the year which is surprising, of course, with the political context. on down side, chemicals are down let's talk about minors. we see a bounce. that is the reason why the ftse 100 is doing well. anglo american is up .30%. rio tinto is up .3%. the numbers speak for the themselves we are seeing the commodities rebound. chip makers. one wof the european chip maker doing well they are warning about the u.s.
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and china issues here are the chip makers in asia seeing a boost up 1% to 2% perhaps on some of the more positive macro optimism expressed in that part of the world. whether it has legs, we have yet to see in terms of luxury, let's look at the luxury stocks every time charlotte comes on and talks about the stocks, we talk about the exposure to china because the china consumer is a big support for the names. on a day like today with the chinese equities, no surprise the luxury sector is seeing a jump up .60%. lvmh is up .50%. turning to travel and leisure. you see lufthansa down the main stock we are watching today is easy jet.
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you see that name is down 5% today. why? the company posted a record headline ebita in the fourth quarter against a better than expected full year loss of 178 million pounds it is looking to increase bookings next year and focusing on cost. the ceo told "squawk box" earlier it will offer flight prices >> like all companies, we will try to recover the cost increases. at the same time, we will be able to offer affordable prices for customers. easyjet does really well compared to competitors in times of uncertainty and challenges for households because people
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gravitate toward value shell will be buying gas proper are producer nature energy for $2 billion. this comes as shell is shifting to low carbon energy and comes after bp bought arcaia energy for $4 billion what is interesting about this is you are seeing more traditional oil and gas companies get involved in transition gas that is the infrastructure they had been looking to acquire with che shell and bp the last couple months, it is up major developments in that space. switching to consumer goods. nestle is expecting sales growth up 8%. it expects earnings per share to
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increase between 6% and 10% for the full year. the reaction has been adverse. nestle is down .60%. one concern is the ability of the food and drinks companies to pass on rising costs to consumers. some have been able to stand out and others not so much you see that reflected in how the stock price has been trading for nestle coming up on "street signs." we will have more from the forum in london where steve is speaking to alberto gandolfi from goldman sachs hi. i'm wolfgang puck when i started my online store wolfgang puck home i knew there would be a lot of orders to fill and i wanted them to ship out fast that's why i chose shipstation shipstation helps manage orders reduce shipping costs
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welcome back to "street signs. i'm joumanna bercetche these are your headlines chinese authorities are vowing to ramp up vaccination efforts prompting the hang seng to close up over 5%. european markets track asia
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higher led by basic resources and oil and gas stocks and u.s. futures rise as developments from china boost investor sentiment. and opec and allies prepare a major policy shift this week speaking to cnbc, a stark warning for energy markets >> the turbulence we have will remain we are looking at one or two years of extreme volatility in the energy markets blockfi files for bankruptcy leaving 100,000 creditors on the hook as the crypto lender is the latest to fold in the wake of the dramatic collapse of ftx welcome back we are getting mortgage data from the uk.
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notable because these are the october figures. what happened in the wake of that very historic mini budget at the time. what is interesting here to note is that the mortgage approvals level dropped to 58.9 versus the poll of 60.2 lower than estimate. net mortgage lending came in at 3.9 billion pounds again, significantly below the poll estimate of 5 billion pounds that consumer credit lower at 769 million pounds it does tell you in the wake of the mini budget that credit lending took a nose dive people were concerned about the outlook for interest rates and what it would do for approvals and offering coming through for some of the banks. it is now reflected in the data. it will be interesting to see how this actually transpires in
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coming months. now some normalcy has been restored to the uk market. steve, as we were speaking to, is at the goldman sachs ca carbonomics event. he spoke to the ceos about the fallout from the uk mini budget. >> two weeks of difficult operating environment because the gilt market was unprecedented with the mini budget when you have the bank of england announcing they are selling gilts and government with the mini budget the next day, the gilt market and capital markets could not interpret that they were conflicting signals with two agencies. >> the pent-up savings that occurred during covid and the fact not re-pricing mortgage is anything like the change of rates. mortgages are not moving the economy is resilient than
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people thought with the pricing power and companies are better than people expected we are seeing down turns in the sectors, particularly at the sharp end of the consumer. there is a broader downgrade cycle. >> downgrade cycle and recession? >> a mild recession. i don't think the armageddon scenario is one that is happening. >> fascinating to hear the economy of the uk coming from the gentlemen. let's head back out to steve at the forum. this time steve will speak to the head of utilities from goldman sachs. a comeuple of years ago, steve, the less exciting sector now it is the center of the storm. >> it is absolutely, as you say, the epicenter. this is the sector alberto gandolfi is here with
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me she said i think she is right. a sector that was not interesting and to the key sector you have been excited? >> ti totally look at the amount of spending the world needs to be electric and you would be excited about the industry there are a handful of companies capable of doing that. >> a handful of companies capable. does that mean the investment universe and the finance here? >> there has to be new trends. what is fascinating is out of the top ten global renewable, eight are european this is europe silicon valley. >> we are so far behind in so many sectors globally.
