anna: china's manufacturing meth -- myth. sectors fall to the lowest in 15 months, showing more signs of a slowdown. oil turns back to bear. crude dips below $49 per barrel and copper slips to its lowest price in 2009. the global commodities red continues. amazon's profit surprise. shares surge after the e-commerce giant overtakes walmart as the world's biggest retailer by market value. welcome to "countdown."

let's catch up on what the market has done overnight. the big issue is oil, back in the bear market. it is currently down 20% off its highback in june, when we reached the high. clearly, china is weighing into that once more with concerns about too much supply and where demand goes when you have the pmi coming out of china. if missed every single economist's forecast. we saw doing even worse than had been expected. i will also bring you up-to-date with some of the market moves we saw in terms of closing on the equity market. the commodities that is feeding into the market, the s&p 500 off by nearly a half a percent.

meanwhile, the european stoxx 600 is off. they have been slumping for three days in a row. that brings us to our twitter question of the day. let us know how much further does the commodities route have to go? tweet me. i want to know your thoughts and what you think -- good oil go even further than a 20% decline? of course it was disappointing in china when preliminary pmi fell to the lowest in 15 months. as asian markets are clothing out the trading week with losses, everything in between. david ingles is standing by in hong kong -- three days of losses in asia. nearly that pmi figures surprising every single economist. david: certainly. it's obviously not helping sentiment. commodity places were in us --

commodity prices were in a slump, and of course it used to become the asus pc flash pmi. a change of sponsorship, basically. as you mentioned, a big disappointment. on top of other data with the exception of japan, every single one that came out today -- new zealand the philippines -- at 9:45 a.m., this piece of data came out, feeding into what you are seeing right now. we are down 1.5% for the week. when you talk about china, for example we will get the official number in a weeks time it comes at a very interesting time because we are in the middle of this single commodity price. this ongoing route in

commodities and i think it is fairly connected to what's happening in china three pieces -- it will play out in three ways. first, let me get to currency. ozzy dollar -- take a look. -- aussie dollar take a look. it is playing out as far as the resource, energy sensitive currency. the aussie dollar and the malaysian dollars are treating your level. we have to go all the way back to the asian financial crisis. second, the mining stocks and australia are taking a big hit. apart from oil, copper is taking a hit, and gold just went off a cliff midmorning in asia. unsurprising, you are saying the big aussie names, 4%-8% drop.

the third effect we are seeing across the asian pacific is the support industry is when it comes to commodity. you mentioned that overnight we had caterpillar coming out with u.s. -- the message was that they are selling less of the earth moving equipment, less generators. that is feeding into sectors in asia -- heavy machinery, construction. hitachi construction. we are down 10% for hyundai. when you have flow like this, a slump in commodities, it is the sort of news that cuts across the industry, across the asia-pacific. you dig deeper and take a look at industrials -- construction is down one point 5%. i will flip the board and show you what's happening -- let me

get japan up for you -- the nikkei is down 6/10 of 1%, industrials down 1.3%. take a look at what is happening in australia. basic materials are down that is where you have the big mining names. let me show you what's happening with basic resources. mining is down 1.2%. not the best way to end the week. fourth day of decline. caroline: three weeks of drops. david ingles, thank you very much. of course it hasn't just been chinese manufacturing data -- we also get a check in on the sector in europe with some of the data out later in the morning. first up is france. market pmi's for the mark of july come out at 8:00 a.m. london time. 9:00 a.m. central european time. meanwhile germany comes out

half an hour later. finally, it is the eurozone pmi data. we are expecting much better than china -- we are expecting growth above all three gauges. now we turn our attention to tech. paul sweeney is here for more on amazon. i want to focus in on the spike after hours. we saw it spike up at 1.19% -- spike up at one point 19%. we even saw a surprise profit. everyone had been so hopeful with amazon and it managed to outperform those. paul: it was an extraordinary quarter for amazon. amazon investors have been used to strong topline growth -- e-commerce is such a great longtime trend and amazon has

always delivered great topline growth. what they have not delivered as profit. i think the company demonstrated here this past quarter that when they dial back on their investments just a little back they can really drive profits -- we saw them blow away the estimates. caroline: is this down to cost-cutting rather -- how much do we go this is a real improvement in the amount of sales that you are making to lure in more customers? or is it really just jeff bezos holding out? paul: jeff bezos has really made it a strategy of the company to continue to reinvest. what do we see every quarter? more distribution centers, more for film and centers, trying to get closer to the customers -- prime shipping, free shipping huge investments of media to drive prime services. we have seen this company reinvest in its business -- i think the shareholder base has

generally gotten comfortable with that. caroline: even drums? paul: stephen drums, exactly. it's nice to know that when the company wants to, it can really drive the profit machine. across the board i think investors got a nice sign of what the potential profitability can be. caroline: and that prime day is doing better than they expected so clearly they are getting the customer base when it comes to sales of e-commerce. the other interesting part of the business -- amazon web services. this has been the theme for the entire week. companies and cloud do well. paul: that is exactly right. cloud storage, cloud computing -- it really is one of the key tech issues going forward. we saw with sap this weekend microsoft -- now amazon is arguably one of the key leaders in the sector and they put up another strong, topline growth 80%.

that accelerated from last quarter when we saw 50% growth. this is very much one of the longer-term growth stories here that they are counting on. caroline: does it matter therefore, that we are seeing so much price competition? we've had google enter the fray microsoft. they're all trying to drive down the price of amazon, of cloud computing. you stick to a start up and everyone is desperately bidding for the business desperately wanting to give me the storage. how can they keep on being this profitable? paul: i think the challenge, the issue here for the cloud computing business is that it's such a long-term, huge growth story. what we are seeing here from bigger players like amazon, like sap, they are going for market share. they are trying to establish their position on what they believe will be a very long-term growth story in terms of cloud computing. they will worry about profits

later. caroline: for now we can see profits doing very nicely. thank you very much. it will be great having you here all week. first, what's coming up on "countdown?" reports earnings later this morning, and after the break, we will tell you what to expect how hard the miner could be hit by tumbling commodity prices. ♪

caroline: welcome back to "countdown." it's 6:14 here in london, 7:14 in frankfurt. here are the stories you need to know. a private gauge of chinese manufacturing has unexpectedly fallen to its lowest in 15 months. the cherish and flash pmi came in at 48.2.

