Transcripts For CNBC Street Signs 20240712

Covid19 own Macro Economic Development Going forward. I in leary, we should expect lower Going Forward. Ab in bef shares up. Vw slashes its dividend after posting the first half operating loss and renault posts a loss and says it is impossible to give any guidance. Astrazeneca rallies as Second Quarter sales top forecast the ceo says he expects to benefit from the Covid Vaccine this is a business that is redirect examinatio resilient. Weve managed the crisis well. Patients are returning to physicians a very warm welcome to street signs. Now on the gdp front, german adjusted preliminary gdp the calendar adjusted q2 number down 11. 7 slightly worse than the 11. 3 forecast the sharpest decline from 1970 the calendar adjusted level, 11. 7 versus 11. 3 predicted the rebound in that data, the pmis came in growth territory but still q2, a very severe decline. Lets bring in annette who knows more about the German Economy than i do. The 11. 7 drop in gdp. Exactly it is worse than expected but thats like the backward perspective. Germany was especially hard hit in the Second Quarter which was like april, may and june in april, literally the whole economy came a stand still manufacturing was add virsry hit but also the Consumer Spending aspect had a regard high savings rate as you were pointing out, the more important data for investors and economies is the forward looking data which you recently got is clearly the expansion for the first time in 19 months being an expansion or a break even territory getting away as one could argue. Also looking at the unemployment data that just got out it was not on the rise as expected but declining and shows you that companies despite using shortterm working schemes in some sectors annette, well leave it there. There you are. Thank you for flushing it out for us i want to give you a check on the markets. We are actually down overall it has been a huge morning keeping us busy in the studio. No doubt keeping you busy at home or in your offices. I can see here loyds, the second worse performing stock on the flip side, we are seeing strength in the Aerospace Sector save ron and airbuswayi weighinn saying july looks worse than june lets take a look at the sectors. More in negative territory than in positive. Weve heard from Energy Majors today. Shell and total, food and bev. And astrazeneca up there insurance. Autos getting hit hard down 2. 3. Volkswagen getting hit hard there and banks. Lets look at Credit Suisse. Reported a 24 rise. Beating estimates as the lender got a boost. Jeff spoke with the ceo moments ago and asked him about the banks out look. We had just under 300 illion, which is about 12 times higher in historic terms, it is still lower. If you look at our credit book, it is very solid out of the loans over 80 60 is in switzerland where that history is quite robust. We as a u. S. Gap reporter followed all of those mack oro economic modelling given that we were already at 600 million brought us to the 900 million for the first half. As we look at the outlook, is it your expectation that weve seen the peak. The way that works is that you would reassess and you have to see now how these forecasts could develop. It is difficult to make a prediction we have now factored in our best possible way to forecast the impact of covid19 Going Forward. In theory, you should expect lower repurations Going Forward. Or a change for the worse which we hope will not happen. In terms of the profitability and the outlook over the second half of the year here, how much better than the 11 here can you do it is very difficult to make shortterm predictions as you can imagine. Nobody really knows what covid19 will ultimately produce over the next quarters we made 12 equity over the first month. We made 10. 4 over the last four quarters i will not make any predictions for the second half. Usually the first half is stronger well have to see how the things develop. Our midterm targets will not change, we want to deliver 10 to 12 through the cycle and after all the work we have done, we are now in a position where we can deliver that one of the trends your predecessor introduced was a continued derisking. We look at the Earnings Announcement today, you have continued that, is that going to continue from here on in tell us about the direction of travel for those assets. Risk weighted assets were broadly flat you have business growth, volatility, model changes. The direction of travel has been up even though we reduced that in the last five years, the risk went up. The direction of travel is up but we are also generating capital and our midterm target is a realistic one Credit Suisse shares shaping up to be higher. Now down 2. 