get a real-time read on the barges. shipping cars across the world. goods and services. we will have that in the hour. >> a tactical pitstop yesterday. the trucks are moving towards the border. with lee it and then. >> france is stagnating. germany and the powerhouse of europe have negative growth. this was not even the quarter when the sanctions started to bite. let's see what happens next. futures are pointing lower. how will we open up? and itave equity markets is the second straight quarter

of stagnation. growth is hard to come by. grow by .5% this year. the top level will be 1%. that is the news in france. this is a change in tone. the worst in almost six months. that and mark carney talking about wages and growth eating under pressure. changed theo have interest rate debate on when we might get the hikes. growth is anemic and european equity markets, we are waiting. let's give you a complexion what is happening. london down atn levels not seen since 2011.

a bit of a reprieve there. in paris, the rally from yesterday. up.ry goods are the dad says not opened on rotation yet and i will tell you that earnings have dropped 62% for almost seven years. they have taken a lot. they said that a lecture >> andld have an interest equity markets are lower. so, keep that in mind. it is a little bit more exposure in london. this is where, if i got the words out the right way, the prices in london have eased to sinceowest -- the lowest

march 2011 and we are seeing a big shift. is it cathartic? they are down and, in terms of korean cute south the rate and if you look at the undecided with where to go. it to thenot made year to date low. you see the overkill -- the overall trajectory. >> thank you for that. we have thursday morning and the ftse is down. the dax is down. 0.4%. go to the global head of equity trading strategy. you see the gdp numbers. terrible.

worse than expected. the contraction is bigger than most people thought. as someone who develops the trading strategy, does it change anything? >> not necessarily. good news is bad news and bad news can be good news. some back in june and we expect an announcement on purchases. by next year, we should get larger scale asset purchases and the numbers gave us last week. anything, we are starting to touch the core. >> are we getting too excited about what they can do? mario draghi talked about hiring a consultant. it does not sound like we are

close. him willunderestimate stop he has an ability to the euro andwe saw we are not talking about it. there are headwinds in the first half of the year that are going to reverse themselves. think that they should be sold. >> you say to buy the dips. nobody can argue against that. is there a point where that breaks down? marketset growth in like the u.s. and the u.k.. them realizing

themselves a bit. the earnings and the improvement of the earnings does make an underpinning to the markets. the numbers in the u.s. were brilliant and the numbers and -- in europe or not as good. altogether, it gives you fair valuations and we may still. the dax has been one of the worst-performing major indexes in the world. what happens? -- in get worse in the russia and the u.k. -- ukraine. >> it has been a hedge. there have been worries. the dax should be the most should bend those under pressure.

a macroseen it used as hedge. there are problems, there are cheaper ways to do it on assets that have outperformed. misnomers in likeny and stocks volkswagen present interesting opportunities. >> they will be the biggest beneficiaries? >> yes. >> here is a look at what is coming up. german gdp takes a hit. we will get a perspective. do we see a turnaround in travel? .rofit

in the meantime, we have markets.

>> this is on the move online and on your phone. everything. here is a stock that is on the

move. a down day. the biotech company. take a look. it is down 5.6%. full profit is coming in. interest was a myth. the stock has punished. we are talking the ukraine now. at the same time, a convoy. ryan has the details. you are calling it a convoy gate. they have left the southern city and are bound for the border. they could take a few hours to get there and it is a good stretch. there have been surprises on the way and they took a tactical

pitstop. nobody expected that. that is what to watch. today, unlike yesterday, they say they will accept the russian-made if the russians allow the ukrainians to inspect what the trucks contained and if the red cross distributes the aid. it looks like a little to progress. we have not heard yet. the ukrainians were saying aggressors the should take the salt with it and the prime minister said that it would be better if russia sent the trucks home in the trucks. a little bit of progress. it is not clear what is going to happen as it gets closer to the story thatthis is a

you are going to want to pay attention to. >> we had a subtle change to sanctions against russia. oning a little bit of color what the nuance is about. that is a rule and it was if someone had been sanctioned by the united states own more than 50% of something, it made sense. wase was a company that mostly owned by garcia. stakeholderajority and he has known him for many years. it turns out that it was invested just enough to drop below the threshold. the treasury did not like that and they changed the rules. they say that if the collection

