is indispensable, and i couldn't ask for a better partner. welcome to "street signs." i'm joumanna bercetche >> i'm willem marx these are your headlines falling out of fashion kering shares are on course for the worst day in two years after gucci misses growth expectations we'll hear from l'oreal's ceo at 12:30 cet. carrefour shares strike a bullish tone on their turnaround plan after first half estimates

rise a faceplant for facebook the company has its worst ever trading day shedding 1$120 billion in value as shares drop 90% after warnings that revenue growth will take a hit happy friday we're back after a couple days on the road covering swiss earnings, you were in italy. nice to be back here let's check in on markets and see how markets are doing overnight. a bit of a mixed session in asia a lot of the asian indices were trading in the red led by china, lingering concerns about the

tit-for-tat trade discussions, even though there's been a lessening of tensions in europe. today the picture in europe is slightly positive. we have the stoxx 600 trading up 0.1% of course the main focus is going to be on earnings. just to give you a bit of data, a data point i was reading from deutsche bank, about 40% of companies reported so far with an earnings growth of about 6% versus 0% in q1. so starting off on a slightly better foot than the first quarter. that's the picture as far as earnings are concerned we also had macro data in focus as well. that's the french gdp data cac 40 is lagging a bit versus its german and italian counterparts let's get into sectors we did have a bunch of earnings come out leadership coming from basic resources. a nice boins therunce there

banks, lots of bank earnings this week. we had the spanish banks reporting. retail is struggling, down 0.9 we had weakness out of kering. a story we'll be covering in the show >> spain's banco sabadell has taken a hit from thb they say a botched computer upgrade in april led to a second quarter net loss of almost 140 million euros. the failure locked thousands of users out of accounts and prompted a rise in cyberattacks. and second profit net growth for kaiser bank. that helped net profit rise 36% to 594 million euros that was ahead of expectations net interest income also grew in

line with forecasts. as well, sticking with spanish banks, bbva posted a rise in second quarter net profits ahead of expectations. they saw the figure jump more than 18% after strong performance in mexico offset its poor performance in turkey joining us is an analyst to discuss this we have a mixed bag. i would say sbanco sabadell has one outage that affected results, but it looks like overall the banks are on the right trajectory >> i agree with you. sabadell has to be looked at in isolation. if we look at that, the numbers are positive, with bbva leading the pack if we dive into the numbers, earnings have been driven out of mexico as well as the strategy

that they've implemented where they want to move customers towards more cost efficient channels they posted an increase in mobile customers, as well as double digit growth in mexico. turkey was affected by the weak currencies, but even though if we look at local currency numbers, we saw an increase in fee income and net interest income, and this is primarily what led to bbva beating consensus estimates. posting 1.6 billion euros. >> how much of a problem are the remaining npls the latest number seems to indicate they're hovering around 5% or higher >> earlier this week a report was put out which showed that spanish banks were -- had done a lot to improve the asset quality issues that happened we've seen a lot of sales happening with bbva closing another 4 billion real estate portfolio sales.

it's manageable, but what will get trickier is the loans being sold now are the best of the worst. as you get rid of these, it's trickier to sell off the remaining assets we may see pressure on provisioning as banks may struggle to offload the remaining bucket of loans. but progress has been made since emerging out of this real estate bubble a lot of work has been done. >> i'm trying to understand why the spanish banks, particularly bbva, santander trade at such a deep discount to their counterparts in europe the spanish economic recovery story is at play, growth has been one of the -- growth in spain has been stronger than many other countries in the eurozone so the numbers on the ground are better they made progress on the npl issue as well. and yet these banks simply are not enjoying a rally just looking at the numbers year to date, bbva is down 15%. santander is also down an equal

amount so they are not enjoying the rally that some other european banks have enjoyed >> there it is a slightly strange situation because most of the earnings for banks have come out of global operations, however with global operations there is geopolitical risk the nafta negotiations will be an overhanging situation it won't change the strategy, but there is that factor santander has brazilian operations which needs clarity, and the capital ratio position remains a concern particularly in the uk. they posted 10.8%. and if we do a comparison, bbva look slightly smarter in terms of strategy, geographic distribution, but earlier we had

