Said 7,000 jobs will go. Sending shares higher. Oracle takes on microsoft taking on tiktok working with groups to go up against microsofts offer. Democrats and some republicans take aim at President Trump in the Democratic Convention with a headline speech from former first Lady Michelle obama. Donald trump is the wrong president for our country. He has had more than enough time to prove he can do the job but he is clearly in over his head we have about an hour of trade under our belt here. Lets give you a sense of how the european markets are moving. I have to say there has been some improvement in the tone here we are about seven tens of one percent. We break that down, that gives you a sense of where weve seen some improvement the ibex 35, the spanish market in positive territory with the german dax a little under two 10s of one percent and the ftse and the cac trailing in their wake thank you, geoff. Travel and leisure underperformed up about half a percentage point overall. In could be traft, the minors were some of the best performing stocks we got a boost out of china supportive of the basic resources. We are seeing a little pull back in line with the broader pull back in markets. Well bring you more with our first interview with bhp and analysis later on in the show. Plenty of mining conversation for you. Lets bring in our first guest this morning, the global head of finc research. Thank you for being with us. We are looking at near record highs for u. S. Stocks and tech stocks in particular yet the uncertainty that surrounds Global Markets remain very high. Do markets reflect the risko outlook . I think it does. Economic recovery has been really strong. When you compare and combine it with the actions, stocks do not look expensive relative to fixed income it is completely rational the market looks here going forward. In terms of what happens going forward, it looked for a while europe had the virus under control. Now we are seeing the risk and resurgence in europe rising. We are seeing pockets of escalation some indicators are a little more encouraging do you think that narrative is going to persist from here better numbers out of the u. S. , worst numbers out of europe. What is more important is what is going to happen on the whole vaccine discussion when will it come, how much will that solve and will it get to people how effective will it be that is the key for the markets. If you have a little bit of the spread, you will lockdown. Youll have regional lockdowns and target lockdowns but not a lk down of the country it doesnt matter too much the whole Vaccine Development is much more important. Of course, happening with the virus developments we are seeing the u. S. And china continue to battle it out. We are seeing an escalation on the tech front with washington having a ban on tiktok why havent the markets reacted to these new tensions the same way they did years ago markets are saying, yes, we have a cold war between u. S. And china. You dont have the risk and sharp escalation of the trade war, which would be damaging to the economy right now that is probably lower these things are definitely a bad thing for the globe al economy. We cant factor in now my base case is not to have a sharp escalation of the trade side this would be a key market scene over the next couple of months i find that intriguing. That is right. On a relative basis, the valuations to where we are on the fixed income dont look demanding. The question is on an absolute basis, they do let me pick a bone with you here, the s p is Something Like 29 times trailing. On that basis, what is that risk to your rosier scenario going forward. Is there a potential to return to the mean on the basis which means you loose money running into 2021. The biggest risk i can think of is if you found out it is very difficult to solve the crisis with the vaccine, that would be extremely damaging. The rally we have seen has been driven by that i would see the tail risk out there, which is outside the vaccine is a certain spike in inflation. Lets say we had that Interest Rate up 3 discounting the future earnings would have to be priced very differently. Nobody is thinking a lot of inflation but if that happened, that would sell off dramatically to next year what is the opportunity to diminish the headline risk from that happening do i rotate into value or other geographic markets or do i go to cash or gold gold is a good idea you still have weakness of the dollar, which is combined with gold there are opportunities and value stocks in europe we like the banks. I know they are underperforming for so long. If you want to hint, you could say the u. S. Risk are opportunities to see the curve in the u. S you have now and going a little less negative. That could be a hedge to combine with a weaker curve. Just the latest number in this drum beat of gradual erosion of deployment. What we havent seen so far is significant spike in defaults. I wonder if your in flags scenario were to come to being, if we were to see a spike in the cost of money, do you think we would see a round of rising defaults i dont think so. In my view, the inflation would be together and sharper than the recovery there are also supply issues it would be a driving force. If that happens, i would not see a sharp decline. In the u. S. And europe in terms of what the market is pricing, it seems to be relatively low compared to rating agencies are saying maybe there is a bit of a disconnect Central Banks have been extremely active and they are all down to the