administration is here. it has been over to you. >> it is behind closed doors today and they have some sanctions. at what is a look happening. over to you. >> reacting to challenges posed surehe tells us that he is that it is taking place. for politicians to do more. back to you. >> thank you very the data we were talking about. through whatn you is happening. the manufacturing number is here. 47.6.

the french economic story gets more and we confirm that. we have further evidence of it. how. find out we have an opening as we speak and earlier on this morning. let's find out what is going on. we are is a trade that talking about this morning and it was flat. london came in and i spoke to option traders. there are a lot of options. is this a four level in this? that would disappoint. we will give you a perspective. -- data is expected to be they were looking for a number around 1% and spain will grow at

a level that is double. that shows you what is ,tructurally wrong with the map in terms of the pmi. the chinese data is at a high. is it reputable? you have .2%. you saw the china data and you will see how it comes in. through ine coming london. a couple of big companies. you have a couple of facets that play. .ore business with russia should you reconsider? that was not the message. they continue for long term strategy. they missed sales and the united

states of america. the ability to price. and will take you through the numbers later. a major area. product and performance is down. let's see where it opens. it is down. this is a big layer in europe. one stock can tell you a story. are seeingre they the overall sales decline. it isissed estimates and over. this is a representation of people not spending. we looked at the euro and i leave you with this. the central bank came out and raised rates for 2014 and the

past year. you are seeing a move here and the central bank are says it is time for a pause. . was right i should not question myself. or, should i? >> a significant fall. we will be talking about that later in the program. let us learn what -- let us talk about what we can learn this morning. good morning. >> bob, i do not know where to start. and the situation

developing in asia that is quite interesting. we have france. it is difficult to comprehend. isthe market this morning not really moving around that much. >> the first question is a lot of stress. >> they are inevitable. >> the list goes on and on. >> why our markets not reacting? i think there are a number of answers to that. what is the impact on the oil price and problems? has not had much disruption and most of the oil

grounds for optimism. it could potentially lead to oil remainsand lidia problematic. that has been the situation for many months. the impact on the market has been minor. andhat is the release valve how geopolitical tension is reflected. we are not getting the transmission mechanism working appropriately. shaleh the development of , i think that the geopolitical stress and the probability of a spike in the oil price is greatly reduced, relative to what we have seen in the past.

>> i think it is quite interesting to listen to the interview with mark mobius. if one looks at the interviews, there are valuations and markets that look scratch. we have quantitative easing have the certainty of interest rates going up. for seeing theds equity market upside being constrained if we look at what has triggered it, what is there on the horizon? it will lead to a major fall in equity markets and we will see an unsatisfactory market. one week and one week down. we have some markets overvalued.

>> which ones are overvalued and undervalued, in a few moments time.

>> good morning. welcome back. i am in full and is down our this morning. the stock is down they recovered

a bit. the right price for it. inwill talk about it more the program. in other stock we are watching carefully. itis short of estimates and stagnated. are expensive -- take a listen. >> the victims of this terrible that wehave to remember got the leaders to step up and bring the solutions to an end in the political complex. you are seeing many parts of the world and the people suffering. it is not easy for business.

for hundredsaround of years and will be around for more. better. our lives many conflicts that we have seen. poverty and execution. we have to be sure that we continue to help the economies do better. that will be the main contribution that we can make. what do you want to see? do you want more sanctions? do you want the u.k.? do you want to see sanctions? and itave seen too many is time that our leaders rise to the challenge. we cannot avoid these tragedies forever and that is what we would be working on.

we are committed to growing our business everywhere and we can help the people. it is important for us and there is no reason. they are not changing. >> serious statements there. , that man wasonth talking about russia being a land of opportunity and it was a strongly worded statement of opportunity that existed. what is being talked about this morning? another company that has significant exposure. they are strengthening their from the giant russian company. is setting amaker target of achieving profit this year and he spoke with the ceo earlier this morning.

