that's all for this edition of "dateline." i'm craig melvin. thank you for watching. ♪ good morning wel welcome to "street signs." i'm joumanna bercetche >> and i'm julianna tatelbaum. these are your head lines. global crude is expected to rise this morning which claims the china recovery continues to top expectations. autos are biggest losers in trade after the factory data in china disappoints.

highlighting the post-covid recovery. the green light of the takeover of eu activis activision-blizzard. the decision is not a contra contradiction. >> we know each other. we have been discussing harm to some degree and now we have different outcomes this is not something that comes between us >> our colleagues speak to microsoft ceo satya nadella tomorrow and the united states inches closer to default as lawmakers dig in ahead of budget talks today. mccarthy is accusing some democrats of wanting a default rather than a deal welcome to "street signs."

we have fresh lines from the iaea the international energy agency. in terms of demand, oil demand, the global oil demand is set to rise by 2.2 million barrels a day to a record 102 million barrels per day. china will account for 60% of global oil demanding growth in 2023 demand is expected to eclipse supply by 2 million barrels a day in the second half of the year in terms of supply, global oil fell to 101.1 million barrels a day in april in terms of the outlook for oil supply, opec plus oil supply is expected to fall to 150,000 barrels a day and non-opec plus is expected to rise. two trends there joumanna, interesting on the

demand front that chunina is gog well >> there are three things in the report that stuck out. china is accounting for 60% of oil global demand. that continues to surpass expectations which is surprising we keep talking about this in the show the data from china is that disappointing to the downside. as far as the oil demand, it is turning up higher than expectations that is the first thing. second, they are also implying that the way the market is trading right now and we just have a screen of brent up trading at $75.70 for print. there is one line i want to highlight. current market pessimism is in stark contrast for the second half of the year indicating demand outlook has

increased up and supply has shifted down you put that together and you have a tight overall market stru structure. the final thing that is interesting, the refined crude oil products is up in april. russian exports are at a post-invasion high >> finding buyers if not the buyers before the invasion looking into the china detail, it is fascinating and insightful with the macroeconomics indicators outside of the report which were weaker. here is what they are seeing in china with the oil demand. personal mobility significantly higher domestic travel by road and air recovering or surpassing levels seen earlier urban congestion showing a

comeback they are stabilizing after a strong start to the year these numbers look robust. we contrast that with the latest economic data we got overnight let's get a check of markets. you see the heat map is evenly split with green and red. stoxx 600 is trading flat line dipping slightly over the last 24 hours, a lot of talk about the debt ceiling discussions that are taking place in the u.s. as we get closer and closer to the deadline and you should expect to see more volatility in the st stock markets. julianna said we have the monthly chinese data drop. many numbers that came through have fallen short of expe expec expectations that implies the recovery pace has slowed down. we are seeing in the sectors today that is translating with basic resources and commodities linked to china.

first, let's break it down by markets. you can see pretty much all of them are trading toward the green. cac 40 is the only one that is lagging. the swiss index is down .30% in germany, we have the dax shy of 16,000. up .10%. some of the carmakers are trading on the bottom. ftse 100 is up .10%. one name we are watching is vodafone down 4%. they have had massive job cuts keep in mind we had wage data in the uk which was slightly below expectations wage bonuses at 6.76%. it is softer than the forecast which means they might actually not go an head with the extra re

hike in terms of sectors, i mentioned any sector that is linked to china is coming under selling pressure autos down .60%. retail is down .40%. we have the tech sector at the top up .80%. let's dig in the china numbers. the second largest economy is still uneven output rose 6% higher, but lower than the 11% increase which was expected retail sales with the fastest rise since march of 2021, but below forecast of 18.4%. joumanna and i were discussing that the iaea discussions and china recovery stand in contrast to what this data shows. joumanna, the question investors will show today on back of the

chinese data would be is this weak enough? will we see more stimulus in form of a rate cut or rate cuts from the central bank? if we see the uneven recovery and it is hard to keep the recovery going, will they step up >> retail sales is increasing year on year is a high number, but compare to the prior significants and there certain is a decreasing trend there. in prior months, it was north of 30%. if that trend continues and it doesn't bode well. e a couple of points unemployment rate. people aged 16 to 24 hit a record high of unemployment. that is showcasing weakness here i want to pick up the goldman sachs analyst.

