almost 15% in credit. it was the second biggest cole'solder and agri shares rose by 20% -- 2% yesterday. >> we spoke with sco and profit beats estimates. theng to sell off of assets. what his view is on russia and ebola. caroline hyde. cars, bmw and toyota have posted. i will be back with more on the car industry. >> asian stocks are lower and chinese pmi services coming at a record low and features nudging higher in europe. on the stoxx 600, we are more

ofn 5% lower from the highs 2014. european markets editor manus cranny on the touchscreen. >> we have had four straight days of declines. london and paris and portugal all rising. the managing index along with retail sales. the display of what is going on. a little bit of relief for one of the main banks. all risingel -- between telefonica and a deal on the table. drop inils on the 98% agricole. bindi just under 7 billion euros. succeed percent of it will be

funded in cash. the rest capital raising. they are trying to pay back share price to the half esters by20 -- to investors of 2015. we'll keep an eye on the story. u.k. construction, we get the services numbers today. 8 is in number 5 you are looking for. hotels down. billion.10 the numbers beat. those are two of the big east. -- biggies. we have bmw and caroline will take you through the nuts and bolts. telefonica is down 1.5%. for vivendi.gft caroline will take you through

the numbers. the margins are doing better and the sales are doing better. discontent, malcontant. what will drive the be forced to do -- mario draghi be forced to do? they wait and see and perhaps that is a good policy. is the worst since 2005. a little bit of a drop. they are leaving rates unchanged. we are back in the zone. morgan stanley saying money flowing out of japan is the dominant force. and into australia was the dominant supporting issue for aussie dollar. >> thank you very much. that is your market opening.

with ubs strategist wealth management. welcome. good morning. >> morning. >> when i look at your monthly news letter, the first line i see if global equities have delivered postal a wonder percent -- 100% earning. think the music is very much going to continue. if you look at the u.s. economy almost the perfect position where jobs can continue to grow but the unemployment rate has not picked up. janet yellen, the chair of the federal reserve, she's going to mid-2015 whilel there are strong jobs growth in the u.s. this picture is very supportive of the equities.

>> when you see the likes of might, their rates of rise faster and in market is behind. do you dismiss that as moist coming out of the fed? >> we have a lot of concern around their earlier last week and that cost the selloff. the payrolls we saw on friday sure really assay those fears. the participation rate picked up. unemployment increase. it is supportive of janet as the economy recover, people will start to rejoin the labor force. said members are talking about it. >> kiran, let's talk about overweight credit. we are talking by u.s. high-yield and stocks.

last week, that is where the softness was. beennet yellen has questioning some of the valuations in the high-yield space. do you continue to hold that view? >> over the past year or so, reducing our overweight position in u.s. high-yield credit because we are aware is around 370 basis points. not as attractive as they once were. we think it is an attractive area. recent comments that we saw from alan greenspan when he spoke about hubris. russianothing to stop and they ran for three years. we think yellen is in a similar position. we think she is nervous about some of the valuation but we do the primary will be

concern. the primary concern is for the labor market. quickly, you are overweight for european stocks. a lot of talk about equities in europe. the possibility of qe for ecb. what has driven your move to redirect? , you get a monthly investor and fund managers gather to discuss views. over the past few months, there's been a lots of discussion where people of them bullish on your. what has been key is people thinking the economy will recover. after contracting for so many call it the earnings starting to grow and margins increasing. it is coming through. if you look at what happened so far this year, we have not gotten there. say-year-old weighing on

earnings. in the second quarter particularly. we had some more witnesses there. weaknessesssist -- theres. >> we will catch up with you in a minute. we will talk by israel next. ♪

>> i am jonathan ferro. this is "on the move." before we move on, i will bring

in a stock on the mold. in a direction you probably would not expect. cut costs.er they 0.y have written down it to why is the stock up? over because it is down 14% this year before trading again this morning. moving on to the middle east. truce between israel and panels -- palestinian militants in effect. it was brokered by egypt. it is the latest in four weeks of fighting. israel will consider sending a delegation to cairo for peace talks if the cease-fire is upheld. economy, i amthe joined by that is really tourism minister -- israeli tourism minister.

