anna: the u.s. and bank says it will start unwinding its balance sheet relatively soon and keeps its key rate unchanged. big oil beads on profit as opec and other producers try to come back the supply glut. regret cap the numbers. anna: deutsche bank reports. kicking off major european bank earnings and the numbers are expected to trail u.s. rivals. we'll bring you an interview with the ceo later this morning.

a warm welcome to "bloomberg daybreak: europe." i'm anna edwards. manus: get ready because we'll have a slew of earnings today, the busiest of the season. first have core earnings per share is that the. outlook for the this year. sales came in 26.34, above the market estimate. they had guided that they would be broadly in line. they are confirming it's about the bio similar threat. the cancer therapy was 1/7 of their revenue. a footnote to history is the line from the ceo. numberscond-quarter

coming through, confirming the 2017 guidance. the bad news they seem to have missed on second order numbers. below the estimate. second-quarter revenue also a touch below the estimate. ramparthe reengineered remains challenging. superjumbo facing a number of issues. the newest wide-body. somesulted in cancellations. a lot to look out on the airbus numbers. basf,etting numbers from keep in a nihilist german-based company. adjusted ebit.

when looking at what the actually reported for the second is a, the sale number shade below the estimate. there saying significantly higher adjusted ebit 2017 and seeing significant revenue increase this year. this is a company that has shied away from consolidation in the second. manus: one other line coming through from roche. they expect to further increase the dividend for 2017. that's a critically important line coming through on the guidance and the dividend. adjusted ebitda coming in significantly above the estimate of 7.9%.

they will spend $3.7 billion in capital expenditure. rose is up revenue by 5% versus an estimate of 3.8%. unfavorable transaction in brazil, they were expected to moderate going into the second quarter. morgan stanley saying that mexico, china, africa, and argentina should all post stronger growth. it looks like the organic growth is something that is triumphant in the numbers for the second quarter. explosiveking at an overachievement there. anna: as well as the earnings story, 85 out of 600 at the stock 600 juggling the relevant screens. we have a lot to digest in terms

of the fed. radar andup the risk show you the asian equity story. that inflationng is persistently at the low target. unwinding the relative -- unwinding the balance sheet relatively soon in september. the earnings season with samsung and nintendo coming through with good numbers. manus: samsung is talking about the capital editor being raised significantly higher. 80% of companies have reported higher than it profits. your looking at the lowest since 2016, pretty dovish for rates but hawkish for the balance sheets on seems to be the consensus view. what news does that send to the white house?

is it good news in terms of the economic prospects in the u.s.? better than estimated result. we put in the aussie dollar as well. the inflation data disappointed but then it was up by .9% yesterday, expending -- extending those gains. juliette: u.s. federal reserve officials have said that will begin running all their balance sheet relatively soon. the central bank left its benchmark rate unchanged as policymakers set to move toward their inflation goal. another milestone in an economic recovery down its ninth year. axa plan to find

middle-class tax cuts with a new top rate of 44% for those earning more than five dollars a year. it's unclear whether donald trump woodson or the move. would bring the top rate to the highest level in 30 years. russia has threatened to retaliate against new sanctions passed by the u.s. house of representatives. the deputy foreign minister said the measures make it opened up on will to achieve the trump administration's goal of improved relations. weekses less in three after donald trump and vladimir putin held their first official meeting at the group of 20 summit. china's industrial firms picked up their pace of profit growth last month. accelerating from the pace of months earlier. it underscores the chinese economies momentum and helps indebted companies grapple with their giant debt load.

sweden has been hit by political crisis that threatens to topple the social democrat led government. the prime minister will have to decide how to respond as they plan no-confidence motions against three of his cabinet ministers. the security breach could resulted in classified information getting into the hands of foreign powers. the u.k. prime minister's director of strategy has time in at a critical negotiations with the european union. he believed the post at the end of this week. the departure means may has lost both her top strategist in the wake of last month's general election. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. you can find more stories on the .loomberg at top

we have the regional index holding a december 2007 highs, the biggest jump we've seen on the msci asia-pacific index and's june 2. the nikkei being boosted by solid earnings from companies including nintendo. you're seeing the asx 200 of my .4%. with theot of concern msci 500 under pressure. noble group in singapore plummeting after it warned of a 1.8 going dollar loss, now all caps almost 30%. nintendo rising after that number the cancer after the bell yesterday. more than 68 billion yen in profit. the nikkei reporting toshiba

