>> campaigning for clinton, bernie sanders goes to bat but many of his ignore pleas not democratic candidate. >> based on her ideas and leadership hillary clinton the next e united t of the state

states. germany's second largest bank plummets. be the second quarter as good as it gets for the majors this year? and hope. ow favoring an immediate stimulus to the uk following bmi week's dire readings. >> welcome to "countdown" everybody. breaking e bit of for you fond people. well ahead of the market estimate of 326. they raised a full year guidance. sales numbers come in, just a little bit lower. if you want to understand what they think about polymers, this is the foams or car parts, the polycarbonate that goes into the top of your laptop

cases. course, it was divested, sold off as part of the buyer family. 64% stake have a in this company. and that could be useful do deals. to second quarter group level 7.7%.olumes up they say that the loans to repaid in be full. so top line is they are year the full guidance. it's by freedom. freedom to make decisions in closing it systems, plants in brazil, and, of course, they are on target for cost cuts. a conversation a little later on in programming during "on the move." i'll have a conversation with patrick thomas at 8:10 a.m. this morning. got something coming in from south korea. manufacturer hyundai. they made a profit, looking of the estimates in. terms of the net income

number also ahead of the estimates. second quarter operating profit ahead of estimates. q-2 sales also just a little bit ahead of an estimate. o those numbers coming through from the south korean automaker. let's talk about where these --kets are and have >> they are rather unsure at the moment. risk look at the rating. we've got equities, just undecided. see what ing to happens. 1.5%, yenthe topix has gotten stronger waiting to see what japan does. week, all of that leading to a little bit haven.mand for safe we see the yen stronger against the dollar. that yeng strength story downward g any pressure you might see on the japanese currency if e're going to see any big stimulus. strong yen not good for

exporters. interesting story around the pound this morning. will be on the front of daybreak. on.l feature this later ostensibly an hawk for his tenure at the bank of apparently he said i've seen enough. he favors immediate stimulus. this is a story in the ft. he literally has been hawkish for midwest of his time. 131.18, as much we'll play into what happens with the ed in their statement tomorrow night. those pmi numbers on friday, i think, have sort of pushed perspective on what's happening in the uk. >> it only a survey. of making that point, course, but one they are seriously. let's get the bloomberg now tom: thanks, sanders told the democratic onvention that hillary clinton must become the next u.s. president. it came after his he plead avoid porters to protests on the floor and it was ignored by some.

michelle obama also offered endorsement of clinton. >> what i admire most about is that she never pressure.nder she never takes the easy way out. hillary clinton has in r quit on anything her life. >> any objective observer on conclude that based her ideas and her eadership, hillary clinton must become the next president of the united states. [applause] man armed with a knife has killed at least 19 eople and injured several others at a facility for disabled peek near tokyo kyoto.ing to broadcaster said a 26-year-old man is under arrest after turning himself in. motive hasn't been established but the man used

to work for the facility. federal reserve policymakers begin their two-day meeting. officials are projected to line on interest rates as they assess the impact of britain's decision to leave the e.u. but funds the chances te of a rate hike this december are almost back at the level day of the the referendum vote. britain needs a new to punishwatchdog wrongdoing in order to win public confidence. that's according to the uk's parliament treasury committee. a new body should operate separately from the regulation authority and the financial conduct authority to help prevent a repeat of the to the te response near collapse of british lender in 2008. impulse 2 has become the first aircraft to fly around the world powered nly by the sun the plane touched down in abudhabi this morning ending 35,000 kilometer journey without burning a fuel.e drop of fossil it made 16 stops in its

navigation of the glob. stories ond more the bloomberg app top go. this is bloomberg. >> tom, thank you. let's check into the markets. david, a little bit of a little bit of nervousness ahead of this bank of japan meeting on friday. and >> right. i think a lot of what people are talking about here now just really lack of clarity and how big that stimulus will be. here are several reports, some have rate chetted up the size of the spending package. yes, there said, is some caution. have a look. apan pulling its way, 1.5% down. you look across asia and just look at this map, it's not a very interesting sense there e is noun one clear direction. are also at an even split between gainers and

lose issues. pulling back is not huge with the exception of the yen. there is also the element of commodity prices on the way down. oil at three-month lows. nickel, down 1% each. if you do consider these where you have ae decent waiting when it comes we'remodity producers seeing a pullback. down .25%. we talked about the yen. chart, biggest drop, in fact in dollar-yen since the brexit vote. time yesterday we were close to 1.06. above 1.06. our now we're making way back to 104. organ stanley, mitsubishi of morgan stanley securities putting this wave of dollar selling, if you will, down plain and simple risk. most equities pulled back in japan. back get some buying nto the japanese yen and

across other currencicies in asia. very much.u david in hong kong for us. earnings season for the oil majors. later. we have a closer look at these numbers. great to have you on the program. verse, ryan, let's talk bout what we're expecting from the second quarter report. >> by all measures it should be a relative zinger. you look at oil prices, rose nearly 25%, best quarter in for the oil price, up 25%. you think about it. e were sub $28 in the spring. the average oil price in the second quarter was 47 a barrel. look at stocks, msci orld energy stocks, up 25% over the last six months versus about 9% for healthcare. stocks globally, and the same in general for stocks.

