a sleep number store. welcome to "street signs." shares outperforming as second quarter profit does better than expected ceo telling cnbc he feels okay about market conditions. >> our current portfolio is mainly protection business which is pure risk or unit link business so we feel i cannot say good, but we feel quite safe even in these market conditions sgl.

out with the old and in with the new. shares of mutual miss. ceo explains the breakup. >> the cost associated with maintaining the structure amount to about 160 pounds a year. if you don't get that sort of number. shares in kns sliding after the german assault and minor warns profits of 2016. the oil takes it's toll of thesen krup. sending shares lower in germany. >> hi, everybody. and welcome. welcome, karen. >> nice to see you this morning. >> déjà vu.

we're doing some swaps this morning. i was on sidewalk. karen was on "street signs"." >> you've got the global oil rising by 8 billion barrels in july. saudi arabia pumping the most in the month. that's according to the ia oil market report which predicts that global oil demand growth is expected to slow so 2.1 million barrel as day in 2017. global oil demand is rising due to india and china in particular and that oil demand in europe has surprise to the upside. it's unlikely they say to last due to uncertainty following the brexit referendum. >> there's a key part i stumble ltd across in this report.

why are prices lower. well, refiebry in the fourth quarter of 2016 is due to decline seasonally as maintenance cuts run. they say also a supply see as quarter on quarter increase could be pricing the fundamentals of at least the first part of a rel tifrly looser first quarter crude market. talking about massive overhang on stocks. keeps the lid on prices newly produced and stored crude. it sets the saeb fen. we've been talking about yields globally. crowd is still dealing with deflation. sfwll you know also how we're talking about the gluts. there's so much oil on the market. although oil stocks or the amount of oil out there are close to topping out, they're at such elevated levels they remain damp on oil prices. nevertheless, they are indicating they're close to

topping out. >> if you bring out the chart for brent this year, there's a strong climb up to the month of june. then there was a turning point. the only elevation has been talk that opec play discuss production caps. a lot of talk after saudis poured water on the deal in april. it has changed the curve to an extent. whether there's a baseline there's a glut you've got many opec producers dealing with. is the question is there a turning point or as you say the swing producer, the u.s., start to come into the mix because there's been enormous restructuring in the shell industry. >> by all means, get involved at the top of the hour. "street signs" europe cnbc.com. you can also find us on twitter. we have loads of guests coming up.

i know for all of you chart heads out there, robert is on as well. our european equity are trading a little bit lower at the moment. as we were saying we were called higher as we head to the open. we then turned around about half an hour into trade and seeing strong europe 600 a little bit under the flat line. sector story out there, the back of the oil price drive. the downside of oil. and in morning we're france lating that through to the oil and gas sector here. utilities and food and beverages both hanging on to slight gains. glancing also at the bond markets. we continue to see depressed yields. u.s. has a 10-year yield falling to 1.5%. also worth noting that guilt prices have been soaring after the bank of england move to

increakreecrease stlis. >> you were talking about charts. if you look at how it's been tracking this year, very strong performance for august. in fact a breakout. down to numbers today as the insurance company has beat expectations. $739 million despite all quarter by natural disasters. >> reporter: absolutely. i'm sure the company would like to highlight the fact that some of the reforms or the change and adjustments that mario grek co-has implemented since he became ceo are starting to gain traction. we have seen disposals from the portfolio. making the case some of these businesses are just not core and a distraction perhaps and

unnecessary to the kind of zurich that he is currently creating. so as far as as the numbers are concerned. i don't think there was too much here that should worry investors. yes, of course, we're still talking about declines in net income, but the numbers are better largely than the analysts had expected. perhaps there was also a surprise in there in terms of the life business is concerned in that they were able to demonstrate that they are able to make a positive return on investment at this point. that of course is one of the mario. this issue of very low yields in sovereign bonds and how difficult that's making its for their life portfolios. >> we feel i cannot say good, but we feel quite safe even in these market conditions. i think the financial authorities are trying to do their best to revamp the world

