francine: apple crumbles. shares in the world's most valuable company plunge in after-hours trading as disappointing iphone sales overshadow profits. manus: the greek prime minister will be relying on help from the opposition to get a second package of reform measures through parliament. francine: and looking for left off. mark carney intensified speculation over when the bank of england will raise rates. welcome to "the pulse."

i'm francine lacqua. manus: and i'm manus cranny. welcome back. francine: it is nice to be here. i haven't missed anything, have i? manus: nothing much. francine: now we have this technology route. big disappointment for the tech giants. manus: despite posting record third-quarter profit, shares in the world's most valuable company plunged more than 8% in after-hours trading as lackluster iphone sales left investors wondering whether the company can keep making its products. francine: let's bring in caroline hyde and paul. thank you for joining us. caroline, we have record earnings for apple but because we are seeing some weakness, analysts are concerned that this is the peak. caroline: a record third-quarter and yet you are about to see $60 billion of market valuation

wiped off. that is three times the market valuation of arm holdings in the u.k. it is 10 times that of stmicroelectronics. the concern is, iphone sales disappointed. we saw 35% growth. you would have thought that would be fabulous. we expected more. then, the forecast for next quarter. sales are expected to the $50 billion, but it is only less than a percentage point growth. the problem is they are perhaps a victim of their own success. china also a key area of concern. tim cook saying china is creating speed bumps. everyone is worrying that we can't see growth in asia. manus: why is it -- these numbers from china do people

doubt the ability of china? why are we disappointed with china? paul: we saw a little bit with ibm. they signaled that china was lackluster relative to expectations. to the extent that investors were baking in a stronger china market to offset the weakness in other developing markets, that story is not playing out to the extent investors think. we are seeing a little bit of a reset for expectations. francine: is this the unraveling of the tech rally? paul: i don't think so. the bulls are seeing some strong numbers out there. the pc business continues to face headwinds. overall, when you think about tech spending, it is one of the growth areas in the economy. a couple days ago tech was thought of one of the few areas

where you can find organic growth. caroline: there is an issue of how much people are being too over concerned. we were speaking to the leader of arm holdings. they are saying, we just one bank 54 license -- just won 54 license contracts. only a quarter of them are in smartphones. when we are looking at apple perhaps sales have been a bit lackluster. 1.9 million is how many -- not a 5 million have been expected. they are trying to rejuvenate a whole new category. manus: nokia may has well have never happened. after you see this kind of quarterly numbers, is that the low point for microsoft? it is essentially about cloud. paul: it is.

when you look at microsoft's numbers over the last several quarters there, the core enterprise business is facing headwinds. you think about some of the bright spots for microsoft, and for sap and amazon. macleod really stands out -- the cloud really stands out as an area for growth. that is despite the fact that the cloud storage business is facing tremendous pricing pressure as these big companies move for market share. they know this is a long-term growth story for them. amazon released last quarter some profitability figures for their cloud business and it showed quite profitable for them. caroline: what many never knew is that microsoft acquired the cloud -- or at least used to and that was an unheard-of

realization, that microsoft is very dominant. i think it was amazon as well, supplying to the likes of apple. i think where many people are going with this is microsoft is concerned with a share selloff. this is the second biggest tech stock in the world, certainly in the united states. we are going to see the tailwinds spilling into asia. here in europe, it has tailwinds as well. the fact that apple is seen as the most lucrative business in the entire world, that is going to have ramifications. 78% of its sales come from apple. francine: it will have ramifications. we are expecting news from yahoo!. are we looking for more de-mergers? paul: with yahoo!, the story is,

they've done a wonderful job monetizing their asian assets. hopefully that gets favorable tax treatment. they have a big investment in yahoo! japan. the problem with yahoo! is, their core advertising business is showing no growth. investors are concerned about that. internet ad spending is a grower every year, yet yahoo! shows no growth. francine: thank you so much. caroline hyde and paul sweeney. francine: manus: that brings us to our twitter question of the day. this takes us to the point. there you go. is the tech rally on relevant link? -- is the tech rally unraveling? francine: paul disagrees. manus: what is your twitter? we are all there. do join us. francine: authorities have arrested four people in israel

after they were tied to the computer hacks of jpmorgan. elliott, this is partly about pumping and dumping. elliott: that's right, francine. this is a standard stock manipulation scheme, whereby the organizer encourages people to buy into a particular stock thereby sending the price higher, and that allows the schemer to sell their own holdings. they pump up the prices and dump their own stock. the israelis are alleged to have been involved in this stock manipulation scheme that targeted about five stocks and they walked off with something like $2.8 million. there's another court hearing tomorrow in israel and u.s. authorities may seek to extradite them. there was another case where a couple of americans were arrested, allegedly for running

an unlicensed money transfer scheme. one of the people involved in the stock manipulation scheme and one of those americans were old college buddies at florida state university. according to a previously unreported fbi memo, those same people were also implicated in the jpmorgan hack as well as other similar incidents at e*trade and fidelity. we understand from is really police that 10 u.s. law enforcement agents have been working in israel to help oversee this. the tentacles of this whole scheme extend both into america, israel, and russia as well. manus: elliott, let's talk about the jpmorgan data snatch. some of the details that were stolen, quite staggering. give us a little backdrop on that. elliott: talking about over a three-month period, the

packers having unfettered access to jpmorgan's main data center, which controls key things at the bank and the financial system. they had access to at least 100 servers. they walked off with 40 gigabytes of data. when you hack into a bank, you probably expect them to go for the money. what seems to have happened is that they scooped up all these names and e-mail addresses to be used potentially for this stock manipulation scheme, to target these people to try and get more pumping and dumping going on. that's kind of the extent of it. it is even more embarrassing for jpmorgan. in 2014, they spent a quarter of a billion dollars to ensure that hacks of this nature didn't take place. some people might be left wondering, if this can happen to jpmorgan, it could happen to other banks as well. francine: it certainly can.