what did he have to say on this subject? overall, the company says that they are sticking to their goals and they are listing a number of headwinds and challenges that they could be facing into the future. a significant aspect was the assets and what they wanted to do. it was scheduled to take place and they said it is not going to take place until autumn. sure that the% deal would go ahead. >> 100% confident. everything is in place. some legal preparations have to be done internally and need to be undertaken. it will happen in the fall of this year. that ahere a chance shift could sway this and stop

this from happening at a national level or at a pan-eu level? they can approve it last year and we increased the share. and have doneng this for many years in a responsible way. i do not see a reason why they should change her behavior in the future stop >> he says he is 100% confident. it plays a big role in the german economy and politicians in germ -- in europe are aware. european politicians talk about whether they would increase sanctions. that isgnificant and the part of the building -- the

company. away from the chemicals part of the business that is under pressure, they are cutting 2000 jobs by 2017. that is part of their company. the announcements are of a headwinds. andas talking about russia latin america. he said that that was an area where they are less confident. the major theme coming through is that this is a company sticking to their guns. we have german approval to do this. he does not think that deal is reddened by sanctions. conversationting happening this morning. interesting. thank you very much, indeed. let's get a take on this. our investors and management underestimate in the potential of how relations with russia would change?

>> i hope that everybody is being pragmatic. they cut through the noise and you have three or four themes. the first is that the probability of countries like and germane action energy comes from russian gas. the probability of threatening the economy is slow. having said that, we are going to see an extension of the see aons and we could european union sanction on to yours getting access his own capital markets. we have seen that already with capital markets. there is going to be a tightening of sanctions. we are seeing, in a way, as tensions by stealth already.

-- sanctions by stealth already. waitnies are adopting a and see attitude. >> he was talking about the fact that he was cooling on russia -- >> he has been in russia for a decade. >> i look at what happens in markets and the oil story not acting as a canary in a coal mine. what is happening here in europe? the german economy has slowed. you are starting to see a turn in the range now. does that tell us that the flow is reversing? >> i do not like to make single figure forecasts. byake the view of the target

the end of december and i think that we have further to go. they will welcome that and they want a weaker euro. >> what are the indications for that and the markets? >> the money is leaving. it has to come from somewhere. >> the first theme is that we have divergence in performance in markets this year. we had performance by markets that have been right to be in. i think the markets are starting to look expensive, relative to markets like germany. extend,go to 130 or that is good for the german exports sector. i will say that it is a positive for germany. peripherall --

market are stretched. >> right. stay with on the move. we will get the latest on israel after the break. tourism. we have not talked about that. how could a dramatic drop-off affect the economy. that story is next.

>> good morning. welcome back.

the conflict shows no sign of ending in the tourism industry is feeling the affect. these are the latest examples of the problems the sector is it feels fairly resilient. let's find out what is going on with elliott gotkine. >> another normal day. is the daily. >> when they are not running for cover, workers north of gaza help so and sell vegetable plants. shelter, a rocket hit the nursery here and this is what is left of the missile from the missile defense system that

crashed through the roof here. looking at a tray of plants and all that is left of the rockets is this. as usual anded that does not mean that they are not affected. >> people have to run to shelters and a lot of running to come back to work. you have to put all the machines. ande is damage to the cover we place it after each missile. >> further south, they are making water heaters. workers are absent and the summer camp becomes open because

of the fighting. matthew says that the factory has not closed. it is not about to now. it is not a pleasure to be here. we have to. in australia or the u.s. is not interested if a war is going on. >> it shows no sign of leaving soon. >> right to our third shelter. >> they cannot ignore it and they carry on regardless. >> tourism is suffering and others are carrying on. let's go to elliott gotkine. >> yes. and tourism news was concerned. there was a ban on domestic carriers flying to israel.

they are still staying away. it could be for political reasons. carrier and aonal blip. bit of a let -- they say they are being impacted. >> we are suffering from cancellations of tourist that may not come big in the early future. country andn each not cancelingre as much as tourism abroad. about 15%-20 5%. 25%. he said it would give them a boost. >> thank you very much. elliott gotkine is our middle east editor.

we will carry on the conversation about egypt when we get back. a company has been involved in the story and we will talk about all of that when you come back. we will see you in a moment.

