nch good morning everybody. you're now watching "street signs." i'm louisa bojesen. >> and i'm luisa chattily. more cuts. shares jump as ceo to the bank tells cnbc he doesn't need to raise new capital. >> the reason markets may feel a bit unffrtable sol we always prefer to be cautious. >> thomas cook cuts guidance as a wave of terror attacks and a

coup hit turkey affect sells, but promises a dividend will be paid. >> we are confident in the uk business. we are adding capacity here. we see the uk market as very stropg. our uk business will continue to report even better profits this year and we expect for next year as well. >> russia, if you're listening, i hope you're able to find the 30,000 e-mails that are missing. i think you will probably be rewarded mightily by our press. >> donald trump stuns with his call for russia against the clinton campaign. >> president obama backs hillary clinton and hits out at donald trump saying he leaves people feeling cheated. >> the donald is not really a plan's guy. he's not really a fact's guy either.

>> welcome to "street signs." great to have you on. i'm very excited today sochlt much news for you the first being germany unemployment stats coming in lower than expected. down 7% for the month of july. that puts the adjusted jobless rate at 6.1% in july. continuing on from the same level of june. a drop in the unemployment claims of july. better than expected. >> a lot of news flow today. a lot of companies that are reporting earnings. get on to them in a bit. general european markets here. we're flat on the stock share up 600. little more skewed to the upside if anything, but the net picture is flat right now. looking at the main european equity markets that picture is

reflected there swell. the ftse mib, the ie decks and ftse 100 all flat to lower. >> let's give you a shot of biggest losers and gainers across the european session this morning. give you a look at that as we mentioned in the headlines thomas cook at the top of the stock 600. they did lower their guidelines. we had the coup in turkey. what they did say is they are going to pay a dividend to clearly shareholders and investors liking what thaur hearing there. i want to point out the fourth upgrade for adidadas. boosting sales of their prugts just to give you a look at the lowest stocks this morning on the stock 600. apple suppliers concerns there from that company saying look, we're going to cut revenue outlook. predicting a decline of 15% year

on year for full year 2016. concerns about softness in smartphone demand is an ongoing story. the other one i'll point out there, lloyds banking group. further cut of 400 million pounds to their cost base by the end of 2017. 3,000 further job cuts. we've seen many companies telling, look, we can't tell you at this stage what brexit is doing to our business, uk got a far better sense and they are saying it's going to impact business. >> let's move on to credit suisse. posting a net profit of swiss franks in the quarter. a more cautious tone on the outlook. what helped them produce the

profits this quarter. >> reporter: that's a really interesting fact. isn't it, julia. great to see you and luisa. part lower loan provisions and lower restructuring costs. if you look at the operating level thachlt was solid too. if you look at inflows coming from asia, that certainly pleasing and that's where the company wants to focus increasingly on less so on the investment side of the banking business. also capital that was good. that's been such a big concern over the last couple years at credit swiss, the company raised 6 billion swiss francs. i asked whether more capital needed to be raised. >> we always said we were adequately capital raised. unsupportive environment we showed in q 1 despite the

massive losses we occurred. now in q 2 we improved that position to 11.8 t. >> reporter: you still remain very cautious for the second shafl half of the year. can you give me any indication what the third quarter has been like. >> we've been very cautious. everybody know what is the uncertainties are. you have brexit. nobody knows how that is going to play out. nobody really knows and it's going to be reversed for a while because for clarification. you've got the u.s. election. a bigger known. you've got the product development in the middle east and the oil price. do you have a french election in may next year. germany election in the summer. italian in the fourth quarter. reasons why markets may feel a bit uncomfortable.

