good morning, everybody. welcome. you're now watching "street signs." i'm louisa bojesen. >> and i'm louisa chattily. the cfo tells us the loan picture is improving. >> cost of credit provisions should improve yoear on year, but, again, with the positive news coming in the developing economies. a strong connection for

investors as tell co-raises deal to speed up broad band network. >> nikkei rails on the speculation japanese is waiting to reveal stimulus passage. abe will announce the plan next week. an historic day for america as hillary clinton becomes the first woman to be nominated as a major party candidate for the white house. >> hello philadelphia. i am no happy. it's been a great day and night. what an incredible honor that you have given me. i can't believe we just putt the biggest crack in that glass ceiling yet. >> hi, everybody. good morning. welcome, you're now watching "street signs" for the next hour. good morning julia. >> good morning. >> how are you.

>> great. half way through the week. >> deep in earning season now. >> we're still hearing it's supposed to be disappointing, but relatively mixed bag so far, but quite a bit of optimism in terms of the outlook. we're going to talk more about this later on the show. stock share up 600. just a slight bit higher than what we were seeing yesterday that the time. most of our european equity markets are here hanging on to gains in just over 1%. that's all we're looking at on european markets. in asia shinzo abe will be revealing a $28 trillion explanations of review according to reports. earlier it will nikkei raild on the announcement it could come as early as today.

>> the bank of japan on friday: it will be interesting to see if we get monetary stimulus before we get broader detail on august the 2. banks also in focus this morning. deutsche bank is one that even deep cuts may with required. revenue slump by 20% due in part to last month's brexit vote. opened the door to more, quote, ambitious and intense restructuring. >> speaking of the bank s santand santander. the fall was mainly due to extraordinarily charges linked to restructuring efforts. nonperforming loans dip to almost 4.3% at the end of june. increased slightly and the bank

is saying it's on track to increase the cash dividend by 10% in 2016. speaking to cnbc earlier, cfo was cautionly optimistic on the bank's eu stress test. >> in the previous stress test conducted two years ago we were the bank that had least in stress. this exercise is different. new methodology and new risks have to be taken into account, for example, conduct risk. we clearly believe we will be among the least affected. >> portugal's bank are among the most weakly capitalized in the area. that's according to moody's who saves it doesn't see room for improvement over the next year and a half. added the weakness of the banking sector was a persistent risk for tfl government's

creditworthiness. you have a whole host of banks out this morning. deutsche bank is kind of fascinating and showing what we've seen from the other banks. lack of activity as far as what we're seeing in trading revenues. >> you've got to love the stress test and the rules and how they've changed. no pass fail. >> they want to avoid a knee jerk reaction in the markets potentially if stuff is uncovered. >> shouldn't we already know this? how many stress tests have we seen now thchlt is the third time. i mean, round and round in circles, but let's dig into some of the details. joins us now, good morning. what do you make of deutsche numbers this morning? >> pretty appalling reflection on the european banking system. i think the banks have been regular latelied out of existence almost. i take your point about the stress test.

it's year after year we reiterate the banks are safe. the problem is the banks can't grow their profits and that's not really a great business model. we are heading slowly to some kind of terrible end for the european banking sector at the same time the u.s. banking sector actually perking up a little bit. >> define terrible end. >> well, just such regulatory constraints. you can't play the role in the economy and society that banks are supposed to play. which is oiling the wheels of commerce and finance. >> but regulators don't think they're doing that. they think they're making the banking sector safety. they don't think they're restricting the balance sheet. ive speak to senior executives and that i have say we've got the balance sheet available to lend and frankly we can't and u.s. banks are saying the same thing. >> i think the regulators need to be told, i think banks need to be unleashed not rained in

and that's what is good. we're all in the opposite mind set post credit crunch and we've been there for eight years, but actually letting your banks go and letting them become more risky can be a good tling. >> we're going to talk more about this, but many are saying to focus on germany, italian bangs banks. >> that's a good question. not something we have explored. we had a position the banking sector, it went horribly wrong so we're now out and i think yes, we still see the valuations have really, really beaten down across the whole sector. yes, you could argue the italian haves this extra filler to the share price from government tax. i think too scary a place to go. >> you talk about the rally coming to an end. so far we naught the rally could come to an end if we had the

