manus: harder and faster. the barclays chairman says he will step up with cuts to the british lender as investment banking profits jump. pumped up. total smashes earnings. despite the crude slumped, production and refining surge. and, twitter takes a tumble in after-hours trading as interim ceo jack dorsey feels flat about growth prospects. you are welcome to "the pulse."

we are live from bloomberg's european headquarters in london. coming up this hour, autos. peugeot's first half earnings surge. we are speaking to the cfo live from paris in about 10 minutes time. make sure you stay tuned for that. first up, barclays german john mack farland says he's going to step up the pace of cuts to the british lender. the bank reported second-quarter profits of 1.8 5 billion pounds. that matched analyst estimates. profits at the investment bank jumped 35%. for more, we are joined by our london finance reporter, julie of her lane. julia these results sound like mcfarlane is ready to take the bank by the scruff of the neck. julia: he is going to run down the non-core by 2017 to bring

down risk-weighted assets. i think he is there to accelerate the whole process that jenkins started. you had equities down 2% and investment banking fees down 11%. it has been offset by the macro performance. manus: in terms of these job cuts, where do we think they are going to come from? will it be the investment bank? is it retail? julia: he can cut the meat in retail. in terms of the investment bank, the asset-backed security division is interesting. when you have the basil review, those are the kinds of assets that will be most hit by a change of regulation. you might see some cutting. manus: where does it fit relative to its peers? the whole industry is in a state of change. julia: ubs started all of its changes. now you see credit suisse

mirroring ubs and barclays and deutsche are in the middle of this change. goldman said we are in a strategic drift. i couldn't find better words for it myself. manus: that is a phenomenal way to describe it. i want to bring in paolo schooler running. great to have you with us. you wear a different cap now. you are at rothschild. this is an amazing time in banks. big changes big ceo heads gone. what do you make of it? >> this is amazing time for european banks. american banks are doing fine. european banks have to change a lot. the best way to start is to change the chief executive. manus: you see those changes coming through. european banks, we see a little bit of growth, things are getting better. the landscape looks optimistic as to mark -- optimistic?

let's go back, julia, to you. what are you hearing? julia: the question is, in the new regulatory environment, which divisions do you keep? the macro division is what showed a 10% increase from last year. that division is quite intensive from a capital standpoint. it seems like what they want to do is focus on the equity capital markets and debt capital markets and pull back in the debt and securities bond trading tight areas. that is more intensive. manus: julia per lane -- julia verlaine our finance reporter in london. total performed better than expected. we've seen second-quarter profit well above estimates. $3.09 billion beating the $2.67

billion average. this comes after two other oil majors published their earnings. yesterday was bp. missed expectations. $5.8 billion net loss. statoil beat. total follows a surgeon production in their refining business. paolo scaroni is still with me. this is your domain. what a great set of results from total. paolo: they have been extremely resilient. they published a hefty set of results. why that? three reasons. first, oil production has increased 12%. it is a huge increase in an industry in which 3% or 4% growth is a lot. this production must be a cheap production, werhere

a $50 price can make a profit. the refining margins in this quarter beat five times the same quarter of last year. five times higher. total is very strong in europe. third the new chief executive started this program of cost-cutting which is tough to deliver. there is a lot to come in the next quarter. manus: why are they doing so much better? bp has it legacy issues in the gulf of mexico. is it just that total is focused on the cost-cutting more than the others? paolo: certainly, the focus on cost-cutting is very strong in total. second growth and production. nobody has been growing 12%. this is phenomenal growth in the

industry. maybe in countries like angola where the cost of production is lower than elsewhere. manus: in terms of capital expenditure, we've got this story, $200 billion has been cut. is there more to come or have we seen the worst of it? paolo: there is more to come, i believe. my view is that oil prices are going to stay low for a long time. certainly for the rest of this decade, i'm not expecting oil prices to go beyond $70. manus: $40 to $70 for the next decade? paolo: it should be lower than that. why not go back there? certainly, apart from geopolitical reasons which are always difficult to forecast the commercial reasons show oil prices going down rather than up.

this is why i'm fairly pessimistic on oil prices. manus: one of the things that came out in this reporting season is the dividend, the great dividend debate. statoil holding on for dear life as it were with their dividend for these quarters. more dividend cuts to come? paolo: i believe that eni did well in cutting the dividend. there's no point in keeping a dividend that is unsustainable. total is a different story. i believe that if oil prices continue at this level, which is my forecast, at a certain point dividends will be cut by everybody. manus: who is going to cut more first? paolo: who is going to give up first? the companies paying the highest dividend. american companies normally keep

their dividends fairly low. for me, these would be the last ones to cut. manus: talk to me about libya. not that i'm trying to draw everything back to eni, but bp took half a billion yesterday. is all the libyan bad news already out there or are there more to come in terms of exposures to libya? paolo: lydia for the time being is very much bad news. it is difficult to see good news in the future of libya in the short term. the great thing about eni positioning in libya is that eni is producing a lot of gas which is used in libya. this makes the libyan gas essential to the country. nobody wants this gas to be cut. there are efforts to bring a political solution to the libyan crisis. i remain fairly optimistic

because i cannot believe that a country as rich as libya with a low population could be another qatar or abu dhabi will continue to destroy its wealth in the way which the libyans are doing today. i hope there will be a solution to the libyan crisis. manus: i can't let you out of the door without talking about shell. we haven't seen that size of a deal since 1998, when exxon mobil got together. are there more deals to be done? will it be transatlantic, european salivation -- consolidation? what is your feeling? paolo: there will be many deals in the area of shale oil and shale. the economics of those companies are difficult today. a solution is always to merge. in europe, i don't think there will be a lot of activity in m&a

in the future. manus: is bp a potential target? paolo: it is a potential, of course. manus: on a scale of one to 10? paolo: down to the one. the british government said, i think quite clearly, that it will not like a takeover of bp. manus: they don't want the italians taking over bp. paolo scaroni him a fantastic to have you with us. former chief executive at eni,. let's talk cars. peugeot's first half earnings more than tripled. they exceeded analyst predictions. they tightened control on spending. they sold more vehicles at a higher price. let's cross to kerley codon -- to caroling, with the cf -- caroline connan with the cfo. caroline: good morning.

