♪ good morning and welcome to "street signs" i'm joumanna bercetche. >> i'm julianna tatelbaum, these are your headlines. >> phillips second quarter sales beats expectations thanks to strong demands in u.s. and china as they forecast a strong second half sending shares higher julius bar has improved margins as the swiss bank delivers its last earnings report under outgoing ceo. the market rebound catches

out as bridgewater flagship funds logs one of its first half performances in decades. and rising oil prices boosts energy stocks after the uk calls iran's seizure of a british tanker in the strait of hormuz an illegal act ♪ well, good morning, everybody and welcome to "street signs. we're about one hour into the european trading session i just want to recap quickly some of the action we had in wall street towards the end of the week last week it was a weaker close for the three majors on the week the dow ended up about two thirds of a percentage points lower. s&p and nasdaq little more than 1% weakish end to the week for u.s. equities as we get into the heart of earnings season here.

28% of those released results have beaten sales and 49% have beaten on earnings according to data from goldman. still right in the heart of earning season, about 150 s&p companies will be reporting this week worth bearing in mind that so far the market has tended to punish the misses a lot more than they rewarded the beat. so that is the picture for u.s. equities overnight, sentiment took a nose dive we had somewhat of a more cautious tone prevailing stock europe 600 today trading a traction below the line. it's a very big week for europe as well. we'll get into the heart of earning season here. let's not forget we get the pmi numbers for july that happens on wednesday and that all important ecb meeting on thursday where the market will be looking for clues on what their next steps are going to be whether or not they signal a rate cut, more easing or indeed tiering on

thursday we also get the central bank of turkey meeting anticipated to cut anything from 200 to 400 bases points a lot to go on and a lot to digest on the macro front. let's switch ftse 100 the relative outperformer not all of these indexes are trading around the flat line i would just point out that the main stocks outperforming today on the ftse 100 are the basic stocks the oil stocks. oil spiked up on geopolitical tension in the persian gulf one of the reasons why we're seeing a lift for the uk index today. i just want to point your attention to the italian index fitsy mib. keep an eye on the politics, the situation is evolving between lega and five-star and there are murmurs this could be the week they call for snap election.

switching to sectors in the breakdown, i did mention that right at the top we have oil and gas today up .7% on back of the rebound we seen in the price of the spot basic resources in line with also some of the commodity stocks that are rebounding in the uk also seeing a bit of a lift at the bottom, defensive sectors, real estate down 1% media also down .6% and telecoms is basket that has been struggling also down .5 percentage financial services we are getting right into the heart of that earning season. lots of banks are reporting this week ubs, deutsche bank keep an eye on that basket as well. let me fifth you more color on the corporates in focus for their earnings phillips has posted better than expected second quarter sales, helped by strong demand out of the u.s. and china for its hospital equipment the dutch health tech company reported a 6% rise in comparable

sales which beat forecasts phillips reaffirmed its targets and ceo said he expected momentum to further improve in the second half of the year. meanwhile, in the financial space, julius bar posted a 19% fall in adjusted net profit for the first half of 2019 compared to the same period last year however, profits did pick up by 18% from the end of 2018 as the swiss private bank noted improvement in client activity and asset valuations outgoing ceo said the bank's cost-cutting program is on track and its effects should materialize in the coming months he is due to be replaced by phillip rickenbacker in september. we are joined around the desk from senior credit analyst starting with julius bar and the market reaction we have seen to these results today, quite a step down when i look at net profit versus the same period a year ago but significant improvement from where we left

off in 2018. what is the positive reaction tell you about how investors think about this stock is the momentum now in its favor? >> yeah. as you correctly said it was a very different comparison to first half last year because things were very well and the gross was 19 percentage point. compare with the second half of last year, there is a clear sign of relief for the market because it looks like we are off the very low level in the second half essentially on market, so markets were very bad in the fourth quarter last year and also there is a level off in term of gross margin we know is the fundamental to remain. but i think at least that's what we're going away as i say, this was on very strong activity in may and june. >> now, if we just continue looking at julius bar specifically before we broaden out to the broader banking space

