it i. welcome to "street signs." i'm julia chattily. i'm nancy hunger ford. these are your headlines. european markets widely ahead of rate cut from the bank of england. boss of viva tells cnbc he is skeptical after the group posts a 13% rise in first half operating profit. >> i'm not sure what the rate cap is trying to achieve. we've already got low rates. is it really going to stimulate it? it's a confidence issue. what i'm hoping for is a wider

passage from the government stimulating things like infrastructu infrastructure. raises full year guidance after engineering a beat in the third quarter despite what they say are challenging conditions. >> the conditions in the marketplace are not exactly giving us a lot of tail wind so we do need to manage the opportunity, which we believe there are plenty of. and rand gold share falling to the bottom as higher costs offset the benefit of a lift in gold. a warm welcome once again. >> good to be here. another busy summer day. we want to bring you some lines

from the ecb here. we are getting flashes that risk to the global activity and particular four emerging economies remain and they're also saying that incoming data for the second quarter point to subdued global activity and trade so a little built of a down waet message here on the euro. the ecb saying that risks to this outlook remain tilted to the downside. perhaps not a huge surprise. post-brexit vote environment. then again we did hear comments earlier saying quite daushs when it comes to expanding the bond purchase program. >> absolutely. earlier saying he accepts that the bond purchase program might have to be shifted because of course they're struggling with low rates in germany. >> we don't want to mix monetary and fiscal policies and we have to maintain the credibility. >> fine line. fine balance. has to push back domestically

and accepts there are still problems. let's give you a look at the heat map this morning. 7-3 ratio in terms of green to red. keeping it in positive territory. let's take a look at the individual market to give you a sense of what's moving. -- [smokey whistling a tune] >> that stock down more than 9%. second quarter profits flat. higher gold prices in the second quarter, but obviously --

>> what just shy of 3.8% here at r rbs. barclays in focus. if we get the 25 basis points from the bank of england as expected this morning and more expected this morning and more (music plays from one way or another )♪♪ ♪ i'm gonna find y♪ i'm gonna getcha ♪ ♪ getcha getcha getcha ♪ one way or another ♪ ♪ i'm gonna win ya ♪ i'm gonna getcha ♪ ♪ getcha getcha getcha ♪

one way or another ♪ ♪ i'm gonna see ya ♪ (inhales cigarette) clearly it continues to feel the pain with returns on its own investment as a result of interest rates falling ever further lower. interesting saying the former member of to n pc has been on twitter saying the bank of england and the committee might like to hold fire at this meeting and there is a large body of opinion including the likes ofl bob wilson and andrew sentence who argue the implication of brexit for the uk are just not clear. not clear enough at this point to take very dramatic action.

they would argue, yes, you hav seen some weakness in the manufacturing and construction service. you have seen that decline in the services sector pmi, but no great surprise that we would have seen a hint of confidence on a monthly basis from the brexit outcome. let's not forget that in terms of growth second quarter gdp was better than expectations at 0.6 running into brexit and we also have the inflation number up off the floor. it post the financial crisis with a run rate at 0.5%. so not everything is going badly here in the uk. we just have this setback at the moment of confidence as a result of brexit. so many arguing they would do well to hold their fire. the problem is there's an

element of commitment and free guidance here. that's what i saw in the july meeting. monetary policy committee stated their intention to do something at this meeting. perhaps we will see this 25 basis point cut. that will tick the box and show they are on their game, but at this point hard to say why there would be no aggressive not knowing how the new chancellor intends to shape fiscal policy. >> jeff, that's a great point. the synergy between what we get oen if policy side and fiscal side with what phillip ham mond can come up with. the action you take today is important as the guidance that he gives not only for monetary policy, but for the interaction between fiscal and monetary. >> i definitely think that will

come up in the comment trry, le go back to that last may meeting where we had a reduction in expectations and some guidance on inflation. in that meeting they did reference back to what degree sterling had already weakened in anticipation of the brexit vote. so i think they will talk a little bit about how the pound has fallen. i don't know they will spend too much time celebrating that fact because clearly that would be a useful development if it remains weaker for longer here when it comes to this country trying to address its current account in balance, if i can put it in those terms. it is an area that has to be addressed. structurally we have challenges in the economy and we are living too much on the kindness of strangers to fund the spending habit.