elliott, thank you. manus: here's a look at what else is on our radar on "the pulse." prime minister alexis tsipras has returned to the greek parliament, seeking support from the opposition to help him overcome his own party's rebellion against the terms of the third bailout. european central bank officials will hold a telephone call to discuss the emergency liquidity assistance that keeps the greek financial system alive. francine: the bank of england publishes the minutes of its july monetary policy committee meeting in just under half an hour. investigators will be pouring over every word. governor mark carney last night said the decision as to when to start the process of raising interest rates will likely come into sharper relief around the turn of this year. manus: chancellor george osborne

has announced he's seeking a further 20 billion pounds in savings from the u.k. government. each is being asked to come up with saving plans between 25% and 40% of their budgets. >> we are going to ask other government departments to make savings for efficiencies. by giving people power over their lives, there will be significant savings for the taxpayer. it will be part of our plan to eliminate the deficit. the best thing you can do for working people's deliver that strong, stable economy. francine: let's look at what is coming up. at 9:30, details on the bank of england meeting minutes. manus: and at 10:30, we will be speaking with the ceo of eleanor, the telecom and media giant which missed profit

estimates earlier this morning. francine: at 10:40, we will be joined by david moore. that is all still to come. we are just getting started. ♪

manus: welcome back to "the pulse." we are live on bloomberg tv radio, streaming on bloomberg.com, your tablet, and

your phone. francine: in greece, the bailout package reaches its second hurdle. those are being debated right now. you can see live pictures from the parliament in athens. a vote on the first set split the governing syriza party. manus: bloomberg's european editor joins us from athens. it is going to be a long day of political rhetoric and jockeying in parliament. where are we? is tsipras going to have to reach across the house for support? ben: almost certainly, it will pass. he managed to get the first package of reforms through last week with the help of the main opposition parties and no one is expecting him to struggle to get it through today. the issue will be the scale of the rebellion within syriza. last week, there were 32 syriza

lawmakers who voted against the measure. that is 1/5 of tsipras' parliamentary party. that is raising questions about what the governing coalition what it is going to be like going forward. first, they have to get through these reforms. after that, there are big questions about how and if tsipras can continue governing. francine: there's another decision today on further emergency liquidity assistance for greece. can you shed any light on that? can they increase it? ben: well, the consensus is that greece is managing to check off slowly but surely the barely us -- the various actions they need to do before the bailout negotiations. they got the first package last

week. they got their bridging loan. they paid the ecb on monday. policymakers are operating on the assumption that greece is making progress and it is going to be able to deliver the measures required to start this new bailout program. francine: thank you so much. manus: let's get a little more on this story with barclays chief u.k. and senior european economist. fabrice, welcome to "the pulse." politics at play today. is tsipras getting weaker each time he goes back to parliament? fabrice: he is getting weaker and stronger. in the open in polls, he has the strongest approval rate ever. from the voting perspective, he has strong support by the population. what he faces now in parliament

is rebellion by some members in his party. that is nothing unusual. look at other governments across europe. what we are looking at here is a possible recomposition of the majority within the parliament with some rebels within the syriza party falling out. tsipras possibly will seek support for more center parties or reform-oriented parties. that is a process that will last over the summer and further. that is an ongoing process. we are also talking about possible snap elections in september. those are the kind of risks we are facing. francine: on the snap elections how much of a concern is that? he seems to be losing control of his own party while gaining support from the opposition. if we face snap elections, that puts the bailout in turmoil. fabrice: it does, but syriza

seems to be in a more favorable position. he is the man in charge. he has the popular support. if he decides to exclude some of the party, then those mps will lose their seats. in terms of the balance of power, i would be less worried about tsipras losing his seat than about the majority to be recomposed. manus: today, the ecb had a discussion on whether to increase their funding again to the greek banks. my question to you is this everybody has told us for the past couple of weeks, you need to see the banks restructured in greece. is greece ready for that? will the ecb want to see restructuring first? fabrice: the sequence for the ecb is, they want the process to stay alive, and the process of discussion, negotiation, and setting up an economic program.

the third economic adjustment program, we will not see it before probably the end of august or september. that is weeks of negotiations to define the targets. as we speak, the economy is freefalling. it hasn't stabilized yet. you have to redefine all the targets. that will take weeks. what the ecb is looking for is for people to talk to each other, for having a credible outlook for an agreement to be reached later this year. if that is in place, the ecb will stay in its mandate as long as the eurozone stays the eurozone. francine: is debt relief now a given? fabrice: i think it has been a given for longer than we think. francine: despite german opposition. fabrice: german public opposition. we never know what is discussed behind closed doors but it was

probably unreasonable to think that without debt relief, greek debt would be sustainable. from that perspective, you mentioned sequence. seek is is important. merkel made a strong point of this. she doesn't want to talk about debt relief before the first successful review of the program. that gives you a hurdle that the greek government needs to pass before they can talk about debt relief. manus: pierre moscovici last night said, that there is a place for greek debt relief. it sounds as if europe is splintering. they all are calling for more. is that realistic? fabrice: just calling more europe for the sake of more europe lacks substance. manus: they talk about fiscal union. fabrice: you have to realize