it is a good set of earnings today. 1.42 billion euros of income. i'm happy to be joined by jean-baptiste de chatillon, the cfo. good morning. the first question, we've had a very difficult year for psa between 2010 and 2013. are you confident that today you are out of the woods? jean-baptiste: yes, we are confident. our plan is delivering results ahead of time. with strong cash generation in this first half, it could make us very confident that we are on the right track. caroline: let's talk about china. that is one of the concerns that everybody is talking about. you have revised your growth target in china to 3% from 7% initially. how badly are you going to be affected by china? jean-baptiste: with a market

growth of 3% it means more or less a flat market, which is a big change. in our case, we have to be humble. we are coming from pretty far away. we are improving in the first half hour operational margin. from 7% to 9% in the first half, a very significant improvement. we are looking at difficult times ahead of us that we will manage with strong cost reduction to make sure that we stick to our profitability target. caroline: are you worried that it is going to get worse before it gets better in china? jean-baptiste: it is certainly very difficult to say what is going to happen in china, but we are preparing ourselves for a very strong plan that will be presented as soon as tomorrow. caroline: does that mean that you might reduce your production

target for china this year or next year? jean-baptiste: we will certainly adjust to the market conditions. volume without profitability is not what we are looking at. caroline: let's talk about iran. iran was psa's second-biggest market after france before the sanctions kicked in. now that we have the diplomatic agreement, how quickly are you going to come back to the iranian market? jean-baptiste: iran for peugeot is a very important market. 6 million vehicles are on the road with the peugeot name. for iranians, a car is often a peugeot. we are eager to go back to iran with a high level of local integration to build its auto industry. we are ready and we are looking for partners. caroline: it is a joint venture

with the local carmaker, correct? jean-baptiste: we have several partners in iran. what is important is to build a good product which develops integration in iran and develops iranian industry. caroline: when exactly do you expect that? in six months, in the next year? how many vehicles do you plan to sell in the next few years? jean-baptiste: timing is not in our hands. we are ready to work flat out on this project. no target at this time of the project. but we are ready to go back to iran. caroline: finally, one question on europe. you put production overcapacity. have you filled in some of that? jean-baptiste: overcapacity is a

concept that we are not so keen on. we think that flexible manufacturing is really what we are looking at, and we adjust to the output level we have. that shows in our results in the first half. we have several partners already manufacturing cars with us. we are looking to manufacture cars with gm in europe, with toyota we are already manufacturing cars with fiat in europe, so no new partners are identified at that stage. we are effectively getting flexibility in terms of fixed cost in our plants in europe. caroline: how fragile is the european recovery at the moment? jean-baptiste: i don't think it is fragile. the tailwinds we enjoyed in the first half will be there again in the second half. we are effectively a major actor

in this industry in europe. i'm pretty confident that europe growth is sustainable for the months to come and years to come. caroline: jean-baptiste de chatillon, many thanks for joining us. that was jean-baptiste de chatillon from peugeot headquarters in paris. back to you. manus: well done. great interview. caroline connan speaking to the peugeot cfo. up next, telling it like it is. the ceo gives a pretty honest assessment of the growth prospects of a social media giant. we will see how that have gone down with investors. ♪

manus: welcome back to "the pulse." we are live on bloomberg tv radio, and streaming on bloomberg.com. here's a look at our radar this wednesday. twitter shares tumbled in extended trading after executives warned that user growth would be slow. the ceo and cfo said the company would not see sustained meaningful growth for a while. the warning came despite second-quarter sales beating estimates. revenue jumped more than 60%. microsoft windows gets a new look today as windows 10 is launched. the software is being offered as a free upgrade to existing pcs.

microsoft looks to attract more customers. previous upgrades boosted pc sales but component makers haven't factored a jump in demand into the forecast. lvmh reported its strongest earnings increased in three years. first-half profit from kering rose 15% beating analyst estimates. the luxury goods maker saw a pickup in sales of its fashion and leather goods while its drinks unit returned to growth. chinese stocks have risen for the first time in four days, led by industrial companies. the shanghai composite index climbed almost 3.5%. it comes amid speculation about the state buying equities. it is decision day for the u.s. federal reserve. policymakers are set to release a statement. that is at 7:00 p.m. u.k. time. while economists see no chance

of an interest rate rise, investors will scrutinize the statement for any hint that policymakers may be inclined to move in september. after the break, more on that twitter story. stay tuned for that. have we hit peak twitter? the market liked the candor, the swagger, the honesty of the interim ceo. is he bidding for the full-time job? "the pulse -- ♪

manus: welcome back to "the pulse." after climbing as much as 12% on the release of earnings, twitter proceeded to drop 11% in extended trading following concerns about the social media company's slowing growth. caroline hyde has the details. what a roller coaster trade. caroline: of she goes. second-quarter earnings beat analyst estimates. 61% increase in revenue. the crowd goes wild. the shares rise up. then the conference calls. then we get paris coping from the new interim chief executive, jack dorsey. he talks candidly. he starts to tell you about problems they face. he starts to tell you about user growth that has stagnating. suddenly, down some 11% in after-hours trade.