complies. the issue there is that the restart of the world economies are not just be on their backs and it also needs fiscal policies, political actions which have been not effective so far. >> now, when mario took over this year, he came from generally, he was involved in a three year cost cutting program at generally that. that squeezed costs out of that company. there were analysts that thought when rearrived he might kitchen sink the numbers just to show how bad things currently are and how good they could be in the future with the cost reduction program he is going to implement. there also was speculation he might want to top out reserves at this point, but no indication

really that he is pursuing either of those strategies aggressively. more steady as she goes. let's trim the sales and let's try to take a billion in coastc out if we can. i asked him the question where does this leave the balance in terms of balance street sthengt sdpls has a very solid capital position. adequately reserved. there are things to fixed and we're fixing these things and we'll continue fixing what needs to be done, but it's not about capital and it's not about reserves caps. the company is in a very good shape and we get much better soon and these results show that we have confidence in the company. >> we now how touch this business has been. let's talk about the nuts and bolts for a moment here. very difficult to get premiums up in a world that is

disinflationary or deflationry in the insurance sector has suffered alongside many other industries, but there were some positive signs starting to emerge in new business margins, and, again, that's something i think which is helping just lift the share price a little bit today. back to you guys. >> jeff, stay there. let's bring in one of the analysts you were referring to about kitchen sinking and expectations for a ceo at zurich. reading one of your earlier notes and you're pointing out that there were some risks that you saw in the business with an incoming new ceo potentially kitchen sinking. you point out exactly the type of ceo you thought and the kitchen sinking hasn't happened. >> exactly. that's basically what has changed. in december and now we felt the new real external ceo coming with a fresh start and having been there is not really the fresh start. so it's more likely for him to expect you know business as

usual and this includes the reserve management and the balance sheet management. >> i want to talk about how bad an environment is for insurance right now with yields. at the same time it's matched up with better profit margins for a number of insurance companies from general insurance and other products. this surprises me. we're in a world were meant to see malaise. not seeing growth across economies. typically not the environment that's good for insurance companies. why are the likes of zurich and asia doing well on general insurance. >> i think on the one side you have companies who report as it is. munich re for example is a company where they report stable underwriting investment. you have other companies with some one offs and also some, you know, turn around situation and that basically explains those situations. if you strip the example from

today's numbers. it remains at zurich and a fair market reaction. >> talking about the low kbreeld environment this morning and how it's making it very difficult for all these insurers to operate. what are you thoughts on this and how they're managing to kind of navigate this very low yield environment. >> i think for life companies much more difficult obviously because the life companies are exposed to nominal years and can reprice. pnc companies are better off they benefit from low inflation. also they can in theory reprice the business in practice and zurich is no different today. the extra supply means very few segments of the market allow this repricing. >> jeff, come on in. yeah, thomas, i thought what was interesting was not only in the interview, but also on the

analyst call when mario was peppered with questions about how much further could the disposal program or the cost reduction program go. he was very reluctant to say much more because they have signaled heavily that november is the time where they really want to address the issue of what comes next for zurich with shareholders. is there a possibility that those buying in today and chasing the price higher would be rewarded by a much more aggressive program in the november announcement? what's your sense of that. >> so regarding the investors, i would say yes, that is inline for what we have called for a very long time. on the cost side, have i a different view. zurich undertook last year a very expensive benchmarking. one of the leading and will assuming they spent the money

wisely on the benchmarking we already know today the answer of the cost cutting potential. i will be very surprise first-degree they come out with a story of much higher cost cuts. >> on the risks scenarios, mario pointing out he felt that brexit had introduced the new elements of risk as far as european insurers are concerned. do you think that takes off the table any possibility of transformational mna. >> absolutely. leads to less activity and also voicemail inflated mna prices quite significantly. whoever you speak tom, mn harks seems to be largely off the table right now. >> tell me what to do with insurance stocks. if you look at the insurance

sector in europe this year. it's been terrible. on a downward path. only picking up in the recent months. the performance of recent months has been mixed. selling off in the numbers. you see the dpans in munich re yesterday and zurich today. is there still value. >> post-brexit has actually reenforced my previous pre-brexit view. that means defensive high yield low macro risk very capitalized insurance companies do very well. you're looking into retail cost leaders. you look at the year to date performance so retail cost leaders is one segment. the other segment is specialized insurance companies of the likes of avoiding commodititized spaces. and companies predominantly playing in attractive markets