we believe that china's consumption led post recovery is still on track, but still weakness in the economy. the sectors they cite is property sector in china for the better part of the last couple years and youth employment and the consumer confidence. all of those things are spelling a little bit of weakness beneath the surface. julianna, it may prompt a reaction from the pboc >> the youth unemployment rate is staggering. you think of the biggest risks to the economy social unrest is a long-term existential risk out there not just in china's case, but around the world youth employment is a serious concern with high levels like this i think from a strategic long-term perspective, that is a serious area of concern.

>> that goes 360 and how we started off the show with the iaea report. interesting juxtaposition there. oil is telling you chinese demand surpassed expectations and all of the cother indicators show weakness. definitely a lot of interesting data to unpack out of china overnight. i want to bring italian inflation data the final eu number that came in lower than expected. 0.9% month on month against the estimate of 1% month on month. the final year on year number has come in at 8.76% still elevated levels. slightly lower than the estimate of 8.8 moving in the right direction. still pretty elevated and it is

something that the eu commission has taken note of. the german finance lender said the eu needs to align the fiscal policies to fight inflation. this as european finance ministers meet to discuss the latest forecast and banking regulation in the wake of the turmoil in financial sectors the meeting comes after the commission issued a more optimistic outlook this year despite a persistently high inflation. sylvia is out in brussels again grabbing the ministers let's talk about the latest forecast from the commission they came out yesterday and it was note able they upgraded the gdp forecast for the eurozone as a whole. no longer seeing risk of recession. if anything, these numbers are

above the zero mark. 1% >> reporter: the picture when it comes to growth is a lot more positive than what the ministers expected particularly going into the year as they were dealing with the energy crisis. that is what most of the ministers decided to emphasize this morning and yesterday when they gathered here in brussels they said listen we are quite proud of our work. the economic picture is not as bad as expected. the problem is when you look at inflation forecasts and that story is totally different the european commission raised forecast for inflation both this year and next and, of course, that is the biggest headache across the block it is in this context that the german finance minister sounded here because he was cautious he decided to reiterate a lot of

uncertainty with the economic picture in eu. joumanna, one of the questions we have is what it means for th central bank in europe the figures are well above the ecb 2% target. i asked the spanish finance minister and said what does it mean for the ecb and she expects the ecb to achieve this 2% target in the medium turn regardless of the inflation forecast >> what we see is inflation to go down to 4% this year. this is half the level of last year and continue to go down next year. we have to bear in mind that the target for the european central bank is a mid-term target. we are on track to reach that target in the midterm. we have to hope and i have full

confidence the european central bank will make the right decisions for inflation and make the forecast in the midterm and ensuring we continue to have strong growth and job creation in europe. >> reporter: now i want to draw attention to another topic the finance ministers are debating this morning that is sanctions against russia there is work under way in brussels preparing a new round of sanctions against russia. i asked the swedish finance minister who is chairing discussions today how far can the eu still go in terms of hurting the russian economy. >> what we need is more sanctions and we have to see the sanction in place with no loopholes and everyone sticks to the sanction we don't see that. that is important. we can have many more sanctions packages, but we need to see

everyone is implementing it and using it as it should. >> reporter: so there has been a lot of speculation if the eu will decide to sanction the russian exports of diamonds and if they will sanction russian nuclear energy for the time being, that is set aside and the focus of the package is being prepared which is on closing the loopholes and making sure the tenth round of sanctions so far imposed are respected all over the world that is the focus for the time being. let's see when the commission does publish the final proposal in terms of new sanctions. >> sylvia, thank you for the great sound from brussels. coming up on the show, luxury home group gets set for the ipo in milan in the next number of days managing director giorgio gobbi

