Transcripts For CNBC Street 20240702

Earnings and plans to fail to win over investors. And now the market is getting green on the board capping a difficult week in the middle of earnings season. Wall street braces for the difficult open as the nasdaq continues to drop deeper into correction territory. Ad sales surge at amazon sales nearly triple sending shares 5 higher after hours andy jassy said he is excited about the deals ahead. The company that moves slowly in an uncertain economy in 2023. We are seeing the pace of deals pick up in the strong last couple months and new deal signings happy friday julianna and myself are happy to see you all. Lets get to the markets and what is interesting about what is going on today is although at the surface, are yoyou are seeia lot of green ftse 100 is trading in the green on the last trading day of the week dax is marginal as well. There is a lot happening beneath the surface. Large, large movers today. Lets get straight to that we are going to start taking a look at nat west nat west at the bottom of the stoxx 600. Not the stoxx 600. Right at the bottom of the ftse 100. Down 11 today the bank has downgraded the fullyear margin after it met the Third Quarter pretax profit reporting 1. 3 billion pounds the earnings were overshadowed by review into the debanking scandal. This is in reference to the closure of the account the financial watchdog saw regulatory breaches in the lenders decisions over the former politician. Very adverse reaction in the stock today. Sanofi shares are considering a separate listing of the business next year. The drugmaker will allow it to focus on other medicines the company sees earnings declines by low single digit percentages next year, but expecting a rebound in 2025. Down 15 today and one of the main under performer in the stoxx 600. It is not every day you see a phama giant plunge 15 air frank klm posted a Third Quarter operating profit of 1. 3 billion euro the highest for the quarter. This on the back of strong ticket sales and yet to feel the bite of rising oil prices. The carrier left guidance for the year unchanged on to the luxury space down 6 . Montcler sales rise 6 in the Third Quarter. The company warned it had seen sales slow in september and october with warmer weather hitting demand one thing about montcler, this is just another luxury name were hearing which is struggling with sales outlook. One thing which emerged is the extremely wealthy segment of the luxury market is managing to do okay like lvmh others are beginning to struggle that is one thing emerging i just want to take viewer as tension back to what were seeing in the uk banks this is a week to forget nat west down 10 . Standard chartered down yesterday as well. A lot of disappointment on the lack of the Capital Distribution plan barclays is down 10 as a whole this week. This is tying up with the macro. Net interest margin outlook has started to be trimmed. Nat west with the regulatory breaches and from the business persp perspective, there is a lot of concern about the Net Interest Income and lack of deposit flight of course, we talk about reputational damage with nigel and barclays is saying that the guidance from nat west likely implying double digit downgreat grade. If were you investing in the uk banks with the promise of Strong Capital returns, you will get dis disap disappointed no wonder the stock is down 10 this morning the one that caught my eye is sanofi it is rare to see a defensive pharma name plunge 15 this is usually a safe place to put money. Two big issues this morning with sanofi they are planning to spin off the Consumer Health business and listing it next year and they are ramping up research and development. They are looking to low estimate declines in 2024 consensus sat at 7 . We are looking at 9 consensus downgrades next year the stock is down 15 . To my mind, thats out sized reaction if you look at the downgrades which emphasizes the fragility in the market. To your point, it is a defensive stock. European markets are negative week to date you expect the defensive sectors to be performing better. One final point on air france. This is one of the big movers we are watching today disappointing to the down side here you are seeing the impact of the inflationary environment coming through air Traffic Control charges and fuel costs are 4 higher than consensus. All of these things are beginning to weigh and this is a good example of how this inflationary environment system p is impacting the bottom line. Lets switch on. As you mentioned over the index level belie what is is happening. Cac 40 is under performing today. Air an france and montcler leading the declines you will see energy at the top oil and gas up 1. 2 as the world continues to focus on what is happening in the middle east we speak about this day in and day out. There is no ceasefire in sight. On the back of that, we are seeing a bit of a bounce in Oil Prices Today that is one of the reasons that basket is out performing good day for commodities on the flip side, sanofi is down media is down 1. 