that the debt relief is a fiscal transfer. once you take the step of debt relief, you open the door of a fiscal union. some leaders are calling for more europe, because that is basically what we are talking about. a union, a fiscal union in europe. you cannot engineer debt relief without having this discussion. some parliaments will insist on keeping the control, on how much transfer they will allow at the european level. this discussion needs to take place at the same time as we are talking about debt relief on greece. francine: we also have to talk about the u.k. we are expecting bank of england minutes in about seven minutes. we are looking at a rate hike, but more visibility at the end of the year. fabrice: what will be interesting to see is whether

the finely balanced decisions are still as finely balanced as they used to be. we expect discussions around the outlook for the u.k. to be a bit more lively than they used to be in previous months. however, we don't expect any members who have taken the step to vote for a hike in july. the most hawkish of them has been pretty clear that he won't vote in july. that implicitly means he will vote in august. beyond these minutes the next meetings will be interesting to follow with how many votes we get in august. and then, how fast will devote move towards the end of this year? francine: thanks so much for that fabrice. manus: easyjet say sales are helping him recover from the spring. this morning the low-cost airline carrier announced pretax

profit for the year ending in september set to increase as much as 14%. francine: for more, we are joined by chris. great to have you on the program. what do you make of the results? chris: certainly an improvement over what we saw a quarter ago. they warned that the spring quarter was looking really soft. there were problems with an air traffic control strike. a few other things. now, they seem much more solid. they are on a more bullish outlook. manus: when we look at some of the things that are going to help airlines, what is the main thing? they are going for better airport locations, a bit of an energy boost. what do you think is going to drive it? chris: very targeted expansion

in some major cities. they are continuing that drive to attract more business, adding capacity in amsterdam for example. they are finessing their exposure in italy. they are getting into venice and a few other places. they are spread across the board. the summer bookings are looking good on what the ceo called beach destinations. that helps with the summer, but the year-round focus is more broad. francine: what can you tell us about london heathrow and expansion plans and the tories? chris: graham brady, who heads the 1922 committee of backbenchers, had a briefing last night where he reckoned 600 of 650 mps might vote in favor of an expanded heathrow. so in numbers raw numbers, it

is looking very positive for them. manus: ok, chris. let's see how those mps vote. the minutes from the bank of england next. ♪

francine: welcome back. the bank of england minutes that we've all been waiting for, no dissent. manus: that runs against the bloomberg survey. the bloomberg survey had 65%. you have carney speaking last night, a little bit of a move in some of the more hawkish comments. a little bit of a surprise. francine: the bank of england says a number of policy makers see rising inflation risks. let's have a look at dollar

versus sterling. 1.5630. we had quite a high last week. manus: last week, we had mark carney raise the flag that raising rates would be on the agenda. last night, what he did was we've still got headwinds. last night, we've got a wee problem. francine: we are also hearing that according to some members the rate vote is more finely balanced. however, because of greece and the turmoil we saw in greece, it risks a material impact. that means that the greek risks are material for no rate change. let's bring in jane marie and fabry'sice montagne. we spoke about it just before going to break. no change.

does that mean we will get an interest rate as soon as we asked act, or is this being delayed even further? fabrice: there has been a lot of excitement in recent days around interest rate expectations on not much data and not very powerful statements. you have the impression that with greece on the sideline with a bit less uncertainty in the u.s. because it looks like the fed is set to hike before the end of the year, people are more and more looking at the bank of england. there was an effort to it look at expectations closer. what we have seen is, the market has brought them word -- them forward by three months or so. when you look at the minutes, the quotes you just made of the minutes, it is nothing more powerful or fancy than what we had in previous months. it was to be expected, given the

previous statements, that some members are more tempted to vote for a hike. that is the kind of natural movement we will see intensify. the primary driver of this is that inflation is set to recover next year. if we don't see an impact on inflation expectations, that will be the trigger. manus: jamie, let's bring you into the discussion. the bank of england says that they are getting more skewed to the upside. we saw last week, breaking out on the upside, and last night, carney warned the path of rights is more important than the timing of the first move. this is the point. there are headwinds. sterling is also an issue. jamie: the path of rates is an important point. your mortgage is based on the price of borrowing for the next five years.

this is kind of what he's trying to get at here. we expect it to be very slow. there's lots of reasons why the path will be lower than in the past. you've got credit spreads wide. you've got headwinds from fiscal policy. so, i agree with him. i think it will be slow and it will not get back to the level that people experienced. francine: that first interest rate hike is still a bit of a shock. every central banker is saying it is going to be a gradual pace , don't worry too much about the timing. the timing is important for the markets. when are you expecting it to start? jamie: if you see wage data continuing to pick up, that will prompt a rate hike towards the end of this year. manus: fabrice, one of the lines that caught my eyes was david

miles talking about whether the fed would go first. i love what he was saying. does it matter that the mpc wouldn't go before the federal reserve? the language from yellen and carney guides us to different points in the calendar. fabrice: yes. the stance of mp membersc on this committee -- of mpc members on this committee is that interests are correlated. they point out that there's very little evidence that the feds in the u.s. are driving interest rates here. it is more domestic factors that tend to be correlated naturally that drive those correlations in the cycle. we have to be careful about this. even though there are a lot of arguments that you could mention, the exchange rate is one of them, it is easier for the bank of england to start hiking after the fed because the

pressure on the exchange rate is less. why not take that and wait this couple of months that you might need to hike after the fed? these are the parameters you might want to keep in mind. you can't say on the basis of those parameters that the bank of england would like the fed to go first. francine: i would say, who's the biggest? let them go first. when are you expecting the first rate hike? fabrice: we are at q1+++