so the decline in sterling has been useful from that perspective. i'm sure mark carney will address it why it's happened, but i know there are some traders in the market who are thinking if we don't get more than 25 basis points at this meeting, we might actually see the pound off the back of this meeting and take back some of that early easing. back to you. >> it's interesting that moint given the prices are higher. they've been even kinder since the vote took place. you can head to our website to read the full prove of the bank of england decision. that's on cnbc.com and stay tuned because we'll be bringing you live coverage of the decision from the bank of england at 11:55 bst. >> one of these instances where the press conference could prove more interesting than the decision itself. joining us around the set,

richard, ceo at wealth management. pleasure to have you with us this morning. jeff was just walking through the various options that the boe has at its goes sdisposal. is there a chance investors can get disappointed here. >> there is a chance. it's been so well trailed. as we saw the committee itself made a statement which seemed to imply almost a certainty of a cut this time around. i think overall markets have been pricing this in quite accurately with the 10-year at 0.8% now. i think there's always a possibility of a shock of no movement by the bank of england stood. overall we're set for it. >> even if they hit the mark on the tools of the announcement people are looking for there's still the concern of the reduced measures we heard making that point, do we need to see

additional pickup in fiscal stimulus. >> that's clear it's not just in the uk in fact it's a real change in the debate we're having compared to last year when it was all central bank action. now it's not just here not uk we're talking about loosening our rules at. it's also the u.s. presidential election both cannen dats are talking about infrastructure spending. the key is getting the shovel ready projects on the go quickly to have an actual impact now because it is filling the gap with confidence that we're seeing post the brexit vote. >> that's the point of monetary policy versus fiscal policy. one has a kwiger effect. we have seen quite significant bounce in equity markets since the brexit vote. you said rate markets quite rightly are pricing in the 25 basis point cut. also what about recession risk?

what are they price for intent of that too. >> i think at the moment the uk equity market is pricing at a mild recession. that's what we expect now in the second half of this year perhaps into the first quarter or two quarters of next year, a very mild and shallow recession. given we're going to see some corrective action for confidence away from the bank of england and the government. if you look at the composition of the uk equity market we see strong movements from international companies from defensive companies. less strong moves i think it's fair to say from uk centered companies. they had a sharp falloff after the brexit vote and now we see some signs of recovery. at this sign i think most of those companies in the house building sector and media stocks are pricing at a shallow recession at this point. >> let's move on and come back later in the show. wells fargo has indicated it had

no material impact on the brexit exposure. the bank still remains its largest foreign exposure standing at 1% of total assets. continue to monitor the relationship between the uk and the european union. meanwhile j.p. morgan said under certain scenarios in a post-brexit world it may have to change the structure and operations of its legal entity. the bank said any changes required might lead to less efficiencies across the company's european business. it also made clear under no likely scenario would brexit threaten the ability to serve the region's clients. let's get back to this and talk about the banks. the most dramatic impact we've seen has been on the banks and obviously in the last week or so as a result of the italian stress test. >> the banks down here for me is the one sector that's exposed and not recovered from

post-brexit and that's because people are very worried about the impact of low interest rates or zero interest rates in the uk now. how they can again rate earnings on the margin pressure they're likely to see. that's also been replicated more widely in the european banks particularly where they've been behind the curve in clearing up their loan books. >> a lot of the european banks have been quick to say it's too early to tell the impact of brexit. they're really waiting because at the moment they say london remains crucial, but i've got to wonder on the cost impact. just the sheer cost involved with the brexit uncertainty and then perhaps dealing with any changes around a passport. financial passporting, is that going to be a risk that comes later on. >> there are costs associated with that particularly in the legal structuring we mentioned just a moment ago, but i think overall the economic impact of

driving better loan growth, better credit quality, and economic growth could be far stronger if that can be maintained and delivered by both the ecb and european governments. >> we're going to leave it there. great to chat with you. deputy ceo at wealth management. if you want to e-mail the show the address is "street signs" @europe.com. >> you can find me twot nancy cnbc. we want to bring you up to speed on a developing story in london. police saying that three people have been discharged from hospital after a 19-year-old went on a knife rampage in central london overnight. one woman was killed and five others were injured. authorities are not ruling out terrorism as a possible factor while the suspect was known to have suffered from mental issues. urged the public to remain calm

saying londoners safety was his first priority. still to come on "street signs," aviva is delivering strong results in a tough environment. is it about to get tougher. we'll discuss is the insurance s sector. stay with us. we should probably move the bonfire over there. [smokey whistling a tune] i'm guessing smokey liked that idea.