the new ceo of julius bar, he has a fairly substantial task in finishing up the cleanup that's really been happening there under the current ceo's tenure one of the things left to him is to deal with the italian unit. do you think that if we see this asset come to market there's going to be ample demand given all of the political uncertainty that remains in italy at the moment >> yeah. that's $1 million question neither in term of profit nor in term of net money or inflow, so i think this first half is a testimony to that. even they had very bad 2018, so that doesn't really help perform. so i think the value still somewhat demanding for 150 million swiss frank. so we write in the press about

the interest from media bank could make sense because they're trying to recreate some sort of asset management whether i think for the new ceo, will be really trying to get as close as possible because i think this represent between 100 and 150 and considering it's not favorable for bank at the moment that could be the thing that could say take the share price totally out. at the moment, the bank is not really demanding in term of illustrating ten times p for next year, but we all know what's coming up from the central banks. so, lower rates is not a great -- >> spiking of central banks, just coming off the u.s. banks earning season and one of the big topics of discussion is it in interest margin and what will happen with the yield kifb flattening and fed anticipated

rate cuts. reading your notes, i thought it was interested that you pointed out that julius bar is geared to the u.s. yield curve out of their net interest margins about a quarter to a fifth of their gross margins come from the net interest margins. that seems to me very, very high number how does that compare to its peers? >> it is very high it's somewhat for example to the setup of swiss but of course you have to think deutsche bank typically invest in the u.s. treasury the swiss party has been around the two year and now so we have the situation which is quite an anomaly. the inverted yield curve at very different maturity and especially for u.s. very penalized two-year, one-month because those guys have a lot of deposits in u.s. dollar one month which costs very little but at the moment they cannot get actually what they get from the two-year is lower than pay

out in term of deposits. so, this really come at a cost portfol portfolio. whether that is going to change is up for debate, probably not but then as i say, that's the proof of the pudding will be in the meeting. we'll see whether the fed will cut by 25 or 50. >> yeah. that's a big question for investors this week. let's talk about another fund, bridgewater peer alpha fund endured its worst first half in 20 years according to the financial times. it dropped 4.9% during the period caught off guard by rebounding markets growing expectations by looser monetary policy proved a tail wind but the fund's poor performance suggests the group was anticipated greater market volatility you know what i find strange about this story, it seems very difficult to fathom what a fund is down in an environment where

equities are up 20%. bonds are up and gold is up. so, does this make sense to you that an alga rhythmic fund could be so much down on the year in this set of circumstances? >> yeah. it's not great but at the same time i think bridgewater were the first to point you to the -- over 30 years of investing of track record everyone can have a difficult first half yeah, it's a little bit should i say peculiar but i think they also want us to look at the performance over a longer time and i think the track record speaks >> just picking up on that, in this circumstance seems to be somewhat of an exception, bonds have performed well for the first few months of the year

what are some of the trends that you picked up on based on the u.s. bank's earning season in terms of take away about the health of the u.s. consumer, all of this is very important as we get to that fed meeting in a week's time. >> it is it's very important. i think the health of the u.s. consumer is still there in the sense if you compare versus say 25, 27 the reason in terms of racking up household debts we have seen in previous days. i think the main question -- the main take away from the q4 the american banks is they need to act more on the cost side, and i think we have seen comments from the side from citi group of america and jp morgan and something that's paradox to the european banks very attuned to european banks of course talking

about -- but maybe so if you wanted for american banks over the last 18 months has been easy sailing in the sense that they have a steeper curve up until last year and the hike of course it was quite easy because they would naturally skew towards higher rates now of course this tail wind has transformed itself in the head wind the cfo those american banks they have to ask themselves, the right geographical footprint we need to trim some of the branchs and do the work on the cost cutting they have been focussed the last three years for obvious reasons because the monetary policies were very different. >> i want to come back to the bridgewater story. it's interesting that bridgewater's passively managed fund rose 13% through june it feels like talking to investors who come across this