february. we had a call of q4. we pushed it back on a lot of talks late and gradual. we pushed it back. i'm actually happy to see what is happening over the last two weeks. manus: they are listening to you, fabrice. fabrice: amazing. manus: thanks to our chief economist, ginny murray, and fabrice montagne. francine: here are bloomberg's other top headlines. authorities have arrested four people in israel and revealed a computer scheme tied to j.p. morgan chase. two men are charged with running a multimillion dollar stock manipulation program. another two are charged with running a scheme using bitcoin. manus: sales recovering from a dip in the spring. the company estimates that pretax profit for the year is set to increase by as much as 14%. the airline says 77% of seats have already been booked. francine: despite posting its best fiscal third-quarter profit ever, apple shares fell 8% in after-hours trading. while iphone sales climbed 35%, it fell short of estimates. the tech giant also missed estimates for a revenue

forecast. manus: one company watching apple carefully is the chip designer arm. it reported earnings that missed analyst estimates. the ceo spoke to bloomberg a little earlier. >> when we look at the results for arm, building on q1 we have pretty much nailed that. within that growth was very strong. when we think about this performance, we think about how more and more chips being built in the world are using our technology. there is the opportunity for multiple arm technologies in these chips. that has led to the outperformance in the industry. caroline: you just signed 54 processors. this is forward-looking. give us a break down. how many of them are in mobile? how many are in other devices?

i suppose what many people want to see is that you are not completely hook, line, and sinker paid to where we see mobile sales going. >> 54 is a record for the number of licenses signed. we have over 400 licensees. about 25% to 30% of our licenses are for mobile. the rest are going into all sorts of markets. iot'as is a big area right now. people are looking at building microcontrollers connected to the internet. at the other end of the spectrum, we are seeing processors used to control wind turbines. francine: coming up, greek parliament votes again, this time on a second set of austerity measures. ♪

francine: welcome back to "the pulse code --"the pulse." manus: goldman sachs commodities research partner says the worst is yet to come for gold. prices could fall below $1000 an ounce for the first time since

2009. prices this week slumped to the lowest level since 2010. the route amid mining speculation that u.s. interest rates will climb this year. it doesn't pay interest like competing assets. francine: go pro shares climbed. the company's second-quarter results beat expectations for the third quarter. go pro says it is quite optimistic. manus: greek lawmakers vote today on a second set of measures demanded by the nation's" at her's to unlock bailout funds. ecb officials will hold a call later to discuss emergency liquidity assistance. greek markets remain closed. jamie: let's get more on that. joining us from the greek capital is amn athens professor. how concerned are you about snap

elections? >> could you please repeat the question? francine: how concerned are you that alexis tsipras will have to call snap elections if there is more rebellion among the syriza party? >> there's a great chance of snap elections for many reasons. i'm not so much concerned because this is something regular in greece, even during times of crisis. the problem with tsipras now is that he has many dissenters in his own party. up to 40 mps probably most of them members of the left platform. so i believe that if alexis tsipras manages to pass, and start implementing most of the prerequisites for the third a allowed -- the third bailout i think the elections at the end

of september or early october might be a good thing after all. francine: a good thing why? it seems that he is losing support from his party but winning a majority amongst the parliament. he could govern as is. >> i'm not sure if i heard the question clearly. the problem right now is that alexis tsipras is a double hostage. even though he's very popular this is unprecedented for greek standards. he is hostage to his own party because of so many dissenters. there is a chance of him losing the majority. at the same time, he is a hostage to the opposition because the only way to enforce these measures is with the help of the opposition. that is why the elections should

be the best option for him provided there is a consensus a tacit consent from the creditors. francine: what does that mean if we do get snap elections? how quickly do you think they can come and what does it mean for negotiations with the bailout? >> as i said, i think a prerequisite for the elections is to be a tacit consent from the side of creditors. to organize elections again with capital controls enclosed banks, is going to be highly problematic. i suppose that creditors would realize that the only way for these reforms to be implemented is by a strong government either a strong syriza government with an outside majority or a national unity government that will be a little bit more possible after

elections. i don't think elections would be a catastrophe. every condition is going to be fulfilled on the greek side. at the same time, the greek government will start to implement our side of the agreement. and at the same time, this ferocious liquidity problem is solved in the process. francine: professor, give me a sense of whether you think the vote will pass through today. we understand it is not going to be a problem. >> today's voting was designed specifically to be easy voting for not only the 123 or 124

members of the coalition government, but also it was designed to lure some dissenters of the previous voting. the government did that purposefully because there is a fear, and this fear is rather serious, that there is a chance that if a particular piece of legislation and the retirement -- the retort of the retirement system was included, it could -- [indiscernible] this is a rather easy piece of legislation to be passed by the greek parliament. there might be some change of mind from some dissenters. this is the hope of the greek government.

it includes mostly an overall of the system, a reform of civil procedure, and some implementation of european union directives about procedures for closing banks during crisis. jamie: -- francine: thank you so much. manus: coming up next, how mila kunis -- you like a little bit of jamison, don't you? francine: jim fields is basically hoping to put diamonds on it? we will take anything. we will explain more after the break. ♪

francine: welcome back to "the pulse" live on bloomberg tv and radio. manus: as we all know, diamonds are a -- francine: girls best friend. manus: they are indeed. a mining company is hoping its latest advertising campaign might change that. tom gibson reports. tom: pairing a listers and precious stones is an age-old marketing strategy, but it is normally jewelers or fashion labels that attract stars like

mila kunis. this is a mining company. >> it was the weirdest thing. first you are like, it is a jewelry company. no. what is it exactly? this doesn't make sense. the credit it to the beers, when they started making diamonds. tom: they took the diamond and turned it into a billion-dollar industry. gemfeields deals in color stones. they are much rarer than diamonds, but they are less valuable. this is the world of gems, where abundance can mean higher prices and scarcity makes spectacular stones untradable. >> we have to mine millions of grams to get one gram. this is special. you don't see this often. this is an explosion of