a guest who mentioned the valuation for banks in line with profitability. returns are low, leverage is lower, valuations are in line. >> if you look year to date for almost every bank in europe, they're down on the year with a few notable exceptions goldman sachs had a report out talking about the fact that major funds have reduced their exposure dramatically to the european banking sector. is there any reason you think that could change the second half of the year not off the top of my head if we see european banks etfs, the volume is strong year-to-date given the ecb posted we're at record highs in lending, will that continue to trend upwards remains to be seen and for banks do well you need loan growth to occur

banks need to stick to their strategy and generate organic capital, core one ratio is looking healthy. and bbva impressed me with earnings coming out today. their cet 1 ratio is also in line with their capital strategy >> excellent we'll leave it there thank you very much for joining us >> thank you very much bp announced it will buy most of bhp billy ton u.iton u. and shale operations for 10$10. billion. education publisher pearson says it is on track to meet its

2018 outlook after adjusted operating profit hit 107 million pounds that was ahead of expectations the firm delivered cost savings of 40 million pounds in the first half and announced 5.5 pence per share increase >> the second half is a bigger half, more significant in terms of sales and more significant in terms of profit. we're pleased with the momentum we got it's good to have this half year under our belts. there's a lot still to do. the key selling season is ahead of us. that's why we're reiterating guidance on a solid set of earnings reckitt benckiser has had growing sales with the mead johnson purchase they upped its dividend to 70.5

pence mper share. elsewhere basf reaffirmed its outlook for 2018 but is warning economic risks had increased significantly. higher cost from feed stocks squeezed margins the second quarter ebit rose to 2.36 billion euros, that was below expectations let's check in on facebook of course we had that move in trading yesterday down almost 20%, 19% or so that was the biggest one-day selloff ever for the company and ever in terms of market cap for any single company in the history of trading big moves in facebook. let's get more detail on what happened there and on its disappointing second quarter numbers, that is a report filed by julia boorstin. >> reporter: facebook raising red flags that after revenue growth slowed more than expected it will decline meaningfully over the next two quarters, while the user number showed the

lowest growth rate ever. and in europe users declined in the quarter, but some analysts are still optimistic about the future >> we think facebook's prospects still look good, long-term and short-term there's going to be a lot of question marks around the decelerati deceleration >> reporter: facebook warned that ads on its stories features are not as profitable as ads in the news feed, though bulls said that could change. >> what happens the revenue per user, can that keep going up with stories bag break out hit for them, which they obviously stole 100% from snapchat, if they figure out how to make stories make money this could be a revenue juggernaut >> the company warned margins will decline meaningfully in coming years as they ramp up investments in safety and security facebook is hiring thousands of employees and is investing to improve artificial intelligence. they are working to protect user

data and prevent scandals like cambridge analytica and comply with gdpr. giving up profits in the near-term to protect the platform's users because the stakes are high. >> if they don't get the security of the plat form rigfo it's all over. we think they will if they can, this is a good asset. this is the opportunity to buy the stock here. >> reporter: a key measure of facebook's success is how well it protect the security of the platform around the midterm elections. consumers and investors will be watching closely for any signs of election manipulation if you want to tell us how sorry you feel for mark zuckerberg this morning, tweet us at @streetsignscnbc. coming up, shares in gucci and kering fall after the luxury