show that a lot of active managers haven't participated in the rally. so i would argue back to your point that it's peculiar the bridgewater fund has underperformed the first half of the year given we have heard that they haven't participated with that as the backdrop moving into the second half of the year, what does that mean for banks if we see active managers that haven't participated in the rally and what that means for their view towards risk assets and client activity for the second half of the year? >> yeah. particularly when we compare talk about q1, so we need to bear in mind we're in q4 of course people tend to forget and they say it's been great, risk asset has been rising through the ceiling. look back in december the picture was quite the opposite of course that's what we all know the famous speech by jay powell on january 4th which basically -- he almost went as far as making the worst mistake.

we screwed up and shouldn't have raised rates in december but i mean, so we 2018 fed versus the financial market which never a good cocktail. things changed completely. maybe too early or too soon or too valiantly up, only time will tell the problem of 2018 still there in 2019 and what has changed we need if you want to experiment of monetary policy montization has been stopped, we don't know if it's forever or longer period of time. but the fed and the ecb, they change completely. ecb, technically speaking hasn't really changed but they will try to do -- >> we'll see on thursday. >> exactly maybe more in september. so, last year they were very against any potential further rate cuts but now i think they

made clear that minus 40. >> that's all we have time for thank you very much for joining us, senior credit analyst. now on the topic of the fed, boston fed president eric rosengrin says a rate cut isn't necessary. rosengren said the fed is in a position, quote, it does not have to take a lot of action he sited the strength of the u.s. economy and current inflation levels now rosengren remained cautious over the impact of global trade tensions but warned of the consequences of lower rates to guard against a potential economic downturn. w. we have to think about some of the collateral effects of taking out that insurance, so we need to think about the potential costs. i agree with the overall view that if we are going into what is clearly a downturn, you want to act aggressively. and the reason for that is because we don't have that much room before we hit zero interest rates. >> but you're not convinced that's where we are.

>> i'm not convinced that the data we're seeing right now shows that and the uncertainty is something that we have to live with by traditional measures of uncertainty. i don't think they're particularly elevated. certainly the trade concerns are a concern. certainly the foreign concerns are a concern. >> see, i was going to ask you 25 bases points or 50 bases points cut you're not in the camp that we should be cutting right now. >> wait and see how the additional data comes in i don't have to make a decision. >> well, it's getting hot out there, but not in the studio here is one way to beat the heat this summer, cool runnings in philadelphia, a 5k race in the u.s. city gave participants an icy challenge, jog more than half a mile and then eat a pint of ice cream before finishing the run. the winner of this year's event finished the tasty trial in 21 minutes and 3 seconds. what do you make of their eating >> the approach to eating like straight on with your teeth sinking right into the ice

cream, it doesn't quite appeal to me. >> i have to say, despite that, they still managed to finish in 21 minutes that's a really fast time. apparently >> i was also impressed. >> i was very impressed. i never actually beaten 25 minute 5k. tweet us, get involved in the conversation if you have tell us what ice cream you're eating coming up on the show, tensions rise in one of the oil markets most important water ways after iranian forces capture a british-flagged tanker more after the break these folks don't have time to go to the post office