we always prefer to be cautious. what it means for census we have to drive our plan. we think our plan addresses that. our plan we believe there is profitable growth. you've seen or international wealth management. you've see asia producing. we're continues to push capital to areas where we believe there is profit growth. we are continuing to lower the cost. increases resilience in a difficult environment. management costs go down. everything we are doing is the right strategy. >> the ceo of credit swiss speaking to me a little earlier this morning. he's had an incredibly tough year. we all know that. the share price has fallen 46% this year. down 57% since last year in part because of the difficult market environment, but also because credit swiss has found it tough

in implementing that big restructuring effort. then on top of tha you've got the concerns around brexit and sentiment around european banks at a record low. so the incremental buying that we're seeing in the stock this morning, it might just be a drop in the ocean, but it certainly is in the right direction. >> just a fraction into the way of that restructuring as well. so more work to be done. we were just saying how excited we are to have you back. >> it's fantastic to see you back. you look great. absolutely great. >> thank you. >> we'll see carolyn coming up. low interesting rates, they've been weighing on domestic retail banking. second quarter numbers they've beating forecast. nancy joins frus paris. the profits were relatively flat. >> reporter: that's right luisa,

but in this environment, slow and steady is winning the race no doubt about it. that is it will reason you're seeing the shares tick up 3%. yes there was weakness in the domestic market weakness especially when you look at the french retail division, but a lot of this was known. we knew low interest rating were going to impact this domestic side. we knew volatility would take a hit. the surprise was in large part down to the investment bank. when you talk about business in the trading side and trading volumes ticking up. and the previous quarter so overall the beat on the top and bottom line are being rel received. for more analysis, let me bring in a senior analyst at axium investment management. i want to get your reaction on

bnp. bnp management this morning, proves that a diversified profile of earnings and that comes along with some fairly good benefitting from june to the brexit. also that comes alongside some easing up on the capital requirements as the ecb has announced on monday night where the requirements for 2017 will be lower than expected. >> and the next risk of that as you touch on there is the stress test. if we can for a minute, i want to interrupt a minute and bring you what the bnp ceo had to say about the anticipation of the stress tests. i asked whether or not they were nervous awaiting the results. >> i'm not authorized to disclose anything on that. the thing is i think the stress test is a good tool. it's one of the tools that

supervisors use. if you look at the stress itself, it's a severe stress test. i think it will make for interesting pa rue sal when it comes out on tomorrow evening. >> are you confident in your own performance. >> we are a very diversified bank. we have seen that diversified approach basically makes us resilient too many of those turbulences. >> reporter: that brings me to the focus on your capital levels here when you look at the ratio you improved by ten basis points. is that enough? do you need to go further on your end. >> that is enough. we are at 11. we want to get to 12. that typically gets us there. we are so again our diversity leads us to resilient returns. if we can add 10 basis points every quarter, that is fine. however to anticipate volatility in the markets we announced we

would ipo our first hawaii banking activities. >> the cfo on what to kpft from the stress test. let's get your view here. you could argue it's the italian lenders everyone is watching here. what are you expecting? how bad will it be? >> well, the particular one, monte dei paschi, you have five italian banks taking part in the stress test. they have mentioned month december monte dei paschi would eventually fail. if you're a bank with low profitability at the end of 2016 and like month december pash, then you've got a problem for

three years and end up with significant deficit you have to plug. that's where month depersonky stands at the moment. >> a lot of. expectationings once we get the stress test results they will be able to move quickly if the eu manages to wave restrictions there. >> you have two problems. you have the asset side problem which is the npl to dispose and you've got to decide with capital. so the italian authorities at the moment are trying to get the european authority consent in order to put together a solution with market participates on both sides of the balance sheet. so npl rea with treaction and c

injection may be through the conversion of military swaps of debt into equity. >> given atlantic fund was off to a bad start. >> well, i want to say difficult start, they have edge to capitalize. and they've got about 1.8 billion left to injects back into the second version of atlantic. so the firm has some capacity to mobilize and address the npl program at monthty. it takes time together investors interest around complex elections where is the senior

will be guaranteed by the state. the middle would be subscribed and where private investors will have to make their mind up in terms of where the value of the equity is in the session. >> timing also raises uncertainty that faces the entire italian banking sector. yes we have heard from the finance minister saying this is really down to an issue with monte dei paschi. do you think that's a valid argument. >> i think there could eventually be contagion into the european markets. in the end, investors are looking for exercise from monte dei paschi with the late october in mind and the potential risk that renzi's political reforms will just be criticized by the

reuters. so it's sort of a particular risk of a hang on the sector, but to be fair, when we look at the trading activity on monte dei paschi debt and hybrids as well, it seems to be fairly contained to monte dei paschi. >> is there any buying opportunity here? is there any reason to buy any particular lenders on the dip. >> with the new management in place is doing significant work when it comes to asset sales and al paving the way for capital increase. definitely starting very excelling story. >> all right. thank you very much. from axiom axiom.