let's take a look to european markets this morning. still in the red. just a touch lower. the banks higher this morning. let me give you a look as well at it will individual commodity prices moves this morning. this is one of the drivers of sentiment, the basic resources sector is one of the few now in the red. wti as you can see gaining a quarter of a percent after more than 3% rally yesterday.

sitting above $40 a barrel. brent crude under pressure today. and also down this morning. i think that's probably got more to do with the stronger dollar in the session today. we're going to be talking a bit later about bill saying very few investments out there worth buying. gold is one of them. doom and gloom message coming from here. >> for now, back to earnings. >> earnings still in focus here in europe and u.s. as well. it's going to be a busy day state side. looking at shares seemens higher. the germany industrial group has cut the debt and lifted cost saving estimate. earlier on today the ceo told cnbc the company is keeping a close eye on the go political environment. >> the single biggest downside and risk which we might face overti is go political risk and all the issues associated with it and unfortunately we

were right and have learned and if i look forward to next quarters to maybe 2017 this is the single biggest risk for the capital goods environment. >> and nokia has posted a mison both the top and bottom line in the second quarter as business customers delayed or cut back on purchases. you can see their shares off 4.5%. this comes against the backdrop of the finished merger. nokia also upped cost savings target as it warned it did not expect a near term improvement in trading conditions. shares in rand gold tumbled the. said gold production had fallen 6% driven by weakness in mines in the ivory coast and the

democratic republic of congo. it put on the chopping block last may. now the sfrong performance is supportive of the german sportswear company outlook last week 6789 v as you can see there investors not overly enthused. stack off 2.7%. merck has lifted annual profit forecast. came in slightly above expectations up 29% in the second quarter. the performance was boosted by the life science branch where sales grew 8.1%. the firm also benefitted from the acquisition last year. british rsa has raised after posting a 72% lead in underwriting profit.

this despite pretext falling. told cnbc while the environment has been tough, the company is well insulated from the impact of brexit. >> it's a group 75% of the earnings actually come from outside of the uk so that weakening of selling is actually a positive for us in the short-term with regards to earnings on the capital. aviva has boosted the dividend. the insurer said it will continue to invest to boost growth in the uk, a region which has delivered positive results. the ceo mark wilson told cnbc on a first interview that the company is resilient to changes in interest rates. >> if one thinthinks when they insurance companies it must be about insurance rates. we have general and life insurance company. that's like saying all cars behave the same in weather and we're pretty good with a car.

we're resilient and the numbers show today 174%. rate changes, equity market changes, we're probably one of the most resilient in the market and that does differentiate us. >> managing director and head of european insurance at rbc capital markets joins us now. gordon, good morning. thank you for joining us. these results look pretty good, 1% ahead of profits. dividend raise: what do you think of the numbers? >> i think what you're seeing today is a bit of a relief rally. the shares are up strongly. the uk life sector as a whole has been a horrible performer, not just since brexit, but the start of the year. it's been down 12%. aviva has been the worst of the bunch down 23 pnkt to date. huge concern going into these numbers for the life insurance companies and aviva is the first to report. brexit was going to have a very debt tra mental affect.

you haven't seen that today and the shares are up strongly. >> you recommendation lies with growth concerns, it lies can cash concerns and you said net fund flows were negative for the back half of last year. the company today saying their cash generations expected to be above their previous forecast as we head into next year. does that sway at least one of your concerns on this stock? >> i mean the concerns are longer term. let's just talk about the big picture here. once shares are up is because there's real fears. you heard mark talk about solvency there. those fears about the so-called passporting issue, but aviva which is 40% of the business coming from the outside of the uk, and, in fact, it has subsidiaries in all these european countries so passporting and brexit isn't an issue for them. you have strong currency coming through the weakening of sterling and that's helped