thank you for joining us this morning. your finance minister told us the conflict barely touched the israel he economy. does it make up a significant amount of gdp? this is an industry under pressure. israel hotel association told of the occupancy rate in some areas were as low as 30%. how concerned are you? , during times of hostility, taurus -- tourists are going to perhaps halt. tourism is starting again as we ,ompare and our people saying just now, we are going to spend our time. hamasnot want to have the make us prisoners in our home.

and boost up our economy and that is what we are going to do. this is an anchor for our tourism and it will pick up as it does already. tourism and we have already this experience of the last rounds. ago we had to talk about 3-4 months until things came back in order and we hope now things are starting to put ourselves together a broad so we will minimize the damage. and we are very hopeful. >> we have seen you get over it before. we had the 2009 half look into gaza and 2006 conflict. is this time different? who there be people abroad

see the horrific scene, the men and women and children web and killed? how much will it hurt israel's reputation? >> i think this was also no different than it was in the past. 2009 and one in 2012, the end of it. has been on a constant increase including the first half of this year where we touched record highs. i should add what is more and more understood in the west with respect is that basically what is happening here is we are protecting ourselves. moves, try to protect ourselves in a manner of which they are trying to as much as to target the innocent civilians who are not involved.

moreis happening is important to understand, it is the hamas people for using their own civilians as shields behind which they are watching their rockets. they are launching from mosque areas and school compounds and hospital compounds. more and more of that is understood. i believe it is also understood that it is in the west that we are confronting hamas. it is very much no different sis and bokoa and i nigeria andli and the horn of africa. israel is in a battle of protection with the very values of the freedom of the west.

it is targeting our judeo christian civilization. but to replace us. ever the justification for the conflict, we have seen the airport shut down and is in different -- it is different from the past conflicts. hamas is targeting an airport. that was shut down. is it a lasting hangover? first of all we are all here in the middle east and definitely in israel. is,the fact of the matter we have terrorist organizations that is part of our population that is deliberately targeted.

with respect to the international airport that we have, we have been disappointed --the direct should direction of the faa not to come to our company -- country. our airport is the most secure airport in the area. most of our airports in the world, the british airways continue to fly and they will in the future make much more business in here. despite ofd, thousands and thousands of rockets shot at our country, our iron dome, it intercepted the majority. the majority of their missiles and on top of that, our airport will be secured. if i may go on and suggest what we're doing here, we are a bastion of a democracy.

we expect countries of the free world, western europe to stand with us shoulder to shoulder against terror organizations and come and join in the country. and obama will come to israel for the first time despite the reports about rockets. israel under those circumstances is a much more secure and safe place than many cities. >> one final question. another headwind for your economy and in the industry has been the shuffle. would you like to see the world bank do more? shuffle --el he sometimes where complaining it is too strong a sometimes two-week. for the past decade, it has been

quite the strong economy that did not spot -- fall into many of the spotss that other places had to confronth and we hope in our economy and the performance now in the future -- thank you fordau, joining us from tel aviv this morning. perspectives with and geopolitical risk is kiran ganesh. he joins us from zürich. ,ven with last week's standoff stocks and global equities have to geopolitical tension. it is something that continues even though we are starting to see a visible impact and some of the numbers? >> yes, we have been watching all of it was a great deal of interested in terms of the geopolitical offenses happening

in the past few months. and north america should be relatively immune to russia for example and the eurozone and gdp and it will have impact on interruption. watch ise key thing to andl the energy prices crude oil prices at 105 dollars a barrel. when viewed as perfectly manageable in a developed world and would take prices to go above $120 before we get more concerned. >> gas prices as well remain remarkably low. the eu has not touched the gas sector. is this going to come down to the weather? as a gets colder, do the russians hold the stronger hand?