brexit vote. which we did, right, and we haven't seen the rally come to an end. why is anything different now. >> i wish i knew the answer to that tion. we had the brexit vote which should have been scary for people. it should have been another of these end of the world syndromes we got into in q 1 and instead it had the opposite affect so maybe we're not relevant anymore in the uk to international capital markets. >> you're staying with us so by all means get your questions and comments through. we're on twitter. you can also find us on e-mail, "street signs" europe cnbc.com. let's move to the auto sector now. restructuring charges, taxes, and debt. however revenues at the french auto maker fell slightly due to exchange rate fluctuations. >> air france this happening as

opposed to the 5% fall in second quarter revenue. the dutch airline improve over the period. >> air bus has reconfirmed the full year targets despite posting a 4% drop in core operating profits. the french manufacturer beat on top and bottom line, but took over 1.4 billion euros of new charges of troubled military jet lineup models. >> lvmh posting a better than expected growth. fashion and leather sales were up u. the fashion houses performance in europe was slightly negative. chris, earnings momentum. i mean are we going to see more positivity coming from european companies given they still have cash to spend? are they going to continue to put it to work even with the

uncertainty sgls i think it's been reasonable decedent. a big company in asia, maybe china is beginning to pick up a bit. consumption has been strong. the problem for europe has been earnings over the last year or two. we've been concerned of course with the euro rising over the past six months you again to get a bit of a head wind to earnings. you're right. earnings' momentum is causing this rally and at some point it has to come to an end. >> quite interesting the contrast with the banks this morning and the banks in the u.s. again with the asian activity being subdued. you think asia can outperform here. >> you're seeing in the stock markets. so i think china is probably the thing we don't really see very

well. it's opec. we don't trust the numbers. that's where the enthusiasm is coming from. >> stay with us. we're going to get your comments on this too. democrats have formally nominated hillary clinton for president. in a gesture of party unity, her former rival bernie sanders nominated her by voice. nbc has the full story. 63 votes for the first woman president of the united states of america. >> reporter: with hillary clinton's nomination racking up the needed numbers a roll call of states, a major moment bernie sanders came to the floor for a dramatic show of convention unity. >> and i move that hillary clinton be selected as the nominee of the democratic party for president of the united states. >> the sting of loss showed on sanders face and some

supporters. >> the roar of what looked like togetherness, even though some supporters walked out. >> bill clinton became the first husband to stand up for a nominee of the major political party have hillary stood with him in 1992. >> she's a natural leader, a good organizer and the best darn change maker i've ever met in my entire life. >> reporter: then the nominee. if there are little girls out there that stayed up to watch. let me just say i may become one of the first woman president, but one of you is next. i >> president obama headlines tonight. he is expected to say hillary clinton will finish the work he started for better or for worse.

chris, you think the markets are 70% priced here for hillary. what does 5050 look like which is what the polls are saying. >> it's more a political worry than an economic worry. i hope that a trump president can't do that much economic damage. he has congress. he has senate controlling him. it's a balanced system in the u.s. the worry is smr on the political side where the president has a bit more power. >> the shakedown in the market as we have to get in september october time. >>e had a big rally. into the summer period. trump is coming you've got to think there's going to be some -- there's a reason there not to own equities at some point. >> in addition too many others, i guess. >> e-mail the show, "street signs" europe at cnbc.com. that's our address usually. we're on twitter. you can tweet us directly.

@louisa bojesen. >> we're going to take a quick break. bayer reports better than expected earnings. stay with us, we're back in two.

welcome back to "street signs." just to keep you updated with a promotional breaking news story this morning from geneva airport. airport officials are saying they are taking heightened security measures an the airport after an unanimous telephone was received. later updates suggests they are checking information from france. no further details at this moment, but heightened security at gentlemeva airport.

>> shinzo abe will be revealing a 28 trillion yen stimulus passage according to reports. the nikkei raild on speculation it could have happened today. little bit of performance on the nikkei coming on the hope from this. >> yes, there was and really just all a lot of media speculation about what prime minster shinzo abe could deliver in terms of the fiscal stimulus passage. really this way and that way. in terms of the dollar yen and in terms of the nikkei on perception of the size of this fiscal passage. it saul started with fugi tv reporting we could hear shinzo abe deliver details. it looks as though that's going to be pushed out into next week. went with the figure of 27 trillion yen. we heard from key know toe.