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welcome back some more corporate news carrefour shares have hit a high on optimism over the company's turnaround plan. the ceo is now one year into the job and he told investors on the call he's confident in the transformation strategy. shares in l'oreal dropped after reporting weak performance at its mass market division. l'oreal also saw sales fall short of forecasts, but strong sales in perfumes boosted the first half underlying profit growth shares in kering have plunged after the fashion brand's gucci arm missed its second quarter growth

predictions. it's the first top line miss for the brand in two years kering had a net profit of almost 2.4 billion euros for the first half, a significant increase compared to the same period last year charlotte is in paris and joins us to discuss these earnings looking at the kering share price, down 7% in trading. for me it feels like this is overblown. at the end of the day, they're still growing at 40% it's a miss versus 42%, but that's still growth of 40% in an environment where world economies barely are growing at 3%, 4% >> that's right. maybe the market is getting greedy it's only 40% growth in second quarter. i guess it's against 49% growth in sales of gucci in g 1 maybe analysts don't like seeing that trend coming. there's a feeling that kering may be too reliant on gucci.

this is the moneymaking engine for the group. the performance at other divisions of kering did not fair as well. they did bring in a new creative director in june, they tried to revamp their brand like they did with gucci in 2015, when they brought in a new creative director so they are trying to revamp the other brands to be less reliable on that one big gucci brand. they are still doing well. this was the sixth consecutive quarter of over 35% growth in sales. >> i saw that a couple of analysts after these earnings came out revised the price target upwards so we're seeing this reaction in the stock today but ultimately the story seems to be quite strong we also have not discussed their sale of puma as well what do you think the significance of that will be for them >> they say sales are still doing well

it's something we've seen at other groups in the week, it's all about china. they see this huge appetite for luxury products. they see no impact of this trade war talk impacting the chinese consumer sentiment so far they say no impact. that appetite is here and is here to state. there's a note of caution, but so far no impact on it >> we also had another disappointing number come out of l'oreal today. you can see shares there are trading down 3.5%, again some disappointment forev for me, it looks like on their luxury brands they're doing well on the mass market goods they are disappointing a bit. what more can you tell us on that >> that's the problem with l'oreal. again, like kering luxury is doing well in china. luxury is only the second division the main division, that one that

makes 50% of their revenues in 2017 is the mass market. the mass market has not fare well when you look at their numbers for the second quarter, it was only about i2.3% in sales. asia pacific is doing well, up 23%. western europe is actually very sluggish they talk about persistent difficulties in france, so reflecting what we heard about the gdp numbers in france. they also talk about a slowdown in the uk. so, yes, the mass market is not faring as well as they were hoping and they missed the forecasts a bit. >> we will get reaction to these results with jean-paul agon, the ceo, when you sit down with him at 12:30 cet french gdp numbers have come in below expectations do you think that's significant? >> the miss was at 0.2% for the

second quarter, forecast was 0.3% that follows a miss in the first quarter. the 2017 gdp numbers are a bit under expectations so far the numbers this year are slightly missing there was a lot of bank holidays in may, which meant less people going to work. so there's a few factors that could have impacted. however they did talk about business investment having a bounce back. they've seen that the end of june and july. the government is hoping that some of the tax cuts they put in place may impact consumption and try to give it a boost for the third quarter. they have maintained the full-year forecast of 1.7% gdp growth for the whole year. so they hope this business sentiment may be a sign of slightly better time coming

ahead. >> charlotte, thank you very much for those various numbers sticking in france, danone posted a 7.9% rise in first half operating profit despite lower sales growth stronger demand for water products and chinese baby food outweighed headwinds from the trucker strike in ba zirazil. the finance chief said the firm will continue to avoid those kinds of external pressures. and lafareholcim reported a 43% fall in profit during the first half of the year with restructuring costs that totaled 300 million swiss francs, so net profit almost halved compared to the same period last year to 371 swiss francs the company did see sales growth of 2.7% for the first half and

confirmed positive targets for net sales. renault profits hit the brakes in the first half after costs from restructuring, raw materials and currency pressures weighed on results, however they saw net income decline 16 % after nissan struggled with price increases. nissan's performance does not impact renault's operating profits, but those also fell elsewhere, shares in comcast rose as it beat second quarter profit expectations. the firm added more high speed internet customers during the period analysts say this is a positive for the firm as it looks to diversify its offering comcast dropped its bid for fox's entertainment assets and brian roberts told investors he could not justify the price tag. first quarter bt earnings rose to 1.8 billion pounds as the outgoing ceo says the firm