well below estimates. that reinforces the need for further policy support in an economy that has not been stabilizing. amazon.com has overtaken walmart as the world against retailer by market value. that is what the e-commerce giant shared -- they jumped 19% in after-hours trade. revenues rose 20% for the period to $23.2 billion, assisted by the cloud business. a gunman has opened fire on an new theater in lafayette in louisiana killing two people before turning the gun on himself. at least seven other people were injured. local police say they know the identity of the gunman, a 58-year-old white male but they have not yet released it. let's turn our attention to

breaking corporate news, because we have air france coming out with second quarter net results 77 million euros. this is down significantly from the previous year, half of where we saw a net profit last year. we are seeing operating results of 185 million euros, down from a previous year. operating profit came down slightly ahead of analyst estimates. they are saying they're maintaining unit costs and debt reduction. overall, the revenue came in at 6.60 4 billion euros for the second quarter. -- 6.6 4 billion euros in the second quarter. price deterioration competition. from the discounters they are getting -- on the long haul you have the gold carriers who are managing to cause significant competition.

we will bring you all that breaking news. air france has signed an accord with its original pilots and hostesses. we will see if we get more on that later. we will be speaking exclusively to the air france cfo. for more on the company's earnings, you do not want to miss that. ryan chilcote is here with everything you need to know about commodities. pierre-francois:ryan: that was in the depths of the financial crisis. i think we can show you a historical graph of the share price. the shares fell 17% in this time around creditors -- it has not been a very good time and anglo

american for a while. then they expect a cut to the dividends of about 20%. they actually think, because they are at a 13 year low and because it is so priced in and because when you look at a price to earnings ratio the stock is so cheap, they think it has been unfairly punished and they have a buy recommendation. that they are a minority -- out of 33 analysts we spoke with they are one who thought you should buy it. when it comes to earnings 7:00 this morning london time, you want to pay attention to what anglo american has to say about the dividends. in many ways it speaks to what all the other mining companies may have to do in the short term, which is do something about the amount of money they share with investors. caroline: underlying all of this

is the commodities route we are seeing -- what is it that anglo american is getting out of the ground? ryan: it's across the board. iron ore is part of it. their specialty is platinum but they are a diversified commodities producer, just like all of these basic elements produ producers. citigroup has in no doubt saying that the one thing in the world right now you should short is iron ore -- that is the best they can come up with in the commodities space. that is where we see anglo american. last week, they wrote down some of their iron ore assets in brazil, about $3 billion to $4 billion. one of the most compelling things that's going on and anglo american -- look at the ceo. on sunday, the board cut the performance targets for him to get his bonus. caroline: they are reassessing.

ryan: they have lowered the game if you will, that they expect him to reach to get that bonus. i think that tells you a lot about the way companies are looking at what's going on -- this is way out of their control. it has really been weighing on them. caroline: thank you. ryan chilcote, great to have you. do stay with bloomberg because you will be sticking to anglo american ceo coming up. jonathan ferro is revved up for that interview -- you don't want to miss it. amazon, the world's biggest retailer by market value, the growing player in the fashion space. it is opening a multimillion pound fashion photography studio. but how does it stack up against the competition? tom mckenzie went to have a little luck.

>> amazon is a growing player in the fashion space -- it sold 30 million fashion products in europe in the first quarter alone. now it is in the process of opening this multimillion pound fashion photography studio for each item will be photographed before being displayed on the website. the question is whether amazon has the cool factor in the brand loyalty to take on the likes of net portray. tell me about this space. >> this space is our editorial space. this is where we create all the information that our customers can access to get more information about the latest fashion trends where we can do our advertising photography. tom: how much has amazon invested? >> it is a multimillion investment.

tom: some have not associated amazon with fashion. this that part of the challenge, about getting the message out? >> today we have tens of millions of customers shopping on amazon fashion. during the second quarter of this year alone, we sold more than 30 million pieces of fashion. i would say that customers already appreciate how we operate. the range, the price. we know that it is a competitive space to be in. it is going to be a tough fight, going up against -- we don't really look at our competitors -- what we try to do is understand what our customers want and give them what they want. we give them great products we want to give them great quality, great prices. tom: the outfit you are wearing

today -- which items have come on amazon? >> all of them, actually. this is a tommy hilfiger jacket in the cost -- a lacoste shirt and my underwear is calvin klein. caroline: over in china, a factory gauge has fallen to its lowest in 15 months, threatening the economic recovery. let's get more on what it means for the market, michael, thank you for joining us. we talk about a recovery in china, but what does this mean in terms of the foreign currency? we are seeing such manufacturing figures, so poor. micheal: it is very disconnected from china -- the reason for that is they have -- ahead of

that, the authorities are going to do anything that might threaten in becoming part of the -- caroline: don't you think the authorities are doing something to address it with their action on the market in terms of equity? they aren't letting a market the of market at the moment. will that action put off the imf, do you think? micheal: there is a risk. they have lost some of their credibility. that argues that they are probably going to do more to keep the currency stable, and not appreciate any further because they're trying to cut any credibility that would help them. caroline: you are saying -- how much are we looking at the euro from a fundamental basis? pmi's here, eurozone comes out at 9:00 a.m. u.k. time. they are looking pretty good. many feel that we will see significant expansion.

the euro to weaken despite that? micheal: the pmi's today -- they will still be a long way above 50 and where we saw them 12 months ago. there are still some impacts of the ecb having positive growth of locations. caroline: is it greece that makes you think we will get a slightly below expectation? micheal: it's not just greece -- they started to roll over a couple months ago and that is what we see in the headline index. we are staying firmly above 15. caroline: and until we get that number, what will that do to the euro? micheal: i think we will see a big deterioration in the pm eyes in order to get the market -- in the pmi's. i don't think it will have too much of a vocation on the euro. what we think will be driving the euro lower over the summer will be people wanting to take

advantage of the decline wanting to put in more risky trades, using the euro as the thunder. caroline: and what about the dollar? we are all looking to the fed it next week. september could be the month we see a rate hike. micheal: i think the fed is probably not quite there. it probably thinks that it could be a little more patient and can wait to see a few more data releases. certainly things like the isn, they are probably going to be the next status for the dollar. if anything there may not be any major changes. caroline: can you make a call for parity? micheal: we are very patient. q1 q2 next year. caroline: thank you very much. always a joy. coming up on "countdown," the nikkei picks up the financial

times for a cool $1.3 billion. we will get more on that deal and find out about the nikkei's plans, coming up after the break. ♪