you look just at the second quarter, and again, you have energy really outperforming all the other industry groups, up about 9%. double what you saw health stocks do in the second quarter, and globally you know, the msci about.3%.dex up oil stocks was a good place to make money in the second quarter. there is no doubt about it, that's what we're expecting to see reflected in bp's numbers. he estimate out there is about $800 million for adjusted profit. that's not a lot. not trump change. est quarter in three if it works out that way. in another lump of money towards their loss. so you've got that. of rally if the price oil but gasoline inventories actually rising so there are any factors that play in, in terms of taking the story

forward, what is the next as?ter shaping up >> it may not be as pretty as the second quarter just indicating. while crude oil inventories in the united states, the biggest consumer of oil have een falling we've seen a huge glut of gasoline. so if you look at total inventories, stripping out reserve, i.e., crude plus refined product, we've just reached a record states.united we're just beneath 1.4 billion barrels, equivalent barrels of oil. that's about 14 days worth of global demand. a lot. there is so much gasoline in particular, that just in the we've been counting tankers, at least five tankers, bound for new the wanted to go into port to deliver their gasoline, were turned away one needs it. >> you can watch those ships. weigh in on the sector as a whole, on the face of these majors, as we scituating to hear from the

first of them. this will be the first. from others later this week. >> exactly. we'll find this has been the best that we're going to see for a while, i'm not so optimistic about the outlook from here. speaking more cautious on the price of oil, expecting more declines than increases. look at the inflation adjustment of oil price it's $30 to $40.round the china boom period clearly long gone. towards a ack range that we think is historically more relevant. number two, we're still is king that the fed going to race it at some point. weaker r slightly oil prices. more weakness rather than strength that will feed sector. the energy >> that's good news for the world growth story. $140 or oill at at $25 didn't do much to boost the growth story. i'm just putting it into context, as long as it stays good s bandwidth it's news. >> absolutely. the key difference is that

we said the same thing. before was falling but it turned out not to be the case because it was such a dramatic decline. we want the nice combination of low oil prices and some stability. efore when you add the big decline it was such a big shock you didn't get to feed through the demand. we'll be more likely to see it than before. >> the supply disruptions oil s agented on the price to support it, we're not in denial about how weak oil prices should be, are we? >> no, we're not expecting another big decline there. will always be the potential for disruptions, be it or venezuela but in a long term perspective, balance is supply and demand. excess supply versus demand, again, more moderate weakness which at this point of a goldilockgoldilocks scenario. >> they struggle with a price below $30, which you suggested we could see. is your investment strategy, if you can, avoid energy stocks altogether? > i think at this point it doesn't seem to be the best

alternative. if you look at the other sectors that performed well o far this year besides energy, we've had the yield plays, utilities, tell co-and so on with the in yields. from our perspective from here, rising new interest rates, we think we'll see a of those ut sectors in energy on a relative basis, probably not so attractive so we're back and consumer because we think that will give you the best appreciation or potential for the rest of year. >> maybe you might want to planes instead. >> take a trip. >> where are we? companies move to protect dividends. holy grail. real focus last year on dividends. where does it stack up in the dividend story for you. people are paying a whole lot for income wherever they can find it, market, rging stocks, that won't change. given what we expect to get now from the bank of england, more stimulus rather than less. so that story won't change. people will pay for growth if they can find it or pay

for income but it looking at valuations relative to the income that you receive where you get a little bit ore uncertain about your potential total return. >> we've seen this period of a oil prices, having refinery business in your stable seems to be something that helped some of the oil that be a story this time around as well, do you think? >> probably not so sure about the mix. people want to think about whether they will see a significant enough increase in consumer demand high level of inventories, people driving more hopefully, i think that will underfin sector as much as anything else, if we see people, consumers feeling more confident. more ies feeling confident about the outlook demand easing the that will bring down inventories. >> if we look at the whole of u.s. n terms oil, european oil, where do to be in that respect? >> right now you've got to look at the potential, with the u.s. energy sector as a whole, u.s.

economy as a whole, as the to adjust to the changes and circumstances, so if it means reallocating or labor, fundamentally i think the u.s. economy, u.s. corporations, tend to do that you have more restraints perhaps on the uropean side so i think if i had to pick one of the two, you'll see more of a change in or the environment. >> daniel morris. stays with us this morning program. >> let's get you your day ahead. the agenda set. this morning, we're going to et the earnings as we've bp.n saying from we also get, in the mid-afternoon, an update biggest world's economy with the u.s. pmi numbers for july. >> a whole host of corporate results. earnings from apple, twitter, mcdonald's and all on the horizon. bloomberg, h lexen bourgeois's finance

minister pierre joins us on pulse," this morning at 9:30 a.m. >> up next on the program the on "countdown," majority of economists say they see the boj easing this week. we discuss the impact of the yen. to the c.e.o. of the temporary employment ompany, and a smooth landing, where the solar impulse plane has completed it's around the globe trip. this is bloomberg.