alternative investments. at least here in paris some optimistic news. back to you. >> thank you very much. we're gearing up for the stress test tomorrow. we'll be having lot more about the european banks tomorrow. e-mail the show. the address streetsignseurope@cnbc.com. you can also find us on twitter @"street signs" cnbc. >> coming up on the show, obama brings the house down. urged voters to back hillary clinton and also hitting out donald trump. .

welcome back, you're still watching "street signs." good to see you, shri. >> reporter: guilty or not guilty guilty or not guilood mo lovely to see you too. continues to be the case today on the eve of that decision of the jaep very closely watched today. expectations are really all over the place. there is the nonrisk the bank of japan could do what is perceived by the markets as very little to inflate the economy. the stakes are high here because the fiscal authorities have already come to the table in many ways. prime minster abe has unveiled a a. the issue here is helicopter money seems to be off the table, but if he can engineer some kind

of drone money or helicopter money through the back door that could be the positive surprise for the markets. those are the overnight indicators very, very elevated. i was having a conversation with all strais at capital connection, he told me the japanese yen is the highest it's been since the financial crisis. prepare yourself for some big big gyrations as the news or nonevent as the risk from the boj comes out tomorrow. >> we're prepared. dialogue cuts sales outlook. the chip maker now sees 2016 sales down 15% from a year ago due to softness in the smartphone market.

>> now adidas has raised guidance on necessary income from between 25% to 35 to 39%. this happening as the sportswear giant announced 77% jump in operating profit in the second quarter to 414 million euros. >> moving on to snider electric has posted 13% growth. western europe and u.s. was up with the chinese market improving. >> we've seen signs of stablization. china is going through that transition. we see sells through the transition. small exposure of snyder. people are getting used to the new paradigm abecoming more

rational. >> renault refreshed rather as it's refreshed model lineup followed the rising european auto markets. increased as overtook as second biggest car maker. >> danone says it is standing by four year sales outlook. the world's largest yogurt maker posted a better than expected rise in first half operating profit boosted by core dairy addition. >> and car four posting a prize. wor world. losses in china. >> now the federal reserve appeared more upbeat about the u.s. economy, but that offered little clue about when it would

make its next move. the chief investment strategist at investment managers, welcome to the show. many are saying the analyst's comments this morning are saying it was a dubbish statement given. was it. >> i think it was a balanced statement. they acknowledged the economy and that was good because a little bit hawkish at the same time to talk about raising inflation risk. there is some kind of blants. the point i would like raise is run like last year. the fed signaled quite clearly they are going to hike in september. we have not received any kind of that signal on the basis of this statement. so that is something to -- september may be because i think so markets pricing around 50% by the year end which looks quite realistic, but it is nowhere clear the fed will move by

september. >> do you think inflation expectations are too low for the timing with. >> yes for a variety of reasons. we had a structural downward trend in commodity prices. if you look at trend growth tlrks is a clear evidence now that after the financial crisis is trend growth globally has come down. there is also talk about and focus on trends. >> what does this mean for the dollar because we saw a bit of dollars softness yesterday as a result of that. if you're saying actually that 50% pricing makes sense here, do we see a size ways move for the dollar here. >> i think this is until the time this shows up again at jackson hole, we will see a move in the dollar. that will be her opportunity to prevail the market for september. by that time they will have more data until then the dollar might go side ways. although bank of japan is the

key to this factor. >> very critical. i think if we zoom out, even though bank of japan does not below market expect thagss which is all over the place right now this is the second stage of monetary policy or policy shift. this is whether big bang or baby steps we are going towards helicopter money. you see clearly more sign sgls if we see a move by the bank of japan just referencing the dollar again, wefz gone from 105 to 115 we're now back 110. what do you think the reaction could be if we see more stimulus. >> if monetary policy is eased significantly they do both interest rait cut. the program is big enough to match some kind of details which are coming through on the fiscal side. you can see a very sharp move on 5 to 7% over the next few days in the yen. however. >> down.