2 . So losses accelerating Standard Charter reported a 25 fall in pretax market after credit impairments rose. The lender warns it expects new waves of coronavirus challenges saying it isnt possible to predict future impairments speaking to cnbc, giving his take on future charges caller on all banks, the local impairments they take Going Forward is going to be hugely dependent on how things settle down. Action on multiple fronts in this country is very, very important to that. It is not the only factor but it is important on that trust as well the statement that we have got in anticipation of the impairment should be lower in the second half as we have it today doesnt get worse. Bbva has seen net profit half and set aside 644 Million Euros to cover potential loan causes mostly caused by the pandemic. That was hurt by the slow down in Retail Banking as customers hunkered down in their homes sharply to the tune of about 6 . The bank which booked even larger provisions is now wellprepared Going Forward especially staying on a recovery path we dont have a second round. We are confident the frontloading has been done. We are confident that it would be between 150180 basis points. Exactly what we said when we present the q 1 results. On the high side versus what is the underlying cost of our Business Model but still weve seen fairly reasonable levels. Eni has posted a net loss as the pandemic impacted Energy Demand that will further cut prices and added that it expects a rebound in Energy Demand in 2021 shares are lower by about 22 . Total has posted a 96 fall. The French Energy major said it would maintain its dividend but added that the Oil Price Environment remains volatile shares up more than 2 shell has beaten Second Quarter earnings because the oil major has reported 600 in earnings despite weak declines the shell ceo told cnbc that he talked about the impact of the coronavirus on the business. We did an extensive review of the Balance Sheet that was tested that was quite significant exercise thats why we had quite a wide range and came within the bottom of the range that is noncash measure and how we see the environment Going Forward. Yes, we are in the sense that we need the review of the Balance Sheet. We are not done with the pandemic we have to see what the coming quarters or years will bring us. Ab inbev shares are up. We are off the highs we had seen earlier. Posting a fall in Second Quarter profit the Worlds Largest brewer took a 2. 5 billion loss on the operation. Sales fell to a year ago but the group added it had improved towards the end of the quarter and giving investors a reason to buy into the stock coming up, well speak with Renault Deputy ceo as the french carmaker slumps to a record firsthalf loss. Businesses are starting to bounce back. But what if you could do better than that . Like adapt. Discover. Deliver. In new ways. To new customers. What if you could come back stronger . Faster. Better. At comcast business, we want to help you not just bounce back. But bounce forward. Thats why were helping you stay ahead and adapt with a network you can count on, 24 7 support and Flexible Solutions that work wherever you are. Call or go online today. Save without even leaving your house. Just keep your phone and switch to xfinity mobile. You can get it by ordering a free sim card online. Once you activate, you only have to pay for the data you need, starting at just 15 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. 5g is now included with all new data options. Switch and save hundreds. Xfinity mobile. Welcome back volkswagen has slashed its dividend the carmaker hit by flagging car demand lets get to annette shares off nearly 5 i guess you would expect that given the dividend cut break down these results for us. Actually, the results were a tad better than expected it is all about the dividend cuts that is clearly very important when it comes to the valuation of shares and that is important to investors volkswagen is a high dividend payer and would gives reason to bend the shares operating profit is a loss of 1. 7 billion euro ee bid even lower. Volkswagen managed liquidity it is up by 17 year on year that is the positive and also the Sales Outlook might be uncertain even though they are saying they are slightly optimistic thank you for breaking those numbers down for us renault has posted a record net loss the deputy ceo will join us. Thank you for sharing your time with us this morning tell us what you have expected in the latter half of the year we have no visibility for the Fourth Quarter we have a good visibility q 3. Q 3 looks good, the question is q 4. What is going to be the development . What will happen is this a real restart or catch up from before it is difficult to mercedes and that is the reason why we didnt give any guidance for the second half of the year heavy on the euro results you published. You presented the plan to revamp the alliance how are the talks progressing on that front you want to leverage that. How has the work been going on since youve announced these plans . It is true nissan and midtt s mitsubishi are in trouble also we had announced the new way of working and the new two explained on the country working on the projects themself and how to put them into life. When you are in a difficult situation, you need to share more, reduce your cost the best way is to have this alliance you see other oems that chose to merge the partnership on some specific segment we have the big chance of already having a reliance. We need to revive