>> coming in at $240 million. interesting comments about shaped up s because, of course, trouble with the second quarter across the son board is it's almost pre- -- feels very rearview mirror so we're looking for the some s to give us clues about july. that's what we're getting. early july volumes indicate growth ond quarter rates have continued. we can ask the management about whether that applies to the uk as well. but as a whole, that might be seen as a reassuring make.ent to we'll be talking to a c.e.o.

in around 10 minutes time. is with us.zie tom? tom: germany's second argest commerce bank says key measure of financial strength fell in the second quarter. t made accounting adjustments to flexibility operational risks to lenders across the industry. income in the second quarter fell about 32% from earlier. but didn't specify how divisions performed. the federal judge has and cized statements executivesformer bear stearns. important information was withheld from the public. e's now allowing a lawsuit to move forward. intend to-to-toe.go the gadd let will go for a

fraction of the standard issue apple watch. and c.e.o. reckons 50,000 watches could be sold within a year of its u.s. debut hoping to bring total revenue to $100 million in 2017. that's your bloomberg business flash. >> tom. much. you very the latest rate decision friday.pan on they see the central bank policy easing. regardless of whether it analysts t most see things advancing. about says it all. so much expectation is this, yet, this morning, we have a statement, i mean, he says minister says the government will leave actual policy measures to japan.nk of this pulls away from that

hope and ambition that we'll et this huge fiscal stimulus. >> two things are going on. one is the balance between he monetary and physical stimulus. if you get something more tilted towards the physical timulus, like what you're seeing in the yen it's likely to lead to more strength. going back to the central what can they do they have already thrown the kitchen sink at it to try to get the yen weaken. there is some of that doubt ultimatelybility of the bank of japan to get the yen weaker that's now.ing to strength if we fall too much back on fiscal stimulus, you could strength. >> we just came out of g-20, where there is a lot of not his stairty anymore as a global concept, japan, the ok at safe haven status it takes n a slightly different complexion. do they have more of an excuse, as a result of the to keep that currency

weak senator >> there are two things you need. some eside hopefully of the monetary stimulus to help, you still have to come ack to talking about reforms. japan doesn't need more physical stimulus. they already have too much debt. a y have already spent lot on infrastructure, not for a very positive result end.he if we don't see along with any announcement about a more al stimulus, focus on reforms. trying to get the economy moving again. of view point you'll see any fiscal timulus that comes in fade of a guard. >> where are you in japan? re they post election victory or strengthening. 8% or lly by, what, 9%. significant pricing in terms of the equity story. are you still a borrower of japan? >> at this point not probably so much. recovery that you've seen is what you've had generally speaking, after a brexit, you've had recovery. people realize it won't have

a big impact. that's helped japan because one of the more safe haven aspects. without expectation for significant depreciation of yen it's hard to see real rallies in japanese equities because there won't underlying it. >> are you a buyer of european equities because on e got a great story bloomberg this morning, for the first time in three sound - does that like the kind of sentiment you sympathize with or trend you want to go against? i think this time you want to be a bit more contrarian. certainly from an equity point of view, if it's weakening, en it's hard to be bullish there. for the u.s., earning season going badly but what will you get from here going forward? ou go back to europe, one segment is negative, probably an opportunity. the earnings growth on.ential you're betting it's just whether or not you're necessarily seeing it. >> that's what we've got. this is the stock 600, current season.

this is what you say is really the big bet. we look at the earnings growth, really -- it's a bet it's a bet.e, more of a e medium term story. the other thing that may finally turn this around ill be what happens in the u.s. in terms of fed. if you finally see an hint, week not get it this that interest rates are going up in september that will push the balance back in favor of european equities. they step back it will be more underperformance. >> great to hear from you morning. us formorris joining the first half-hour of the program next, we'll be jacques ivan den broek. all about second quarter numbers. this is bloomberg. [hip hop beat]

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tokyo, the dollar against yen, we talk a lot about yen strength this morning, against the u.s. currency. general safe haven demand to be the reason. numbers coming through this for the telecom sector. confirming 20 202016 numbers. pretty much in line. the revenue, in line with the estimates as well for

the second quarter. billion the market estimate was 10.1 billion as well. stands at them $24 don't 5 billion. you've had three consecutive expansion for them. you've had price increases business.ed line you know, there is greater 4-g coverage. one thing with the telecom service is the lack of consolidation. takeaway. >> the most recent consolidation was rejected regulators. where that story goes next we'll see. daybreak.k about new addition is now available on your bloomberg and mobile. dayb.on let's take a look at some top stories being covered in edition. we start with great picture. economy specifically, i suppose here. -- he's s martin been on the mbc.

