. welcome to "street signs." i'm julia ches see and these are your head lines. t tisson group dies for a contract to build australia's new submarine fleet. >> oil major enjoying a big beet as it promises to keep cap ex in check. the prospect of apple's first revenue decline in 51 quarters.

>> kicking the diction. saudi arabia unveils a 15 year plan to cope its reliance on oil. a warm welcome once again to today's "street signs." we're seeing a bit of a risk appetite in europe this morning. let me show you the individual markets. just inching back losses we saw yesterday. we're just about there now. the ftsi 100 higher. bp helping gains there. ftsi mib out performing here.

the individual sectors. a bounce in oil this morning too. not sun sector actually now in the red. so all gainers today. oil and gas higher. something something. will be talking about that also in the show. lowest gainer this morning. obviously the story in foreign exchange is the dollar. very different story what we saw in last week's session. i want to point ule couple of these. sterling ten week highs this morning. saying the probability of the uk deciding to remain in the eu is now at 72%. that is up 10 percentage points since before president obama came and talked about the risks

surrounding brexit. something something something. analysts saying they were not expecting anything from the bank of japan on thursday. but something goes back to 110. we singapore and asia now. >> we were tracking some losses for asian equity markets throughout the course of the session. investors indeed positioning ahead of the boj meeting and also analysis from the fomc. the nikkei 225 now, the market sitting down half a percent at the close of trade. and the worst performer on the market today was mitsubishi motors. it fullum 10% as fell almost

10%. the market previously thought it was 2002 as a result the scandal worsened and we saw shares tanking. also shares in toshiba as well. after much refusal they also booked an impairment charge. shanghai comp up. hang seng up as well. losses for some other stuff. and indeed -- we're also tracking losses on the asx 200.

and in australia we've also had a major defense announcement as well. japan losing out to france in the race to win the billion u.s. contract to build australia's next fleet of 12 submarines. we saw shares in japan's major defense contractors. mitsubishi heavies and kawasaki heavy industries both down. >> and tisson group shares driving. the the project was awarded to the french firm. australia's prime minister called the decision a momentous national endeavor. elsewhere bp shares catching

a bit after first quarter underlying replacement cost profit. a huge beat on analyst expectations for a loss of $130 million. the company ceo dudley expects global oil supply and demand to balance by --. stan chart issued an update day. after some stuff. what can we expect? paul, good morning. great to have you on the show. what are you expecting here? >> you may all at the end of 2015 new ceo bill winters came in. a high powered j.p. morgan banker. with a task. it was really to restructure

standard charted. they had many non performing loan, exposed commodity, oil markets and kmods has a tough year last year. and he came in and raiseds $5 billion under a rights issue and certainly put the company into a strong position. the key thing is of t $300 billion of risk weighted assets the feeling is about a third of those are either non performing or underperforming and the tacsk is restructure that. >> what message can he send to investors that says we're going to get this under control? we're going to be tacking this and how long it is going to take? >> bill winters has a good job on his hands today. the first thing to say is he was very well accepted into the role as ceo. and since then the share price has performed very strongly against the banking sector. it is up around 60% relative

value and that reflects the combination of his involvement with the business but more importantly a more produce pous side for the commodities morks. >> standard chart is a well capsulized bank. particularly after the rights issue. there was a feeling the old management guard didn't feel need to raise more capital but the first thing he did was to put that into place and get the balance sheet support as he undertakes this structuring. there is a feeling that the negotiations that are taking place with some t of the larger clients with loans that are

performing but really delivering very low returns for standard charted. the renegotiation has led to hay high e reattention of those assets. and really what bill winters needs to do is not to be overly confident but show early efforts are beginning to yield results. >> do you think there is more upside? as a bank weighted versus other assets they certainly scope for more improvements on that i think the feeling from analysts is that it's gone a little too far too quick and that today he's got to come one some surprise too that will take it higher from here.