it, which is down now working on the specific project. It will take a little time we are working on the product that will come to life in 20 to 23 that will give us time for companies to go back to the good foot in their own markets and their own segments preparing the future and their costs on projects. On platform, on driving and technology in order to make sure we attack the future on very good grounds you had announced also your own Restructuring Plan a couple of months ago with almost 15,000 job cuts give us an update of how the discussions are going in france and with the french government yes the plan has been announced. Two months ago, almost day per day. We are in the process of the discussion with the union. Last week, we signed a discussion of how this will take place in the coming months we are in line with the plan the french government has approved our plan. The only request was to make sure the social dialogue was taking place which we had committed to and was in any way to renault we had no specific request from the government that agreement has been signed very important to be noted by all unions all agreed to the process. Right after summer, discussion will restart you see now working in the detail plan category by category, if i may say on the plans, on the white color and engineering. Everything will restart just after summer no specific concern on that front we knew it would take time we have specific time to work in detail with the union. We want to develop the economy and really go in detailed economy. With record sales up 50 and youve got the best selling car in europe. That might surprise some given the hype how do you view the threat of tesla coming into the European Market okay. First, it is worth reminding everybody weve been very early on the ev. We have almost 10 years now of experience we have almost 10 years on the car. We have a very good car for the adapted market this car is extremely a dapt dapted compact and easy to drive in the suburbs and city now with the battery we have, you can go quite a lot of kilometers with it we know competition would come that is good news. When you have competition, you have more charging stands, more people think about electric. We have the best ratio in terms of economy versus cost, which i dont think our competitors are able to do there is competition tesla is one not the only one we have psa and volkswagen coming in. I dont think any of them will have such a good ratio between the driving pleasure, the cost and the auto we have the cars in the streets. The other ones are not yet there. Competition is good. We look at it with not so much concern. Well leave it on that note thank you for spending your time with us. Deputy ceo of renault. Coming up, well discuss fresenius after the break. Welcome to street signs. Injulianna tatelbau im Julianna Tatelbaum these are your headlines the sharpest decline on record Credit Suisse rallies alongside a merger of its market and Investment Bank divisions. Provisioning will continue to decline. We have factored in the best way to forecast on Macro Economic Development Going forward. An impairment charge on africa business. Astrazeneca rallies with the ceo telling cnbc he expects to benefit from the potential vaccine. This is a business that is very resilient. Weve managed the crisis well. People are returning to fifgss lets get a check on the markets. Weve got red across the board none of those manage to hold off to the early gains red across the board the losses seem to be accelerating we have the italian index down in spain, that market down 1. 4 . Not enough to get investors cheering the results given the limited visibility that could be part of the reason we are seeing the selloff. The dow looking at the 200point drop the sentiment has been deteriorating over the course of the morning. That has been a mixed picture muted in the market suggesting a weak start of trade. The busiest day yet. We have a number of Tech Companies to look forward to back here in europe, we have a few numbers in focus the british bank set aside 2. 4 billion pounds sales at casino surged as consumers rush to buy amid the lockdown travel restriks cost the firm valuable roaming fees. Restaurant cloerz dragged on the Water Division sales at hermes with the luxury group saying the situation remains difficult. A fall to 10. 3 billion down 3 and beaten core profit expectations and the steel maker said it saw signs of recovery. In health care space, astrazeneca has maintained Second Quarter revenue telling us earlier the company has managed the crisis well and expects a better Third Quarter it was very strong. Q 2 was also very strong as you just mentioned the business is very resilient this is a buzz that is very resilient, weve managed the crisis well. We see that patients are returning to physicians. We see a good q 3. Fresenius has posted a better than expected earning bringing in the cfo for more on these numbers. Rachel, describe for us the quarter or how you would characterize the performance and what you are expecting for the second half of the year. Good morning. I have to say we are very