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♪ hong kong chief executive carrie lam condemned an attack on beijing's main representative office in the city speaking alongside her police chief, lam said the incident in which protesters threw eggs and paint at a chinese emblem was, quote a challenge to national sovereignty. >> another weekend, another protest in hong kong, the main

one that was inspired by the opposition to the extradition bill ended with police firing rounds of tear gas once again after hours-long march in the central business district of hong kong. now, some of these protesters channelled their anger this time towards mainland chinese authorities. they vandalized the chinese liaison office in the city by throwing eggs at the building and the defacing the national chinese emblem outside the building the china office responded with criticism, calling them, quote, radical demonstrators and saying that it seriously challenged the one-country/two-systems framework and the authority of the central government of china. hong kong seems very much shaken up because of unprecedented level of violence seen later at night at a subway station across the harbor scores of men dressed in white attacked not only

anti-government protesters dressed in black but also passengers and members of the press. local media says these men are believed to be pro-beijing gang members. this latest has certainly put the hong kong police under heavier criticism with some people accusing them of showing up too late, doing too little. >> and new tensions in the gulf have pushed oil prices higher after a british flag tanker was seeszed by iran in the strait of hormuz on friday video released by teheran appears to show the moment the ship was raided. it comes two weeks after the uk seized an iranian tanker off the coast of gibraltar jeremy hunt has spoken with his french and german counterparts who condemned iran's actions he said they view the seizure as a quote tit for tat situation. >> this is totally and utterly unacceptable it raises very serious questions

about the security of british shipping and indeed international shipping in the straits of hormuz. >> dan joins us live from abu dhabi. we got some strong words from the iranian foreign minister over the weekend directed not just at the uk but also at the u.s. as well tell us more >> that's exactly right. in this situation continues to evolve later on this morning, we are expected the outgoing uk prime minister theresa may to discuss the uk's response to this tanker crisis as you pointed out, we have also heard from the iranians and the iran -- iranian foreign minister who took to twitter to say that unlike the piracy in the strait of gibraltar, our action in the persian gulf is to uphold maritime rules iran guarantees the security of the persian gulf and the strait of hormuz. he went on to say the uk must cease being an accessory to

economic terrorism in the united states this will be interesting to watch because the security meeting that theresa may is set to hold later this meeting will discuss an appropriate response to this crisis and address the current security of ships in the united kingdom over questions of how and why this situation actually came to be continue to circulate. at the moment, as you know, the uk and the international community also have a number of economic and financial sanctions in place against iran, so it's still not clear what options the uk has on the table but no doubt all options are being explored further sanctions including asset freezes could be in the mix, according to recent reports. but you can see here this dramatic picture that really captures it all. iran's revolutionary guard captured the tanker on friday. they sent out this vision of what appears to be ansae assault on the ship. it was captured after colliding with a smaller craft but the uk insisted that, in fact, it was

in amani waters when it was taken and that's in clear violation of the iranian law everyone is safe on the crew the tanker itself is still in the iranian port of bas where iran says it's going to remain for several weeks while it undertakes its over investigation exactly what that entails remains to be seen but of course the uk has described this as a hostile act, as you pointed out before. it's also demanding the release of the ship. no surprises there and it's also threatening iran with serious consequences and advising other uk ships to avoid the area so this is certainly going to be front and center in the uk, not just from geopolitical perspective to see how the uk responds with the international community to reign in iran's behavior but in particular a question for the incoming new uk prime minister a question of whether the uk decides to further sideline and perhaps

saddle up, if you will, with the united states and isolate the iranian regime or another angle it could take is perhaps come closer to the europeans as it has done in the past and perhaps decide to attempt to continue to bring the jcpoa back together, that fractured iran nuclear deal so certainly a lot of questions that need to be answered from the uk side as this crisis continues to develop and no doubt we'll learn more after the cover meeting and the address to parliament later on today. >> certainly, dan. and as we mentioned, germany and france have condemned that attack it's also worth bearing in mind that the foreign secretary is one of the two people in the contender to become the next prime minister, so we're entering into the final stretch here with the winner due to be announced on tuesday we'll be live from downing street right after the break ♪ more, more, more

♪ how do you like it, ♪ how do you like it ♪ ♪ more, more, more ♪ how do you like it, how do you like it ♪ all you can eat is back. how do you like that? applebee's. now that's eatin' good in the neighborhood.

