pointta).secho(. udab,9rlimasierran...4caps. &{4caps.rromeocechossbuniformt papa.i. onlyhe moment, there is one man who will bring you that. that is manus cranny. the equities will open higher. more ons has to do earnings than sentiment. you can see it opening. it is alcatel. they are going up and we will talk about that more.

curiosity killed me. europe are over $1.1 billion on this map. it is the biggest since april of 2013. equities fell and that is the longest losing streak. streakhe longest losing coming out in july. of the bondket, one markets that is definitely in focus is a differential that is important. it is 2.47%. the amount of money put into european bonds, spanish, german, and italian has dropped. peripheral and european bond markets down. yields see u.s. bond

versus german bonds use. differential is the widest in 15 years. that is telling you something really substantial about the market perception of where we are with interest rates. >> the bond market moved on gdp data and growth in the united states of america. changes withnts inflation and markets moved more significantly on gdp data. time whenmoment in gdp data came out and that is when these markets reacted. everything else is a sideshow. reasons of not wanting to leave the federal reserve, they will be voting and a voice of dissent. the dollar is trading higher and the euro will be the focus of the market stop -- market.

look at it. it is anemic. it will tell a better story. do i understand the trajectory and the respond flows will change. and it is thewn biggest monthly gain in may 2013. change is afoot in these markets. >> that is the biggest. it is built blaine. good morning. >> i went through the statement and the big changes. it is not about elevated unemployment. it is not underutilization of the labor market. it lots of it. brings thation language and that risk is diminished. for as not like the line

simple time after asset purchases and the question is, which one stands out the most to you and what matters. fed is likethe watching a bouncing ball. look at where the dollar is where the fed is going. especially the euro. i think that is the key. they get the euro lower and it is about coordination. ande has been an omen of it a stronger dollar with a weaker euro. and itre going to change is all nuance. exactly where the new wants falls is in the next couple of days.

the u.s. under usage of the workforce is critical to watch and that is the key thing that has really determined what the thinking is with policy. intoo you get more people the workforce and consuming. is about their job. is the job of monetary policy to be solving the problem? >> i think the fed sees their role as supporting that. patty get the economy working properly. the consumption factor is key in any central bank goal. we talked about the issue of the dollar and a dollar rally. i tried to be happy. we need a rate hike from the fed.

the question is if this is a. on. we are talking about no rate hike and is this another. ? >> i do not think we need to look at it with a rate hike. there are clear signs that the rate hike is coming. rates andfed setting what we are going to have here is the markets say that it is recovering and the u.s. share of global gdp is increasing. of the economye rises and rates should be rising to reflect the transfer that the fed will hike. piling into dollar assets and the treasury market. seen such awe have

little reaction to the numbers yesterday's. good revisions, as well. it is showing some of that weather-related weakness that was overplayed. >> quickly, is it falling behind the curve? do we end? >> no. bill stays with us. results and aord massive u.s. fine. the cfo ways in. thought i will catch up with the ceo. guess where the russian shares drop. over 10%. we will be back in.

>> welcome back. we are streaming on your tv and amazon tv.

as much as 10% this morning. they are saying they are going to miss the 20 -- 2015 target. talk about that in 30 minutes time. the profits are up 33%. the chilcote house more on earnings and the challenges in russia. it is up this morning and the profit is over $6 billion in the quarter. the expectation is that it was going to be up. it is good for earlier this year. russia said absolute nothing about it in the earnings statement. it is interesting because they have $10 billion of assets in

russia and, as we see with a lot of the companies, they generally way for the analyst call and we will see what they have to see -- say. >> moving along and talk to me about mega fund. how are they adjusting to these sanctions? >> there are things to point out. you have the barometer of the economy and their sales are up and the share prices are up. that theything is give us insight into how companies respond to sanctions and the threat of sanctions. shareholder as far the u.k.'s richest man. kong so putting in hong that it does not get frozen and

dollar accounts. it is interesting to see them protecting the working capital and this is a company that has not even done sanctions. >> for more on those earnings and perspective, it is a strategist. we are starting to see some of the unrest in russia show up and some of the words coming out. is not muchis that for the market impact and also, why hasn't been so isolated? market has no moral compass and what it is looking at is how prices are going to adjust to the events and longer-term. if the market takes the view of the noise and sanctions with the thatne tragedy, the fact

stock prices have remained relatively high illustrates that the sanctions will be short-term and limited. concentrated in long-term sanctions and that will be rich. that is why we are not seeing actions. three.d go from level >> you think we will ever go to that level? >> that is when it gets out of it.rol and you see it is larger. it will break out of the current up and down. when it gets larger, you should worry. >> something you are interested is default.