a lovely line here, have a cable.t this morning, it's done. an eighth.bout weale has been hawkish on england and this weale is ting that the independent member of the machine tear policy committee. changed his mind? what changed his mind? numbers, the lowest since 2009. >> he was so disappointed. turns dove at the bank of england. let's talk about the yen, as came tioned when we back from the break. 104.46. the yen breaking through at 105 level. the impact of the potential timulus is priced in, perhaps. that's sent tokyo stocks diving. see what happens with this story. on the one hand demand for safe haven. on the other hand, talk about what they will do what

will be left to do despite the stimulus. >> we've got a couple of coming ing reports out. organic revenue expected to grow by nearly 3%. of the toughest sales at growth comparables, and, of course, apple. be the that will real -- lovely story talking about the value of the dollar this morning and should be using apple index rather than the big mac index. so am numbers come out to ninth. the u.s. after close. e're expecting a 15% slide in terms of the sales. >> before we get to that big "u.s. news and world report" bp numbers, in and around 27 minutes time. now, we mentioned what's japan.n in japanese shares have fallen ahead of the boj meeting. is expectedbank to ease policy. caroline is looking at the etails of this morning's trading session.

caroline, good morning. aroline: yes, i'll be digging into some of the asian moves. a little bit of concern, maybe the bank of japan live up to expectations when it comes to stimulus. maybe the fiscal package that's been reported pressed today in japan. also not living up to expectations. trillion yen, many expected a larger package. a look at what's going on. one of the main japanese enchmarks continues to erode in value for the last three trading days. currently trading off by 2.4%. clearly a bit of urgency, a bit of concern we won't live up to expectations with stimulus. oil playing into this. lower.ng stocks commodities worst performers. market, we're seeing some interesting technical indicators. hen the oil market, we're starting to see for the first time since april the price in the yellow as we these are the closing

price that is we see for oil trading below the hundred average.g could we see further weakness in oil? t's already near a three-month low, 4% down over the last three sessions. course, that number coming out soon. all prices not being sustained. lastly, i bring you a chart on the uk. you were just talking about that great story of martin hiel, potential hawk turning dove. this shows you what the bets are in terms of differing uk and the he united states. so much expectation now that could see the u.s., sooner rather than later, pick up rates and tuck you rates.op yea year yield spread. -- demanding more

money for the u.s. than the the most since 2009, it seems to be overall. so we're starting to see pickup, the difference in yields, you want more money from the u.s. debt you expect rates to go higher. in see rates going lower the uk. very much. earnings a little bit early on, second quarter earnings from ran stad, missed numbers. jacques van den broek. you with us this morning. i can see, you've got $153 illion, top lynn a little bit of a mess but when you talk about volumes, july indicate second quarter growth rate continues. where is that coming through post brexit, where is it

more pronounced? jacques: good morning. we don't see any post brexit affects in our business. we see a continuing trend, a u.s. with the softening in growth. till having 3% growth in q-1 and now flat. urope is continuing at a decent pace. ountries like france also, dutch business, the german business, they do show solid no post ill so brexit. just a continuation of a trend. this is now our 11th quarter of low to mid single digit growth. like the st seems new normal. no, fairly limited. continuation of the trend. we're flat in revenue. you do see some spotty

evidence, for example in our onstruction property and engineering business, but probably many brexit voters didn't know this a lot of work in the e uk is being financed by the they are , so indicating a little bit less confidence, of course. transpires into less permanent placement. by ough slightly offset temporary. >> jacques, as you say, phrases like new norm and no real post brexit impact. about wages. there is a little bit of a push -- we see dramatic spain, millions of jobs but not the right skill set. seeing in terms of wages? jacques: millions of jobs in the skill set is not what we're recognizing. we do see good growth in spain. --e election prone almost, but solid in spain.

we've seen wage inflation in the u.s., took a long time. you do see is you first need to see one or maybe ven two areas of economic recovery before wages go up. and, in europe, we don't see inflation.ge >> on the uk, again, jacques, do you see -- do those candidates who may have keen to stay or keen to go to the uk for are less likely to from other parts of europe because of the brexit vote, measure also, do you see very little impact on the company? far, that's a very small part of our business, people moving to the uk. although, indeed, if all the people who are living in the and came to the uk because of work would suddenly leave that would be very interesting. but, no, we don't see these moves yet. to you know, it's tough say, but apart from the reaction in the financial postbrexit, so far,

is rather uneventful. jacques, trying inspire e here, because you're using new norm, not seeing the story that i'm seeing in spain. very sort of low tempo thrust that you're giving me here. low ust get used to a growth rate from ranstad? should i be -- randstad? we get by very well. improving our earnings every 11 ter for the last quarters. so as a company we're doing very well. but, i would also like to see 10% or 11%, 15% growth we used to see. it's not so much about really , it's not us, but you're asking me about markets and economic development.