previouse seen in years, russia has used the cold weather in the winter for example in the case of the 2009.e and 2008 and yes, of course, gas is needed and russia. her hand. strong interest to keep it flowing. yes, of course, when gas is needed and russia has the strongest hand. europe is dependent on russian energy. we think it is very much in both countries' interests to keep the supply flowing. of ubs, thankh you for joining us. terrific insight. sales beat at a bmw and toyota and will have all of the details after the break. ♪

>> welcome to "on the move." i am jonathan ferro. we are watching automakers. beat estimates. i am joined by caroline hyde. some pretty solid numbers. >> increase in profits. we were expecting profits to slump by 11%.

rage in the u.s. we saw the sales tax kick in japan. she toyota highlander and lexu and the rav 4. they outperformed. the u.s. is doing better. saleshas been increasing by 12%. evil political instability in asia was not enough to ruffle their feathers of stability. they are not so jubilant we are seeing increased in sales and the long-term. they said they will dip about 2% for the whole year. overall, winning in the u.s. and japan and asia. >> interesting they keep their targets but change in their aspect of assumptions and bring down dollar/yen.

on bmw side of things, is all about the x5? >> it is flying off. it is quite a stellar. almost 50% increase in x5 sales in the second quarter. it is all about the suv. and 6 seriess, 5 are dominating. that is why they are able to battle audi and remained the top dog when it comes to luxury. they have the mini and rolls-royce. the rolls-royce is still doing well. the measure of profitability is way ahead of the competition. that is almost double where mercedes is and ahead of audi. 26%.ll, earnings up britain got new ran -- bringing out new ranges and a new

electric cars. they are trying to stay ahead of the game. will dig through earnings reports. more on what the ceo had to tell us. we'll be back in about two minutes time. ♪

>> welcome to "on the move." i am jonathan ferro. 30 minutes into the trading day. this was the markets session looks like. the ftse 500 is up by 0.5%. and pmi in asia china. it is at a record low. is it the rebound we have been looking for? at the touchhyde screen. >> on the downside. we have one big fall today. the second profit in one month. the warning. almost down 9%. second profit warning.

what happened? we waved goodbye to the old chief executive. he is going to be taking over until next may. german construction company has and shiftingtself gears into services. it does not look too pretty. biggest loser on stoxx 600, axel, a german publishing group up 8% at the moment. with a standout results and the media company and these sales are up 8%. they beat analysts' at simmons. another german standout performer up 26% in terms of profit, bmw. currently trading up nearly 3% on the stock price. company that is strengthening. the biggest maker of luxury

brands. it is on the success of the x5, it is all about sport-utility vehicle. 6ey said our series 3, 5, and are all dominating the sectors they are in. beating the markets euro. profitability is where it matters. to you. >> thank you. some of the top headlines. chinese stocks fell at a gauge declined to as record low. the july reading came in at 50. the dividing line. suggest the stimulus measures are failing to gain traction outside of manufacturing. the reserve bank of australia is what economists surveyed is doing what they thought, nothing. trend.ct a period below the aussie/dollar is high by

historical records. a three-day truce and the gaza strip is now in effect. weeksthe lens after four of fighting. hamas has accepted and israel will consider sending a delegation to cairo for peace talks. israel said it completed its omission of destroying hamas' tunnels. staying on the geopolitical front. continued fighting sent oil producers totaling. among the companies feeling the energy.go the ceo is sticking with the forecast was a ryan chilcote joins us with a. hayward is not feeling concern? >> not now. we will have to listen to the conference call later today to

see what he makes of the fighting. they do not really talk about it too much. here's what you need to double -- need to know. profitability is down, sales are up. that is the important thing. 63 company said it is about thousand on average per day. most of the north of iraq. that is why investors have been concerned because we have seen quite a bit of fighting and we saw oil fields seized. and investors think maybe assets could be seized as well and that is why shares are down today and that is why they fell 3% yesterday. the issue is not the 2 oilfields. they are about 30,000 barrels a day. the issue here is that what this means for the north of iraq because of the islamic state

the has been made with kurds in baghdad have been focused on the south up until now and the question is, are there ambitions now? do they lie in the north of the country? are they interested in the region? do they have the capability to problems?g they are known for their fighting abilities and have been known to be a reliable operator. this weekend got people concerned about the fighting capabilities and to the islamic state. >> is that the big focus as well? there is the mundane issue of exactly how much oil they are pumping and is the key to all of this how they are able to monetize it.