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caroline: let's have a look at the time -- 6:30 in london, 7:30 in brussels. let's bring you breaking news. first half training operating profits coming in line with analyst estimates, but first let's bring you the rest of the top stories. amazon.com has overtaken walmart as the world's biggest retailer by market value. the e-commerce giant's shares jumped by 19% in after-hours trade after a surprise second quarter profit with sales that beat analyst estimates. revenues rose 20%, helped by the

cloud computing business and an initiative to learn more customers. greece's three main official creditors are sending representatives back to athens today after lawmakers approved another batch of austerity measures. there is antagonism between alexis tsipras and the ims, ecb and european commission. the greek government is now racing to complete negotiations ahead of an august 20 deadline. britain's best-known daily newspaper has been sold to the japanese media group. they are buying the paper for 844 million pounds in cash. the deal does not include the building on london's river thames. the ftc's chief executive spoke to bloomberg following the

announcement of the deal. he talked about nikkei's plans for the newspaper's international expansion. >> this project and this investment -- they see significant growth potential particularly in the u.s.. if you look at the way they operate and their shareholding strategy, you can take a long-term view. the main point, in their minds, is to take cost out of it. they want to build business and grow the revenue. caroline: let's get more on this mna story with men well -- why now? manuel: they have been living more and more newspaper -- they have been leaving newspapers and going into education. they took "the financial times" into a more digital

newspaper, investing heavily in online, i. . caroline: we are hearing that they are going to share digital strategies. was the buyer a bit of a surprise? manuel: it was, indeed. they have a collaboration content agreement, but it was a bit of a surprise. all news organizations were talking about -- it was in the lead until an hour before the announcement. it was a very intriguing, very dramatic deal because it was quite competitive until the very end. caroline: i want to continue the conversation around m&a. were you surprised by the deal? >> it's not a surprise that it sold it -- we knew that. i'm just surprised at the price. of course you do have to look at

mcpherson which is going through dramatic restructuring but clearly they feel confident about doing m&a. there is a strong, long-term rationale, or a short-term payback. you need both of those to align to have the surgeon m&a, what we are seeing now. caroline: are we expecting yet more m&a to come? how much is it down to the money? manuel: that is key. the deals have been brewing for years. dft was a good example in terms of buyers lining up and being ready, knocking on the door. caroline: today's the day. manuel: exactly, we are ready to buy. financial markets right now are perfect. caroline: we have seen so much

in tnt and telecoms and media -- is this a key industry you are looking for m&a opportunities? matthew: obviously, industrials -- we are seeing lots of portfolio shifts in terms of assets. mna in technology, a sector where you don't see a lot of high-level m&a. you are seeing a lots of that public company merger activity, and that can continue. and of course in telecoms. those seem to be the big three sectors where we are seeing consolidation right now. caroline: do you think this is a change, the right move for pearson? matthew: i'm a little skeptical about that. i think the opportunity that is very large will be the -- john van has done a good job of trying to recall the company and

moving towards an education centric but there are challenges to -- caroline: have we understood what pearson group will be using the cash for? manuel: what is believed is that they will try to get something in education. on the one hand, they will try to balance the sheet, and use part of that to try and expand the acquisition of education. caroline: what other deals should we be looking for, keeping her ear out as we head into the weekend? manuel: there is a booming market for m&a globally, so volumes are increasing. tmt, industrials. i was surprised -- the media had

been a little bit quiet. these deals tend to make sparks on other deals. caroline: we will keep an eye on education stocks. we are looking at the commodity route going on -- we have mark carney saying that mining might be the area we see some consolidation as well amidst the route of deterioration. could the negative sentiment going on in that area look promising for more deals question? matthew: you could, but it requires a view on the underlying commodity prices. the big deal and the whole broader commodity space. absent that, we haven't seen a lot of consolidation, affecting commodity prices.

that level is crucially important on your view on whether an end as value created here or if it is a cost-saving opportunity that saves in the short-term. caroline: do you think this optimism around m&a will stay even though we are seeing deterioration in the chinese, the second-biggest economy with concerns of global growth? is at the low cost of finance that keeps the optimism when it comes to m&a? matthew: for me it is about the stars aligning. people want to pay back on that investment. there is a more uncertain environment and the returns look less certain, and you see people being more cautious. caroline: stay with us. we will be saying goodbye to

manuel, with bloomberg news. we will speak much more on this deal coming up. also coming up, the world's most improved airline -- air france release its earnings earlier this hour. we will be speaking exclusively to the company's cfo to get more because troubles are still apparent. ♪

caroline: welcome back to "countdown." i want to bring you up-to-date with air france earnings that came out earlier. we saw profits fall 22% at the carrier. we have been seeing significant turbulence of air france kln, continuing to be hit by strikes with potential issues with the pilots, not wanting to impose cost cuts the company needs. to get more on the company the cfo is joining us now, pierre-francois riolacci. an exclusive interview.

thank you very much, sir, for joining us. first of all, please tell us about your fares about the competition you are facing. this competition the key issue driving down? pierre-francois: good morning. yes of course competition is putting quite a lot of pressure on us and our business. it is true that we face issues of capacity and that will be a game changer in the next few years. we need to continue recruiting and we need to find good partners, like china. but we also have competition in europe. we need to make the difference

