big showdown going in the finale. for ricky carmichael, thanks for watching smx. from inld di, and we say congratulations out to the man who swept the triple crown tonight, jett lawrence. ♪ european stock markets are open for trade and the early signals are paused again after loss of momentum stateside. european stock markets still gaining up .30% for the week. that was the eighth positive week in a row. on the major markets from france to germany, we have seen a lot of fresh records even with the friday trade. another pause for french stocks up 1.7% for the week. contrast that to the dow which

was the third negative week. on the s&p 500, down .10%. second negative week in a row for the u.s. markets. we continue to see the strength in the boards with wall street fading. we bounced over .10%. the decent appetite moving on to the poboard. the slippage in the basket of media names. you have universal music group and ung at the bottom of the chart. that stock down more than 1%. the travel and leisure basket at the bottom. te telcos reversing. vodafone is weaker at the start. the chemicals basket are giving

back territory. real estate is below the flat line. we push higher. banks with 1.7% bounce for the italian lender. 1.5% pop for the commerce maker. we have retail out pacing industrial. household goods up .25%. we have autos with strength. all trading higher. oil and gas also seeing a further improvement and technology with the top position and modest uptick in europe. let's take stock with the ftse 100 this morning at 7,731. we are trading above the 7 threshold. descent bounce of .90%. it is edging into the green this morning trying to track behind the likes of the french market.

comfortable territory this morning which is upten points to thew year on a positive note with res anticipated. retail sales up 5%. the fastest rate in two years. we are seeing modest n rio tint. similar stages for bhp.

luxury players this morning. a mixed basket. we have kering up. a slight fade on hermes. to the autos basket which is mostly green, volkswagen is up .70% to renault at .7%. the bank of japan started the two-day policy meeting over speculation that the first rate hike could be delivered in 17 years and exit negative rates. local reports suggest tightening is likely to be announced tomorrow with goldman sachs expecting a hike at this meeting rather than april. apple is using the gemini a.i. tool for the iphone. this is according to a report in bloomberg which says the two companies are in discussions to

let the google a.i. models power the features on its ios. apple had similar negotiations with openai. let's get to david roach, strategist at independent ext strategy. what do you make of how bullish the sentiment has been around some of the macro, but the a.i. story? >> well, i would say first of all you have to remember that europe is out of fund from the united states for years. there are worse things you could say about europe at the beginning of this year. it became evidence that any sort of moderate news would be good news. whereas the u.s. has optimism, including around the a.i. story. of course, if you look at shares like nvidia, itis expensive by

my standards. in europe, you can buy into technology at more modest rates. you have a lot of solid stocks like in the granola grouping which mirror a lot of the good performance criteria like heavy reinvestment of profits made which has empowered u.s. corporations to maintain such high growth rates. it is evident we are bouncing from the u.s. to europe is taking place. my guess it has further to go. >> david, some would say to your point it looks like the air is getting a bit thin on the mag seven and some of the stocks within that. when you look at the tech counters you are speaking about, on this side of the pond, where exactly do you feature?

they don't give you the growth that you get stateside. >> no, you don't. you are not paying the same pe ratio. you see, there is an enormous problem about concentration. when you go to the u.s. and look at what is driving the market or what has been driving the market, you will find the big tech stocks, the a.i. stocks like nvidia and those stocks are responsible for the growth. nvidia is responsible for 20% of the growth in the u.s. market this year and a lot of it last year. the concentration of the performance in the united states is a risk factor. therefore, i am prepared to buy less dramatically good stocks in europe as a way of diversifying that risk. i think it is what you are seeing really is a diversification of the concentration risk in the u.s.

market which is leading to flows into other markets which may be more stately or elderly or boring, but contain stocks that do the right things. >> david, your views with the stocks appand valuations are different. you had a piece the last couple weeks saying the ecb hasn't killed the golden goose. has it? >> i think yes. the golden goose is the european economy. of course, it is not particularly golden, but it is a goose. the way i look at that, at the heart of europe, still with the greatest concentration of gdp lies germany. i don't believe that despite the rise of service industries and even technology industries in other european countries that you can get away from germany. germany has got two problems.

