>> decision day for the usa. gold advances and the dollar weakens ahead of the fed decision. eyes on the prize. dominating wins in the presidential primary. iphone long as waning sales in day 50 one quarter growth streak. in winters morning. joinsandard chartered ceo forces in europe.

this is countdown. we are live from london and it's just gone 6:00 in the morning here in london. let's get straight to breaking news. we start with the oil sector. that come through with a profit. 122 million u.s. dollars against loss of 125of the million u.s. dollars. talking about exploration spending, 2016 being $2 billion and giving a certain amount of guidance around capital expenditures, talking about organic capital expenditure coming in 13 billion u.s. dollars. that's in line with what we heard previously on the capital expenditure number. we will speak to the ceo to discuss the oil price.

does he think $60 a barrel is the magic number? that's the number we were hearing discussed yesterday. we will talk to him at 6:30 u.k. time. let's get to the numbers from the banking sector. q1 net profit came in at 1.60 3 billion euros. the estimate was for 1.5 billion euros. 10.27 percent, higher than december. net interest income 7.20 6 billion euros. lower than it was a year ago and a little lower than the fourth

order as well. the bad loans ratio moving in the right direction against 4.36% in december. on the domestic economy and what they say about brazil, a big focus here. they've given us their ratio in capital in 2015. the bad loans ratio moving in in december.ection let's talk about a few of the things moving around in the markets right now. , a big see where we are move in the aussie overnight, weakness coming through in the australian currency down just shy of 1.5%. sincein the first decline 2008 and the crisis that ensued

in the global economy there. been at four.ad we need to keep an eye on what the dollar is doing. withed has been concerned a host of other factors. we saw some weakness because of the durable goods order yesterday. gold gaining just a little bit ahead of the fed rate decision, up for a third day. david joins us from hong kong. >> good morning. let's get things started in the u.s.. donald trump has to clear himself the presumptive nominee for the republican party as he five to victory in all northern states holding primaries yesterday. hillary clinton the bernie sanders in four out of the five.

there was pressure on the that theys to show remain viable in the race for the white house. spain is heading for new elections after failure to select a prime minister for the first time in its democratic history. june 26 is the likely date for the new poll. the ceo of standard chartered says there could be tensions in europe. >> we all know that should the u.k. choose to vote to exit the eu that on the day after, nothing will happen. life in go on as it did the david or come up that there will be tremendous conjecture about what might happen. even if the u.k. votes to stay

call, it is a close leaves some element of uncertainty in the way the conservative party manages itself. leaves, there is real risk that it creates tensions in europe. is betting that the billionaire is wrong about china. he said the country faces a hard landing and resembles the u.s. before the 2008 financial crisis. but some disagree saying china has artie had its crash. thee are signs manufacturing center in china is recovering. forers suing led zeppelin plagiarism over their most famous song say they're willing to credit -- settle the case for just one dollar.

supergroup is accused of facing from a bandriff called spirit. they could be entitled for royalties in tens of millions of dollars. the case is scheduled for a jury trial in los angeles next month. shares about apple have slumped in after-hours trading after second-quarter sales fell 13% from a year ago. the tech giant is predicting further sales growth in china. you can find more stories online. let's pick up where he left off at the apple story and get more on those gloomy apple numbers.

this report from san francisco. >> apple reporting fiscal second-quarter results of revenues of $50.6 billion. a little disappointing for apple. even though they had massive profit of $13.6 billion for the quarter, iphone sales down 18% year-over-year and maybe even worse for the company. analysts had hoped the number would stay strong in the 39% range and it looks like it will be below 38%, disappointing to wall street. the gross margins are still strong by industry standard but maybe we apple standards. no new products to announce in the quarter, one of the reasons results are we. it suggests that the new apple

gross may have less margin since some of the phones already on the market. not enough to please wall street with the thought that's with the stock selling off. cory johnson, bloomberg san francisco. anna: asian equities slumping again today ahead of the fed meeting later on. a asian stocks down for fourth day, set for the longest losing streak in two months. health care and take stocks leading the losses after those numbers from apple that you just heard corey talking about. it means the msci asia-pacific .exis down slightly on the year it was up as recently as yesterday. the aussie dollar dropping the most in two months.