trading curve. Thomas, if i can shift to the u. S. The Democratic National conviction kicked off. For the first time ever, wall street donors are giving more to the democrats than the republicans. What do you think a Biden Victory would mean for the markets . I think the fed is more important than the election. What the fed will do next month is more important. I do think election is also important. What is especially important is the issue around fiscal policy what would be the difference between biden and trump. I think if you have a landslide biden win in the house and senate, youll have probably more fiscal expansion. Youll raise taxes and do more on that side and more in terms of stimulus. There for, i think you could end up with having a bit of a positive for markets baseline, i dont think that would be a major driver. The fed and the vaccine is more important. Of course, that was long ago i think that was also different. It seems more likely biden will win. We know trump now and what hes going to go for. I think the market will try to see that now good to have you on thank you for the analysis okay lets move on. Sources have told cnbc software giant, oracle has entered the race to buy tiktok u. S. Operations a person familiar with the matter told cnbc oracle is working with Venture Capitalists to challenge Microsofts Office after donald trump gave tiktoks owner bytedance 90 days to diverge the app in the u. S Peter Navarro says the decision is rooted in security concerns the rational of banning these and perhaps others is simply that these are tools that collect information that goes back trade to main land servers. There is a reason why the Defense Department banned tiktok you look at the dangers from these social media app they surveil, trap and monitor people there this comes after trump announced further restrictions on huawei. Oracle is now in the race to buy u. S. Portion of tiktok working to challenge Microsofts Office after trump gave bytedance 90 days to divest u. S. Operations tiktok already had until september 15 to have its u. S. Operations snapped up by microsoft or face a ban in the u. S. This newest order has further pressure to sell and has given a hard deadline to do so the u. S. Is also tightening the screws on another Chinese Company that is huawei further limiting the company now access to semiconductor chips. The Commerce Department had already imposed restrictions which were made on the software without a license. This goes further and adding 38 affiliates to the government black list saying that they tried to evade earlier restrictions by working with third parties. This is said to be aimed at circumventing huawei and is also aimed at trying to close loopholes that huawei could potentially use. U. S. Pressure has already taken a big hit to the company this could deal a huge blow to the firm sch already had limited options and could be costly. In sydney . Back to you. Epic games have made it impossible to offer any new apps to apple users fortnite was removed from the app store after a direct Payment System went around apples software from which the Company Takes 30 cut. Soft bank builds up 1. 2 billion stake in amazon as the Group Expands its focus beyond late stage unlisted startups. Also bought shares of netflix, tesla, microsoft, nvidia and alphabet still to come, the leader of belarus may be ready to make concessions. Well find out more when we come back you say the customers make their own rules. Lets talk data. Only Xfinity Mobile lets you switch up your wireless data whenever. I accept 5g, everybodys talking about it. How do i get it . Everyone gets 5g with our new data options at no extra cost. Thats good. Next item corner offices for everyone. Just have to make more corners in this building. Chad. Your wireless. Your rules. Only with Xfinity Mobile. Now thats simple, easy, awesome. Switch and save up to 400 a year on your wireless bill. Plus, get 400 off when you preorder the new Samsung Galaxy note20 ultra 5g. Welcome back belarus leader has offered to hold a referendum on his constitutional powers. A move that could lead to new elections. Follows a wave of antigovernment protests and strikes following last weeks election which demonstrators say was rigged speaking to cnbc earlier today, the uks former ambassador to belarus and senior fellow at the iiss said the latest offer shows hes living on borrowed time hes made a mistake after mistake in recent days with a response the latest proposal really not to be taken seriously. His authority has been so undermined he is improvising and playing for time the former ambassador do you agree through the analysis that he will be gone soon and living on borrowed time looking completely at his power in the eyes of citizens the question of how much time he has on his hands on the rule russia will play in it we did notice two phone calls, i am sure they would try to coordinate the strategy. We do see a reporting of unmanned, unidentified vehicles with military equipment moving towards belarus. Perhaps implying that russia is concerned with protecting its own border in recent years there hasnt been a lot of love lost has been an unpredictable ally. On this change where he is building a legacy where putin would expand more in the region. He wasnt giving up much of belarus. Right now, russia has the opportunity with the transfer of power and with him being gone to restart this new pressure. If the west imposes sanctions on belarus and if they find itself isolated, being economically dependent from