this was the roller coaster because reality bit. we are hearing that there is barely any growth. don't expect to see a sustained or meaningful growth in monthly users anytime soon. clearly this is a concern. how are they going to rectify this? we are going to see a need for reach of the mass-market. many feel that it is just you and i that use twitter, the journalist, the celebrities. how do they go up from the 300 million users they already have? they need to reach the mass-market. they focus on new products. project lightning and the like. this is to get you involved in immediate advents. maybe you are not a usual user. this doesn't seem to be attracting more users. 1% growth in the last quarter. and employee turnover. they are losing top product

managers. how will they study the ship? manus: how do they broaden the church? that brings us to our twitter question. stay tuned for that after the break. ♪

manus: welcome back to "the pulse." i'm manus cranny. u.k. mortgage approvals, here we go. 66.6 thousand mortgage approvals in the month of june. the market was looking for 66,000. that is a nice lift. there has been a big rush to remortgage. that is what we are seeing before these superduper low rates. u.k. mortgage approvals rose more than forecast.

66,000. this is the best number since july 2008. net mortgage lending, gross loans, 2.6 billion pounds. that is the best and's july 2008. consumer credit comes in at 1.2 billion pounds. let me see what that was relative to what the market expected in terms of lending. 1.2 billion. that was about 100 million i had of estimates. all's well in mortgage land in the u.k.. will it last? let's get up to speed now with some of the top headlines. barclays chairman john mcfarlane says he's going to step up the pace of cuts. that came as the bank reported second-quarter profit of 1.85 billion pounds. twitter shares tumbled in extended trading after executives warned that user growth was slow.

interim ceo jack dorsey and cfo anthony noto said the company would not see substantial -- would not see the same meaningful growth for a while. the warning came despite second-quarter sales beating estimates. revenue jumped more than 60%. lvmh has reported its strongest earnings increase in three years. first-half profit rose 15% to just under 3 billion euros. the luxury goods maker saw a pickup in sales of its fashion and leather goods. decision day at the federal reserve. policymakers are set to release their statement at 7:00 p.m. this evening u.k. time. while economists see no chance of an interest rate rise investors will scrutinize the statement for any hint that policymakers are inclined to move in september. volkswagen has reported second-quarter profit in line

with investments -- with assessments. all this comes as we found out yesterday that vw had overtaken toyota as the number one global car sales in the first half of the year. a little more of a breakdown. chris is our european autos correspondent. when we look at these numbers, the earnings picked up. no longer expecting a sales game this year. that was the big red flashing headlights. where is that cautionary tale coming from? chris: china is the big driver here, but there's also other markets where volkswagen is very strong, such as russia. the russian market has been freefalling pretty much all year. in brazil as well, there is a recession. all those markets are where volkswagen is very strong. china is the biggest car market

and volkswagen is one of the leaders there. manus: and it doesn't look like that story has run its course yet. if we look into the numbers give me the saving grace here. margins is part of the business that wasn't too bad. chris: margins weren't too bad. operating profit margins declined a bit, but still within the higher end of their target corridor. europe is doing really well. the recovery in europe has been faster than expected this year. that has helped volkswagen a lot. it has also helped the competitor peugeot, which is number two in europe. they had a great quarter, produced some really solid returns. that is basically on the strength of what they are doing in europe. the cautionary tale there is that growth prospects in europe

aren't that fantastic. it is a recovery market now but it is not something you want to bet the house on. manus: where are the growth prospects? if china is in a slowdown europe in recovery mode we've had the best registrations in 5.5 years, where are the growth opportunities for vw? chris: china was the growth driver in the global auto market for a long time. it doesn't look that way anymore. that's one of the few places to grow. the u.s. is doing well. europe is doing well. those are mature markets. one of the opportunities that's opened up is iran. with the sanctions lifting in iran, automakers are scrambling for positioning. it was a very solid market in the past and it could develop into a solid market in the next few years.

peugeot is definitely keen on getting back. daimler told us yesterday they are in talks. they are keen to get back. that will be a key area to watch. there's not many white spaces on the global map these days. manus: indeed. that could be the opinion of a lot more people. chris reader. up next, we are going to talk tech. microsoft windows 10. you will want to stay with us for that. the barclays conference call is just starting as well. eyes down for any more lines coming from there. that's what the market wants to hear. the expectation is to hold the dividend flat for the rest of this year. this is a bank getting ready for

fast and furious transitions. ♪

manus: welcome back. this is "the pulse." here's some more top headlines. greece has moved a step closer to reopening its stock market. the european central bank has approved proposals to end the closure of the athens stock

exchange. an official with direct knowledge of the matter says trading may resume by friday with restrictions. las vegas museum dedicated to the mafia says it is opening an exhibit about fifa. the national museum of organized crime and law enforcement says its feature on football's world governing body will feature a game turned ugly. u.s. investigators used federal racketeering rules to charge officials for corruption. microsoft windows gets a new look today as windows 10 is launched. the software is being offered as a free up rate for existing pc's. previous upgrades boosted pc sales, but some say this launch will be different. component makers haven't factored in a jump in demand in

their forecasts. twitter shares tumbled in extended trading after executives warned that user growth would be slow. interim ceo jack dorsey and anthony noto said the company would not see sustained meaningful growth for a while. there warning came despite beating estimates. revenue jumped more than 60% to $500 million. that brings us to our twitter question of the day. how does twitter broaden its audience? how do they broaden the audience? is it more than just journalists and kardashian followers that use twitter? for more on the rest of the tech industry's latest trends, we are joined by a tech city board member. wendy, great to have you in. our twitter question says it all.