emeralds. tom: the ceo has held the reins during the meteoric rise while the rest of the industry has slumped. >> our market cap going from a couple million to hundreds of millions. tom: for colored stones, prices often increase to justify marketing to customers. the value of emeralds appreciated 1000% in recent years. but like debeers, marketing the product is almost equally important in this business. >> by adding mila, we were able to get more exposure and recognition, and funny enough it also worked extremely well on the financial investment side. tom: partly to boost presence and elevate the position of gemstones. one thing it is loud about is

responsible sourcing, which might be the most powerful sell it has. mila: a gemstone is a gemstone. a ruby is just as luxurious as a diamonds. the difference between a diamond and an emerald is, you don't know where the diamond came from. you look at an emerald and you can determine the exact mine the exact country that that emerald came from. francine: emeralds versus diamonds. manus: you are giving me a hint. francine: christmas is not that far away. for those listening on bloomberg radio, "the first word" is next area for our viewers, it is a second hour of "the pulse." manus: we also have the conversation with the ceo of telenor. that is one of the mobile companies. they had earnings out this morning. francine: we will also talk the business of food with

pied-a-terre founder david moore. this is going to be a great conversation about restaurants in london. manus: ok. you can join us both on twitter. our twitter question of the day, is the tech rally busted for now? i'm paraphrasing. that is bad bloomberg manners. francine: i like it. we should recall it. another thing we are focusing on, the bank of london. it depends on how you read them. first of all, 9-0, that is how they voted to keep interest rates unchanged in july. more members are concerned about inflation. does that mean they are preparing for a rate increase? manus: the pound 1.5627 is where you are on dollar-sterling. we are talking about slack in the economy. they said greece was a material

risk for them. everybody is focused on greece whether they like it or not. manus: -- francine: we are back in two. ♪

manus: shares in the most valuable company plunge after disappointing iphone sales overshadow the best ever third-quarter profits. francine: the prime minister will be relying on help from the opposition to get a second package of reform measures through parliament. manus: the latest bank of england members voted unanimously to keep interest rates at record lows. ♪ manus: good morning to our

viewers in europe good evening to those in asia, and warm welcome to those waking up in the united states of america. i am manus cranny. francine: i am francine lacqua. manus: a disappointment for apple. despite a record third-quarter profit shares in the company plunged 8% in after-hours trading. that was as lackluster iphone sales left it investors wondering if the company can keep making hit products. francine: let's bring in caroline hyde and paul sweeney. take for joining us. caroline, what do you make of what we heard from apple. maybe they wanted too much. the share price fall is nothing compared to what they have taken in in the last 12 months.

caroline: it is still the most valuable company in the world. we could see $66 billion wiped off if we see what happens in after-hours trade happened when trade opens today. $66 billion eradicated because they are not living up to the hopes of iphone sales. this is still there keep product. we still saw 4.5 million shipped, but people wanted more than that. they are used to a 10% growth quarter on quarter. in china there was a hint of worry they suddenly made railroads into china being sold over there. they say it could be a near-term

speedbump over there. the watch is not selling enough. it is not enough to dissuade us that the iphone is where it is for the apple product points. manus: is this about what happens in the world of apple? and 18 months time, there is a speedbump in china. the iwatch sold more than the ipad. is there a lack of conv -- a lack of conviction? >> the highest evaluation in the marketplace. clearly, investors, when they step back it is the same story. what is the next product to drive apple forward? tim cook says there are a lot of

legs left in the iphone story. but this lets the bear step forward and say that the phone might be losing a little moment them, and that we do not see the next product coming down the pipe. while there may be a decent long-term story for the apple watch, there is nothing in the near term to pick up the slack. we are very early in the entire wearable segment. google had its stumbles with the google glass, which is passe now. it could be a new platform for growth in software and hardware but it is not there yet. if the wearables market will be significant most investors believe that apple will lead the way. manus: some would say that he

has kitchen sink the value of nokia. francine: they have taken that and a restructuring that cost them close to another billion. they taken $8.4 billion hit. that means they have a net loss. the biggest net loss in their quarterly history. i think what is worrying for investors and why we saw shares fall after hours is that this is not doing well in terms of sales. people can swallow write-downs and restructuring but when you have sales down 5% -- windows which is the cash cow loaded onto pcs and incorporations, we want to be moving away from software.

they are now moving into windows 10. operating systems are now going for apple, google android, ios. they're trying to make changes. this is why the commercial cloud is doing well. revenue is up 88%. they are about to launch window 10. that will make it easier to use on your android devices. they're trying to put the mobile and cloud first, but that takes time. manus: the yahoo! story is very tough. it is about the monetization of the asian investments. they have done a great job of monetizing alibaba, and hopefully they will get the fair tax treatment in the fourth quarter. japan is another $8 billion in value. they have done well for shareholders there. they continue to drop the ball

on core operations. you sought no revenue growth to speak of. yahoo! for several years, has shown no core revenue growth. investors might be saying that marissa meyer the honeymoon might be over. francine: i think it is interesting when we saw so much hype coming into the beginning of this earnings season. more than $6 billion added to the valuation of google. of course you are going to see recalibration when you get a few knocks. the pc slowdown will be an issue. the longer-term trend is that we are going to have wearables and devices, but you cannot buy that every single day. francine: thank you.