and the supply of the oilfields themselves and them getting it to market. the oil is flowing through. the problem is the storage area in turkey itself is now full. basically, they are not able to offload this oil. once they get it onto tankers. oil on the be tankers and go somewhere to market it. people who do not buy it in part because they are concerned the government will sue them if they buy it. there's a struggle between the kurds and iraqis over oil revenue and the iraqi government. and they do not believe the kurds have the ability to sell it independently. you and double all of this oil floating in the sea with nowhere to go. that is where investors are looking to hear from tony hayward later today. chris thank you. another company is intercontinental hotels. i will send it to manus cranny. the big take away?

>> i like intercontinental. >> you do. >> intercontinental hotels, a lot of them are run by franchised. they are lovely and simple. it is a cash cow. paid back investors $10 billion in the past few years. is a little bit of -- from a shareholder. they are pushing. a strategic review of the business. i talked to the ceo and asked who do you want to or could you share a bedroom with? >> it is a story. we have a lot of strong competitors. we are one of the biggest in the world. we are getting a market share. it is organic growth. in the supply on top of what we

have and we have a lot to do. of the ceo,adition he was not answer questions if he would have discussions or if he was in discussions. a pipeline is 1100 rooms. you can do you 1100 rather than owning the hotels out right. i think that's a critical point. are they going to be pushed into a merger? what is the strategy going forward? >> china. >> it is a huge issue for them. they have a business and basically they are going to open their first branded hotel by the end of the year. and that is where the beast of growth really begins.

marketna is the fastest in the world. 1.7 million. -- u.s. >> go on. >> i was waiting for a drumroll. 5 million hotel rooms in the united states. 35% of the rooms in the world are in the u.s., but my favorite fact of the day -- >> i am ready. >> the chinese are coming. 2014, you justy do not have to cater to what chinese people want domestically but alsoos the brands what are you doing here in europe? what are you doing to accommodate the single biggest portion of any terrorism?

70% of what they spend money on is hotels. -- what are you going to do to accommodate the single biggest portion of terrorism t -- t ourism? >> we are spoiled by manus cranny. "> coming up on "on the move, we are look at the business of putting a new spin on the fitness club later in the show. stay with us. we are "on the move." ♪

>> welcome back. i am i am -- i am jonathan ferro. this is "on the move.". increased athas the fastest pace in years. we have an economist from goldman sachs. , weonly question i have is this not find out, is [indiscernible] >> as you say, we will not know until the minutes. and it would not be announced butl wednesday in two weeks we think it probably will be. decision is finally

balanced. and we think it is likely that may be more will go over for tighter policy. we do not think it will be a change of policy. vote,re policy, minority is not a good predictor. i would not say it does not account for much but the days after will be substantial on the the theyhistorically, have been a good predictor. >> when we look at the bank of england and see unemployment and ,age growth and the 2009 low how do they square that when looking at the debate? >> something they will be focusing a lot. borrowing big supplies on thursday and bigger feud will be

the inflation report and the bigger focus on the minutes. , for us, the big surprise perhaps from the inflation report will be how little it changes. >> 2.0 here? >> the economy has developed as a forecast. the surprise has been the combination of employment and unemployment continuing to be very strongly while wage continues to be very weak. we do not expect a large focus on that but i inc. they will say it is falling by more. there's a good chance they will reevaluate their estimates of the equilibrium in the economy. how far under the limit can follow before it starts to generate higher wage growth and inflation?