28 tril yen figure total to it. . 13 trillion of that passage in direct fiscal measures so here lies the issue. how much of this overall passage is going to be direct spending and new money. that's where the market is undecided about. that's what is really not clear. then you have this other piece of the equation which is monetary policy. expectations really in terms of the boj this week are all over the place. negative rates have yet to cycle through the system to helicopter money or even drone money. we're somewhat in between is the truth of the matter. dollar yen came off from the highs. we were at one point more than 1.5%. not bad showing up by 1.7% on perceptions that we will see a fiscal stimulus passage delivered in the not too distant future. that's where we stand, ladies, back to you. now deutsche bank has warned even deeper cuts may be required

to turn around fortunes after second quarter net profits sank to 20 million euros. revenues slumped by 20% due in part to last month's brexit vote. ceo has opened the door to more ambitious and intense restructuring. bank analyst joins us now. chris, good morning. >> good morning. >> do you expect to step up and restructuring? is environment is tough? i think that's what he is intending to do. he said it would be a slow process. it would take a number of easier to get the bank into the shape it needs to be. he does realize the kind of declines we've seen has obviously made things more difficult and he needs to think about the cost soid of the balance sheet. >> also seeing equities down 31%. they've got investment banking revenues down more than 20%. bond trading which was originally their cash down down

19%. we know there's a restructuring going on in that business in particular. that's kind of precluding them from shifting capital. >> they fell 19% on fixed income. the u.s. was up 21%. look at equities down 31%. u.s. bank is down 4%. to employees, the u.s. was a bust market during the quarter. obviously didn't have the european fluctuations around brexit, but they're losing market share. this is the core business. this is not just one business within deutsch it is a dominating business and they really need to make sure they hold onto shares in this difficult times. you go through this big program of change at the bank. >> how important are the stress tests on friday. we get the results. we only have 51 banks being assessed compared to 124678 assessed last year. no pass fail.

how closely are you looking at this? what are we going to learn. >> this has become a modern day sorts thing. when i was a young man you either came first or second or third. now if you come seventh or eighth or ninth you're doing well. we have definitive ratios that have to be beaten. as you say no passes or fails. what will happen on friday night i'm assuming is the eba will say these banks have a capital short fall and they're going to have to solve it. at that point in time we're going to go through a capitalization phase. >> i don't understand it any longer. my understanding was a lot of the weakness comes especially from some of the smaller banks that aren't included in these stress tests, but can be important as a backbone. are we missing an opportunity to really look at the health in an

in depth way. >> it's nagain, with the u.s. w cleerp definitive lines on those issues. they can deal with them. you're right. they should be looking at the smaller banks, but at the time being they have to look at the big banks because there's been so much disruption in the last months. >> are you as worried as everyone else is the about the banking sector. >> the italian has problems. a slip on the session. npl is moving up. italian's have fine banks, but they want to have stronger balance sheets. clearly what they're trying to find their way through is how can we capitalize that. where by after stress test, you can come in and recapitalize banks in that is going to stabilize the market. that's what is going to happen. something around that. once we get through these tests so we can say the good banks

perhaps in terms of the onlation. >> thanks very much. chris wheeler, banks analyst. telecom has raised profit guidance after beating expectations thanks though a strong performance in mobile. forecasting single digits in 2016. separately telecom italia has agreed to invest $1.2 billion together in a broad band network across 29 italian cities. basf reported a drop. the chemicals company has maintained it's 2016 outlook. >> solid results are out of

bayer. the germany pharma currently in a bidding process. also raises full year guidance following an almost 6% jump. managing partner from nova and he's with us. so bayer easily beating second quarter earnings. they came through and raised full year guidance as well. is this going to make it easier for them to acquire monsanto, chi they're trying to do. >> it's good to see success out of bayer. it's driven by the health care business as you've explained. the ag ra chemobusiness wasn't so great. it was flat. basf had trouble with ag business as well. being strong clearly puts them in a better position to make an acquisition. don't want to go in at a point of weakness. >> why is it so difficult for them to convince shareholders on both sides and monsanto as a

