♪ >> coming up on "bloomberg best, the stories that shaped the week in business around the world. the federal reserve holds the line. balance sheet normalization seen relatively soon. we hear what that will mean for markets going forward. >> to me it means higher tenure -- 10 year rates, perhaps 2.5%. >> and earning bonanza. we hear from -- the busiest week of the season, we hear from tech giants also but, samsung, amazon and face. guest: we had a really strong second-quarter and it was based on increased engagement and increased ability to work with marketers. >> deutsche bank earnings disappoint, revenue falling the most in three years.

>> we used to focus on cost, now we need to focus more on revenues. >> we hear from deutsche bank ceo and ceos of other european banks reporting this week. major data out of the u.s. and japan. we size up the state of the global economy. >> i think the economy is picking up but if you look around the globe it is happening elsewhere, so i do not think the bank of japan can take credit for that. >> it paints a picture of an economy that is effectively treading water. >> it is all straight ahead on "bloomberg best." ♪ david: hello and welcome, i'm a david gura. this is "bloomberg best," with weekly news, analysis and interviews from bloomberg television around the world. let's start with the top headlines. to week began in st. petersburg, russia were opec leaders gave

their commitment to continue cutting imports in order to best exports in order to put a stop to the global supply glut. thee're pretty sure that process may be going on at a slower pace than we earlier projected. but it is on course. it is on course, and it is bound to accelerate in the second half because of these numbers. >> august is going to demonstrate further leadership by saudi arabia. we have informed our customers of a deep cut in our august exceeding 600,000 barrels per day. also, august is coming to experience the maximum demand within the kingdom of saudi arabia. >> more of the same, it is going to get that her, it is going to get better. but the saudi push seems to be ramped up just a bit.

>> yes, it is also the overall projection of strength that the saudi minister put on today in the past few hours. they are still camped out behind me here in the hotel pointing going to sticke with our lead by example model. i asked him if they would continue over complying, and he said yes will continue to do that. that is how we do business, from the very beginning. also, those who are not pulling their weight in terms of compliance, which was key going into this meeting. onsaid we will go heavier in them. it will no longer be tolerated as much as it was in the past. then you have the destocking that the nigerian minister is talking about he says that there are going to be picking up and there was no need to refine the agreement. having said that, they are exporting all future options for future adjustments. fascinating to say the least. >> i did not collude with russia, nor do i know anyone else in the campaign who did so.

i had no improper contacts, and i have not relied on russian funds for my businesses. i have been fully transparent in providing all requested information. >> a number of senators, or too -- particularly democrats that have said that they do want to see him in public. i think clearly democrats will not be satisfied until he appears in public. i think at some point, he is probably going to have to, given the number of questions still swirling around about it. >> was there anything in the statement specifically that stood out that in your sins, politicians thought seemed vulnerable. that they wanted to understand more about? >> one good example would be the statement about how he did not rely on russian money. we are not quite sure what "rely on" means.

is that something said carefully or was it just a word he chose, so that is an example of something that democrats said they would like to learn more about. ♪ >> the senate being equally divided, the vice president votes in the affirmative and the motion is agreed to. >> gavel has been struck. the vice president breaking the tie, and the senate has now approved, voted yes to go ahead with motion to proceed. they can now begin debate on the health care bill. >> i am very happy with the result. i believe that now we will, over the next week or two, come up with a plan that will be really, really wonderful for the american people. >> i know the president is going to be doing a victory lap on this. it might be a little too soon to celebrate, though carried it is still a bumpy road ahead. anna: the president will be -- the senate vote on the amendment to the health care bill am a guinea repeal bill, it seems the senate lacked the votes on the skinny repeal.

this being brought by the senate gop leader mitch mcconnell. >> this is a disappointment. a disappointment, indeed. our friends over in the house, we thank them as well, and i regret that our efforts were simply not enough. this time. >> what will be the response of the white house? >> the president is tweeting, tom, just after the vote failed in the senate, saying three republicans and 48 democrats let the american people down. as i said from the beginning, let obamacare implode and deal. watch. of course, he was talking about senators lisa murkowski, and john mccain -- the latter of him was a big surprise and the literally audible gasps on the floor at senator mccain having returned to sender -- senate and voting against the health care bill. >> no change in policy, concern about inflation and that hint about the balance sheet jeff was

looking for. the committee expects to begin implementing its balance sheet normalization program relatively soon. >> the fed is keeping to this narrative of transitory factors holding down inflation so that they can get on with the balance sheet renormalization. then the focus shifts to notmber, as to whether or inflation has proceeded enough along the path to give them another hike. >> i think the fed will stop raising short-term interest rates, maybe 25 basis points, maybe not, and start disinvesting in 10 year treasuries by reducing the balance sheet over time. that means, to me, slightly higher 10 year rates. perhaps to 2.5% over the balance of the year, but not much. ♪ mark: one analysts saying he is having one of the best earnings days, that he is experienced in over 20 years. james edward jones, arriving today in london. at the same time, the world's biggest -- reported results.