caroline hyde and paul sweeney. manus: that brings us to our twitter question. is the tech rally unraveling. you can tweet us. this is "the pulse." francine: prime minister alexis tsipras is seeking support from the opposition in the greek parliament to overcome his own party's rebellion in terms of a third they'll. european central bank officials will discuss the emergency liquidity system that keeps the greek financial system alive. manus: each one is being asked to come up with a savings plan for 40% of their budget. we're going to ask other governments to make significant savings for efficiencies, and by

giving power to people and communities over their lives. they will be significant savings for the taxpayer. it is part of the plan to eliminate the deficit and make sure the country lives within its means. the best thing you can do for working people is to deliver a strong economy. francine: members voted unanimously to keep interest rates at a record low after governor mark carney made the decision of when to start the process of raising interest rates will likely come around the turn of this year. 9-0 is the vote. more members are concerned about inflation indicating an interest rate right sooner than expected. manus: when will we see the first rate hike from the u.k.? let's bring in our senior economist. welcome to the show, james.

the decision -- and this is the key point, the decision was becoming more finely balanced. this move goes along with what we have heard from mark carney indicating the decision will be at the turn of the year. james: it is interesting that if you look at the domestic story which is very good, but the risks were very concerning. we were building up to the greek summit to discuss the bailout. there was concern about china falling substantially. the greek and china situation has calmed down. we are looking at domestic fundamentals. over the last 36 hours the comments from the bank of england have been more hawkish. francine: they talked about greece saying that if they excluded greece they would be worried about inflation. when do you expect the interest rate hike? james: we expect

february. in the absence of productivity gains and in the presence of consumer demand corporations have pricing power. wage costs are the driver. there is the potential for inflation to creep through quickly. this is alluding to some of the missing comments. manus: between the minutes and last weeks comments, they talked about the durability of the recent pay growth. have the highest wages we have seen in 5.5 years. the durability of the recent move and does that have the ability to stay? james: there are some arguing that employees will push back on employee -- that employers will push back on employee demands. i would argue that what we are

seeing now is that the pool of available labor is so small, their only -- it is a tight labor market. if you want to hire new staff you cannot get them off of unemployed people anymore. you have to hire from other companies. staff retention is more of an issue, so they are willing to offer higher paid to keep their staff. this has more momentum. wages could rise of more broadly than people are expecting. francine: you expect the first interest rise in february, then a gradual increase almost flatlining. does it make more sense before or after the fed? james: we have the spanish elections in december and the irish elections next year.

you could have antiestablishment parties in the coalition at a time when the whole story will be kicking off for the grexit as we approach the referendum. the u.k. is very open. 20% of all investment spending is from foreign firms. i think that that could the concerning for the growth of the bank of england. therefore, he will be looking cautiously at this story. francine: thank you for joining us. manus: coming up next. and alexis tsipras gather enough help from across the week parliamentary aisles to pass another set of reforms to unlock the allowed? that is next on the agenda. stay with us. ♪

manus: welcome back to "the pulse." the greece bailout package reaches its next hurdle. a vote on the next set of reforms. our european government editor joins us from athens. how likely is this a vote to pass? we are hearing that it most likely will with opposition support.

ben: the vote will go through. the opposition parties will support the measures because they feel that will serve the national interest. the question is to what extent will the syriza lawmakers rebel against prime minister alexis tsipras? last week we saw 32 of his 150 lawmakers vote against the lawmakers with 6 abstaining. that brings him into slightly delicate territory in terms of the survival of his governing coalition. the most likely scenario is that sometime in the fall, after we have resolved the bailout talks there has to be some kind of political event. whether it be elections or a new coalition agreement to renew the government here.

francine: what about the ela? ben: the ecb, as you know, raised ela for the first time in several weeks. last week after the first vote. since then all of the signals have been positive that greece is checking off the various boxes that they need to before this boat can go ahead. there are reports that the ecb is set to grant a small increase on the ceiling for emergency funding. the policy environment for greece is becoming slightly more benevolent, but i do not think the ecb is ready to give them a free pass yet. manus: thank you for writing that up for us.

francine: authorities have arrested 4 people in israel after they revealed a security fraud scheme tied to the hacks of jpmorgan. elliott, this is about dumping, tell us more. >> the organizer of the scheme encourages people to invest in a stock through e-mail to boost share prices. when the share prices go up the scammers sell their own price. that is what the israelis were arrested or yesterday. they could face hearings today and possibly an extradition request. there have been 10 agents from law enforcement agencies working in israel from the united states. 2 americans were arrested for being involved in an unlicensed

money transfers game. the connection between the israeli and american arrests aware that two of the people were college classmates at florida. the reason for that seems to be that he is in russia and beyond the reach of u.s. law enforcement agents. as a result of these things, the same two people who were old college buddies, and a previously on opened a memo from the fbi, they are alleged to be involved in the hack of jpmorgan . that is the connection. it is complicated but this scheme and the connections range from u.s., to israel, to russia. manus: in terms of the details on the data stolen from jpmorgan, give us a little bit of context on that.

elliott: we should know that the share manipulation scheme predated the actual jpmorgan hacks, but the hacks could have -- they would have had to have gotten data from the hacks to get more people to ramp up stocks. these hackers had access for three months to data from jpmorgan. they accessed at least 100 servers and walked off with 140 gigabytes of data. that is troubling for jpmorgan considering they spent a quarter of a million dollars on security to prevent this from happening. the concern is that if they can happen at jpmorgan, it can presumably happen at other banks that are not as well resourced. francine: how summer sales are

helping easyjet recover from the winter blues. we will break down the budget airlines results, coming up next. ♪

manus: welcome back. this is "the pulse." we are live on bloomberg television. easyjet says that sales in the summer recovering from the

spring. the pretax profit was for the year ending in september. it will increase 14%. we have details from our london aviation editor. good news for carolyn mccall? >> a very strong share reaction. 5%. there was surprising news in the spring when the second quarter was looking bleak. various factors were at play. the biggest share decline in three years. they are back on track. good booking levels. already 77 percent booked through september 30. strong bookings to beach resorts. manus: that is you. francine: i'm single-handedly

boosting the revenue. expanding heathrow would get a 600 parliament vote. how much of this is for real? chris: you might call it a spin in the fact that he said and this is the chairman of the conservative party the 1922 committee about ventures, that he's early event, he said he is not someone who is directly involved in the debate. he is a northern tory mp. he believes the vast majority of his own tory backed ventures. he believes the labour party was prefer for heathrow to be an got wake. other than the still relevant

problem for heathrow of boris johnson if maybe he would resign over this. manus: we have to leave it there. chris jasper. we are back in 2 minutes. ♪