first of all, by sucking up to russia. it thooked itself on cheap energy. that has gone away. the other end of thescale is merkel who spent her last days ins ofs office sucking up the t chinese to maintain german machine tools and automobiles in china. that is going away. you have germany with a structural problem with the dependence on the manufacturing sectors. that is something the ecb cannot take use account. it is a regional government. what it is doing is it actually on top of the ecb interest rates is adding structural weakness to

europe. that has to come through. what the ecb fears is the rather high rate at 5% plus of wages and salaries in germany and in europe and the full employment will spillover into inflation generated by producers passing those salary increases on in terms of price increases. i don't think that's going to happen. the economic environment is too weak. the other thing that would support the thesis on stocks is not the european economy hestro, but the interest rates will fall more. >> david, by that logic, europe needs these rate cuts quicker and first ahead of the united states. with that be your sense? >> precisely. that is exactly what i'm saying. said in a more succinct form.

>> the consumer story in the united states is carrying a lot of the load from the u.s. does that begin to wane a little bit? seeing the pressures and that will force the hand of the fed? >> well, i don't think it will force the hand of the fed. i think the fed is quite happy to see the consumer slowdown because any risk to inflation or risk of inflation in the u.s. would stem to excessive exuberance. also, the economy would pick up quickly and wages and salaries would cause another inflationary problem. i don't think this is a huge threat to the consumer because, one, it looks like the consumer is actually so rich in terms of

asset prices that it may not havethe excess savings given to it by the government during covid, but it has a lot of asset prices. w wages and salaries in europe is within the range of 2% inflation, frankly and they are enough because of falling inflation to provide real purchasing power to the consumer which would also continue to keep him on track. i'm less worried about the u.s. consumer than you might draw the conclusion from the recent confidence. >> david, i want to ask about the bank of japan which is getting interesting for markets and our strategist was saying it is finally airborne at this stage. what do you make for the bank of japan and the ability to hike rates soon? >> i think whether it does this

month or next month, i don't care. you have the wage settlements at 5.3%. that is less for small companies at 4%. nevertheless, well above the benchmark of 3.6% or so which have to be breached. that baseline would be breached for monetary policy to be put on normal footing. those conditions are satisfied. you could argue the bank of japan should wait and see if the wage bonanza would be spent or saved. i don't think it will. i believe that the bank of japan would start to exit the super loose monetary policy in terms of the negative interest rates, which i expect to go to zero or .1% which is still negliativ

in real terms by the fact that the consumer is not that strong and they will also exit yield curve control which will mean the ten-year jgb will go to 1.5%. now the question is does that torpedo the equity market? i think not for the reason you said. it is the golden arrow which has come home to roost which is the reason to own japanese equities is because governance has improved so much and shareholder returns are prioritized. i'm not as enthusiastic about them by japanese equities as i was a year or two years ago. >> fascinating point that some of the wage hikes could be saved rather than spent. david, i want to push on to the chinese economy. we had better data for the first two months of the industrial

production and on retail. you have been consistently bearish on chinwhchina. does this change your view? >> not really. china cannot use the manufacturing sector to get back on track as regards with growth because the manufacturing sector depends on international trade for that growth and the world is united against letting china gain market share in international markets. i think this is a result of stimulus going to the wrong places. china is already in a def defladeflation s economy. the output is indicative of that excess capacity used in the inflationary manner. we got 5% which was expected and built into the cake. it does point to what we need to

see for china to get back on track and us to be interested. that is confidence. that's the missing economic driver. if you do not get confidence in domestic demand growth in service industry growth and in the individual households to invest in housing again, then china is going to be on a very low growth trajectory. probably around 3% really. they stated the 5% figure, but that is an idea, really. >> david, thank you very much for joining us this morning. david roche. we will take you to tesla. shares are higher in pre-market trade after the ev maker will raise prices on a number of cars in a number of countries.

