of the 250 riders and 450 riders. the blue crew have a good night with deegan and webb. they'll be celebrating their trip home, and they're on the right side of the country as far as where they're based. on behalf of the entire team, thanks ♪ good morning. welcome to "street signs." i'm frank holland with silvia amaro. these are your headlines. israel weighs response after the directed attack on territory with more than 300 missiles and drones. >> this is a declaration of war. we are considering all options. i'm quite confident we will take the necessary steps to protect and defend our people.

and french president emmanuel macron says he will do everything as possible to avoid an escalation as leaders con temperacondemn the attack. >> we don't seek an escalation. we don't seek a wider war in the region. german chancellor olof scholz is warning that competition must be fair. and private equity group cvc confirms to list in amsterdam in one of europe's biggest ipos this year. now to the top story this morning. u.s. officials fear that israel way respond hastily to iran provoking a wider conflict. according to nbc sources,

president biden has expressed concern that israeli prime minister benjamin netanyahu is trying to drag washington into a broader conflict. iran brought a slew of drones and missiles on saturday night in retaliation that killed top officials earlier this month. it identified 300 threats and eliminated 99% bound for its territory. the idf said the launches were made from iraq, yes, men and lebanon. >> translator: from our point of view, this operation is over and there is no intention to continue the operation. if the regime takes action against the islamic republic,

our next operation will be much larger. i want to take you to what is happening in the markets. it is the start of the new trading week here in europe and there is a lot on the minds of investors. the prospect of higher rates for longer in the united states and the earnings season which kick started on friday. we have more companies reporting today. investors are looking at all of the dynamics and trying to understand how to position. one analyst from bnp made the comment that the investors are likely to be cautious this week because we are waiting to see what will be israel's potential answer after iran's attack over the weekend. with that in mind, the stoxx 600 is marginally higher . that is different from what we saw the end of last week. i want to take you to the

breakdown to show you what is happening across the markets in europe. ftse 100 is the only one at this stage in negative territory down .40%. it was alongside with the italian market that posted positive gains last week. looking at the other major boards, the cac 40 in france, up .60%. higher moves in germany by .80%. when it comes to the sector breakdown, this is the picture at this stage. i want to take you to oil and gas stocks. at this stage, they are the worst performers down by 1.4%. we had seen this sector actually with a lot of gains last week. that is a different picture today as we are keeping in hmin that the oil prices have been priced in last week. today is a bit of a different

picture with oil and gas stocks. we have autos up 1.2% and industrials higher by almost 1%. when it comes to other asset classes, we are definitely keeping a close eye on what happens in oil prices as well as when it comes to gold. this as we saw investors taking a little bit of a cautious approach last week amid the geopolitical concerns. i want to look at brent which is just below that $90 a barrel mark. i want to see if oil will reach the $100 mark because that could have implications to the monetary policy and inflation pressure. as we look at gold, currently, it is up .40%. frank. silvia, thank you very much. u.s. futures are higher on the back of the u.s. telling israel it will not participate in offensive operations against

iran and urged it not to retaliate. many countries urged restraint. israel vowed a significant response. israel's war cabinet member benny gantz warned all options remain on the table. >> this is a declaration of war because we know there are repercussions and we have deliberations with our partners and we are considering all options. i'm confident that we will take the necessary steps to protect and defend our people. we are not world seekers. >> dan has more on this developing story. dan, good morning. good to see you. >> reporter: good morning, frank. this is an extraordinary moment for the middle east. for the last several months, i have been covering this story and we have seen ongoing

escalation since october when the war broke out. what happened this weekend in israel is unprecedented. to use the words of the u.s. president, it is unprecedented. it is unpress cedented because n has never attacked israel. iran seeking a message that israel's air strike on the embassy in syria and the ongoing war in gaza have crossed a red line. israel says its air defenses destroyed 99% of the iranian fire. analysts say this attack was mostly symbolic. perhaps aimed at showing dete deterrence without provoking all-out war. tensions are running high in the region, frank, ahead of the u.s. open as investors and analysts and every day people in the world now question exactly what