chip unit sales could still be elusive. , you can seet industrial profits continue to search. also reflected here in the producer price inflation. there had been some concern that went tpi came off the highs we saw in december last year he could way into industrial profits but that doesn't seem to be the case. concerns that momentum is stalling continue to be proven wrong. one is never wrong, only temporarily interrupted. the senate rejected a simple repeal of obamacare. the failed amendment similar to the affordable care act repeal that passed congress in 2015 and was then be towed by

then-president barack obama. earlysenator still in the stages of an unpredictable floor debate on health care and there are a significant doubts that republicans can muster the votes needed to pass any kind of deal. there will be an all-night boat later next week that could feature dozens or even hundreds of amendment. manus: inflation remains below target even as the economy picks up steam. with the details, here is mike mckee. the fed confirms wall street expectations. concern about inflation and a strong hint about balance sheet timing. the committee expects to begin and lamenting its balance sheet normalization program relatively soon, providing the economy evolves broadly as anticipated. investor consensus going into the meeting suggests the september announcement. the benchmark rate stays in the 1%-one .25%.

in what will be interpreted as a dovish move, it was dropped to a reference of running somewhat below its 2% target. the forecast language has not change. inflation is expected to remain somewhat below 2% in the near term but stabilize around the committee's 2% objective over the medium-term. a bit of a surprise on the balance sheet and inflation language but a sickly it leaves investors where they were going into the meeting, anticipating a balance sheet move in september as a rate move if it happens, no earlier than december. michael mckee, bloomberg, washington. anna: joining us is the global generale.ciete there were some language surprises on inflation but no game changer for people's

expectations about balance sheet news in september and interest rates changes in september. does that remain your expectation? >> argues that the business cycle is coming close to that. we see a slowdown are recession in 2019-22. one of the things that is puzzling is the fact that unemployment in the u.s. is at a 13 year low and yet inflation is still below the target. so there's a big question, is the phillips curve rogan? that is the link between wage inflation and unemployment. we will start to see inflation moving to the left at lower levels than be her. our view is that we should see more inflation going over, but it's just a question of timing. manus: what probability do you put on -- they're still a little

bit of time in growth before that? kokou: if you look at copper 1949 termsin since of how they involve through the cycle, currently a roughly 80% through the current cycle, which has been one of the longest business cycles we've seen. we see a high probability of that occurring. it will depend on whether we see unit labor cost inflation and it's a trump administration is able to pass through tax cuts, the cycle can clearly last longer. but we see a high likelihood of a slowdown in 2020. manus: we're just getting some deutsche bank numbers. $6.6 billion in revenue. the man in charge is in the

process of turning that bank around. $822 million on the pretax profits. you have net revenue of $6.6 billion. thems a very clear ms. for , just to give you some context. fixed income in the u.s., we saw those numbers drop by 16%, so these are the top line numbers from deutsche bank. we will have a conversation with john a little bit later in the day. income comesr net in at $447 million. , butncome is significant will have that conversation a little later this morning. matt miller join me for the first part of the market show

and then he will never often do that. f and do that. the estimate was three $.11 million. anna: you talk about tax cuts and what they could deliver in the united states. is that the difference between recession or not in a couple of years, whether we get those tax cut? kokou: absolutely. this will be a key different you need after this time -- a key differentiating factor this time. literallystories have unraveled because expectation of more inflation has been wiped out from market practice except for the equity market. in our view this is driven by share buybacks at $400 million the year. anna: nestlé reporting

first-half numbers, or granting revenues coming in at 2.3% growth. that's below the 2.7% english four by analysts. this coming through for the world's biggest food company. the reason i mention the buyback , they've had respond to statere on a $3.5 billion last month and announcing a big share buyback as much as 20 billion francs. manus: they are talking about organic growth being at the lower end of the reign. -- of the range. they are building a plant in japan. anna: very exotic. revenues not universally

strong, is they would have liked. they're making good progress in bringing the cost down at the bank. that see what he has to say about this, that the board to be coming to an agreement with the former directors terms of some retained bonuses. in terms of revenue, it's not universally strong as they would of liked. there's a great deal of concern this time last year about capital and liquidity. a lot of business left deutsche bank. that's the top line from john cryan in terms of the business. be back to talk to you in just a moment. we'll get his thoughts on some of the earnings season and how you play that in the market. we have 85 of europe's

top companies reporting through the day. what do you make of this earnings season? this is bloomberg. ♪