the worst performing currency against the greenback today is weakening against all 31 of its major peers after inflation had its first negative reading since 2008. this was unexpected and is boosting for a rate cut from the central bank. decision later on from the fed. i want to show you is happening with treasuries. volatility plunging to the lowest since 2014. markets are pricing in zero probability of a rate hike at this meeting and 20% chance in june. this is interesting because we have been getting we aref weaker data and not expecting action at this meeting, get money has been moving out treasury, pushing yields higher. the treasury bond index has fallen for the last seven

sessions. about crude oil pushing expectations higher. the city line is economic surprise index. you can see the data has been surprisingly on the downside yet to hear yields have been going higher they are most sensitive to action from the fed. our markets listening less today to and more to the fed rhetoric. they have to balance the issue of weaker data against keeping in on the table for later in the year. is being held hostage by the global economy as opposed to domestic one. .et's get to simon the elephant in the room today is the fed conversation. i want you to talk first about

the australian dollar story. we have seen such a big move in the aussie overnight on the back of cpi. >> it brings us back to this very simple conversation, it's all about the central banks. everything we've seen in one form or another is about the monetary policy sector. commodity prices were going up because china was having less pressure on its currency. the fed was more cautious in january. have cpi suddenly starting to come into negative territory. everybody is making a logical assumption. these are just two

different measures of cpi that the central bank likes to look at. a rate cut at the central banks tuesday meeting as pressure mounts on the governor to resume easing. what are your expectations? >> that is about right. a strongthat you have aussie and they have been so clear in that view that it's bad for the economy will start to kick in. it comes back to what happens this evening with the fed. suddenly commodity prices are down and the aussie is going to be down anyway. we have the problem of a commodity price will in china and elsewhere. it increases the likelihood of a rate cut from the rba. thank you very much,

simon. plenty on the macro agenda for you today. starting in germany at 7:00 u.k. gdp willhen be flashing across bloomberg. then at 7:00 in the evening u.k. time we get the outcome of the fed plus today deliberations around policy. we will bring you coverage of that decision here on bloomberg television. driver's seat, trunk and clinton extend their lead in the race to the white house. do their challengers stand any chance of mounting a comeback? ♪

anna: markets over in asia are a little bit sluggish this morning, down .6%. boj tomorrow, a lot going on. twitter.look at shares took a tumble in extended trading after missing revenue projections. analysts were projecting north of $77 million for the company. twitter also missed his first quarter revenue estimates, struggling to add new users. profit-quarter surprising analysts who are expecting a lot. the oil company announced

adjusted profit of $122 million u.s.. a $.22 per share dividend was also declared. exxon mobil has been stripped of its aaa credit rating for the first time in 86 years. they question the decision to spend billions on stock buyback and paying back debt. allywood may be scripting change of studio ownership. the wall street journal says comcast is in talks to buy dreamworks. the independent animator as a market cap of $2.3 billion while comcast is valued at $148

billion. that is your bloomberg business flash. i think i've seen all of those films. i'm not sure if that is tragic or not. let's talk about u.s. politics. donald trump and hillary clinton have trounced their rivals in the northeastern state primaries. donald trump says is clean sweep made him the presumptive nominee for the republican party. let's get to margaret who joins us from new york. great to have you on the program. follow when after hillary clinton. >> it was fascinating. andld trump takes the stage peavy its to the general election where he goes squarely after hillary clinton. assets is hergest

gender. donald trump says if she were a man she could not get more than 5% of the vote, that he will actually do more for women that she will and that women do not even like her. was a very aggressive turn of events that may be aimed at next week's primary election but will carry over to a general if they face off against one another. donald trump called himself the presumptive nominee. can he be stop? >> he doesn't have that magic number of delegate votes that he needs but it becomes exceedingly hard to stop him. the last stand make him a week from now in indiana. anna: and hillary clinton tried

to reach out to bernie sanders and his supporters. how have they been reacting? it's interesting because bernie sanders is committed to continuing the race up until june over getting to see some potential shift in his language, talking less about how he still has a pass to win and more how he has been able to bring independence and new ideas to the process and he is committed to caring -- carrying those forward. clinton probably does not need him for the nomination but she needs to bring his supporters along into the fall to compete in the general election. anna: staying in the u.s., we get the latest rate decision from the federal reserve later today.