israel's prime minister will do next. how will israel respond to this unprecedented iranian attack? of course, what happens next will determine if we see calm or major regional conflict. as you reported earlier, officials will exact the price from iran, but no final decision has been made about the timing or the scale of that response. we also understand israeli officials have been meeting in last few hours through the war cabinet system to determine what type of response would be appropriate. it is quite clear at this point there is still some division within the cabinet over how to proceed from here. tensions are running high. at the same time, it is interesting to gauge the reaction across risk assets in this part of the world and elsewhere around the region. we have seen local stocks here mostly muted in response to this

and we have seen flows into gold and the big focus on oil at the open in asia today with the expectation being a significant spike in the price. because the fundamentals remain in tact and because we also see no critical oil infrastructure damaged or issues with oil supply being impacted here means we have seen a muted response in the crude markets as well. you can see brent and wti pulling back on the risk premium in the price over the last couple weeks. now down by more than 1% here. a really unprecedented strike on iran and a critical moment for the middle east. all eyes are on what israel does next. >> thank you, dan. we are just getting lines across the wires from the german minister for foreign affairs. iran's regime brought the region to the brink of the abyss.

israel should secure the offensive victory against the iran attack with diplomatic means. no doubt, the message so far from the leaders in europe, including now the german minister for foreign affairs, is appealing for diplomatic conversations. a lot of concern about whether this situation in the middle east is going to escalate. to dive into details into the geopolitical concerns in the middle east, we have our next guest with us. the senior analyst for middle east crisis. good to have you on the show. i would like to understand what will be the implications for gaza at this stage if there is, indeed, furthest escalation between israel and iran? >> at the moment, israel hasn't

scaled back the campaign in gaza. things have very much remained the same in terms of intensity and in terms of israel's ex strategic objectives. this hasn't had any significant implications in terms of the intensity of the conflict on the ground. what you have also seenwith the tension shifting to regional escalations between israel and iran, you have seen an increase in violence and opening of the new front in the west bank. you have seen an influx of settlers and soldiers. that is the issues we should pay attention to as well as gaza. >> we are seeing the comments from the german minister of foreign affairs appealing for diplomatic means in the situation. we are going to have a european summit in europe this week. this topic has been added to the agenda. it was not meant to be a topic

of conversation for the leaders. what would you like to hear from the heads of state when they gather this week? >> well, i think iran has made it clear this escalation could have been avoided had the heads of state, israel and uk and france and the u.s. already issued a come denndemnation. it would be ideally a more balanced condemnation. this was not an iranian prove indi provocation. this awould be good to hear a more balanced and fair condemnation of the sides. more importantly, i think it is also worth considering the

regional escalation beyond iran and israel. this is having aim n implicatio for other states. jordan and egypt. jordan especially in terms of the stability is precarious. its current involvement two days ago has put the regime in quite the situation now. >> you mentioned the regional escalation. are you concerned this attack by iran clearly in defense of palestinians and gaza might ramp up the aggression from raisrael? before this attack, there was a growing call from the u.s. and the international community for more humanitarian aid and a possible pause to all this violence in the area. are you concerned this may lead to the u.s. and others to decide not to back a cease-fire or not to back an increasing humanitarian aid in the region?

>> let's be clear. what has just happened is not in defense of palestinians. this has nothing to do with what happened in palestine and everything to do with the strike on the iranian consulate in syria. you know, iran felt itself pushed into a corner and felt two options. capitulate or react. let's be clear. this had nothing to do in defense of gaza or palestine. if anything, lebanon and iran have been trying to avoid getting embroiled in this because they don't have the capacity to get involved in regional conflict right now. neither has the u.s. the u.s. has not made a secret of that. in terms of the cease-fire negotiations and gaza looking forward, they he are in the position where both sides, israel and hamas seem to be

exclusive. hamas does not have much in the way of concessions to offer and israel is unwilling to back down on the objective which is to destroy hamas. even if it means making gaza a complete wasteland which includes destroying infrastructure and making any potential governance dysfunctional. nothing that can ultimately threaten the sense of security and that includes allowing aid in. israel has failed to still achieve its objective which is to dislodged hamas. >> to your point, there has been a broader call for aid. i want to hit on the headlines that silvia said. the german foreign minister looking to secure with diplomatic means. dipl diplomacy. i'll state younger generations