where those markets because of structural reasons allow full repricing for the lower investment income and then in a second tier of investment ideas,you can put the munich res of the world where the risks are known. stabilizing the high yield cause is strong. munich re seems to be attractive these days. >> thomas, thank you very much. insurance analyst and thank you to you as well, jeff, from outside zurich's headquarters. now ing has lowered the target price. this after the insurer jumped in trade. now, the ceo told cnbc that the company was coping with the low rate environments. >> we of course would like to have higher interest rates, but on the book of the business, the

low interest rates do not really hurt us because our liabilities are covered by very long lasting high yielding assets. >> meanwhile, swiss life has beating expectations to post first half net profits. this thanks to growth and escalation in cost cutting measures. the insurer said it was in a strong position to achieve 2016 financial targets. >> as usual, you can get involved at the top of the hour. "street signs" europe @cnbc.com. one of our past guests ran 28 hours overnight. >> tell me you want to see long running sports. is that what four hours of you and i together is like? >> it's fantastic.

i'm @louisa bojesen as well. happy to get your questions and comments through. coming up on the show, out with old, in with the new. we'll be hearing from the company's ceo. also gets technical thaugtds from one of your favorites from the ecu group. all of that coming up and more.

hi, everybody. welcome back. you're still watching "street signs." this is karen, i'm louisa. old mutual has missed profit. uk and south africa financial services company which is planning to break up into four separate parts says net client cash flow declined.

>> the cost associated with maintaining the structure amount to 15 million pounds a year. if you try too diversify the benefits between the businesses you just don't get to that sort of number. you can't get -- you can't recover the costs you've invested in the business to maintain the structure. >> spain says it has reached a restructuring deal with creditors to cut the debt and avoid bankruptcy. the agreement provides a 1.7 million cash line. meantime concerns for the uk pension industry has growing concerned. this is both 30 year and 10 yearly rates touched record lows and the yeefrld curve continued to suppress. the bank of england managed to complete the part of its bond purchase program which had experienced shortfall the previous day and was seen as a

key factor in driving yields sharply lower. >> now despite yields slipping in the uk, the global balance of negative yielding bonds actually fell in the past two weeks. the credit rating agency attributed the drop from $11.5 trillion to $11.4 trillion to a pickup seen in japanese yields on the back of further announcements there. gains were a offset by the rise in european debt now offering negative yields. robin griffith joins us now. welcome robin. i like how you mentioned you were on your entering yacht. >> it's not an ocean going yacht. it's one for bumming arnold. it's a pretty little boat and great fun. >> while you're on your interim yacht you're having market thoughts about what these days.

>> it's surprising the ftse is higher than it was before. in fact as the result of brexit, all uk assets are worth less to global investors than they were. secondly when you come to the ftse index itself, now it's absolutely the wrong moment in the year to buy. we know to sell in may and go away. we had a set back to june the 23. with or without brexit, we were going to get a mid summer rally. we've had it. may not be quite over. and now we begin the weakest three months of any given year. so going long of equities now between lately octobering is a really bad idea. >> is it going to be drimpt this time around given we're looking at all the stimulus and all the help and -- >> the reason why the bank of england came in with the package wasn't because it saw a great boom ahead. it came in to cushion the downside. the fact that sterling is soup weak does help.

the fact that the oil price is not on the way up, but back down under 30 is also a help in the short run, but the point is now is not a good moment to go long. you want to keep some money available for bargains, but don't keep that money in sterling. keep it in dollars or better yet, gold. >> the weakness in sterling is not helping the ftse today so remarkably as you see sterling drop in the trading session, the ftse is also tracking lower. have we now seen a breakdown in that trade where sterling drops and ftse rallies. >> yes, we're at the top basically of most equity markets, not just ftse. sterling hasn't ended the down trend yet. it will be weaker. it could be go to one. >> analysts said as soon as sterling drops again, it's going to be positive for the market. you have to see the rally in the ftse. >> the big buyers aren't going to come in and buy it yet. they all know by late october