proud of the results we have posted in the Second Quarter of the first half year. Clearly a challenging time, a unique time for our business and all other businesses i think weve shown our Business Model is very robust and die verz tied. Clearly, weve played a kraushl role in the pandemic weve been able to show by leveraging the diversity with the hard work, weve been able to rise to the challenge to play significant role in what the Health Care Sector has been able to achieve and what weve been able to deliver despite the challenges Revenue Growth and a modest decline in our net income. For the second half year, on the basis of how our assumptions are created. We are exhibiting significant acceleration in our earnings we have pleased to see that elective patients are not are now able to return to hospitals. That supports our expectation to see an acceleration of growth in the second half of the year. Looking at your full year 2020 guidance. Would you say you are being conservative in your assumptions. Th would you say you are being conservative or optimistic here . Clearly, i think it is very difficult for anybody to say how the pandemic is going to develop. Weve done our diligence in attorneynally to look at the potential scenarios. We can western across different parts and taken what we believe is a realistic set of scenarios that have led us to be able to guide growth 3 to 6 and on earnings that will post a slight growth. As ive said before, in the context where weve seen challenges significant challenges for our hospitals and medical workers, that is a pleasing set of targets. One that is realistic and shows how robust and resilient our Business Model is and how weve risen to the challenges well continue to face in the coming months to your point, where do you stand now, your hospital groups in terms of supply and preparedness as you prepare for a second wave in cases we felt very well prepared with the hospitals with the hilios brand in germany and in spain. We are the largest operator in those markets and in europe. Weve done a lot of work securing all of the supply chain and things we need not just ppe but relative equipment and medicines needed to treat covid patients. We can leverage and clearly within the group and with our business segment, we have a manufacturer of Covid Development drugs and wider pharmaceutical products. Weve been able to level to be sure we are in a good position to provided best care for our patients weve been focusing on being able to build confidence so they can really feel safe to return to hospitals for those procedures which has time passes become lessee electric tiff and more urgent. We want patients to know it is a good time to come back to hospitals. We feel comfortable that we are well prepared and weve shown flexibility over our footprint it has been a learning process we have significant capacities of icu beds Still Available in germany and spain. With the increment al capacities weve built and to be sure we react, those stand us in very good sted where there to be heightened second waves or outbreaks as we go through coming months. Giving us a sense of how things are going in spain, weve been watching the rising numbers as well as the uk and french government to be aware of traveling to the country how do you think theyve been handling the resurgence of coronavirus cases. It is not true in spain but across many markets. As we have seen before, everybody has learned through the last few weeks and months exactly which measures are necessary to try to address the outbreaks as quickly as possible as clearly as the hospitals, we have worked really hard. Being our workers and staff to be effective and give the best care to our patients and to reassure our patients in terms of the environment i do think the Health Care System in spain and more widely is in general better prepared or has better expectations to handle that. I feel very convinced that we and our hospitals are in a good position to make an important contribution to tackle these challenges we are seeing in spain and rising markets cfo of fresenius. Also posting a drop in Second Quarter sales, speaking to the ceo who said the Worlds Largest cement maker has seen business hold up in the u. S. The u. S. Was volume wise the most resilient market we have. Even though we have the hot spots, we have unfortunate situations handled quite well. From our own company, we have a Strong Health and Safety Culture even before the crisis this has helped us extremely well adapt to the new situation. We have quite a safe protocol at our site we could add a covid19 precauti precautionary measures still ahead, big tech goes to washington. Facebook, apple, google and amazon get grilled well hear more after the break. Welcome back to stooichbltz the ceos of four big Tech Companies were accused of political censorship in a fivehour hearing. In five hours of bruising and specific questioning, republicans challenged apple, amazon, facebook and alphabet. Democrats focused on the size and power. The subcommittee chair our founders would not bow before a king and we should not before the four emperors of