of ypalestinians say this will not work. they don't see an argument for diplomacy working. >> palestinians don't see an argument for diplomacy working with the current israeli administrations. they have not acted in good faith. it is not they don't believe this diplomacy, but they don't feel they have a negotiating partner to work with. yes, that is pushing palestinians into a corner. feeling as though armed resistance is the only way to assert their agency, especially on the ground being met with complete violence. in the case of gaza, it is telling the fact that since the start of the onslaught, israel has only be able to release two

or three hostages through the military campaign. the rest have been released through negotiations. this is really showing diplomacy and negotiations is the way to go. this is not where the current administration wants to take things. it wants to destroy hamas. it has made it clear it is looking for the maximum objectives in destroying hamas. it will not stop until it felt it met that objective. that means the permanent cease-fire is off the table for israel. israel has refused a permanent cease-fire. it is looking for pauses in the conflict in order to release the hostages, but there have been no reassurances that the pauses will ultimately lead to a complete cessation of hostili hostilities to any tracking for the palestinians. if anything, you have the current government renounce agreements with the plo. it has refused to allow any state-liken entity to govern th gaza strip for any foreseeable

future. you have the call for the dismantle of the issue. you have the change on the ground. gaza sees reoccupation. gaza is a fifth of the size it was prior to october with the presence of israeli troops on the ground and north/south corridor. >> we have to leave the conversation there. we will continue to follow the developments out of the middle east. that was tahani, senior analyst for palestinian and international crisis group. coming up on the show, we will be looking at olof scholz who has landed in china for a three-davy visit to discuss the beijing tensions m. we'll be back after this break.

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welcome back to "street signs." germany's olof scholz has arrived in china for a three-day visit amid tensions in the country's beijing support for

russia. the german chancellor is set to meet xi jinping and premier li in beijing after visiting shanghai. speaking today in shanghai, scholz advocated for an open european market for chinese cars and saying small markets should not be afraid of big ones. we have annette joining us with more. first, what should we expect from olof scholz's trip to china particularly with the ev market? >> reporter: what we can expect is perhaps to have the positions moved a little bit, but nothing more. let me tell you what the situation is here because china rose from being a partner when it comes to supply to a real competitor in the ev market. china, according to recent studies, is having three to nine

times higher for subsidies than domestic indices than the rest of the other countries. despite that, olof scholz, the chancellor of germany, doesn't want to have higher tariffs. he wants to have free trade, but urge his chinese counterparts to actually use the subsidies they are deploying for the industry. byd is flooding the european markets with their cheaper evs which they can afford with the subsidies. what we can expect is some positive rhetoric, but i don't think we get actionable news from the negotiations. today is all about economic policy. tomorrow is more interesting. perhaps it is international relations security and that is when russia comes into play. olof scholz wants to push china to move away from supporting russia and perhaps also

mitigating a potential peace deal in the region because clearly china seems to have a sway over russian politics. here, there is hope that there could be actually progress when it comes to the war action in ukraine. i guess the hopes are high and the result is the jury being out from that meeting. >> we will see what is important to monitor with the potential tariffs in the space as well. we know the europeans are currently looking at that. thank you, annette. i'm pleased to say we can continue the conversation with eric heiman. it is good to have you on the show. i like to go back to the question of what the european union might do with chinese evs. we know they have the investigation ongoing at this stage. what is the chance we will see

the eu imposing tariffs on chinese evs from this trip today from the german chancellor? >> i would not make a direct connection with the commission and chancellor scholz in china. this is an ongoing process. we have to wait and see how this investigation will end and, of course, china has in general some advantages in it producing evs with the raw materials and energy costs and so on. this investigation is something difficult and we already heard recently that also german oems have said they are at least in favor of tariffs or other measures to regulate imports from china. >> clearly, the european brands are under a lot of pressure. you have subsidies stateside and

subsidies in china. they are making pressure to be more aggressive here and protect the companiesies based in europ. what is the outlook for the european ev makers given the tension? >> it is clear that the competition to chinese carmakers will increase. china is now going into the electric car production and increasing exports to europe. that is what we see. the numbers of chinese brands on european streets is still low. it will increase. this holds true, especially for the volume car segment. before, china had advantages in terms of costs. they have better access to raw materials and factory production. they have economies of scale. this is the advantage they will not lose in the next few years. this is a challenge for the european carmakers.