investors don't see any chance of there being a move today. let's turn to the fed and your thoughts on the fed. there is growth, and might not be stunning, but there is growth. talk about the distinction between the strength in the u.s. concernsn the clear they have about the global story. >> that was a really fascinating bit. thingsas always been about global markets, going back to 1998. i think it has become more explicit over the past 12 months and that was made most clear in september last year when we had and in the crisis first rate hike was postponed.

go to this year, all of a sudden we have the turmoil which i would argue was generated indirectly by the strong dollar. the fed suddenly backed off, and then we go to march. i think it presents an becauseing conundrum you could argue, looking at the u.s. economy, they could do with a rate hike. >> i have a chart that shows u.s. deflation hedges getting cheaper. unlike australia, it seems in the u.s. the concern is on the other side about inflation.

>> may be to strengthen the dollar feeds into that over time. the problem is from their if oil prices again , that's the problem you have, hikes int two rate without causing too much unrest in the markets. if they're aiming for two rate one will be innd december. you don't want to do it in november just a few days ahead of the election. do you really want to do it in late july?

you've got to go in september, that becomes your only choice. you see it most clearly around central bank, this your more than any other? >> absolutely. over the last 18 months, the biggest overnight moves in terms all come from the back of central-bank meetings. this is a market where monetary policy dominates everything. thank you, simon.

next, how do they do that? we will speak with the ceo next.

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anna: 6:30 in london here. bloomberg first word news. here is david. >> let's look at the u.s. first. donald trump has declared himself a presumptive nominee for the republican party as he in all fivey northeastern states holding primaries on tuesday. hillary clinton beat bernie sanders in four of the five.

apple shares have slumped in afterhours trading second-quarter sales fell 13% from a year earlier. the company's first revenue drop in more than a decade. the aussie dollar has weakened quite a bit after inflation unexpectedly dropped during the first quarter. the consumer price index fell .2%. global news 24 hours a day. find more stories at bloomberg.com. anna: david there in hong kong. norway's biggest oil company has beaten first-quarter estimates posting a profit as crude prices

fell to their lowest level in almost 12 years. company's ceo.he great to have you on the program as always. how did you get to this profit? >> hard work, i guess. we are reflecting the low commodity prices. and westrong performance are growing our production capacity organically. that we'verogress been working on for quite some time now. >> you surprised the analyst and bob dudley surprised the analyst. what is it they have been

getting wrong that they don't understand about what's going on in the oil industry right now? do. focus on what i can i guess what might surprise a little bit is the ongoing method to increase efficiency, reduce costs and the approach to our industry and the impact it has on the cost structure of the company. >> do you see any scope to go beyond what you have already and announced?ady quarter, sohe first strong this is been

documentation that we are on track for the targets we established a couple of months ago. we targeted $2.5 billion u.s. and we are working hard to achieve that. anna: the brent price this morning around $46 a barrel. the p and other oil companies if it isbout $50 as some sort of magic number for the industry. is $50 a magic number for you? quest there is no magic number for me. if still too much physical .apacity out there there is still downward pressure

, an indication that we might be heading toward rebalancing. we should expect volatility during that time. >> you were talking about cost-cutting is one reason why the analyst are surprised by the results we are getting from the industry. what about the refining assets? you oversaw the downstream operations. would you benefit from being more diversified and having more exposure to the refining sector? that is a relevant question in times like this. it's something they are very comfortable with. we see a market that is gradually going to strengthen.

anna: the saudi's in the last few weeks have had a lot of plans to cope with the big picture global transition. you getting further into offshore winds. are you making big plans for post-oil? >> this is a long-term strategy. we need a portfolio that represents an alternative to oil. this is a gradual approach. we launched a new wind projects yesterday. these are all industrial projects that take time.