the advertisers believe in twitter. dorsey says, it is going to be a hard one. we are just getting the traction that we wanted. is it peaked twitter? wendy: i think they've got to keep reinventing. if you look at somebody like facebook, they really looked to the future with a bigger vision. with the purchase of instagram and whatsapp and oculus, they have been looking forward. they have managed to broaden both the mass market, but also what celebs want to do. manus: zuckerberg did some blockbuster deals but he's got to monetize them. wendy: he has. manus: he probably will, and that's what he is saying. on the twitter story, the most sexy it has gotten is periscope. wendy: it has to keep reinventing itself.

it was good on mobile. its viral growth came from a very short amount of text. but it has to bring in more. the reason facebook growth happened is because of the mass market. you have to bring more mass-market people in. manus: twitter is getting easier to use. i can use it on the mobile, on the ipad. the next are which i can interact with photo and video is ramping up. what should be top of his tree to do? wendy: there's got to be more value. if you are a celebrity brand or brand such as yourself are mine, that's ok, but how do you create your own brand within that? it is hard to create your own following. in facebook you can bring in people you know. there needs to be a better way to pull in a broad group for each individual taking part. manus: they need to broaden the church. how do they do that?

spend money on marketing telling the story to the man in the street? wendy: spending money on marketing is ok, but is not the way to grow revenue in a social media network. if people are not referring you through word of mouth or growth is not built into that product, it is always going to be a very expensive game. manus: if we look at microsoft they are giving away software. for me, when you are microsoft and you are giving the stuff away, it is not good, is it? wendy: same thing, they've got to innovate. they've got to find a way to broaden what they are doing. the big trend at the moment is unbundling. you take something like payment. they are not trying to be a whole bank. they are taking a piece of it

and doing it better than the incumbent market. microsoft has that problem. they need to unbundle themselves and win on that. manus: we have twitter, they've got to broaden the church. microsoft are being challenged by various people. have we hit a buffer in terms of innovation? if we are looking for them to do this this, and this -- i'm not being inventive and i'm not being visionary. i'm merely doing it better. that's not what i call a burgeoning industry. wendy: i think you are seeing two big trends. the two things i look for is one, the next big platform. are we talking about robotics internet of things science? that is coming in the future. that is the sexy stuff. but there's an enormous change

and disruption coming to business. it is about disrupting business and unbundling. you are seeing that with airbnb with companies like warby parker. who would have believed a new glasses brand could come in and reinvent it and take a whole market segment out? i would be worried about that. that is coming everywhere. it is in the automotive industry, in health and i would worry about that now. i would also keep an eye on the future innovation. manus: in terms of you and your business, what is the moderately sexy investment you are doing? wendy: street bees is interesting. it is basically trying to reinvent market intelligence. if you were in unilever in the old days, you would ask for a survey. you would pick 100 people and pay a lot of money. street bees they have 20,000

people on the ground. if you want to know how is the peanut butter, you've got 20,000 people to ask. the upload that data into a system that can process that information and get that in real-time back to the company like unilever. that is harnessing the power of networks in a way that hasn't been done before. probably the way you were -- uber harnessed cabdrivers and distance meters. manus: so a radical shakeup. great to have you with us, wendy tan-white. tech city board member and angel investor. as we were discussing, windows has released its latest version. let's take a trip down memory lane and have a look at some of the best and worst of windows. >> ah microsoft windows.

the king of the pc. love it or hate it, windows is one of the most profitable products ever made. how did we get here? our story starts in 1981. a small software company hit it big with a textbased operating system called ms dos. dos was a fission the time, but the average user wanted something more accessible. microsoft used an internal product to put a graphical face on dos. cut to 1985 and you've got windows 1.0. this first version of windows was revolutionary. it brought us the things we know and love to this day. drop-down menus, scrollbars, dialog boxes. it also used this device called a mouse. version 1.1 included a game. in 1987, windows 2.0 arrived

with better graphics. one year later microsoft became the largest pc software maker. in the early 1990's, microsof sold tens of millions of versions of windows 3.0 and 3.1. windows media hit an all-time high with windows 95. microsoft sold 7 million copies in the first five weeks. the start menu arrived and so did lots of bugs. windows 98 was an upgrade but not everyone was happy. >> you told us windows 98 would be faster! [gunshot] >> ys2k. microsoft put out windows me and unloaded windows 2000 for business. the 2001 successor, windows xp was fast stable, and tuned for the internet and media. it was a hit. after six years microsoft tried

to write a brand-new windows. vista ended up being a terrible mess of glitches. it took microsoft two years to fix it with windows 7. in 2012, microsoft tried to the radical again with windows 8. it did away with the traditional desktop and attempted to bridge pcs, laptops, and smartphones. most people were confused and went back to the familiar desktop. what about windows 9? today, we have windows 10. it takes us back to the familiar desktop and smart menu. and it is free. this will also likely be the last time microsoft is a number on windows. going forward, windows will just be windows. manus: steve ballmer hasn't changed much over the years. up next bra wars. we hear from the start of trying

to challenge victoria's secret. ♪

manus: welcome back to "the pulse." victoria's secret may be the biggest brand name in women's underwear, but a new startup is

showing amazing growth with its own online lingerie store. a dormy -- adore me's founder explains how it has grown revenues in three years. >> adore me is a new brand of women's underwear competing with victoria's secret. i came to the u.s. and i didn't have much money but i had a girlfriend and i wanted to buy her some lingerie. nothing came close to the range of my budget. i decided to start a company that would make beautiful products affordable. i started from campus to pitch some of my professors. victoria's secret has been the dominant brand for the last 30 years. there are different things that we could do better. we cut the middleman. we do not have any stores. the bra that you are going to

find at victory a secret for $90, we are going to sell for $40. when we started in 2012, we had 100 products on the west side. three years later, we have 1000. the biggest challenge is the supply chain combined with marketing. the wait times are very high. we are talking nine months between order and delivery and 25 sizes for a broad. -- for a bra. you take a financial risk. you take an inventory risk. when everything arrives at the warehouse, you need to sell it all of a sudden, which means marketing. in the first time, we would market everything one line. now, we diversify by doing it online and other channels such as television. we are very social. we love social media.