-- we have products, quality, airports, frequency. and also we need to protect market share. we operate in france -- caroline: but also, you are curbing seating for the window. -- for the winter. shouldn't airlines be doing the same? pierre-francois: it's true that when some of the networks are under too much pressure, a good decision is to manage capacity. that is what we have done with the capacity. we used capacity during the third quarter but we're sad to say that in the first quarter

week cut routes and frequency, where markets is down, like brazil. you see the demand is down. others would follow -- that is a decision which is there, but it will dissipate. caroline: tell us about how you are going to tackle the shortfall competition -- the low-cost carrier you were hoping to set up was put off because of the reaction of your own pilots. are you expecting to still set up a low-cost carrier? pierre-francois: we have already been developing it for many years. 10 years now and france. we have been growing capacity in france by more than 20% year-over-year.

it is sad to say that we have been delayed, and we are also extending operation outside klm and outside france. since then, we have reached an agreement and we will start again. the possibility is outside france in the coming months. caroline: what needs to happen between now and september to get an agreement with your pilots? pierre-francois: on the dutch side, we have reached an agreement. it is now coming to an end. on air france flights, things will start to move -- we have already signed an agreement about operation in france. we reached an agreement also on

the 747 division pilots. we are now moving into the end of discussions. we are optimistic that we can get an agreement in the next few weeks now that the pilots have decided -- and then from there we believe that the ground is ready to start negotiation with our second plan for improving productivity, which is expected to be contributed -- caroline: could we see more strikes in the future? are you bracing yourself anyway? you sound optimistic. pierre-francois: i think

[indiscernible] we feel there are big achievements in the company, so we have some good grounds to see that things are improving. of course it is difficult, of course we expected to be sectarian, we need a lot to improve. [indiscernible] caroline: thank you very much indeed. talking us through your hopes. air france cfo pierre-francois riolacci, joining us on the phone to discuss how they are working with the pilots to avoid another strike. barack obama will arrive in kenya today for his first visit to his father's homeland since he took office. let's get more on obama's trip

with gavin serkin. -- i -- he is an quite ready to be joining us and instead we will turn our attention to matthew beasley talking about central investments and ryan chilcote has been speaking about kenya. he has been speaking to an urban land developer outside nairobi. they complain that corruption is holding back investment. ryan asked why he's putting his money there. >> sub-saharan africa is at an inflection point. sub-saharan africa represents some of the fastest-growing economies in the world something like 12 of the fastest-growing economies in

africa and kenya is one of them. we are seeing growth rates in excess of 6% and the demographics look terrific. the average african is about 18 years old, and moving in a direction that is really accelerating growth across sub-saharan africa. ryan: you announced a deal to build a satellite city to nairobi, the capital of kenya five years ago. why has it taken so long to get this project off the ground? frank: whatrende rendeavour does -- we own about 30,000 acres of land in five countries across sub-saharan africa. tattoo city -- tattou the city was one of our first land growth

projects. some of the obstacles to doing business are political, sometimes legal. there were some delays in kenya as a result of that. but i'd the end of the day, all those obstacles can be overcome. caroline: let's hear more about kenya, with gavin serkin who knows the area intimately and will tell us why obama is visiting. what are the opportunities? gavin: in some respects, this is personal. this is his ancestral home from his late father's side. he went there 28 years ago as a senator in 2006 and was presented with the goat. of course a senator can take a goat on a plane, so they had to decline. but beyond that there is a legacy issue -- obama is criticized by some for not doing enough for africa.

there are issues -- it's interesting that obama just a few days ago met with the new nigerian president, and now he is in africa as a wave of terror is scaring people. beyond that, there is a vibrant economic growth and china has a strong foothold, particularly in kenya,. caroline: kenya is among the top five picks. matthew: this has been an area we've been shunning for the last few years. we have a very difficult outlook

but the dollar stabilization and the falling commodity prices for some emerging markets is a good thing, and much lower valuations. however, it comes down to very country specific opportunities, stocks within countries rather than the big overarching view. caroline: you've got to look at each country. talk to us about ethiopia -- another opportunity. gavin: sub-saharan africa's biggest economic growth rate for the past decade. this is a country that is etched in the global consciousness for the wrong reasons, for famine and poverty. it is a very vibrant economy, right in the region of kenya, which is one of the best in the book. ed has this economy that it is growing it has a very strong

i.t. component which is led by safaritron the telephone provider there, that creates its mobile money. caroline: i just want to bring as breaking news -- all these countries are affected by commodities and we are getting breaking numbers from london, from the mining company with significant exposure in south africa -- i want to bring in those headlines. let's head out to ryan chilcote. we will be looking at this particular miner in terms of how they will be performing with 4500 jobs at risk when they have artie cut over 1000. ryan: hi caroline. another signal as to some of the pain in the commodities industries and producers are going through. 4500 jobs are at risk after

1300 that they had already announced. a bit of the human side of this -- this is in south africa. we are seeing this across the board -- the mining companies need to cut costs and the only way they can do that is to cut jobs. they are saying that it will indeed happened -- that an additional 4500 jobs on top of the 1300 they said were at risk are now at risk. an example of the human cost of this commodities drought. caroline: ryan chilcote with the latest on the mining numbers. for now let's turn our attention to what we've got on bloomberg's business side. tim coulter joins us with his top picks -- it feels a bit distasteful to be moving from vast amounts of job cuts to ferraris, the we're going to do it. tim: they fall for the ipo

yesterday, and our story today is how ferrari is going to do what they want to do. it talks about a few different things -- one of them is its continuing to expand the brand merchandising it. the big challenge will be finding new markets. we've all seen a huge slowdown in hong kong and china, so where are they going to go? he had a story not that long ago about rolls-royce. caroline: are you tempted by an ipo and ferrari? matthew: obviously from a restructuring perspective this has been happening, but it is still a very highly technical sector, asset based. investors should be a bit more cautious, more contrarian. right now we are looking at the auto data outside china -- it is universally strong.

it's only really china, i would argue even with bmws. caroline: we will have to leave it there -- thank you very much for joining us. ♪

miss. a gauge of the sector follis -- falls to a lowest and 60 months. oil turns back to bear. crude dix -- dips below $49 a barrel. the global commodities rout continues. shares surge after the e-commerce giant beat estimates and overtook walmart is the biggest retailer by market value. welcome to "countdown."