anna: welcome back to "bloomberg daybreak: europe." second quarter profits the expectations. adjusted net income $1.29 billion. inl be speaking to the cfo his first interview of the day coming up at 6:30 a.m. u.k. time. facebook investors optimistic about revenue potential for messenger after mark zuckerberg said he would like to move a little faster. facebook reported second-quarter

sales that beat analyst 29.3 billion dollars. , net incometronics rose to a record $9.16 and the three months ending in june while sales by 20%, killed by the success of the new galaxy fortphones and demand semiconductors. that's your bloomberg business flash. manus: let's dig a little deeper into the earnings quarter. we have the global head of solutions that societe generale. getting a sense of the east of the reporting season. nestlé got a little bit lower. sales growth 2.3%. deutsche bank looks as if it has the. , butis the earnings report a natural are one of the

splendid leaders here. kokou: absolutely. one thing to remember with financials in europe is fact that that's gone through a darwinian process of natural selection by their return on equity. they've had growing pains, when you look at a lot of the issues with the eurozone. over the past two months we have three european banks either in bailout are being bought by other bigger companies. the transformation of the dna of the banking system is paying out. variety in's a global banks and european banks, not a great condition compared to its peers. kokou: the price-to-book is out ofin europe count with its peers.

one of the things we should see going forward is less volatility on r.o.e. which is low because of leveraging, and driving lower cost of equity which should improve the price book overtime. it's interesting to point out the profits on the earnings site doing better than the top line which clearly shows the benefit of the cost-cutting, yielding benefits. manus: we have a few more headlines coming through from deutsche bank. they see revenue from their operating business at the lower than last year. transition. it credit loss provisions are likely to increase in the second half. going back to the discount price-to-book value relative to their peers. ac full-year origination up ever

so slightly. line after line about a bank that is in transition. there,out revenues profitability and the top line falling short. manus: we get shell next hour. is this a should -- is this a sector that is a interest to you? we are at a shadow of where we were in 2014. kokou: the oil price has been one of the big surprises because of its performance. we have roughly a target for the oil price but it will be interesting to see how the companies manage their cost cuts that were implemented last year when the oil price was much lower. so we are still early stage in the earnings season. thank you very much.

manus: up next we will dig deeper into some of the numbers. this is bloomberg. ♪ these days families want to be connected 24/7.

that's why at comcast we're continuing to make our services more reliable than ever. like technology that can update itself. an advanced fiber-network infrustructure. new, more reliable equipment for your home. and a new culture built around customer service. it all adds up to our most reliable network ever. one that keeps you connected to what matters most.

anna: welcome back, this is "bloomberg daybreak: europe." 2:30 in tokyo right now. let's not dwell in asia, let's get that to europe. bayer has been in the headlines, second-quarter sales up 12 $.19 billion in terms of sales for the second order. at three point zero $6 billion. the forecast for the crop unit in brazil, there was a big

stockpile there. three different parts of this this. terms of sales, that's a nice beat for the second order. i love what are the analyst wrote down, best forgotten after the profit warning. that's the top line from bayer. they still on 45%. a few more results but we will have a conversation with ceo at a: 30 u.k. time. anna: let's talk about french earnings, dan and reporting. concerning the 2017 guidance, performance in line with dues at they were -- returning to the first half of 2017. with sales to

generating. they bought right way, saying it allows them to increase their guidance. are watching out for underlying sluggishness in the over market in europe. getting numbers coming through from the french market. adjustedcond quarter ebitda, keeping the policy of selective acquisitions. in spain there seen a nice recovery and in africa and the middle east section and return to growth in france for the first time 2009. sales up by 8.8% in spain.

a nice set of numbers for them there. price wars in the french market have been a story little while. let's return to the oil story, norway's biggest oil company reporting its highest profit since 2016. beating average analyst estimates. joining us on the phone is the cfo. welcome to daybreak. well done on the numbers. you are telling us your reduced your overall debt load and the market is most focused on that. what is it cheap of all -- what is achievable on the debt market going forward? hans: good morning, today we

present solid results based on strong production. transformed the company and we have strong cash flow your today. showing that we've covered investments in dividend. at 50 goingthe same it will very quarter to quarter based on price changes and commercial decisions. were not providing any guidance on gearing going forward. anna: going into all of that will be your plan for investment and capital expenditure. cap your outlook at $11 billion but you've cut back your guidance for the same year for spending.