aviva's first half numbers and what we're concerned about now is the longer term picture. if we go into a economic recession, how does that board for the uk life company. >> and the economic head wind in the europe and the uk. exposed to the broader europe market. how much of that is a concern? >> i mean the uk is a concern. europe is a concern and that's reflected in the very poor performance of the sector and year to date. aviva has businesses and big business in france, italy, and spain. the concerns there are linked to the health of the banking sector and so you're offering guarantees and unfortunately with bond yields where they are in europe and you're offering a guarantee. it's very difficult to achieve investment returns above the guarantee. >> mark wilson was telling cnbc slugging off the impact of low

interest rates saying they have built their business model to be resilient in this environment. given we are waiting on another boe decision. does this eventually hurt? >> well, it's a feature of the insurance sector that low interest rates are bad for insurance companying. they're bad for balance sheets and that's because liabilities are typically longer than assets. you get a hit there and bad for herniation as you explained when you are offering guarantees you can't achieve the investment return. knew insurance companies are immune to this. and aviva because it's a life business and less exposed than some of the life stocks. >> we know the challenges they've been facing for many years as you say the low interest rate environment never mind competition if you're looking at the life side who are your top picks in the sector? do you have any. >> we went bearish on the sector back in september and downgraded all the life stocks in the uk so unfortunately i don't have too

many overweight recommendations right now, but the ones we do like are the annuity writers. the bulk of annuity opportunity is huge in the uk. you've got 1.3 trillion of assets and 65% of finest directors of companies say they do not want to hold on to that pension scheme. we think it's a stock to buy in the yield at the moment. sitting arno inting around 8% i attractive. >> that's interesting. yields coming down has had an impact. do you think that sorts itself out at the back end of this year. >> what you're referring to are retail annuities and there was a impact for consumers buying annuities. they took a hit on the income they could receive. the big opportunity comes in the bulk market and the opportunity to see 1.3 trillion of assets

and while that growth is slightly slower, the opportunity remains and the fact that pension schemes are suffering so much at the moment and just banks need to find director to afloat that risk to the insurance company at some point. >> that's a great point. great to chat with you. gordon aken from rbc capital markets. you can check out world markets live. our blog running throughout the european trading day. stay with us, we're back in just a few moments for plenty more.

good morning and welcome back to "street signs." these are your headlines. european markets hedge higher. the boss of british insurer aviva tells nbc he's skeptical

about further easing from the bank of england after the group posted 13% rise. >> i'm not sure what a rate cap is trying to achieve. you've already got low rates. it's only going to estimate it. it's a confidence issue. i'm hoping for a passage from the government stimulating things like infrastructure. also contributing to the upside of the germany industrial giant raises after a third quarter despite challenging conditions. >> the conditions in the marketplace are not exactly giving us a lot of tailwind so beneed to manage opportunities which we believe there's a lot of. >> randgold falls and higher out put and costs offset the benefit of a lift in gold prices.

>> good morning and just welcome back to "street signs." we're only a few hours now from the boe decision. the big focus for investors this morning, but state side investors are counting down to the nonfirm payrolls report due on friday as well and interesting comments we heard from bill yesterday. really doom and gloom in some respects. nevertheless, there was some upward momentum on wall street overnight t. dough breaking the losing streak. the big story was the move in energy. we saw wti jumping about 3%. there you have the dow jones called higher, but so slightly at the moment just by 5 points. the s&p 500 now called lower just barely in negative territory. let's give you a view of how european equities are trading. solid green arrows for most of the major markets excluding the ftse 100 which is basically flat at this stage. earnings continue to be in focus. seeing rebound in the banking

sector as well. the bank of england decision perhaps more the decision it's the inflation we're getting and any additional comments from carney about the path ahead. let give you a look at how the sectors are fairing. we did point out strengths in the bank. we've seem some relief in the italian lenders. boosting that sector which has been hard hit on the year of course. auto now higher by about 1.7%. oil and gas to surprise there on the top higher by 1.6% after that strong rebound in wti we saw overnight although there are still some doubters out there wondering if the gains in oil can hold. >> we've had some comments from the ecb this morning saying britain's vote to leave the uk has made the global growth outlook more uncertain. adding risks remain tilted to the downside. central bank said data coming in subdued activity in the euro