we have about 800,000 followers on facebook. it is a strong way to communicate. we keep expanding. we want to the approachable for everyone, whatever your taste size, or genre. we are talking at some point large merher -- merger acquisition. manus: the risks associated in bra wars. broad church here on the pulse, which takes us back to our twitter question. as the ceo set up last night and said, getting the audience to grow is going to be hard, how does twitter broaden its audience? the kind of response i've had so far, besides being invaluable for breaking news, i use it to communicate with students and test ideas. twitter at $32.11.

another one here, could it be another tech merger on the horizon? i wonder what old mark zuckerberg is thinking. stay with us. ♪

mannus: harder, faster berkeley's journey is to step up to plate. pumped up. massive earnings estimates find crude slums as production and refining's search. twitter takes a tumble in after-hours trading. the interim ceo talks bluntly about social media companies growth prospect. ♪ mannus: good morning to our

viewers in europe, good evening to those in asia, a warm welcome to those waking up in the united states. i am man is currently in the bloomberg headquarters in london. stepping up the pace of cuts at the british lender. that forecast is where we are joined by our finance forecaster. he is optimistic. he is using language for he talks about streamlining. this is a man on a mission? >> what is more streamlining? a euphemism for more cuts when it comes to staff, or automation of processes? streamlining can come in anyways. mannus: in terms of breaking

down the numbers, where do you think the key interest will be? julia: he said today it is not so much about the numbers that more about the message from the chairman on the conference call right now, and about the strategy. it will be the rundown of the non-core. if he wants to have the risk down to 20 billion by 2017, that changes from $45 billion from 2016. he is going faster and taking action. mannus: he wants to take up management levels in the retail banks. is that where the real changes will come? julia: a lot of it is taking out senior people in different parts of the bank. that is where you will see trimming, and it will probably the across divisions they don't see as profitable. mannus: thank you.

performing better than expected with second-quarter profits above analysts' predictions. the results have helped to boost the company's share price. where trending a little bit high this morning. yesterday bp messed expectations with a $5.8 billion net loss. let's speak to our chief energy correspondent. javier, these numbers knocked it out of the park. they say they are pumping on all cylinders. javier: they have made almost as much as they may best year. that tells you how well it is

going. and that is on the back of this integrated model. they have a production unit that is suffering because prices are lower, but the refining unit is doing well good as it benefits from the fact that oil is cheaper. drivers are hitting the road driving more, paying less at the petrol station. in the u.k., the demand is rising at the highest rate in 10 years. mannus: the total house story sounds different than the bp story. it has its own issues. relative to bp and others that we had yesterday, the dividend seems more assured. these guys are probably more assured of their dividend than others. they are more efficient. javier: they have three things.

total will continue benefiting. the second thing that is very different from bp is that you could see a growth in the production of oil. reduction went up 12%, that is a big increase on the back of the new concession in abu dhabi. also new top spot in angola and russia. they plan to exceed the cost savings, they are selling assets. you see a situation in which the company is aligning the amount of honey that they've -- the amount of money that they produce from the operations with what they need to sustain and give money to shareholders. mannus: that is the mantra of big oil, cutting costs and

saving assets. if you have everyone in the same procedure and process, what is the risk that to these assets lose their value quickly and it is a fire sale? javier: these companies have assets that they are selling that are not only oil fields. they are selling things like pipelines and storage units. those are attractive to long-term investors. they'll get a network of pipelines in the united states. that is very attractive. it is a utility business. mannus: the other big issue is, of course, the oil price. we are all getting used to the new $50 barrel. we have a low price environment.

he's talking about the next decade with $40 to $70, and that is being optimistic. who is doing best in the low price environment? is it total? javier: you cannot forget exxon mobil. exxon has some of the best engineering capabilities in the oil industry. they are a very steady as it goes vessel. i would be sure that the engineers at that company would be able to reduce costs and produce good money. they're not one of the big five but it is interesting to as they have the highest shale oil in the u.s.. statoil. and if oil prices rebound from

$50 to $60, they could be a very interesting player. mannus: the next merger and acquisition spree, that may come it is probably more likely to be stateside rather than here in europe. it was great to have you with us. our bloomberg chief energy correspondent. here is a look at what else is on our radar this wednesday. twitter had stock that fell during the ceos conference call amid concerns about growth of the company. take a look. >> we have not had meaningful impact on growing our audience and produce a patient. this is unacceptable, and we're not happy about it. i have gotten a deeper understanding of where to focus my team. we need to ensure a more disciplined execution.

we need to simplify our service and deliver twitters value faster. we need to better communicate our value. mannus: microsoft windows it's a new look today as windows 10 is launched. software is being offered for free for an upgrade for existing pcs. microsoft could attract more customers. micron and intel have not factored a growth in demand into their forecast. >> says it is the best or action for windows of her, and they are providing a free upgrade for all windows seven and eight users. it is about bringing the best of windows across all of them with one experience, one platform, one installed. mannus: they recorded a 4.7% jump in sales.

new customers in germany. 11.3 billion pounds in june. bloomberg spoke to the sky ceo. >> we have had a very good performance. we have added almost one million new customers. we have had great growth. germany is performing well with record levels of growth. that translated into revenues of 5% and operating of a percent -- operating up 8%. mannus: the first-half profit was paring operations rising 50%. just under 3 billion euros with kick of sales of its fashion and leather goods. chinese stocks have risen for the first time in four days.