2 the food and beverage down. 50 . Lets go to wall street and the u. S. Close yesterday nasdaq ended 1. 8 lower. You had meta dropping 3. 7 microsoft and alphabet pulled back in yesterdays trade. S p lost 1 . Dow showed resilience ending 0. 8 higher. Interestingly outside of the magnificent seven of the big tech sector, it was a fairly neutral day for u. S. Equities. Magnificent seven are now down 12 in the last 15 days. On that note, lets look at markets this week and how they performed over the course of the four days. Nasdaq off 3 . S p off 2 the Dow Jones Industrial average, the resilient of the bunch, down 1 here is the picture of the treasury markets slightly higher yields this morning. 30year trading at 5. 02 all right lets bring in the head of investments. There is a lot going on in european markets today lets go to the u. S. Gdp print yesterday. Surprise to the upside 4. 9 gdp is the number that many countries around the world, including china, would be happy to see from the comments i read from the analyst community, nobody expects that strength to continue that was amazing. 4. 9 after such a brutal tightening of Monetary Policy for the past 18 months that is remarkable lets keep in mind that inventories and governments together added a bit more than two points thats a very strong contribution thats not going to stay the consumer remains extremely strong you know, this is the holdout from the pandemic. A lot of money was thrown to the consumer they have savings which they tapped into aggressively we still think eventually the consumer also is going to come down yeah, thats been the surprise of 2023. The resilience of the u. S. Economy. When you see numbers like this, the whole narrative of the fed doing too much and the fed overtightening or the fed at some point will regret all of the Monetary Policy tightening they have done makes me question the narrative. The economy has managed to continue to perform well despite the tightening credit and the monetary accumulative moves into the system are you concerned they have done too much or have they navigated this well . I think they he have navigated well will it hurt eventually . I think so the 10year treasury yield adjusted for inflation and increasing by 150 basis points since april. 350 basis points the last many couple years will create pressure in the system its true we came into this with private Balance Sheets which were healthy the pain is probably not as fast as big as it has been in the past we still think such a sharp increase in yields will hurt lets keep in mind that fiscal policy has been expensive. It is unusual we have fiscal policy pushing the other way than Monetary Policy that will change that is one of the key points to watch in congress now that we have the speaker in the house, was going to happen to fiscal policy already in the last quarter of the year, it got less expensive. This is turning and that will take some of the tailwind of the economy. Let me take you to equity markets. We have seen a plunge in sentiment in equities on both sides of the atlantic. Nasdaq down 3 this week one of the key elements of the selloff. Here in europe this morning, we are seeing huge moves as well and some unexpected big movers we were talking about sanofi in the healthcare space down 15 . What do you make of the extraordinary moves on the back of earnings . What does it tell us about how investors are positioned and sentiment is overall in the market right now it has been a pretty ugly earnings season so far in terms of the Market Reaction any miss in particular is finished badly we have seen some moves. Look at the Energy Market yesterday. The season itself is okay in the u. S. Earnings are up 12 for the season year on year. Thats pretty good thats resilient not as good in europe down 4 year on year so far for companies which have reported. The Top Line Sales are weak. We have actually only onethird of the companies in europe that are beating sales expectation. That is a low ratio. That sends a signal that this economy in europe is struggling. I would say the earnings season here is really not great and the market is pushing that we came into the earnings season with the market quite high by late july and now we have come away with the past three months with the market correcting to the downside there might be some downside especially when you look at equities compared to bonds in terms of pricing earnings are not great in europe the economic picture is not great either putting it all together, what kind of downside could we talking about for european equities and are there parts of the European Equity market you want to stay away from or short here i think, overall, you want to be cautious with the cyclicals the global when heconomy last b resilient this year. It looks like q3 is going to be soft q4 will be negative if you look at the last pmi that were quite disappointing. You want to be cautious, i think, with the cyclical side of the markets. Skewed more to defensive skewed more toward stocks that could benefit from the pullback in bond yields i there ink there is room for bd yields to decline here i think that will create some damage in the