♪ welcome back to "street signs" i'm julianna tatelbaum.

>> i'm joumanna bercetche, these are your headlines. >> phillips second quarter sales beat expectations thanks to strong demand in the u.s. and china as the dutch health care company forecasts a strong second half sending shares higher. julius bar delivers the latest earning report under outgoing ceo the market rebound catches ray dalio out as bridgewater's flagship funds logs one of its worst first half performances in decades. rising oil prices boost energy stocks after the uk calls iran's seizure of a british tanker in the strait of hormuz an illegal act well, european markets trading in the green now, stock 600 initially showing some signs of stabilization around the flat line, but things have picked up

in the last half an hour or so we're seeing some fairly decent moves in the dax and ftse mib as well as the ftse 100 leading the charge up .4% coming alongside some weakness in the pound, very strongly correlated for the exporters in the european market last week, we saw the stock 600 outperform the broader global markets. wall street struggled for gains last week, ending lower for the week overall europe continuing this moderate positive momentum. a big week for corporate earnings, nearly 150 companies reporting out of the u.s we also have that ecb meeting on thursday and global flash pmis coming out on wednesday. plenty on the corporate side and plenty on the macro side for investors to look at this week fx markets ahead of the ecb meeting. last week we saw the dollar index climb a third of a percentage point, second positive week in the last two,

so some more dollar strength now this morning we're seeing that broadly continue looking at the euro down 0.04% versus the dollar and the pond continues lower down about 0.15% at the -- just under the 125 mark. of course, tuesday, big day where we will get the announcement of the next prime minister here in the uk, so all eyes on that appointment, although widely expected boris johnson takes the role looking at u.s. futures, let's see where things stand we're looking at a positive start to trade this week as i mentioned, last week wall street struggled with all three major indexes having their worst week since may this week we'll get more of a check on the earns front and particular in the tech space, amazon, alphabet comes out with their earnings so plenty on the data front as well but let's get back to the uk joumanna, give us a bit more detail on where things stand heading into tuesday

>> that's right, julianna. news over the weekend, chancellor phillip hammond announce head will resign from government on wednesday if boris johnson becomes the next prime minister in an interview with the bbc hammond said his stance at a brexit deal was at odds for boris johnson. he said the uk must leave the eu by october 31st, do or die speaking to cnbc last week, hammond revealed his plans to step away from the cabinet. >> i will not continue in this role under the new government, but i will continue to take a close interest in brexit and the way it's managed and in the uk's international trade and commercial affairs generally, and i will continue to be a member of parliament the new government -- the new prime minister will have a majority of two or three in parliament i'll be one of them. a lot of power rests in parliament going forward. >> now, willem is at downing

street it's interesting those comments out of the chancellor saying he will resign this week and he certainly has the potential to be quite disruptive as a back bencher given the working majority stands at three could possibly be reduced to two if there's an a bi-election in august there's not that much room to play with? >> reporter: normally people are focussed who they will choose to be in their cabinet, and that will be a focus later this week as well. but as you mentioned, it's really who is not going to be in the cabinet and who does not have to vote alongside the government what's interesting with people like phillip hammond, last week in his 22 years he decided to vote in favor of an amendment essentially one that does not make it easy for a new prime minister trying to spin parliament force through a no deal when you have people like phillip hammond, high profile conservative ministers resigning their posts this week and then

taking up positions on the back benches, they have a huge potential to disrupt the agenda of an incoming administration most likely led by boris johnson. that's going to be important because over the last few months parliament and the government have often been at odds over brexit and that's unlikely to change in the near future. that's why the parliamentary role is so important, according to phillip ham hond. >> this is a parliamentary democracy and the new prime minister can persuade parliament to vote for a no deal exit, i have to accept that. this is a parliamentary democracy, but question can't have weezs suspending parliament in order to deny parliament its voice. this matter must be decided in parliament >> now, of course, only so much can be decided in the british parliament because a lot relies of course on how other european nations and other european leaders agree to give in terms of compromise when it comes to