but over a three year plan there is further scope to close that gap. >> and how much of the recovery that we've seen in the share price to do with -- we've had analysts coming out saying look this is the turn now in some stuff. versus hopes for restructuring. let's say we get a change from the fed. suddenly we start looking at the stronger dollar again and wind come out the sails of emerging markets and you have a problem for standard charted. >> what's good for the first quarter of 2016 is not necessarily good for second quarter. a large part of this outperformance has been driven by investors wanting short-term exposure to emerging markets commodities and --. >> quick question. who's going to outperform in this earnings season. if i look at bar claeys has a

classic example. and sterling. >> really, on the core banking side and again we look at standard charts but on the resale side there are good bits. we continue to see unemployment trends across the world improving. income still modest but increasing. so these sort of shoring up of balance sheets across the world for the retail banking operations has been helpful. i think the retail will continue to perform solidly this year. >> something something something. right, we're going to do an about turn now. al lines energy fund great to

have you own. we're going talk bp. whether do you make of the numbers? >> i think these are pretty good numbers in light particularly of concern going into the numbers that they were going to be disappointing. and the ongoing concern generally in the sector that this is an industry that is restructuring but is it restructuring fast enough to maintain dividend stream that is important to shareholders. it is the only way sharelders have been paid in the industry in the last ten years. we're seeing big cost cuts in the upstream. we're seeing big cap ex cuts as well. guided down for this year, cap ex and for next year. that is important for getting the break even oil price, the point where the business can ambulance, cash in and cash out. >> going to come back to that point. the real fear i think coming into this was the downstream operations, prapts a bit of pressure on the margins in the

downstream. can they sustain it that? >> looks like they can. seems the operational performance under the new divisional chief executive there has been pretty impressive and it's underpinned not just by good capture of the trading environment but also good cost control and that's really important. >> dudley said we're going to continue to focus on the cash ambulances, the cash flow balanced. if i look at the numbers i think it is pretty weak at 1.9 billion dollars for the crash flow. you look a 10 cents dividend. they are still not covering that dividend ultimately with cash flow. with can they still sustain the dividend at oil prices at this level? the chairman hinted perhaps could do something fit gets worse. >> i think important point if we can get cap ex down to 15 to 17 billion for next year and make

that a sustainable number. if you add back 7 billion roughly cash cost of the dividend then you have to get somewhere between 22 and 24 billion. if you analyze the last 12 months you are looking at about 17 billion. so you are not too far off those numbers. if you can reduce the cap ex putter you can start to close that gap. the question is one of time can the industry restructure fast enough? do oil prices stay too low for that to happen? >> do you think this takes pressure off -- >> i think it probably does. this is about delivering on operations of the business after what was a pretty weak fourth quarter for a number of reasons. and i think this is a testament to the ongoing restructuring not just within bp but the rest of the industry. the industry is in crisis and it's got to respond in this

front foot way. >> if you compare them to someone like shell. absorbing the $50 billion deal they've just done. if you contrast to two of them you need to hear the -- >> more cost absolutely. we'll see that hopefully next week when shell report. we have others reporting tomorrow. i would expect them to again report significant cost savings. similar the 20% year on year we're seeing here at bp today. >> bp is up 20% since lows we saw earlier this year. do you see room in there? >> i think the sector in january was overtaken by panic. to see shell back to the 10 year low is soot example of that panic. and i think from an oil price a lot of industry is about the oil price, the share price

performance but there is a lot of self help the industry can deliver. the. teasing standard chart erpgs and saying they were going to be and ner now.earnings and saying going to be and ner now. >> operating expenses down 10% year on year to $2.2 billion. operating income figure coming in at 3.34 billion dollars for the first quarter. income from their private banking. $118 million down 2 2 year on year. they are struggling in private banking business. cost efficiency. 1 billion in something remains on track. and overall performance of the first quarter of the year was inloo with our expectations.