system in terms of borrowers will need to rollover the debt in the next couple of years. In the books of investors, you have a high level of unrealized losses that creates fragility in the system i think we are at the point of the cycle where there is a lot of fragility and you want to be defensive. Luckily, in terms of seasonals is a better season for stocks, especially in the u. S. Im not saying were going to collapse from here the last three weeks have been weak thank you so much for joining us, vincent h now on to amazon the shares in the tech giant are higher in premarket trade after the Company Posted a top and bottom line beat for the Third Quarter driven by stronger sales and its cost cutting measures. Revenue at aws was stronger, but growth was faster at 12 from previous quarters. Joumanna, investors are always watching amazon results. This quarter in particular with the moves being drastic on the back of the after earners. If amazon was cdisappointed, it would have been calamatous a couple of that were interesting is ecommerce is doing okay up 7 year on year improvement from last quarter up 4 from the previous quarter. Ad revenue up 26 . Listen to this ad revenue is growing faster than google and facebook and faster than snap as well they are really beating the competition with ad revenue. Aws, the leader in cloud services, and this is interesting as well. They only showed growth of 12 for the quarter. This matched the growth they had experienced in the prior quarter. Do you remember early in the week when alphabet showed growth of 20 , the market reacted negatively in the case of aws, i guess because they are the market leader, they are establishing dominance and spending from the higher base. The interpretation of the market is aws numbers were fine i thought that was interesting as well in terms of how investors view alphabet Cloud Business differently from amazon i wonder if there is a point that which the strength in amazon and microsoft becomes a negative given the concerns of an antitrust for being the market leaders in cloud that is something to keep in mind in the coming months. We will push on. Such a busy couple days. We have so much more to discuss. Next up, we will be live in paris as france prepares for ru rugbys world cup final. Arabile will be joined by dan carter after the break you deserve better than that. Im hungry, im in a hurry, i dont have time to make anything healthy. You could if you had a blendjet. Blendjet . Its the portable blender that makes the healthy choice the most convenient choice. I dont know. It seems like a hassle. Hahaha wrong. Just pour in some milk, add some frozen fruit, and bam youve got a nutritious and delicious smoothie. Mmm that is good. Youre welcome, sad office guy. Get yours today at blendjet. Com are we in in an ad . We sure are. Ah, these bills are crazy. She has no idea shes sitting on a goldmine. Well she doesnt know that if she owns a Life Insurance policy of 100,000 or more she can sell all or part of it to coventry for cash. Even a term policy. Even a term policy . Even a term policy find out if youre sitting on a goldmine. Call Coventry Direct today at the number on your screen, or visit coventrydirect. Com. When we started our business we were paying an arm and a leg for postage. I remember setting up shipstation. One or two clicks and everything was up and running. I was printing out labels and saving money. Shipstation saves us so much time. It makes it really easy and seamless. Pick an order, print everything you need, slap the label onto the box, and its ready to go. Our costs for shipping were cut in half. Just like that. Shipstation. The 1 choice of Online Sellers. Go to shipstation. Com tv and get 2 months free. The power goes out and we still have wifi shipstation. The 1 choice of onlto do our homework. And thats a good thing . Great in my book who are you . No power . No problem. Introducing stormready wifi. Now you can stay reliably connected through Power Outages with unlimited cellular data and up to 4 hours of battery backup to keep you online. Only from xfinity. Home of the xfinity 10g network. For those sports fans out there, we, along with you, are looking ahead to the Rugby World Cup final. New zealand and south africa set to faceooff in paris. Arabile is joining us live from paris with a special guest reporter julianna, thank you for that it will be a monumental final. South africa and new zealand for the last 20 years, there isnt a country outside of those two which havent won the world cup. That may be another issue that perhaps world rugby will look at with the investment into things like the tier two nations. We have seen competitions come to the floor lets get to the interview im joined by twotime Rugby World Cup winner dan carter. Dan, thank you for the time. I appreciate it. Good morning. Thanks forego having me on the show lets talk about what players might be feeling as a south african, i imagine what this would be like 36 hours before the Rugby World Cup final. What are the emotions like a lot of nerves the hardest thing about the week leading into the biggest game of