their industrial and technology companies. the shanghai index climbed 3.5% amid speculation of the states equities. decision day for the federal reserve in the u.s. on a two day meeting. policy makers will release a statement at 7:00 p.m. u.k. time. investors will scrutinize the statement for any hint that policymakers are inclined to move in september. stay tuned to bloomberg for that. still to come, more on the trouble that twitter. how can social media companies broaden its audience? that is our twitter question, as well. we'll discuss that later. ♪

mannus: welcome to "the pulse." live from the blowback headquarters in london. as you have heard, we have had a lot of company results. for more on the season so far we are joined by the jp morgan assets management stephen. you are here almost at the halfway mark for the recording season. what do you make of it so far? stephen: there have been tailwinds building up over the

last 12 months or so, one of which is the weakening euro and the following of oil prices and commodities. it is a very easy monetary background. european companies have been reshaping themselves to face domestic challenges. we are seeing them reap the benefits of that and improving margins. mannus: they were put under more pressure to reform under -- then the u.s.. when you look at the macro themes, china is a concern, europe improving, the usa looking for a fed height -- fed hike. those globally-based are the one to want to play. how do you look at the european space strategically? stephen: companies of a global focus have been invoked in

europe for the last five years, probably because everyone is aware of domestic problems. a lot of those problems were fixed last year. we think the ecb assessment was a watershed moment. you are seeing an increase in consumer confidence, unemployment has been falling since 2013. domestically, there are now opportunities. mannus: some of the biggest things have been on the dw for the last couple of years. if we look at oil where do you look at that from a european-u.s. context? you have to be very careful about how you choose your oil exposure. there are a variety of things at play. how do you look at the oil majors or how do you access that story? stephen: the main story remains with the profitability of the

companies. we have seen that in reactions from the last six to nine months. these stocks are the most downgraded, and the prices followed. they're dealing with british gas. that shows that the industry is seeing value in the assets we investors might not be. we remain relatively under the oil space. we are live to value opportunities. you could see a quick turnaround in share prices. mannus: banking. the swiss banks are building capital, management changes in the german banks, i am hearing that the british banks -- barclay, they are getting ready to reinvent themselves

again. you are about to go into a rate hike cycle at some stage of the next year in the u.s. and u.k.. how do you look at that versus the european banks? how do you play that story as an investor? stephen: the way we think about the european banks varies from country to country. there are seven countries where the franchise is very important component -- is a very important component to the prophet, as important as corporate lending. we are seeing a slow recovery in corporate lending because they are well capitalized for returning loans. the extension of credit to the euro zone is more combative than it has been for some time, and that will back up profit. you have to bear in mind that europe has a large net savings area, and i think we will hear about that are banks, or about some of the italian banks, who

will be booking fee incomes as the savings balances rise. mannus: when we sit down at the bank, i was looking at my earnings analysis, and one that i came up with was technology. we have had twitter microsoft, and last week in the u.s. we saw some of the older tech. it is not exactly firing on all soldiers. there are a lot of issues where you have to differentiate. where are you in your exposure to tech, and had you look at it? software, hardware -- how do you look at the area? stephen: it is not a particularly homogeneous sector. in u.s. there are a couple of large companies. s&p is our largest sect. if you look further down the scale, there are other european companies that have been

european leaders. lithography is one that has looks good for the last three years. as they transition to other tech allergies, that transition looks like it is going to plan. mannus: the whole debate about the side in terms of who will win that market share and that again -- any thoughts on that before we finish? stephen: it is an area where i think s&p would admit that they have been trying to transition and that is costing them money. i think the market has been concerned about the value of acquisitions that they've made. i think on the point about acquisitions, it illustrates a broader name in the market where the companies are more confident about the future. the interest that in their balance sheets. they're mostly cash

generative. we will see that benefiting through technology. mannus: joining up all of the dots. thank you. stephen maclow-smith. up next, telling it like it is. it is a whole new concept for ceo. the ceo -- the interim ceo of twitter gives a brutally honest press conference about the company. ♪

mannus: welcome back to "the pulse." live on bloomberg television streaming on your ipad at bloomberg.com. twitter shares dropped 11% in extended trading, and that is when the management spoke. what on earth did he say? >> at one point there was euphoria after these numbers. shares spiked 11% or 12% because the second quarter results beat estimates. then, we heard in a conference call more of the reality. the fighting reality that user growth has stalled. 1% growth. we are now at 360 million users. facebook has 4 billion users.

they only grew slightly in previous quarters, and that has now stagnated. the interim ceo, jack dorsey spoke very candidly. there are no updates on this interim ceo. he has come back to help the company that he has helped to found, but he is the ceo of another company that he found it square. will he come back to twitter, does he want to come back to twitter, or will he stay at square? that question was not answered. at the moment everyone feels that the only people using twitter are celebrities and journalists. what about the mass market? they don't have a marketing chief. they are getting close, they

have seen good candidates, but they do not have a marketing chief. project lightning will try to get new users so that they can logon on and see simultaneous events like on television. there is an issue about whether or not i crowd will come in for the life experiences. there are losing some of their top talent. key turnovers since dick costolo left this month and the interim ceo, jack dorsey, came in. 2 project developers went to competitors, youtube and drop box. how they keep new users coming and keep their own talent? the shares went down 12% after hours. mannus: thank you for wrapping that up. it is decision day for the feds.

what will they say? economists are predicting no surprises. will janet yellen give us any date rise clues? stay with us. we will chew it over after break. ♪

