>> donald trump's business councils are disbanded. a c.e.o. jumps ship over the president's race remarks. >> rate debate. fed minutes show a split over no inflation cutting the odds of another hike this year. the dollar falls for a second day. >> now over to the e.c.b.. >> and 10 cents -- the chinese internet giant soars by the ost in a year. profits that rival alibaba.

>> a very warm welcome, everybody to "the daily". our flagship morning show. i'm anna edwards. >> i'm manus cranny. the disbandment of the advisory boards by trump and the fed minutes. look at this. this is a band width of trading on the bond mash. it has been 29 -- the nair owest in almost -- narrowest in 27 years. april to may 20. what does it take to knock a ond trader into dislocation? the probability of a rate hike is dropping away. is that enough?

is the trump political debacle enough to stir the moment? >> not at the moment. when we see what happened in the last three months. the drama at the white house, we have the fed and questions around where that question goes. geopolitical concerns over north korea. there are so many questions and yet we remain range bound. the stock market a quick recovery from last week's selloff as well. we have a little bit of reaction that we are seeing to those fed minutes. e see the dollar index weak. in general decreasing the chances of a rate increase this year according to what is priced into the market at least. the agent stock market picture looks positive. most stocks, a fairly mixed day. >> that is the driver.

goldman sachs and credit suisse raising the target. oldman sachs up. we put up here the futures. we're rocking about in shanghai. production is dropping. this is about tightness in supply in these metal markets. >> a shortage of ore. shrinking to the lowest since 2014. this is affecting other asset classes as well. the australian dollar moving on the base of the base metal market. steve bannon has gone public with his long feud

with some of trump's economic advisors. he said he often battles with steven mnuchin over taking a tougher position on china. south korea plt said north korea is approaching his nation's red line and only seoul can make a decision. donald trump and steve bannon have dialed back the administration's rhetoric on north korea in recent days. u.s. federal reserve officials engaged in a debate on the timing of the balance sheet redetection. a majority of the fomc sticking with the forecast that inflation would rise to 2% target over the medium

term. many saw some likelihood that inflation might remain at 2% longer than expected. brexit talks could be delayed until the end of this year. cabinet ministers involved in negotiations have privately indicated next talks may not happen until christmas. there is a possible change in merkel's coalition partner. japan has posted a trade surplus for a second consecutive month in july. exports continued to rise. surplussurged a trade of $3.81 billion. global news 24 hours a day powered by more than 2700 journalists and analysts. you can find more stories on the bloomberg.

>> here in asia we are seeing markets generally higher. you have seen a strong movement of the yen against the dollar. the hang seng flat. we have some mixed earnings coming through in australia. have a look at the kospi and the taiex. where we see a lot of other tech players like samsung and apple rally. jumping to a new record high in trade. second quarter numbers beat expectations. we had a number of growth pgrades. it posted its worst loss in at least two decades. it says things are on the up for the second half. telestra falling the most on

record after it cut its dividend payout ratio and trading volume on that stock more than double its three-month average. we're talking about about the japan trade story. analysts at smbc are telling us that we will see exports be the savior in japan's economy, particularly in g.d.p. growth in the third quarter. exports rose from a year earlier even though we have seen the yen's strength in recent days. it is likely that exports are going to rebound. >> thank you very much. president trump's business forum has been disbanded after a growing number of c.e.o.s quit in protest over his response to the violence in

charlottesville. >> the first c.e.o. pitched hls as a savvy businessman who would cut taxes. larry summers says the trump administration is unlikely to be able to enact significant tax reform. >> maybe there will be some ax cutting but i think the prospects for structural reform, which was the aspiration the president laid out are minimal at this stage. >> our gulf of mexico has been watching the -- our guest has been watching the twists and turns of this story. his hand was a little forced on that, wasn't it? >> it was. after his second set of remarks the other day, and the

incidents in charlottesville, it became harder and harder for these c.e.o.s to justify being on a panel like this. an advisory panel. so they were starting to talk about levering. we already knew one panel the other day, several had left. the intel c.e.o. and the underarmour c.e.o.. we are going to see a number leave and they were pulling each other and by one account, going to leave. he hadsident announced disbanded it. it means he has lost the support of some key business leaders who are publicly saying they don't want to stand by his administration at this point. >> it is interesting. we just heard from larry summers. have been troubled by the