yeah, it's not very exciting. exciting.y would fiscal stimulus make it better for europe? jacques: i think europe needs to directive a forward looking agenda, but yeah, that of course, is also, brexit won't help there. inward focus, short-term, won't help. about mobilizing labor markets and driving a growth agenda in europe. so very much looking forward that and also, very much willing to pitch in, in these discussions, but the enormous, ot honestly speaking. thank you for joining us. amsterdam.tad, >> a big rally has been under way in the united states. it mean? our middle east anchor joins us now. in the 200 day moving average, it's all pesky riggers in

the states. >> yeah, i spent some with crude oil and here's what i'm looking at in terms of that oil count. up by 14 is the magic number. we put this on a chart to context. you can pull it up on bloomberg. what you're looking at is that increase. increase, weekly biggest increase since december 2015. even color coated it, rig building in blue. the key thing is what's difference this time around it coincides with a small uptake in u.s. crude last two in the weeks to the tune of 2.4 million barrels per day. perspective e on all of this from the e.i.a. numbers that we're on ing forward to wednesday. the bloomberg survey is forecasting a decline of 2.25 million dollars for a 0th weekly drop in those

inventories, which remain at a hundred million barrels five-year average. >> thank you. markets, bloomberg middle east anchor. up next on the program, choice is not even close. bernie sanders says. behind his support hillary clinton. the democratic national convention from philadelphia. the 7:00 a.m., we get beast of oil. t's bp, the numbers, challenging year with lower oil prices weighing on upstream earnings and 15 speak toater we'll challengerof the virgin money. this is bloomberg.

>> welcome back. this is "countdown" 1:46 in in morning, if you're new york. central banks in many parts of the world, the united one of them, of ourse this week, 6:46 in london. here's tom mckenzie. second many's largest bank, commerce bank, a key measure fell in the quarter, it made an

an accounting adjustment. income in s net the second quarter fell bout 32% from a year earlier. but didn't specify how performed. he chinese intelligence ants to go toe to toe with apple. it will go for a fraux of the alp watch. they reckon 50,000 watches could be sold within a year, helping to bring revenue to dollars inillion 2017. a federal judge has sharply riticized statements and executivesformer of bear stearns. mportant information was withheld from the public. he's now allowing a shareholder lawsuit to move forward. that's your business bloomberg flash. >> tom, thank you.

sanders has backed hillary clinton's candidacy for the .s. president in philadelphia. speaking on the first night event, the day choice between clinton and trump is clear. senator sanders: we've got to defeat donald trump. [cheers and applause] senator sanders: and we've got to elect hillary clinton tim kaine. [cheers and applause] [boos] >> for more let's go to our bloomberg politics reporter, philadelphia. it's great to have you on the program. clinton, did she get the needed don't from sanders. we heard a little bit of booing there. think she got the speech that she requested, you know. in the first day of the convention, there were oud protests coming from senator sanders' supporters.

they were upset, of course, tim the selection of kaine as hillary clinton's running mate. they feel he's not progressive enough and they upset with ousted dnc chairwoman schultz for the leaked emails which they show as a rigged primary process a tall order for sanders tonight. let's take a look because he offered his full fledge hillary clinton, despite there being some boos in the crowd and even some reporters saying up."er let's take a look at what senator sanders had to say. sanders: i'm happy to tell you that at the democratic platform there was a significant coming together between the two campaigns we produced by far the int progressive platform the history of the democratic party. > so clearly, senator

sanders is trying to appease his supporters, trying to signal that his candidacy not for nothing saying that they do have the result they will need to go forward. but a lot of unanswered uestions heading into day two. >> did saunders go far enough? i was just looking at some he usedhetoric that in terms of aggressive, pushing back against partnership, talking about breaking up major financial institutions out?id he reach did he convince the auditorium that he's really behind hillary? well, big policy issue jor points the mainly of division is on the transpacific partnership. opposey does sanders but also donald trump, interestingly enough. ernie sanders has really hammered u.s. big banks, really hammered this notion "rigged" system is against people and it's a populace rhetoric, something hat donald trump has adopted.

it will be interesting to see how his supporters do this.g into looking forward to day two of the convention we'll be hearing from former bill clinton. he himself, of course, was "explainerobama's in chief." look for him to try to go more nuance policy type of rhetoric. of course, it's a historic clinton hillary where she will become officially the first female andidate for either major party. the nominee for president. much.anks very our politics reporter there in philadelphia. studios, w in the paul jackson, head of the firm investment source. great tough to on the program. thank you for your company this morning. about politics and how that rubs up against investment strategy and the economy. what do you think stocks would vote for, clinton or trump? or other assets class, you

pick. paul: i suspect they would clinton. historically stocks do better under a democratic president than a republican president. if you go back to the 18 50ss, about a 5% annualized democrats, 3% under republicans. that's history. frankly, i can't see a lot the fference between programs of the two candidates because we don't know a lot of detail but stability and continuity perspective the markets would prefer clinton. i think we would have a of what we're getting. >> where are we, in the ollar debate because we've had a whole host of opinions come through here in terms of trump might be more in terms of taxes. for you, who is the stronger story? paul: that's a difficult one because sometimes the dollar safe haven.a so you get surprising results. guessing, g, i'm and i guess my heart is saying that clinton would be he stronger dollar