talk us through the thinking behind those decisions. hans: you're right, we expect to read -- retain about $11 billion in activity picking up in the second half. we continue to invest in a world in activity is picking up in the second half related to project activity. drilling and the giant project, so a lot of activity going on in the second half. we've had a successful start of the year with nine discoveries over 14 wells. we're cutting back on the to $1.3 billion related to efficiency gain throughout the organization. itself, theusiness

bread-and-butter is this of the norwegian operations, the market wants to know about the stability of those. can you quantify validation in terms of the norwegian operation? the norwegian continental shelf has surprise people several times. we just made one of the biggest discoveries ever a few years back. that was in the bering sea. we're in the middle of the campaign that is quite interesting. they made too small discovery so far. a small gas discovery potentially adding value and volume, so we have more wells in

this campaign. were drilling generally north as we speak. we have others coming up. i will not comment specifically on the expectations. 40 years of drilling in the bering sea, several big discoveries and we are awaiting the results later in the season. what assumptions are you making in the oil prices? your revised your numbers for 2017 back in february. how does it sit against what you're seeing in the markets at the moment? hans: year to date were seeing an oil price pretty much around 50. there is a lot of uncertainty around production cuts and the u.s.of able inventory and

shale production. we've not changed our goal price projections. we think we're heading to rebalancing based on an increase in demand. remember we had three years in a row with investment cuts. fighting decline is still a significant challenge. we saw moderate decline in commercial oil stocks in may and june, down 30 million barrels since january. a think we are moving towards better balance and that calls for an uptick in the price. manus: cu would dispel the myth that the oil market is having a doubting thomas moment. opec has some serious discussions on further cut. there's a lot of rumors and uncertainty in the market

related that. there's also some uncertainty related to development in the u.s.. it's hard for me to speculate on further cuts made by opec. anna: are to know where that one goes next. a little closer to home, norwegian elections loom on the calendar. i wonder if you have a message for the government around taxation or arctic drilling licenses, for example. any message you want to put to the administration? regionhe message to the politicians is not something we normally do, but we always remind them we need access in and ino do the drilling order to maintain the activity. that is exactly what we are doing. manus: thanks for joining us

this morning. getting ready for the monsanto deal, they're saying the purchase remains on track. they are about to do or discussions with e.u.. that's the line from them in terms of the timeline. dupont, china national chemicals, this is a beast of a deal. $66 billion. anna: let's check in on the broader markets. nejra: second day of declines following the fed. the bloomberg dollar index has dropped below the moving average, approaching the 200 week moving average. some saying if it drops below that level we could see a deeper

retracement to key support levels and we could see the gains from 2014 erased. that's something are keeping a close eye on. treasury yields have been moving lower, 10 year yield study, dropping five basis points in yesterday's session. hedge funds have been building up unprecedented shorts on the two-year treasury. this is what happened after that decision. two jerry kill dropped three basis points. . little bit of a short something to keep an eye on. asia-pacific index higher in today's session. tech stocks leading the gains.

samsung and nintendo two of the stocks leading the rally. manus: one of the world biggest outdoor advertising companies reported their first cap earnings this morning saying adjusted revenue rose. expectsmpany currently third-quarter adjusted organic revenue rate to accelerate to about 3%. a pleasure to have our guests with us here. looking at what you have reported in the first half, net profit down by 7.8%. has us an update on what disappointed to move that number in that direction and what pleased to about this set of numbers. >> we had a revenue decline in

which represented about 54% of fire total revenues, which was upset by strong growth in the u.s.. u.k. atformance in the 6% and solid growth in europe at 2.5%. the revenue decline in france and emerging-market was the reason for this slight decline. growth, driven by return to growth in china and strong momentum in the u.s. and europe, but some ongoing weakness in france and a slowdown in the u.k., where we have clearly outperform the market in the first half with percent growth. manus: i want to dig a little deeper into the two younger the you mentioned.

do you look more towards the united states, do you deploy into the out door advertising strategies there? where do you redeploy or capital as a result of how you see the world? >> would continue to deploy are capital and the digitization of our french assets. we started last year in london and we now operate 784 screens in london which is the reason for the strong performance in the u.k. last year and this year. we are doing the same in new on fifth avenue -- as well as newsstands. we continue to believe that emerging countries will continue to contribute significantly to

gdp growth on a worldwide basis. that's why we continue to invest in latin america where we announced some significant organic contract wins. we recently announced a merger in mexico. advertising business is fragmented in mexico. in china, which is a big market for us, were generating more than 600 50 million euros on a regular basis. delivering $350 million eyeballs on the yearly basis as

well as 35 million on a daily basis in our metro concessions. you lost a very symbolic contract, the bike sharing program in paris. what kind of disappointment was that? why do you think the business was lost to you? bidder on the best all the financial criteria of this public tender and we were slightly more expensive than the other better. time will tell whether the service will be as good as the one we delivered the last 10 years, but having said that, the city decided to split the advertising concession and we retained the advertising contract which means there will be no impact in terms of top line or bottom line.