abdeindication of morals. why is it important? >> it is symbolic. they have not met -- i think the last time one of these panels met was in april. they have not really done much. they have lent an aura of support. he proclaimed himself to be the first c.e.o. president and he needed the support of the business community to get things done. like an overhaul of the tax code which is extraordinaryly hard to do anyway but without the support to have business community and public backing from them, it is going to make it even harder to get things done on capitol hill. >> joining us in london, the manager at aberdeen standard vems. -- investments. the c.e.o. in the white house

delivering what businesseses wanted, lower taxes and the like. the relationship is not what people expected from these two communities. >> yeah. the market honeymoon with trump was short lived as well. he seems to have lost a lot of power in congress. the press conference to other day was troublesome. and this latest move with the businesses as well moving away from him too. it becomes hard seeing how he pushes through. >> does it mean you hope for less now? >> in a way. stability is good. there are some important points coming up. we'll be talking about the debt ceiling a lot during september. when you're seemingly leaking political powers. this is an important showing get done and get done early. i fear the democrats are going to use it against him. >> we started the show with

the narrowness of the bond markets. 29 basis points. one of the tightest -- 17 years ago. the monthly range was almost triple that. is it the debt ceiling that provokes the air of the bond market? trump hasn't moved it. north korea war hasn't moved it. potential of war. is it the debt ceiling that moves it? >> yes, but it is probably shoft-live. the forces that have suppressed volatility across the board are pretty massive. the lower inflation. the q.e. profile we're in. keeping volatilely low. as we go through september, the risk of getting spiked to a more exciting month, are very high. i would love it. i would love a little bit of volatility. >> there is one group who are moderately concerned. the federal reserve. the fomc.

the risk evaluation prices arest are elevated. i think that is the most significant thing. i know everybody is freaked out over balance sheet reduction. >> well, you know, if i had your laptop, i would -- when the s&p talking -- 500 is so high. >> strange that you should mention financial conditions. here is one. hikes and financial conditions. >> s&p 500 helps. those two factors. credit spreads have come in as well. probably sideways the last few months. that's exactly what they are

talking about. this has loosened up because over the evaluations getting tighter. >> i want to talk about the debt ceiling. we will talk about the looming debt ceiling day. the 29th of september. it is goc going to be a big time. a lot of grandstanding and heightened rhetoric. they extend it and we move on. >> we have not been fair. that is if significance. if the democrats, let's hope they don't go down that road. if they think this is a weak point his presidency, let's tab at it and see how it bleeds. a debt ceiling. the republican party, they want to cut spending. the potential is there for --

and you see the short-term t bills that expired just past that in early october popping up. >> you're painting me a rubenesque picture there. this is the dollar. it is bleeding. many would say yesterday was a turning point. the fed, the possibility of a rate hike and two, the trump drama, the theater. the night of the long knife. whatever you want to call it. are we entering a new psych until the dollar? >> i think there is a very good chance we're not. i'm afraid. i still think they are going to get a free hike here. i think we're going to get something come december. they are very, very keen to debt depending on the ceiling, i think this is going to happen before the end of the year. >> a bit of a distant dream.

>> your point being that you're keen on things that are not necessarily going to happen. that's just terrifying. in interprets of where the fed goes from here, you think they should. you think that is the right thing because you think they have enough powder and tools if we end up in a situation where they need to cut rates? >> >> let's look+++

economy with or without trump. it had grown well. >> the validity of their own inflation. models in terms of veracity of those. >> one number that fits all, right? doesn't really work. it depends which -- which part of the country you're in. it doesn't work as a consistent number. i'm not sure that is really helpful. it is not just about that whole as we go up the hill, how do we come back down the hill? >> if manus is buying pardon mes in chelsea, his inflation is -- back the manager of aberdeen standard investment. >> get earnings from chinese online giant alibaba. >> an hour and a half later the european central bank publishes the july policy meeting. >> the defense chiefs meet to discuss north korea. >> coming up, will there be talk of tapered talk?

we'll discuss the future to have euro area economy. this is bloomberg. ♪

manus: 6:2 1:00 a.m. in london. it is 1:21 in hong kong. they are not laughing in hong kong. juliette: companies behind the most popular u.s. credit cards have said they are severing ties from extremist organizations. they are ending merchant grems with hate groups while visa and mastercard said they were utting ties with a number of companies.