any changes to the agreement between the uk and the european union. that's something that boris johnson and jeremy hunt, the other contender in this leadership contest promised to redraw that agreement, something the europeans and particular the irish have pushed back on very strongly, guys >> willem, thank you very much for setting the scene over at downing street joumanna and i are joined around the desk i want to pick up on the question to willem around hammond and the fact that he is working with such a slim majority, the conservatives are working with such a slim majority he said he would not rule out backing a no confidence motion that's a pretty big move, isn't it given how little it would take to actually proceed with this and the implications of actually going forward with a no confidence motion with the threat of labor right there in the background >> well, it's the nuclear option and it's the one threat you can

hold over brexit prime minister say you can have your hard brexit but the chance of you being prime minister to deliver it would be very low look, the conservatives in the dup together have a three-seat working majority if we weren't talking about brexit, we would talk about something else it's impossible for this government to put anything radical through whatsoever probably we go through a quiet period over the summer and big head to head between boris johnson if indeed he generally means it when he takes a hard line on brexit and what is still a very large majority moderate parliament. >> in terms of boris johnson and he -- the hard line he's taken so far, the european side says they're willing to negotiate the political declaration but not the withdrawal agreement do you think that tory lawmakers will be convinced enough by boris johnson and his strategic negotiating abilities to pass the withdrawal agreement on the basis that he'll be able to negotiate the irish backstop in the political declaration.

>> that's a good question, are his brexit credentials sufficiently strong? he has a habit of pandering to his audience perhaps he hasn't himself made his mind up. his options are -- his real options are probably to try and stare down the eu and actually the irish prime minister to convince him that alternative to a hard brex sit a time limit on the backstop he may actually get that, low proeblt event but perhaps he will if not, boris's real task would be to lose the battle, swallow the withdrawal agreement as it stands and i will ensure we don't end up in the customs union on a permanent basis. >> we have talked about that absolute working majority of three, but we haven't talked about labor in all of this i think what's really interesting what's happening to the main opposition party is that they have just slid from one thing after the other in the polls. now would not be a good time for a general election to be called

because it wouldn't be favorable to the labor party if you were a labor mp from a brexit constituency, isn't surely your incentive now is to vote with the government on brexiting by october 31st to save your job? if it doesn't look like a general election is going to be called >> that's a very, very good question the threat of deselection is much, much lower for labor mps now the chance of them actually doing well in election is fallen probably what we'll find is probably around ten to a dozen labor mps in brexit that won't back the government in a confidence vote, of course not but what they might do is make it more difficult for that majority moderate mp bunch that want to make it hard for a brexit pm to deliver brexit. we saw it last week. we have moderates now in the conservative party making it hard for boris to close parliament down over the summer. labor may side with boris, ten

of the mps now majority needs to be bigger. >> i want to point out we have news just out the foreign office junior minister allen duncan has resigned according to the times political editor and it's also been confirmed to cnbc as well so that is the foreign office junior minister and obviously the foreign secretary jeremy hunt has -- well, is one of the main contenders to be the next prime minister as well i should mention the junior minister has been very critical of boris johnson in the past in the preemptive resignation similar to the chancellor over the weekend. going back to kallum, you have the probability of hard brexit up to 40%. how does that compare to historical odds? >> for us this is the highest it's been. the very low point when it looked like theresa may could get something through we were at 20%. you have to take boris at his word he surrounded himself by hard