instead of providing an operating 23,000 bikes with nearly 400 people, we will now pay rent. importanthe most advertising concessions in the world and will be digital going forward. bottom line is that we continue to operate by in many cities around the world -- operate bikes. we pioneered this more than 10 years ago. disappointedsly not to retain that paris contract, but at the end of the day, we want to remain, and our service, quality of services second tonight. there has never been a compromise in the history of our company, which goes back to 19 to see for -- goes back to 1964.

we recently installed panels were people can recharge their iphone or ipad at the bus stop. i'm going to jump in because time is slightly against us and focus little bit domestically and. one ceo said france will need a hero to execute the labor market reform. his macron capable of reading that hero to deliver in france? -- unique a new you window to reform this great country. i hope mr. macron will be able to implement his plan. he has the unique chance, having a strong majority in the parliament and being someone who

is capable of attracting talented people from the socialist as well as the conservative. so it's a unique chance in france. having said that, france is a very difficult country to reform. there will be resistance, but at the end of the day, we have no choice. we have to have more flexibility in the labor market. we have a lot of great talent and startup companies. we are very much looking forward to the macro policy as a businessman. we employee more than 4000 people in france and this is an important time for our country. anna: thank you very much for your time today. joining us from paris this morning. juliette saly has the

business flash. deutsche bank has reported second-quarter income that beat estimates. they said net income was 447 million euros. net revenue came in below estimates. we'll bring your interview with the deutsche bank ceo later this morning. adjusted net income was $1.29 billion compared with analysts estimates of $1.3 billion. between 17 sales growth will be at the lower half of its forecast. anes increased 2.3% on organic basis, missing analyst estimates. haynes the earnings rose to $3.35 billion adjusted basis. grower benefited

after the acquisition of another company. facebook investors are optimistic about the revenue potential for its chat businesses. mark zuckerberg said he would like to move a little faster to make money from them. facebook reported second-quarter sales that the analyst estimates , climbing 29 $.3 billion. >> were seen a lot of content engagement ship to mobile. our goal is to be a platform for content providers to find their audience and monetize. inoing some early investing extorting those systems. we think that kind of video is important, so we are making that investment. anna: let's get back to our

guest here in london. will talk a little bit about your strategy. , awere talking about france good time to talk about what you make of france. he was saying france has no in terms of market reaction. how excited are you about what can be delivered in the french roast story? story -- the french roast -- the french growth story? kakou: france historically has been a difficult country to do reforms. it's interesting to see that a lot of it has been built in two markets when it comes to the euro. since then, one could argue the

has is on match because it rallied quite significantly. data, theook at the momentum is clearly much that been.an what it has however, the strength of the euro could be a drag when it comes to european exporters as opposed to u.s. companies. ofa: adjusted net profit $496 million is above the estimate. we have other oil majors reporting today. first from the spanish oil business. you mentioned the euro that could be a driver and the dollar at a one year low. if we hone in on the flow of it takes you to a directional trade in europe.

you want to be long europe what you want to do it relative to the russell. three bullet points to remember. europe is seeing great economic momentum and it should benefit earnings, you the banking sector. europe is seeing a lot of share buyback here it small caps are sitting on a huge amount of debt that is not sustainable. the small caps will sell for -- will suffer from that load. the final point, this is an interesting trade were you doing up large cap-small-cap trade, and you're also doing a long europe, short u.s. trade. the u.s. is getting closer to the late cycle. so you're killing two birds with one stone. anna: where is your concern in asia? kakou: it's really china with

the nonperforming loan situation. one way to think that china is that it's going through an explosion in slow motion. the government has been a -- has been unable to monitor and manage the slow flow of funds. we see more volatility going forward. manus: we covered the gdp numbers last week and the readings. there's a moment of excitement that china has had its many crash. you are not enamored by the data. kakou: the data can be volatile. we've seen surprises in the past. we think there is a disconnect and that should ultimately be reflected by more volatility in the medium term.

if that is damaging -- if chinese authorities are able to manage statics loge and i suppose it might not have the global repercussions it could have. kokou: absolutely. it's part of the defining gravity exercise through global markets. it does to remember reflect and is being reflected in asset prices. this is something we saw over the past years. much, kokua.you so we're watching a host of conferences this morning.