shares have jumped the most after the company posted profits on the fastest sales growth in recent years. they announced a surge in net income to $2.7 billion. they are benefiting from the popularity of their smart phone game which along with other games gives the company more than 200 million clients. elliott management attempting o block berkshire hathaway's nthis cor bid. they oppose berkshire's offer on the majority of credit in the company. manus: thank you very much.

lots of focus on the euro area. g.d.p. data. anna: we had that data yesterday morning. today we'll get july's inflation numbers. a couple of hours later we'll get an insight into draghi's thinking with accounts from the e.c.b.'s july meeting. manus: our guest is the senior at aberdeenanager investment. the data is building up neefl. i found one interesting thing in your notes. you say draghi at aberdeen is no go for a big change at jackson hole. why do you think he is going to maybe step back? this is the financial condition. financial conditions are easy in the eurozone. why would he hold back from hitting the pedal? >> in europe, with the

negative 40 rate. it should be more than this. i think mario draghi amongst all of the central bankers has been very, very careful not to want to push the market too soon, too fast. he doesn't really want to see that much up to 90 basis points in the german bonds. we talked about reducing the size over the pilot debt they had been buying. they are being cautious about it. i think it will be pointhing towards again september and maybe early in the first of november. we don't have one in october, the e.c.b. meeting. to the point where they start to talk about the mechanisms and how much they are going to do and starting before the end of the year is ideal. anna: we have been busy talking about the fed and the german election. is this something that worries you? talking about the swings, the

strongholds, the potential for shocks at but overall the poles suggest -- polls suggest hat merkel stays in place. september 24. >> a great graphic. i love the graphics. our internal -- experts who have great connections to germany are looking at the same poll data but also looking talking to people and i think this is merkel's election to lose. that would be a massive shock. there is to be some chattering. how much the coalition -- some room from there. we're talking thin pieces of paper, the difference here between these two parties. anus: the trade weighted

value. we're up nearly 8% in the past year. that is going to cut core inflation. this is draghi's problem. >> absolutely. manus: the bond market would probably quite this problem. >> we would love a bit of inflation. it would be great. anywhere in the world would be nice really. and consistent demand for inflation rather than cost push. manus: how much of a headache is that trade weighted -- >> it is a headache. anna: lots of people are looking to jackson hole and wondering whether draghi will talk about this. >> no, because i don't think he feels the conditions are loose enough to take the flak. it has done it before a few times. you have to come in and all the staff comes in the next day and calms everybody down. that movement up in the euro, one of the things that tightened conditions around. manus: stay with us.

anna: aberdeen standard. we'll take a moment to catch up. up next, discussion about the brexit deal. we talk brexit next. this is bloomberg. ♪ ♪

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anna: welcome back, everybody. it is 2:30 in the afternoon over in tokyo. the delor at 109.85. -- dollar at 109.85. the u.s. has chief of staff chairman speaking. this is over the political rift in north korea. u.s. ministry exercises are not negotiable with north korea. the u.s. to consult south korea before any millry action in the north.

manus: the president said donald trump has agreed to consent before taking any action. military action. it can only be decided by the republic of korea. anna: a very cooperative tone coming from trump. >> let's talk about where we sit this morning. this is the picture. down .2 for the ftse. not a lot to write home about. keep an eye on the metals this morning. take a look at zinc pulmoup by 6%. aluminum continues its tear. it was zinc yesterday going through 3,000 a ton. the first time it has done that in 10 years. we continue to watch zinc rally and rally hard. jackson hole the next big event coming up. the accounts can be

fascinating today. keep an eye on them. from a u.s. point of view, we're still pricing in, it is dipping a little bit but not by much. the function when it comes to december. a 40% chance of a nike december. -- hike in december. . take a look at u.s. dollar futures. i talk about the euro and the impact that it is going to be having. this is a question that mariio draghi will have to answer. here is basically the daimler share price and the euro. euro and the diesel story. that is what it has done to the share price of daimler versus the euro. you can see that spread ridening out. back to you. anus: thank you very much.

anna: brexit and the prospect for a customs union after march 2019. they talk about the free movement. it misses the point if the u.k. has a big deficit. it basically goes into this -- talking about how services are the real pride. services make up 80% of the u.k. economy. they