still, free trade would benefit the progress of the technology. it is very complicated. if you argue that china is acting with non-wto conformance, it is clear that the european commission has to do something against it. it's still the ongoing investigation. at the end of the day, consumers in europe would benefit from imports from china because prices have to come down if we want to have a higher increase or market share for electric cars in europe. it's a tricky situation, but the competition in the car segment will intensify. >> eric, you mentioned how complicated this issue is here for consumers and the automakers. talk about what is at stake with

scholz's visit? european markets are dependent to sell vehicles as well. how do they balance this? do tariffs threaten their ability to sell in the chinese market in your mind? >> this is obviously an issue. you said there is pressure from the european car industry on the european commission, but on the other hand, i heard last week some are afraid of tariffs and other measures because retaliation is always an issue in the car sector and as you said, china is a very important market for not only german, but other european friends. they will use chinese factories to as the new export for the markets in south asia and so on. it is a risk on both sides and this is difficult to the balance out. >> the key part of the auto

business globally. making cars is a global business. in your notes, you say chinese evs is a small percentage of adoption in europe now. what is the concern? they are entering the market at a lower cost or is that a long-term concern with the japanese and u.s. to enter the market, but take significant market share? >> i think it is quite clear that the chinese competition in the volume car segment will intensify. this is something where some european friends have the risk of losing market share and losing market share means lower economies of scale. this means higher costs and production and this will impact competition in the future. again, it is rather a question of how do you balance out the interests of some of the european car industry, especially those who are located in the volume segment. on the other hand, the consumers

would benefit from lower prices and as we have seen in the last few quarters, yoeuropean carmaks react to the price competition. they have announced that increase or decrease for higher market share. >> quickly, we have to let you go. should european automakers be concerned about the price cars we have seen in china with the evs? market share depoends ends on t market adoption. is the real concern price war? >> price war is the medium-term fear. short-term, the chinese brands will be too small to have a real price war. price competition in the ev pace will increase. >> thank you. coming up on the show, major u.s. lenders failed to impress in the first set of earnings this year. we'll discuss that and more coming up right after this break.

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welcome back to "street signs." i'm silvia amaro with frank holland. these are your headlines. israel weighs response after iran launches an attack on israel territory with more than 300 missiles and drones. >> this is a declaration of war. i'm confident we will take the necessary steps to protect and defend our people. germany's chancellor warns iran over another attack, but says other countries contribute to the escalating tensions. and olof scholz is calling for open market access in china, but warning competition must be fair. samsung is overtaking cupertino as cell phone demand

increases. welcome back to the show. it has been a hour and a half since the european equities have been trading. let's look at what is the picture in europe at this stage. looking at the main boards, the ftse 100 is the only one in negative territory down .40%. a lot of pressure there given we're seeing companies like shell and bp shares down this morning which is putting pressure on the market here in the uk. the cac 40 is up .70%. the german market is up .80%. we are seeing investors taking a lot into consideration. concerns about what might happen next when it comes to the g geopolitical tensions in the

middle east. we may be looking at higher rates for longer in the states as well as well as the earnings season. there is a lot on the table for the investors to monitor at this stage. i want to take you to the u.s. futures. they are suggesting that we will likely see a positive start to the session on wall street. this is after the dow and s&p both saw their worst week of 2024 thus far last week. a lot of pressure off the back of announcements from major banks which disappointed investors. we will see what happens later today from goldman sachs. there are other big banks reporting stateside as well. another important event for traders this week is we are also expecting to hear from the fed chair jay powell on tuesday. there is a lot on the table here, frank, but looking at the

futures at hthis point, it does suggest a positive start to the wall street. >> we are seeing how they digest the comments from israel and iran. in the past few minutes, olof scholz warned iran about another attack and warning it needs to contribute to the deescalation of tensions. he said iran has brought the region to the brink of the abyss. this comes after the members condemned the iran strikes and reaffirming the commitment to israel. the u.n. secretary-general said now is the time for maximum restraint. the u.s. urging restraint with antony blinken talking with counterparts in jordan and saudi arabia and urkey. president biden calling prime minister benjamin netanyahu directly. the spokesperson, john kirby, spoke out on "meet the press."