your life is controlling your mind i was curious on the way to the interview, i rang aaron smith with his last game for the all blacks tomorrow night. He was actually really calm. He was really focused. He was doing rehab with the physio a lot of it is around controlling your emotions. Nothing they will be doing on the Training Field thats out of the ordinary it is more controlling the mental side of the week and stick to the process and not spending the whole time playing the game in your mind before the game is played and the feeling of being World Champion or how that happens you have done it twice. That feeling is insurmountable there is nothing like it it is incredible. The pinnacle for any rugby player to play in the Rugby World Cup and to be a Rugby World Cup champion a lot of the players on both teams have achieved that you know, what will be driving him . I know for the all blacks, it is about creating history doing something no other team has done before and being up against the springboks one will come out victorious and get the much beloved fourth title. Lets call it forth sight the competition has been different this time around the ones who may have seen dominance coming into the world cup are not as dominant coming into it or playing through it and same for new zealand your fourth coming into the final and what it takes to win it thats the beauty of Rugby World Cup. Just because youre favorite like ireland, doesnt mean you will be on the winning end of the competition. I have gone in as hot favorites and not made it to the final the springboks and all blacks deserve to be there with the performances at the right times. They have played huge games. For the final, it is a whole other ball game with the pressure on these players. You have seen through the world cup in particular with the playoff games with teams and individuals havent executed the basic skills under pressure. For me, this week, it is about which team can handle the pressure and execute the fundamentals of the game it will come down to one or two moments. If you take those opportunities, thats the difference between victorious or not. Dan, you spoke about the dominance of south africa. Then australia as well wbeing dominant how do you get the tier two nations rise up we have seen that with argentina, but we need more teams here. This is the focus for world ru rugby. The reason why they are in investing rugby developing nations. We were even back in the inaugural world cup and progress of the tier two nations has improved, but it is important they continue to really invest and try to help the Pacific Islander teams there are incredible athletes there. The likes of japan, obviously not this world cup w, but the previous two world cups. Fiji was close to making the semifinal. Portugal against fiji. Great stories in there i think it is improving, but terms of making rugby a global game, we need to continue to invest and grow the game in develop it is a focus. Lets talk about the reason to write that book im reluctant to talk about how to win 24 hours before the final. Im close to rugby and i transition out of the game and there are challenges for athletes close to retirement i want to be vulnerable and discuss the difficulties of repurposing my life and the direction i was moving for life after rugby. I was obsess ed about winning ad social impact and helping people i used that format of the book to share those experiences. What is your score line prediction what margin . Obviously all blacks. 2418. Thats a sixpoint margin im fivepoint margin the other way. Dan, i appreciate the time thank you reporter guys, you can tell it is a massive buzz it is beyond the game. From here on, it is mental 47 games have happened and one thing is for sure that the team that perhaps reaches or gets to that final game gets a clear sense of understanding what they need to do and execute their plan will come out on tap. Arabile, you know my husband is argentinean we are still not over the shocking defeat of the all blacks a week ago. Im all in for south africa. Im team arabile reporter good luck tonight england play argentina. It doesnt matter in this case, well take it. Well take it. Enjoy yourself, arabile. Coming up on street signs, the president of the European Council tells sylvia it is important to prevent escalation with the israelhamas war. Well have more after the break. Take advantage of spine chilling savings. Blendjet 2 gives you monstrous power for a delicious smoothie, shake, or frappe anytime, anywhere. Cleaning blendjet 2 is scary easy. Just blend water with a drop of soap. Recharge quickly with any usb port. Boogie on over to blendjet. Com and order yours today. Welcome back to street signs. Im Julianna Tatelbaum im Joumanna Bercetche and here are your headlines. Nat west shares are volatile after the lender downgrades the profit outlook and the uk watchdog finds breaches in the debanking scanscandal. Shares of sanofi fall to the worst level in years as the sales unit fails to win over investors. Stocks capping a difficult week in the middle of earnings season wall street looks to an uncertain