the country could not come to an agreement and hedge funds wanted to be paid in full on the debt. hans nichols has been following this. and we aretastic past the deadline. i am asking what is next. >> the sequel involves more name-calling and recriminations. this debt has not been resolved and the officials struck a defiant tone. it and theident said state is not going to sign anything or consent to anything, despite the pressure. >> now, we wait for the ruling and the have an incredible amount of power.

turnthe technical defaults out to be a credit event? all of these may have to be paid. there is a question on who owns cds.bs's -- there is a way out of this. you have private banks by the debt from hedge funds and they hold onto it until the end of the year. the 1.5ld get paid billion and all the other claims would not be triggered. a lot of nasty things are likely to happen in the argentinian economy between then and now. >> i spoke to someone last night said the prospect and they grief. we will leave that there.

what are the prospects? >> it depends on looking at the signaling and telegraphing from the argentine government. they are saying no deal. that is why there could be a deal. they want plausible deniability that you is the theory hear stronger denials which makes it easier for the banks to have a private side deal. they cut something and you kick the can down the road. the agreements are no longer valid or viable. a lot more reporting needs to be done on this. >> thank you very much. a few final thoughts on the subject. singer.c story for mr. should we care? >> it is interesting to maneuver yourself into a position where

you stand to make money that the holdouts are we to make. well inouts have done recent history. if you held out, you did exceptionally well. if you held the in the bank give ireland, you did well. there's nothing they can do to avoid the holdout accounts making out like river bill bandits right here. that is the strategy and they were sensible about it. it took the right legal advice to put themselves in this position. is it morally right? the markets have no moral compass. .> they have delivered how does this layout? >> in watching the last couple of weeks since they did the rights issue in the middle of

apparenthas become what the degree of mismanagement of the holding company is and there are losses. we did not get transparency or ideas. 3.5 alien. we know they are trading with a capital level. we are told that investors are waiting to come in and put capital and. this is important for subordinate bondholders. if we get new capital coming in, they will be ok. greaterthey will get a loss or some form of loss that reflects the capital positions. suffering a case of to poor equity holders. from my past, that is wrong and wrong. thank you very much.

i want to bring breaking news. ande is next for company they suspended the ceo and the coo of initial investigation. they authorized payments for benefit and i will bring you more on this story through the hour. another story this morning is the largest bank. cfo abouto the regrets and bonuses. more after the break.

let's bring you up to speed with some companies. raising capital. creating provisions of exposures. the included the biggest shareholder. the bank shares slumped this month and they requested protection. the creditors shares are suspended. lloyd's has suspended to traders. u.k.tlement with regulators is expected earlier today. shockingsidered to be

and unacceptable. ever loss. amounted to 4.3 billion euros. we have opened marginally higher. there you go. and you see the marginal losses in spain. the big news is what is going on. a big loss on the back of a big find. we are joined live by the cfo. saying that it was back in 2000. they had 5.70 5 billion euros.

ofis damaging the reputation the bank and i asked how he was planning to win back the confidence. results are quarterly related to the comprehensive settlement we reached and if we underlying result is that 1.9 billion euros. it is up. , do youapital ratio plan to raise capital? >> not at all. we have always said that a diversified bank is where we want to be. this is where we are and there is no need for any further capital rating. >> the confidence after what

happened. >> we have reached out to the client to see if there is an explanation needed. clients have been supported for the bank and we thank them for the trust. >> it seems like it is damaging the reputations. >> it is something that the bank said should not have happened and they have regretted it. action not to happen again. hirew many people will you for better compliance? remediation is what we agreed to and we will review control. and it go beyond that tol be presided by the ceo

make sure that for all sensitive ,usiness and all the policies they're all and span to make sure it is going forth.