company as a whole that it makes sense. >> that's a very good question. when you read what they're saying about it they talk about an invasion power house. they talk about investment, they talk about growth. investors like to see perhaps more cost cutting, more synergies, savings. chemicals is a global industry. i think the invasion and growth story isn't perhaps resinating with the investors as much as it could. >> you just mentioned the strength of their health care business. they acquire monsanto. they acquire $9 billion worth of net debt. th they need nonorganic growth there too. that's a huge limitation of this deal. >> it's interesting when you lock at what they say about the health care businesses. they're committed to continuing with organic growth. notably omit the fact you need

to be able to do partnerships. you need to put big upfronts down for the right assets. that's how you grow health care businesses. bayer under the settle of more debt, they're already 18 billion of debt. putting more on as you say is going to be a problem. this is going to perhaps cause difficulties for the health care group. >> this actually looks value destructive. just running through the numbers here. they expect $1.5 billion of cost savings. if you look at the revenues they can generate today around $11 billion in total. they're paying $16 billion for this. >> it's expensive. you're right. >> i get it, but even if you're looking at the potential maximum upside over the next few years. it's a great deal for man tan sew. i can understand why some of the bayer guys are like. >> ting bayer folks. the question is really ag ra

chemicals is an difficult business. bayer is great and doing something with thing a ra chemical business. >> somebody has to do something. it's a difficult area. bayer to it's credit is looking a lot options to the ag business. my fear is the health care business which is a great business and could grow. when you get into the consolidation game. things get expensive. that 1.5 billion and they say its total savings, revenue gains is not that ambitious. >> and glek sew quickly. >> strong and people are looking at them with the brexit issues to make a statement about brexit and they're announcement this morning of 275 million pounds is very encouraging.

>> fantastic to chat with you. managing partner at nova sector. i find it a fascinating sector. >> it is. also in terms of a more political view. >> we're head sboog a quick break. check out our world markets live blog. runs all day long. plenty of top stories. we'll be right back on "street signs."

>> welcome back to "street signs." i'm julia chattily. >> i'm louisa bojesen. two of europe's biggest banks suffer a drop in profits. the loan picture is improving. >> all in all i think cost of

credit provisions should improve year on year, but clearly again with the positive news coming in the more developed economies. a strong connection for telecom italian investors. strikes a key deal to speed up the roll out of broad band network. nikkei rails on speculation the japanese government is set to invail a stimulus passage. shinzo abe will announce the plan next week. historic day for america has hillary clinton becomes the first woman to be nominated as a major party candidate for the white house. >> hello philadelphia. i am so happy. it's been a great day and night. what an incredible honor you've given me. i can't believe we just put the biggest crack in that glass ceiling yet.

we've got some surprising gdp dates. quarter on quarter we're looking at a plus 0.6% reading. the reuters poll was expected 0.4% so that is stronger than expected year on year. plus 2.2%. again much better than expected. a 2% reading was expected. that's also versus the first quarter reading of 2% where we saw some strength seen there as well, but the strongest annual growth since 2015. the industrial output level 2.1%. plus 2.1%. very slol id p industrial quarterly growth since the third quarter of 1999. so a lot of the strength coming from there. uk services output while we're at it.

plus 0 .5%. slightly lower than we saw in the first quarter. they say they've been boosted by the strong growth of output in services in april. >> just had some comments from the uk finance minister saying the gdp figures show the british economy strong and they along with the bank of england will do whatever action necessary to support economic growth. >> well, that was an issue of whether or not we're going to be getting any move from bank of england on these numbers. >> hang on a second, i'm not sure we need stimulus. >> what do you make of these numbers. >> certainly a surprise on the upside. what strikes me the most is the economy accelerated heading into the eu referendum dumb. it could have been a 0.3 quarter looking at the pmis and confidence data. let's think about why this is important. the confidence data has sunk.