it will gradually increase as we move forward. anna: great to have you on the program. ryan joining up -- joining us for that conversation as well. chart of the oil price, highlighting $50 a barrel. other saying there is no magic number. what are your expectations? fed is cautious, we will head back to $50 a barrel, it's a simple that. high.eems i seem to remember in 2000 u.s. was considering releasing oil from+++

highs it was $28 a barrel. think it's his -- a measure of how extreme the margins have been over the last 10-12 years. oil prices can continue to rally. if they are hawkish, if they do send a message, we have a clear picture for 2014. how quickly oil prices can fall. anna: what are you looking for out of the commodity currencies? its volatility at its most extreme. to currency is clearly track

commodity prices. the simplest way to play it will be the canadian dollar. anna: simon, thank you very much. standard charter says the effects of global stimulus continue to be one of the biggest risks to the world economy. francine lacqua has this interview. >> my biggest concern is the cumulative effect of extraordinary monetary stimulus over a. of time. cumulatively it's building out and itet him balances does feel like a that is being stretched. perhaps it doesn't feel like a

bubble today but it becomes one with the benefit of high-tech. this is what they are talking about. banksof the pressure on is intended to have the resiliency to -- event of an unexpected shock. >> i'm less worried about the systemic risks. think the wobble we saw last year when there was concern that increasing monetary stimulus in europe and japan would have diminishing returns. looked like the authorities

who had kept pretty tight control on too much market , mina been losing the real ability to influence things. there was effectively doubling down and strong rhetoric that have called things down. there are consequences to negative rates. no one knows exactly how it ends. have to be careful and aware of that. the other risk you mentioned earlier, obviously we are very concerned about the combination of a tightening fed and a china whose objectives are a little bit unclear. an --d has demonstrated

every behavior since then has suggested that is the case. >> if angela merkel becomes more hawkish in the next couple of weeks or months, what does that mean? >> i think emerging markets are better prepared for growing interest rate differential relative to what they were a year or two ago. as we saw from the volatility this year, a little bit of stimulus creates a lot of jitters in the marketplace. we had a rate increase and i think the market can handle that. good run back up.

less in other markets. we have probably reached a but weble equilibrium continue to have growing demand. it is still 6.8% growth. supply will begin to come off as high producers. i think we will see stabilization of economy prices. it is unfathomable. life will go on as it did before there will be eight minutes a

tremendous amount of conjecture about what might happen. even if the u.k. votes to stay , ifif it is a close call , there is real risk that it creates tensions in europe that are destroying. simon is still with us. stimulusncerned about meaning in balance in the global economy. it makes me think about the boj tomorrow and expectations around what they might do. >> they've got to do something. the interesting part about this , strong pressure was brought -- is really trying

to weaken the currency. the question is, can they get away with it? can they do anything additionally? straightn buying just shares. not everything that done has achieved that end. good point. i don't think there's any question most people's mind that that was what was being aimed for. we can go back and look at 2012 up dollarnd qe drove yen.

anna: we will see what they do. another part of the world is europe, which seems to be on hold at the moment with the ecb. actors that the other need to do more and there needs to be more on the fiscal front, for example. some parts of the world we did not have stable government. , therenking of spain will more likely be further elections in spain. >> you need a fiscal union which of course implies political union. in the domestic political issues

that have bubbled up in the aftermath makes it ever harder to achieve. so it's not surprising that the back to always comes the ecb to do the stuff that nobody else will do. anna: that takes us to the next part of the program. simon, thank you very much. next, the standard chartered ceo tells us extensively about his brexit fears and we will get further analysis from our guest, up next. ♪

anna: welcome back. there is a live shot of new york. perhaps a little weaker on the u.s. equity market, bringing things back to europe, 7:50 if you're watching in germany. through,news coming we're not expecting to get an update from the leisure sports manufacturer. 2016are raising their forecast from continued operation. 15%-18% the income up in 2016, expecting to continue to generate operating leverage. they will publish full details on may 4 with more details around this outlook. they had previously seen revenue up by 10%-12% and now they're