nestlé, the numbers coming through. keep an eye on airbus. we'll bring you some of that shortly. this is bloomberg. ♪

manus: see you in september. the u.s. central bank says it will start unwinding it balance sheet soon and keep key rate unchanged. treasuriesfalls and climbed. anna: we will break down the numbers from shell and to tell -- totale. manus: deutsche bank keeps shrinking as the investment bank earnings slump. we will ring you the interview with the ceo later this morning. anna: a very warm world --

welcome to the program. i am anna edwards. manus: i am manus cranny. more breaking news on totale. anna: second-quarter adjusted net profit $2.7 billion, coming through from totale, the estimate was 2.3. second-quarter adjusted net profit rising 14% to 2.4 billion -- 2.4 7 billion. the ceo saying that totale has the flex ability to take it manage of the low-cost environment like thing able to launch profitable thought it six -- projects and acquire resources under attractive conditions. they have been trying to exploit the drop in the cost of drilling rigs and other equipment caused by the slump in oil prices anticipating that the mark will -- market will swing to a shortage.

we have seen them expanding in argentina and iran, that is subject to final approval but that is the top line coming through from totale this morning. let's get to shell. manus: a little more from the thomasors, we have show second-quarter adjusted profit at $6 billion, the estimate was three points -- $3.36 billion. the upstream profitability, 300 -- $330y $9 million million. -- is $.47 ain share. in the first quarter they had this splendid moment of where oil was at turning above $50. the adjusted net profit $3.17 billion, a beat against the estimate of $3.36 billion. the liquefied gas -- natural gas sales rise by 20% to 32 point -- 32.1 million tons.

gas production volumes are positively impacted. how do you think about shell, is it a gas company or an oil company, that is the question. the transformation and integration of the bgc. you look up the anglo american numbers and i have numbers from lloyds. deutsche bank, we have the u.k. corporate and tomorrow in the banking sector, second-quarter underlying profit coming in ahead of estimates, 2.4 billion pounds. the estimate was 1.9 8 billion. despite the fact that this is reliant on the u.k. and people have been talking about what kind of slowness they are saying in the u.k. economy, this is a decent set of numbers coming through from the second quarter. we have first half metrics coming in. companyof this returning lloyds banking group to private ownership shrinking

the lender back to its domestic routes putting some of those is conduct scandals behind them. investors want to see growth coming through. this is one of the stories we are looking out for here and to what extent are they seeing an impact from the brexit conversation question mark this bellwether of the u.k. economy, looking for details on loan interest income. interesting in light with the ink of england said that banks were heading toward a spiral of complacency and consumer lending. interesting to see what the company had to say about that. manus: a little bit of news coming in from anglo american. the first dividend for them in quite a number of years. completelys disappeared. first dividend payment from 2015 adjusted earnings per share a buck 19. a buck 19 in terms of the earnings, mccoury wrote it could be christmas in july. that is the potential. santa claus has arrived for shareholders.

it has been a tortured road. they cut the debt to $2.6 billion. net income $1.4 billion versus a loss. point -- $8.0ight billion. these are businesses and transition. the dividend policy is there, they target a ratio of 40%. save by anna edwards for breaking news. give that woman an oscar. anna: financial guidance in 2017 reiterated over at the drugmaker. eps, thearter court numbers coming through from the company at $.87, the estimate was for $.80. low toar core eps down mid teen percentage and for your revenue down low to mid single digit percent. we will be running those passed what they a previous expectation was, i am checking in on that.

futures are indicating higher, there is going to be a raft, 85 companies have reported today. we want to bring you a correction in terms of shell. we had 85 companies reporting on the stoxx 600. profit for shell, three points it's billion. my apologies. -- 3.3it was an estimate 6 billion. 3.36.timate was for 85 have reported. we are looking for ski in terms of the numbers. record highs in the u.s. and the doubt inhat moment of terms of the veracity of inflation. anna: the fed in no hurry to raise rates, the conclusion that some people took away signaling below target. is

unwinding the balance sheet relatively soon. let's put up the race greater and show you where we are in assets because this story relates to where we are in the session. -- does this mean that september, is that where we are in terms of the u.s. story westmark the bloomberg dollar index showing a little bit of a retreat right now. the lowest in more than a year. all back to the fed. manus: and the lovely line in the daily profit saying is the dollar the new volatility in the utility index? of 1%.. dollar up half it is breaking out, breaking free above its range bound limbo. where about $.80 against the u.s. since 2015. the question you can ask, one is commodities, to his china and three is the fed. shall we look at the bond markets? the bond markets in terms of the oat's and bunds.