maybe if it's overstating the brexit affect into the referendum it's doing the same thing on the exit. maybe we should lift our expectations a little for the underlying economy post referendum. >> do you think some of this has to do positions pre-brexit and could we have a post-brexit repositions now. >> it's hard to say. what strikes me is the services sector, which is mostly domestic oriented, consumption driven, but the industrial output which is export oriented has grown strongly. it suggested 13% prereferendum since november peak is now starting to feed in and boost export demand. >> why because in the past we haven't seen much of a kicker when you see a decline in sterling. why is it conveniently adding to it now. >> probably this is a shock which is just hitting the uk economy. remember in 2000 or 2009 or 2011

and 2012. our main trading partners were also suffering weak times. at this time, european growth has been okay. u.s. has been doing quite well. >> does carney step up and give more stimulus in august. >> he has to. the economy was accelerating at the tend of last year. fundamentals are pretty good in the uk. employment and strong balance sheets have improved vastly since 2008. what the economy needs. >> that goes completely against you know what you just said a second ago. that we're actually doing pretty okay. why do we necessarily have to have stimulus if it will economy is performing well enough. won't the consumer follow in the foot steps of that type of confidence, basically. >> hard to say. there is a risk in the bank of

england steps up slus we do scare consumers and say things are quite bad. that would have been an argument if the bank of england reacted after the vote. we have seen the soft data sink to a level we would be concerned about recession risk. it was good for for housing market. >> avoided being accused of panic by not reacting in the first instance. >> if everything is so strong why do we need slus. >> this is data in the past. the data since has fallen. remember it's the domestic side of the economy which has been weaker than expected. that will be the thing that drives growth ultimately. >> it was a high in april. >> that's right. >> do you think the economy can avoid recession. >> i do. the two risks are lending to the real economy and the housing

market. if we say get a 10% fall in house prices over the next 12 months, that would be something like 2.5 fall in consumption. this has been the relationship for about 30 years. that's my key risk, but if the uk housing market can weather the storm of brexit, which there is some signs it can though we've seen some weakness, i think the uk can be okay. >> if i were carney now and looking at okay data on the back of what has been probably the biggest upset in the history of britain for a long, long time, why would you necessarily act now? you can wait a couple of months and interest stimulus later. >> works when you're looking to tighten. the consensus of economist to reduce the forecast by from 2.1% in 2017 to below 1% warrants a signal. >> lack of time remember you

talking about impacting next year, not this year. >> massive rally on the markets right. so it's like. >> not the consumer. >> thank you very much for being with us. senior uk economist. speaking of the house developers and market. taylor wimpey. financeirector told cnbc conditions were improving following eu's referendum. >> the uncertainty that comes with the referendum or potential consequence of the eu referendum is quite uncited before it happened. before going through it, the political leadership that happened quickly. the support and housing being a constant higher agenda item for all political parties given the structural end of supply of housing in the uk a positive. the comments from the bank of england in terms of being

supportive to the wider economy as well as for home ownership are all positives. >> now, deutsche boerse has received approval for the london stock exchange. backed the $27 billion deal that was recommended by the boards. earlier this month the germany exchange operator lowered the threshold. >> unicredit in focus this morning. we have reports this morning they're consider a stock sell and selling their stake in the polish bank. that took it will shares down lower. we've also seen reports this morning that a unicredit and bank santander ended their talks to merge asset management businesses. this is with pioneer investment. may consider an i president obama

. >> one of the next to keep an eye out on the stress test. >> we spoke to the ceo this morning and he said no problems, don't worry. let's look at the european markets this morning. still in the green. the ftse 100 outperformer here the cat kran. we have t media bouncing back from some of the losses. the media sector yesterday and the tech sector up. benefitting from it will after hours kicker from apple this morning. >> u.s. features tilting to the topside. now hillary clinton has become the first woman in the u.s. history to be officially nominated as a presidential nominee by a major political party. in a surprise video address ahead of her official speech on thursday, clinton told cheering

supporters until philadelphia she owe this is victory to them. >> hello philadelphia. i am so happy it's been a great day and night. what an incredible honor that you have given me. i can't believe we just put the biggest crack in that glass ceiling yet. thanks to you and everyone who fought so hard to make this possible. this is really your victory. this is really yourle night. and if there are any little girls out there who stayed up late to watch, let me just say i may become the first woman president, but one of you is next. thank you all. i can't wait to join you in philadelphia. thank you. >> i want to be like that. >> i watched it. does that qualify me. >> hey, you never know. there are female presidents in