candidate, but once again, we don't really know a great deal about what either of do. would >> it might depend to what extent trump wants to stick more ome of the aggressive rhetoric around anti-trade, i suppose, a ause that was seen as big threat to the global economy -- >> they are both quite -- be both seem to aggressively sort of anti- -- this is what the -20 is fundamentally worried about, the west turning its back on open trade. >> yeah. paul: i suspect trump feels this more strongly than clinton. clinton isl that using it to help win votes, really not sure she believes it. trump, i think, passionately does believe this, believes america has been cheated in some way by various trade agreements, that by stepping back from free trade, in some way, the united states will e stronger, which, personally, i don't believe, but that's the story that they are pedaling. > if i look at the web

function on bloomberg it tells me there is a 47% hike by therate end of this year. beyou think the fed will able to hike, by say, even 25 basic points? it around put 50-50 by the end of the year. personally i think the feds hiking.be when you look at where inflation is, core inflation s in line with the fed target. maybe a little bit of both depending on which measure you use. the economy is growing. it's not booming but it is growing. low.loyment is pretty and fed interest rates are at half a percent. > does it feel like an emergency setting to you in a nonemergency? paul: absolutely. central banks are psychologically scarred by the financial crisis. react every time the markets ask for something, the central banks jump. incredible.ely the fed is left with a policy setting that's way opinion, in my versus where the economy is

and where it has been. > let's talk about the translation of low rates for the economy. this is the s&p earnings index so far in the current season. looks like it will possibly be better than the european side. growth growth so the really has come through, what, 2.5% overall. hat's your make of this reporting season so far some e there has been concern. earnings growth is going to tail off. you don't get profits to be of gdp that they have become in 2012 and not get a slowdown in profits. it's just normal economic reaction. on the other hand, the particular negative influences on u.s. and profits, strength of the dollar, weakness of commodities, and the slump investment spending is

the result of the fall in oil price. three factors are now less forceful than they were, so i think it's that, at this moment in time, we get a little bit relief. >> you're calling for a dramatic price in oil. back at $20. there?you get paul: quite simple. it always gets back there historically. back to the middle of the 1800s and look at the rice of oil in real terms, yes, it does go out of the $20 to $60 range. $60 in today's prices is where it tends to be four out of every five months 1870s.the it goes back above that but when it comes back down it $20.ys goes back to also look at the marginal cost of production. sector, trade body that represents tuck you can oil industry stimates that the marginal cost of production fell to $20 last year. 43.21, eather at

we'll keep that in mind. thank you very much. up next -- >> a little bit of recovery that we've just been talking about. could this be as good as it gets? we'll break down the oil major reports from bp, this is bloomberg.

: campaigning for clinton. bernie sanders goes to bat for hillary as many of his toporters ignore the pleas vote for the democratic candidate. >> any objective observer will conclude that based on her ideas and her leadership, hillary clinton must become the next president of the united states. crunch.ommerzbank second-quarter net income at germany's second-largest plunges 32% from a year earlier. the reports are hitting the bloomberg terminal with the second quarter. we will break those numbers down

eminently. and halt to dove. -- hawk to dove. stimulus for the u.k. following last week's dire pmi readings according to the ft. ♪ to "countdown." gone 7:00 herest in london. let's get to the breaking news. the big number coming through from bp. $720 million, below the estimate of $819 million. manus: it is indeed. the dividend remains the same. look at the downstream and the upstream business for the second quarter. billion and the upstream business comes in $29 million.

joins us on set to break these numbers down. the dividend for me is a big miss. we have numbers through from man group, the world's largest publicly traded hedge fund. at 389 million dollars. adjusted pretax, $98 million. a host of numbers coming through. business is in focus. we heard that their ceo was going to be leaving at the end of next month. we are leaving man group after 40 years after his successor was named. they are talking about net

inflows in the first half of $1 billion and redemptions in the first half of $8.8 billion. manus: breaking news on bp. open reach should become a distinct entity, a distinct company. a distinct company with its own brand. a detailed plan for major reform. accountableld be for the open reach. this is in terms of the potential split from bp and open reach. anna: they are describing this as detailed plans for a major warm of open reach should become a distinct company with its own board. this is something they suggested they would be open to. it is a private board at the moment, perhaps giving it more transparency and independence.

saying that open reach should be a separate company within the bp group. how they define that is going to be crucial. will bp have to consolidate this into their account or not? will it still be part of bp or a subsidiary? that will be crucial. those will be details we will be looking for as we go through. let's get to ryan. a little bit of time to digest those numbers. a big miss on the net income numbers. it was supposed to be a good quarter in terms of the numbers. : it was better than the previous two quarters, but it missed estimates. that was one of three where ms. whammies that-- we saw during this quarter. the safety net for all the big, integrated oil companies is not

so much anymore. finally, the company warning that production in the third quarter going to be what -- below what it was in the second quarter, which is not encouraging when it comes to the future outlook, particularly when people say that oil could creep down to $40 a barrel. manus: you have spoken with bob dudley on a number of occasions. they just booked another significant allotment for the horizon. where are we? billion on$61 deepwater horizon. are we near the end of that? ryan: we are never going to be entirely at the end, at least not in a couple of years. but we are getting closer. in a sense, a lot of people would have been watching today's numbers and saying, are we going to get a notice from the company that mr. dudley will step down?