is making progress in its turnaround plan. revenue fell 2%, in line with expectations mobile customers for the public and business sectors jumped 4% adam reid, our sports reporter joins us they have been spending a lot of money. what has that been focused on? >> sport i think that was a loaded question considering that, yes, there is all of that investment in sport, bt still thinks they'll make a profit from their outlay from sport because of the mobile and broadband. it's over $4 million, when all is said and done, when this next set of rights deals come in, they have the exclusive rights holder for champions league coverage in the uk, they got continued presence as part of the secondary premiere league broadcast in the uk.

even though per match they are paying 295 million, which is crazy because they have ten fewer matches, that's not per match, but the total outlay for the next deal. it's 9$900 million they're payin for the three seasons. a crazy amount of money. but they've made acquisitions as well that have branches into sport with the other mobile phone operator, ee, which is the main sponsor of wembley stadium where the england national team play, and anthony joshua, the world heavyweight boxing champion has signed a deal to fight at wembley stadium sport is hugely important to bt, the audience peaked in the champions league final at 4 million viewers for the season just gone, liverpool and real

madrid, that was when mo salah hit the ground in the first half, just over 3 million people watched that game. they made that free to air on youtube and on their streaming side because they want to encourage people that will come in for next season when this new champions league deal kicks in, 1.2 billion pounds, they will be the exclusive right holder, so there will not be free to air highlights deals as before. >> it's a complicated world. >> but it's a smart strategy clearly it's a lot of money, 1 billion pounds for champions league, but i read in the announcement that they're also considering increasing sports rights and device costs in the latter half of the year. doesn't that tell you they're beginning to get nervous about the return on investment will they have to increase the price people pay to get access to those football matches, then

clearly once they got the captive markets, they'll just start putting up prices more and more and more. >> it's always the consumer that feels this pinch the most. sky and bt decided to come together and sell each other's products on each other's platform you've been able to get sky on a bt box and vice versa, now they decided to sell it together because they're worried about the influence from amazon coming in to the area they picked up a premiere league package. when the new deal kicks in, they have an unprecedented match day simultaneously shown at the same time sky and bt have to think about other ways of making themselves more relevant, especially as bt lost italian serie a coverage. >> what a shame. >> you sound more disappointed than he does

>> deeply disappointed thank you very much for joining us >> thank you. coming up, how high will the u.s. gdp figure be we'll bring you all the estimates including president trump's after the break.

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welcome to "street signs." i'm willem marx. >> i'm joumanna bercetche. these are your headlines fashion fail kering shares are on course for the worst day in two years after gucci misses growth expectations l'oreal also slumps. we'll hear from l'oreal's ceo at 12:30 cet. carrefour shares hit a high level after striking a bullish tone on their turnaround plan after first half estimates rise a faceplant for facebook the company has its worst ever trading day shedding $120 billion in value as shares drop 19% after a warning that revenue growth will take a hit. and white house economic

adviser larry kudlow says today's gdp number will be big, as president trump predicts a terrific report. >> somebody predicted today 5.3. i don't think that's going to happen 5.3. if it has the 4 in front of t we're happy. >> a 5.3% print would be great, if it does happen. all eyes on that u.s. gdp print. we are about halfway through earnings season. good reports so far with about 40% of companies in europe reporting with growth of about 6% on the eps side. this morning the macro is weighing a bit we have the slightly disappointing q2 gdp printout of

france cac 40 trading in the red this morning on the back of that somewhat disappointing print and somewhat underwhelming results coming out of kering and l'oreal weighing on the index. in terms of macro, we'll be watching out for gdp in the u.s. let's switch to fx and see what the picture is like there we had somewhat of a boring ecb, didn't seem like anything major came out of the meeting yesterday. we'll be waiting for september 2019 to get indication of what they do on the rate side as you would expect, there wasn't much movement in the currency euro/dollar trading down cable also trading weaker. the big one we're looking at is dollar renminbi. renminbi continues to weaken down a half percentage point yet again in trading overnight again, with the backdrop of further escalation, the trade war rhetoric between china and