of shareholders had more than 50%, the entity is sanctioned and it would appear that they thein the dog house because company has been sanctioned that has 12.5% stake will stop miley cyrus may be involved in this. she was going to go to a stadium with justin bieber that is co-owned by the man i mentioned , a judo partner of the russian president, there co-owner has 50%. the question is if they are a sanctioned item will stop if she has not gotten paid their or is is going to she

have to get that money. entity,ld be an according to our interpretation of the rules. roles always change. there are surprises with the ownership structures. >> miley cyrus. really? >> a wrecking ball. >> look at the russian markets and they are in the green. >> they are. the russian stock market is rising and it is the biggest in months. the russian ruble is up because there is a significant amount of investors who think that a convoy may arrive in the east of ukraine and lead to negotiations. some people are optimistic about the convoy. a couple of days ago, the

ukrainians were negative and sold off their national currency. they say there was panic buying. the ukrainian currency has been rebounding. witht's talk about this the global head of citigroup. you hear about noise coming out of russia. we have seen sanctions escalating. are you concerned that they will escalate? escalate, it is penalized. as it stands, they are increasing and make nor -- make more noise. it is on the horizon and these concerns usually work. i am not advocating that is going to be the case.

investedlike it is selling hasd the been driven by international redemption. healthyas been trading in the last weeks. and they have been underperforming. there will be an economic cost. i'm talking about an economy and a slowdown in china will stop people might dark to shout at the screen right now. german be bearish on the economy? a big risk and we

mentioned that they will address some of the issues and a misnomer is that they are not just buying germany. they are buying global growth. got a littleng optimistic. and i think we have neutralized that to a large extent in the last 6-8 weeks. we have seen underperformance. another thing that is happening is that china seems to be waking up. a credit condition seems to be there is lows. that there isy another boy on the block. >> coming into the second half, there seems to be a blanket on europe.

it appears to get slammed for local reasons. macro reasons.r are you starting to draw a line on the position? ande look at countries characteristics we like. like in theing we context of the level they are at. view, thereint of are sectors that are growing well. and we think that some of the positioning has been normalized. ofare coming in terms quantitative characteristics. >> there we go. thank you very much for joining us this morning.

profits are dim for german utility companies. upull breakdown is coming and we will be back in two minutes.

>> welcome back. let's bring you up to speed with companies on the move. the company is concerned about turnarounds.

details fromore the chief executive later this hour. lenovo posted a boost and profit in smartphone and computer sales. the market is in contraction company ishe negotiating with agencies for planned acquisitions. estimates after in steelmaker made money their previously unprofitable unit. if the analyst estimates. profitsted a quarterly for the first time in two years. let's keep the corporate. and one days down after a report of a drop in profit -- profit.

our guest is mark martin. >> you are looking at the recurring income and it is a 62% drop.ken with a the poorly figure was a loss of 89 million euros and it is the fifth time they miss estimates and it was down to a simple story of germany favoring subsidized renewals. economy does zone not help either. listen to this. wholesale favorite power prices averaged 30.5 euros. that was the lowest in seven years and below last year's level. that is why the profits are down and we had a lot in the second quarter. the good news is that the wholesale prices are bottoming out.

why is that a large number of power stations are in europe. i guess -- guess who is in idle? it was rwe. they are decommissioning. the second best stat of the day 9000 megawatts have been idle. it is a euro zone economy. that is what we know. off of the back of a mild winter. it is almost a mirror image. >> it is. they are treading cost and. they say they should get through the regulators by the end of the year. what they are doing that is different is less reliance on

germany. turkey andshing into brazil. they have headwinds in those companies -- countries. a lot of. -- cap ex. it is lowering investments. problems andrency a weaker economy. it has market condition problems. company and more profits. they are both suffering from the same issues. renewablesh into that is pushing down prices. the second quarter is not even profitable. >> it is pushing down the stock. we are heading to the break and we leave you with a look at shares. profits were up last quarter.

we will hear from the ceo. stay with us. we are on the move.