that did not happen. there is a sense that what he could do in terms of the divestment program, making the hasany into a leader, as bp become, it is a fraction of what it was in 2010, before this bill. that work is largely done. mr. dudley is going to stick around. there is a lot more to be done in terms of how this company defines itself beyond the reconstruction stage. anna: paul jackson is still with us. is this a sector that you have interest in? we were talking about your bearish call on where oil prices go. does that mean you are not interested in investing in this sector? correct.t is i'm not interested. it is a simple equation. this sector basically gives you what the oil price does relative to the market. if the oil price is going down,

this sector will perform. on a long-term basis, given that we're looking for the price to go down, i am not interested. dudley need tos say or do today? you have pushed him about debt and the dividend. ryan: keeping the debt under control is important. maintaining the dividend is essential for investors at this point. if they have to make a choice between reducing debt and maintaining the dividend, maintaininghey say the dividend. what the market wants to see is getting costs under control and doing it in a way where you do not lose out on future production growth. that does the trick. you can sell everything you have got an cut your costs down to nothing. what does that leave you with as a company in five years time? that is where bob dudley is going to be judged right now. not: does the yield convince you if they are talking

about maintaining dividends in this sector? paul: we have to see some pain in the sector. that is what will bring equilibrium in the oil market. there is still oversupply. there are big inventories out there still. ,he chinese, by my calculation are adding 1.4 million barrels per day to the strategic reserves. the underlying demand in the global system is not what it appears to be. there is artificial demand coming from china. the market is not at a point of equilibrium. to get it to deliver them, you have to impose suffering. price has to go below marginal cost. up withwhere you end numbers like $20. manus: the that come back to the fracking story? we were talking about the number of trackers coming back in.

fracturesllowed the to come back in. is that the biggest threat to the oil major. do you see oil companies going bust? it is possible. you have to get supply down. part of it may be that some company somewhere is bust. systemy somewhere in the does suffer as a result of the market coming back to equilibrium. we have not seen that coming yet. anna: thank you for joining us this morning. paul jackson and ryan chilcote joining us on the oil story. manus: tom mackenzie has the bloomberg first word news. has told theanders democratic convention that hillary clinton must become the next u.s. president.

it came after his supporters avoided protest on the floor. michelle obama also offered her endorsement for clinton. >> what i admire most about hillary is that she never buckles under pressure. takes the easy way out. and hillary clinton has never quit on anything in her life. >> any objective observer will based on her, ideas and her leadership, hillary clinton must become the next president of the united states. tom: a man armed with a knife has killed at least 90 people and several of -- and injured others at a facility for disabled people in tokyo according to the kyoto news agency. a 26-year-old man is under arrest after turning himself in.

a motive for the attack has not been established. police said the man used to work at the facility. federal reserve policymakers begin their two-day meeting in washington today. officials are projected to hold the line on interest rates. fed funds futures indicate chances of a rate hike this december are almost back at the level they were on the day of the referendum votes. britain needs a new financial watchdog to punish wrongdoing according to the u.k. parliament treasury committee. it has said the new body should operate separately on the prudential regulation authority and the financial conduct authority to help prevent a repeat of the inadequate response to the near collapse of a british lender in 2008. solar impulse 2 has become the first aircraft to fly around the world powered only by the sun. it touched down in abreu dobby, ending an epic 35,000-mile

journey without burning a single drop of fossil fuel. it made 16 stopped in its circumnavigation of the globe. global news 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries. find more stories on top . this is bloomberg. anna: let's find out how the asian+++

to david ingles has details for us. it seems the move in the japanese currency are influence the mood in the japanese stock market. that is one of the standout stories this morning. david: exactly. the inverse correlation between the two. japan is heavily weighted in asia. it is keeping gains on the benchmark fairly limited. the rest of asia, have a look at this. we are coming off the for these markets that are on the way down. hong kong is up. a lot of this is the casino story. have a look at the big movers. sands china reporting second-quarter earnings. not getting into too much detail here. they are saying there is hope for a recovery across the you are, which is why seeing games -- gains. back to japan. that is the market story. 1.5% down at the close. , lot of this, if not all of it is down to this huge move down -- thear yen -- in biggest move down since the brexit vote. we have some comments out and several brokerages weighing in on this. saying this is down to risk aversion. seems to be the sweet spot ahead of the boj meeting. thank you very much.