15%, so aout substantial topline upgrade. the ceo of standard chartered believes if written votes to leave the eu it will create tensions in europe. bill winters spoke exclusively to francine lot. >> we all know that should the u.k. choose to go to exit the eu that on the day after, nothing will happen. life full go on as it did the day before, but there will be tremendous conjecture about what might happen. even if the u.k. votes to stay , itif it is a close call will leave some element of uncertainty. there is a real risk it will

increase tensions in europe. anna: meanwhile the former greek finance minister said it would speed up a breakup of the eu and create a vortex that would consume britain. progress.is a work in andexit would speed up this it would create a gigantic deflationary force, a vortex within continental europe that would consume britain. our guest joins us here in london. great to have you on the program. talk about the broader implications up brexit. how much does it represent a big threat to the european project?

i think it will have effects more broadly than in this country. have been hearing from various commentators giving their thoughts. -- willhink it faces people asked if the union can be held together? leery of doomsday forecasts. i've always thought the european union is stronger than people give it credit for. goa: we have eight weeks to until the referendum on eu membership here in britain. onave a nice graphic here referendum polling. the remaining camp got a bit of a boost. what are your thoughts around

the polling and what it is telling us? it's very uncertain. you could draw a line between those two graphs and it would be straight, that shows that nothing much has changed. things have remained fairly steady. i think change will occur over the next two months because the majority of people have not focused on this yet. to start too soon try to predict what is going to happen. what will change their mind, will they be swayed by policy or is it all to uncertain in any kind of post vote world to know what that would look like? story talkingt about how people will engage in issues but they are engaging with the people who are talking about them. >> it's also going to be a

messenger as well. in thes emotion background. sometimes it is a visceral paying -- visceral thing. it's very hard to predict how people will decide. >> how does the rest of western europe view this? do the french and germans talk about this much is something that weighs on their future? >> there is no doubt there's concern in every other european capital about this referendum. we have migration, the eurozone crisis. they fall obviously decided to stay out of the debate because they've been told they would not be very helpful if they were involved. anna: professor, thanks for joining us. .e will take a short break

of next, consumers sour on apple. the streak of 51 straight quarters of sales growth is halted. that is coming up next. ♪

anna: decision day for the usa. gold advances and the dollar weakens ahead of the fed. eyes on the prize, trunk and clinton extend their leads as both scored dominating wins in the latest primaries. the end of an era. apple slumps as waning iphone sales and a 50 one-quarter growth streak. the future is into pretty. in an exclusive interview, standard charters ceo says br exit would create destructive forces in europe. welcome to "countdown."

i am anna edwards. it's just past 7:00 in the morning in london. we are war eating for a number of large corporate. we've got numbers coming through from total. i'm joined by ryan chilcote who is pouring through these numbers. profit, $1.64t billion. it's an estimate much higher than the estimate of $1.25 billion. bill o'neil has joined us from the ubs -- from ubs. ryan: solid beat. adjusted net income at 1.64 billion dollars. that's a 37% drop in profit. nonetheless, that's less of a drop in profit than we saw at bp. that's less of a drop in profit that we saw from statoil. first bp, now statoil, and now we have total now beating. it's a surprising quarter for

analysts. anna: we have seen a number of energy businesses beating estimates despite the slump in oil prices. analysts are getting things wrong. bill: clearly, there has been an effort at aggressive cash flow management. that's beginning to have an impact. itself, we would sign a note of caution. we think brent has moved up to quickly too far. some of the supply outages have been overstated. anna: what we were hearing from bp and others about the magic number being $50 to make their sums add up, that won't be needed. what about the reasons they have been? ofn: cost-cutting is part it. guidance going into this year saying that they expected to spend $19 billion. they are now saying they will come in below that target. last year, they spent $23

billion. in addition to that, to tell is europe's biggest refiner. they also have a large sized chemicals business. the company pointing out that their refineries were utilized to the tune of 94%. that means they were pretty much running at full steam. they had a lot of things going brokenm, and they hadn't this out, but trading, as well. anna: any negatives in this? ryan: you mentioned bp needed a $50 per barrel oil price. totalmpany here, reiterating they need $60 a barrel. they said they would be cash flow positive, would it need to borrow to pay the dividend at a price of $60 per barrel. plus, we saw an uptick in the share price yesterday for total on the back of bp, so it will be interesting to see if there is still more to go.