line euro skeptics and may box himself in now we have to contemplate that outcome even in the second referendum if the conservatives are in power hard brexit may well be on the ballot paper. >> maybe we can shift gears and look at the economic side of things feels like business leaders and investors are fairly fatigued by all of this brexit conversation. >> so are news anchors. >> add us to the list as well. but what does all this mean in terms of we had a lot over the weekend again so much focus on the negatives of a no deal what's your view as an economist on what that actually means at this stage given where we stand on the brexit fatigue front? >> unresolved brexit is like a kidney stone lodged in the abdomen of the uk economy. it doesn't kill you. you can stumble along but you're in an awful lot of pain and the pain we see is on the business side weak employment slowing a little, the demand side, consumer spending doing okay if we get the kidney stone passed, we will see an awfully

large relief rally in the uk and uk assets but of course it can all go wrong. >> gosh, quite graphic. >> we will be thinking about that for some time i'm sure. shifting gears away from the urk over to japan, japan's ruling block has fallen short of the two thirds upper house super majority needed to push forward constitutional reform. despite that, shinzo abe pledged to carry out, quote, sincere debate on the topic while continuing to make the economy his top priority now martin joins us with more. martin, you laid this out for us so well on friday. the importance of this super majority and particular the implications for this constitutional reform. now, where do things stand post these results? >> good morning. the easy way to think about this is sort of a good news/bad news situation. right? the good news is shinzo abe, the

coalition are back and won a mo jurorty in the upper house but it's a simple majority, just over 50% they crossed that line the super majority, two thirds, they weren't able to hold that yes, that basically net net leaves them in a -- with a weaker political hand this time around i want to talk about what that means for a couple of thing. one is the economy economic management policy, two is the upcoming u.s./japan trade deal and three would potentially mean for constitutional reform to bring it full circle. let's talk about the economy first. biggest worry and election this sunday was upcoming hike in the sales tax from 10% to 8% the government is planning a big offset in plan of supplementary budget as well as extra fiscal stimulus including hash handoff to lower income to offset that also remember there are a lot of carve-outs as well, food

beverage, what you eat or drink, whatever you pay on that that doesn't get taxed. expert i talked to earlier said that takes the rate down to 1.6% that may be easier for people to handle that's economic policy there the trade deal with the united states, another expert saying, look, simply by virtue of being able to maintain their majority it means that it was the rural areas, the foreign folk who helped shinzo abe win this vote. in other words, he's given them enough concessions for them to be on board when he has to go into tough talks with the u.s. and those talks are going to resolve at least the partial deal is going to revolve around as you know autos, et cetera for japan, though, that's a red line they're not going to cross. the industry is too big, too important. so because of the support of the farmers, he'll be able to offer instead concessions on food as well as agriculture.

very sensitive this time around he actually may have the political wherewithal to do that finally, let's talk about regional security, the national security adviser john bolton in town today heads to seoul tomorrow one of the things he'll be talking about, of course, is how to play mediator and cool down these tensions between japan and south korea over the tech curves but the other thing he'll be doing is talking to japan to get them on board part of the coalition of the willing to help patrol and keep the strait of hormuz safe, safe passage for oil tankers if nothing else and that plays into this lack of a two-thirds majority. it will put the ldp and its partner and in fact the public here in a bit of a bind. public opinion is very divided and split still over this constitutional change, which is all about giving the military here a more legitimate and normal rule for goped economy. so, three key things to watch as we go forward.

guys, back to you. >> thank you very much for such a comprehensive report, martin now, also coming up on the show, ireland's shane lowry wins his first open some emotional scenes after the break.

♪ welcome back to "street signs. china's tech board kicked off trade today and most of the first batch of 25 stocks ranging from chip makers to bio tech companies have jump on their debut. the star market has been billed as china's nasdaq, complete with a u.s. style ipo system and more relaxed rules. over 140 companies have signed up to list as beijing works to bolster its home tech market and compete for ipos with new york and hong kong. eunice yoon has more >> shares rose as much as 25% for china's version of the nasdaq the star market or the science technology innovation board is meant to help shanghai lure