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welcome back to the show elon musk has been in paris meeting with french president

emmanuel macron at the choose france public. he said they would make significant investment in france in the future. musk dined with the french finance minister who talked about the green technology all of the discussions with the business leaders show the long term commitment to economic devel development. >> translator: all investments are as a result of months of negotiations this doesn't happen because a ceo comes and says it looks nice and forks out 2 billion euro that is not how it works it comes from months and years of negotiations. >> he is a busy man, elon musk he does get around david faber will be sitting down with elon musk at 6:00 p.m. eastern time today 11:00 p.m. if you are out late in london.

not one to miss. that will be an interesting conversation elon musk has the attitude to travel all over the place. france is trying to lure in inve investment remember, tesla built a factory in germany you have to think there is a bit of competition >> we know that france was interested in tesla and choosing france for the factory he was asked if they were building a factory there he would not give information on the content of the conversations. we know that france previously tried to get that factory, but he went with germany >> it is funny, the optics the british newspapers are picking up on the fact that elon musk showed up for the interview unshaven he joked to macron that he had to sleep in the car. these videos of him emerged of

him in mexico the next before. >> he gets around. >> he does again, it is part of the persona and vibe that elon musk is going for and he is an international man and busy man, but also likes to party and go out and show up and meet world leaders that's power, i guess, in itself >> in terms of the tesla story, given that he is stepping down as ceo of twitter and we have seen tesla shares benefit from that announcement. we'll see if there is any material change in his engagement with tesla as the decision materializes in the decisions taking effect. let's talk about vodafone. it announced it would cut 11,000 jobs the performance has not been good enough. the company forecast flat earnings after the net profit of

12 billion euro. it is currently in merger talks with ck 3 group. the group says there is no certainty any deal will take place. luxury home group italian design brands will trade in milan on thursday after closing the ipo. the market cap is under 300 million euro with shares offered at 10.88 euro. giorgio gobbi joins us thank you for being with us. high-end furniture, doesn't feel to me, a particularly safe investment if we are looking at an economic downturn why is now the time to come to market >> thank you for hosting me. good morning definitely there is never the right time to go public.

that is we realized since the project start in 2015. i couldn't use the statement when the going get tough, the tough get going. that is not the matter in our c case it is a thoughtful decision over time our plan was to go public earlier, but the pandemic and we had to postpone our progress here we are. >> your company is a portfolio of companies and a number of brands make up the overall group. the strong international focus looking through the perspective information with 140 countries exporting into and that makes you vulnerable to supply chain and trade tensions given the u.s. export to china and the u.s. to countries across europe. s>> not just the supply chain,

but almost all of our growth components and supplies with three furniture. we have markets served and that is pretty much well balanced with different destinations. we sell 25% in italy and other percentages in european union and other 25% in north america i would say we are balanced in this sense. >> to what extent, do you think, your business will be linked with what happens with the housing market we talk about the housing market with the higher interest rates we see house prices and growth begin to slow down what sort of impact does it have

on businesslike like yours? >> in this case, there is not much coordination because all of our brands are high-end players in the furniture and industry. very likely our market on average is 4%. we have seen a couple of downturns since 2008 with the financial crisis and pandemic more recently. i would say it is much more related to how our high wealth individual customers plan to decorate houses. we plan to open new stores

not much issues with the real estate >> let me ask you about what you are planning on doing with the proceeds raised by the ipo i know you have been agile of building up the company and brands are there plans for further expansion with the proceeds? >> definitely yes. that is the reason why we are going public our project since 2015 and since then we acquire companies. our program is to keep doing this path. we expanded our growth rate on average of 40% 30% came from m&a which is an addition of new kidncompanies a

other is new greowth we have new capital to maintain the growth rate and we are going along with one side with acquisitions and the other side of growth rate of the existing companies. that is our mission. >> why should investors think about your peer group with valuation? it sounds based on your discussion with us so far that the company really is a luxury company. should we think about this as trading in line with the likes of the luxury brands lvmh and hermes >> it would be fantastic to be compared with lvmh much smaller, of course. it is very hard to find margin by the french brands

what we do is we select all of the successful companies and what makes us unique is we keep the people who sold the company to us within the company we are creating a club of entrepreneurs where the italian brands of other companies have a majority stake of each company and still we work a lot with our partners and meet with them on a monthly basis. it is unique when compared to the big french luxury groups >> giorgio, thank you very much. managing director. fingers crossed for you. >> thank you coming up on the show, a deal divided eu regulators broken with the uk counterparts on microsoft's proposed takeover of activision.