they're likely to see some bargains of much better value. >> you like long dated government bonds though. >> yes, the most powerful trend on all of the charts of the world is the falling interest rate trend. what that says even in america with the equity markets at a high, you shouldn't have been in equities since the year 2000. if you had been in 30 year treasures you had taken less risk and made a 50% greater return. actually in equities you've been wasting your time. if you buy them at this season of the year, you'll waste your money as well. >> good morning. we've had a lot of conversations this week where investors, companies, are chasing liquid assets because that's where the better returns are. >> yes. why do individual investors not also go down that path. if you're not needing to tap into the capital for a number of years, why not also hold liquid

assets. >> you've got to be in a flex nl position. if you don't have liquidity, you won't be able to buy a real bargain. actually in the equity markets there are some stocks that have had their bear market. they've got a dividend yield of 7%. we can live with that as long as we're talking good companies. >> that sounds like the good old times. >> even more. thank you very much for being with us this morning and good luck sailing on the interim yacht. sounds nice. chief technical analyst from the ecu group. the olympic updates. jack lafr and chris meres won first ever diving medal. meanwhile the diving pool itself, look.

it's kind of a deep green hue. the pool organizizers. reassuring it will be returned to a blue color. >> i prefer the turquoise waters to dive into. >> i'm happy to dive into both. >> no, i'm turquoise. the first gymnast in 44 years to win back to back olympic all around titles. eked out the narrowest of victories after superb performance on the bars. >> when was the last time you did a cart wheel? >> i think i did attempt one recently. >> let's move on to the pool where the american swimmer katie la dedecky continued dominance. third gold of the olympics so far. the american team outjewelled a

let's take a look at the medal tally. tieing with the states and china, six total metals and yesterday's competition, but the u.s. well on top there followed by china, and, of course, japan coming in at third. >> yes, indeed. we were seeing earlier on squawk. 16 hours ago when we were doing that show it's amazing how far ahead the u.s. is. >> it's incredible. you scoop up the middle in every other sport takes you to the top. >> if you could compete in any discipline wharks would it be. >> gymnastics. if i could. that was the question. i don't have the means. if i could, i would do that. >> we've got to take a quick break. check out our world markets live blog. it runs throughout the entire trading day. much more online as well. we'll be back, karen, and i,

with the rest of the show. u.s. politics, gold and minors coming up.

>> if you are just joining us, welcome to "street signs." >> i'm louisa bojesen, you're headlines. european shares lower, zurich insurance performs. ceo tells cnbc he feels okay about market conditions. >> our current life portfolio is mainly protection business, which is pure risk. or unit link business. so we feel i cannot say good, but we feel quite safe even in these market conditions. >> out with the old, in with the new. shares in old mutual slumping. ceo explains the breakup. cost associated with maintaining the structure amount to about

160 million pounds a year. if you look or try to quantify thedy seriousification benefits and between the businesses you just don't get to that sort of number. >> shares in k 5 warns profit of 2016. the gluten oil taking it's toil. missed expectations sending shares lower in germany. >> hi. welcome back to "street signs." welcome again, karen. we're guesting each others shows. it's been a busy day. >> super busy. our european equity markets first called a little bit high higher. then opened higher and turning lower now we're mixed. u.s. fuchls setting ourselves up for how the u.s. could trade a little bit later on. the imapplied open on the

right-hand side of your screen. very mixed story at the moment. price of oil continues to be center stage. have oil falling quite substantially yesterday. settling off 2.5%. wti crude currently lower. stockpile data out. jump by the iea indicating where it thinks oil is heading. it was doing that a little bit earlier. >> staying with commodities, glen core has predicted falls for first half of year. production of copper which makes up revenue dropped 4% while coal saw a 14% decline and sink a 31% tumble. gold hit record highs according to the report accomplished by the world gold council. >> sow a flurry of interest in

exchange funds during the quarter. boosted demand for the precious metal by 15%. joining us now to talk about gold prices since july have been going nowhere fast. a lot of bears are not concerned where gold goes from here. what do you think? is there any upside? >> i think we saw upside over the last four months. there's mixed bag in terms of demand, there was a lot of demand in etf in the western world, but there was actually weakness in physical demand in emerging markets. this is individual situations in turkey for instance or individual situations in india and china, but the overall expect the demand is going to pick up. you're not going to see the same kind of outperformance of could in the next could you tell of weeks or month as you have seen in the past, but overall we