focus also on what we got in terms of loan impairment and performance. they are saying the loan impairment of $471 million here's. broadly in line with what we saw in the first quarter of 2015 but down significantly on the fourth quarter of last year. in terms of the outlook they are look, the group performance is going to remain subdued. we're talking about the fact there is an ongoing restructuring process and it is just going take time the get those assets under control and try and off load some of the non performing loans ultimately if that is what the plan is. they remain confident in the estimated total cost of the planned restructuring of around $3 billion to be incurred. and now we've got the capital ratio. up 50 basis points and i mentioned that would be around 12.5% so that's significantly

better than expected on that number. what we saw from the u.s. banks was the trading conditions and the investment banking division was tough. and they said exactly the same thing. trading conditions in q 1 remain very difficult. let's take a break. if there is anything more on that i'll bring you up to date. coming up wit bred serves up a dividend hike and rise in earnings. more from ceo allison britain after the break.

we delivered a good first quarter, supported by oil -- all businesses. our materials had robust results. supported by low input costs. all in all good growth, good margins and good returns. having said that we are mindful that the macroeconomic environment out there remains tricky. but we are confident that for

the full year we will deliver. >> british american tobacco shares move higher. buyers posted a near 16% jump on the back of strength in precipitation drug sales. the german pharma group made something. >> french tellco reported 1.6 drop in profit due to related costs. >> the french industrial gas supplier is still forecasting a

rise in full year profits. we've been talking to nancy for the last two days. she's in the hanover mess talking with cloud technology with microsoft. what are they saying? >> reporter: well the fig focus here is the internet of things. and we're talking about big tech companies such as microsoft teaming up with a traditional industrial players to make things a reality. and that is good news for microsoft's cloud business. you may remember just at the end of last week microsoft's first quarter results actually shed some concerns when it comes to growth in cloud specifically. it wasn't enough to offset some sluggishness in other areas. i had a chance to speak with the head of cloud telling exactly where where the growth was, why investors shouldn't be concerned and also talking to him about

competition. this of course we use to talk about cloud being a two horse race here between microsoft and amazon. but now google taking a big investment, really stepping up gains against those two players. so i spoke to jason xander from microsoft and asked how concerned he was about the decision. >> there are only a few pler pl ers that have worked that hard to get there. our business not is designed to help people from where they are to where they want to get with the cloud and they get to pick what pace they want to move. >> talking about cars you said you will continue to provide

technology technologies but there will be a microsoft car. >> to me i think if you look there is a significant amount of automotive experience around the industry and the partners i mentioned before that we work very closely with. i think they have a lot to bring to the table and in our case we want to complement that with with our perform and cloud. that's all role. >> the race is on to realize the benefits of innovation taking place by the auto makers themselves and very appropriately i'm standing in front of a volkswagen gulf here. there is a lot of high hopes for the innovation. but as, you know, the diesel scandal still hanging over the industry. and up tomorrow we'll be heading over about 50 or so miles to wolfsburg to get the latest on the scandal to ask volkswagen exactly what they are doing to implement these new

technologies. >> we've got some flashes coming across from mitt mitsubishi motors. we're hearing from the ceo saying he was not aware of non compliant fuel economy data use going back to 1991. they also say that prioritizing handling the fuel economy with issue with developments of new vehicle models has not stopped and also from an executive at mitsubishi saying it is unlikely the issue will do something but for now another break.

prospect of apple's first revenue te cline in 51 quarters looks to overshadow the fed's meeting. >> european markets this morning

taking back stuff. oil and gas overall higher. the cap higher. may n maintained the sentiment from the european markets. saudi arabia plan unveiled.

is this the rehab investors are looking for? >> women don't they say the first step is at least admitting that you have a problem? and i think the vision for 2030 is trying to do and at least address some of that. basically what we heard from the deputy crown prince yesterday here in reiad was a vision for the future. and he valued that company above 2.5 trillion dollars as well. big huge numbers coming out of saudi arabia but not much detail. the whole vision we heard is baseden an oil price of about $30 a barrel. >> we'll achieve this even if the price of oil is $30 or less.