russia, it could have more concession we understand what happened in ukraine and the pretext that president putin used to send military forces into ukraine is there a rice being sk of thee thing happening here we could see the use of some proxy groups to buy more time providing protection in a strategy to buy time that was part of the annexation. Hear, he would try to make sure he is in control of the transaction and that his scenario were respected. It is very important for the west to stay on top of developments and be proactive. Targeting the belarus leadership in the way it was decided to move in. It is important that there is a sudden conversation going on and a possible phone call between them taking place today. I think it is important to confirm the principals and the west should stand by so many going by the street to defend free and Fair Elections and to support those option leaders and society is crucial to the west at the moment. That timing is intriguing for the u. S. Here. The way that russia will evolve in President Trumps term. Do you see that as a potential factor that could stay president putins hand at this point the concern he may have to see President Biden and not a second term trump i think president putin clearly sees an opportunity of using the time when the United States is preoccupied and trump being an admirer of many dictators around the world we have seen not much support for democracy and liberal values it opens a gap and opportunity for putin to act and hope it will not really cost them much if the United States remains in a way not involved in a way, this would be a great mistake in the European Countries and United States should act in concert taking into account political situation in the capital something notably different from ukraine is that protesters are not waiving eu flags and they are not demanding western intervention or even russian intervention at this point apart from the end here, what do you people in belarus actually want to happen next . You are right ukrainian protests were very much about putting on track ukraines european integration and for a new agreement which took place in belarus, it is more about dignity. It is more like the orange revolution in 2004 they want respect and dignity and to make sure they have a future in belarus hes been in power 26 years i think they are tired of him. He didnt handle covid well. They feel like they deserve a better leadership. Thank you for the Research Fellow for russia and your asia program. Something else has been happening and the european markets have been improving with the ftse in positive territory youve got the cac and the dax higher the French Market has moved into positive territory well continue to keep a weathered eye here some of the better data weve seen around sales in the uk has helped the uk Construction Company reinstating its dividend payout. Weve seen positive news flow on some other corporates in the european context as well well tell you more when we come back well talk about minors. The mining giant bhp has talked about plans to divest its Coal Division well hear from the ceo when we come back. Welcome back you are watching street signs. Lets have a look at your headlines. Democrats and some republicans take aim at President Trump in the virtual Democratic National convention which gets under way with a headline speech with former first Lady Michelle obama. Donald trump is the wrong president for our country. He has had more than enough time to prove that he can do the job but he is clearly in over his head oracle takes on microsoft. Making a bid for tiktoks north american assets. Working with Venture Capital groups to go up against microsofts offer. Marks and spencer reports a 40 plunge saying 7,000 jobs will go in the next few months sending shares higher epic games calls on apple calling on a judge to stop them from removing the game from the App Store Amid dispute overpayments lets get a check on european markets. We have seen price action over the last half an hour. We started out the day with the majority of shares trending lower. We have seen positive change and the main benchmark has crossed in with most Major Regions trading higher out about a third of a percent we have a couple trading in negative territory the bulk of shares are moving higher travel and leisure the standout after a pull back from yesterday. A little catch up trade there taking place in travel and leisure stocks lets look at fx markets weve got the euro and sterling trading up nearly around 119 mark sterling trading around 131. 50 u. S. Futures, lets take a look at what wall street will look like the nasdaq outperforming rising about 1 and hitting a fresh record high. This morning, we are looking at modestly positive start to trade and muted moves, geoff bhp has reported a 9. 1 billion profit warning most Major Economies will continue to contract this year Ceo Mike Henry stressed uncertainty remains while he also addressed plans to divest of the thermal coal units. I would ask everybody to continue to look and where weve continued to be productive and produce in the time ahead. Given covid19, things remain uncertain. We have exercised the best programs today as we move through the course of the year, things end up better than expected. Well speak to the market better than expected. Weve sharpened up and made the announcement today i would want us not to lose sight as well that in the past year, weve secured options in the commodities. T tending to the current portfolio there. Lets have a look at the wall showing you how some of these stocks are trading with a mixed picture. Bhp is off about 1. 