anna: expectation changing as we go through this earnings season. they wouldn't like your call in paris. thanks very much, ryan chilcote. let's get to the barclays numbers. atpretax profit is coming in $793 million, $1.06 billion. interesting lines coming out around the eu referendum, barclays saying they are cautious as we approach the 23rd of june referendum. they say it's too early to make specific comments on second-quarter performance. they give us their first quarter cet, one ratio, 11.3%. going into these numbers around the investment banking part of the business, where they are, so they say the april income rate for corporate investment, slightly down. jeff daly, trying to defend the of investment banking

barclays engages in. he hasn't been on the job all that long. they have been resisting calls to spin off that unit, instead opting to cut the dividend and selling down the banks state in their africa business. we heard more about that in .esterday session they said barclays is on track to meet their 2016 guidance for core operations at $12.8 billion -- 12.8 billion pounds. let's come back to the broader picture around the banking sector. expectations around banking were pretty low. how does that fit into your view? bill: i think it is clearlybill: reflective of a low-inflation environment, flat yield curves, a tough environment in terms of the energy sector, but the big story, the positive on the eurozone side was this expectation of significant improvement in credit demand. year, will that flow

onto the u.k. and the continent -- i mean, the u.s.? not necessarily. anna: do you credit what central banks have been doing in that uptick in loan growth you see? ryan: certainly the ecb. bill: the ecb are playing a strong role in trying to supply, but also clearly nudging consumers and business, which by the way are at the cusp of meeting pent-up demand or realizing pent-up demand. the earningsout season broadly? has it taught you anything materiel? bill: what is interesting is how limited the top line environment is in the u.s. and europe. it's all about execution at the moment. there are some indications things might be improving in the states, particularly the impact of the rising dollar, the fall of energy price declines. going to be modest,

somewhat better than europe. we are talking about a mid to mid to high -- single digit earnings environment. anna: in terms of your expectations about how markets will function in the run-up to the referendum and any fallout, how do you view this? bill: we are driven very much by the opinion polls. some would argue that the markets have made a decision about the risk. i think the big things are watching what is happening in of votershe extent stepping back from one party's side or the other, and obviously, the intention to vote. at the moment, the polls seem to be moving towards the remain campaign. discussing itjust moments ago. thank you very much, bill o'neil, the head of uk's investment office at ubs. let's get to bloomberg's first word news. here's david inglis. david: good to see you again.

let's start things off in the u.s. donald trump has declared himself the presumptive nominee or the republican party. victorye as he swept to in all five northeastern states holding primaries tuesday. democrat hillary clinton beat bernie sanders in four of five. the winds at pressure on their challengers to show they remain viable in the race for the white house. spain is headed for new elections after parliament failed to select a prime minister for the first time in its democratic history. kingsley penn called a halt to last night. he concluded none of the candidates had enough support to win. june 26 is the likely date for the new poll. the australian dollar has weakened quite a bit. inflation unexpectedly dropped during the first quarter. cpi falling .2%, while economists had predicted a 0.2%

gain. as low-inflation advances in australia, one region well appointed with the phenomenon is struggling to diff eat it. the ecb has adopted several unconventional monetary policies to that end but has been unable to vanquish stubbornly low-inflation. present we men weighed in on the prospect. in my opinion, the concept belongs in the academic corridors it came from, not in discussions about monetary policy. distribution of money to the people will lead to the dissolved made of boundaries between monetary and fiscal policy, and it creates the expectation that money can keep raining from the sky, which is not right in my opinion. david: the ceo of standard chartered says should britain vote to leave the eu, it would