that is post fed reaction. anna: let's get to another corporate story. that came infit below analyst expectations, profit before tax declined 19% from a year earlier to 69.5 million swiss francs. ons was banks cited pressure margins in the asset management business. to the ceo, get think you for joining us. i haves of the quarter, just returned from julius baer and the line from the ceo was a decline from two much cash and it is difficult to get them to move. what are you seeing in your quarterly numbers? guest: i agree, declines are still with a significant part of their money on the sidelines, declines are passive and their behavior. try percent of the holdings of our clients is in cash, we respect that and they failed to

fill in topline margins. anna: you have been talking about flagging margin pressure in the asset management business. where's the pressure coming from and you see that changing? : i do not see it changing, it is coming from the [inaudible] and a low yield environment. we are defending very well, we are very specialized, high conviction, after this acted desk active asset manager. we are very confident that this will remain so going forward. also the overall industry is trendnged by the general to passive and by the low yield environment. is a theme,lidation acquisitions, we have seen europe tidy up some of its banking issues so the question to people like yourself is, to what extent can we expect to see

you acquiring assets, acquiring ,anagers and wealth managers etc. in the marketplace? are you going to be an active player in the asset management consolidation story? o: absolutely and we have been. we are a clear winner of the structural change in the market. we have done three acquisitions over the last two years. we have acquired the majority inke in 24 asset management london in 2015. we have the italian market and we have bought the leading [inaudible] and's disdain ability -- sustainability specialist which is more important to us, we are leading in terms of organic growth we look into our wealth management division which grew 6.8%e first half year with annualized growth rate. we are a clear winner of the consolidation and we intend to continue i gaining market share,

by attracting great people and by adding up on the m&a side. we have the capital and the ability to execute. making -- you are making changes. give us the background for the opening of your new york office. why is this the right time to do that? zeno: as a specialist and focus boutique as we are, it is almost always the right time as long as you are convinced about your capabilities and about the value proposition they bring to the client. what we have opened in new york is an office for our sec wealth advisor offering which is a dedicated offering for u.s. citizens that focuses on below asset allocation, global diversification with swiss quality as a backbone. we have been doing this business since 2009, it has grown by an average of 10% over the last

years. we have offices in zurich and geneva and dallas and we have made the step into new york where we have been present since 1984 with our asset management and our brokerage business. always curious when i speak to a ceo, you see the political news flow in the u.s., here in the u.k. and in mainland europe. your-- to what extent do clients talk about that and to what extent are they vexed about two of those geographies and seeded by one, i am referring to the u.s. and the u.k. and the optimism in europe. are not political scientists but it has clearly changed the amount of time we spend with clients and using our research to think through risks has grown. nevertheless, we are still convinced that everything has to a fundamental

economic view on companies and markets and then in a risk layer, you have to think about political themes. you should never allocate money top down from a political opinion, opinionated view of the world. so we stick to what we know best wishes a mental analysis and economic thinking, but yes, the need to add a risk management layer due to the political situation is clearly increased. the time we spend with clients especially talking about the changes and developments in the anglo-saxon part of the world is -- has increased. anna: you mentioned your defending ourselves well against the index tracking funds. tell me what is your best defense as we witness this big shift in the way that people choose to invest their money. what is your best defense

against those businesses? true focus on high conviction active asset management and that means high active shares, concentrated petroleos, and through the cycle overtime, outstanding risk-adjusted investment results, that is what we do since almost 100 years and that is what we deliver with outstanding track records in many strategies for 10, 20 years. it is focused. what is dying in the marketplace are passive managers and -- in disguise which are people who try to sell index hacking for active fees, they are dying and this is rightly so. manus: keep the focus. anna: nice line. thank you. you onwe will speak to the next round of results. we will continue the of inkation with the ceo

joining us with the first conversation of the day. ♪

manus: welcome back. breaking red headline on astrazeneca. the drug trial is called mystic combo trial did not meet the point.nary end this is a line coming from astrazeneca. the mystic drug was also [inaudible]known as be one of to astrazeneca's biggest medicines by sales. tagged as.t it was it has put on a huge amount of value, 16 billion pounds on the basis of this would be a blockbuster. that is a bit of temperance on that. anna: that is one of the corporate's.