>> what number do you think they will give? now, they have it in the lower 60's. we would put as and the fine handle on it and we what have to wait. by 6%.t we will lower it >> the other debates will be around productivity. still pretty low. >> it has improved. >> in terms of the past few years, it has not done very much. you have an explanation for this? >> we put out a note where we thee again how critical banking sector, the u.k. banking sector as a credit provider has been at explaining u.k. economy postcrisis performance. periodthat keynote -- between 2009 and 2013 when the

economy had a feeble recovery and week productivity and a exchangeo rebalance on rights and persistently high inflation, we argued that all of those and a lot of that underperforms is due to the oflure of credit, the lack allocation within the economy. it is no coincidence that the turnaround of the u.k. economy but dan and early -- began in early 2013 two improve credit provision and the economy. has improved and productivity slowly. unimpressive as yet but slow to pick up. the trade balances and that is why understanding what is happening we think is absolutely key. >> we have seen it to loosen up. mortgage credit. cost have come down a lot. .ot as much for corporate

do you think that is about to challenge? >> we do. significant incentives to increase lending. it is a reversal of doing post crisis where there was a significant incentive to contract landing. baynes will continue to fall and the margins on their lending continue to rise. you saw that first half results of u.k. banks. risenheir valuations have , the required return on new and it hasthe return fallen. it has increased in some ways. worried it will create a bubble in the house. they are putting a limit on how much they can expand limiting into the household sector. with these ongoing incentives

and corporate lending, we think of next leg of expansion landed from u.k. banks will be into corporate lending. very quickly, i will bring my mom into this. she sends me a text and ask what will happen to raise at the bank of england? >> we have a q1 of next year. if the economy continues to risk, certainly it is a but a rate hike by the end of the year. thank you very much for joining us. " is coming off a side johnson joins us. what have you got? guest willless, our talk to us about what it happened and the eurozone. of the ecb meeting. we will be talking about what is happening with the business in west africa and will go to

nigeria and get a take on what ebola means for the region and if the government is doing a decent job to make sure they are on top of the story. not on a grassroots level. are we seeing businesses coping with what we are talking about? we will talk about that. we will talk about some of the cargo coming out of iraq. we have a lot covered. we'll talk about bmw as well and what is happening with vivendi. also.of m&a an action packed show. >> i will bring you company news. xiaomi is the number one smartphone maker in china. it shipped 50 million phones in the second quarter. was founded just four years ago. linkedin has agreed to pay unpaid wages.

the u.s. labor department found that they failed to record all hours in a week including overtime. they are trying to inume beef and chicken sales china. they said they connected a full effect of 2014. german builder has replaced its chief executive. a second profit warning in a month. they fell 14%. the former ceo will take over and of the interim. a new trend that practices -- promises to add a jolt of energy to your morning. we will show it to you next. ♪

>> it is 7:00 and in the morning and there is a party downstairs. this where people come to dance a get sweaty while sober on a tuesday. they are going to their desk in about two hours. you walk down into a dark basement. >> it is a huge energy bomb. >> you get to sweat. >> a lot of crazy people. >> it is actually 9:00 a.m. and you have the entire day in front of you. ♪ >> day breaker is a pop up party. you get an e-mail to subscribers. they announce the next party, you get a ticket for $25. there's usually only $300 for sale. three hundred four cell. >> we do not think there were many people would show up. only 300re's usually for sale.

>> i am a dermatologist. >> i am a buyer. >> are you going to work? >> yes. >> day breaker started in new york city. both groups have expanded overseas and are planning more parties in cities around the globe. and iteconomics work allows us to grow. it is a labor of love. >> every body like i will try it once. and it ine it once again. >> i know your life screw that 7:00 a.m. and there is no way i will try it. try it. you will become a vick them. b --ah, some of us gold so go to bed at 3:00 a.m. i get up at 7:00 a.m. you can follow me at twitter.

i will see tomorrow. ♪

fricks -- >> profits are wiped out as the bailout takes is told. shares rally. a better than expected ratio. the line.ica is on telefonica offers $9 billion to an internet provider in brazil. intercontinental ceo. unrest escalates. ♪