5 here thomas price joins us. Great to have you with us on the program. Let me ask you, youve got a list hereof most preferred over the next six months and least preferred. Lets focus on the most preferred. What do you like in the commodity space . A good place is coal. We actually like the coal and Steel Industry you cant really change this market japan, korea, taiwan coming back into the trade there is upside to coal. We also see things like steel scrap scrap metal and supply no one is allowed to go out and collect. Manganize is needed for strength so much dependent on china for smooth transition from lockdown to the command. Any reason to believe that would continue to happen at a relatively smooth pace if you are a commodity analyst, you spend a lot of time thinking about china. They are the World Biggest commodity consumer the speed which theyve come back into the Commodity Markets after the lockdown have been extraordinary and had a broad based impact from copper to the coal market. Iron ore and steel well probably see it stablize in the quarter the only down size is the good pull back as they head into the winter that is something well see every year the risk is more from the upside to the down side even after this rewrite. Thomas, i want to pick you up on your bullish call for coal. Is this a shortterm call. Interesting you are making the call on the announcement that they are pulling back from their call and a push for cleaner materials. What is the time frame for this call are you bullish short term and more bearish long term thats right. We are waiting for china coal players to put pressure on these markets. Those will take place and the restoration of the Steel Industry in japan and taiwan and india. Their important demand to drive. Thermal coal will be stockpiling ahead of that event. Short term, weve seen prices lift from the range to buy at least 10 going to the back half of the year. Longer term, we recognize the shift. Bhp is trying to reduce their use of cole. R riotinto has already done that this is a global thing they are trying to diversify away from coal and reduce carbon emissions. We are seeing a major shift in this very, very large industry so, yes, shortterm goals. I want to link this to your mining equities. They are very linked themselves. Weve seen more conscious investors shy away because of coal as one factor to consider glen core joining the ranks, does that create more opportunity for investors to get involved yes im looking at the structuralal change in every time frame going from small to midcap players. The reasonable reason at all is because the global power system is in fire to the tune of about 50 . We cant just do an overnight change on that that is something that will evolve over many years i would expect equity markets would be evolved into that private equity will probably have a bigger part over time as well it seems to be very popular over the coal space. Theyll withdraw in the market and hand it over to the small to midcap space a bit of support from the fact that Berkshire Hathaway has gone on buying the stake as well my question is back to the fundamentals it seems theyve used the higher price to pay out debt. Not to go on the hunt for the opportunities. Does that mean well see the price go higher here without cheaper replacement . It is great to see more people come into the gold space, it would probably confuse a lot of those investors out there youve asked and who cares about my supplier. It does matter and weve seen structural changes in the mined supply of gold over the last decade or so it seems perhaps the minors are a little cautious about the Strong Performance of gold they are doing the right thing of handing cash back if gold price stays at these high levels, maybe theyll start to become increasingly comfortable. You are right. If they dont do that, then that becomes a contributing factor in the medium to long term. It is an interesting thing to look at probably, the thing they are looking for beyond the u. S. Election to get beyond the short term theyll be more stable beyond that. Thank you for being on the program. Head of strategy weve had that turn around then in the equity Market Sentiment are we being drawn higher by the shift as we are implied positive on the major indices coming up on the show, walmart is set to report Second Quarter earnings with the u. S. Retailers Online Business to get a boost from recent government stimulus well get you prepared for the numbers just after this break. Look here, its your very own allinone Entertainment Experience xfinity x1. Its the easiest way to watch live tv and all your favorite streaming apps. Plus, x1 also includes peacock premium at no extra cost. This baby is the total package. It streams exclusive originals, the full peacock movie library, complete collections of iconic tv shows, and more. Yup, the best really did get better. Magnificent. Xfinity x1 just got even better, with peacock premium included at no additional cost. No strings attached. Welcome back to street signs. Home Builder Sentiment in the u. S. Has hit record levels as consumers ditch urban areas for larger suburban homes. The National Association of Home Builders and wells fargo housing index. The survey also found an increasing number of homeowners are failing to pay their mortgages. Senate republicans plan to outline a new stimulus package that includes 10 billion to the u. S. Postal service