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francine: welcome back to "the pulse." i am francine lacqua. manus: i am manus cranny. authorities have arrested 4 people in israel and florida, revealing a complex security fraud scheme tied to the security hacks of j.p. morgan chase and other financial institutions. two men are charged with a multimillion dollar stock manipulation program, and others are charged using an unlicensed

money transfer business using that coins -- using bitcoings. francine: easyjet's profits will increase 14%. 77% of the second half seats are already booked. manus: apple shares fell as much as 8.8% in after-hours trading. iphone sales climbed 35%, but that fell short of shipments predicted by analysts. they also missed the revenue forecast for the current period. jon: nine straight days of gains on the stoxx 600. yesterday we posted losses. we are inching toward the second day of losses. we are down by 4/10 of 1% in frankfurt, germany. in london, down by a tenths of

1%. -- down by 8/10 of 1%. the bloomberg commodity index hit a 2002 low. i said there were 2. that is one. apple earnings disappointing. iphone sales surged 35% and a record fiscal third quarter, but still a disappointment. that is what happens when the bar is this high. estimates are being missed this morning. the big question, as we go into the u.s. open with the nasdaq futures lower, is the tech rally unraveling?

disappointing, disappointing disappointing, it looks like it could be. euro sterling is below 70 pence. we come back with a weaker euro and a stronger pound. a vote of 9-0 to keep rates unchanged at a record low. as bloomberg news states, the shift to a rate increase is building momentum. when you look at the color in the detail, a pickup in inflation pressure will be key. a wage pickup, and what the bank of england will do a better rate hike. manus: jon ferro, on the markets and the potential for rate hikes. the largest phone company telenor. it fell short of estimates. growth in the mobile industry was offset by growth and host cell probability. the stock fell, we were down

nearly 4%. we have recovered a little bit of the losses. joining us on the phone to discuss the latest earnings report is the ceo jon fredrik baksaas. it is good to have you. people are worried about the balance of the business. what will you say to reassure them? mr. baksaas: thank you for being invited. this underlines that mobile is a strong driver in several markets. we have several challenges, in thailand in particular. on the positive side myanmar and norway came across as very strong contributors. manus: you mentioned myanmar and norway, i want to get a sense --

one of the lines in the report was that customers have doubled their daily usage. can that momenntum continue? --mr. baksaas: mobile downloads are increasing rapidly. customers doubled their take. norway is one of the special markets in europe for the time being where consumption is growing. this has been a challenge and other markets in europe to achieve. manus: i want to get a sense of that. the domestic momentum. are you seeing anything like that? rank the markets. you have myanmar you have

eastern european countries as well, thailand -- give me a sense of the data appetite, the reality of it. mr. baksaas: we should concentrate on the people of myanmar. for several years we have seen the benefits of mobile communications and developing economies. we see this in play at high speed in myanmar. we are only nine months into operation and we arty have 10 million customers. -- we already have 10 million customers. it is incredible. 55 percent of users are already intimate users, meaning the local impact of these investments that we carry out with long-term ambitions to produce a paid in the development of the country has paid off.

manus: we understand that that is the success story. one of the questions is what is the story in india in terms of your discussions for the potential of a merger. where are we on the timing? do you have any comments to make? is that a deal that should be done? mr. baksaas: india in general is something that people are looking into from different for spec this. -- from different perspectives. for me to comment is not applicable. we need to think over our own position in india, particularly when it comes to data services in the long run. right now, we are ok and comfortable. manus: talk to me about europe. this is the geography of the

world, which is different from the united states of america. we have dozens of carriers. where are the biggest opportunities? will we see more consolidation? will you be a player in that, as opposed to a player in developing markets? mr. baksaas: consolidation will probably happen. there are some signs and lots of talks about that. telenor has activity in europe and asia, primarily northern europe. asia is a front-runner in network quality, investments and usage. europe has been lagging. they have been lagging the rollout of 4g because of regulations rather than

incentives. data communications is as needed in the european space as in the american space. there is a lot to do in the industry as well as getting the regulations right. manus: thank you for joining us. we wish you well in whatever direction you take as the ceo of telenor. francine: officials have been saying that they have perceived to the risks of inflation building, meaning that markets are taking this interest rate rise earlier than expected. this is despite members voting to keep interest rates at a record low. we had the institute of directors saying that the nearly -- saying that the bank of england should start the rate

increase. this is part of the puzzle that cap to the mpc even entertaining the idea. they voted unanimously to keep the interest rates unchanged. it would have been a different outcome had greece been excluded. manus: they're moving to a more finely balanced position. they're looking at the amount of access -- of excess. last week we saw blockbuster numbers. the best wages in 5.5 years. well the momentum continue? and mark carney was talking about headlines. francine: we'll see what is cooking with chef david moore. that is coming up next. ♪

francine: welcome back to "the pulse." live from london on bloomberg tv. manus: cooking up a fortune. that is the plan of our next guest. francine: let's welcome restauranteur david moore. thank you for coming on.