the u.s., despite the deescalation we've seen between the u.s. and europe after that surprisingly productive meeting between juncker and president trump earlier in the week. that's the picture for currencies let's look at u.s. futures of course yesterday the big mover was facebook a lot of scrutiny was on the tech sector, and the impact that would have on the nasdaq so that was the underperforming index yesterday. today the picture looks slightly more positive. dow opening up about 42 points higher nasdaq about 30 points higher. larry kudlow says today's u.s. gdp number will be big. speaking to fox business, kudlow did not speculate what that number would be, but he said he had no reason to disagree with the prediction that it would be in the range of 4%to 4.5%. speaking in illinois, president trump gave a sense of his personal hopes for the second

quarter anybody. >> somebody actually predicted today 5.3. i don't think that's going to happen, 5.3% if it has a 4 in front of it, we're happy. if it has like a 3 but it's a 3.8, 3.9, 3.7, we're okay. >> steve liesman has more on what to expect it's the one economic number everyone is talking about, second quarter growth which could be as strong as 4%, 5% >> most people understand what president trump is doing, what we're doing is good for the economy. i think as you know, we're looking forward to a very strong gdp number we have real economic growth. >> reporter: earlier this week the president tweeted out we have the best financial numbers on the planet. the median of 12 economists

surveyed by cnbc see gross domestic product coming in at 4.1%, the strongest quarterly number since 2014. for the administration the number is nothing less than proof that its tax cuts and deregulatory economic projects are working. but there could also be temporary factors in the numbers, including a surge in government spending. >> the quarterly numbers are volatile and we juiced the economy with fiscal policy and the underlying trend has been moderate and built in some fiscal oomph on top of that and you've got some real momentum here. >> there could be some additional trade and inventory building in the number as businesses bought and stocked goods ahead of coming tariffs, but that won't explain all of the trends and consumer spending could also be stronger likely driven by tax cuts >> it is not all driven by exports and there could be solid, underlying growth here that can't be explained by one-off factors like exports or

inventories and some of this is the tax cut. some of this is the increase in discretionary spending and some of this is an underlying economy that's quite healthy at this point. >> only the actual data over time would tell how much investors should believe whether the high growth is permanent or just a temporary talking point. let's bring in david riley from blue bay asset management great to have you on today's focus is about this u.s. gdp print. whatever the number is, it will be a strong number >> yes >> 3 handle, 4 handle, 5 handle, still a strong number in the context of the rest of the world. you're a fixed income guy. ten-year note is trading close to 3% again. what do you think we need to see for sustained break through that

3% what do we need? what conditions need to be satisfied for us to see that break? >> we could break through the 3% but i think it's hard for the market to sustain long-end treasury yields being above 3% meaningfully for a sustained period of time unless we get further pick up in inflati inflation, and we get signals in terms of the fed one point that's happening at the moment is that the markets really only price in another two to three rate hikes, not what the fed is saying they'll do so it's hard, i think, for long-end treasuries to sort of push out of that on the other side we also got low yields in japan and in germany. >> on the flip side, if i wanted to follow that logic, in case we get a high print, let's say 5%, the market will probably be quick to price in a faster rate hiking cycle coming out of the fed. it's underestimating what's

pricing in in terms of the dots. another way of thinking about it, it could be constructive for the ten-year treasury, every time the market perceives the fed to be more hawkish the curve flattens, and we could see a situation where a strong number is actually bullish for long-end fixed income >> possibly. i do think that there's a couple things we could be at the point of peak growth for the u.s i think it will be a strong number i don't think president trump and his administration would be touting this number unless they were confident it would be high. then i think what's been interesting is the first half of this year we had this divergence issue between the u.s. growth leadership and the rest of the world. so we went from a synchronized global growth story -- >> i want to pick up on that did you expect growth in europe