area, but indicated it's ready to intervene with all instruments in its power to battle sluggish growth. nothing new there. everything mario draghi said at the last meeting. meanwhile the boeing is expected to cut interest rating for the first time in seven years today as it faces weak economic data following the brexit vote. jeff is outside the bank of england ready and waiting for that. we've talked this morning, jeff, about the balance of what more the bank of england can do on the monetary policy front dp the effect it can have versus the need for fiscal sflus. how much of a nudge do you think carney gives hammond here to reflect more on what the fiscal side can do. >> that's a very interesting question and very pertinent to where we are at the decision today because we know very quickly a lot of the post-brexit nerves were calmed by the rapid shift we saw within the conservative party and the fact

that within a matter of days they managed to move from the uncertainty that surrounded a selection and then election company that was going to run through until the middle of, what, september potentially and what we actually got was a very rapid shift in the leadership race that saw theresa may coming to the floor very quickly. phillip hammond replacing george osborne and a rescinding of the fiscal commitments that the previous chancellor had set out which argued for a balanced budget and significant reductions in government spending through the course of this current parliament. inevitably that does change the way now mr. carney needs to look at this of economy going forward because back at the may meeting when we last got growth and inflation forecasts, the growth

expectations were revised down to 2% for this year, and then rolling forward because it was expected government spending would be reduced radically to try and meet those fiscal targets. well, if that is now off the table and we have to wait until we get phillip hammond's new budget in the autumn statement, it makes it very difficult, i think, for markarney to make a lot of assumptions about how the economy is going to perform. i have to say the data is not clear here. we may have seen a couple of wobbly pmi numbers that suggest we're on the verge of recession, but within the last 30 minutes the society of motor manufacturers have put at data on new vehicle registration which indicates an uptick. modest growth. that's the business community voting with its checkbook. i thinks that makes it

increasingly difficult to be too aggressive at this meeting. >> makes total sense. the other thing that's going to play into this is the inflation forecast. as you said earlier, sterling sells off. that has an upward inflationary pressure. if it's not in the short-term, the long-term is going to be more monetary policy kicks in, that's a problem for them too. overstimulating here and having the risk they overshoot on the inflation front. >> reporter: yes, but you know what, the trouble with the inflation story and you know this at the moment, you might as well do this. lick your finger, put it in the air and see which way the wind is blowing. in a world of normal economics as we understand it being practiced over the last, i don't know, 50, 60 years post war, yes, those kind of relationships make a complete amount of sense so we would anticipate we would see a gradual pickup in

inflation as a result of the moves that you're describing. the trouble is nothing seems norm at the moment. the bond market has lost itself sglaling function. very difficult to look at the guilt yield projections to give you any guidance as to where inflation is going to be at this point given the involvement of central banks in the fixed income markets at the moment. that's not telling you too much at all. of course everywhere you look at the moment, there are deflationary pressures. whether it's the reluctance of employees to demand higher salaries or the unwillingness to go out and spend too aggressively at the moment given the broader economic outlook. we will look at this inflation projection today with a great deal of interest, but of course as we've seen in the past, sometimes these projections are not worth the paper they're written on given the way that we see economic events shifting

expectations and outcomes. back to you. >> thanks jeff, great point. not really fingering the area, but not clear where that inflation is. you can go to the website to read a full prove of the bank of england decision. that's on cnbc.com and stay tuned because we'll bring you life coverage of the decision. then we'll bring you the press conference from governor mark carney from 12:30 bst. >> sticking with central banks. >> that's right. some messages to be digested yesterday among them coming from chicago federal reserve bank charles evens saying one increase may be appropriate this year. even though he would prefer to wait until inflation reaches 2%. evans who is not a voting member of the rate setting committee, but participates in deliberations has historically preferred to keep rates low.