lots of global. >> yes throughout europe. >> yes. >> on the second night of the democratic national convention, bill clinton delivered a keynote address describing his wife as quote, the best darn change maker i know. he explained why he thought she would be a great president. >> if you believe in making change from the bottom up, if you believe the measure of change is how many people's lives are better, you know it's hard and some people think it's boring. speeches like this are fun. actually doing the work is hard. so people say well, we need change. she's been around a long time. she sure has and she has been worth ever single year she's put into making people's lives better. >> most of the comments i saw were talking about how long he spoke. joining us now from philadelphia

is nbc tracey pods. it felt like a two-pronged attack here. and hillary going for the women's vote here. how successful were they? >> well, you know, he took his time building an argument in only the way he can. he was telling the story of their relationship, but interspersing what hillary clinton has done in public service over the course of 40 years at at the end of that, he compared it to donald trump. it was really masterfully done in terms of the type of speech. it was more like telling a story. the effect on the people in the room, there were people afterwards who said it was interesting because they learned a lot of detail they didn't really know about hillary clinton's service. that's important especially to young voters here because a lot of young voters were not around during the clinton years. they don't remember here work on health care as the first lady. they don't remember her as the first lady of arkansas.

he used this opportunity to bring people back and brick her past forward to help give her a boost over donald trump. >> we talk about the divide from within the republican party. how big is the divide within the democratic party though? >> well, you asked a key question. how big is the divide. we know there's a divide. even after yesterday with all the energy in this room when she was nominated there were about 100 bernie sanders supporters that walked out. there was a demonstration outside. when you're talking about 100 in a group of 4,000 people that's not something the clinton campaign is going to have to worry about. definitely bernie sanders swoerss who say they will never vote for hillary clinton. right now it seems to be a minority. >> thank you very much. just want to update you we're hearing via twitter actually

that junger is appoints barnier. we now have someone in charge of dealing with the uk from their side. >> he always wanted to speak french, but he speaks very perfect english. that's an interesting choice. >> you need two leaders to get along ideally. somebody who gets along with may. >> pragmatic. >> yes. >> interesting. we're going to take a quick break. comi coming up on the show. find out how apple pleased investors while twitter disappointed. stay with us. we're back in two.

shares in twitter fell after hours. disappointed by the company's revenue forecast. advertising turnover did rise in the second kwaerlt and the company beat earnings expectations, but that was not enough to delay fears over revenue. growth remains relatively static. >> arm holdings, an apple supplier. has posted a 5% lift in second quarter profit and 9% jump in sells. the british chip maker is saying it's unable to provide guidance given restrictions to the takeover. >> rose after hours after topped expectations with third quarter earnings despite iphone sells slumping for the third quarter. reports on the results. >> reporter: apple stock had

been under publiressure, down a 20%. apple reporting and beating on q 3 results reporting a 1.42. expected 1.38. gross margin clocking in at 38% just turning to the product segments iphone units 40.4 million. that was better than expected. other products remember that includes the apple watch, revenue there 2.2 billion and certifies 6 billion a pop of 19%. looking ahead to q4 apple guided up. remember the streak hat been at 45.9. i did have the opportunity to talk with apple ceo about the results. he said in his words he felt fantastic about how the iphone was performing. he pointed out for q 3 saw record number of android

switchers, for the first nine month it's been a record of android loyalists coming. they talked about the four-inch mod model. attracting new users to it will ios system. areas investors are kons trafting a lot more on is as the hardware comes under pressure. expects services to be the size of a fortune 100 company. pointed out app store growth. told me apple music and ie cloud also growing. finally china, down more than 30%. cook is make it can case mainland china is only down 2% in cost and currency. hi point being the given the tough economic challenges in his words he continues to feel good about that business. for cnbc, i'm josh lipton. >> i think one of them is the

asp is lower. that helped them to some regard. doesn't really change anything. he talks about how there's not going to be rewaiting on the shares until they branch into new product areas. they're not doing anything yet. he says he likes to think about apple equity as a bond on the basis that is currently paying a coupon to owners. he says that equity holders they are then earning a yield. at a very low risk profile and who wouldn't want that. >> you don't pay for growth here. i think the point on the prices is important because this is one of the things we were looking at. yes, they saw strong sells, but they were cannibalizing the sells of the higher price. the price coming down is impacting the margin. >> it's keeping momentum going for the time being. >> i hear you. >> then twitter. >> well, twitter interesting isn't it. not only do we have a growth problem, a revenue problem as well. i think there's going to be