let's have a look at the broader market. . your stocks 50 is down by -- the euro stocks 50 is down by 8%. there are a host of individual earnings stories behind that move. we had 85 of the stoxx 600 are reporting. the bund yield, you can see some movement. 53 is where we trade on the german bond market. manus: this is awesome like -- ozram licht. making iris scanners for smartphones. great to have you with us this morning. momentum.ding to this samsung are telling the world they expect to see more spending going on, more capital expenditure on the chips part of their business, your third profit -- quarter profit beat.

take us through the quarter. ingo: thank you for having me. we delivered a solid quarter with their growth for osram. if you went for a special pre-buying situation the underlying growth is north of 8%. the profitability on an adjusted andda level was positive cash was positive despite a much higher capital expenditure level went can -- compared to a year ago. we expect for the year to grow between senate percent to 9% which is a very strong performance. stake in a minority company which is a leading player in the field of [inaudible] lots of good developments for osram in the quarter. anna: i looking at every line of

the earnings statement that has been flashed up here and everything seems to be coming in ahead of estimates. in terms of the everyday -- ebi up andy not go the next suggest you will do better than what you said already? ingo: we are positive about the business in this point. there is the seasonal low point for the business as we enter the summer season and the automotive business goes on holiday breaks. it is nothing unusual, we have seen it in the past. so we are sticking with the guidance that we issued a quarter ago. manus: you touched on the auto industry and we are curious to get your perspective in the second half of 2017. the u.s. and chinese are markets are expected to soften back a little bit. in the u.k. it is softened.

are you seeing the softening on that side of the business? your outlook for the second half there. see a softening in the u.s. where if you look at the official forecast them a production growth is forecast to decline for the calendar year at 2%. we are still growing in the u.s. because the content that we put into cars has somewhat of a different growth pattern so we still expect positive growth but overall, the market is expected to decline. is our growth driver. we expect the growth in china to pick up again in the second half of the year but the last quarter we saw a little bit of a slowdown but that was because we had a really strong first half in that market. now we are taking a breather. for the rest we think market is going to pick up again and europe is on a good level. we have seen some of the earnings results of other companies this morning.

in the auto industry, we are seeing that as well. we are positive also but the u.s. is on a decline at this point and china is taking a bit of a breather. anna: your business has shifted its focus to making high-tech components from producing lightbulbs another lightning -- lighting equipment so this is a business and transition and there are others who have been moving away from bulbs as well. ge is looking to sell some of its operations. ingo: we sold the business that e. were competing with g we are not interested in that part of the business because we believe that the footprint we have right now is going to take us into the future and the that we sold which is similar to what ge is selling, it is more the bulb making and

we shattered that business. manus: one final question on that same, where are you interested in doing acquisitions, it is not in the ge lighting business. is that what top sure agenda them at internet of things? our agenda iss the theme of economists driving. -- minorityk in a stock in a company which is a digital writer for -- provider for anything to do with economists driving. -- autonomous driving. if you look at semiconductor leded technologies such as where we are strong at, if you combine it with electronics and software you increasingly have a very promising growth opportunity for intelligence -- intelligent lighting solutions and those are the opportunities we are looking for right now. anna: we will look for that. thank you for your time.

let's talk about the oil sector, earnings from shell, totale, the list goes on. talk to our oil and gas analyst. how sustainable is the austerity that these will companies have adopted in this low oil price environment? >> this is all good now, they have delivered great results, great cash flows but this is an existing assets, fields, and discoveries they made years ago. the question is what comes after that? they need to keep making discoveries to develop the fields in three to five years and that is a big question. manus: we had a conversation with the ceo of statoil. he was tempered in what he said about the expansion and this is the core, they need to develop new things as they will face these shortages in a couple years time. >> the big question is the air sea.ee -- baren

barenestion is will the sea revealed the discoveries they are hoping for? anna: what potential is there for technological advancement, is that where'd companies that do will will set themselves apart? >> producing oil and fighting oil is not easy but it must not get more expensive. the oil price is low for some time. cost inflation must be kept at bay and not make it too expensive. manus: thank you. futures have turned around a little bit, we have an update from lloyds. on second quarter underlying profit. second lineting the

profit before tax. 1.4 9uld have read billion. the european market open is next. we have the ceo of show, anglo-american, and bear -- bayer.

manus: welcome to bloomberg markets, it is the european open. we bring you the first trades of the day. i am manus cranny in london area and here is what we are watching for you. it is super thursday or day from hell as companies worth more than three chilean dollars post earnings. we bring you the ceos of some of the biggest. , do not relax. the fed signals it intends to begin producing its balance sheet in september.