tesla cut prices across many vehicles over the past year and the stock has taken a hit with the latest lender to cut the price target from 190 to 220 previously. you see the movement 2% today. the germany insurance company hannover re increased the dividend. the stock fell in session today. it posted a net income of 1.8 billion euro. it did better than expected. i want to take you to haleon. we have a fall of 2% in the stock prices. pfizer is set to cut its stake in the consumer healthcare giant. it is down 24% from 32%. it is worth 2 billion pounds accordingto the friday closing price. i'm not sure this is big news with a lot of flags raised with

pfizer and the ownership of the stake of haleon. and shares of logitech's cfo is leaving for a new career opportunity with that stock down 6% in the early opening. coming up on the show, russian president vladimir putin securing a landslide victory in the election. we'll have more for you after the break.

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russia's vladimir putin secured a landsliede in the presidential election with 99% of ballots counted. according to the central election commission. the win puts putin on track to become the longest serving russian leader for more than 200 years. keir joins us from moscow. not that he needed it, keir, but

could the president then use this election to kind of embolden his steps when it comes to the attacks on ukraine? >> reporter: that's right, arabile. we are just hearing from the russian electoral commission which says it is a 77% turnout in the election. that, too, would be a record in recent russian history of the russian elections, of course. that is something that will be questioned by many people around the world because what we did see through the weekend were protests. we saw arson attacks on polling stations and dye poured into ballot boxes and drone strikes blamed on the ukrainians through the country and just before he died, alexi navalny called on people to come to the polling station at midday and stand

there silently. we did see that taking place. there were pockets of resistance and signs of resistance despite the official results. after the election, president putin arrived at a news conference with a spring in his step. we were there and we were the first international news organization to ask him a question as he won six more years in power. take a listen. >> mr. president, journalists spent this election in prison. boris, who opposes your war in ukraine, wasn't allowed to stand against you. alexi navalny died in one of your prisons during your campaign. mr. president, is this what you call democracy? >> translator: for sure, that is what this is all about. there were not enough votes to proceed to the public election. as for mr. navalny, he has

perished. that is always a sad event. we had other instances where other people died in prison. has nothing like that happened in the united states? it has happened. not just once. by the way, this will be unexpected, but several days before mr. navalny perished, i was told by some people that there is an idea to exchange mr. navalny for some people in prison in western countries. believe it or not, the person talking to me hardly finish ed their sentence when i said i agree. we will exchange him to never come back. let him stay there. that's it. unfortunately, the thing that happened happened. such things happen and you can't do anything about it. that is life. if you want to learn my opinion on whether our elections are democratic or not, i consider them democratic. vice versa. in some countries, for example, in your country, you can use administrative resources to

attack a presidential candidate, including the courts. is that democratic? we have no preference for any candidate in the united states. we will work with the u.s. voters trust. the use of the resources and court system is laughable and a shame for the u.s. across the world to talk about your democratic system. i have all grounds to see we have no democrat iscy in some election campaigns. the u.s. included. the ball is in your court. >> reporter: that confirmation from mr. putin that he agreed to have navalny released from prison before he died making news around the world. there will be many around the world skeptical of that from mr. putin as he embarks on the new term in power. >> keir, what's global reaction been on this? >> reporter: there is plenty of

it today. we recently heard china congratulating president putin. many of the countries you expect. venezuela's maduro saying putin won over western i mperialism. president erdogan of tur wkey wl congratulate him. democracies around the world will question this election profoundly and whether it is free and fair, including the biden administration. many european governments. japan saying i would like to refrain from commenting on elections. having said that, russia conducted so-called presidential elections in the illegally

annexed regions of ukraine. violation of international law. a split screen of the countries expected to congratulation russia and the many others not doing that. >> nbc news' keir simmons. thank you. coming up, we will have annette joining us for the general manager of the business for international sector. stay with us. that's right after the break. er up and running. i was printing out labels and saving money. shipstation saves us so much time. it makes it really easy and seamless. pick an order, print everything you need, slap the label onto the box, and it's ready to go. our costs for shipping were cut in half. just like that. shipstation. the #1 choice of online sellers.