15 minutes later, came nestle's then dannon, diageo, british american tobacco, all of them -- before 7:50 a.m.. james edward jones is still with us. he is on the phone. crazy day. you're not even done, are you? we have l'oreal in a few -- roughly 26 minutes. >> 706 million euros is market cap reporting today. incomesly enjoy reporting on at the same day, you just have to focus on what is important. the problem today, is that it is possible to work out what is important. something i missed for example was the sales in the u.s., and i had to go back and revisit it at 11:00 this morning. so, it has been hectic. ♪ >> we are watching all of the economic -- economic numbers that have come out. inflation not really budging, still essentially flat there in

japan. we did see retail sales miss on the other end. household spending, a nice tidy beat there. kind of a mixed picture there that we haven't seen with economic numbers out of japan. >> at least these numbers do not really change our view that despite the labor market tightening, and upward wage pressures, the pickup in inflation is going to be very muted in the near term. >> i think the economy is picking up but if you look at around the globe -- it is happening elsewhere, so i do not think the bank of japan can take too much credit for that. inflation is weak, and in fact if you look at the service inflation, which is probably the best gauge of domestic prices is in japan, it actually turned negative last month for the first time since the bank of japan launched quantitative and qualitative easing. that is a big sign that the policy is not gaining much traction. >> the gdp number is a mess. it comes in at 2.6%.

the estimate was 2.7%. this is second quarter annualized gdp in the united states coming in at 2.6%. the estimate was 2.7%. >> the pce headline number comes down at best comes down from estimations. inflation is just nowhere to be seen. >> it is a soft inflation picture. it paints a picture of an economy overall which is effectively treading water. maybe a reflationary dividend will be paid later on a year -- later on in the year which will upset the apple cart. we will see this weekend, the markets reaction to it. we saw the downgrading of the inflation outlook and the market took that as a ha moment for the third rate hike this year. treasuries rose, dollar gained. ♪ >> tech earnings on tap. we digest the results of alphabet, facebook, samsung and amazon.

and deutsche bank that's the wrong way on u.s. inflation, sending second-quarter revenues south. we want to -- we will hear from the leader of germany's largest investment bank. >> we said that if revenues do not meet our expectations -- the -- there is good and bad. the micro investment environment and europe is still very positive. >> this is bloomberg. ♪

♪ david: this is "bloomberg best, " i am david gura. let's continue with our week's top stories. tech earnings, starting with alphabet. >> alphabet shares dipping in after-hours trading. google's parent company releasing second-quarter earnings which initially sent shares soaring, then turned south. revenue for the search giant came in at $26 billion, up 21%. year-over-year, but aggregate

costs dropped 23% from a year ago. these numbers include the effect of that $2.7 billion fine from the european competition commission. i spoke to the cfo about the fine and she told me, it is so early for our analysis of the decision and it is illegal mark -- and they haven't decided if they will appeal. shares were up and then down, cory. why did that happen? >> this is more about traffic acquisition cost. >> i think so. i have warned of a big change in their business -- they will be more mobile and more programmatic, it is going to cost more, and this time we saw it. >> we talked about the adpocalypse this year when they were really criticized for their extremist content shown next a prominent advertising. a lot of advertisers pulled their campaigns. it seems those advertisers have returned. i did ask about this and she

reiterated that it was strong. they have returned and we continue to take very seriously the issue and we are doing all that we can to protect the ecosystem. >> a lot of them have made a lot of noise about this, but they also like the traffic, that google is giving them overall. in terms of clicks from their ads. i mean, the google ad is like nothing else in the history of advertising in that you can actually see the results of an ad as it runs. and advertisers like that. ♪ >> facebook turned out faster than expected, quarterly sales growth fueled by continued strength in mobile video advertising. the social network now has over 2 billion active monthly users and is steadily driving revenue at a faster pace than other text giants. facebook has also been heavily investing in original content and the first shows are expected to come online in august. i just got off the phone with facebook ceo sheryl sandberg who explained the strategy. >> so we are seeing a lot of