>> welcome back. this is how equity markets are trading. we are lower. the stocks are down. a big question is where the growth is in europe. the answer is, not much. is atraction in germany concern going forward. they are going to miss the budget deficit target. you tell me if the previous forecast was credible. it is a new forecast. is that credible?

i will let you answer that. three stocks. one of the biggest gains on the stoxx 600 is a company that builds infrastructure and it is doing well. it is almost the biggest gain in four years. the stock is down. a biotech company making enzymes missed on estimates as morning. we have an operator in europe that is up and that is reporting an 89% increase in profit. i know you are talking to the chief executive soon. >> i am and i am excited about it. here are the top headlines. french and german gdp misses forecasts. they are getting no growth. they abandoned the deficit target. not a shock.

the aggregate reading in the getting has not many their hopes up about that. urging members to abandon the current prime minister and backed the president's nominee. insist that the attempts to replace them are legal. the country says that they are ready to accept a russian shipment where pro-russian separatists are surrounded by troops. it will be delivered by international red cross. the u.s. in the eu warned not to use it as a pretext as -- for innovation. there is a european company looking for americans. biotechiance unit and a

company may be snatched up. here is more. let's kick off with ge and the appliance unit. >> this is about the chief intotive trying to turn it more of a manufacturer of big capital goods. they invented the electric toaster. a useful thing to have. they are trying to get out of a low margin business and stop the future is power plants or rail equipment. they are trying to offload this. that many of us will have to look up his 14. it is a start up. >> what is next? transaction that they have agreed to that will take a long time and they will try to spin off the consumer

finance business in the company -- the country -- company that almost sank ge. they've looked like they made appointment and were not an industrial company. the chief executive is going to retire and we will have to see the direction that they go in after that. theoes this sound like inversion of inversions? >> i think that if you are a european company, you have to we have seenat yououraging data and if want to do this, you can go west, as well is east.

>> let's turn to travel and the company announcing a jump in profit this morning. joining us by phone is the chief executive. welcome to the show. thank you for joining us. about the thing that everybody wants to know about. how do you plan to convince shareholders? they should agree to this proposed merger. in a time for our communication. said, you have them and we are at the upper end of the guidance for

this year. hand, we said that we would treat the container line of only owning 13% of the merger and the financial instruments. you will not see the numbers anymore and it will be a financial stake in the business. it is defense meant and it is a different one than in the past. plan b tohave a complete the merger? >> there is no plan b. >> do you plan on selling the stake? spinoff.ll see a >> there is a contractual obligation and commitment of all invested parties to this next

year. , there mightf that be opportunities to do a deal and we will do whatever is possible. we can contain the guidance into not any deal. any smart deal. >> fantastic numbers for your company this morning. not from the company -- country you are based in. , do you see it as incredibly resilient? the numbers have been good

and consumer confidence has been .ood consentame time, the that's the communication sentiment inagain the more significant quarters revenues anded our the numbers. i do not see a challenge here. >> what about going forward? sentimenttion is that around the travel industry and the shot down airplane in the ukraine. reality?he

decreased customer numbers and revenue. destinations and an incredible increase of demand in the future. >> thank you very much for joining us live from germany this morning. coming up, we will go inside to gdp numbers and we will see if exports are going. stay with us. we will be back.

>> welcome back. this is on the move. >> you make me smile. the data is nothing to smile about. >> it is not. we will see what people are writing about. team at bloomberg. let's not forget about the team at bloomberg. fundamental problems in germany. have is a little bit of a bright spot in this ofber that is a contraction