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we have a head start in renewables >> we had a head start up until 10 or 15 years ago, the renewables were in europe. europe versus the globe. with the inflation reduction act, they are picking up in terms of targets, it is starting to leap frog europe >> i talked about this with michaela, i don't want to get too far. is this going to happen at a europe pbasis or country by country? >> if put a change of events, it has to start from europe and implemented state by state the rest will happen automatically. i'll give you the example. the biggest bottleneck stops acceleration is permitting
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people wouldn't know it, but it takes five or six years to have a wind farm or solar farm to be fully authorized that is not acceptable with the targets that we established. the eu has a goal to reduce permitting to one year that would be a game changer the pipeline is there. we are not lacking projects. >> there has to be a reason why it is three-to-six years for environmental safety rules and importance of that asset in that region and connect to a wider grid can you really get that down to one year from the previous timeframe? >> that is the challenge in the next year to be implemented. and at the moment, permitting is very much based on heavy paper work that has to be digitalized. >> it is not digitalized >> not. >> all i hear about is
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digita digitalization you are telling me brussels is not walking the walk >> they are trying to walk the walk now it is trying to happen. >> all of that paper is not environmentally friendly tell me. permitting is important part of the solution you said to me off camera and spot on. a security crisis is an affordability crisis and at the moment, both abated for various reasons. they haven't gone away >> correct essentially, one-third of the gas consumed in europe is from russia russia going to zero is a problem. there is no other fix you can really have. you can import more lng globally the almost hoarding of lng led to high gas prices we went from 20 on average for 15 years to peak of 320. we increased more than tenfold
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suddenly gas prices is more than half that peak sdp >> we have this very effective cap now. sorry. >> now we are seeing the capital markets relaxed about the energy security crisis. october throughout europe was closer to summer than winter november has been mild a cold winter or warm winter can swing consumption 20% up or down versus the steady state level. we are becoming complacent about the weather. we are complacent about the fact that china is a big importer is exporting lng because of the lockdowns and reduced industrial production as soon as china is back in the market and if the weather normalizes and the energy security concerns are likely to be back. >> there is an argument we had cheap energy for a long time and we will never have the cheap energy again
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that is not necessarily a bad thing. it will lead to substitution and conversation no one watching should assume the prices will go back where they were before or is that gloomy >> there is a bit of truth when you are a large supplier of gas and it is no longer there and the key infrastructure to import gas into europe is not functional or gone forever, there is a risk premium in the gas price which tfilters to the price. commodities are cyclical remember many years ago, oil at that barrel forever. now cyclical in 2025 and 2026, we will have a wave of new energy projects. if the power begins to work in europe, we will have acceleration of renewables that will normalize the gas
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prices difficult to imagine 2025 and 2026 would be correction years >> uae is upping production. target to 2027 from 2030 from 5 million barrels a day others believe hydro carbon is the mix. is it going to happen quickly or take longer? >> hydro carbons cannot be eliminated overnight this is a mistake of energy prices if you look at what germany is doing. germany has been quicker at passing lightninegislation to sn coal and nuclear they have been speeding up permitting. what it means is we have certainty on the closures and uncertainty on the additions they extend the life of nuclear and coal >> that is a shame alberto, thank you pleasure to meet you nice to see you.
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head of utilities at goldman sachs. it says i was always interesting even when utilities weren't. back to you in the studio. >> fair enough i have to i say that interview s interesting. steve, thank you as steve was speaking, i have been looking at credit suisse shares i want to point out credit suisse shares have hit a record low. you can see the stock is down 3% to today. it has widen to a fresh record high of 403 basis points wider than yesterday actually tweeted a chart of it to indicate and show how much we have moved over the course of the year it is significant. it is is worth remembering thiss the second day subscription rights is trading. this is the second day it raised the capital.