>> good morning. welcome back. we are in london. it is an equity section. let me show you what is happening with the stock market story. we open down. a little bit of a momentum. you can see it down. -- it is down. the manufacturing number is stronger than forecasted. below expectations. we are way stronger than expectations there. this is interesting. there is a feeling about the

german economy as a result of what we are seeing from russia. get some context in there. hans nichols has the numbers for us. >> it is clear. we see a diversions with german manufacturing and french manufacturing. it declined over the last months. it is a surprise. germanyted that in because of the exposure to russia. they came in at less than expected and you can see them holding up. it is an indication. and you take ae look at some of them. and henkel.delberg these are numbers that we are

looking at. $1 billion in revenue. 1.3 billion in revenue. overall, there is a lot of trade between germany and russia. companies,n the auto you see the fractions of it and you take a look at this. the industry leader. you get into the luxury space and you are bouncing around 19,000. increase.had an mercedes had a clear increase. data toif we look for , the european economy is slowing down. it is hard to tell the story with that. germany looks strong and france looks weaker. widening and it is

fascinating to see the numbers coming out. we will talk about that later. daimler is owned by vw. maybe they have the information and we will see what is happening there. great work. thank you. that is the latest data out of the eurozone. let's run you through the bloomberg headlines. levels in 18 months and the preliminary meeting of estimates. meeting 2014 growth targets of 7.5%. the regulator is closer to the settlements and people had knowledge of the matter. they said it could come this year. they want to fast-track the investigation and speed up the settlement.

flightsrs have lifted to and from israel. they were all halted because of rockets in gaza. it was near the airport and that was extended a little bit. canceledairlines flights. some say they will cancel flights because the ban has been lifted. let's go back to the rushes story and find out more about what is happening today. it remains unclear how the sanctions will be potent. they have continued the policy of inching forward. more extremeing sanctions that could affect sectors of the russian economy. here inlcote is brussels earlier this week. talk to me about where we are.

fewerave to take a few and bolder steps. has doneited states about one third of that and what the euseeing is that intends to close the gap. andan expect an expansion individuals and companies on that list should have expanded to include more insurgents and people in the military who are seen as to stabilizing the situation. we will get a further expansion of the list and it is difficult to predict when the eu will take the steps. that includes people in putin's circle. the idea is to not just go after the doers. and are discussing plan b

they are in the draft process of plan b. plan b is to threaten russia with sanctions if they feel it is necessary. putinould involve giving a chance to respond. >> what are the sanctions? >> there are a few ideas out there. one is the financial space. we know that they are looking at restricting the access of companies in capital markets and the ability to. >> that is what the united states has done with a handful of companies. they would mirror that. there is an options memo that they are looking at today and the european commission will be a moreing and more -- aggressive step. of alld call on a ban

individuals from buying newly issued securities and companies. whether it is equities or bonds. people would not be allowed to buy stake in russian companies and bonds. stake like bp, you could hold onto that and collect dividends. if they want to take a larger stake, they would not be allowed to do that. that is a huge step. there is a weapons embargo. we discussed that in great detail. prevent thesibly french from selling a warship to the russians. likewise, they could sell weapons to the european union or eastern countries. a few billion euros worth of

weapons every year. >> a market reaction to all of this? we are starting to see a reaction now that is continuing . gradual trend down >> the market did open down and they have some losses. they are reacting to that. they say they're going to year in the stock market. that is not helpful. when it comes to where this goes going forward, people are obviously looking and saying that they get a bit of strength because they have to pay taxes and a lot have to. weakness and it

is down one third of a percent this morning. that is a sign of geopolitical issues apt way here. >> thank you very much indeed. andes are down this morning the forecast was this year. we are going to see what is going on next. we will see you then.

>> good morning. welcome back. you are watching on the move. i am guy johnson. numbers reported this morning and the focus is on this vision's to suspend carrier flights to israel. in relation talking to egypt and israel. let's look at the numbers this morning and the averages for this company. strickland.ing by we are joined by terry lundgren. let's start off with you. morning are a little bit of a reaction. reaction.ss, a big numbers had a small miss on expectations. >> a small miss on expectations. analysts were noting that this is an issue.

the airlines noted that the slots and takeoff slots were the biggest space. that really puts pressure on yields. that is what they noted and it is something that would be very positive for them. their positive about the business plan and that is giving them a bit on earnings. >> they had a great run. it made a premium and we had a clear divergence. they are taking a more high end of that for longer. they go to recognized airports and that has worked. have we gotten ahead of ourselves? >> is a high level of expectation. at the pressure on yields that has carried and it

is a lot of capacity added by them. we see two things. and averagestors over 90%. as an industry veteran, it is good going. and theds are rising pressure is in the key market. we are moving in the same it has showed to be adept at moving capacity around. there is pressure and they are good at moving the capacity to where the best opportunities are. that is something in which they are ahead of most companies. , we talked with you about egypt and that has been interesting. have been discussing the flight and we have a tel

aviv story. they operate the airlines safely in these kind of environment? >> challenging is the word to describe it. has always had to deal with a multitude of issues. economic his underlying and the unknown and security issues are far more difficult to manage. the company said that the issues the been factored in and fact that they are lean and efficient is important. limited,ortant and compared to big-ticket activities. that is the biggest base. are rough in the medium term. it downsizes the fleet and it is an important thing.