open after the nasdaq is dropping deeper into correction territory as things have turned around in the last half hour. Profits at amazon nearly triple sending shares higher in premarket trade Ceo Andy Jassy is excited about the deals ahead. Companies that move slowly in the uncertain economy to complete deals we see the pace of volume pick up in the last couple months fr we have been open for an hour and a half and a lot has happened in that time. As you see on both sides of me, we are seeing positive momentum come together in both europe and the u. S. U. S. Futures pointing to a rebound. Nasdaq looking to gain 130 points down 3 week to date coming into todays session. Perhaps amazon results after the close yesterday which were stronger than expected are causing the turn around in the market narrative Dow Jones Industrial average looking to rebound 90 points s p looking to rebound 40 points after pulling back 1. 2 yesterday. Over here in europe, we had a number of movers to the downside looking at the markets overall, we are now looking at a green picture. Ftse 100 up. 75 sanofi is plunging 15 this morning. On pace for the worst trading day in 29 years. Montcler under selling pressure. Smi up. 30 . Ftse mib and ibex 35 in spain are trading higher now turning to asian markets it was a positive session. Shanghai ending 2 higher. Nikkei rebounding 1. 3 joumanna. Chinese industrial profits for September Rose 12 on the year adding to hopes the growth is picking up again following a series of support measures by beijing. This follows the august surprise gains of 15 with the industrial profits down for the first nine months of the year. Former chinese premier le keqiang has died he suffered a heart attack friday morning li served under xi jinping two terms before stepping down in march this year. He was 68 years old. Chinas wang calls for indepth dialogue on global issues this is seen as a potential summit between President Biden and xi jinping tensions have been heightened on the russia and ukraine war and chips as well as hightech goods. U. S. House Speaker Mike Johnson has kocalled for funding requests for ukraine and israel to be held spreparately. Any money would be funded by cuts elsewhere President Biden proposed 100 million aid package for both countries and hoping the house will approve further aid for ukraine. The u. S. Launched a series of air strikes in syria on iranianlinked targets in retaliation for drone attacks on american assets. This comes as rising tensions are in the region as air strikes are continuing on israel sylvia is in brussels speaking to leaders about the conflict in israel and hamas as they call for pausing in the region. Pedro sanchez says leaders are focused on the humanitarian situation. We need to be with those who are suffering. Civilians in israel and palestinian. I think it is important we send a clear message of humanity and empathy. Sylvia, it looks like you had a busy morning already in brussels give us a sense of what the eu leaders are hoping to achieve with the discussions on Foreign Affairs today. Reporter it is worth keeping in mind this is the first time they are meeting facetoface since the october 7th attack it is the first time that wering swere seeing them come together with a common line visavis with the war with israel and hamas. It is worth remembering in the first few days offer october after october 7th, the eu lacked Organization Since then, what we have seen is the eu coming together and saying that they respect israels right to defend itself, but at the same time, they are calling on israel to do that by respecting International Law going into the summit and the leaders spent five hours alone discussing this topic yesterday night, the question was whether they would ask for a humanitarian pause or pauses to have some more aid going into gaza it may sound like a simple detail, but it is not because of the european history for germany, netherlands, Czech Republic and austria, they do not want to sound as if they are supporting a ceasefire because they do not want to prevent israel from defending itself having said that, it is difficult for other European Countries such as spain because the Prime Minister of spain is sounding more supportive of palestinians the Prime Minister of luxembourg says there is a difference with hamas. They are asking for humanitarian pauses several moments of aid provided into gaza, but calling on a humanitarian peace forum to happen soon. In the near future you mentioned early in the show that we are seeing more tension now between the u. S. And iran in syria. I asked the members and heads of state this morning whether they are preparing to see furthest c further escalation in the middle east. We are aware the situation is dangerous for the region and world. Thats why we are active to try to avoid facinges c escalation. We should make the situation more difficult when i was talking with many leaders of the eu, they were drawing attention on pulling together to prevent the representing of escalation that is why five hours session on the topic is needed to make sure we are not stressing on one