>> down, because the yen raild. >> it was not -- you're totally right. the comment try which came out together with that is that this is it. discussion has moved since then. >> what do we do with european banks ahead of the stress test tomorrow. >> the business model of european banks has completely changed. the focus right now is solvency. not profitability. if you were a shareholder, i would be worried. mr. draghi talked about the focus on solvency. i think that's what they're going to focus on. they will ask the bank to raise more capital. >> that's the opposite of what draghi said. he said the hit to share prices has been profitability and not solvency. >> the emphasis is on solvency. he made the point banks are much more stable compared to

precrisis years and the focus on solvency. if the bank is solvent it can continue to give credit to the economy. >> we shall see. >> thank you very much. chief investment strategist from lombard investment managers. loads more to come on "street signs." we'll be talking abou coming up "street signs." it's done. [whistle] [dance music playing] [record scratch] announcer: don't let salmonella get funky with your chicken. on average, one in 6 americans will get a foodborne illness this year. you can't see these microbes, but they might be there. so, learn the right temperature to cook each type of meat. keep your family safe at foodsafety.gov.

welcome back to "street signs." lloyds call for more job cuts. shares jump as he tells cnbc he doesn't need to raise more

capital. so we always prefer to be cautious. >> oil majors continue to strip out costs. tell us it's on track with its savings plans, but rival shell falls in london after unveiling a 70% drop in profits. >> digging out of the debt hole. an glow american cuts and saying further reductions will come sending shares sharply higher. >> and facebook shares hit lg all time high as profits from huge user base. >> let me give you a look to u.s. futures. little move after that fed decision yesterday, but the nasdaq closing at the highest level of the year thanks to apple. and the bounce that we saw in

those stocks. real direction drivers coming in earnings today. we've got alphabet and amazon reporting as well. 72% of s&p companies that have reported so far have beaten estimates. more exciting i think 56 topping revenue estimates. europe, here in europe. mixed markets across the board. tons and tons of results being report third-degree morning reported this morning. cac just slightly outperforming at the moment. >> heading to the food and drink sector now. miller has put with inbev. that according to reuters sources. following the decline in sterling after the brexit vote. the two drink makers agreed to merge late last year. we'll give you a look at the performance of the shares here. sab miller down.

diageo. the drinks makers says that net sales grew. which was inline with expectations. now speaking to us earlier the ceo was outspoken on the fallout from brexit. >> both with the skpuk scottish governments our messages are very clear. create the conditions to keep what truly is one of the jewel businesses in the united kingdom and in scotland healthy and thriving. >> he is head of research from wilson management. morning. >> good morning. >> they were very outspoken on not wanting to see a brexit. heading into the vote. it's happened now. there's concerning about the strength of bargaining in the sector disclosure and acknowledgment form you think they'll be hit in the short to medium term. >> it's difficult to say. we still aren't seeing the real implications of brexit coming through. it's not likely to start to come

clear for at least three months. maybe even six months where we can have at least a couple of quarters of trading to look through. it's been a real beneficiary so far in terms of share price. shares up 15% in the last few months. the reason for that of course is europe aside. it's a diversified business globally. it's going to have to pick up the potential slack elsewhere. >> how are they doing as a company, their overall performance and revenue stream at the moment. >> one of the more interesting things is they had really tough 2014 and 2015. part of that was due to currency head winds and that's been turned on its head within the space of six or seven weeks. not only that, they're suggesting that taken that fall in terms of this year, that could actually boost sales next year by operating profits by