breaking news from ab inbev and we heard from sab miller that there was a push to get more money. to 45ev up to the offer pounds. to 79akes a total offer billion pounds. moneywill not be any more on the table. this is the full and final offer. anna: the final round, perhaps. jackson is still with us. we have seen ab inbev of coming back with a little bit more. you?is that a thing for in the run-up to brexit, a lot of people worried that a brexit vote would destabilize the m&a story. is that going to be a feature of the rest of the year? is it something you are investing around? paul: it is true that there is a

price for everything. as sterling has gone down, it no matter.k. assets, what type of asset you are talking about, more interesting. if somebody from overseas was thinking about buying something from the u.k., all of a sudden, it has become much more attractive it has boosted earnings whether domestic players as well. it is one of those things linked to the currency move which is the counterpoint to the uncertainty around brexit. that is the reason why u.k. stocks have done better than most people imagined. manus: how much exposure are you prepared to take in terms of the u.k.? residential property sales are under pressure. where is the exposure that you want to take? even international investors have lost about 6%. paul: absolutely.

before we had the referendum, we neutralized all of our positions. luckily, we were zero weighted in u.k. real estate. it was very difficult to see which way this was going. i don't feel like changing that at the moment. the movement we have seen in the ftse 100 and the big stocks, i think, is taking account of the movement in sterling. it has the boost from that. i am not sure we have yet seen the negatives that will come through on the domestic side if the u.k. falls into recession. i think there may be another wave of negative moves to come through on assets such as u.k. real estate, u.k. equities. , it am choosing real estate would be much more stuff on the continent. anna: thank you for joining us.

good to get your thoughts this morning. up next -- manus: we talk about the challenge for banks in the u.k. a ceo next on "countdown." this is bloomberg. ♪

anna: welcome back. this is "countdown." we are live from london. it is 7:20 here. the pound is a little bit weaker against the dollar. interesting story. he is ready to do a little more stimulus. what does it mean? there is one lady in the house who runs margin money. it is the u.k. challenger bank, as it is known. it has not seen brexit changing customer behavior. anna: joining us exclusively,

the ceo of virgin money. great to have you on the program. in your statement, you are seeing no evidence of brexit changing behavior. that might come as a surprise to some. you are not seeing any change in behavior. >> not yet. we have had our strongest first half ever. newly everymers month. a very strong performance for us . we wondered if we would see a slowdown post brexit. so far, we have not seen that. interestingly, the things we have seen is customers completing more quickly. they are thinking we will get this done before anything might change. we are seeing changes in spending patterns. .t is really important now that we are out, we need to make the economy flourish. it is important that we speak

positively about the future. it is important that we support our customers. if we support -- if we do that, it is looking good for all sides. one of the members of the monetary policy committee has about turned last week. what would a rate cut due to your business? would it challenge profitability, embolden the customer? it does not make a dramatic in terms of the 20 five basis point cut. what does it mean for your business in terms of the margins? bank, we areenger talking about the big banks taking too much share of current accounts. the rate cuts, that is a benefit for us. a lot of current accounts do not pay interest. their margins are likely to squeeze. because we do not have that base, our margins are protected.

for us, in terms of overall net interest margins, very immaterial. margins of to 216 basis points, depending on the timing of the bank-based rate reduction. >> yes. all else being equal, the interest margin will remain very stable. a cut, there will be a small impact in profitability that will come through in the interest margin. beyond that margin, it will remain stable. the carou mentioned business as well. you have gone aggressively to grow the business. in this environment, there will be lots of teaser rates offered around. how challenging is that market?

are you still moving your balances? do you offer those? is there a bubble in the car business? >> we take about $.50 of that new market. we are trying to offer customers real choice and opportunity to manage their finances and to give them good pricing as they do it. we do not see any concerns around that. manus: tell us about your loan book and how it looks. some analysts say for a business, it has not been through a full credit cycle. how are you at testing your loan book? >> we know everything about our loan book, very focused details. from a mortgage perspective, we have no commercial property. our affordability has always been great. responsible lending has been something we have focused on. the team that run the credit card business is one of the

biggest card providers in the u.k. manage that book excellently and brought all the money to virgin mobile. -- money. credit cards seen through the 2008 crisis. we are bringing that experience to virgin money today. manus: the market has had a few punches from the previous incumbent at number 11. do you think that could be part of hammond's reset in terms of policy? >> our business is looking strong. total mortgager portfolio. because of the way in which we priced this and the way we look at it on a daily basis, we did not see a bulge before. we have seen very level and

stable over the course of this year. does your positivity go as far as doing deals, buying up smaller challenger banks? >> we never say never and always look at everything. for us, we are focusing on organic growth and successful business is a key focus. anna: will this be a sector that consolidates? >> over time, possibly. the winners will be the ones whose balance sheets are strong enough. that is what we are continuing to do. manus: thank you very much for joining us. anna: that will do it for "countdown." manus is staying. manus: cannot get enough of me. i think the dominant story is martin will doing a bit of an about turn. anna: that is one thing we are

watching. the ftse 100 could outperform a little bit. buyersflat with downward "countdown. that looks to be in store. that is" for you. we will leave you with manus and the "on the move" team. ♪

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♪ manus: you are welcome. it is "on the move." 7:30 in london. 8:30 in berlin. we are counting down the market open. manus cranny. caroline hyde is in berlin. what have we had for you today? it is a bad start as bp kicks off the earnings season. .5% fall in profits net income dropped by a third and the tier one ratio is eroded by risks. democrats descend on philadelphia while t f