we believe this is almost impossible that oil price will be less than $30 but this vision will deal with oil whether the splice 30 dollars or 28 or $100. >> any way you look at it these are seriously ambitious plans. they want to reduce unemployment in the kingdom by 4.5%. they want to build a 30 mile bridge and possibly a pipeline as well. they want to give arabs and other muslims green cards and ability to invest and stay in the kingdom longer. another thing, the bigger question have they biting off more than they can chew. we're hearing good numbers but this is a at time when they have a war in yemen ongoing and also

at a time when they are still financing the oil needs of other countries like egypt. i asked whether or not they have just bitten off more than they can chew. >> there is also a risk of managing expectations going forward but i think at the same time from where i sit i actually am quite encouraged they are setting out objectives that are ambitiou ambitious. that is a good thing. the other point which i subscribe to is not t key issue is not just how you invest resources. it is the actions that they are going to have to take to bring their fiscal deficit under control. last year they took some actions towards the end of the year.

still ended up with fiscal deficit close to 90 billion. this year based on plans they have they probably come in a little beless but it's still substantial deficit. and over the next five years you have to try and bring that into balance because that is what generate the sustainable model and the resources for investment. >> still a lot of questions about most of what was announced yesterday. at the same point everyone we speak here whether the younger generation, women in general, the older generation, they are filled with optimism because you have to remember this was a country being in 1932, some eight decades in the kingdom and finally they seem to be moving. >> we were talking about this yesterday on the show and i was talking about the role of women and how you can galvanize an

economy when half your workforce is effectively excluded. and i think you are expecting too much. as you said this has been glacial pace and reforms like are simply going to take time and we should manage our expectations. do you agree with that? >> i think managing expectations is important and certainly something folks here are used to. but at the same time this was something huge they were even talking about this. this is the son of the king of course, he came out and said this is a societal issue. it is not a religious issue. and he said in the last week in different interviews that driving for him -- for women it just isn't that big of a deal. but as he said as the societal issue. and when the society is ready it will move forward. and given the pace we've seen over the last year and a half, lots of changes, lot of movement

so it is not beyond the pail for this country ry. >> that is so funny. it is not a big issue for him because he's not a woman. thank you hadley. u.s. is sending forces to help fight isis. >> it represents from i've said from the start, which is that us dismantling isil is a priority. and although we are not going to be sending ground troops in to fight we are going to try to find out what works and double down. and one of the things that's worked so far is us putting special forces in training and advising local forces but also intelligence gathering. one of the challenges of mounting a fight against a group like isil that embeds itself with civilian forces.

they are not isolated. they are not out in remote areas where we can just hit them on their own. so having people develop relationships with local tribes, with people o who may be going in and out of places like raqqah. us being able to distinguish between those who we can work and those -- >> skipping to a potential future president. donald trump has called the new alliance between senator cruz and governor john kasich pathetic and weak. meanwhile hillary clinton has criticized trump's luxurious lifestyle, saying he's out of touch. >> he says wages are too high and he doesn't support raising the minimum wage. and i've said come out of those towers named for yourself and actually talk and listen to people. you know at some point if you

want to be president of the united states you got to get familiar with the united states. you got to spend time with americans. of all sorts and backgrounds in every part of our country. >> nbc's tracy potts is in washington. hi. i guess the question is is he effectively out of touch with the american people enough that they decide to vote tactically for two diametrically opposed candidates? what do you think. >> when you look at donald trump's numbers in key states like pennsylvania today he's still leading and leading by double digits. so there is no denying he has a strong following within the republican party. the question continues to be whether or not it is a majority following in the party. and that is what this alliance between ted cruz and john kasich is all about. if one of them.