nearly 400 million pound. that particular difficulty for the moment has been put to one side. that aside, yes, they are still being bothered by some weakness in the likes of china for example and a couple of the emerging markets. on the other hand, things are looking better in the u.s. >> they've had a problem with flat sales for a significant period of time. this is the fourth quarter we've seen sales growth thchlt is a huge sigh of relief for the ceo here. there were questions about viability of his position. this buys him time to continue with the sort of weak positioning, particularly in north america. >> you're right. the u.s. scene of the crime the largest market for the whisky, and t. looking in a better position in morning. has anyway for some time. >> talk to me about sab miller

thchlt is fascinating now. do you think the deal is off the table. there were a number of shareholders saying this preferential treatment, we're not happy. >> it's a fascinating development overnight. i think the reaction of the share price which is only down 1.5% would tend to suggest the market thinking it's still on which in turn puts pressure on inbev to come up with the offer. if they've seen it 85% of the way down the line, they will want to push it over the line. >> game playing. >> absolutely. >> richard, thank you very much for being with us. head of research from wilson king investment management. republican presidential nominee donald trump has come under fire for encouraging russia to release any ems they have stolen from hillary clinton. in a press conference appeared

and lifting sanctions against the country saying he would consider that a possibility. the gop nominee also received criticism from across the media for his tone towards nbc reporter, katie tur. >> i would like to have them released. gives me no pause. if they have them, we have them. you know what gives me more pause is that a person in our government, crooked hillary clinton, be quiet. i know you want to saifz her. a person in our government katie, would delete or get rid of 33,000 governments. that gives me a big problem. >> this is eye watering. this is kind of classic trump making a comment offhand, russia hand them over, this missing 30,000 ems, but it was down to his vice presidential nominee mike pence to step up and say there would be serious consequences if russia trying to interfere in this election.

>> i have not a lot to say on this, but i would love to hear what viewers are saying on this matter. feel free to send them through. you can find usz on twitter. >> now barack obama took aim at donald trump's rhetoric. head lined the democratic national convention. experience and character saying she is the clear choice to succeed him. >> no matter how much people try to knock her down, she never, ever quits. that is the hillary i know. that is the hillary i've come to admire. and that's why i can say with confidence there has never been a man or a woman, not me, not bill, nobody more qualified than

hillary clinton to serve as president of the united states of america. >> watching that gave me goose bumps, bill clinton's face when he said that. tracey joins frus philadelph s philadelphia. do you want to talk donald trump, bill, hilly and obama. >> i think you wrapped up donald trump. since we're here let's stick with bill, hillary and obama for now. we can put trump in a box and talk about it later. how much stronger of an endorsement can you get for a still popular president to say she's better than i am which is essentially what he said in that sound bite that you just heard and then they had this pass the baton moment afterwards where clinton came out unexpected, unplanned. people here didn't know they were coming out. and they had this sort of waving cheerful moment with the crowd.

that's exactly what the clinton campaign wanted to happen. the president is not expected to be here last night thchlt was the moment when he could endorse her and they could get that photo on so to speak. him saying no one is more qualified. he also got a bit choked up when he talked about hillary clinton and hope and how people had kept him hopeful over the last eight years and he said he wanted people do the same thing for hillary clinton. now, there were other key speakers here last night. you saw the reaction of bill clinton. he was happy when president obama said that. there were other key speakers here. vice president joe biden, vice president hopeful, tim kaine. another one former mayor michael bloomberg, number one billionaire and also an independent who people had talked about running himself and then he came here and said no, hillary clinton and i don't agree on everything, but i think she is the person that we need to elect so some very strong

endorsements for her. now it's up to her. she carries the ball tonight to see if she can change minds even within her party after all of these high powered endorsements. is she going to be able to bring it hometracey. tim kai who does tim kaine appeal to: well, clearly he's trying to reach out to latino voters, he spoke spanish a few times last night. not just through in a few phrases as we see politicians do. he actually spent some time living in latin america and he talked about some of the things that he learned about their culture and how similar it is to american culture so really trying to pull in that voter. he's trying to pull in faith