create tensions in europe, which he says would be destroying. bill winters spoke exclusively to francine lacqua. u.k. all know should the choose to vote to exit the eu, on the day after, nothing will happen. life will go on as it did the day before, but there will be a tremendous amount of conjecture about what would happen. that is destabilizing. even if the u.k. votes to stay in, if it's a close call, it leaves some element of uncertainty in terms of the way the conservative party manages itself. it pushes to an adverse scenario. there is real risk it creates tensions in europe. apple's shares have slumped in after-hours trading, that after second-quarter sales fell 13% from a year earlier. it was the first revenue drop in

more than 10 years. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world, and you can find more on bloomberg top . anna: thanks so much. a few more details coming in about barclays. barclays saying they are in next was of talks for the potential sale of their french operations. they are talking about the sale of french operations. they are giving us more details about the breakdown of different parts of the business, the cid unit, pretax profit dropping. they are also talking about their risk-weighted assets. expect a 3.4 billion pound reduction in risk-weighted assets. this is a business in flux, trying to dispose of its french operations, and as we know, the

africa story on the move. david was mentioning those gloomy numbers out of apple. bloomberg's cory johnson sent these details from san francisco. cory: apple reporting second-quarter results, revenues billion, which is a lot of money but not enough for wall street. even though the company had a massive profit of $13.6 billion for the quarter, nonetheless, iphone sales were down 18% on a unit basis year over year. even worse, a look towards guidance for the upcoming third quarter. analysts hoped the number would stay strong in the 39% range. it looks like it is going to be below 38%, and that is disappointing to wall street. gross margins, still strong by industry standards, but maybe week by apple standards. the stock, selling off in after-hours trading. no new products to announce, so

maybe that's one of the reasons the results are week. with the lower gross margin guidance, it suggests the new ipo -- the new iphone se might have worse gross margins. impacting profitability. the company is returning more cash to shareholders in the form of an increase dividend and buybacks. not enough to please wall street. cory johnson, bloomberg, san francisco. anna: let's see how all of this is going to play into the start of the european equity trading day. things could be pretty mixed at the start of trading. the ftse 100, on the back foot little bit at the start of the european trading day. 45 minutes or so to go until we start trading in europe, but that is the suggestion from those markets. dollar,s in the aussie weakness overnight in the aussie dollar, down 1.8% against the u.s. dollar.

week inflation. -.2% cpi, the first of klein since the 2008 crisis. aonomists expected cpi to be positive number, increasing the chances of a rate cut. the dollar index, 94.55, pretty flat. we've got the fed on the radar. we will continue our conversations about that. 46.32. a host of earnings reports coming in from the oil sector, many pleasing on the upside despite the weakness we have seen in the oil price. increasing just a touch for the third day as we head towards that fed meeting. next, handling a hike. ahead of today's decision, we asked how many rate rises the u.s. economy can take. ♪

anna: welcome back. this is "countdown."7:17 in london . the pound, fairly flat against the u.s. dollar. many weeks to go until we get the vote, eight weeks until we get that vote on membership of the european union in the u.k. here's david inglis. talk about some earnings. total has posted profits that surpassed analysts estimates. first quarter adjusted earnings for the french energy producer was $1.64 billion, more than $1.25 billion. the beat was spurred by cost cuts, rising production, and a resilient refining process. profit was 37% lower than a year ago amidst a slump in crude prices. statoil has also reported first-quarter profits while

analysts were expecting a loss. the company announced adjusted profits of $122 million. the market predicted the norwegian energy producer would be at $125 million in the red. a dividend was also declared. adidas has raised its full-year profit forecasts. that is according to the company. net income, rising 18% this year. analysts forecast a 12% increase. the company raised its 2016 sales outlook. twitter took a tumble in extended trading after missing revenue predictions. it's expecting second-quarter sales to be lower than $610 million. analysts were penciling in $677 million.