either one of them is outof the picture in either particular state does that give vadvantage to the to other? not necessarily. it is interesting. we will find out after today's primaries in indiana the first real test of this alliance if in fact people who don't vote for kasich or don't vote for cruz will go for the other or will go for donald trump. that is the real question here. and some are describing it as a sort of a hail mary pass. because if it doesn't work donald trump is moving towards that nomination. on the other side today we've got the democrats where bernie sanders is increasingly under fire for whether he's going drop out of race, whether he's going to endorse hillary clinton. after today if she makes a clean sweep as the polls are

predicting she'll be literal just a few delegates away from clinching that nomination. >> tracy, thank you so much. now let's move on to separate subject. profits in --. according to the ministry of the finance. on the flip side however, pharmaceutical and petra chemical firms performed better. shanghai overnight was bucking the broader trend we saw in the asia session, higher by .6%. >> you said you quit the chinese equity market a year ago you saved seriously eye watering volatility. why is now the time to get back in in your mind? >> i think the starting point is

always valuations. i always come back to valuations. and if you look at the -- it is now 9. it was above 15 a year ago when we quit. so from a valuation perspective it is pretty cheap versus its own history. cheap with the u.s. and cheap versus other emerging markets. so evaluations are a good starting point but not always enough. valuation. >> are you saying the stimulus we seem to now be seeing feed through into particularly the growth stats here is viable? >> yes. i think no doubt china has many problems. and there is a lot of focus on the problems of china. but it is not surprising to me that we are seeing some acceleration in the economic data. recent data from march and the

first quarter suggest that there are -- that the economy is not faltering in the way that many expected -- >> -- exploding. >> it is one reason. i think there are a number of reasons why the chinese economy might be doing better. first of all easing by the central banks and that feeds into the credit argument. but at least in china there is demand for credit. the central bank can have an effect in the way that the ecb the fed and the boj cannot. will help the economy if they help the currency find its natural level. >> if we get a change in tone from the fed for some reason because the u.s. data starts to pick up again and we have the

volatility we saw in the first quarter this year. if you throw the fed back in and see pressure on outflows from china is there a risk that has --? >> i think it's possible. you have to bear in mind the sell in may and go away is not actually a bad idea. and that actually works in china. the middle third part of the year has been a worst performing part of the year. so i wouldn't be surprised if there was a little bit of volatility. the market has recovered quite nicely since the end of january. and fed, a change in the fed tone could bring that about. but bear in mind that historically when the fed is tightening it is not a bad environment for markets. volatility historically has tended to be lower when the fed is tightening then at other stages in the economic cycle it.

all depends on the circumstances. and an important circumstance and backdrop here is what's happening to the chinese economy. most of the volatility in the last year i think was a result of fears about the chinese economy because of the slump in chinese equity prices. the economic volatility is not coming through in a way that was feared. >> so you are saying it is a chicken or egg situation. and actually we're perhaps looking at it the wrong way. are you talking index purchase here? >> i would always start off at the index level but naturally a strong part of the chinese economy is the consumer sector so i would imagine continued growth over the medium term in that area. but i don't think that is a news story either. and if there is cyclical turnaround than presumably that feeds through to the industrial side as well.

>> morgan stanley if you look at the stabilization in electricity, growth, they point out some stuff. and actually that can only last three, four months. so that kind of brings us into the middle of your period where we tend to see a dip in the chinese markets. would you buy at that point? >> yes i would. and that is what i said. you look at the valuations. there is a lot of bad news in those valuations. so any further down would pressure in the next months i think is a good buy-in opportunity. >> paul jackson, managing director and head of research at source. we're going take a quick break. coming up, will apple post its first revenue decline in 51

quarters?

welcome back to "street signs". global financial network used by banks has come under threat via fake messages through its system. first time swift has acknowledged the scale of the threat from cyber theft