i am caroline hyde and we are looking at the commodities this morning. keep an eye on oil back in bear territory. we will be talking earnings of the minors and earnings of pearson. let's get over to ryan chilcote looking at angela merkel and how much they have been affected. ryan: we are just getting some of the headlines right now. the first concerning the interim dividend. the dividend coming in at $.32. pretax profit at 1.8 8 billion. also pretax profit coming in it to eight .04 -- 28.04. that is kind of a backwards looking number. what people want to see is, is the company going to adjust its

guidance and its forecast going forward? we cannot tell you that. they now say they will pay a dividend of $.32 per share. the backward looking numbers are very positive. the eps coming in above estimates at $.70 a share. the first half looking like it came out better than people anticipated at anglo american. we know that ceo has been cutting costs. what you need to do is cut costs faster than the commodity prices can fall or at least faster than your competitors. that is what happened in the first half year of anglo american rid caroline: thank you -- anglo american. caroline: thank you very much, indeed. let's keep it on the breaking

numbers. let's keep it on m&a as well. looking at pearson just yesterday they were selling off something phenomenal like 35 times the ft rocket and they are selling it in excess of 800 million pounds. just slightly ahead of analyst estimates. interim dividend coming in at 18 p. meanwhile, guidance remains unchanged and they are reiterating their adjusted earnings per share to be between 75 pence and 80 pence per year. adjusted operating profit coming in at 72 million pounds. vodafone's first quarter organic service revenue eating analyst estimates. the estimate headed for not .5% growth overall.

-- 40.5% growth overall -- headed for 0.5% growth overall. a company managing tubing and grid revenue of 10.1 billion pounds and maintains its full-year forecast. looking at tech amazon reported a surprise second quarter profit on top of sales that beat analyst estimates. shares jumped as much as 19% yesterday after it was reported that revenue rose $20.3 billion. paul sweeney is here with more. an unexpected boost to amazon. is it all about jeff bezos rating in his urge to flash cash? guest: if you are an amazon investor for the last several years you are eustis drunk topline revenue growth -- you are used to strong topline

revenue growth. amazon is a company and jeff bezos is a ceo who has been adamant about reinvesting every dollar back into the business to make it more profitable long-term. what we had in this most recent quarter was dialing back on spending and that drove a huge eps beat. it showed the street that jeff bezos can deliver profit when he wants to. caroline: i want to show our viewers what actually happened after hours. a phenomenal spike. there market valuation is just gathering pace. they are now more valuable than walmart in terms of retail. how much do we attribute this to their e-commerce side of business and the cloud side? guest: it is starting to become a factor for investors.

not just for amazon but some of the other tech companies. we saw some good numbers from sap and microsoft. amazon is a clear leader in that business and what they disclosed last quarter for the first time is that they showed great topline growth. what is really interesting to investors is that this cloud business is very profitable today. it is a good story all around and i suspect it will become a bigger part of the amazon story going forward. caroline: we will also get an investors take. matthew beasley is still with us from henderson. give us a sense of how these american companies are performing. we have had a bit of fortunes. but apple people are very worried about similar situations for ibm in the dollar seems to be weighing on all of them very >> i think broadly i would categorize it so far as

satisfactory. some very high-profile successes and some high-profile misses. they've also refer to a few of them there. >> it's not just for more corporate but also the u.s. economy. the dollar has been strong and we all know that there in for those outside the u.s. that has been a problem and you can see the export data in a country level in north america and at some point that will put pressure on gdp as well. as an investor it makes the assets more attractive but if it depreciates too much further it will be an issue for corporate and exports. caroline: in terms of the text -- tech roundup, would you say that satisfactory is the way to interpret it? matthew: we had some winners and some losers and just this week we had apple that really disappointed investor share but i don't think anyone really questions the longer-term story and on amazon, such a great way

to round out the week with tech investors. still, tech remains very much in play for anybody looking for growth in the marketplace. tech is one of the few places that has organic topline growth. caroline: matthew, you stay with us. i want to bring it in closer to home. you have the u.s. dollar weighing in on earnings. what about the eurozone and how much the economy will hit our earnings here. matthew: it will be very interesting for europe. in some countries like france very encouraging given where we are coming from. expectations are for today's readings to reflect uncertainty that has crept into those manager surveys given the uncertain environments around grace. more -- greece. more roughly we are looking for that positive data trend around europe.

at the start of this year we are seeing a generally encouraging data set. for investors to say invest in the eurozone and to be excited about prospects, we are seeing ongoing improvements in the data series. caroline: so expecting an expansion or in the realm of 52 to 54, next month now that greece is in that rearview mirror -- do you think greece will hang over investment sentiment for the next few months? matthew: there is potential for greece headlines to hit investor sentiment that it is hard to imagine it will impact actual business. corporate investment and corporate behavior. as we look across the european data set more broadly, there are lots of encouraging signs. loan growth in italy, car sales in spain retail sales covering

another part of northern europe. there is a lot to be gently encouraged about. this is a reassertion of the positive trend. caroline: we have been talking about m&a a little bit but labyrinth is in the moves to merge with the gambling group. ryan: the ceo of lab brooks will be the ceo of this combined company. a little bit of consolidation in the gambling sector here in the u k. ladbroke's will merge with its rival gala coral. in addition to that, we can say that play tech which will get 75 million pounds as part of the merger ubs and the deutsche bank will be the joint book runners in respect to the placing. caroline: meanwhile, all eyes on

the continuing deal between gbc and whether they will buy be when party. so much out there when it comes to gaming. not as much happening when it comes to commodities. let's check on the oil price because we are back in their territory. -- bear territory. we are back below $49 per barrel. that brings us to our twitter question. how much further does the commodities route have to go? it is not just oil, we are looking at copper. goldman sachs says it has further to go. gold at its lowest since 2010. do you think it is time for a rebound? ♪