kashkari says keeps rates low to boost jobs. concerned with the city's high unemployment kashkari said the fed does not face -- >> i don't like bonds, nor stocks or prooiflt equity. in his monthly letter to investors criticized central banks. the veteran investor highlighted real assets such as land and gold as better bets. speaking to cnbc, the veteran investor advi advised to take q from policymakers actions. >> i like gold too. i think ultimately if fiscal stimulus comes in and we're seeing that in japan by the way, if we see fiscal stimulation in japan, china, and ultimately in the u.s. after the elections, i think we should be investing in real assets as opposed to

financial assets. >> for more on gross's investment tips, head to cnbc.com. >> bill gross hitting on japan's massive stimulus plan. on the corporate front feeling the burn of the yen. toyota reporting a 15% drop as the strong yen weighed on the earnings in the period. the japanese auto maker cut guidance saying it expecting full year to slump 44% to 1.6 trillion yen which would be a four-year low for the world's largest car maker. estimates are based on a stronger yen forecast. toyota sees a rate of 102 yen to u.s. dollar compared to an earlier estimate. we can get the latest look at the dollar yen trade. 101.4 mark just below toyota's

forecast there. sterling will be the big focus point today as we get closer to the bank of england decision. the sterling weaker by abo about .30%. >> mean chilet's get a check on asian markets faired earlier today. taking the equity from the yen moves. shanghai comp higher just about 0.4% there. rally we saw in wti overall night and the hang sang higher, but .40%. unlikely to lead to a major shift in thinking. that's according to a deputy governor speaking in a news conference yesterday. said the bank of japan is not planning to make changes to the asset buying program that could tighten monetary policy.

joins us now. thank you so much for joining us. if we look at what happened in the assets in japan since we had the disappointment over the increase, slight increase in etf purchases and what we got on the stimulus plan this week, the yen strengthened, is this a classic case of fiscal stimulus announcement from a government that's not been matched evenly by further monetary stimulus. >> i think you hit the nail on the head. to the extent that you promise the market a big passage and you leave the option open for an even bigger passage in the future, the market will price some probability that that fiscal policy will trigger rates to go higher. we have seen a move of 20 plus basis points in long-term real rate expectations. now the equivalent to that in currency space is a stronger currency. what could have upset that is

bank of japan saying no matter what the government does or in light of what the government does, what i am going to do to just overload the economy is do equal amounts or bigger amounts of monetary stimulus. indeed the perception of the three errors between 2012 and 20 2015 was that the government would step in with big passages and tbank of japan would accommodate that shift. >> they have done. >> one-third of the jgb market. >> you're talking about needing more stimulus to match the fiscal side. i'm telling you've they've already done it. >> between 2015 and now basically, the market has been expecting them to deliver more and more easing until their inflation target has been reached. despite the fact inflation has been heading in the opposite direction, they have been getting more and more cautious of how much the policy will achieve and remember the bank of

japan before 2012 was always doubting the extent to which monetary policy can stimulate the economy with which had led to very strong levels of yen. the response to the market is in too. >> the doubt of the monetary policy precisely explains the moves we've been seeing. what is the plan b? what is the fiscal passage does not have intended efelfect and without additional monetary stimulus, what happens then. >> i don't believe that central banks or governments have basically gone all the way out to delivering as much as they could. there is still a lot that central banks can do to create inflation expectations and indeed the bank of japan needs to step up its rhetoric and explore ol tendertive ways of easing policy and coordinate deeper with the government and that will guide expectations. >> you kind of told him a fangt i would argue is more of a question. is the backup in yields in jgbs

about concerns and efficacy of monetary policy or about fiscal stimulus. >> the fact we're moving away from monetary policy. >> right. so it's more rabbabout the fisc stimulus side than the monetary side because until we get more stimulus in the bank of japan. >> you need to see both. >> exactly. >> what's the impact looking out of japan. you make an interesting point in this environment there was a large amount of foreign investment coming into u.s. treasuries in particular. >> that's the most important point. japan at the end of the day can be in a good point economic perspective, but the markets care about treasuries. if there's one big driver that led the s&p to new highs it's the compression in the risk free yield basically. given the amount of flows we have seen from japan since the introduction of negative interest rates into the u.s. treasury market, a lot of market

participates have been worried that higher yields in japan may be triggering a selloff in treasuries. now we have tried to quantify that. we used the best statistics can offer at this stage. you still get a big move of japanese levels going above january, january negative interest rates were introduced then what you would see in treasuries would be a 20 basis points move higher. is that a tradable move. yes. could that cause volatility in the equity markets. yes. is this a paradigm shift cau, probably not. >> they ruled out helicopter money, but when you're talking about synergies between monetary and fiscal policy,you're kind of inching closer. do you think we get helicopter money. >> i think it would be fantastic if we got helicopter money. so far the policy looks like a submarine. >> it's all in the definition.