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welcome back to "street signs.

i'm julianna tatelbaum >> and i'm joumanna bercetche and these are your eadlines. global crude demand set to rise by 2.2 million barrels a day according to iaea after china continues to top expectations. auto and basic resources are the biggest losers in europe after factory data in china disappoints highlighting challenges for the post-kocovid recovery. the eu green lights the takeover of activision the decision is not a contradiction. >> we know each other. we have been discussing theories of harm and alliances and now we have different outcomes. this is not something that comes between us as jurisdictions and

law enforcement. >> our u.s. colleagues will speak to satya nadella come. and the u.s. inches closer to default with budget talks at the white house today. kevin mccarthy says there is still some way to go and accusing the democrats of wanting to default rather than a deal let's check on european markets. an hour and a half into the trading session. we have a muted start to trade we are higher in the exception of swiss down .30% cac 40 is hovering at the flat line ftse 100 is trading .20% higher despite weakness in the minemins the china data out overnight which has called into question the strength of the recovery in

the country. also, in contrast, it is raising the question if we see a policy response which would beive of ts we have the euro trading firmly against the dollar sterling is trading lower against the the dollar dollar on the back foot of the yen. in terms of the dollar, we are keeping a close eye on it with the debt ceiling and the outstanding questions if we will see resolution before june 1st bonds sold off yesterday heavy around those concerns. as for u.s. stocks, here is the picture. a mixed start to trade yesterday, we saw all three of the majors move higher dow jones industrial average snapping a five-day losing streak semiconductors and banks performed best yesterday here is a story we are

north monitoring eu announced approval of the microsoft's $69 billion takeover of activision. the eu regulators accepted the cloud gaming which the british regulators deemed insufficient sylvia spoke with some following the decision in brussels and asked why they took a different view >> we had a concern of cloud gaming naycent right now, but it will grow we were wondering if all of the gaming would be available. that would be a concern. we were given a remedy a ten-year license for free for existing and coming games. now to be made available we think this is not only

solving a problem and pro-competitive. that is a good thing. >> that was enough to convince you on this one? >> it was enough, yes, because this is not about different procedures or difference of legal bar you have to climb. this is about a competition concern being soft so a merger can go on. >> is this a new phase in the regulatory work of the commission where the commission is becoming, perhaps, a little less strict? >> no, it is not had we found a concern and cloud gaming is 1% to 3% of the gaming market t >> let me ask you about, perhaps, contacts you had with colleagues stateside have you had coordination with

the deal with the ftc? >> that, i don't know. we are coordinated closely on the substance as we have done with the cma of the united kingdom. we know each other we had been discussing theories of harm to some degree being aligned. now we have different outcomes this is not something that comes between us as jurisdictions of the. >> -- jurisdictions as law enforcement. >> what is your message to one another? >> if we need to message one another, we grab the phone and call we feel we have a good solution. a lot more games will be available in cloud streaming >> arjun joins us with a

wonderful floral tie today let's ask the obvious question why did they take a different view >> it goes back to the crux of the regulators with the deal if this deal goes through, microsoft could take the games like "call of duty" and "world of warcraft" and make them excl exclusive. the console market would not see a big deal because it is not commercially beneficial for micr microsoft. in the nascent cloud gaming market, it is a small part of the market and they said this is a concern. the difference was the remedy. microsoft said for ten years, whatever games people buy, they can stream off any cloud gaming service. think of it like netflix for