think it's going to go higher. >> it's easier to find pokemon than inflation. what is the point of holden on to gold. >> it's an asset class. the cost of carrier has been falling. and in combination with low interest rates it is for many people a cash environment increasingly uncertain and high strong prices. >> i wonder if there are any here. the pokemon's. when do we know when is the good time to cash out. >> what are you cashing out of? are you cashing out of gold itself or stocks. the gold stocks needs a lot more attention at the moment. gold stocks means s&p 500 gold stocks over the last year are 130% when gold is only up around a quarter. similarly gold stocks since the beginning of the year up 65%

while gold similarly is only up 23%. so gold stocks are totally different are profile than for instance gold itself. >> how much does it cost these days to hold gold. >> probably 30, 40 basis points. >> and the good ole days the big strategy was to get the diggers out there and get heavy machinery and find something in the ground. these days it's managing the balance sheet and speaking to investors. which point do we switch to finding gold discoveries again. >> that's correct. gold companies have focused on get tlg cost structure. if you speak to hiring agencies now in the last couple of weeks, interestingly lots of them got calls to chase clients so there seems to be a really resurgence in gold companies hiring people back in all levels. >> and fundamentals for gold, has anything changed fundamentally for the actual gold environment here over the past half a year, year.

>> i think it's very difficult to say what the fundamentals are because you have the kind of investor demand and physical demand. i think fundamentally in terms of industrial demand in emerging markets you will see an uptick in the current months and years. >> what's happening on the listing side? you've done work on the iposs in the sector. is there anything coming in the future. >> the market is wide open for gold equities so there was a real resurgence in q1 and q2, but there was limited to no activity in terms of ipos. >> which makes complete sense. thank you very much for joining us today. germany is planning a string of new security measures that could go as far as scrapping your citizen championship and. >> two attacks claimed by isis

and a mass shooting carried out by a mentally unstable teenager last month. reportedly include a boost in the number of police forces and the fast deportation of foreigners thought to pose a terrorist threat. >> now tensions are rising in crime after vladimir putin accused to destabilize the region. two servicemen were killed in clashes and claimed had to dismantle a ukrainian spy network. ukraine is denying the accusations. turkey has warned the eu is making serious mistakes in response to july's failed coup. told the eu plaged by anti-turkey and anti-ird when

sentiment. urged more than 60,000 people. includes soldiers, judges, teachers to tighten his grip on power. it's not anti-eu. it's anti-u.s. as well. >> yes, definitely. i'm also seeing uprising areas not in the west against their own governments. now, a man has been captured after attempting to scale trump tower in new york in an apparent bid to secure a meeting with the presidential nominee. emergency services removed a number of windows from the building exterior to pull the climb tore safety. responded to the incident by congratulating the police department by saving the climber and protecting the public. he got quite a ways up. it's an extraordinary feat.

meanwhile, hillary clinton has slammed donald trump for the comments on gun reform. said that her republican rival causally incited violence when he suggested second amendment advocates have options now to stop her from appointing judges. >> words matter, my friends. and if you are running to be president or you are president of the united states, words can have tremendous consequences. yesterday we witnessed the latest in a long line of causal comments from donald trump that crossed the line. >> nbc's tracie potts joins us live from washington. trac tracie, we were talking about the latest speech yesterday as well. we had the climber last night, which stole quite a bit of the limelig limelight. quite a bit of the focus. we had newly released e-mails

the clinton foundation's ties to is the state department as well. >> a lot to talk about. let me break down the e-mails. these are e-mails between the state department officials and the clinton foundation where it looks like the foundation was seeking to use clinton status at the state department to get some favors, a meeting with the leb niece ambassador. a job for an associate, the clinton campaign says none of that stuff actually happened, but it does look like there were some e-mail exchanges that raised questions about whether or not they were trying to get special access because clinton was secretary of state. you were talking about clinton's response to those comments. new ones now with donald trump saying that obama, president obama was the founder of isis. apparently referring to his strategy against isis and the fact trump doesn't think it was working. he said last night obama is the founder of isis and as he likes