>> shares jump the most in a year after the chinese internet giant boasted record profits and the fastest sales growth in seven years. anna: a record 2.7 billion dollars. for more on the company's earnings, let's bring in lulu chen. what are the highlights then from this earnings story? the laws ofefying large numbers. this was the fastest growth in seven years in terms of revenue. most of that boosted by the mobile gaming revenue growth. net income was 70% higher than last year. part of that was boosted by

the portfolio investments and tech companies and ride sharing and bike sharing companies including mobike. for things that investors were excited about and also had some concerns about into how to build their financial models. management said they posted triple digit grothse with the payments business growing faster. manus: the payment side over the business is almost like the holy grail for them, facebook and apple getting hold of our wallets. what drove fastest increase in the mobile area? >> it is the darling of this quarter. analysts are expecting game alone contributed to more than half of the revenue growth this quarter. they have a healthy pipeline of other games and feeding into that nostalgic sentiment

of chinese gamers. of course this whole phenomenal of attracting 200 million people in china playing this game has stirred concerns with the state regulators, people criticizing them for tapping into people's addictions. these are some of the things that we should look at this terms of regulatory crackdown going forward. anna: we heard tencents. what are their expectations for alibaba? >> they are sky high, expecting 49% growth in revenue. people are looking at what they are doing in their traditional retail vems. they invested into all of these traditional department stores. that is a strategy that we have seen. also being copied by amazon with their investment into whole foods. a lot of people are wondering what they are doing with these

traditional retailers. are they going to transform them with their cloud competing strategies and their platforms. are they turning them into delivery centers? all of that is what people are looking for in terms of more details. manus: thank you. the senior investment manager at aber zone standard, we're listening for more numbers to drop. when you look at the phenomenon run, for you as a bond manager, you look at these equity evaluations and you have a lovely line that everything eventually fines -- finds -- is drawn to gravetifment >> i talked to them about whatever we're calling them this week. this is a question about value and growth. these kind of growths go --

stocks, i've been there before. i was managing equities in the late 1990's. this time, there is revenue growth. that is different. but you're still seeing companies that are burning cash flow like amazon with a debt issue the other day. you have to be cautious. did go in for some long debt. we didn't buy any of the u.k. debt. just didn't look attractive. anna: the rates are -- it is un-- why a company would go out and issue over 40 years. you have confidence enough in this business model over such a long time. >> i think even if you buy it you're not taking a view for 40 years. it is probably a four to five year --

manus: you're holding it to maturity. >> i think, you know, that the tech stocks have different -- are different this time around. the inflation and growth value stocks generally has gone too far. let's think about positive cash flow. talk about the top four biggest borrowers this year prm amazon are in there at number two. anna: thank you very much. manus: coming up, japan recovery. rise. we'll talk another about their economy. this is bloomberg. ♪

anna: welcome back, everybody. this is bloomberg's daybreak europe. european equity markets having their first time to digest the fed minutes.

looking for guidance later on. s&p futures down at the moment. let's go to the bloomberg business flash. juliette: companies behind the most popular u.s. credit cards are severing times with merchant hate groups. visa and mastercard said they are cutting ties with a number of clients. the move came after they came under pressure to stop providing ways for white supremacist groups to raise funds in the wake of the violence in charlottesville, virginia. the late bid to block berkshire hathaway's bid. they have acquired about $60 million of leveraged buyout notes in intermediate holdings.

-- shares intes, cisco systems have fallen in extended trade after it predicted another revenue decline as the business tries to remake itself amid a change in networking industry. the backbone of the internet. revenue in the current period may decline as much as 3% from a year earlier. the c.e.o. joins us at 2:30 p.m. u.k. time. that is your bloomberg business flash. anna, manus. manus: thank you very much 3 japan exports continue to grow. imports surged again. the latest sign that the domestic demand is recovering. anna: for more, let's bring in bloomberg's brett miller. great to have you on the program. what has the takeaway been from today's data? domestic story.