they deal with the new airbus. they could have a fleet that is lower than today. >> some of these are replacement aircraft. >> how significant is the root for them? -- the route for them? this into the context of the wider easyjet, how significant is it? and propose that last week it is very important. there was a competition with virgin atlantic and it was a coming of age to announce that route -- route. to regulatorsing and of to start flights back there soon, fallen with the faa said. said.lowing what the faa

travely be hesitant to and they have a healthy customer base. it is a popular airline. it began flying from there. that is a positive aspect here. >> how has the last few days change the perception of the airlines sector? it has been a story for the airline sector for quite some time. put assile attacks different spin on the story. we lived through 9/11. eventsd through other that had significant effect. can you tell me what this means? >> what it shows you is that the industry needs to speak with one voice and have a more consistent approach to what it does. it is a well-regarded industry leader.

they sit down and come to a consensus point of view. look at government and security agencies. an experiencehad like 9/11 until it happened. wars and two years -- the arab spring. look at the long-term trend in the industry as upward travel and there are certain shocks that happened. business,s a global by nature. it is about leisure and it has to be with affective lobbying. >> more cost? >> there could be. there is speculation about antimissile devices and we need to manage it better than that. theel maintained that

airport is open -- safe to operate in and they continue to fly. >> you have been reporting on this. how do the airlines make a decision on what is or is not say? >> i would pushback on why they were. it is curious. >> exactly. they did not give me the secret sauce on the rationale on that one. >> do they rely on that? it is a combination of both. >> i understand. i believe that is looking to regulators to see what they say before they go ahead and return to flying. >> thank you very much, indeed.

let's move on. i'll be speaking to the chief and it is an increase in activity. you can track where an airline is and point your phone at the sky. they are telling you what the airplane is an where it is going to. it is amazing stuff and we will have that conversation coming up. we head into break and it is a quick check on the markets. european equities are down, as you can see. we are going to take a break and be back in a couple of minutes.

>> good morning. we have learned that the spanish unemployment rate fell in the second quarter. growth forhas shown a year now. it will bring down the rate. we are joined from. with details. it is a lagging story. that is what we are taught when it comes to economics. is it more significant? >> we are seeing a recovery.

we're seeing record exports and an improvement in the message demand that has been driving .rowth in the last quarters it is an improvement and we are economy not -- and destroying jobs. it does not mean they are creating a lot of them. itis promote by a slump and is the worst in the democracy. what are they thinking about using to expand the process? what's well, it is early to say and spain is at the beginning of the recovery. the government is trying to boost exports. situation isnd the fragile. of workrnment has a lot

to do to cut the deficit. it will depend on the economic partners. the partners are in the european union and the rest of the world. >> thank you for your time. latest data out of the spanish economy is showing a small improvement in the underlying story. let's stay with the underlying story. what cranny joins us with we can see. how will this help with the number when we come together for the aggregate? >> translate that. translate that. the bundesbank versus mario draghi. re-accelerating and momentum is picking up again. france is under pressure. it is year two of recovery and

the unemployment rate is staggering. the debate moves to a nudge better. it will beg in and on the german side. that would be next year. >> that is interesting and what is interesting is breaking out of the bottom range. chat on marketplace and the sentiment seems to be options and the rights to sell if it drops. will it hold? >> the market is short. >> yes. short on the euro. short on the euro. it is short on these numbers. >> thank you very much. we are going to stay with you. that is it.

bloomberg television will continue and the anchor of that show is me. we will see you in a couple of minutes after the short break. do not change. >> me.

>> committed to russia. unilever's ceo says he will not bow down business following pressure from the dutch. another company with exposure. basf. as one of its units partners with gas from. -- gazpromm. to u.s. lifts its flight ban israel's busiest airports. we will take you live to tel aviv.