content viewing and content engagement shifting to mobile and our goal is to be a platform for content providers to find their audience and monetize it. right now, we're doing some early investing in kickstarting the ecosystem to promote video -- episodic video viewing on facebook. we have a lot of video views on facebook, but not really of that kind which is why we are making an investment. we hope to have content providers creating the content and finding their audience on facebook. >> frankly, for facebook to be producing original content is a major shift for them away from the approach they have always that they wanted to take, which was to be a neutral platform for content created by others. so typically, when they have defeated from that in the past, they have given up, so i will not be surprised if it doesn't work. to be honest. >> cory, what do you think about facebook as the new netflix? thing in america seems to be selling content and making content. you have anyone from hulu, hbo,

netflix, amazon, all of them buying such content. >> i think when facebook looks at this, they want to see what works. it is a company that has as a part of its culture, experimentation and trying new ideas. i think this one is just so sexy, we will see if they actually try to roll this out in any kind of scale. ♪ >> samsung at record highs, not surprising given that their profits have beat estimates. we are talking about net income surging $9.6 billion last quarter. the company is such a big part of the south korean economy. >> it was a strong quarter for samsung, estimates were quite high, about $9.6 billion. that was about 10% ahead of the average analyst estimates. so, a strong performance and part of it was driven by the samsung smartphone business, a comeback from the note 7 troubles that they had last year, and also the chips business has been very strong for them.

so samsung is benefiting from not just the smartphone business itself, but also making a lot of the components and selling to them to their rivals, including apple and xiaming and other competitors. >> you know what, it was a very solid set of earnings. we are used to these crazy beats, is that why you don't sound very impressed? >> well, it remains a tough market, if you look at the overall smartphone market, it is till very flat. and it is very difficult to differentiate that smart phone from hardware. so of course, when there is a product launch, there is rush to create a revenue search, so we still need to remand a portion of the long-term, -- how some -- samsung can differentiate their product beyond just the hardware. ♪ >> amazon dipping in after-hours trading due to disappointment with its financial guidance, especially its projection of a potential loss in the coming quarter. the company's second-quarter

earnings per share, $.40, missed estimates, showing amazon is trying to set up competition microsoft walmart, and alphabet. >> below expectations, a bit unusual for this company, they tend to fluctuate wildly. and investors have been trained to focus on what jeff bezos wants them to look for. >> exactly, what we've seen with the stock -- whenever there is a dip in the earnings every quarter, the stock pulls back and investors pile in. and try to look at that as an opportunity. because again, the long-term lish story for the amazon play is growth in online retail sales and obviously amazon is the dominant player there. fromcontent different these other things, in which, maybe there can be multiple players? spending $4.5 billion on content, only bested by netflix. we have never seen a company

show up with this sort of artillery in any chosen field. even in an adjacent category. whole foods, they're about to become the fastest-growing within, retailer potentially the largest consumer market in the world. i'm sure a lot of people here shop at whole foods, and they would shop there more if it was less expensive, guess what, it is about to become a mercedes for the price of toyota when , amazon brings its over rational excellence, it will happen. >> it looks like revenue growth though, has been slowing down. in the first quarter, revenue rose 42%, that was down from 47% in the preceding quarter. or 55% in the quarter before that. this is a deceleration of amazon's most profitable unit. >> yes, this is a business growing very quickly, but it is a competitive business. microsoft is in the marketplace, with a very compelling product. facebook and others, google in

the business on the cloud business, so this is a business that is competitive, it is subject to severe price cutting across the board. what is happening in the cloud base are all of the companies are going for a share right now and we've seen that in the pricing. but i think long-term, it is kind of a real estate game here. they are trying to get as much real estate as they can in the cloud business because this, again is another long-term secular story. ♪