. caroline: welcome back to

"countdown." here other top stories. a private gauge of chinese manufacturing formerly known as the hsbc market pmi has unexpectedly fallen to its lowest in 16 months. the chai shin flash pmi came down well below estimates. that reinforces the need to reinforce an economy that has seen signs of stabilization. amazon.com has taken over the world's biggest retailer by market value. on the back of a surprise second quarter profit. revenues rose 20% for the period of $22.3 billion helped by a fast-growing cloud computing business. a gunman has opened fire on a movie theater in lafayette louisiana killing two people

before turning the gun on himself. seven other people were also injured. police say they know the identity of the gunman but are not yet releasing it. onto more corporate news. the property developer posted earnings earlier in the hour. the net rental income at 155.9 billion pounds. in the first interview of the day -- how is the u.k. and your exposure to france how are we seeing the pace of growth? you are very exposed to retail and seem to have some -- slightly uncomfortable numbers earlier in the week but that is not showing up. guest: we've seen good and healthy growth and consumer confidence and spending. that has led to an increase in sales across the u.k. at about

2% to 3% and that is one of the main reasons why we posted an increase in earnings per share. so you have consumer confidence running at an increase of levels not seen since the 1990's. disposable income, the highest level of growth in 15 years. there is momentum in that market, right across the u.k. and that is feeding into reese -- retailer confidence as well. caroline: clearly saying that you are well positioned to benefit, how much is coming from the chinese tourists? chinese pmi manufacturing not looking very good and you have quite expensive luxury here. guest: about 13% of our business is in the premium outlook structure. they relatively rely on chinese tourists but over the last 12 months a increase in sales to

the far east. when you consider that only 6% of the chinese population have a passport, even with a relative slowdown we are very confident in growing sales. in the sales itself over the same six-month period have grown by 6%. caroline: give us a sense of what you're feeling with china. should luxury retailers and the u.k. and tourism be worried? matthew: in short, i would say yes. in macau maybe it is a different issue but there is a big headline about lots of structural growth. a very sharp slowdown in that market. it does seem with confidence being somewhat dampened by the aggressive move downward in the equity market that you will at some point see a negative round in the market in china. caroline: let's turn our attention to the eurozone. the euro is looking week.

is now the time to start expanding in france? guest: it is rather counterintuitive. though it is a relatively weak consumer market in france. with benchmark rates a lot of investors are filing into an increase in property values. around 3% higher than in the u.k.. think we need to be careful what we have been doing is developing. we can develop cheaper than we can buy wholesale. we completed a major scheme and marseille where we made a profit on the 400 million we invested. steve in northern paris that completes in november. development is probably the way to go in france. caroline: talking about

development and projects you have bishopsgate railyard. you are working with belly more, redesigning when will we see planning? that is not retail, so much. are you going to exit that? guest: we are in for planning. we've taken account for comments from many local people. we had to get planning by the end of the year. in terms of the scheme at ground level there is around 200,000 square feet of retail. quite a major element to retail in the areas where a lot of young people live. i think the retail will go very well. caroline: i am a shortage gal so i look forward to more retailing space. very good speaking to you. hamilton chief executive, david akin. let's turn our attention further afield.

the u.s. president barack obama will arrive in kenya today for his third visit to his father's homeland. gavin serkin why kenya? is it all about family ties or what is drawing him at the end of his presidency? guest: it is interesting because he does have the ties through his father's ancestral line to kenya. he is a bigger reason which is the growth of islamist terror in africa. kenya is a hotspot. we hear daily reports on the trust or's there from al-shabaab militants coming in from somalia. african countries are looking for u.s. help in fighting back. these are resource starved regions that need the u.s. input. there is another big reason which is trade.

china has a very big foothold in kenya. big infrastructure projects like the train from mumbai's a to nairobi -- from mumbasa to him and nairobi. caroline: why then is kenya one of the top picks in your book? guest: terrorism is a big concern. not just for the humans but because it is directly attacking tourism. also corruption is endemic in kenya compared to other countries. we hear a lot about nigeria but by transparency index kenya is the worst place for corruption. against that you have a growing economy with a big i.t. buzz about it. we know from the kenyan phone company safari, was the one that introduced mobile money to

the world and in africa the logistics of getting money from one place -- a guy earning money in nairobi to his family and the agricultural part of kenya is very difficult. the used to rely on bus drivers and not have this mobile money system through the phone network. it is creating financial inclusion. you are seeing a big pickup in the formal economy. matthew: frontier -- guest: frontier, exploring the top 10 merging markets to caroline: thank you very much. we were speaking just earlier about investment in kenya. ryan chilcote cut up with frank mezey a from casimir he -- frank mezier from czasimiry.

>> sub-saharan africa is at an inflection point. it represents some of the fastest-growing companies in the world. kenya is one of them. we are seeing growth rates in excess of 6%. the demographics look terrific. the average african is 18 years old and moving in a direction that is really accelerating growth across sub-saharan africa . ryan: you announced a deal to build a road to the city, why has it taken so long to get the project off the ground? guest: what rendeavour does -- we own 30,000 acres of land in five countries.

tech city which is 1000 actors -- tatoo city which is 1000 hecaters -- sometimes there are political obstacles and legal obstacles. there were some delays in kenya as a result of that. at the end of the day they can all be overcome. caroline: tattoo city? interesting to know if it does what it says on the tin. more from matthew beasley. we are hearing from many feeling that kenya is the place to be right now and you feel japan is where it is at. matthew: we feel that the equity fund is weighted toward europe and japan. despite the fact that japan in dollar terms has been one of the

best performing of the developed markets this year. of slight concern we look at investor surveys. it is understandable, i would argue, given the momentum we have seen right now, a rise in benefiting from oil prices. caroline: we just had earlier this week from toshiba. governance coming back into the limelight. matthew: there have been issues and it will never be quick enough for non-japanese investors but there is definite change and improvement. with the largest pension fund in japan investing in companies themselves that have high growing aro we above a certain -- oroe above a certain threshold. there is enough going on with margins growing it is still it central place to invest. caroline: wonderful having you

on the show. coming up on "countdown," chinese manufacturing unexpectedly fell to the lowest in 16 months. we analyze it next. ♪

caroline: the stories in a to know this morning. ladbroke's has agreed to merge with gala coral. the combined business will be called ladbroke coral and will have an annual revenue of 1.2 billion pounds. the three main official predators are sending representatives back. the revival draws a line under the antagonism between alexis tsipras's government and european commission. the greek government is now

racing to complete negotiations of its third bailout in five years. britain's best known daily business newspaper has been sold to a daily media group. the deal does not include the building on london's the river thames. the ft's chief executive followed the announcement yesterday talking about the cai plans in -- about nikkei plans. >> they see growth potential for the ft in asia and the u.s. and if you look at the way that they operate and if you look at their shareholding structure they take a very long-term view. and i think there is no point in their mind of taking the cost

out of it. they want to build the business and grow the revenue. kerry girl -- caroline: right tame, right place? >> exactly. it was just one of those deals that have been on and off for so long. they have been knocking on the door for years. a well respected and well-known brand. for britain it was not the time to sell it until now. after years investing in their online strategy and turning it from a traditional newsprint strategy into a traditional one. the same time they could ask for a higher price. caroline: the price is quite phenomenal. clearly they are feeling they can exert more money out of this particular asset. why did n ikkei win out?