gaming streaming games on the go. you don't need hardware. a tv or mobile phone what microsoft said is we will give them out royalty free if you buy an activision game, you allay those concerns. the eu said yes to that remedy eu said this will boost c competition. it allows other players to have a good library of games available for players. that will increase competition the number of service providers in cloud gaming. uk said given this is so young a market, microsoft's remedy is not going far enough it is not taking into account the changes in the next ten years. wit we don't know how this will play out. that is where the difference lies. >> my understanding is for the deal to go ahead, microsoft needs the approval of the uk as

well as eu and u.s i wonder if this adds political pressure to the uk to come back and rule differently there is an appeal >> it does need the uk cma and ftc as well. the eu was a surprise given the track record with big tech and the fact that this has not been anti-big tech. cautious about the power of the tech giants. the uk, i feel, at this point post brexit is trying to forge its own path with regulation and how it views tech sector and maybe the cma decision was about showing that the uk regulators still have teeth over in the u.s., ftc under the leadership of lina khan is almost in line with the eu looking concerned about the size

of the companies and deals that sis a hurdle for microsoft. i think it has the eu approval big win. it has been working hard on the eu brad smith has been to the eu and met there multiple times the question is if the uk reverses decision and the ftc as well >> what about the context of our colleague marty soong's conversation last week with the prime minister this is the example of being a major company, you are deterred by the cma from the business perspective, the ckconcessions that microsoft is offering to regulators, is this payback from the acquisition of activision-blizzard? >> it follows the strategy of microsoft under nadella over the

last two years microsoft was a closed ecosystem. you have to buy a windows pc and windows products and everything. what nadella has done is opened that up. use windows in word and other platforms. it is becoming more open you see a similar approach to gaming microsoft has fallen behind sony and nintendo in the console market it has staked its future to cloud gaming you have microsoft with the subscription gaming service. i think it sees that if it can bring activision games into that, it feel it is could win in cloud gaming given the library of products and also the services offering within the game subscription services although activision games may be

used in any product, microsoft is betting on its proposition to win the next generation of gamga gaming. >> it goes hand-in-hand of nadella being a visionary. super insightful for more on this decision and what comes next, check out cnbc.com and andrew ross sorkin will sit down with satya nadella. the interview will be streamed on cnbc.com at 4:30 cet. those are elon musk hours. and speaking of the man, cnbc sits down with elon musk after the tesla annual meeting you can catch that special presentation midnight on wednesday. >> we have to watch the

highlights in the morning if we want to be fresh for "street signs. >> or not. roll up like elon musk >> channel our inner elon musk for tomorrow's show. let's talk about whale wat watching bridgewater sold in the first quarter. bridgewater exited in jpmorgan chase and bank of america and wells fargo and goldman sachs and morgan stanley the hedge fund kept citigroup. david einhorn snapped up shares amid turmoil in the regional lenders. picking up shares in first republic among other lelenders. berkshire's 13-f showed they have a stake of $950 million in

the bank which held up in the sector volatility. shares jumped 5% in disclosure of the stake. tech stocks were in focus for hedge funds with bill ackman's pershing square development. and david tepper raised its stake in uber making the ride sharing app the third biggest holding. he hiked stakes in amazon and alphabet joumanna, one caveat here to the 13-f, it is backward looking with the q 1 purchases it looks how the giants reacted to the banking turmoil it was divided with the stepping in or selling out.

one thing that stuck out from the banking perspective were the moves from the bridgewater selling position in the banking giants actually the titans that were beneficiaries of the deposit flight. >> in retrospect at the time, it wasn't the right decision to make i thought making investment into first republic and back then, this is a snapshot from the end of march this is after the decision was taken to sort of guarantee the depositors of silicon valley bank many investors at that time thought it would apply as a blanket guarantee to other regional banks as we found out, that wasn't enough to stem the tide of depositors interesting to see that change

one nugget in berkshire is share of activision-blizzard they reduced their stake throughout the first three months of the year down 6% they were playing on the deal potentially going through. it is interesting they actually reduced their stake. i wonder with the eu approval coming through and if that changes. >> still hefty they have been trimming, but stands at $4 billion major position one little nugget i picked up. >> nugget. >> this one came from michael burre. he has a stake in zoom massive loser with the stock down 30% in the past year. he sees value in it. i wonder what the investment case is? >> it feels passe.