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in the headlines, mining stocks out performing on signs of respite for the chinese economy with retail sales and industrial production topping expectations in the first two months. year. the nikkei kicks off the week on the front foot ahead of tomorrow's rate decision from the bank of japan. now expecting to hike rates for the first time in 17 years. vladimir putin claims a landslide victory from the russian elections and set to become the longest serving russian leader for more than 200

years while dismissed allegations of the rigged vote. >> translator: in yof you want learn my opinion if the elections are democratic, you can use administrative resources to attack a u.s. presidential candidate. and alphabet and apple are tied up for a deal while in talks to use the a.i. models. well, this market movement has been flat so far in the early trading picture. last week, we saw the markets in red at the close on friday. the stoxx 600 had been up for eight weeks in a row. we are beginning to see the turn. that little bit of a push toward

things like granolas and the european market being more significant. the first time it has gone up eight weeks in a row since 2018 for the stoxx 600. reaching the record highs. above 500 points was the key level that we saw the market close out last week. all the european majors moving higher across the b bhe board f week. here are the sectors. the bottom here with travel and leisure lose out by 2%. you have insurance stocks down .20%. the likes of hannover re. you see the stoxx 600 in play for it. financial services weaker by .40%. you have oil and gas shares managing to move up .75%. that would be in step with the basic resources moving a little

bit higher there. these are particularly the stocks moving things so far this morning. logitech at the bottom of the stoxx 600. 7% weaker so far this morning. tele theperformance down 2%. record going up 4.5%. at the top of the stoxx 600 is 9% higher. here are the stocks you should look out for here with aston martin. the shares have moved up 7%. that's a sharp move in the early trade. it does come after the luxury carmaker was upgraded by bank of america global research to a buy. that stock is now at 170.6.

we are watching for consumer goods company reckitt. shares rebounding from the 14% slump on friday after the u.s. jury awarded $16 million of damages in the baby formula. that is 4.5% to the good for reckitt this morning. persistent price pressure could delay rate cuts from central banks. that is according to the bank for international settlements which says the sticky prices in the services sector is the biggest risk to higher for longer rates. let's get to annette with more. >> reporter: thank you, karen. i'm joined by the head of the bank of international settlement. >> pleasure to be with you.

>> we were just saying in the recent report, you were saying the sticky inflation could be a reason for pushing back rate cuts. do you think this is going to happen and is that a threat to the economy? >> you know, so far, we have had a very impressive process with inflation. we have said before the last mile is difficult. we are seeing some stickiness. i would say nothing to worry about. that means that central banks need to be observant with the path of inflation. they have to keep going until the job is fully done. that job being fully done is what is in the minds of many people. i think the key aspect with the monetary economy with the lag. we have done the tightening, but

the effect on the rest of the economy is still going. therefore, the uncertainty is how much impact that will be. if everything goes fine, i think certainly this year we will see major progress especially in the second part of the year. >> you are saying the second part of the year is when they will likely see the cuts by the central banks? >> if everything goes according to our estimates, it will be the case. >> let me broaden out the question or the picture a little bit. you were saying in the history with the last mile of fighting inflation is always the most challenging. you look back at the crisis management in your career. currently, it looks stable out there. how do you judge the situation we are in currently?

>> you see, we have always needed to be observant. there are many economic developments that are real. if you don't take care of them, that can lead to a crisis. most of the time, we are really in charge of that. if you see many crises coming out of the price. you see it coming from the back and it hits you. i think this broader thinking of what could be wrong and how can you be in for a surprise? that is the key to prevent crisis. often times, the seeds of the crisis are sowed when things are tranquil. >> when do you think the next volatility spark or correction or crisis, whatever you want to call it, come from? >> you see the political aspects

can be a trigger of certain things as we have seen with the ukraine war. obviously, aspects of nature like covid can also have an effect. there are some aspects where we can probably do a better job and not be so surprised and that could be in the non-banking financial system. we need to enhance our surveillance of the system and understand it better. i'm afraid there is plenty of liquidity mismatches and hidden leverage that can be the course of the price. >> private credit has been surging in the last decade to levels which probably is at the same level of bank lending. >> exactly. >> how many risks are hidden in there, especially if you look at commercial real estate and helps sectors that need a correction?