♪ david: you're watching "bloomberg best," i am david gura. just four months into his latest turnaround plans, deutsche bank ceo john cryan is already dialing bank ambitions. what is weighing on the banks? -- germany's largest bank? my colleague sat down with him in frankfurt. >> we continue to work on our costs. yes, you probably saw that the

headcount has started net to come down. that is a mixture of the work that we did to restructure in germany, which is now almost complete. but also, we have been internalizing some of our technology in particular. head down will come down -- headcount has come down which will come through as reduce costs in the future and we continue to modernize the bank. we distinguish between running expenses and investing, and we want to keep up the investment because we do need to move on with the modernization program. still a bit of a mixed picture, but we have been focusing on costs and now we are can be more , focused on revenues. >> he bought -- brought renumeration down to some extent in the last few years -- have you started to turn that around because surely if you want to get the best talent, you have to pay for it. >> we recognize that we were a bit of an under payer and we need to rectify that. matt: is that one of the reasons

equity trading revenue has not only been down, but under for formed -- underperformed your peers in the u.s.. john: i would argue against that, especially in fixed income. we lost a bit of market share and we are down quite a bit. it is in the pack. we think there are some underlying factors that. we need to invest more in electronic trading. in cash trading and derivatives, i think we are ok. we have seen come back, but we have more potential to make revenues and finance. those balances are back, and once activity levels pick up should see an improvement in revenues. matt: how much market share do you expect it takes, even if the whole pie is shrinking, you still want a bigger piece, don't you? john: a little bit, but we do not want the bank ever just chasing after market share. the byword here is always long-term sustainable profitability. obviously, revenue shares are important, but we need to make

sure we are relevant to our clients by investing in systems and in people. we have been, particularly in our advisory side, but also in equity sales, trying to build up the numbers. that also works under the new rules coming next year. matt: where will you build up the numbers? where is your business, because of brexit, obviously, everyone is going to be wondering where you will be focus based? john: london will obviously be an important venue for us, but we will also try to focus on germany little bit more on countries in europe, in particular germany. we will try to straighten the roots of a bank here. matt: what is the headcount, moving from london to frankfurt? john: whether we have an adjustment to where our people are, depends really on what brexit looks like and what the rules are. what we said is from the perspective of contingency planning, we need to ensure that we can do in germany, pretty much everything that we can do in london today. we know that means moving,

adding at least, some operations people here in germany. i am not sure about moving. but certainly from the perspective of making sure that the competences are the same, we do need to build here in germany. there is a positive impact here. we don't know what the impact will be in london. we genuinely don't. matt: what will your business -- what would you guess your business will look like in london, post-brexit? john: i guess that eurozone clients will gravitate towards doing more business within the eurozone, because going outside the eu adds a modicum of risk, bookas they don't tend to in our tokyo branch today. it probably will gravitate to europe. we have to respond to the way that clients react. matt: let's talk about your revenue outlook. you said that revenue, i believe operational revenue at least, will be smaller this year than last year. can you quantify that? a little bit more precisely?

john: if you take the first half as a whole, that will be a little bit indicative of the new footprint of the bank. revenues do not meet our expectations, and there is good and bad, but i think the microeconomic environment in europe is very positive. there are aforward, lot of predictions for growth at the end of the year, up to 3%. that is a way of taking down the u.s.. though, we should be very positioned. we think that we are positively exposed and if interest rates go up will make a lot more money with out -- without any additional costs. our american peers have reported already have said pretty much the same thing. there is a lot of positives tailwind to that. but the timing of those improvements, it is difficult to gauge. ♪ >> deutsche bank was not the only european bank in the spotlight this week. coming up, we hear from other executives lead in europe's against banks. ♪

♪ david: this is "bloomberg best, " i am david gura. the global growth story is part business and part government. geopolitical tensions, trade and central-bank policy have been factors in local growth. -- global growth. we start in united kingdom, our reporter spoke to a trade official in washington where he began preliminary trade talks in cash with the u.s. against britain's exit from the european union. ♪ to lowernot willing standards, but we are looking for areas where we have a greater overlap. so, in areas perhaps like dispute resolution mechanisms, we may have a closer view to the

u.s. whereas a lot of areas we may be closer to the u.s.. that is for us to find our way through. ultimately, we are setting united kingdom standards. be --neither are going to we are neither owing to be members of the eu or members of the you ask. -- the u.s. central bank. we will try to work to our mutual interest. ♪ >> what happened to inflation, and what is that going to do in reacting to the apparent lack of inflation right now? >> for a while, i think the cyclical explanation was dominant. we now know, as many of us suspected, there was more slack in the an economy -- economy then the unemployment numbers had suggested. under those circumstances it is not surprising that inflation remains soft. now, though, after a long period of employment growth substantially above the levels needed to deal with new entrants, one begins to wonder whether other fact is have been at work, things like the end of