twitter's struggle to add new users is affecting advertising sales. that is your bloomberg business flash. back to you. anna: thank you. we will get the latest rate decision from the federal reserve later, and while officials have expressed confidence that the american twittereconomy will be strong eo whether two rate increases, investors don't see any chance of there being any move today. bill o'neal is head of the u.k. investment office at ubs wealth management. give us your wise words on the fed. they are trying to juggle a domestic picture. i think it's a signal about the global picture and what is happening in financial markets. signal about june and july gekko it's not about what happened today. will they suggest there's a move in line for june or july? our view is they will delay until september, particularly with the mixed news , and clearly, a

weak start to the year in the u.s. the last nonfarm payrolls play a big role. just on the bottom left, we've got 66.9%, 67% chance of a rate hike by the fed by december. the market, still not convinced by the rate hikes this year. bill: we think we will get them in september and december. anna: why does the market not see that? bill: i think there is the sense that there is something out there, particularly the deflation risk news. it does not dissipate with a recovery in the market. conventionals have performed quite well in the circumstance of a risk on, and also, worries over china. anna: you mentioned deflation or inflation. maybe the worry is more inflation as opposed to deflation. this is the u.s. deflation.

hedging is getting cheaper. yet janet allen has quite often that theto the fact inflation pressures, she is not convinced they are sustainable. bill: no, and to some degree, she has been proven right in the data. we have seen a fall back in cpi. the market is waking up to the idea that possibly deflation and had been overpriced, breakeven rates of inflation are lower now than they were in december. they have begun to rise. the market is beginning to think , maybe this is a way of protecting gains we've made on conventional bond portfolios. i think it's something to watch. becomingtself was concerned about how market expectations on deflation became decoupled from what they were signaling in terms of their intention. anna: we will see what signaling we get about the rest of this year.

how does that play into strategy? technology in the u.s. is something you've been thinking about. bill: we have been with technology for a while. clearly, it has been a fairly glum quarter, year. the big thing on the technology side, enterprise spending is quite solid. that's the important thing. it's a strong cash flow story. it is still forecast to be something over 6%. in a world of no nominal growth. you've also got a strong cash flow story. we are looking at things like virtual reality. that's the next big exciting thing to come through. the story is global improvement in enterprise spending, the resilience of enterprise spending. anna: we have seen some reference to virtual reality from apple. apple numbers, twitter numbers come is that gloomy?

bill: gloomy for a certain sector, but the thing is, the smartphone has been evident of that. online entertainment, e-commerce, shopping, and virtual reality plays into that. i would caution we are at an early stage. it's about infrastructure, the cost, etc. this is still a 6, 7, or eight-year story. in terms of virtual reality. the technology piece is still essential. not only about smartphones but more about basic things such as cash flow generation and valuation. anna: let's talk about the earnings season overall. we are not that far into it, i know. we can talk about what technology reports have looked like, not great compared to estimates. where are you dipping your toes?

i know you are neutral on u.s. equities. give us your big picture. bill: where we are seeing some inflection in terms of expectations is around the european story. we are seeing an improvement coming through. domestically generated, not simply around the euro. topline is a challenge. on the u.s. side, we have recently gone overweight in the u.s. my argument is that the earnings picture looks more sure did now. that's a market that will respond to that, even in environment the set is likely to tighten. anna: we've got breaking numbers coming through from eva j-roll a, a generating, distributing, and trading electricity business. , 2 billion euros. i guess a touch below estimates

for their numbers. going into these numbers from iberdrola, the focus was this being a business emerging from a recessionperiod of and regulatory risk. they are saying on capital expenditure, but that certainly has been a focus as of late. bill, thank you for spending the last hour or so with us, bill o'neil, head of uk's investment office at ubs wealth management. a quick look at the futures before we go this morning. futures are suggesting we will be mixed at the start of the trading day. stocks, up by 1/10 of 1%. 100 looks like a laggard in that regard. perhaps some of the better gains are coming through in the german

market. we've got a host of earnings, total and statoil both coming in ahead of estimates. we've got numbers from barclays in the banking sector, as well. 7:26 in london. i will leave you with the "on the move" team. ♪

guy: welcome to "on the move." it is 7:30 in london. berlin.30 in i'm guy johnson alongside hans nichols. here is what the pair of us are watching. the fed decides. no fireworks expected, but investors await a risk assessment. is june 2 soon? a bad day for barclays the chairman promised to double the asre price and falls far off profit drops 25%.