>> we saw a really good figure for exports today. we also saw the same thing for imports indicating strong domestic demand. we had double digit gains, gains in terms of volume for imports and exports. that was very good. we saw exports increasing to the e.u., the u.s. and china. to all of these key export markets. for japan, we saw increases. it should flow through into corporate profits and affect the stock market in a good way. manus: japan has posted the longest string of core g.d.p. growth in more than a decade. to that extent, abe must be happy. does it seem as if it is driven by domestic factors?

how much of a boon is the strong export situation? >> well, the exports have been quite strong all year. that is a key point to make. when we got the second quarter g.d.p. figures, we saw our domestic demand coming through. that was an encouraging change. we saw businesses spending more. we saw consumption from households increasing. that was a big increase. a real boon to the economy. yes. when we look forward, we expect that could tail off just a little bit but exports could keep increasing. that remains a key for the japanese economy. the export picture. the domestic picture is increasing somewhat. for abe that is a good thing. anna: thank you very much. our guest still with us onset in london. right lane interesting, the conversation around japan. for a long time, the export engine was doing its thing but story. stic

>> we are talking about a long time to get here. i think that is good to see. i think we are way off from the bank of japan removing their stimulus and they need to see the inflation coming through. we have seen some signs of wage growth picking up a little bit in japan with employment rising as well and actual -- coming through. but people still nervous about it. i think japan as much as europe and the u.k. and china and the u.s., the correlated global growth we have been in since the spring of last year when china pumped the system is still going on. hopefully it sticks with it. i think there are risks around that. japan is a good story but not enough to really move the dial from let's call it five basis points. japanese 10-year yields. manus: abe is going to be relieved by this. there have been voices. we have talked to a number of

guests about it. rising pressure on abe to consider resigning. does this kind of data give him a reprieve? >> it is whether it goes on long enough. l three arrows he has been throwing at the japanese economy trying to get it to grow. we need to see more and for longer. anna: it feels good. growth feels good. >> wages and employment. all that good stuff. it has to continue. it has to change expectations. anna: you're talking about one of the factors here. we have done some research. it is a great story on the bloomberg. the economy chugs forward is the headline. we're going to see growth accelerating in 2018 against 2017. that's a big expectation from economists on the bloomberg. the world economy looks well

on its way to a year of faster growth. >> we would agree with that and we would be looking at global growth picking up. it looks priced into markets which is a problem we're going face in 2018. what to expect for the next year. how can you support evaluations at that point? it is good for global growth. bond markets don't really reflect that. i can talk about high yields for too long. manus: if you talk about what's happening with the balance sheet. it is interesting how draghi views the balance sheets. you have the fed in white and the e.c.b. in blue and the bank of japan in purple. there still could be more -- do you think there is more to come? let me hold myself back from being subjective. do you think there is more to come from the bank of japan? they really tride tried to take the market the scruff of the neck a couple of times

this year. there is more to come from the bank of japan? >> if we get this correlated global growth. yes, they are going to have to work harder to keep that yield suppressed. and actually spend some money to do it as well. i would expect their balance sheet to be the only one that continues to rise as we go to next year. anna: you're watching what all of that does to bond markets of course. hat are you stocks saying? msci, oil well index. stocks. we have seen that rise over the past five quarters. that is the longest stretch of gains since the 2007-2008 financial crisis. is this recovery looking among the the tooth of stocks? >> they look at stocks. they say actually it is getting easier to find the value stocks and harder to

find the growth ones as we were talking earlier on. that rotation between the two styles is what we would look to becoming down the line. finding company s that aredoing well from a global growth environment that is getting more positive is easier to do. for most of those colleagues, they are pretty happy at the moment. anna: they believe there is no recession coming then. >> which i think is a fair starting point. we're going to get a pause of growth of course. we always do. there are cycles in everything but it doesn't feel like we're in an environment where we could get a recession unless we get a policy error from the fed or the e.c.b. manus: thank you. our guest, the senior investment manager at aber zone standard. -- aberdeen standard. anna: coming up, turning on trump.

c.e.o.s protest against the president following his response to the violence in charlottesville. forcing his hands in the disbandment of those business groups. what it means for the rest of the agenda. this is bloomberg. ♪ manus: the board walks.

donald trump's business council is disbanded as ceo's jump ship over the presidents race remarks. anna: a split over low inflation. the dollar falls for a second day. stepping back from stimulus. it is over to the ecb. could the central bank account of its last meeting cast more light on the timing of the taper? anna: tencent on a chair. soaring are the most in a year after posting record profit. can rival alibaba follow suit later today? ♪

tous: you're welcome "daybreak europe." anna: it has gone 7:00 a.m. in london. we are getting some headlines coming through from the south african-based standard bank. manus: we have a red headline for you on that and their numbers are as follows. we are waiting for working fisher to come through. standard bank earnings adjusted, the market had penciled in 7.4 rand. that is the red headline. anna: out of south africa, let's talk about kingfisher. second quarter it like for like sales down 1.9%, the estimate for was -- was for 0.8%. performance down

11%. they are comfortable with year useconsensus underlying eps so they are comfortable looking ahead. some analysts were worried about the bnq. running into these numbers, barclays was saying watch out for deterioration in sales. manus: you have to numbers coming through on bnq. store closure programs, like for like sales for .7%. in france, sales fell 2.2% on a like for like asus -- basis. as secondthere w quarter sales down 2.5%. losing market share to [inaudible] is the story. up 7.2% for a like

for like basis. where would we be without a widget and a screw? anna: let's talk about what we have in the equity session. .2 of 1%. in and out of territory on a couple of the markets but it was positive. the fed being interpreted as perhaps a little less likely at the margins to move in the extra rate hike. a positive sign for asian equity markets. manus: let's look at the risk radar. strongd their own driver, the tencent numbers and the beast of the internet recording record profit, the fastest on record. over .5%.p raising rates on that. that is where the msci is being driven.

the dollar is being driven by that prevarication by the fed, that could be a word that encapsulate a couple of the sentiments. you have been what is driving the asian session higher. 6%, a rallys of by in base metal crisis affecting other assets. sync futures and shanghai climbing by their daily limits, the highest and 10 years on production out of china. 2014 toshrinking since the lowest. manus: another line coming through from our brexit team. the u.k. is said to plan these a treat -- visa free travel for europeans after brexit. this is one of those lines the brexit team, this is from their leader. we saw a white people are -- a

thee paper and this is latest, planning visa free travel for europe and after brexit. anna: here's juliette saly. juliette: white house strategist steve bannon has gone public with his long simmering feud, in a rare interview he told the american prospect magazine that he often battles with treasury secretary steven mnuchin and national economic council director gary cohn. anna did not respond to a request for comment on the interview. south korea's president said donald trump has agreed to ask for consent before taking any military action against north korea. office withdays in his first news conference as president, he said only his country could greenlight a strike and he warned to that the regime is putting a red line as it seeks to weaponize missiles

with nuclear warheads. officials engaged in a detailed debate about deflation while keeping the door open on a september and balance on the timing of alan sheets reductions. the majority of the fomc sticking with the forecast that inflation would rise to the 2% target over the medium-term. many saw some likelihood that inflation might remain below 2% for longer than they currently expected. the uk's [inaudible] talks could be delayed until the end of this year. according to sky news, cabinet ministers involved in negotiations said the next talks may not happen to christmas. some figures anticipate a change in angela merkel coalition partner making it easier than with the grand coalition. japan has closed with a trade surplus as exports grow, rising by 13% while imports surged

16.2%. domestic demand is recovering. a trade surplus of $8.1 billion, more than anticipated. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . we are seeing the japanese equity market close lower by about .1 of 1% on the nikkei, that is as you see the strength in my japanese yen, up against the dollar slipped overnight in the u.s. session. the hang seng lower despite the rally in tencent but look at the kospi.nd the tech players rally on the back in$.10 and samsung listed seoul and type a. as we mentioned, jumping to this new high-end intraday trade. let's look at how it is faring, up 2%. it has been as high of as 341

hong kong dollars. it has been 6% higher. posted its worst loss -- have your loss in two decades. we may have seen the worst australia'sd largest listed telco down 10%, the most on record this after it's cut its dividend doubt ratio. putting the japan trade picture japan posting, that trade for the second month in a row and we are seeing exports as the savior for this economy. analysts telling bloomberg that even though we have seen this yen strengthen in recent days, the environment is supportive of japanese exports. manus and anna. anna: thank you, juliette saly with the latest on the markets. president donald trump's is this

after a disbanded growing number of ceos quit or threaten to quit in protest on his response to the violence in charlottesville. if it's to himself as a savvy businessman who would unleash growth on u.s. companies. manus: the trump administration is unlikely to be able to in a significant tax reform, larry summers said. >> maybe there will be some tax foring, but the prospects structural reform, which was the aspiration of the president laid out are minimal at this stage. anna: let's ring in -- bring in an analyst. was supposed to have good

relationships with business, it has not had -- happened that way. hethat was one of his points used to sell himself, i am a ceo, i can get the best things done and other ceos will back me and they have. that is why they were on this consult. after the president doubled down on his remarks about the charlottesville incident after called outack and white supremacist and went back to the many sides are gimmick, it was too much for many of the ceos and there were going to leave the group, so many of them it would have been up look embarrassment. the president disbanded it himself. this will make it harder to get to his agenda about -- the regulatory agenda without the backing of ceos. manus: the ceos wanted to be close to trump, they did not want to be on the end of i trump tweet -- eight tweet. they have not met recently, did they expect -- affect anything

that one can demonstrably say moved the american economic dial? jody: these panels tend to be symbolic and these certainly were. they have not met since april. the symbolism was important. issaid the business managing part of what donald trump wants to do in terms of overhauling the tax code and furthering infrastructure spending. it had a very visible effect in terms of making him that ceo president. now that you have people stepping back to my especially issues ofcontentious language and about race and hate to the that, it makes it president and it will make it harder to get these things done on capitol hill. tax reform will be hard anyway as we just heard from larry -- larryhis makes

summers. this makes it harder. good to see you as always. has this fall that with business, has this reduced expectations or increased the risk that trump cannot deliver? >> what we are looking at is u.s. economy that will not have that big tax stimulus. if anything that has pushed into next year. we have stopped the talk about tax reform. it is about tax cuts if possible. you're not going to have that big momentum coming through in the u.s. if we have a slowdown in china coming through as well. your reliant on eurozone growth area -- you are reliant on eurozone growth. hesome people would suggest could still deliver on that? >> you would like to think so. there are three or four different plans for tax reform and tax changes. even there it is difficult to get something coming through. manus: what do you make of the

recovery? we looked at the headlines and undoings is the s&p 500 last week. it is one of the fastest recoups in history. we have the resignations coming through and the stock markets rocks on. the fed say they are warning about their elevated and warning about a potential bubble. evaluation of asset prices being elevated from notable. >> we are looking at people who do not know what to do with their money so we have a high level of consumer interest in global equities, that is elevating these valuations. if you get this level growth slowdown in the second half of the year because of the lack of tax reform, you're going to see these markets coming off once again. the bounceback after the initial enthusiasm that we were not going to get nuclear war, that is a good thing, i think that will be slightly short-lived.

anna: why the skepticism on the global growth story? we were looking -- the economy looks like it is on the way. when you consider how well the global economy has done in the second quarter. ian: the trouble is this is the peak of the year. this is the slowdown. this got has been asian based, based on the stimulus we had last year in china feeding through to the rest of asia and into things like the eurozone growth numbers. we are starting to see that inventory overhang be replaced and now we have got the scope for things to slow again. as china's tightening comes in and that credit impulse starts to get less of the stimulus coming through. for us, you still have the policy uncertainty and you have got much more concern about where earnings are going to go. onus: if that is the risk

the u.s. side, a lot of people said we are taking a little bit of money off the table, we like europe. i would go the other way. have a look at this, you i'll more in. -- you i'll more in. that gets hit is the euro zone. because of the ecb tightening. that is the place that is overexposed and europe is a cyclical economy. the eurozone is a cyclical market. manus: what about valuations? talks about european stocks of the biggest discount on record relative to the u.s. peers by value of their assets. half that of the s&p 500, the largest gap since we gathered the data in 2006. ian: let's look at the longer side. the work that we do looks at a , ebilation of valuations

and the price-to-book measure. there is not that big valuation discount. there is always a valuation discount for europe but when markets, off, even in 2000 when it was a tech level and the tech market collapsed, the u.s. market outperformed the rest of the world. does what does -- on europe? is it the strengthen the euro bringing it down? the euro is a positive story. ian: that is the bad news. but we have seen over the last three years is europe has gone back to being negatively correlated with the euro much as period.in the pre-2007 export is that big machine and that is what drives european equities. manus: that is a strong and

forceful point made, hopefully people will listen to that. next. recordencent posts a profit and alibaba is expected to have a strong quarter. we will break down the tech industry in china and the u.s. this is bloomberg. ♪

manus: it has gone 8:20 a.m., futures down by .2 of 1%. equities are set for a slightly lower opening. 10 year government bonds are up and running. just finishing off for the day. dubai markets 3588, flat on the day, bunds and equities little bit softer. indicated a slip lower. let's take that down.