>> we have a little bit of a gap in terms of being able to quantify the vulnerabilities. there are two other important sources of vulnerabilities there. one is the link between private credit and the formal banking system. also something that takes effect through time is how the competition between the regulator and the unregulated financial system and how much that creates. if we strongly make the case that we need to enhance regulation of that secretarying to sector. >> we have the ecb and the head of the eba saying there may be multiyear chris as head for the

banking sectors. how can they compete with that non regulated secretor? >> i don't know p the kcontext this. i don't think the banks are out of the woods. the banks have been sturdy and resilient and has been part of the solution this time. we have a few accidents a year from now or a year ago. we have to learn from that. the cases with business models which are not the best. also, we have to enhance the region. often times, a region is slow and recommendations are not heard. i think we need to enhance the capacity of the supervision to be on top of the real dangers in the system. this will become more so as

technology advances with banks and other financial areas are using more technology to take the positions. >> i.t. risks are a major factor when the german watchdog is talking about the risk to banks. is it also the smaller banks need more supervision? we hhave seen that as you mentioned the smaller banks were the reasons for the crisis last year? do we need to close that gap? >> i think, obviously, it is important with resources to focus on the most systemic important institutions. part of the problem in the u.s. is the regional banks were not subject to the tighter regulation. therefore, that is the gap that needs to be closed.

regional banks need to be s subject to tighter regulation. >> we need to talk about public debt. interest rates were so low in the financial crisis and it did not matter to economies, but now it is a different picture. how much of a threat is it for a new financial or debt crisis? >> it is quite important. debt continues to be high and even increasing. there are risks out there. just let's remind ourselves of what happened in the uk in september. >> yes. >> of a few years ago. traditionally, the uk is very, very solid and resilient. you though, there were events that put the market under threat.

this is just a clear example of how the die thatynamics of the can give you that problem without no notice. >> there is also a potential for political risks. we are now in a year of so many elections. would you say that is one of the major risks out there if you look into that year? >> well, i think elections really mean the possibility of changing governments. it also means the public will be subject to a different type of policy announcements or policy settings. as we have insisted a lot at the bis, it is something that is very important for the success of a country to have people trust the governments. i think when there is a jump from one administration to another, how to preserve trust

is a challenge. >> that is a challenge for the question whether we will see a soft or hard landing. that will be my final question. what is your dominant scenario for the world and the u.s.? >> well, i think this year has been very clear in sort of making it obvious or very likely that the soft landing is there. we have seen a very important disinflation. the economy is resilient. i think part of that is what we have seen is a very important improvement in the aggregate supply. as that has been increasing, it has put downward pressure on pricing. that with the decisive actions of central banks which have managed to bring inflation expectations down and start

realizing inflation without hurting aggregate activity. i'm hopeful for the soft landing which is my main scenario. >> thank you for your time, sir. >> pleasure. >> reporter: karen, with that positive note, i send it back over to you. a soft landing is the dominant scenario. >> thank you very much. coming up on the show, central banks take center stage this week with the key decisions from the boj and the fed and bank of england. we'll bring you the details next. to lose 80 pounds and keep it off with golo is amazing. i've been maintaining. the weight is gone and it's never coming back. with golo, i've not only kept off the weight but i'm happier, i'm healthier, and i have a new lease on life. golo is the only thing that will let you lose weight