to fall as far behind the u.s. as it has? >> that wasn't our expectation but the market also got too pessimistic about the outlook for growth, particularly in the second half. the first half has been strong for the u.s. part of that is simply they had big spending increases as well as the tax cuts coming out of the federal government they are more encouraged we are seeing pick up in capex as well. if we get a recoupling between the rest of the world and the u.s., maybe this is peak moment for the u.s. growth outlook, it has implications not only for rates but the dollar what powered the dollar strong ser that dis the recoupling. we have seen emerging market credit begin to snap back a bit what is your take on emerging

market credit given the move we could see in the dollar? >> we've been adding to emerging market in the sovereign space and our multi asset credit strategies because we felt after the selloff that you saw in april, may, june, that they were offering good value. value was to be had, particularly given that we don't think we are facing some sort of systemic problem or crisis within emerging markets. a stronger dollar definitely is a headwind i think we're more neutral now i'm certainly more neutral on the dollar going out over the next six months or so. >> one final question. what impact do you expect from this warming of relationships between the european commission and the u.s. after that meeting this week? if any >> i think the impact is that's a cease-fire, which i think will be proved to be quite fragile because there's a lot of

elements on both sides i think if i was sitting in beijing i would be worried it sounded like the u.s. and europe, when they talk about forming the wto, they're talking about making it less china friendly i think we'll get more tariffs imposed on china come the end of the month or early september >> one final question on the ecb. on the rate side they probably won't do anything until late 2019 let's not forget they are stepping away from the bond market one of the biggest beneficiaries of the ecb qe program was the european credit markets. are you turning more cautious on european credit here >> we've taken down some risk. i do think the end of corporate bond buying by the ecb is in the price. we've had a significant repricing of european credit by anchoring the short end, having a steep curve, it's made

european credit quite attractive to fx-hedged asian investors we think there will be a strong marginal bid coming in from there. it's more about the rates than it is per se about the end of qe and as you said, you know, we're not going to get a rate hike until september, october of next year at the earliest >> so buy and hold >> exactly yes. >> thank you for joining us on "street signs. >> thank you all right. so let's switch and talk about some uk news the european union's chief brexit negotiator, michel barnier, poured cold water over britain's customs proposal he criticized the offer to collect duties on behalf of the eu he added that while the eu respected britain's desire to take back control, the uk should also respect the eu's laws and

borders. speaking in brussels, barnier highlighted what he saw as problems with the new customs plans. >> the eu cannot and the eu will not delegate the customs policy, rules, v.a.t., and excise duty collection to a non-member who would not be subject to the eu's governance structures. any customs arrangements or customs union, and i always say that the eu is open to a customs union, must respect this principle. and in any case, a customs union, which would help to reduce friction at the border, would come with our commercial

policy for goods >> barnier also warned prime minister theresa may that attempts to gain support for her brexit plan among individual eu leaders would be a waste of time may is traveling today to austria to meet with the czech prime minister later today facebook suffers the biggest one-day wipeout in u.s. stock market history find out why investors gave the company a thumbs down after this break. you might take something for your heart... or joints. but do you take something for your brain. with an ingredient originally discovered in jellyfish, prevagen has been shown in clinical trials to improve short-term memory. prevagen. healthier brain. better life. man: are unpredictable crohn's symptoms following you everywhere? it's time to take back control with stelara®.

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welcome back to "street signs. let's talk about facebook and the price action that we saw there at the stock at the end of the day, the stock almost 19% lower mark zuckerberg lost $15 billio off his total wealth it was the worst dunn-done-day performance for the stock, for any company ever in the history of trading given where its market cap was starting from

so a rough day for facebook. actually for the year it is slir slightly lower facebook down after those disappointing earnings let's look at the broader picture of how f.a.n.g.s did yesterday. there's been focus on the f.a.n.g. basket given that if you take f.a.n.g.s out of the s&p, the year-to-date results would be negative. the picture for f.a.n.g.s in yesterday's trading was mixed. mostly negative, also had the worst day for the nasdaq since the end of june. to that weighed on all of the tech sector. just to put things into context, amazon is up 55% for the year. apple up 15% netflix is up for the year. amazon reported a massive increase in net profit that topped 2$2.5 billion in the