>> welcome back. i am jonathan ferro. andre in the trading day you can see the board behind me. the losses on the dax in germany. broade not seen much reaction on russia and it is starting to show up in the earnings. here is manus cranny. russiansl get to the 105 in africa and the ceo and coo have been relieved of their duty.

is showing on authorize payments. they have been 30%. fact of look past the the shock and off and take the hit. can you imagine the number of with theeuing up outsourcing divisions. about one inch of your life. ratio and buffer of capital drop. it puts the investing taking business up 22%. up and the equity advisory is up again. looking through the numbers and the business, it might be somewhere that you want to be. what happenscant to your business and is not just about reshaping the margins under pressure.

it is closing more stores in russia. they say that russia is going to have an impact. and they wipeded out the values below the biggest one-day drop and it is down the most in five years. >> thank you very much. concernedl reserve is about the labor market. ofy signaled a wariness interest rates, despite the fall of unemployment rate. the fed president gave the only dissent and objected to the central bank pledge to keep rates low. argentina in default after missing a deadline yesterday in interest payments. andfull days of negotiation

investors are now focused on whether the bondholders will demand immediate payment. the two russian oligarchs are attempting to pressure. added to ae were blacklist of individuals in sanctions. the u.k. drugmaker reported numbers today and they showed continued growth. here is more is caroline hyde. has had a lot on their mind. it is optimistic. >> that are off alone is the picture that the chief executive tanks. >> who needs that when you have a pipeline like ours.

they say that again and on the top of my interest was emerging markets growth. they are saying that emerging markets is no longer a panacea to the currency and tensions in russia. emerging markets is the place to be in china and they see the emerging markets growth. so good were the numbers that they are raising their forecast and they say it is going to be the same as last year. they said they are not going to until 2017.s back they bring it forward and they are going to see it once again. have onethat they now of the most exciting pipelines in the industry and 114 projects. remember that it is about experimental drugs and fighting cancer. they want to pay and they want

need a that they do not partner like pfizer. they say they are going to and the sales by 2023 company has a long way to go in the next decade. >> you say they are better off alone and making acquisitions on their own. >> it is no longer. the buyers snapped up a company and respiratory drugs. they hundred $75 million could rise and there to be a development and sales school. they're focusing on respiratory illnesses and this is the area of growth. some blockbuster drugs are facing competition and they have drugs that fight the concerns .nd they have nexium they have sold licenses to pfizer. they have been expiring patents

and they have a future pipeline. it is interesting that pfizer ifld come back next month the shareholders wish. until then, they'll have to wait until november for a big year approach. they will be eyeing its more favor -- fervently. it has not been a great year. areoes not look like they winning at all. they reduced forecasts and hans nichols has the details. >> good morning. you can blame this on a slowdown either way, the numbers of the forecasts are dismal and then expect a net income for 2014 that went from the forecast.

-- a massive increase. it is down 8% or 9% and clearly one of the is losers. restateast, they had to the forecast because of the currency and the euro. this is more than that. they talk about exposure and having problems with the unit. it is a golf? all russia-related. when you look at the second quarter revenue, it was not that bad. they came under expectations at 3.47 billion euros. ideas -- were wearing

adidas. we will begin to see how much russia, orut golf, golf in russia. >> is it golf or russia? is it golf in russia? next andalk about that the sales slowdown. in, what is going on emerging markets. we are on the move.

>> welcome back. in london, this is on the move and we're focusing on the impact of russian sanctions all day. is having an impact. we spoke with the chief oncutive to get her take international sanctions squeeze the car market. the automotive says that it the help of the market to grow car manufacturers need the

support and it is a restricted the chance to explore. >> he said that the premium andet had remained strong >> is a political situation and a building. there are lots of german cars a final success. had political -- tostating there, they expect sell self-driving cars. i do not know how people feel about that. is it secure? is it failsafe?

one of the only places or few places allowing this to take place on the highway. matt miller went for the ride. >> you think of self driving cars and google. or, silicon valley. audi has entered the game. this for itsing car on the highway. >> here we go. the technology has not been perfected and it is on the way. there are countless engineers and what you have is a population in the state. andhave several urban areas this technology is beneficial. >> rick scott has a lot of jobs.