here or one there. A real strategy debate to understand what can be the exce exception. This was an important moment to make sure that we will be better prepared for the next phases we understand it is not the last time this topic will be discussed. Reporter that was Charles Michel he is responsible for chairing the eu summits and trying to have unity among the 27 heads of state. I spoke to the Prime Minister earlier of estonia there is a concern here among the 27 that there could be a conflict in the middle east. I said yesterday that for me, the worst matters over the meaning. The meaning is israel has the right to defend itself against terrorism and humanitarian law has to be followed and humanitarian aid has to reach Palestinian People as well we had a very thorough discussion and one of the colleagues said rightly that we have created this problem around those two worlgds the bottom line, i think, and the understanding is still the same of course, we want peace in the region and how we can have that. What kind of initiatives europe could bring about to help restore peaceful situations there. U. S. Tensions with iran emerging are you worried we are going to enter a broader conflict in the middle east . Everybody is worried. That is why we are doing everything to prevent that we discussed yesterday how to prevent that as i said, it is not easy, but everybody is worried that is true reporter so it is also worth monitoring what the eu is saying when it comes to israel and hamas war because there are critics out there suggesting it can be eu player role in the Foreign Policy when you look at the numbers, it is clear that the eu plays a Critical Role when it comes to humanitarian aid in that context, let me share with you the figures as of october 7th, eu shared 28 million euro to palestine. Thats also worth keeping in mind a final point to say the leaders had a very Important Message yesterday in the sense that, yes, they he aare focusing on t israel and hamas war, but not for getting about ukraine. They are talking about further support for ukraine. Another important conflict and important for us to monitoreu i. Thank you, sylvia if you want to get involved in the conversation, you can tweet us im cnbc joumanna and cnbc dl cnbcjou we will discuss more on the Fintech Industry being under fire in the next street signs segment next i knew there would be a lot of orders to fill and i wanted them to ship out fast thats why i chose Shipstation Shipstation helps manage orders reduce shipping costs and print out shipping labels its my secret ingredient shipstation the number 1 choice of Online Sellers and Wolfgang Puck go to shipstation. Com tv and get 2 months free this halloween, trick or treat yourself to the blendjet 2 portable blender. Its to die for. Blendjet 2 gives you monstrous power for a delicious smoothie, shake, or frappe anytime, anywhere. Cleaning blendjet 2 is scary easy. Just blend water with a drop of soap. Recharge quickly with any usb port. Boogie on over to blendjet. Com and order yours today. You want to be able to provide your child with the tools or resources they need. With reliable internet at home, through the internet essentials program, the world opened up. Fellas, fellas. Thats how my son was able to find the hidden genius project. We wanted to give yall the necessary skills to compete with the future. Kevins now part of this next generation of young people who feel they can thrive. Welcome back to street signs. Bitcoin has rallied this week on is speculation that s. E. C. Approval is close for a spot etf. This is driving demand for the cryptocurrency with exposure on any Exchange Listed product. The s. E. C. Has only approved bitcoin tied to futures contracts. And Sam Bankmanfried has taken the stand over the collapse of ftx. Judge kaplan ruled that he would testify without the jury present to determine which testimony is admis admissible prosecutors say Sam Bankmanfried should not say lawyers were responsible he told the court that lawyers were involved and setting up the system where customers are depositing into the alameda bank account. And charges were brought back into focus swiftly after worldline posted disappear pointing numbers in the Third Quarter sending shares spiraling in wednesdays trade the revenue wasnt the only thing that disappointed, but the fact they had to sever ties with merchants which put the microscope on worldline and causing doubts in investors minds of the direction of travel for the french Payment Company it is trading at 11 euros a an sh share. We wanted to take a deep dive into the space to see what is in store for future weaker environment and stricter regulations have come to bear on the fintech space in europe and the u. S. That is seeing a sharp pullback in valuations which sky rocketed during the pandemic. Lets look at how the space has performed year to date pullback in payments in the uk down 80 worldline down 70 with the bulk in a single day move this week which is extraordinary adyen down 60 and others have come down lower with worldline to take us further into the space, i have simon taylor here at