the commodity super cycle. is finallybor getting a higher purpose for -- proportion of the returns to industry and that is being eating by companies rather than resulting in price increases. those types of explanations, i think, need to be considered. >> what are the risks of going too slow in getting runaway inflation or asset inflation bubbles, as opposed to really slowing down the economy? >> one of the most important factors of the last several years, for people thinking about monetary policy, has been the fact that with interest rates low, still quite close to zero, should we get a shock to the economy, there is not much room to reduce rates. when you consider the fact that in the normal recession, fed's response would be 700 basis points of easing, there is not room to do that. therefore, there has been a sense that risks in the structural centaur asymmetrical

to the downside. side ofs on the other runaway inflation seen pretty modest at this juncture. ♪ how important was the climb down in your relations with the eu? >> our relations with the eu are not so rosy over the last 18 months, i believe there were a lot of misunderstandings. in all of this. i know it is very difficult to explain in a couple of seconds, but everyone agrees that the post community judiciary cities -- system needs reform. there were no -- not too many changes after 1989 when we started the transformation. now, the reforms have to be thought of by the judges, by the president, by parliament, opposition parties. you will see what the next propositions will be on the table. mark: are you ready to take

action in case markets, sentiments turn against poland? >> markets and investors are for me, critically important. what i can assure you is that we will do everything to make sure that investors are happy, they are -- certain about our democracy, legal situation, and so on. ♪ >> multinationals play a major role in global growth. this week we talk with top executives of major companies on their business plans. ♪ >> when we invest on the customer's agenda, they respond well. it doesn't mean they want to pay more, they truly appreciate -- if they go to the supermarket the usually have to pay more. mcdonald's, we want to make sure -- we are democratic and affordable for everyone. >> why is it so challenging to make the transition to fresh beef?

>> you can start from the supply side, if you think about the way -- not just that you prepare the fresh patties versus the frozen patties, you have to transport them and store them. so you need more freezer space. then you get to the restaurant, and the handling of the food needs to be done differently. cooking times on the grill are different. ultimately, we recognize that and we had customer saying that customers saying that it is juicier, tastier, and more beef flavor. it was very encouraging and we went ahead. our job is to solve operational challenges and deliver what the customer is asking for. >> chipotle found out what it is like to get the supply chain wrong. >> you concerned -- are you mindful of their experience when working on something as challenging as fresh beef? >> i think we have been mindful since 1955, every day. we never take for granted -- we

have 60 odd million customers a day visit a mcdonald's all over the world. the absolute number one priority for us is food safety. hit -- risk on the horizon that everyone is aware of and that is , nonperforming debt. your bank is not in that category by design, but it is a risk. maybe you can tell us what kind of a risk it is and is it a hurdle or obstacle? >> the governments have put in good measures which will lead in to a resolution. they have brought in the insolvency act, asked regulators to be more active, approached the banks with tighter standards, and the big borrowers that created a problem, have singled them out and the banks are required to swap them out in the next six months or refer them to the bankruptcy court.

so, i do believe that over the next 12 to 18 months, this problem should not be that much of an issue. >> what about growth? >> we are, again, fortunately positioned. when you take where we stand today, we probably have the best brand in the system. we don't, as you rightly said -- we like the old-fashioned banking, i give you money, you give me my money back. or we have a problem. so, we don't have any asset issues. we are in a country that is growing at 7.5% and could be going to 8% once capital comes in. we have also, during this time, with the use of technology, taken our products to rural india, where 60% of the population lives. previously it did not make sense from the cost of revenue basis, but now, our ability to deal with them on mobile, take photocopies and send messages, the ability to provide them back

up, train our people electronically, we have gone there and that accounts for 20% of the business. we are almost the market leader, we are almost the only major financial institution on the asset side of the business. so the country will grow, and we -- the country will grow, we will grow in combination of increased market share and increased geographies. i don't think it -- growth is an issue to the future. ♪ manus: you did the block us to deal -- $50 billion deal. the question in my mind is, a, would you ever reach out for a deal of that size and that magnitude again? >> not this year, i would say. but, joking aside, it was a good deal for us to do. first of all, much of the results that you are seeing today, of course, are on the back of that deal. we have been able to bring in high quality assets in brazil, australia, with a lot of growth.