thank you so much. the strategist at ubs. >> still to come on "street signs" brazil prepares to welcome the world on friday, we'll take a closer look at the issues plaguing the country. coming up. 21st century

fox shares after hours. higher markets cost, operating income declined due to weakness at the company's movie studio, but adjusted earnings per share still managed to beat expectations. fox news said it was on track to record its highest ever rated year in the run up to the u.s. presidential election. the company also pledged to protect the quote, unique and important voice of fox news following the departure of roger

ailes last month. square has posted a 45% jump in revenue. the mobile payment service expanded the customer base beyond small retailers with 42% of sales coming from larger customers. square is still not turning a profit. loss is slim though to $27.3 million year on year. tesla missed revenue on second quarter, but showed promise in production capabilities. all the details. >> reporter: shareses of electric carry company tesla not doing a whole lot after hours. company reporting a wider than expected loss of a 1.06 on a nongap basis. the estimate was for loss of.52 a shire. the reason for the greater loss engineering costs going into

developing the next vehicle. the model three. elon musk says he's optimistic about the core business and where it is right now particularly when it comes to deliveries in the second half of the year. reiterating it expects to deliver at least 50,000 vehicles in the third and fourth quarters combined. if that happens, you combine that with tesla already delivering a little over 29,000 vehicles and you have the company coming pretty close to if not eventually hitting its guidance of deliverying 80,000 vehicles this year. overall the conference call a rather boring one by tesla standards with ceo elon musk saying he's comfortable with the where the company is right now and where itself headed as it getted ready to work on expanding production and putsing more work into the development of the model three. tesla shares trading a little bit lower, but not doing a lot after hours following a q2 loss greater than expected.

cnbc business news, chicago. the 2016 summer olympics officially begin tomorrow. it's hard to believe this one. where has the summer gone. that's when the opening ceremony kicks off in rio de janeiro. the south american country dealings with infrastructure concerns the zika outbreak and unrest surrounding the impeachment process certainly hanging over the big event. wilfred joining us with some analyst here. carlos, pleasure so have you with us around the desk. it's a real shame. we look at the olympics as something to drel brat. a chance for the host country to put themselves on the map of the world. all these risks are clouding brazil. i want to ask you about the political situation that is clouding the process of

infrastructure development there surrounding president. she is getting closer to a verdict from the senate. what do you expect next week. >> i think the big difference is in 2013 when brazil secured the right to host the olympic games, it was if commodity in brazil was doing very well. and it appears to be a fantastic idea, but since then to now, the country is serious crisis. economic crisis. the worst in possibly 70 years. and worst political crisis since 1955. that had ha negative impact on the olympics and many people think it's not a great idea. definitely the political crisis is distracting attention. people are focused on economics, employment, job losses, lack of infrastructure rather than anile benefit from the olympics.

>> this uncertainty persuade we've seen with an interim leerld waiteding a verdict. when they clear this, will it improve the situation and do you think she officially goes. >> the idea is the final vote will take part on the late week of august. baef through testimony olympics you will have the uncertainty and you're going have tomorrow significant amount of protest against the president from the supporters of the president. it will be impacting the olympic games throughout the whole three weeks. >> what are the key risks of people visiting rio. >> you stay within the hotel areas, the level of military deployment is huge. >> it's doubled. >> it's doubled the saturation, but you really go outside and you are not careful about where you go, then you face significant risk. not necessarily of being killed,

but theft, robbery on the street is a significant risk in right knee rio de janeiro right now. >> thank you for joining us. people heading to rio, stick in the areas of the limpbolympic g that's it on today's show for nancy and i. "world wide exchange" coming up next. [child speaking indistinctly] announcer: are your children in the right car seat for their age and size? it may be too late to check when you're on the road. [blaring car horn and skidding] fortunately, you're on the couch.

good morning. global markets alert. the bank of england expected to cut rates for the first time. that decision just hours away. >> crude bouncing around 40 bucks a barrel. a key driver for the broader markets major all. plus giving up on golf. we'll tell you why nike plans on stopping making balls, gloves, and bags. "world wide exchange" beginning right now. ♪ ♪ >> good morning and welcome to "world wide exchange" on a