to call her crooked hillary clinton is the co-founder. we'll see if there's any reaction to that today. >> i want to ask you about the seating plan at a recent democratic rally where you saw the father of the shooter of orlando behind her at a rally. where does this lead us in politics the fight against terrorism and the way muslims are considered in this campaign agenda. >> it certainly is raising questions, especially on the other side why he was there and seated so prominently. you see her speaking and right behind sadiq mateen, the shooters fathers, disvalued support from him. it was an open public rally. they didn't know who was coming. they didn't know he was going to be seated right behind her. it was an open public rally. they don't agree with some of his more radical views. however, you know, it's not

optically in terms of politics, it doesn't look great for hillary clinton to have that visual, but they are -- is it something that's going to be lasting that voters are going to remember for the next couple of months, interestingly donald trump mentioned it. mike pence talked about it a bit. this happened on monday. they haven't jumped on it as you miegtd expect. >> thracie, thank you very much tracie potts live from washington. >> at 13:00 cet donald trump will be joining us. getting in on the show. talking about the rise of eher sieve entertainment with the men behind two of the hottest tickets in town, punch drunk theater and crystal mays. have you heard of that stuff? >> no, but i might having seen clips of this. we'll hear more about what this is after the break.

(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)

>> k and s has warned of sharp profits. weaker product prices and production issues. rwe has reported an operating loss of 156 million euros missing expectations. all this due to weakness in the volatile trading unit. despite this kept the four year outlook unchanged. second best performers on the dax so far this year, but in terms of the morning trade have bounced 1.3% after weak signals. >> now hen kel has raced guidance.

the german now see full year adjusted. the margin there coming in above 16.5%. shares in hen kel up by about 9% over the last -- no, that's a big old lie. 15% over the last three months. >> it all makes a difference. >> it does. >> thiesen krup shares stumble after bigger than expected drop in sales. due to the glut in oil and raw material prices. the stock down 1.4%. the company nevertheless has maintained full year guidance and saved 700 million euros in coast ahead of schedule. not made a difference to the performance today. it deutsche telecom posting mixed revenue results. the company they've confirmed the full year guidance thanks to a strong performance. >> tough time in the travel industry from many of the operators.

tui has lowered forecast. the stock there bouncing fairly strongly in the trading session. the travel operator maintained 2016 operating forecast saying a increase in long hold trips is offsetting weakness in north africa and turkey. handbags as brands ditch department stores in a shakeup of strategy. >> reporter: high end handbag makers aren't happy are department stores. department stores keep upping the anti-on the discounts just as brands like michael kors and kate spade are working hard to go the other way. these handbag makers are working on rebuilding the premium brand images by returning to premium pricing. michael kors is most exposed of the three. half of the sales coming from the wholesale channel. looking to remove itself from all of the retail partners couponing.

including friends and family sales. >> we think it's creating confusion in the consumers mind relative to the value of the michael kors brand when it's being seen so often on sale at so many different places. >> earlier this summer confirmed it was pulling back on the number of products it sends to department stores explaining less available product should lead to increased demand. that demand will be at full price versus sale. coach is taking it a step further. pulling itself product out of a quarter of the north american partners. not only is volume below the threshold at these locations, but the increasing promotional levels are creating a negative impact on long-term brand health. >> we think reserving the brand in that luxury type of positioning is the right thing to do. it seems like reliance on the wholesale at large is becoming less and the retail mix shift is something to talk about.

>> it's a conversation analysts and investors are having trying to determine what it means for continuously challenged department stores as well. kourtney reagan, cnbc, business news. >> here's something i kind oi dig. you know when we're all becoming to lazy we just sit down all day long. >> i don't know. as i mentioned pokemon go before. we have to go get out tv tof th armchair and go chasing. >> here now out of the armchair and on to is the stage. eyed at the future of entertainment or one form of entertainment. audiences there now showing increased appetite for real live experiences from eher sieve theater to gave game shows. here to talk about this is felix. founder and direct tosh of punchdrunk. and we're joined by tom, director of little lion. let's start with you tom.

we need to clarify first of all what crystal maize is. >> the crystal maze was a very iconic 90s game show. here in the uk it was quite uk centric. basically it was a journey through a maze in which you played games, little mini games to win crystals and at the end you i understood ended up in a it was a famous tv show that we've now recreated so you can play it for yourself every day of the week. >> so this is kind of a theater experience almost or is it a gaming experience, but where you are the figure. >> this is it. i think the interesting thing about hour show and all shows in this industry whatever you want to call it, is it straddles quite a few genres. it's a theater show. it's a live theme park. it's sports. it's live entertainment.