the economy. Competition drives us to innovate and leads us to better products, more choices for everyone customers have a lot of choices and products face fierce competition. Companies like samsung, lg and google have different approaches we are okay with that. Our services are about connection our Business Model is advertising. We face intense competition in both lawmakers probed app store pricing, goods and commenting preesing bezos acknowledged aggressive pricing but says it doesnt use tellers data to do that i cant answer that yes or no we have a policy against using sellerspecific data to aid our private business i cant guarantee you that policy has never been directly violated the most direct questions went to mark zuckerberg. Coming down on the 2012 acquisition of instagram and potential buyout of a onetime competitor he said in 2012, they had the same information and the federal trade commission unanimously approved the merger. The Federal Reserve has kept Interest Rates on hold warning the fate of the economy will, quote, depend significantly on the course of the virus. The Federal Reserve kept Interest Rates unchanged said it will maintain until it is confident the u. S. Economy has weathered recent events around the pandemic. The fed pledged it will increase treasuries and mortgages to support the u. S. Economy it noted that growth and jobs created were well below those on the year fed chair said High Frequency data follows the recent outbreak in the u. S. And reclosings of some businesses and states were weighing on the recovery we have seen some signs that the increasing virus cases and renewed me yours to control it are starting to weigh on the economic recovery. People are confident that it is safe to reengage powerful language that the breath of the economy depends. Suggesting that fed would be willing to do more as well stating that the public crisis will weigh heavily and faces considerable risk to the economy. Reporting for cnbc Business News lets get you a check on the latest virus numbers brazil and australia have reported a Record Number of new cases as the pandemic continues to accelerate. Latin American Country report 69,000 new infections in a single day in australia, now outbreaks have forced authorities to close some borders and impose new restrictions in the United States, california, florida and texas have all reported a record spike. Some states will reopen in days. In florida, they say they will not return to classrooms as cases there continue to rise u. S. Emergency unemployment aid to run out tomorrow. Tracie potts with nbc. Is there any hope of getting the deadline of tomorrow hope, yes today and tomorrow, thats it. Both sides have hit a brick wall with republicans wanting to reduce the 6 00 to 200 a week. President trump has said, look, lets come up with something temporary to keep the checks going so that people who have lost their jobs as a result of the coronavirus can have that money while they work out something bigger neither republicans nor democrats like that idea they dont want to deal with it temporary or piece meal but have yet to come up with a Decision Making it worse for many families, the moratorium on evictions expired last week, lawmakers have yet to do anything about that. We have a new analysis that showed 40 of renters in the United States might not be able to pay their rent. 12 Million People would be evicted on top of not getting those benefits if the deadline comes and goes tomorrow. Tracy, on that note of evictions. Reading that President Trump had been pushing for a shortterm patch but members of his own party resisted the idea of a way to protect renters can you give us anymore info . Right, the white house said that they wanted to extend those protections from being evicted until the end of the year. That is still their position on this, on unemployment and other parts of Coronavirus Relief there is not just a struggle between democrats and republicans but within the republican party, there is not agreement right now on what to do the Senate Republican leader has acknowledged that. Thats part of what is complicating things. It has been a rocky morning looking for green on the board hovering on the flat line now and moved firmly and the dow now looking to open 240 points lower. The loss is accelerating in the last 15 minutes. S p 500 also posed to a weaker start. Yesterday, we did see u. S. Stocks advance the nasdaq outperformed yesterday putting it on pace to break a twoweek losing streak well see if we can continue that trend today it looks like that will be difficult. A huge amount to get through the busiest day of earnings for wall street. Well hear from the tech giants hours after we have heard from them all we will look forward to. Thats it for me Worldwide Exchange is up next. It is 5k at cnbc here is your top five at 5 finding a reason to buy now turn their attention to the busiest day of earnings season maybe because of the fed Holding Steady on the promise to keep rates low and concerns about the strength of the American Economy big tech to open its books one day after the historic hearing on capitol hill