>> they had a different lead candidate until the very last minute. up until one hour before the announcement that axel springer which had been working on this for a while -- they were thought to be the leaders and they were but nikkei came in with an offer and they got it. caroline: how will they help? this seems to be all about going digital. to combine their efforts from moving from traditional newspapers online and getting money out of them. >> i think it is a really good combination. they're are both been in collaboration agreements for maybe a couple years or so and they seem to have a really good mix of the brands that they get and they will get access into europe and the u.s. which is very important for nikkei as well.

they are getting a very good brand who are respected with a big presence in europe and the u.s. which is what japanese companies are trying to go diversify geographically as much as they can. caroline: always great to have you on the show and thank you very much indeed. >> now it was disappointing news in china. the preliminary pmi unexpectedly fell to the lowest in 16 months and now it is formerly known as the hsbc pmi reading. the asian markets are cloning out the trading week and for all reactions and numbers and everything in between, david engel is standing by in hong kong. our commodities playing into this day and age? >> i am the bearer of bad news. commodities is playing a big part in the trading session. things started out with around that we saw taking oil prices into a bear market and gold

trading at fairly low levels. then midmorning you have this data out of china which is the preliminary number. hsbc now called the chai shin china manufacturing number is disappointing. lower than even the lowest of estimates. from analysts. the best way to describe how that completes the picture in china is that in these recent measures, these recent measures from the pboc haven't really filtered in to that part of the economy. this is not the official survey. it is more private and smaller companies. it is also a fairly important piece of the chinese economy. as we speak the shanghai composite is on the way down. it will continue to fall.

it wasn't only the china data. we had a slew of other data out of the region. really bad imports and -- import data out of the philippines. you put everything together and you take that initial numbers from the u.s. and it highlights the difference between the slowing growth momentum here and in asia. that delayed -- played a big part. why you have the strong u.s. dollar putting pressure on asian fx this morning. add in what i just mentioned the chinese manufacturing data. the reason you're looking at a fairly bad and to the week -- end to the week, if you have these cyclical sectors on the way down. minors and related industries like heavy machinery and construction on the way down.

i mentioned fx. one currency worth mentioning coal relation to commodity prices. aussie-dollar. 73 u.s. cents you have to go back to 1999. a six-year low for the aussie currency. this move down in gold as well -- exacerbating the move here. adding to the bear sentiment you have for the aussie currency. a look at this cross-section here that may affect trade. nikkei 225 closing down at 0.7%. big industrials up. a little bit of a rebound for basic materials. some of these were sold off quite heavily this week.

look at what happened in south korea. that is a fairly interesting market. heavily weighted toward cyclical. in south korea you have consumer goods at samsung and the sunday. -- hyundais. let's look at construction. the sentiment is quite bad in asia as we close out the week. on the way down for the third straight week so let's hope that things pick up a little bit better. when we get the official pma data out of beijing. caroline: fascinating the interlinking themes between the commodities route and the asia route continuing to a third week. in addition to chinese manufacturing data which disappointed, later we get a health check on the sector in europe. first up it is the french

market pmi's for the month of july. then germany pmi data out at 8:30. finally the eurozone pmi data due at 9:00 a.m.. we are expecting expansion across the board. just under 20 minutes to go until the start of european equities trading. i want to bring in jonathan bell for a look ahead to what to expect and the pmi data we are getting. china disappointing, eurozone expecting growth. how will that play out for you in terms of expecting growth? guest: you start from the advantage with europe. we have low expectations all the time anyway. the difference between earnings and the terms of the revenue coming through in cost and currency and euro terms.

look at the constant currency by unit lever put into it -- uni lever put into europe and you have a 12% increase in. revenues. because of this weakness there helping on the exports and the translation effect. i am positive on europe. low expectations and good earnings growth. caroline: on the plus side america has been weighed down by the strength of the dollar. we have seen a bit of negativity when it comes to u.s. earnings on the tech side of things. how much is the dollar a factor for you? are you more worried about the underlying business in revenues? guest: if you look at earnings over the these reported this quarter, we have 117 companies and you had earnings and revenues falling on average -- overall there is a hit.

part of the hit is the strengthening of the dollar. so the like 18% against the euro. that is hitting companies. look at the revenue numbers. you look at it from amazon and you have a 20% increase in revenues. that is why the market is up so much, but look at coca-cola, look at mcdonald's look at 3m and caterpillar -- a lift -- list of companies that cannot get revenue growth. caroline: in a moment today we were all struck by oil back in the bear market. commodities continuing copper at 86-year low. where are you seeing commodity stoop to in the industry right now? for some it is a boon and cheap oil might be a positive. where are the opportunities to buy and when should you get out? guest: another reason to prefer europe over the u.s. is that week oil helps more than it hurts the u.s.. the energy companies are the

ones taking the big hit. commodities is difficult. it is having an impact everywhere. the oil price looks as though it will remain low. the fact that iran will come onscreen pretty soon and it will add another 500,000 billion barrels per day if they can get up running quickly. we are concerned about commodity prices and that has a bigger impact on emerging market companies that it does on western companies. you have all the big oil producers and commodity producers where they had been increasing supply. china had been where the supply was going into, but china is slowing their it that is hitting -- slowing. that is hitting. that will continue for some time. caroline: it may lead into what we have coming ahead anglo-american talking about minors and commodities it takes

a hit after the commodity -- commodities. it takes a hit after the commodity collapse. jonathan bell is worried about commodities. how worried are you? how much further have we got to go in terms of the rout?