>> charter --. this is the television industry faces pressure from online rivals such as netflix. watch out snapchasnapchat. >> good morning wilfred. >> very good morning to you. as you said, apple expected to report earnings of $2 a share on revenue of $52 billion. among things to watch in release, iphone sales apple is forecast to report 50 million

units versus 61 last year. second, watch china. the country has been the bright spot for apple but the market is becoming over saturated. and service, investors will want to see value beyond the hardware. shares of apple roughly flat year to date and down more than 19% over the last 12 months. we're down about .6% yesterday. of course the tech sector here stateside has been underperforming over the last week or so as other tech names have disappointed. hence an increased focus on apple earnings. the broader market up about 3% foll following --. back to you. >> -- stole from a tease before

the break. it is that time again in the fed kicks off its two day policy meeting. traders will be on the lookout. someone joins us now. great to have you on the show. what do we get from the fed because they have to somehow acknowledge slightly weakened data but at the same time they keep tells us the market is lax about future rate increases. how do you find a ambulance? >> i think the balance is really the trick. in some ways this is a at least interesting decision simply because no major policy guidance is expected. right now the odds of aollar positive outcome or -- is pretty

much ruffleem equal to a dollar negative one. we all know the u.s. economy has slowed going into april. does the federal reserve think that the slowdown is transitory and i think they will. the mental and rhetoric from policy makers in the u.s. indicate they believe the mar t market --. i think when it comes to the statement you are going to see them indicate the slowdown is transito transitory. we're also watching to see whether the balance a risk statement returns to the statement. in january as well as march it was removed because there was a complete division. no one inside could agree on how the economy was doing. i think there is no question it slowed since then.

the other side of the coin is that the global markets have stabilized a little bit. that is the wild card whether that statement returns. if it turns and they indicate more balanced it is going to be dollar positive. and if it's absent investors will take it as the signal for a rate hike in june. >> -- >> i the fed rhetoric is key. and the message has been very consistent. the u.s. dollars pulling ahead. i think dollar yen after breaking out above 110 looked pretty good. i think the boj has a strong chance of taking action. so i think dollar/yen is probably your strongest

position. f wom >> what you do expect them to ask? suggestions they could do negative rates on loans similar to what we got from the ecb. what can they do to get major bang for their buck? >> in terms of getting a major bang their buck it is really a matter of complementing negative lending rates with the negative deposit rates. short dollar-yen positions and the question is is that enough of a surprise? i think because investors haven't completely priced and discounted easing this month, i think it will be a sufficient surprise. and specifically because everyone is leaning the other way and not pricing in for additional easing that could be enough to squeeze dollar/yen

higher. >> i mentioned earlier on in the show some now asking or giving far higher probability of uk remaining in the eu. are we just pricing out concern about the brexit? >> i think you are seeing that. you are seeing the hedging cost for brexit has declined. that indicates investors are interpreting every negative headline, including what president obama recently said about how long it would take to negotiate a free trade deal with the u.s. as a reason to stay in the union. there are a large substitute of voters undecided. and could push sideline voters to opt for a something something. and they're covering with less than two months to go before the referendum.

>> kathy thank you. just a quick run down of the standard chart figures. they announced earnings for q o1q1. this is something they are going to continue to tackle. the shares significantly higher this morning. investors certainly liking what they are hearing, higher by 8.5% here. standout to me is stronger than expected. wealth management division, down 20% year on year so struggling there and they have also said q1 trading is in line with views and it is going to be subdued

tough performance. that's it for me. i'm back tomorrow. worldwide exchange coming up in just a few moments. don't move muscle. the pursuit of healthier. it begins from the second we're born. because, healthier doesn't happen all by itself. it needs to be earned every day. using wellness to keep away illness. and believing a single life can be made better by millions of others. as a health services and innovation company

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good morning. earnings alert. shares of bp rising despite 18% drop in profits. the details plus ceo bob dudley's call on oil prices coming up. >> apple ready to roll out results. we'll bring you the three things to watch. >> and 2016 decision, five key primaries today. could be make or break for many of the presidential hopefuls. it is tuesday april 26, 2016. ♪ oh i think i found myself a cheerleader ♪ ♪ shes