second quarter revenues fell below expectations but the profit numbers were more than twice what analysts had predicted. that was due to the continued strength of amazon web services, the cloud unit has grown about 40%, and makes up a significant majority of the overall profit we're joined by jay jacobs he is live, up early in new york for us i have to ask about these amazon numbers. that was 12 times the profit they reported the same period last year. is that just about cloud >> well, when you look at these profit numbers, a lot of these tech companies are not trying to be that profitable when they do have profits, they're so low you can see high expansions on a multiple basis of those earnings.

that's not the relevant metric for a lot of f.a.n.g. stocks you're trying to look at the engagement of the user base, growth of the user base and how much they're monetizing it longer term trends, earnings are less relevant than other metrics we're looking at >> how significant is it that their e-commerce revenues are 1% lower? the bulk of the revenues come from the e-commerce side of things but the revenues have begun to if not stagnate start dropping is that negative on a forward looking basis? >> you do wonder how much of that is seasonal versus how much is a company losing focus. certainly, you know, everyone talks about the amazon effect on every industry now you're not immune to anything if you're in any industry from amazon you do wonder if, you know, they're overextended to some extent f they're loif they're lh

healthcare space we are still seeing incredible year over year growth. this is probably just a blip in quarterly earnings >> let's talk about facebook it was the big story yesterday i've never been a member of that social media organization. but they lost users in europe. flat users in north america. isn't the big picture that there's only so many people on the planet with the internet and they have two-thirds of them already on the web >> it's a good question. at what point does growth for facebook stop? at some point everyone in the population will have access to the internet, to mobile phones, suddenly the question won't be about user growth. we're not really worried about that now growth is driven at multiple levels at the first level you are seeing more advertising spend. even if they had flat user growth, there's a lot of

monetization there in the digital space, digital advertising is growing over 18%. you're still seeing the overall pie of number of people joining social media platforms growing at about 13% so you see so many growing con centric circles here user growth for facebook will be less relevant. you see so much more advertising dollars directed towards digital media platforms. that is going to be the biggest driving factor going forward >> it looks like you're still constructive on facebook i can see you own it in your portfolio. what we have found out is that they will be spending more and more to deal with these privacy issues, as a function of the increased scrutiny after cambridge analytica, and they have set aside increasing amount of reserves to spend on that side of the business which will eat into profitabilities and

potentially ad revenue as well when you think about that, doesn't it make you more luke warm on the stock given their shifting priorities? >> certainly this will have an impact on operating margins. this is a space that has developed so quickly, so fast that there's some things they have to do to keep their house in order yes, they have to look at fake user accounts, the quality of the content, adapt to new regulations around data. but the long-term picture is still so bright. we're focused on the growing advertising numbers, numbers being spent in the digital space, this is kind of cleaning up their mess behind them and something that would happen inevitably, but we're focused on the more long-term revenue projections at this point. >> thank you for bringing us the latest some quick corporate news. bp announced it will buy most of

bhp billiton's u.s. shale oil and gas assets for 10$10.5 billion. the move is part of a growth plan for bp. it is the biggest acquisition in 20 years and expands its footprint in america's oil-rich onshore basins let's look at u.s. futures before we head out looks like the picture is positive dow seen opening up about 37 points nasdaq up about 35 points. bouncing back from its worst day in about a month's time in today's session. before we head out, make sure you tune in at 12:30 cet when we will hear from jean-paul agon. that's it for today's show are you ready to take your wifi to the next level?

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it's 5:00 a.m. here are your top five at 5:00 the bite is back in f.a.n.g. amazon crushes earnings and shares rise. starbucks perking up with record sales and profits a $10 billion oil deal as the brits go big into texas. and north korea turning over what are believed to be the remains of 55 service members killed in the korean war. and one economic number that will get everyone's attention today, especially the president. we'll tell you what