according to nbc news as funding for the usps has become a major Sticking Point between white house officials and democrats. Marks and spencer will cut about 7,000 jobs over the next three months reporting a near 40 drop in clothing and home sales over the last14 weeks giving a boost as customers continue to work from home and avoided eating out walmart is set to release Second Quarter results before the bell with the retail giant to post strong sales and posting more online. The Resource Group joins us now. Thank you for being with us to set the scene for todays result walmart, unlike many retailers in the u. S. Has not only been thriving but surviving what should we expect from the numbers. This will translate down to the margins. It is especially good that it translates to profitable sales because that is a record amount of money in the inventory. Adding its own trucking fleets and adding people to stock the shelf. Walmart in the preopen is up 2 after setting the 52week high yesterday. You mentioned an interesting point that walmart pays all invoices in time and in full in 23 days. During this time when so many smaller retailers have been struggling to pay the bills, what does that mean for walmart in terms of taking market share and the overall picture for how theyve been doing how has this been aiding them . It aids walmart the most in growth and apparel and accessories. General merchandize, hard goods, defined as consumer electronics. Sporting goods and soft goods. Walmart paying 23 to 30 days net where the Department Stores were paying 30 days net are paying 60 to 90 days if their paying at all or if they are paying in full so there is a massive shift for brand suppliers to support walmart in power Shopping Centers and those paying slow to not in full at the shopping malls. Bert, i dont know how much you are focused on the International Strategy interested in what will return here and walmart has been looking at markets like india and china. With full diligence on whole foods in the uk and north america. It was caught in the cross fire between england and ireland. So walmart will continue to gain in mass and in the gold mining as you referenced. India, the flip cardiac wizition will go well as you referenced under the ceo of walmart who had been the prior president of walmart international. Theyll start to catch car foreand other chains in the peoples republic of china and get asia on firm footing for the first time in nearly 25 years. Ive got to circle back here where weve had Market Intelligence through on the uk grocery numbers. Weve seen a record high going through the e commerce channel what can we expect on the market side walmart will grow at a bigger rate than amazon hired jeff lory away from amazon and my former cornell business student away. Walmart is hiring the best and brightest and investing record cap ex and still turning negative in the stores with whole foods, walmart is gaining and grocery comparison will gain 14 . For bricks and mortar, walmart can deliver to over 80 of u. S. Homes now. It will be over 95 by the end of the year. With flip cart in india and developing worldwide, they are committing the cap ex, the inventory and the talent and size and scale to win and start to check mate amazon and others. Bert, back to school is a huge part of the landscape there is a lot of uncertainty over what the back to School Atmosphere looks like. How dependent is walmart given uncertainty and changes this year back to school will be an issue. It will be muted to walmart. What will work for walmart is prior to the covid pandemic, only 10 of 21 meals in north america were consumed at home. Now between 17 to 21 meals are consumed at home with people learning at home for school, working at home and living at home walmart misses in back to school, it will pick up in consumables. Picking up on the present point you referenced on the prior segment on housing walmart has the least exposure to urban areas where there has been civil unrest and as you referenced, people are moving out of the cities where walmart dominates in the less densely populated towns and counties where walmart is losing a little bit in back to school, it is gaining from mass migration where walmart started Building Stores in 1962 because at that time mr. Sam walton could not afford to build in the densely populated markets in the u. S. And elsewhere. Thank you for your company this morning managing director for the strategic Resource Group thats it. Street signs comes to a close. Thank you for your company we are very focused on the dnc well tell you more about that over the next show or two. From julianna and mylfse, thank you for tuning in. Well see you tomorrow look here, its your very own allinone Entertainment Experience xfinity x1. Its the easiest way to watch live tv and all your favorite streaming apps. Plus, x1 also includes peacock premium at no extra cost. This baby is the total package. It streams exclusive originals, the full peacock movie library, complete collections of iconic tv shows, and more. Yup, the best really did get better. Magnificent. Xfinity x1 just got even better, with peacock premium included at no additional cost. No strings attached. It is 5 00 at cnbc here is your top five 5. Holding out the s p 5001 from the high and nasdaq with its record run boosting elon musks net worth along the way. Senate republicans laying out a new plan to save the stimulus negotiations but it may not be enough for democrats taking
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