a lot of those pandemic stocks have not done well in the last couple years that is interesting. >> for more on the latest and you want to see what is most interesting in the 13-f filings and what warren buffett is doing, you can check out premium service cnbc pro. still ahead on "street signs," president biden continues to meet with congressional leaders as the debt ceiling deadlock continues. we'll have more after this break. re d seamless pick an order print everything you need slap the label on ito the box and it's ready to go our cost for shipping, were cut in half just like that go to shipstation/tv and get 2 months free

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welcome back the time has come to talk debt ceiling. janet yellen reill terated the country could default. she warned that this could cause serious harm to business and negatively impact the credit rating the comments came as the white house and congressional leaders prepare to meet at 3:00 p.m. local time to continue negotiations jesse wheeler joins us now jesse, thank you for being with us

what can we expect from the meeting today? >> so we're currently, as you mentioned, two weeks away from the point when the u.s. government is in position to run out of money to start paying its bills. the negotiations as we go into the meeting today are still hopelessly stalled republicans and democrats are far apart on fundamental issues as republicans try to force concessions from the biden administration and spending and the biden administration is reportedly still proposing some tax breaks and things that remain red lines for republicans. the clock is ticking as we approach what could really be a disastrous event >> you know when you talk about what could be a disastrous e event, the question is who blinks first i wonder which side will end of caving first if the democrats do go along

with spending cuts, where will they come from >> ultimately, this is a very political issue. both sides are positioning themselves and looking and wondering how the public would interpret this he event and howt plays out. how it gets resolved and what are the things on the table regardless of who gets blamed and if there is a big hit and voters are feeling bad, the administration will get hit. the democrats and biden administration know this i think that they are looking, potentially, to make concessions here some things on the table are pulling back the covid relief funds which could save a good deal of money on the spending side there are also talks about work requirements or permitting issues that republicans care about and broader cuts to programs

these things could beput on th record and would be placed as cuts over the next ten years i think the democrats will ultimately make concessions if we are going to reach a deal it would be a lot smaller than the trillions that republicans are asking >> jesse, we heard strong warnings from janet yellen and joe biden, but we obviously don't have a deal yet. what will spur policymakers to come to an agreement what will it take? >> i think it will take something pretty big at this point. as i said, they remain far apart on the real core issues here right now, markets are taking the news in stride we're seeing some early signs in treasury markets and spreads that markets are starting to take notice. it may take real voluatility or panic on wall street to spur

action by pal olicymakers. wall street officials are coming in to d.c. on thursday to talk with janet yellen. i'm sure both sides will plead case for action there. >> jesse, what prevents this from happening again and again it feels every couple of years wit we have the discussion about the debt ceiling will we have the concerversation another year >> i hope not. if history is a lesson, we may be one question here is if they lift the debt ceiling and manage to breakthrough the impasse and actually lift the debt ceiling, how long is it lifted for? how much an ddditional funding? right now, republicans are proposing something that would be projected to last until march of next year democrats are hoping to push

that back to the end of 2024 past the election. even that question of how far and how high to lift the ceiling is political >> jesse, thank you so much more your views perhaps we'll speak to you again come march je jesse wheeler. we want to be prepared let's look at u.s. futures before we hand you over to u.s. coll colleagues a beautiful shot of washington, d.c. as we prepare for more debt ceiling talks. >> and u.s. retail sales reporting today. that is it for "street signs. i'm julianna tatelbaum. >> i'm joumanna bercetche. "worldwide excng icong nt.hae"s mi

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. it is 5:00 a.m. here at cnbc global headquarters. here is the "five@5. we start with janet yellen doubling down on the debt default as president biden prepares for the second face-to-face with mccarthy. ahead of the talks, markets are pricing in a credit rating downgrade with echos of the 2011 debt ceiling and busy day on capitol hill as two former failed bank leaders take the hot seat. and all about a.i. with anothe