this is a new concept? the smokehouse. it is more simple in the offerings. what you think it will take off in the city? david: it is beer and ribs. this is our second site. we opened one in west h hamstand to test it. we had an opportunity to come to the city, and we thought it was too good to be true, and we had to do it. manus: you were born in west end. here you are in london. who is going to come in and eat the ribs and drink the beer? david: we have a jack the ripper

tour going by every night, and no one has come in. we are looking at a speed of service. when i go to -- when i booked a party i am ringing the michelin star services. we bring the quality of food. i'm trying to get a really good beer scene. we have 17 beers on tap. we want to marry this with a speed of service. we are trying to reinvent the carverry. francine: what do you mean? david: if you're opening a restaurant with a carvery you cannot go the other direction. we had a little bit of market research in new york, and we saw

a lot of the operators are moving to a style of service called service assisted meaning it is not for long the floor service. you are interacting with the restaurant. it is old-fashioned pub service. we have a brisket bar in 160 which is a new concept. manus: do we want less formal dining? is that what you are seeing? david: what you see in new york you will see in london in six months. we're trying to get ahead of the curve. we saw amazing concepts there. people are expensive to employee. if you can create something where the customers are happy to be a part of it actually queuing up for a pulled pork bun we can keep the prices down. we are talking a dollars $.95

for -- we are looking at $8.95 cents for a plate. we're not looking at posh nosh. francine: you are mentioning that talent is difficult to come by and retain. david: i worry about everything. don't get me started on business rates. skills shortages are an issue. the government does not seem to catch on to how big the industry -- we employ 3 million people in hospitality. the colleges are not taking through enough people. if you plant a vine to make wine, it takes seven years to get fruit. we need to think about getting people into the industry. getting people in school to talk about wanting to be chefs and

working in hospitality. i think we are a great career choice. you can get into this business, and then you can start your own business. look at street food, one of the biggest trends at the moment. there is no business rate you have no responsibilities. you go somewhere with your truck, serve your food. it is a low entry point. i see a lot of people looking at that to get into the restaurant business. going back to skills, every restaurant in london is looking for a chef. there are not enough of us out there. manus: do you have a message for osborne, apart from rates? david: come and talk to us and see what it is that we need. during the recession france, germany, and spain had a reduction for food.

it was a kickstart to those industries. we outgrew the u.k. economy during the recession and added 154000 jobs in the middle of the recession, helping the country out of recession. just come and talk to us. francine: thank you for that. david moore. the owner and founder of 160 city in that city of london. david: opening in two days. manus: the favorite dish? david: the brisket. francine: david moore. manus: coming up, how mila kunis will talk about why diamonds are a girls best friend. we will talk about that after the break. ♪

francine: welcome back to "the pulse." live on bloomberg tv and streaming on the ipad and bloomberg.com. manus: the mining company gemfields is hoping that its latest advertising campaign starring my looking this might change the saying that diamonds are a girls best friend. >> a listers and precious stones is an old strategy, but it is

normally fashion labels that attract stars like the look of this. gemfields is a mining company. mila: it is weird. i thought it was a jewelry company. they were like, no. what is it, exactly? at that point, i found out they mind for emeralds. >> they took a diamond and turned it into a million-dollar industry. gemfields deals in colored stones like emeralds, which are much rarer than diamonds, but less valuable. this is the topsy-turvy world of colored gems where spectacular stones are untradable. >> we call this the goliath. you do not see this often.

it is an explosion of emeralds. >> he is held the reins during the meteoric rise of gemfields while the rest of the industry has sunk. we have seen it shares increase. going from the capital of millions to hundreds of millions. >> for colored stones prices increased to justify marketing to customers. the values of emeralds depreciated thousands of percents. marketing the product is important in this business. >> we were able to get more exposure by adding mila kunis on the consumer side. we were able to get more exposure and recognition. it also worked well on the financial investment side. >> they boosted presents an elevated the position of

gemstones. one thing it is loud about is responsible sourcing, the most powerful cell that it has. mila: a gemstone is a gemstone. rupees are as luxurious as a diamond or an emerald. the difference between a diamond and an emerald is that you do not know where diamond came from. if you look at an emerald you can determine the exact mine and country the emerald came from. francine: there you go. gemfields. for the rest of the day we are going to athens for the vote in greece to see if alexis tsipras can hold the party together. we are expecting the vote to go through. ben: the issue is the scale of rebellion from his parliamentary colleagues. last week he pushed through the first set of their loud measures, and 20% of his

parliamentary party voted against him. he had to rely on opposition groups to get the vote through. today that rebellion will increase in scale because of some of the doubters involved in what happened last week. that will raise questions about how he will govern going forward. he has to keep things under control for the next couple of months so that he can seal this third bailout package with creditors. manus: we will see how that the beta goes later today. we are to hear from the european central bank as well. that is the real focus. francine: "surveillance" will bring you that. that is it for "the pulse." keep it here on bloomberg tv for "surveillance."

they will be joined by chris dodd. manus: just a reminder, we are always on twitter. ♪

announcer: this is "bloomberg surveillance." tom: apple enjoys a modest miss as the piggy bank tops $200 million. tim cook says wait for the iphone upgrades.

gold is below $1100. commodities cannot find a global bid. coke and pepsi -- actually neither as coca-cola deals with a kale punch watermelon. it is a watermelon-ginger world. please drink something. this is "bloomberg surveillance ," from new york. i'm tom keene. joining me vonnie quinn and brendan greeley. it is like a normal day greece-three. brendan: do you have a kale blender? tom: we tried this juice thing a whole three years ago. brendan: it did not work. tom: i made it the lunch. vonnie: you secretly were -- tom: vonnie will have