>> you start with things like vehicles developed right here. it is exciting for our state. a the car we are driving is sedan and piloted driving is the term for autonomous vehicle technology. it will keep you in the lane and excel rate or break as necessary. it is not until stage five that you can have the car come and take you. itself and weves believe that when you want to drive, you should drive. when you want the car to take over, it should do so. >> when it does, it is useful. ,> i don't know if you notice my hands are not on the wheel and i just sent a text message.

fort could be a boom carmakers. peoplee are 6 billion who would like to have the mobility of the car. johnson loving the car. i am bringing you company news. the shares are down after the electronic maker posted estimates and cheaper smartphones. also gained in the south korean earnings. terminating merger talks with the deal between the companies. ands worth about $5 billion they insist that they cancel the sales of the unit. planning to sell a stake of manchester united.

of the club back in 2005. they are trying to bounce back from the worst premier league season ever. it is a second straight season after the hiring. many of you hate me right now. >> do not worry about it. >> i reckon i have a lot of heat. >> the polls. the polls. pulse. the pulse. there is an emerging market moving through. that storyk about and we will take you to the driving car story. theill talk to second-biggest producer of that in europe and how big a part

that will be in the business moving forward. is?big of a problem that he says he sees the german automotive industry. thinks that that he it represents a serious threat to growth. >> this is my question. is this the excuse? thisny of us really blame on russia? >> rush is the home. >> it should be good. thank you very much. over one year ago, the world learned edward snowden's name and they learn that the whistleblower is in russia. we will have that next.

>> welcome back. we get to the ceo and the sales growth that missed estimates this morning. numbers.rt is in the we are joined by ivan menendez. welcome to the show. >> good morning.

>> the numbers are maxed. let's start with china. this is a long-term bet. my question is the time horizon for the bad to pay off. what about the write-downs? put theed -- let me total business in context. europe hass in stabilized and the emerging markets have been choppy. overall, the market share grows. 1% and iresents about put it in context. in thea correction segment this year and, because of the gifted and entertaining restrictions coming, the veryory is large and

profitable. consumptionsthe and i am confident we will rebuild. category with a small brand and a wonderful franchise. i see. ine and our national spirit china does well. up and bailey's is growing. china, as they become a consumption economy, bodes well for international spirit and i think we will see growth in china over the next decade. >> let's talk about the companies concerned and you see the net sales growth. what is the outlook here?

and, economic downturns in russia. is that to be concerned about? is it the impact on the results that hurt? currency impact was substantial and we had an impact on sales and profits. you get to individual markets and business is strong. andre growing market shares russia represents less than 2% of the total. we see the trade up in that environment and brands. they do very well and they grow the market share. spiritsfident that the will do will and they are well-positioned. >> i do know that.

i am looking at russia and i have asked the question about the political environment. do you think you will reassess the operation in the country? >> it is small and we have scotch whiskey in the marketplace without large investments. and iimportant for us expect us to stay the course and build the brand and reputation. i'm confidence about the future of russia. andarily with the whiskey spirits category. >> help me out. that is a market whisper they may be interested. is that something that you are looking at? respond to the whisper here. if you look at the track record.

we have grown this company through a combination of organic and not organic growth. built businesses and expanded emerging market footprints. we have it in india and my intention is to fully extend the leadership over time. ticketanic growth is the to a great balance sheet and your ability to keep expanding what we have and go through acquisitions. as we go play a role forward. >> putting it another way. johnny walker, you put out a video and you and i are going to have a wager. will we be drinking johnny walker or will we be sitting down with a bottle of perrone? >> nothing beats johnny walker

blue label. the brand is of and in the u.s. 40%-50% i'llis up take johnny walker. to that. you thank you for joining us this morning. >> thank you. the biggest distiller. that is it. stay with bloomberg television. guy johnson is back. we go to the break and here is a picture of the markets. is that an excuse? can you throw it in with the weather? in the meantime, you can follow me on twitter. . .

>> getting it kicking. adidas shares fall the most in five years as it slashes forecasts. siemens is also worried. the ceo says tensions over ukraine pose a serious risk to european growth. time runs out for argentina. s&p says the country is in default as the government misses its debt deadline. good morning, everybody. you are watching "the pulse." we are here in london. i am guy johnson.