>> it was clearly we stand with you and your defense. that was the message the president delivered to the prime minister. he congratulated the prime minister and idf for the extraordinary job they did knocking things out of the sky. i go back to what the president said time and time again. we don't seek an escalation or wider war in the region. >> for more on this developing story, brian wie jackson is joi us from washington. brie, good morning. >> reporter: good morning, frank. president biden spoke to prime minister benjamin netanyahu on saturday. according to senior administration officials, president biden said support for israel is ironclad, but the u.s. will not anticipate in counteroffensives by israel. the white house does not want to see an escalation of the war. last night, president biden spoke with leaders of the house and senate and the

administration source said the president expresses support for passing aid for ukraine and israel. calling on the vote as early aras this week. the senate deal stalled in the house. speaker mike johnson said he wants to pass some type of legislation. lawmakers are trying to work together to hammer something out to get passed this week. frank. >> brie jackson live in d.c. brie, thank you. i want to bring the conversation back to markets. we heard from u.s. lenders last week. their shares declined after they failed to impress in the first quarter. jpmorgan chase beat expectations for eps revenue, but issued disappointing guidance for net income. elsewhere, wells fargo topped estimates, but reported a decline in net interest income.

citigroup posted revenue that beat wall street expectations, but profits declined 27% from the year before amid higher expenses and credit costs. looking ahead to european bank earnings, our next guest says a year after the collapse of svb and credit suisse, there is a divergence with key players in the banking sector. christian edelman is with us. good morning. good to have you here. let's look at what we are looking to hear from yoeuropean banks. the message was not that positive looking at the net interest income. what does that paint for european banks when they start reporting? >> let's be clear. it is day one. today is day two. we will see more. i think what the americans have seen is trading held up well.

ibd and dsm came up above expectations. the consumer side is holding up well. cre losses have not materialized to the extent people would have expected at this stage of the journey. still lots of good thus. expectations are high. you need to consider the net interest income. discussing the q4 earnings, the average expectation probably is still worth six rate cuts in the u.s. inflation was higher last week than expected. you have a lot of difficulties in actually managing net interest income from the banking perspective. hence, providing forward guidance is incredibly difficult. there was an element of conservatism. >> i want to look at rate expectations in a moment. first, i want to get your

thoughts on the data from eurozone last week. the survey suggested that the demand for loans actually slowed substa substantially. to what extent is this a one-one-off or is this a reason for concern? >> you see the divergence in the u.s. which is going strong and inflation in europe is coming down. to the extent you have seen expectations continue being the two rate cuts is different and lower loan demand is triggered by higher rates. rates coming down will probably increase loan demand at one point in the cycle the. >> christian, i want to talk about something we don't talk about. deposit data. for clarity, the amount the deposit rates increase. according to the data, that is softening. give me a sense. what does that mean for the consumer banking business or the

investment banking business? it is facing pressure from the money markets. >> it means that it is good for banks from the earnings perspective. they pay relatively less on the deposits than they do charge on the lending side. it is hard to judge what is driving it, right? you could argue that some of the rundowns of the post-covid savings we have seen in consumers are being run down. there are less deposits in the system. as you say, a lot of the banks and asset managers have been pushing money market and other investment management solutions over the last couple of months as well. >> also i want to talk about the proposals on the u.s. side to increase bank capital. similar moves considered in switzerland for european banks. that is a move to invest the

solvency. what does that mean for the stock price and investors? >> i think the end game because we have been talking about this since the global financial crisis. that shows you how long the journey goes. the comments in the u.s. were due in january and it is all political debate. the expectations is it softens a little bit again. it is clear that capital liquidity and risk management expectations are going up. what that means is private credit, outside the traditional banking sector, continues to do well. >> you touch on private credit. it is a big competitor to the traditional banking system. i'm looking at data. the assets under private credit is $1.5 trillion. now up to $1.75 trillion. the banks clawed back $20

billion. isn't private credit growing? >> the banks lost another $20 billion. in q1, they had half of that clawed back. it is a drop in the bucket. it shows where this is coming from which is large syndicated lending. the banks that will report the next couple days and whether it shows softness in the u.s. with the regional banks. they are still adjusting risk management. risk appetite is not there. that creates more opportunity for private credit. >> looking at the european banking sector and the ecb may move with the first rate cut in june makes me think what is the outcome for the banks? they were benefitted by the rate front. what is the outlook for the year

and not just in mind what the ecb will do, but we are discussing the parity with the dollar as well. what does it mean for european banks? >> european banks had a difficult decade. deregulation and negative interest rates. then covid. particularly the end of the negative rates was a game changer. the ability to start buybacks which they have done the last two or three years made a massive difference. you see it as a key valuation. one of the things to watch out for in the earnings sessions now is to what extent will they commit to buybacks. the other key is the question on costs and how they manage to bring down costs. >> interesting times to look at the banks. thank you for the time. christian edelmann. coming up on the show, apple