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can to give you the best experience possible. because we should fit into your life. not the other way around. mannus: welcome back to "the pulse." live from the bloomberg headquarters in london, i am manus cranny. john mcfarland is going to step up the pace of cuts at the british lender as the banks set get quarter profits were 1.8 5 billion pounds matched analyst 's expectations. jack dorsey says twitter would not see sustained and meaningful

gross for a while. that is despite second quarter beating estimates with revenue jumping 60% to $5 million. it is decision day at the u.s. federal reserve. policy makers will release a statement at 7:00 p.m. u.k. time. economist see no chance of an increase in rates, but we will analyze the statement for any chance on the policymakers moving in seven timber. how are the markets looking? jon: let me take you through the highlights. gains of a 10th of one percent in spain with half of 1% on the dax. here we are back in the green for 2015. we are inching back into positive territory on the stoxx 600.

it is still high by 14% on the stoxx 600. the only industry group in the red on the stoxx 600 are the minors. blame china if you want, the slowdown there is making people nervous. the shanghai composite totaling 10% made a little bit of a comeback closing up 3.5%. it has been a busy session with plenty of earnings. this is one i have been talking about. total, the stock is up 1.4%. the oil price has basically halfed in the last six months but they have only slid 2.1%. this is a significant presence downstream to take advantage of refining margins. total did that. they're really protecting the bottom line with the refining side of the business.

another highlight at this morning session is that sprint is down for six days. another one third of 1%. we are down 63 dollars a barrel. down 20% from the highs and may. looking at the dollar, the federal reserve decision possibly today, a dollar is down 1/10 of 1%. a little bit of a reversal of the last hour. over to you. mannus: that is john with his interpretation. hank you for putting that in context. the federal reserve has a message for the market today see you in september. our economic editor, mike mckee joins us from new york with a preview. this might be the most closely watched that statement in years.

a very good day to you, a very early morning for you. will take over this statement this evening because there is a lot there. what will we focus on? mike: the last time, they said the statement was more important than what they do, because they will not make a policy move this time. wall street will be looking to see if there any lose for when they -- any clues for when they will do a rate. they will not give us any kind of new economic assessments. janet yellen does not deal with news conference this time. it will be all about the statement, what they say about growth inflation, the labor markets, and if china or other problems, the strong dollar will affect their decision-making. mannus: it is almost as if greece has moved off and china

has supplanted it. where we looking for the clues and statistics? mike: in 2004 the last time they started a rate rise cycle they were playing about it. this time they are data dependent. we have to look at the statement . you can look for tweaks about what they say about the u.s. economy's growth prospects and labor market, and if they upgrade either. we will want to know if they will see more inflation on its way to the united states. here is the most important thing -- will they drop the word nearly from their statement assessment of risks and say that it is now balance. if that is the case it will be a red-hot crucial he by the markets. we will get reaction even if they do not specifically say their target is set timber. mannus: we do these statistics

sometimes in terms of a possibility of they september or december hike. where are we in terms of that debate in september or can we even think that she might go on a rate meeting where she doesn't have a news conference? that would be a lack of communication. mike: it is considered unlikely, because there is no reason. they have press conferences in september and december. we have surveyed 50% of economists for september, and a little less for october and december. there's not a lot of liquidity in the markets in december. if we get strong job markets and if the gdp comes in strongly he will see a lot of that pile into the september 17 date. mannus: we will leave it to

yourself and tom keene. always great to get you an early, mike. keith wayne joins me. mike was just saying there are a number of things we will focus on one of them is inflation. the economy complex is back at levels we have not seen since 2002. how does that play into your thinking? >> the fed has said it does not want to raise rates until it is reasonably confident the rate will be going back to 2%. what we have seen is a fall in commodity prices that will push down inflation further in the u.s.. combining that with a stronger dollar, and you have had deflation pressure for the last

month, and they will be impacting that on in the nation. they will be ok with that if they think the labor market is continuing to tighten. they will balance that against what is happening in wages and productivity. we have seen oil and gasoline prices coming down, and that will put an other down like to the inflation rate in the u.s.. they all need to be more confident that the labor market will improve, unemployment will come down, and it will improve. mannus: the phrasing that you are using is all very domestic -- is all very domestically focused in america. the international issues -- china the equity market might not be in contagion, but the china story in terms of what is happening in china. greece is less of a peak moment.

global growth internationally. i could be an issue that they site for holding back for now. keith: yesterday we saw the consumer confidence number come out and it was weak. one of the possible explanations of that was that consumers in the u.s. are getting spooked by what was happening in europe, in greece, and in china. those risks are fading. we know the greece situation is under control. the authorities in china are trying to correct the fall in the equity market, the china is an ongoing worry. we know the banking needs to be recapitalized in china is not growing. that could be a continuing concern, but the overall view of the international picture, for the fed, they interpret it

through the dollar. if the dollar is strong they have a look at the international picture through that. i do not think china could derail the u.s. economy on its own. mannus: call me a skeptic. talk to me about the most dovish rate hike cycle in the world. when he's rate hikes come in the u.s. it will be one of the most dovish tightening's we have ever seen. how dovish will it be when we start? will he be in 2025? it will not be the usual 25, 25 25. it will be guided. keith: janet yellen with rather go early and gradually than late and quickly. that points to a slow cycle

where they might move in set timber skip a couple of meetings, then go again. i think that they will move 25 basis points in september. i think the labor market will point them in that direction. are they go after that is more of a debate. they need to get interest rates up to 30%. mannus: do you think they could get it to 2.5? keith: over a year q4 next year, that is quite country. that is what a lot of the models suggest where interest rates should be now. they should move them up to that level. the on to that, i think that is where they would stay. i see them moving more quickly, having rates peak and then

moving very slowly up to a higher level. mannus: i hope it all goes according to the proverbial textbooks. it is great to have you with us. keith wade a chief economist and strategist. thank you very much. microsoft launches its latest version of windows. we look at some of the operating system's test and worst moments. stay with us. ♪

mannus: welcome back. let's bring you breaking headlines. a price war. that is potentially what is on the way. and comments it was said there is the possibility of her price war coming along in the auto market. a deal has been signed in iran for ds models with the local partner in iran. he said that -- the climate in iran does not favor the french. the french position on the iranian nuclear talks is reflecting back. the price war is looming in the chinese car market. that is where a great deal of competition will come. keep an eye on the stock is trading at 15.7 in euro terms, and that is up over 5% at this stage.