based vote ergs. he talked about hit faith hechlt talked about going to church. that type of thing so he's trying to pull in not only democrats and independents, but maybe some more moderate republican who is are faith based, but are looking at donald trump like he's not my guy. >> tracey, thank you very much. tracey pods joining us from philadelphia. >> the point tracey made about how popular obama is and we're talking about angry voters. it's quite interesting we talk about him being popular. if i'm allowed to get trump out of his box for a second, mike bloomberg, did you see the comments yesterday. a lot of people talk about or question the veracity comments that trump makes, but he went for the jugular here and said we need a sane competent person in the role as president. him not just questioning trump's temperament like others do, but

questioning his mental capacity to be president. >> i said the other day, i said, look, we don't know how trump would be as a president. >> you make a great point. >> he's made a lot of u-turns in terms of things he's said in the past and changed his mind on and the press has been having a field day following all of this. we don't know what type of president he is going to be and if there is something we do know about trump is we don't know. a lot of you wrote in and are trump supporters and said we think he's the best qualified candidate out there. >> something new, something different. >> the only thing i would say is it seems like the issue of having a very divided country might become greater with trump as president. i don't know if you agree on that and think of social issues or race issues, all of the above religious issues, but we would love to hear your views on this. you can find us as usual on

e-mail, "street sign e-mail. will the social network continue to expand its global reach. we'll dive deeper into that after the break. thomas cook

has seen bookings drop sharply following a number of terrorist attacks. some of the bookings excluding turkey are up 8%. speaking to cnbc the cfo addressed the impact of volatility. >> we're a business that does have to manage through disruption. we took early action last year to rebalance our holiday program out of the eastern

mediterranean, turkey, egypt and into the western mediterranean and by and large that's been successful. weav we're seeing summer bookings: the summer is the important period for us. all of our profits are reported there. summer bookings, excluding turkey are up 8%. that rebalancing has worked. >> total cost cutting paying off. posted a better than expected rise in second quarter net profit. met target ahead of schedule and now expects to save more than $2.4 billion originally targeted. >> shell second quarter slumping below expectations as oil prices continue to weigh. current cost of supply the company's version of net income hitting $1 billion. missing forecast of $2.2 billion. a bright spot, oil and gas production jumping by 28% thanks

to acquisition of bg group. anglo american putting the debt to meet the full year targets. this as the reported a steep first half loss as weakness in commodity prices continue to weigh on earnings. >> tell phone ka disappointing second quarter. bt, they reported better than expected earnings. posting 1.82 billion pounds on the back of strong broad band demand. listened to off come and they've set out plans to increase the independence and tran parns si of open reach. >> sky reported full year operating profits up 12% to 1.6 billion pounds beating forecast. the media company reported an

11.2% turn rate. that's the percentage rate at which customers stop subscribing. apple has now sold it's 1 billionth iphone. he said the iphone has become, quote, one of the most important world changing and successful products in history. it's like a utility now, isn't i. your mobile phone. used to be an add on, now it's a utility. >> facebook share is hitting an all-time high on a solid set of second quarter earnings. highlighted the success in raising revenues for mobile and void owe where time spent by users expanded by double digits. >> reporter: facebook beating expert testimoniations s expectations across the board. earnings of 97 cents per share beat expectations. and nearly doubled from a year

ago. this as facebook grows its users faster than expected. 66% of them check the certifise daily. mark zuckerberg saying the company is particularly pleased with the progress in video. >> ten years ago most of what we shared online was tech. now it's photos and soon most of it will be videos. we see a world that is video first with video as the heart offous services. over the past six months we've been particularly focused on live video. live represents a new way to share what's happening in more immediate and creative ways. >> gaving up some after hours gains. given tough comparisons they anticipate lower ad revenue growth rates. he also warned that ad load would be a less significant factor driving revenue growth