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welcome back to "street signs." now in other corporate news, the private equity firm confirmed the stock market listing in amsterdam. cvc has a valuation of $16 billion. this comes after the firm opted out of the ipo attempt in november after the middle east tensions weighed on markets. and samsung takes a bite out of apple and apple shipments fell 10% in the first quarter. samsung secured 21% of market share ahead of apple with just over 17%. apple shipped 50.1 million iphones in the first few months falling short of the estimates amid tougher competition.

turning back to the lead story. iran with a barrage of drones and missiles in response to the suspected israeli strike. israel identified 300 different threats and eliminated 99% of those bound for its territory. idf said launches were made from iraq and lebanon. crude prices are lower today . we have amrita sen with us to discuss more. >> thank you. >> why is oil lower across the board? after the strikes, we thought we would see a spike in oil prices. it is above $10 from the low, but pulling back. >> we said that we thought prices would pull back because

this was telegraphed where the market price in the reaction. that doesn't mean prices will continue to go down, but you always see this with geopolitical events where people take profits. the next step is to see how israel reacts. depending on that, we could go back up again depending on the scale. we think there are signs that it will not necessarily be escalating. if that is the case, we will remain range bound. i expected prices to be lower today. >> a bit of buy on the rumor and zesell on the news. going forward, how big of an impact are u.s. cuts have on the oil market? we thought it was avenuseven, bw if you believe neel kashkari, we may not have one. >> this is the interesting dynamic going on. if you look at the physical

crude market, it is strong and it has been strong. prices are catching up to it. the $10 move is geopolitics, but it is also fundamentals. i hear the global economy is looking better because the fed will startcutting interest rates, but i'm thinking what if oil continues to go higher? doesn't that derail what the fed is doing? we have a number of advisers who do the macro analysis. with very done this highlighting the risks. that is the biggest risk for the fed. if you have energy prices shooting higher this summer means this remains a risk because we are seeing in the market with u.s. production under performing and mexico and guyana with the supply side. opec will add at $90 per barrel. >> i have seen speculation if we see oil prices hitting the $100

barrel mark. this could have implications for inflation and mondayetary polic. what does this mean wecould see it escalating? >> we always tend to under-shoot and over-shoot. opec is doing a good job of keeping it tight. especially when you don't have a lot of inventory. that is what i want to asstress. we are low on stock. if that happens, with geopolitical tension like this, it will never be perfect. we don't know what the summer of energy prices could look like. >> what levels are you looking

at by the end of the year assuming we get two cuts from the fed? >> we think the outlook is starting to look better especially in the second half of the year. our price call was $90 a barrel. we thought we would trade well into the th90s in q3. solid prices. if the geo politics gets out of hand, we will raise our price. >> i want to come full circle the. iaea is citing security concerns. why is the risk premium going down? we covered buy on the rumor and sell on the news. >> if you talked to me a few years ago, we would be $150 right now. that's the market which has changed partly because u.s. sanctions on russia is not really designed to keep russia and oil off the market and it is also a u.s. election year. they will try to get prices down

with a summer spr release. opec has a lot of spare capacity. at the end of the day, it is held by saudi arabia and some other countries, but traders view there is another spare capacity so you can bring it back. >> amrita, thank you for joining us today. amrita sen. that's going to do it for today's show. a quick look at the european markets. i'm frank holland here with silvia amaro. "worldwide exchange" is coming up next. what is cirkul? cirkul is the fuel you need to take flight. cirkul is your frosted treat with a sweet kick of confidence. cirkul

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it is 5:00 a.m. here at cnbc global headquarters. it is 10:00 a.m. in london. this is "worldwide exchange." investors around the world is coming to grips with the boldest attack. on wall street, investors trying to pick up the pieces after the dow's worst week in morning a year and inflation fears are adding to unscertainu. >