it is certainly bombing along at 18.70. let's get you up to speed with some of the top headlines. russia's bank has altered purchases to replenish the national reserves. the operations were suspended as a result of growth in volatility on the domestic currency market. the unexpected move may lay the groundwork for a fixed interest rate this year on friday. greece has moved a step closer to reopening it stock market. the european central bank has approved proposals to end a four-week closure of the athens stock exchange. officials with knowledge of the matter said trade ache may resume on the use of money from greek banks. microsoft windows gets a new look with windows 10.

the software is being offered as a free upgrade for existing pcs. previous upgrades boosted pc sales, but some say the launch will be different. makers such as micron and intel have not factored a jump in demand in their forecast. let's go down a trip down memory lane with some of the best and worst of windows. >> microsoft windows, the king of the pc. love it or hate it, windows is one of the most profitable products ever made with 4.6 billion users. how did it get here? the story starts in 1981 when a small software company called microsoft hit it take with a software company for ibm's new personal computers. the average computer user wanted

something or is accessible, so microsoft used interface manager to use a face on dos. it may look crude, but this first version of windows was revolutionary and brought us things that we know and love. drop-down menus, scrollbars, icons, and boxes. it also uses a mouse. version 1.1 included a game. in 1987, windows 2.0 had better graphics including overlapping windows. one year later windows he came, and state, the largest pc software maker. in the early 1990's microsoft sold tens of millions of copies. windows mania hate an all-time high in 1990 five with windows 95. microsoft sold 7 million copies

in the first five weeks. windows 98 was an across-the-board upgrade, but not everyone was happy. >> you said windows 98 would be faster. >> it is. >> microsoft put out windows me for home which no one bought, and windows 2000 for businesses which boosted sales with the pricier option. windows xp was faster, more stable and a hit with consumers. microsoft tried to write a new windows, vista was a terrible mess of glitches. it took microsoft two years to fix what it -- the mistakes he made with windows 7. in 2012 microsoft tried to be radical with windows eight replacing a desktop with tiles which attempted to read pcs

tablets, and smart phones. most people were confused and went back to the desktop. today we have windows 10, which takes us back to the familiar desktop and start menu. it is free. this will probably be the last time that microsoft puts the number on windows. going forward, windows will just be windows. mannus: great package. still to come on "the pulse" what to watch. we are keeping an eye on how high the federal reserve will go, and mike mckee is up early in the u.s.. he will have that covered from top to bottom. more to come on "the pulse." ♪

mannus: welcome back. live on bloomberg television, streaming on your ipad and bloomberg.com. victoria secrets might be the biggest brand when it comes to women's underwear, but there is a new start up with growth in its online store. i am joined by the founder who shows how revenues have grown from $1 million. morgan: adore me is competing

with victoria's secret. i came to the u.s. without much money, but i had a girlfriend it was our anniversary, and i wanted to buy her lingerie. nothing came close to my budget. i decided to start a company that would make dutiful products that were budget friendly. victoria's secret has been the home and for 30 years. there are different rings that we could do better. we have our own designs, it is very colorful. we do not have any stores, so the cost is much lower. the bra at a victoria's secret for $90, we will sell for $40. we had 100 products when we started, a year later we had 10 times more.

the biggest challenge was the supply chain and marketing. the lead times were very high nine months between order and delivery, and 25 sizes for a bra. it is not easy should know in advance what you'll need of what product. you take a financial risk. when everything arrives at the warehouse, you need to sell it all of a sudden, which also means marketing risk. the first time we did everything online, now we are doing it online with other channels such as television. we love social media and social media loves us back. we had 800,000 followers on facebook. it is a way to communicate with our customers. we are expanding. we want to be approachable for everyone, no matter your taste, size, or genre.

we are looking for a large merger acquisition ipo. mannus: ok. how to just read the market. let's talk to hans nichols and berlin. -- in berlin. hans: we cannot try to have any sort of witty conversation after alonzo a.p.'s -- after a lingerie piece. after 2:00 p.m. we get the statement. no press conference, so we cannot get that excited. what will jeffrey lacher say? will he dissent? if he does, it could be more likely we will have a rate increase the next time they meet in september. he is the president of the richmond fed. on the u.s. trip, we will go to richmond to eat barbecue.

mannus: that is it from "the pulse." we are back tomorrow. the fed is the focus for bloomberg. stay with bloomberg tv for that. "surveillance" has that covered from new york. ♪

announcer: this is "bloomberg surveillance." tom: first do no harm as janet yellen and the fed look to september. this morning oil tries to find a

fragile bid. we consider the commodity elephant in the room. think china. and it is not what jack dorsey said, it is how he said it. twitter confronts wall street. twitter confronts it's very future. this is "bloomberg surveillance ," live from our world headquarters in new york. i'm tom keene. joining me, brendan greeley -- and it is about emerging markets this hour. brazil is leading the way in weakness. one of our themes. brendan: they have had to revive their estimations on what their fiscal surplus is going to be. they had one and it wrote it. for the finance minister, he was pitched to have credibility. does he still have that? tom: one of our themes on brazil and we will touch that twice. there are top headlines with vonnie quinn. vonnie: