manus: good morning from bloomberg's headquarters. these are your top stories. world's largest media company lunch, with rising regulatory hurdles, as futures decline. a transit planning truce. -- transatlantic truce. asian stocks ease off initial gains after the s&p neared its all-time high. and mario draghi's confirmation, the ecb may use today's decision to settle its qe exit timeline.

and clarified when it will make the next hike in rates. that is at 12:45 u.k. time. ♪ manus: a very warm welcome to "bloomberg daybreak: europe." we have a feast of breaking news for you. first up is airbus. at one point 2n billion euros. to understand the gravity of brexit, this is one of the companies that broke cover to tell us in terms of what it might cost. let me get a little bit more of a breakdown for you. confirming the critically important part, first-half revenue comes in at 25 billion euros. let's get a more -- a little

more details for you. share, thegs per market had penciled in nine -- 903. expertsa whole host of out there, some more numbers for you on roche. they now see sales at mid single effect.nd a constant so it's raising the guidance, very different than some of the others we have seen. core operating profit comes in at 11.16, a comfortable beat on the 10.40 6 billion at the market was anticipating. anheuser-busch, anybody for a bud?

adjusted earnings per share above 10, that is amiss. the are ready revenue, this is a considerable miss for airbnb. they came in at 4%. the market was looking for 5.7%. brazil is the second-largest market. big were hoping for that boost from the world cup. the campaign for bud started in may. the going to spend $2 billion on building the brand. $5.3 billion in terms of sales, a comfortable beat on the 5.19 that the market had penciled in. let's have a little more detail on the nokia numbers for you. nokia, the operating margin 1.5%. the primary focus for nokia

network is the market declining by 1%-3% this year. that is your guidance for nokia. an upgrade on the guidance for roche. networks -- expects the network business to improve in the second half. from tech and phones and handsets, that's the performance on nokia, the challenge there. the market penciled in 963.30 5 billion yuan for hyundai. a nice level for them coming through. upgrade.an hyundai deliver their numbers, a quick indicator, the litmus test for risk this morning.

they smiled, shook hands, and greeted each other with warmth. i'm talking about another theing at the white house, state is set for release that they didn't see a ratcheting up of tensions. a little bit of helpful relief. asian markets are higher. there is that europe and the u.s. might be evident move toward zero tariffs. we've seen this rerun of a .ewrite of a rerun when it comes to nasdaq futures, this is a key focus for you. $151 billion, exxon lost $53 billion in 2008. an annihilation in terms of the size of the monetary value last night in facebook. not enough active users.

divergent issue is this, you still have the s&p roaring towards an all-time record high that we saw back in january. have a look at the chart in terms of overall performance. that gives you a sense of what was going on. this is the moment of absolute relief. you need to press the like button more. it's not good enough. you can wrap it up and 25 different ways. the third and fourth quarter will be tougher. regulation and reputation are the issues for facebook that have come home to roost in last night's number in a shocking way. the roll call today, angela merkel, what's going on in the mining industry? what would a full-scale trade war really mean? what are the costs and

applications when it comes to royal dutch? we're moving into a sweet spot for the automaker. will he do a share buyback? it's never too early for a drop of brandy, i say. what is going on in the emerging markets? and a global wrapup of the day. juliette saly is in singapore with your first word news. good morning. juliette: facebook shares have slumped in extended trading after the social network reported second-quarter sales falling short of analyst projections. the company told wall street the numbers won't get any better this year. >> this is a critical year for facebook. we made progress preventing abuse, forged ahead with new innovations, adapting to a new

trend, messaging, stories, videos, and groups. juliette: doll trump and jean-claude juncker have agreed to suspend new tariffs on negotiating over trade. they both vowed to lower industrial tariffs, excluding autos. announcement pulls brussels and washington back from a transit lending trade war. the former cricket superstar has taken an early lead in a tightly fought election. so far, falling short of a majority needed to clinch power without a coalition, even if his main political rivals complain of rigging in a contest already tarnished by violence and widespread allegations of army interference.

global news, 24 hours a day, on-air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . we do have the regional benchmark index up for a third consecutive session but you similar bit of weakness coming through for key markets. the yuan essentially erasing all of its earlier gains from the day. of weakness coming through from the nikkei as well. the indian market still trading at a record high. up by about .3%. the stocks were watching in detail, we mentioned john called juncker and -- jean-claude juncker and trump talking their. shipbuilding up by almost 8%. there will be a merger between sydney.in

fairfax shares doing well. begin pressure, the drugmaker falling in tokyo as well as biogen in the u.s. though the alzheimer's drug has done quite well in earlier studies, analysts are still not blown out of the water, the worst performer in terms of member may -- member ranked returns in the region. manus: i'll need some of those alzheimer's drugs quite soon, i would say. trump anddonald jean-claude juncker agreed to spare new chairs while negotiating over trade. --ald trump explained by what both sides will work toward. >> we agreed to work together toward zero tariffs, zero nontariff barriers, and zero

subsidies on non-auto industrial goods. huge ambitions. meanwhile the president of the european commission said the u.s. and the e.u. will hold off on other tariffs while negotiations proceed. >> is the united states puts the 20% tariff on car parts and other countries retaliate in kind, it would cost the u.s. economy $50 billion from lost gdp by 2025. but we made a deal today, because we agreed that no other tariffs would be introduced as long as we are in negotiations. manus: joining us is kathleen hunter to talk through yesterday's news conference and the significance of the

breakthrough, or not. great to see you this morning. tell me, from that piece of theater, was it theater or substance? i think it's more substance than anyone anticipated going into it. there was a lot of rhetoric on both sides. trump was saying tariffs are great right before the meeting and then tweeted hours later that he was hoping they could get rid of all tariffs, but at the same time he was giving $12 million of farm aid to farmers. i feel like there wasn't very high expectations heading into this. is it likely to quell the concerns? i thought this was an opportunity where he was able to slot back thatp he got, for want of a better word, terms of his performance. does it quash the rebellion in the gop? kathleen: i think it definitely

helps him. there's a lot of angst about trade because a lot of republicans are running for reelection. republicans are running for reelection in the senate. there's a lot of angst about his trade policies. ron johnson it is one of the republican senators who said on monday, he was reacting to the eight and subsidies being given to farmers, we want trade, we don't want a. that's kind of the key -- we don't want aid. making sure they're not being negatively impacted heading in to the midterms. manus: thank you so much, kathleen hunter. ,ur guest host is scott thiel great to see you this morning, thanks for coming in. a different reaction to what we saw in helsinki.

is very significant. the tariff issue is one of the swords of damocles hanging over the u.s.. european gdp looks to be about .5 percent quarter on quarter. what's holding back the markets in many respects is fixed income. the concept that the tariffs will be negative for emerging markets and risk assets. so any sign we get, and you saw the euro reaction, is the simplest way to look at it. as we've been talking about for a long time and as the federal reserve has been mentioning over and over, fundamentals in europe and u.s. look good. the tariffs are a really important issue. it takes me back to the

warning about the bond market, the bond market will have a harder time than the stock market. , we resolvedrough trade wars, things get better, and yields move. the major investment base is undisturbed. economic growth and upset surprises in the u.s., fiscal spending, tax cuts, european growth continues to be positive. the central bank policy is methodical and reacting in a way that the market expects. treasury rate may continue to rise modestly, but that's positive for u.s. assets. the fly in the ointment we've had recently is the tariff situation. we don't know what the impact will be on emerging markets or global trade. if you go back to the central regime analysis which is economic growth is strong, and

it's good for risk assets. manus: we have a lot more to get through on the central bank story. stay tuned for the next 45 minutes. it's a hectic world. facebook shares plunged, that's the understatement of 2018. second-quarter sales fell short. mark zuckerberg said it is a big year for the social network. let's bring in alex webb, who writes about tech. good to see you this morning. i did some of the benchmarking. it looks like a walk in the park. move in theramatic look --scott: let's 50 been only did

dollars in annual revenue. the expectation was that the revenue would continue to grow at that healthy margin. now they're saying it will decline. revenue at several not grow at the same pace every year. it will grow perhaps 30% every year. what about the other parts of the business? what about instagram? are businesses that were supposed to shine magnificently. did we lose the story? alex: what they're doing is pooling all of their user numbers as one. it's all the same bucket. that clearly is an intention of showing that instagram is concealing where the growth is

coming from. future, it will take on more of the burden. manus: thanks for being with us on bloomberg. growthtlé, organic sales 2.8%. the market had penciled in 2.5%. it is about the guidance, the internal growth rate. the real internal growth rate would be 2.5%. they have upped the guidance, a comfortable beat. growth rate of around 3%, which on first viewing looks a little bit better. pushedhneider has really

to try to reignite growth. he promised the market, i will tradinge underlying margin to 18.5%. it doesn't look like the brazilian strikes have hurt the market in any way. reckoning, the swiss seem to have at this morning in spades. -- has thely his the business flash every morning. juliette: qualcomm is on track to abandon its bid to acquire a they chipmaker after failed to approve the merger before final deadline. the hong kong ceo tells bloomberg, we didn't see an end to the process so we had to move on.

there were bigger forces at play here than just us. for has tumbled in extended trade after cutting its full-year earnings forecast. the company said it will make between $1.30 and $1.50 a share. a restructuring plan would take as long as five years to play out. it will have said the company's first female head and catapulted her into the ranks of all straight's most powerful businesswomen. into the world's largest manager,cture asset which now on's more than two thirds of its income overseas. profit on booming sales of memory chips, it boosted the value of overseas

sales. operating income rose to $4.9 billion in the three months ending june, beating analyst estimates. results reinforce optimism that after remains resilient record earnings last year. that is your bloomberg business flash. manus: thank you very much. , we haveming reminder more exclusive interviews for you. mario draghi is likely to confirm that the currency bloc is back. relatively -- back to relatively solid economic health. predicting the council will reaffirm that bond purchases will end in december. the ecb may use today's decision to clarify when it will next

hike rates. ceo, scott thiel, here we go. what's mario draghi going to do? is it steady as she goes? scott: we've had a very good set up in europe. yields are close to all-time lows, around 50 basis points. back to 2017 year in levels. 0.5% growth, if forward guidance is in place. he may mention reinvestment of the qe proceeds. the big question will be, can we price in to rate hikes over the course of 2019.

that will be very difficult at this point. manus: can i ask you why it's going to begin for culture price that in? the market has a bit of a different perspective. bloomberg intelligence says you will get a rate hike in september or october 2019, but the market is only pricing in 20 basis points by the end of 2019. is the market behind? scott: it may be, but the issue is that were not going to get any new information for some time. it looks pretty attractive in this environment. there is reason for him to rock the boat and change the market set up currently. he's not under pressure from her were like -- from arising inflation rate and he has set the table for steady policy. optimistic, isly looked at long growth in the

eurozone and i looked at confidence. consumer confidence is at a record high. is this as good as it gets? to remember that this is the policy committee that is very cautious. they -- the tying crisis of two months ago is obviously still fresh in their mind. it will be a long, methodical path to normalization. time, as they look at their mandate, he's not under pressure from the mandate. he is a dovish guy and i think will remain so. bubble, italy,he does it offer a premium? would you be more tempted for a bit of italy rather than spain?

scott: we shifted our view on the italian bond market. the outcome of the election was levels,ive, at current other markets are much higher yielding and much more liquid than bond markets like portugal, for example. medium-term, i think they are attractive. on frome are six years when mario draghi said, and i'm sure someone will correct me if i'm wrong, but i think to the day, six years on, we will do whatever it takes. i know for a fixed income man, this may be off to the left, but is the euro value a sure value?

we are back at the middle here. do you think the euro will accelerate? scott: my view is economic growth in the eurozone will continue to grow. u.s. economic activity at the same time is very strong, and policy reaction has been relatively methodical. you have to say, what is the relative economic growth of the two regions, and going forward, what would that be? briefly on the inflation front, what about europe? i don't think the inflation story is one for this year. growth picksonomic up, inflation will pick up. anna: -- manus: stay with us. coming up, we bring you our

with a ceo. you are tuned into bloomberg. ♪

six: 30 a.m. in london, 2:30 in the afternoon in tokyo. the dollar-yen, bottom of your screen. it keeps doing strange things on global trade tension. the question you have to ask yourself, very simply, if trade tensions ease, do you want to be long? yes, that's the question. let's get more breaking news. nejra cehic is standing by.

>> second-quarter revenue coming in at 12.1 billion euros. just beating by a whisker on second-quarter revenue. the number beating the highest estimate out of the range. the net debt number for the second quarter coming in at 43 .6 billion euros, a little less than what was expected. second-quarter net income is coming in 3% below estimates, given the automated analysis coming through on the bloomberg. also reiterating guidance for 2018. those are the numbers coming through. i also have some coming through from orange, second-quarter coming in at 3.8 billion euros. a little bit of upbeat on the second quarter.

reaffirming objectives for 2018 as well. now we have the first word news with juliette saly in singapore. facebook shares have slumped in extended trading after reporting second-quarter sales and user growth fell short of analyst projections. the company's whole wall street the numbers won't get any better this year. >> we made progress presenting -- preventing abuse, forged ahead with new innovation, and aren't acting or services to new trends and groups. talk trump will delay a second summit with vladimir putin until next year. in a statement announcing the delay, the white house last week vladimirp and invited

putin to washington for a which was criticized by both republicans and democrats in congress. china has taken another step to ease the pressure from its deleveraging campaign. the people's bank of china has told some banks a specific capital requirement would be manage thelp increasing credit demand. british officials are considering allowing the e.u. to impose market regulations on the northern island while the rest of the u.k. breaks away after brexit. bloomberg understands that the plan will come into force as a backstop if other programs fail, in order to guarantee that will not be a hard order. the northy to enrage korean party.

global news, 24 hours a day, on-air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. manus: thank you very much, juliette saly. donald.e numbers formic was 3.75. it that is a considerable drop over the year. owners is then car return 8.4%. they say that full-year will be at around the 2017 levels. they see light growth in terms of this year's full-year sales. so let's get at,

deeper dive on the markets this morning. about jean-claude juncker and donald trump this morning. nejra: we're seeing a third death gains for the msci china isfic index but lower and you're seeing losses in hong kong even though south korea stays higher. look what happened with the u.s. and china, but we did see some dollar weakness in yesterday's session. a number of the asian currencies declining against the greenback. we are seeing some weakness after again yesterday as well. you can see the 10 year yield up almost two basis points. , sore seeing some metal

that for your seeing some of the optimistic. i mention jgb come at the 10 year yield has jumped to its highest in more than year. this is about speculation that we could see some tweaking of policy. it's not come from any kind of .ixed-rate operations oil holding on to yesterday's gains, the highest in at least a week after we saw stockpiles dropped to the lowest since 2015, and also concerns around saudi arabia. manus: thank you very much. could this support the team of ample demand toward the front end of the curve? the auctions this week didn't go

to badly. how do you look at the demand side of this equation at the moment? pretty attractive yields at north of 2.5%. be demand continues to institutional investors, etc. is front end of the market really attractive, particularly for retail investors. thes: i promise to get to jgb move and i really want to do that. are victory central banks, the fed, the bank of england, and the bank of japan. we have practically doubled our yield, how significant is it and why should i be concerned? is that theeality bank of japan has your control in place. touched the upper end of that

band. the market has to be anticipating a change at the month-end meeting. securitiesy buy less , or whole basket of different types of securities, it's not about inflation or growth being stronger in depend, it's about tweaking the program so that the banking sector can be somewhat more profitable. manus: i presume if the ban was widened, that would be more for cluster for you than the equity side of the equation. is that a correct assumption? not about reacting to stronger economic growth or higher inflation. but it can have significant impact on the yen. when markets get more volatile, repatriation of money in japan drives the end stronger. now we have a traditional kicker with the new change of policy.

is moved quite a bit in the last few days. whether nowssess the market is priced in for this kind of yield curve control. when we look at the global central bank committee, it's important which direction they are all moving. the fed is obviously hiking. the ecb will begin hiking and a qe program. the people's bank of china is still easing, it looks like. moree bank of japan is relaxed about the degree of accommodation, and you have three big central banks going the same way. so the market is focused on it, although the move is microscopic in the big picture. what it implies could be significant. excited but you are right, it is microscopic. it's the messaging that goes with that. you mentioned dollar-yen. i got excited, i was looking back to the 1980's.

this takes you back to the reagan era of tariffs. that was the predication looking at this. extrapolate, what does it do to yen in the backdrop of potential tariffs? scott: for the whole market in general and the direction of the dollar, the terror situation has been positive for the dollar. if the tariff issue is lifted, then we go back to economic fundamentals. one could suggest that the dollar appreciation could reverse marginally over the next several quarters. we look at things like emerging markets which have suffered because of the terror of issue. to me there is an attractive asset class. concern about tariffs boost to the site. prices, this is a

very good environment for those assets. manus: we were chatting it about yield differentials. do you trade the spread? are you brave enough to buy out right in the moment? scott: the yen is a better value at that spread. we have some egos and credit issues we are dealing with. turkey is the most recent example. but you get it diversified sovereign basket tied to a fundamental view about economic growth. to me, that is attractive. scott will stay with the show. by 24%. shares up revenue growth will decline in the third and fourth quarter.

mark zuckerberg says it's in the year for the social network. >> this is a critical year for facebook. we made progress preventing abuse, forced ahead with new innovations, adapting to new trends. richard windsor back in the big brother house. how are you doing? did it deserve to get wiped out? >> the answer i think is yes, for two reasons. ofyou look at the pattern after hours trading, the disappointing headline figures, not that disappointing, really. i think it was more a case of expectations getting ahead of themselves. this is where i see the problem, the company is guided in the medium term for margins to be in

the mid 30's. they are currently at 44%. i think that's where the real problems have occurred. is it just there -- just that their moment of glory is being challenged? is key facebook for now. withook has a problem artificial intelligence. they talk about it all the time, they are not very good at it. as a result of that, they will hire humans like crazy to do the jobs that machines cannot do very well, which is scan all the data they are collecting. humans are expensive compared to machines, and that's what the problems are with margins going forward.

until facebook gets its ai under control, you have seen peak facebook. humans, theypesky cost money, they are hard to manage, they are emotional. this, this is the analyst recommendations. they are not very on the ball, are they? >> i would be inclined to agree. with that much momentum, it is often that way. you pay analysts to be ahead of the curve, to understand the marketplace. 44 analysts have a buy.

you, but iagree with would also like to point out the budget for research has collapsed in recent years, so all the experienced people have long since left the industry. manus: [laughter] in've got to come and see me to buy one morning, is not that long of a trip. equinor rebranded, just had their earnings. is hans jakob hegge, here to discuss the company results. it looks like a good set of results for you. you going to spend $11 billion on capex. the market is going to focus on this closely. uplift have expected an

in your. put me through your justification of $11 billion. >> thank you for having me. we delivered a solid set of results with adjusted earnings billion after a strong tax reform operation. we have experienced a high activity level where we continue to deliver projects. the reason for maintaining the around $11changed billion for this year is the increase share activity in the second half related to activity in brazil and others. b expiration side of the budget as well, we understand you're looking into about 40 expiration wells, 25-30 of those

in norway. $1.5 billion on expiration. expiration has historically been important to us. it's just a reminder of the importance of exploration. we've drilled 10 wells in the first cap and five ongoing. activity coming up in the u k and brazil, russia onshore. this is important to maintain fromo the value created expiration. we also have exciting things going on in brazil for example. we still have great faith in expiration. manus: talk me through the debt

situation for you. obviously we saw a little bit of a drop from q1 through to q2. talk me through the debt profile at the moment. slightly up in the quarter, due to negative currency effort an increase in the working capital due to building more , completing deals in the u.s.. based on commercial position and the strengthening of our port olio. they have strong corrections

going forward. bringing it potentially below 15%. manus: buybacks or something you have intimated that you have the scope for. can you update the language on that and tighten it up for me? will there be a buy back before the end of this year? >> dividend policy remains firm. said as you stated that the scope for share buybacks is emerging, based on a strong macular environment. we also said that near-term we would continue to strengthen the balance sheet, and that is still the case. so no new news on the buybacks. manus: the price of oil, the

average $75 in q2. what is your price? >> fundamentally, the markets are more rebalance, close to a five-year average. u.s. stocks going low. it was driven more by the paper market. we have a lower cost base. be prepared for volatility going forward. we wish you well on the day. equinor joining us for the latest on the numbers. something we are kept an eye on is inflation.

if i move quickly have, i can prepare a chart and put it all on one screen for you. these are the moments when you realize that anna edwards and i are symbiotic. is liver with me, this tv, anna is not here. globalalking about high-yield premium. rock thiel is the black deputy cio for fixed income. he is still with us. global high-yield premium, as you can see, it looks as though we are just moving a little bit off the ice. >> it's interesting to look at the breakdown of the market. have enjoyed is a caring component to high-yield.

over 10 years, it's really the higher yield. but not the capital appreciation. we see a steady market, which is something we anticipated at the beginning of the year. what has underperformed is asian high-yield. part of it is the tariff issue we talked about and part of it is concerns that chinese economic growth, etc. u.s. high-yield has been steady as she goes over the past year. that is theent in default ratio as well. and anve tax rebates economy on fire, relatively speaking, i know we've had five hikes in a year and a half, but relatively low rates. the important point is that

economic activity continues to the strong. to high-yield investors, they matter slightly less. a 325vestors, you get spread over that rate. incremental increases of the yield are important but not dramatic. we've seen tighter spread ,arkets like investment grade but high-yield has been very steady because the economy is good. it is a market that is fundamentally driven and we haven't had any big name issues. manus: we have traversed the world, we touched on the bank of japan and europe. outstanding calls that -- asia has a little

more credit default priced in it. >> emerging markets continue to look very attractive to me. if the discussion is about moving the tariff situation, and if there's a negotiating ploy by the u.s., it would be hard for them to come back and compromise. then we go back to economic fundamentals and we look at growth, strong oil prices, and very wide spreads. i think fixed income will do well in emerging markets in the second half of the year. manus: great to have you with us. we will bring you the ecb policy decision at 12:45 u.k. time followed by mario draghi's news conference. the world and the market will be watching that for guidance in terms of rates and qe.

juliette saly is standing by with a business flash. roche has raised its estimates. the swish drugmaker -- saying it will rise by a single widget percentage. the u.s. -- constant exchange rate is boosted by u.s. tax reform. of stella artois boosted marketing and challenge to its rival. second quarter profit doubled as the country -- company accelerated delivery following delays of the models interest

riders. following delays of the interest rate. qualcomm is on track to abandon as $44 billion bid to acquire rival chipmaker after chinese regulators failed to prove largest ever merger in the semiconductor industry before a final deadline. said we did not seen into the process or near into the process, so we had to move on. there were probably bigger forces in play than just us. that is your bloomberg business flash. manus: let's take a quick look at the markets as we get set for another sweep of earnings. equity markets are still holding on.

you have a relief rally there. nasdaq futures indicated at the facebook.wiped out on dragging the nasdaq lower. will we see a move from the bank of japan? more earnings to come, right here on bloomberg. ♪

manus: face plant. growth slows in the wake of a data scandal and rising regulatory hurdles. transatlantic truce. and jeandonald trump claud juncker strike a deal. and draghi's confirmation. the ecb may use today's decision to settle its qe exit timeline and clarify when it will next hike rates. .hat is at 12:45 p.m. u.k. time,

welcome. we are talking about shell. adjusted net profit for $.69 billion, below the estimate, significantly below of five 18 7 billion. she'll say the conditions progress well and they are cutting their debt and the oil price positions. is subject to conditions. this is where the disappointment was, they did not give us a share buyback. it is there. there is a buyback. we have a $25 billion share 2018ck from shell in through 2020 subject to conditions. that is the key piece of news.

there are 16 key integrated companies out there according to macquarrie. the cash flow, the profit misses but a buyback in lieu of competition. join us later to discuss all this but let me give you the anglo american numbers. that is below the market estimate of $1.29. that would be an escalation and trade wars, debt, $4 billion and tda $4.6 billion. there is approval in developing one of the peruvian mine sites. you are seeing approval come through for anglo american on that story. shell will trump the agenda on that news flow. let's talk about one or two of the other stocks we have. we have total, complementry what is going on with shell. also ecuador.

total give you the numbers. second quarter net income 3.5 5 billion, a little bit of a miss, in threet penciled point 6 billion. gross will be above 7%. there is a dividend of 65 euro cents per share. what you have there is european $35ning margins around since the start of the third quarter. , a strong upside growth, they have the assets and they have done those deals in brazil and abu dhabi. a red headline for total income, that is below the market expectations. astrazeneca, we gave you roche. you have astra coming out with the second quarter earnings per share, $.69 and a nice

comfortable beat. 69 cents. the estimate was $.61 but they roush.ttle with rauch -- astrazeneca maintains their guidance for the year. we are, keep an eye on that at the open.ock drugs will be a focus, autos will be in focus, the oil giants will be in focus, there is asked to zeneca up 9%. when it comes to japanese banking on brokerage, let's have a look at nomura. 3 billion yen. the conference call starts in life go. quarter, net fell for nomura. beating the estimates on the slate out there. in terms of sales, 430 .9. the mod -- market penciled in

370.45. pointquarter income five 22 billion. let's dig in a little more on this. 23.9 versusanking, 22.7 a year ago. ,he asset management side trading profit. this is going to be something the market will focus on. 71.80 union in terms of trading, that was 120. ontalked to the head of ubs monday. doinginvestment bank side well relative to some of the others. brokerage commissions a little bit lighter. that is where the market will focus within the nomura numbers. brokerage commission is lower as well. that is the performance down 16% on the year. it is in case you have not guessed it, it is a big day for earnings very at and with that in mind we have the equinortion, the

conversation. like, itt is going to with thatmfortable share buyback. my favorite line is from some of the analysts who said cash flow paradise for shell. it is a start, the share buyback. cash flow paradise should last till 2021 according to macquarrie. just broke their full-year numbers, let me get those for you. this is what they have got. they are at 19 a share buyback as well. with -- in that respect. share buyback, i can tell you that starts on july 26.

full-year net sales meets estimates. 12.16 billion, the estimate was for 1211. that is it. juliette saly, good morning, how is your first word? shares havecebook slumped after trading, reporting sales that fell short of analyst rejections and told wall street the numbers will not get better this year. >> this is a critical year for facebook. preventinggress abuse, forged ahead with innovation, and are adapting our message to stories, messages command groups. juliette: president donald trump will delay a second summit with russian leader vladimir putin until next year. john bolton cited special mueller'sbert investigation into russian interference in the 2016 presidential election in a

statement announcing the delay. the lack -- white house said trump had invited putin to washington in the fall, a move that was criticized i both sides of the aisle in congress. british officials are considering allowing the eu to impose its market regulations on northern ireland. while the rest of the u.k. breaks away under brexit. the plan would come into force as a backstop to guarantee there will not be a hard order on the land frontier with ireland. the radical option is likely to enrage the northern irish party which is property -- propping up theresa may's fragile conservative government. global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . checking on markets in asia, starting to see some weakness in some of these key markets. the csi 300 under pressure down 1.2% in late trade.

the yuan erased late gains after we had a stronger fix from the pboc. some good movement in emerging markets, indy -- india still at a record high, the nikkei closing 5.1 of 1%. in terms of stocks where watching, a lot of focus on facebook but tech stocks have done well and the biggest surging app has jumped up 7%, it had seen ad revenue jumped by 42% despite a decline in subscriber numbers. we had the talk between juncker and president trump and that did -- gave a boost to shipbuilding. plan to import lng from asia to europe and finishing on luxury goods, we heard from lvmh in the european session and jpmorgan has updated product in hong kong saying it sees a major rejuvenation.

i know i'm much you love your product goods. transatlantic trade war appears to have been averted for now. president donald trump and the eu president agreed to suspend new tariffs while negotiating over trade. the u.s. president explain what both sides will work toward. >> we agreed today first of all to work together towards zero tariffs, zero non-tariff onriers, and zero subsidies non-auto industrial goods. juncker said they would hold off on terror. >> if the u.s. puts a 20% tariffs and other countries retaliated in-kind it would cost the u.s. economy $50 billion by

2025. deal.ere to we made a other we agreed that no terrorists would be [indiscernible] as long as we are in negotiations. manus: some breaking news coming through, a blast has been reported outside the u.s. embassy in beijing. the cause of the blast is unknown as yet. and we will bring you more details as we get them. , the latestide detail is it is a blast at the u.s. embassy in beijing and the cause is unknown. we will keep you up-to-date. kathleen hunter is the lady in residents who keeps us up-to-date with all rings trade and all things trump. i have not seen that kind of rhetoric, it was progressive

relative to some other engagements we have seen yesterday. your take. >> it is worth noting that this is straight out of the trump playbook in the sense that he tends to ratchet up the confrontational and belligerent rhetoric before negotiations, that is his tell that he is willing to make a deal. he wants to be able to say i talked tough and that is what got the deal. who knows if that is how they got a deal, but the fact that they got a deal is surprising to most people. i do not think that was what he was signaling over twitter. when he said that tariffs were great hours before he sat down with juncker. has a vested interest in having some kind of a trade eel with europe as well. manus: let's see how the auto her response this morning. auto industry response this morning. that was half lane hunter.

-- half lane hunter. -- kathleen hunter. good to see you. bitre waking up to a nicer of relief. theone day does not make underbelly of support for equity markets, a progressive step in the past 24 hours? guest: one thing you are seeing from all these companies is cash flow. companies are bringing at results and buying back their own shares, that shows they have cash flow in future earnings which could only be positive. manus: you mentioned earnings and i wanted to pop the s&p into my chart monitor. we have done such great work even in the face of it, we have the tax cuts and i know we have looked at ford and gm and they told us it will cost us in regard to terrorist but we are in spitting distance of that record high.

do you still like u.s. stocks relative to the u.k., relative to asia? or just out right? times the s&p 500 is 225 earnings as a court -- as opposed to 14 times. you need to look at what kind of growth is priced in. you can be brought back down to earth very quickly. i would prefer europe where we are in terms of valuations, good, high quality international call -- companies and low valuations. billion$151 wiped off. when you see that kind of demolition on a stock, how brave would you be on facebook? some people are waking up and go that is a magnificent buying

opportunity. said pick facebook for now. are you part of that club? guest: i would probably agree. when you are trading at 30 times earnings you are pricing and a lot of growth. the rating is quite high and in the two major markets, growth has stopped completely are stalled. revenues may be growing but your expenses are growing at 50%. we are in this position where they have got over significant issues around privacy, gdpr rules came out in europe. one quarter does not make a company but this will -- we will see if this is a momentary blip or a momentary issue that company has. manus: airbus has given us a couple of lines. and clarifying his position, the ceo said he is not suggesting

there should be a merger with hasunit but airbus delivered profit. i have been told we have to take a break. more on airbus when we come back and other commodities. if you have not had enough today, tune in tomorrow, we have a huge day for earnings and we renew more ceo interviews. more from the l'oreal ceo. right here on bloomberg. ♪

manus: and has gone 7:19 a.m. here in london, moments away from the start of the trading day. juliette saly has your business flash. juliette: sky has reported earnings of 63.7 cents per share beating estimates. the european media group said it

is not proposing final dividends at this stage. profit declined by one sales slowed for luxury cars prompting it to cut targets. the world's biggest luxury ,armaker reported interest becoming the first company to cut its profit outlook blamed on part -- in part on the escalating trade tensions. rush has raised its estimate even as its biggest medicine faced a challenge from cheaper copies. sales will rise a single digit percentage while court earnings will be faster in the mid-teen digits at a constant exchange rate boosted by u.s. tax reform. that is your bloomberg business flash.

you, juliette saly there. we have seen the numbers from two of the major oil companies, shall missed on the net income, the point i'm a to you, they missed on the net income but also on the cash flow generation operating side of the business. those are two negative is but to balance that, the share buyback. this is what disappointed the market. initial $2-- with an billion over the next three months. the cfo ofspoke with equinor. firm,idend policy remains in line with underlying earnings and the scope for share buybacks strongging based on environment and the develop mend of a portfolio but in the near-term they would strengthen the balance sheet and that is

still the case. no news on the buybacks. go to t . our managingis editor for energy and commodities. are you having a good time and south africa? let's start with shell, my read is that $25 billion of a high is more bullish than we thought. how do you think this has gone so far? bag, but you mixed are right, investors have been looking for the buyback and have been usually disappointed. they will be relieved that it started in the first instant. we also had totale, coming in

line with analyst expectations. profitspicture here is are rising as oil prices rise, no supplies, but there will be a couple of concerns. cash generation is not quite as strong as some had hoped and we are seeing that for ecuador -- equinor. manus: when we spoke to the cfo lineld me, my favorite when we rode up -- wrote it up, it is not in cash flow paradise but the rest of the industry has that ability to hit nirvana. keep on will: we expecting the great cash

paradise to come. it is worth digging down into the numbers because there are details that mean the picture might be better than the headline numbers three at they had a big positive working capital adjustment in the third quarter and a large negative adjustment this quarter. if you strip those out and do a bit of digging and clean them up, it is a little bit better. manus: that is what the team are for, to dig through the numbers. we have two more interviews to american ceolo speaks to bloomberg and royal bech shell's ceo, it will knee deep in cash flow questions even though it is rewarding the shareholders right now with those $25 billion of share bad back -- buyback. the warning on the cash flow, i got excited only because they

missed it in the first quarter. >> it is a comedy company. company.ity commodityry good for companies and in this case an oil company. when you know the type of revenue, when it stays stable you can manage better but will is right. the service companies will see the oil prices rising and their employees will want a rise and they will see they can get more for their services that it is making sure that those costs are kept in check. the average price of a barrel of oil is $75. where is the acceptable price of oil, will we settle lower? many: it depends on how projects can come online. you have seen the large oil and gas companies reduce their capex

and this is what happens after, you see a rise in commodity prices, exactly how you would expect the cycle to go. manus: cars, autos, donald trump wants to get tariffs to zero, what would that mean by the -- for the auto sector? daimler is down. what would it mean to go to zero in the trump tariff war on cars? u.s., if you look at the the u.s. is 4% of the world's population and 25% of level gdp. global trade,om 0% trumps on -- tariffs on everything. his ideal for them, it is ideal for the rest of the world. beat nevada and a lot of different ways. thank you for being with us. a quick snac snapshot of how the world looks.

what happens next? bg.p an eye on j will the bank of japan move and equity markets [inaudible] this is bloomberg. ♪ retail.

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this is the european open. we are live from our european headquarters. my cohost guy johnson is out this week. the cash trade is less than 30 minutes away. for a home the opening bell tolls, facebook shares plunge as much as 24% in after-hours trading as growth stalls. the u.s. market open could see $150 billion