listings away from the traditional markets like new york and hong kong they have applied for the board with 25 debuting today and raising more than $5 billion the star market is seen as a big step towards reforming china's capital markets because its listing rules are much looser. companies don't need to prove they make profits. the government plays a smaller role on the approval process >> the star board has good future why, because actually china is focussed more on technology, more on the true, original innovation, right? so the the country so so big you have more than 1 billion people we're doing the laser, of course i want to do this hardly with the chinese theater. but i got to do this in china, this is my home market, my

domestic market. >> the chairman said he hoped more foreign investors would eventually take part to help professionalize the exchange but for now, many international fund managers say they're in a wait and see mode with prices so volatile eunice yoon, cnbc business news, shanghai ♪ well, golf's open championship was won by shane lowry who battled the wind and rain to triumph at royal portrash adam joins us around the desk. beautiful moment for the sport, the 18th hole. you can see the smile on his face the six-stroke advantage, pretty much certainty he was going to win but it was a big victory for an irishman playing in noern ireland. >> six-shot lead when you played your approach on to the green is pretty near as a relaxing moment you can have when you're trying

to win your first major title. a few over eager spectators got in the way shane lowry won for the island of ireland shane lowry from the republic, no more popular winner you can see. and basically because partly because he's irish and partly because he played such sensat n sensational golf over the four guys to win a major title in such circumstances because the conditions were incredibly testing. the wind and the rain were making even the best golfers in the world look completely average but not shane lowry. he won by six strokes, nearly $2 million in his pocket adds well as the claret jug. he is the sixth irish major champion as well and he did it in style it was like an outer body experience setting a new course record on saturday and going on to just get round. it didn't matter what number he posted just as long as he stayed

ahead of the chasing pact and there could have been a sense of deja vu for shane lowry. dustin johnson chased him down on that occasion but shane lowry this time around triumphed over everyone else and if you ever wonder what a major champion may be thinking as he is about to walk down the 18th to lift that trophy for the first time, here is what shane lowry had to say >> i hit my tee shot at the 18th that was it. i was home i started to enjoy it then it was just incredible to walk down, to walk down 18 with the crowds going wild. it was like something that, you know, i just can't -- i couldn't believe it was happening to me to have -- it was very nice paddy to be at the back of the green for me. >> incredible win for shane lowry as he lifts his first major title. >> exciting scenes

tommy fleetwood came second, englishman he seemed a little disappointed at the end it's never nice to come second place. >> second time he's been -- >> the winner over here. >> second time he's been the bridesmaid, though. >> what does this mean for fleetwood's career going forward? >> second time he's been the bridesmaid second time he's come runner up in a major tournament. his time will come he's a young man he maybe doesn't want to get into the situation of somebody like ricky fouler. you only deserve it if you goen and do it. ricky fowler, he's on the first page of the leaderboard there. tommy fleetwood was aiming to be the first englishman to win the open title in almost 25, 26 years since nick faldo did it in the early '90s lee westwood also on the first page not quite happened for him tommy fleetwood, it's going to come for him there's a lot of buzz around the way he plays golf.

>> had a guest give hard brexit a 40% probability. what's your probability of tommy fleetwood winning a major. >> 50/50. >> really putting yourself out there, adam. just go for it. okay thank you for talking about the golf. quick look at u.s. futures before we head out for the first day of the trading week. the three majors are seen opening up in the green. it's a very big week ahead lots of earnings to anticipate, 150 names are reporting in the s&p as well as lots of macro events to watch out for. that is it for our show today. i'm joumanna bercetche. >> i'm julianna tatelbaum. "worldwide exchange" is up next. ♪

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it's 5:00 a.m. here is your five at five. could earnings be the start of something new? more than 130 kanes in the s&p are set to report their numbers this week, including three fang names. also, mideast tensions rising new audio emerging from the moments right before iran seized a british oil tanker in the strait of hormuz last week peaceful protests turn violent. thousands take to the streets in hong kong for a sixth-straight week of anti-government rallies. and dethroned. hedge fund king