it's a lot of things in where you know and i think that makes it really interesting because it brings new audiences and new people to it, not just people who would go to traditional theater for example. >> felix, explain what you do with punch drunk love. >> ours has the roots in theater, take over big empty spaces and rather put action on stage we scatter it across the building itself. sometimes it's 100 plus rooms with full long island sinmatic design. the audience is left to explore the space and find the action that plays within it. it's almost likes exploding out theater show. >> what you're talking about is a very different type of experience than popping down to the pub to have a drink with your friend or colleague, going to a nice restaurant, you're making people work for their entertainment. who is the natural demographic for this type of entertainment

and is it the same for both of you. >> we find anybody, the harder they work the more they get out there. as you say in your intro everything is easy and accessib accessible, two clicks you can have everything your heart desires, but this is valuable in the day and age and people are hungry for it and that connects to anyone. it's pretty universal audiences from here in london to even china where our next show is, anybody can have something where it's touches their heart and real live and that's the biggest thing we have. >> you think about younger generations, but i wonder if it is because the family groups i've spoken to they want to do it with their partners and husbands because they want the get away from talking about kids when they go out. >> the thing we found really interesting it's not one group traditional theater goes. it's old and young and different demographics and to be honest i think it's a great thing that

people are spending more money on experiences and there's a shift away from moving stuff. i'm glad people are experiences things. >> are there actual actors in the rooms you're talking about. >> yes. >> so you interact with the actors. >> we have a cast of 25 as you would in a broadway show, but their scattered across the building rather than in a stage. and rather than in a seat, you're amongst them, running after them. it involves a level of danger and thrill and it's a proximity you'll never get. >> how often do you have to change up your sets or the actual narrative of the story? do people get tired of the same set every night. >> we've set up so there's going to be a long running show so we're going to be here for a while we're developing new shows all the time to bring to the rest of the country and expand into places like the states. >> we have seen more that's been

running in the new york for the past five years and we're about to open no shanghai in december. it feels like within this work, the audience can come fresh to it and always something else to uncover. >> how do the profit margins in the new type entertainment businesses stack up against the old type? >> i mean, for us, we actually the good thing is that we don't need to get through as many people as say a western show. the lion king on a saturday needs to fill 12, 1400 seats. we need to sell fewer tickets and it's a key. because it's eher sieve, you need to have that relationship with the actors with what's going on so you can't flood it with people, i found. >> certainly for us, we want it to feel lavish as though you stepped inside a movie. it's expensive. i think it's worth spending the money on our end because it feels so real for the audience.

>> you mention the shanghai market, can you price differently depending where you are. not many experiences of this type in emerging markets. can you charge more because of the novelty. >> that's a question for the producers. we haven't opened yet. we don't know. there's a hunger for this work out there and the audience hasn't seen it before we want to appeal to wider cross section as possible so we can share the work. >> so how does it actually work, is there a story line your actors are told to follow? then what happens if i somebody running into a room, do i actually get to talk to the actors or how. >> we'in shanghai you wear a ma and it takes place in a hotel in the 1930s little jazz swing era. it's up to you to find the character and follow him and witness as his story plays out.

>> interesting. really fantastic stuff to both of you. >> i think this would be better than a drink at the pub together. >> fantastic. i'm in. >> thank you very much. little lion and punchdrunk. that means we're almost done with the show. our four-hour marathon is coming to an end. it's been fun and emotional. let me show you the futures as well. we're setting ourselves up for a market that's slightly to the upside. here in europe, we're a little bit mixed at the moment. we'll be back tomorrow. same time, same place.

retail redo. macy's gets another chance with investors. one quarter after the department store annoyanced worst quarterly sale since the recession. money on the trail. we heard trump's economic plan. now it's time for hillary to react. we'll tell you what to expect on the political front ahead. it's thursday, august 11, 2016. "world wide exchange" begins right now. >> good morning and welcome to "world wide exchange" on cnbc.