questions about what he has done in the last year. whether or not he should be continuing to run two businesses. still the ceo of square here as well. even he said the overall advertising revenue declines. when you add yahoo and verizon together you've got google, facebook, that pairing potent l potentially. >> the only thing is i think they're a strong brand and starting to do a lot more in terms of video or streaming. >> already on the market though. >> but not better than facebook. >> they're strong. we'll see. >> let's move on: it's also fed day. the fed is expected to keep rates on hold. two-day policy meeting. stalling inflation fwroet in global headheadwinds. joining us now is lindsey. chief economist at staple fixed income. great to have you on. to what extent do you think the

fed acknowledged the better data here and hint towards the possibility of rate hikes sooner rather than later. >> you know, we're really not looking for much change in the statement language this time around. remember there's an incredible amount of uncertainty still in the marketplace. when there is this level of uncertainty, central bangers tend to err on the side of caution. not only do we not expect the fed to announce policy change, but the statement is likely to keep similar language to what we saw in june. the fed is likely to have an assessment that is still having cautious of the economy. so in the realm of modest. we may see optimism on the consumers characterization. we expect the fed to recognize the low level of prices and also maintain that language reiterating the importance of maintaining and monitoring international developments from a standpoint of risk or

contagion to the domestic economy. so not much change in the language. >> we were just talking to an analyst in the studio about the uk gdp dates coming through stronger than anticipated. a lot of people are anticipating a 2% plus reading. is that what you're looking for too? could this change the fed's mind? >> i think we are going to see plus 2% in the second quarter, but i really anticipate this is going to be the peak of activity for 2016. first off, if we coupled that plus 2% fwroet rate with first quarter weakness which was right around 1%, you're still talking about below trend activity. now as we move forward or look out to the third quarter and end of the year, we are anticipating that growth continues to slow from that anticipated above 2% growth rate in the second quarter leaving 2016 falling short of the post recessionary activity level which is right around 2.1% for the u.s.

economy. while we may see a bit of a pickup for the second quarter, that's about as good as it gets we can expect for 2016. >> what we aren't seeing is a pickup in expectations. we can talk about the growth side and data here, but not seeingick up in dpptations and inflation which is going to be critical for the fed. what about that and also the external environment thchlt is a fed whether they choose to or not equally watching the environment as much as the domestic surely. >> you may a really good point. right now you can make an argument that the u.s. labor market is moving or at full employment, but on the inflammation side, prierss are still low with no sense of upward momentum. as you mentioned expectations are well anchored. so the feds looking at what's happening in prices in the inflammation sector. there is no sense of immediacy to take action. so again, central bankers given

the uncertainty in the international market and the risk of contagion, they're likely to err on the side of caution for quite some time. remember, policymakers are trying to anticipate where the global economy is going to be over the next 6-12 months. none of the underlying data suggests a clear upward momentum in inflation, business investment, there really is no underlying momentum to drive a kmang in policy at this point. >> have a lovely day in chicago. chief economist stifle fixed income joining us there from the windy city. let's take a look at today's top stories. shinzo abe will be unveiling a 28 trillion yen. could have come as soon as today. >> deutsche bank warns even deeper cuts may be required to turn around fortunes after second quarter net profit sank to 20 million euros.

ceo says the door is firmly open to more, quote, ambitious and intense restructuring. telecom italia has raised profit after beating expectations. the phone company is saying it's now forecasting a single digits if 2016. now, make sure you stay tuned and join us later. speaking to the glaksome smith clien ceo. that is it for today's show. i'm louisa bojesen. >> i'm julia chattily. "world wide exchange" coming up next. we'll see you tomorrow. and move only when you hear the seatbelt click that says they're buckled in for the drive. never give up till they buckl.

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it's reliable. just like kung pao fish. thank you, ping. reliably fast internet starts at $59.95 a month. comcast business. built for business. good morning. earnings alert. apple shares popping, twitter stock dropping. breaking overnight, japanese stocks jumping on reported stimulus from shinzo abe and his government. that story and the global market implications coming up. >> plus the race for the white house. hillary clinton officially clenches the democratic nomination and husband uses a prime time address to introduce the world to a different side of the former fist lady. it's wednesday, july 27, 2016 and "world wide exchange" begins right now. ♪ ♪