also places like kazakhstan and other areas. it has afforded us to upgrade our portfolio, but in a lot of growth opportunities that we are still harvesting. we are still growing our cash flow on the back of that deal as well. altogether, it is a deal that has worked out very well. the synergies, we think, by the end of the year, we will be done with the synergies. the $4.5 billion that we promised in capital markets mixed year, we will get that eye -- next year, we will get a year early. so what i do something like this again? yes, absolutely. do we have something in our target at this point in time, i don't think so. ♪ >> the results that we announced in the second quarter are good because all of the engines they have are doing very well. looking forward, we believe the momentum is still there. but some of them are

market-driven, so it is hard to forecast exactly what the future will look like. what i can say that the momentum created since the end of last year has continued into the second quarter. >> wealth has done really well and and completed your acquisition of workplace in november. have you fully digested barclays at this point? >> yeah, barclays is fully integrated into the bank of singapore platform. we have been able to cross sell the capabilities that barclays had into our original franchise. so, penetration ratio has really increased. >> are there plans to further expand the wealth management business, because when you take a look at the number of billionaires, one billionaire in asia is minted every three days. so there is great potential. are you looking to hire more, acquire more, what is the strategy? >> we will continue to build the business. organic growth, as well as well as through the addition of rm's which will recruit from the market. with respect to whether there will be further acquisitions or

not, it really depends on market opportunities. ♪

♪ david: you're watching "bloomberg best," i am david gura. in addition to deutsche bank, credit suisse, and barclays also reported quarterly results this week. we spoke to all of them. let's start with the ceo of credit suisse. ♪ >> i think our strategy is working. as you say, it is 18 months out of 36, and i believe that we are delivering. he said we had a jump in growth and we have generated almost 23 billion of m&a's in the first half. our best performance since 2011. so it is very, very good.

very good years for wealth management. growth is back and profitable. profit is up 21% year on year. we said that we would resolve the capital issue, we have seen move capital rates are now 13%. we said we would cut cost. we have cut $1.9 billion in 2016, 600 million in the first half to read we have a target of 18.5 for this year, and we said that we would reduce risk, it is now 47% down. the sru is half the size it was 18 months ago. we have been growing, cutting costs, reducing risk. >> revenue is beating expectations, but flat somewhat. will that change? >> know, it is right on expectations, up 9% over the prior year. it is good to grow 9% every year.

financial service is a very good performance. a bright spot. revenues grew even faster, for the first time. if you look at the and send be -- if you look at the statistics, we grew 5% while other companies in the market grew through .5%. francine: on the swiss bank, it is one of the few units with high risk returns on capital, -- does it validate your strategy? >> we have always said we could grow pti profit. it is up over the past two years. i think we can actually grow, and the swiss universal bank is a very good leader, and we are a universal bank. we can play on every level. ♪ >> if i look across the board, very strong momentum. we had growth in our

international business of 6.6% on a very high base. this is in fact because we have been producing our plant advisor accounts, and demonstrating that we can grow with a quality and we're not focusing on quantity. we will focus on quality and we can perform in different market traditions. -- conditions. >> you mentioned the institutional client activity slowing down and the pre-tax profit of the investment bank being down 6% in the past quarter. this is not anything surprising, concerning what we've seen out of the u.s. banks. when do you think that good take--tick up again? >> despite the market conditions, we returned 18% on allocated capital.

so, of course with volatility levels being so low, all institutional clients have been on the sidelines. until you see a little bit of a cap there in volatility there it is difficult to see a change in the behavior of our clients. we are also entering -- in the middle of the summer, a time which is from a seasonal standpoint not the best time to -- time. but i am confident that most important for us is to show that -- with our investment bank that under any market conditions, we are able to perform, not only to shareholders, but to clients. this was the case also in q2. ♪ >> if you look at domestic markets, commercial activity has been doing well in a low interest rate environment. that is true. international financial services has been firing on all cylinders. if you look at it, it has been doing very well and will

continue to do very well and grab market share. >> with that offset by equities and the rest of your capital market activities? actually, it is our diversity approach. it shows we are well capitalized. it is very diversified, corporate banking, security services, all of these activities. revenues are at best are up 5%. cost, as a continuation of our plan, costs are down, so basically, yes it is a good result which has allowed us to continue to capture market share in the situation. >> the fixed income was difficult. have you seen some activities from clients there. >> it is true, if you look at our cid, which is related to our institutional clients, it goes up with demand. sometimes there is higher demand than others, and if you compare to last year where there was probably more demand, it would also the. bank of the breads a discussions, so that is how it

goes. in these deals, linear with the demand. slightly down, 0.1%. when you expect the turnaround. --wrote have learned turnaround, and you expect the turnaround to be quicker, given a new government? at ourink, if you look france activities, or activities in general, you see positive pickups to our commercial activities. in france, we are up 8%, we are there to serve our clients. we are in a low interest rate environment. however, when comes to france, we are of course, very supportive for a continuation of a positive is this out like best outlook that has been going on for the past couple of quarters. ♪ anna: in terms of the fx trading business, how happy are you with how that is performing question -- performing? what action do you want to take their? >> with the investment bank overall we are quite pleased.