.2%. bang. bad news. domestic demand is holding up. let's go over the border. shock, horror. not really. we are saying that the export markers -- market is about 42%. index and 56% of the france is much less exposed. actually, it is worse. italy, germany, and france. growth, and engines are under pressure. gdp or bothered about

inflation? i have never heard of l owflation. it is the new one. lowflation. that is the warning signal. take all of this. give you that. what does it mean? demands the argument, and cause for quantitative alternative form of what you understand budget easing to be is not common in the form of asset backed security. withad that conversation the european central bank and we are in august. beforebe one year older

this all comes to bear. the tension and demand and statistical and empirical evidence will go to a point of capitulation. that is my call. it is not anybody else's call. it is a 14 year high. >> it is a big deal today. is pulling itself up by the bootstraps. even greece. 24 straight quarterly contractions. recession is easy and nearly out of a six-year slump. the summer. the item. you can see spain and portugal. it is an inversion of the north of europe and they side of europe. it is the most worrisome of all. >> maybe we should be worried. >> can i have the notes back? what yes.

we have the gdp numbers and nichols is the correspondent standing by. over to you. port withhere in the the ceo to talk with us about the numbers. inland portbiggest and a great barometer for what is happening to stop that is the first question that we saw and we so so much expert activity. how much of this is due to the situation in russia? >> well, the first half of the on ourhere is influence business and i expect that exports in european countries will become more flat. it is not just about russia.

it is about the ukraine. we sawa situation when the development of the southern states of europe and germany is doing fine. we have a strong basis and we did our homework many years ago with our human resources and these things. helps. an agenda and it a the other end, we have country linked with export has become an important market for us. >> you have done your homework and there are questions that you might not be able to answer. the growth in europe is slow. problems,re global what is the strategy and kay

continue to drive growth? >> we rely on the quality of products and we have seen how to go ahead. markets andsome market share. equality, we have new markets and we look at the discussion about china and the lower growth rates in china. ,e are very strong in turkey indonesia, and mexico. cani am optimistic that we compensate for the slowdown in the way that we did. >> i have questions about the port. it is integrated. you did rail shipments and this week, you are going to be shipping new vehicles. tell me about that.

>> it was an interesting story conceptupported a new of building a land bridge. >> they are building a land bridge. explain that to me. that had different companies from china, russia, and germany. days and got 18 rid of all the problems with all of these things at the borders. and, if you think, for instance days, we can do it in 16 days. it is very interesting for the automobile industry and when the president was here, he said we had so much exports -- so many exports and products coming back.

acquiringrted with the automobiles. >> what are you shipping? we are shipping the products with the producers of audi. joining the dedicated weekly train and it was very specificng on containers. this business will grow in the next year. nevertheless, the percentage of exports to china by the land is on a complimentary basis and is very important. very expensive

efforts. >> you are always hedging in the shipping industry. i thank you for your time. i will send it back to you. we are going to take the land bridge from the port to china and do it in 60 days. we are going to point you on a barge. >> a barge to china. i will pass. here is the picture of the markets. the lower opening across the eurozone and the dax is up. there is not much of it. the big three. italy is in recession. the powerhouse of germany is negative. the economy contracts. the euro data is huge and becomes a 10:00. the estimates are 0.1%.

the inflation. lowflation. no inflation. call it what you will. we are on the move.

>> welcome back. pulse is coming up. >> good morning to you. that will be a topic of conversation that we will pick up on. french and german numbers that

you have been talking about all morning are coming out. we will get a fuller picture at 10:00 of the number and before that, we focus on europe. company's are expecting to come under considerable pressure through self-imposed sanctioning. gdp.ll talk about polish on markets andus recovery. we have utility companies that are the victim of weaker power pricing. they are active in the renewable areas and that is not the core of the business. of economy sanctions

are part of this. forward givens the deficit targets, what is it like? >> it is really interesting. the peripheries are backed and the core was doing ok. it seems to have been turned on its head and it has structural problems that it needs to address. the weakness is coming through germany and this is just the second quarter we are talking about. week earlierame in this week. >> not looking good. record lows. that is out. in the meantime, if you want to talk markets, you know where i am.

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>> europe's recovery stutters. the german economy shrinks more than expected as france flatlines. putin's victory lap. the u.s. tightens rules on sanctions. r.w.e. powers down. they swing to a loss on merkel's shift to renewables. we're live with the company's c.f.o. a warm welcome to "the pulse" everybody live from bloomberg's european headquarters in london.