fintech brain food. Thank you for having me hopefully you agree this is a good time to look at this space given the massive moves we have seen in the publicly listed companies. It feels like there are so many factors weighing on the sector the economy and inflation and reducing revenues and you have companies slow to adapt to covid and regulatory scrutiny after a few scandals in the secretary tornad sector do you think the pullback we have seen is justified or overdone it is hard to say the reality is it is complepcom. If you zoom out on the chart, you will see that the trading range now is in the 2017 region. What happened during the pandemic was a massive spike especially for ecommercerelated stocks like adyen. In the private markets, strike, meant everybody had to get into ecommerce and everybody had to buy from home. They have given a lot of that back there are worries about the economy and consumer is this a return to reality . Is this tech going riskoff . Is it Interest Rates it is probably all of those. If you look at the secular trends driving the payments industry, those are the same things which is a new competitive dynamic. Lets go back to the pandemic era. 2021 was a wild year for the space. Since then, there has been a big reevaluation across crypto and fintech and tech stocks. One creiticism which has been leveled in the payment space is they did not react to the new postpandemic reality. I also think that is a little bit unfair because what could they have done to adapt to the new reality . It wasnt theultimately in thei power . How long would it go for . You could not hire people quickly enough it is harder to let them go after easily hiring people how do you let people go when the customer revenue goes out the door how do you predict when the revenue is not coming in and the secular trends changing . The tech sector was doing the same thing hiring people and signing long contracts. Those long contracts are renegotiated and pushing harder on price there is the dynamic to think about. I want to ask how seismic events of the scandal was and what it meant for the fintech players . The Money Laundering and all of that costs a lot if you are a small fintech firm, you have to think about all these things. There was the tension between time to market which entrepreneurs want and lower overhead and super regulated the banks are super regulated. They argued for the past decade they are not on a level playing field. What they operate in is something unfair they have a higher level of scr scrutiny not all of the Fintech Companies are the same adyen is a bank. It has a higher compliance overhead than somebody who is not a bank like worldline. It has to deal with banks behind the scenes that is where the challenges can creep in when i see a stock plunge 70 in a single day and trading 11 euro per share, my first thought is this a target you have to think pe firms are strategic and looking at this space and saying there is some value here are we going to see more m a activity given the Payments Companies are trading at lower valuations certainly it started with worldpay and the decade of the companies were trying to get bigger and bigger and acquire each other nowing again there are a number of other companies in the smaller market. The next generation of companies and what will happen with stripe those are the big names. The second class of Midsized Companies with meaningful revenue in the hundreds of millions or billions and these are high margin. They throw off cash. There is something attractive for somebody under the hood, how regulated are they the other question is how good is that Technology Stack and can they compete in the next decade . One in five vc dollars went to fintech in the last decade that is a lot of competition with a lot of talent. Simon, thank you for helping us out this morning. Were going to leave you with the picture of u. S. Futures which are higher at the moment nasdaq looking to open 130 points higher as investors react to the amazon numbers after the close yesterday and come off a brutal week if you have been a tech investor. That is it for street signs. Im Julianna Tatelbaum orwim Joumanna Bercetche. Wldde exchange is up next. Street signs is not on air next week, but we will be back the week after meet the portable blender we can barely keep in stock. Blendjet 2 gives you icecrushing, big blender power onthego. So you can blend up a mouthwatering smoothie, protein shake, or latte wherever you are recharge quickly with any usb port. Best of all, it even cleans itself just blend water with a drop of soap. What are you waiting for . Order yours now from blendjet. Com before they sell out again it is 5 00 a. M. Here at cnbc global headquarters. Here is your five 5. Stopping the slide wall street looking to end the week on a positive note with the s p set to open at the lowest level since may. Looking to amazon to stem the tech wreck how the cloud giant may be the Silver Lining investors were waiting for. And not just amazon boosting fortunes upbeat report from intel. And temperature may be rising in the middle east as the u. S. Conducts