the debt at -- underwriting, the equity underwriting, we had a great quarter, the first half of this year was one of the best results that the bank has ever had in that part of our business. credit rating, we did quite well. rates and currency, we are still not happy with where we are. we were down in the second quarter. we have made some recent very important hires and we will get that corrected. but overall, and i think the investment bank had a pretty good quarter. anna: and so you are still happy with the extent to which you backed the investment banking business at barclays and you have taken enough action to turn its performance around? >> we still have room for improvement. we are clearly very pleased with the strategy that was set out in terms of the transatlantic consumer corporate and investment banks. the investment bank we had a strong position in you new york. we were the number one investment bank and the u.k. with a market share of over 10% in the second quarter.

so we like to business, we think it is important to the overall strategy of the transatlantic rank and we will continue to invest in the investment bank. anna: we continue to see the consumer credit story in a united kingdom, lenders are in a spiral of complacency. has that forced you to change or -- or policies with regard to credit cards? >> we are definitely focused on it. we have been in discussions with the bank of england, and what we seen is a pretty sharp increase in consumer spending since the brexit vote. that has been matched by an increase in consumer credit per pita, consumer credit is roughly where it was in 2008. that being said, unemployment stays very low, and we're watching it. we are adjusting our underwriting standards and we want to remain a bank with one of the highest quality consumer

credit loan portfolios. so, we are focused on it and we are focused on unemployment, which continues to be quite low. but i think everyone should be mindful of the levels of consumer credit, both in the u k and actually in the u.s. as well. ♪

♪ >> i just want to come inside the number care. this is grr, where we are in the first half of the year. tech performing at 23%. health care at 17 and energy. the losers, telecom and energy, down double digits, as well. >> ea , the wonderful function on the bloomberg. look at the sales surprise, beats on average for companies that are reported on earnings. wonderful function. my bloomberg. on a quick snapshot of where we are. the bloomberg has about 30,000 functions and we always enjoy showing you our favorite on bloomberg television. here is another function you will find useful.

you can get fast insight into timely topics. here's a quick take from this week. ♪ >> simple question. ♪ >> what is actually healthy for you to eat. we know this is good for you, but is this? what about this? this or this? knowing what to eat is complicated and a big reason it is so complicated. that's a perfect example. in the 80's, they were associated with heart disease.

and scientists later confirmed that the transcript and those alternatives were more dangerous, people avoided fat altogether, resulting in the low and nonfat dietary trend in the 1990's. that led many to increase their carbohydrates and sugars, which experts say helped cause the obesity and type two diabetes epidemic in america. still, the connection between dietary fat is far from settled. that is because nutrition science relies on observation, which can't definitively connect. all of these component observational studies. the problem is, it is impossible to know for sure if these connections are real. because somebody factors can affect the outcome. here is the argument. guidelines won praise for specifics on what you should eat like vegetables and whole grains, but criticized for keeping the what not to eat section a big list of nutrients. for example, avoid soda, they said avoid excess sugar.

pages, many city guidelines are simply too long, too complicated and too influenced outside forces. ♪ david: that is just one of the many quick takes that you can find on bloomberg. you can also find them on bloomberg.com with all of the latest business news and analysis 24 hours a day. that will be all for bloomberg best this week. i am david gura. thanks for watching bloomberg television. ♪ jonathan: from new york city to

our viewers worldwide, i'm jonathan ferro, with 30 minutes dedicated to fixed income. this is "bloomberg real yield." ♪ jonathan: coming up, the u.s. economy rebounds, but inflation forces paid, -- say the, -- fade, raises questions about the fed's next move. at&t gets away with the biggest debt market deal of the year. the market wanted even more. billionaire investor howard marks of oaktree capital issues a warning about current valuations. we begin with a big issue -- fading inflation forces raising questions for the fed. >> yes, inflation has come