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billion valuation. central bankers take center station with interest rate decisions coming from japan, uk and the u.s. now we will get fresh inflation data from the uk, japan, canada and south africa. manufacturing and pmi will be released from europe and asia. inflation has raised doubts of when the fed will start cutting interest rates with jpmorgan chase pricing in .75 cuts this year. the wall street still expects the fed to cut this summer despite the higher than expected inflation. >> we think the fed is lyiikelyo start easing in june, but we

changed our call to three from four previously. inflation has been a little higher than anticipated, particularly in january, but we still think we're on track to get to the low 2% range in the coming months and we think the fed will look at this as an opportunity to begin bringing rates down from what are restrictive levels. >> cnbc's steve liesman has more on the fed projection for the year. >> the december forecast expected gdp at 1.4%, but the economy is running faster than that in the first quarter. core pce down to 2.4%. the fed funds at 4.6%. the median projection at 4.6. if two of the four officials

decide to cut, it will cut twice. the question is how to think about the past two months of inflation. is this a sign of stalling or noise? is progress going to be delayed into next? joe brusuelas says there are risks to the outlook with the economic continuing to out performance consume ares are still resilient. t futures markets began the year looking for 160 basis points of cuts which would bring the rate to 3.8%. a lot of that is gone now. it trades at 4.56 with 80 basis points factored in. will the fed move that forecast and markets have to price in the risk of when the fed begins cuts and also by how much. steve liesman, cnbc business news. the fed started the two-day

policy meeting amid the first rate hike discussion and exit negative rates. tightening is likely to be announced tomorrow and goldman sachs expects a cut this meeting rather than april. there is a 40% chance of rates tomorrow. cnbc has been asking economists about the expectations for the central bank. >> over the last few days, there's been a shift for march given the strong wage negotiations as well as multiple articles over the last few days in media implying the boj will move. those things, i think, increased the probability on march. there's still an expectation that the rise in rates over the coming year or two will be slow. >> the bank of japan has been saying for some time and

hammering on the point it wants to see good wage increases and what we have received on friday is an even better than expected number. we have to keep in mind this is only for a small labor force. it will set trends. this was a strong wage growth number that should be enough to move. >> the background is now very strong. you mentioned the negotiations were more than what anyone anticipated. we had all of the leaks the last few days and they are considering the strong language by the boj. over the weekend, we had noise they would make a move. >> i want to pick up on the boj. we heard fresh intel today that the third arrow has been filed as we see corporates chasing

more growth and profitability and if this fits in monetary policy. it has been so aggressive for so long. we are talking about the first rate hike in 17 years potentially. does this make a difference? we heard from david roche saying you may not see those wage increases we're talking about last week passed on. you may see people save that. for the boj, if they are dealing with higher wamg wages and deal with the wage price spiral, but in the boj's case, it may be different. we may not need the adjustment. the $3 trillion parked offshore may not be needed aggressively. >> i think on the side of the consumer front that we are

speaking about here, i look at it and i think to myself conventional wisdom is that because you get higher wage hikes that consumers spend more and demand nmore increases, et cetera. we have seen out of china that that is not the case and the situation may be slightly different. you don't necessarily have a big rece recession. again, it is weakened growth in japan, but not a recession at play. you are still worried about that economy as it currently stands. if demand doesn't pick up, what do you do then? have you hiked prematurely and stifled any growth from the economy? should you not wait that economical calendar? >> we may not get much from the other central banks with rate cuts from the central banks. neel kashkari implied one or two

at this stage. i think that sets the scene for the discussion from all central banks at this point. thank you for joining arabile and myself. that is all for "squawk box" this morning. "worldwide exchange" is up next. m and i'm the founder of the stay beautiful foundation when i started in 2016 i would go to the post office and literally fill out each person's name on a label and now with shipstation we are shipping 500 beauty boxes a month it takes less than 5 minutes for me to get all of my labels and get beauty in the hands of women who are battling cancer so much quicker shipstation the #1 choice of online sellers go to shipstation.com/tv and get 2 months free

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it is 5:00 a.m. here at cnbc global headquarters. i'm contessa brewer in for frank holland this morning. here is your "five@5." central bank decisions this week on tap including the federal reserve. taking a page from the iphone playbook. now apple looking to google. and server maker to darling. a company that has a better year than nvidia and se