caroline: welcome back it is 7:46 here in london. here are the stories you need to know. chinese manufacturing for money -- formerly known as the hsbc pmi has fallen to its lowest in 16 months. the chai shin came in at 48.2. well below estimates. that reinforces the need for further policy reports. amazon.com was -- has overtaken

walmart is the world's biggest retailer by market value. shares jumped by as much as 19% on the back of after-hours trade. and sales beat analyst estimates. revenues were helped by a fast-growing cloud computing business. ladbrokes has agreed to move with gamma coral -- gala coral. the online business will be called ladbroke's coral. let's bring jonathan bell back into the conversation. we have them teaming up. is this wave being spurred by optimism, greece out of the way or is it the fact that cash is cheap and people want to make savings? guest: we talked earlier about

revenue growth being weakened. that is the aerial companies are finding difficult. if you cannot get revenue growth organically emanate is an obvious way to get -- m&a is an obvious way to get revenue up. it is an obvious place to say if we can get costs down we don't need organic revenue to grow that much to generate a good profit growth line. we have been keen on looking at areas to invest in where we can take advantage of m&a. we have done that through arbitrage type funding. caroline: which sectors are you most interested in looking at? guest: u.s. to europe is most interesting and we are seeing japan to europe. caroline: could that be a trend? guest: i don't know whether it is or will be but we have seen an increase in m&a coming out of

japan. they have the real boost from yen weakness up until the end of last year. yen is now sort of stalling. caroline: therefore it is now quite an expensive time to be buying a u.k. asset. guest: compared to what they would pay earlier but as you can say financing is cheap and that makes sense. if you look at investment grade bonds in europe, yields from close to 4% to close to 3% you are borrowing at a low level. if you can get cost cutting through you will generate extra earnings. caroline: what other cost cuts articling your fencing? -- fancy? guest: the other area we are looking at is real estate developing in europe. quantitive easing will push up

asset prices. because i am optimistic on the recovery and low expectations -- the also the low cost of real effect is an interesting area in places like france and spain and northern italy. caroline: into the eurozone. it has been wonderful having you on thank you very much. jonathan bell. we also had earnings from anglo-american later in the hour. it is been a tough time for the miners. collapsing commodity prices. ryan chilcote is here with a closer look at the numbers. we are seeing a 30% fall in profits? actually that is a good thing. ryan: the news here is no dividend cuts. the expectation is that they would not pay any dividend at all. yet they paid $.32 per share.

you ask yourself -- how did they do that? you pointed out that profits were down for the first half of this year and 30% on last year. it is how you manage that downturn. when you talk about profit, it came in ahead of expectations. when you talk about how much money they got for the metals that they sell, that came in ahead of expectation. a couple weeks ago they were flagging and impairment on brazilian assets. taking and impairment of between $3 billion and $4 billion but today i said $2.9 billion. caroline: they are getting better prices so not taking as big of a write-down? ryan: the expectation was in a market where you have falling commodity prices it is the wrong time to sell the family china. that is exactly what the ceo is doing. across the board in south africa

and other places, they are selling assets. they are maintaining that they will get good prices. it is a case of -- yes there is a downturn, but they are managing it that are then anticipated and they are cutting costs ruthlessly. another half billion dollars of cost cuts. the ceo is saying this is time to intensify cost-cutting. it is like what we saw bp and bob dudley do. the new model for anglo-american is a larger return on investments. assets that don't give us that return, we will get rid of. even if we are doing that in the falling market will not get the same prices as five years ago or 10 years ago. but these share prices are down at a 13 year low. while we might get a pop in the share price, they are so far

away from where they want to be. so i think that the real takeaway for me was the ruthlessness of the ceo's dedication to cutting costs. 6000 jobs. these are managerial jobs. this is a company with about 140,000 employees. they will cut their workforce down by 100000 and 6000 are manager types. as they sell some of the assets those go with the assets. but if you are not taking something out of the ground and if you cannot prove that you are adding value, you are gone. caroline: watch the share prices keenly on the open. you have to stay tuned because we will be speaking to the anglo-american chief executive at 8:15 u.k. time

you do not want to miss that interview. the man helming that interview is jonathan ferro. he is here minutes ahead of the european open. is it all about commodities? jon: it is an a guess we have to start at the top of the chinese pmi number. unexpectedly sliding to a 15 month low. you cannot talk about china without talking about commodities. wti crude back into a bear market. we know the story and we know what has been happening with the minors. to the left of me, that shot is the mining index for the stoxx 600. that is down over 6% in the last four trading days and one of the stocks getting caught up in that route is anglo american. the suspicion coming into these numbers is that the dividend would get cut or scrapped. it hasn't happened. so the big question for the ceo when i speak to him is how much

longer can you maintain that dividend given what is happening in the commodity market. that will be a big story. and number three, amazon proving to everyone that they can produce and report a profit. look at that stock surge in after hours. >> caroline: we will see how their shares open as well. and stay with us. countdown, that is it from us but we are handing you to "on the move with jonathan ferro. a quick look at our futures currently trading lower. some 3/10 of a pursuit -- percent down. it could be a full sail decline. jonathan is up next. ♪

jonathan: good morning did heavy friday. welcome to on the move. i am jonathan ferro. bloomberg's european quarters right here. just moments away from the start of european trading. china's slowdown. a private gauge of chinese manufacturing drops to a 15 month low. the commodity rout continues. the wet retailer reports a surprise profit, sending shares soaring after hours. making amazon the world's biggest retailer. minas under pressure. -- minors under pressure. the company maintains its dividends. we was pegida -- we will be

speaking to the ceo and 50 minutes time. do not miss that. futures lower. futures down by nine is. backs down by 40 bits. corporate earnings to get through. let's get the open with caroline hyde. karen: -- kirilenko we had for a down day. not surprised when you see asia on track for the third week. when you see asia having to take a hit on chinese pmi. coming below every single economists surveyed. we saw a contract more than we were anticipating. we are seeing the frank down more than 2%. where getting numbers. we are expecting pmi manufacturing services to expand across the board. let's check in on the euro. currently seeing it trading fl