your stocks futures -- euro lower.futures anna: let's get to juliette saly. juliette: companies behind the most popular u.s. credit cards have said they are severing ties with extremist organizations that incite violence. it is ending merchant agreements with hate groups while visa and mastercard said they were cutting ties with a number of places. they came under pressure to stop providing ways for white supremacist groups to raise funds in the wake of the violent protests in charlottesville, virginia. tencent shares have jumped in hong kong, the most in a year after it posted record profits on its fastest sale growth in seven years after the chinese internet giant announced a 70% surge in debt and come to a record $2.7 billion, topping analyst estimates.

the company is benefiting from the popularity of its smartphone game. along with other games, giving the company more than 200 million players. elliott management has but debt in the parent company of oncor electric livery. -- delivery. familiar,to a person paul singer's firm has acquired $60 million of leveraged buyout in the intermediate holdings. elliott and sunrise partners which also opposes the offer on the majority of every class of impaired credit in the holding company. shares in cisco systems have fallen in extended trading after it predicted another revenue decline as the business tries to remake itself amid a changing networking industry. the company whose machines formed the backbone of the internet, said revenue in the current time may decline as much as 3% from a year earlier. the ceo chuck robbins joins us

.fter 2:30 p.m. u.k. time that is your bloomberg business flash. thanks million. tencent shares have jumped the most in a year after they posted a record profit in the fastest sales growth in seven years. anna: we'll get earnings from rival alibaba. analysts expect the company to show strong revenue growth. as we were just discussing, we have a chart from one of our colleagues on china's text giants, this is global. ian: global growth and the -- in the economic sector is muted. even though we are talking about stronger economic activity will 4.around 3.5 or you have the growth expectations from these tech stocks, they are

long-duration stocks so as bond yields stay low you get that stimulus, there classic roast plays in that is why people are getting excited about this. in a world where earnings growth decelerates according to our top down monfils kinds of stocks stand out attractively and that is where the valuations get pushed up. manus: they still hold attraction for you. we get filings at the end of every quarter. this is not cast in stone but what we are seeing is a selling of apple and facebook and holding on to the latex -- likes of netflix. how much of america versus the rest of the world in terms of tech do you want to have? ian: you have to stay with the u.s. tech stocks if you want to be in their space. they are the expensive part. they are going to be the areas were used to have that strongest growth. if this global

activity comes down and slows, most tech stocks will not be immune. what you have seen is that when that growth slows, america still does relatively well. so that is where we will be focused rather than on some other chinese stocks. anna: you mentioned what one of your models show on valuations, what does the valuation model tell you? ian: when we look across the model, all of them are as good as it gets. particularly the earnings models. panelists are excited about the forecasts. top-down models suggest that around that 10% growth you will look at low single digits for the next 12 months. anytime you get this kind of disappointment because of those high valuations, any kind of economic growth slowdown, that is where we get the weakness from. we do not where it will emerge

are increasing for the markets, it is a very mature market. manus: one big topic is activism. news initing for the terms of that deal. what does activism mean for you, investtreat around or around activism? and: there are specialists that work down that line. for the broader market activism, m&a activity, these are signs of the mature phase of the market where earnings growth is getting harder to deliver. that is why you're seeing this greater focus on activism and why you're seeing that pressure toward m&a activity. for us, it is a sign we are getting to the top three at anna: thank you for your time. interesting, michael creed making some comments saying they take some comfort from the u.k. papers we have seen. the devil will be in the details. business voices are

becoming heard in the u.k. and take some comfort from the paper, stocks are opening lower. that is next. this is bloomberg. ♪

♪ guy: it morning and welcome. you are watching bloomberg markets, this is the european open. 30 minutes till the first trade of the day. matt miller is in berlin. what are we watching this thursday morning? a business breakup. donald trump's business council this banded as ceos jump ship over his comments on race. van andcatch steve