after mid 2017. also updated company expenditures saying this year will be at the top end of the prior range, $4.5 billion. this as the company invests to support the rapid growth of the business. talked about how facebook is working with the 60 million businesses who now have a presence on facebook, that's 10 million more than just three months ago to grow revenue across the board. >> people have shifted to mobile and marketers know they need to catch up. we're working closely with marketers to make this transition. watch video differently in mobile feeds. the goal is to create what we think of as some stopping creative. videos that grab attention in the first few seconds even without sound. >> it is early days as it works to make money on two of its biggest platforms. what's app and facebook

messeng messeng messenger. managing director. good morning and welcome. to me is this is a pretty astounding set of numbers for a whole bunch of reasons. maybe one of the main ones, one that was just adhered to there or alluded to namely we're moving towards a world where video is the heart of all of our services and they're just beginning on this whole video agenda. >> yes, if you look at the way they're revenuing breakdown, monetization in the states is really amazing. this has been a gap that's been there for a while because facebook has had large user numbers for a long time. what it has not been able to do until very recently is work out how to monetize the key area for that which is mobile. it's quite difficult to do on an app in mobile, particularly in

the technology as of two years ago. because asian users invariably mobile rather than pc. you had to work this out: and finally they've cracked it. they cracked it first in the states which is interesting, but they've cracked it and they know they can then bring that across to the rest of asia. then suddenly you have this 1-2 dollar per user level in asia to five, 10, perhaps. >> really? it's an average income inequality or gap between the likes of if you're talking a about someone like thailand versus america. do you see them matching the level? >> if you can afford an apple iphone. >> yes, but more to the point, think of the spending that's done on gains in asia. people fesht in america you commute frequently in a car. if you live in a city, you're commuting in a sub wway.

those aren't ideal app scenarios. in asia people sit on a train and two hours. >> 80% of revenue. that's massive. are they going to be able to see that model. >> they're moving from sort of placement ads to video ads. it's so important to get people's attention within seconds because the last thing you want, the advertising won't pay if they're not getting the message across quickly. they're spending $1.5 billion to do this. so it's quite difficult to suspect they'll fail. they're probably going to succeed. >> on the core they're making more effort to match buyers with sellers. so their marketing is far more targeted which i think other guys need to focus on as well. there's a saturation point

there. even if you're targeting people with the right products, they don't want too much advertising. so some point and even they elualluded to this that actuall next year it's going to impact the revenues because there is only so much advertisement you can hit someone with. >> the same time we saw these figures come out we saw newspapers add revenues here in the uk four. there is quite a lot of easing money out there. low hanging money for the likes of facebook and google to take. that's what they're after. the old print media that went online which is going to struggle until this world. once that's taken out it gets interesting. >> number of monthly active users increasing by 15%. twitter increasing by 3%. at the same time also these big plans also for virtual reality. complete lip different space.

virtual reality has to be there. >> there are some amazing games available, there's one tower game where you start look -- it's a tower defense game and you're looking down and it's amazing you can see the people below and the 3 d affects coming in. >> i like talking to your friends. >> we didn't talk about this yesterday, but for me one of the things tim cook said how huge he thought augmented reality was going to be. that to me was quite fascinating. >> it's been one of the big shocks for apple. is just when they're struggling on the iphone what comes along, but pokemon go. they have absolutely nothing to do with it, but probably 9% of the gross spend on pokemon go ends up in apples pockets. >> because realization is there

upside in facebook share price. after hours had significant rally. >> if you prorate that performance, just prorated thad for the who 12 months, they're only on about 13 times market: that is pretty cheap for a company which is producing 50% top line growth. >> have you tried pokemon go yet. >> i tried to avoid it. my daughter is going around everywhere with it. >> they've got accident insurance now for it. people falling off buildings are whatever. >> we had one in our office just beyond the window. >> we have to go. joining us there. thank you so much joining. we'll see you tomorrow. bye. e-mails.

ready or not, here comes a flood of earnings. it's the busiest day of the reporting season. names like amazon and alphabet leading the way. plus your money, your vote. president obama takes the stage to make a pitch for four more years of democrats in the white house. it's thursday, july 28, 2016 and "world wide exchange" begins right now. >> good morning and welcome to "world wide exchange." i'm sara