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many investors are now selling those rights to subscribe to new shares down 22% the stock itself is down 3%. we are keeping a close eye on what happens with credit suisse. a big story over here in europe. well, crypto lender blockfi has filed for bankruptcy blockfi blamed ties with ftx and down turn in crypto prices kate rooney filed the report >> the crypto lender blockfi filed for bankruptcy in new jersey it was one of the handful of firms that was supposed to be bailed out by ftx which is going through its own high profile bankruptcy we did get more bankruptcy paper
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work where blockfi was faced with severe liquidity crunch with the unprecedented collapse of ftx they go on to say ftx's apparent rescue in summer of 2022 stabilized blockfi, but that was short lived and over the past few years exacerbated instead of cured the ailments it has substantial exposure to ftx. it will allow blockfi to maximize value they can deliver to clients at this point the trouble started in early summer with the hedge fund implosion. the line of credit back in june increased to $400 million in july when ftx agreed to buy the company. it had the option to buy the company as ftx went under,
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blockfi had to halt customer withdraws. in the filing, it has more than 100,000 creditors and liabilities and assets stand between $1 billion and $10 billion. >> crypto winter continues. coming up on "street signs." we follow the action on the covid announcements out of china. this is a quick look at european markets. we will have more in a few moments.
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welcome back to "street signs. another look at european markets. we tried to open in positive territory given the session in chinese equities and hang seng overnight. we are tilting into the red. you see dax down .35%. the ftse 100 is leading the only bit of green today up .40%. a quick look at fx this is what we are seeing in currency the picture is one of dollar
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weakness for the pound at 119.90 euro is trading firm against the u.s. dollar. happy to bring in the global cio of equity from allianz happy to have you on the show. i know you recently moved back from singapore i'm curious to hear insight on the developments we see out of china. it feels the macro community was optimistic of the easing of restrictions now people are reassessing >> clearly the opening was never going to be in a straight line we have seen all of the countries with their own stop and go this is happening in china ch china doesn't have the same vaccines than the ones we have we have to understand we are on the path of reopening, but it will be bumpy. what matters to the global economy with the commodity
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prices is good news and bad news it will support the global demand and growth in the recessionary environment, but it creates a bit more inflation pressure with commodities prices going up on the back of the china reopening. it is a really interesting dynamic. >> how does prolonged lockdown and huge resurgence of cases and possible deaths as well, thohow will it affect your framework. people were not thinking about china until recently. >> for us, it has been long-term thinking china has been part of the strategy and large asset base for us if you look at china, i think it is the price risk. lockdowns, yes, bumpy with a lot of risk. a lot has happened with china the past few years with the innovation and trade war with the u.s. i call that china phase 3 and
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the technology in competing around the world i think all of this put together puts china that is right now really underestimated by the rest of the world. the reopening would be critical. >> i feel we spent time talking about the recession that hasn't quite come we are seeing signs of it in europe what i noticed the last couple weeks, analysts are coming with the 2023 outlook they are upgrading the forecast for european growth and u.s. growth transpiring what is your outlook from the economic gdp standpoint. >> thank you very much i think 2023 is mind the recession gap. what you are seeing is nearly a lot of optimism versus how the recession will unfold. what is happening is tightening
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happened so fast, much faster than any time since 1980 rate heightening and kwa quantitative tightening. we started in march. this is about to come. if you look at all of the leading indicators and pmi and all pointing sharonly. w sharply. we need to see the adjustment. then we find a bottom. i think 2023 is a year of volatility and really coming back which is not bad for stock pickers. you can find things to buy that would be very interesting. >> the fact that the monetary lag works with a lag and hasn't been expressed in eps or eps forecast reading between the lines, you don't think we reached a bottom for equities >> i think we are in a relief
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rally. i think we will have adjustment when eps adjusts to the reality. the critical point is companies have a lack of visibility because understanding how that recession will unfold. clearly in the u.s., the job market has to have more slack. 3.8% we need 4.5% unemployment. all of this will feed through. >> quick one for you i'm keeping a close eye on fixed income we are rallying back because the signs are coming in lower and preliminary. what is the view on the fixed income is it a buy? >> i like fixed income it is a space that had become abnormal in the supply of the so this is a year of reset. that doesn't mean you shouldn't buy lation with the fixed
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income equities will end in the next six months. >> thank you for coming in global cio from allianz. let's look at futures before we head out for the day. pointing positive for the session. taking the cue from the asian markets. not so much for european markets. that is it for our show today. i'm joumanna bercetche "worldwide exchange" is coming up next. a lot more analysis of what is happening in china and the response from the authorities there. stay with the chan'll. channel we're told that success is all about making it on your own. the truth is... need some help? c,mon, get in. nothing great gets done alone. that's why there's shopify. with shopify, you can set up your
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it is 5:00 a.m. at cnbc global headquarters. here is your top "five@5." stocks looking to stage a turn around tuesday after kicking the trading week off in the red. calm returning to china overnight after weekend protests that called for president xi to step down. elon musk taking on apple over claims the tech giant is pulling back ad spending on the platform and may kick it out of its app store. disney ceo bob iger having a tough talk with employees about the road


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