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tv   Countdown  Bloomberg  July 29, 2014 1:00am-3:01am EDT

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>> missing estimates. it comes in less than expected. ubs reports a jump in profits. we spoke to the chief executive. year we reinforce the capital position in different scenarios.
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>> hello. welcome. i am mark barton. what are you watching today? >> we are watching brussels. they are going to put new sanctions on russia and it looks like it may really drop. isa bit of a russian flavor what i am looking at. the european carmaker has exposure and we know that rush is a key source for the carmaker. they are seeing a cool down in demand. slightly cheaper makes of cars. sales really are growing in the first half. >> watch out for those companies today. revealingank is
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results. the second-quarter profits are why theand the reason company paid more in tax and not interest income. it declined. net income fell. that is below the estimates. bloomberg. this is a bank that raise money last quarter and is relying on fixed income operation. other banks are scaling back. deutsche bank is putting money into fixed income and helping market share revenue. debt and foreign exchange was not changed. it is unchanged. is it paying off investing in fixed income? corporate to see how banks are doing. it is interesting to see if
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litigation is still a cloud hanging out over investment banks. litigation is on the back of that and all of this keeps coming out. it is interesting the feedback that we are getting. the litigation costs that we are seeing and lloyds bank had to pay up in terms of manipulating libor and key interest rates. we had the bank of england chief say that this is reprehensible because it has been bailed out to a large degree. not putting it up in the way that they should. >> there are actual litigation costs and they are unpredictable. it may be going ahead. >> it continues and they say that they have 2 billion euros in the coffers to cover reserves. litigation is unpredictable.
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>> that something to watch. they armitage leading currency markets. manipulating currency markets. bank missed estimates today. let's keep the banking focus. earnings.ed they beat estimates. manus cranny is in surrogate with the details. he had an interview. give us the breakdown on the numbers. have just given the deutsche bank numbers. froms stepping back investment banking. it is no longer the core of the business. it will be difficult for the market to assess what to do with the numbers. estimates and i was here saying that credit suisse delivered lots of swiss francs.
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litigation is a strange word that you have been using again. a quarter billion in swiss francs. we are not done yet. we have a tax investigation. the costs are down and that is the critical headline here. it fell by 36%. they are cleaning up the issue and the expenses are down. that is the clear message. ubs settled with the germans on a tax investigation. that settlement cost them and they estimate that money is coming in. net new money. the rich are coming in. a big pick. it is way ahead of the estimates. they are not trading. what we call gross margin is
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dropping. the investment is rising. germany sorts it out and the costs are lower. there is new money coming in and we are not getting a turnover in decline. i think, really, when it comes to the big issue of foreign exchange, there is still no clear answer on when that will be settled. say, and we will play part of the interview in a short time about what they had to say about the french that the one way and treated they got back last week. that is all i can tell you. we will have a look at some of the comments last week. >> we will come back to you after that.
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the interview in a matter of minutes. stay tuned. earnings willnd be reported in one hour's time. it is the biggest number. the investment in russia. >> we are talking about metrics it has risen to $3.5 billion $2.7 billion. that was the second quarter of last year. subject is russia because bp has a 20% stake and a fistful of cash. know they are in the doghouse and the u.s. has gone access to restricting american capital markets. wey sanctioned the ceo and have the eu representative meeting today. one thing i will be watching is
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if they do the same. they have a blacklist and he was allowed to come. anddudley is the ceo of bp he can move around without impunity. will we see that added to the restrictions of european capital markets that the european union is looking at? state ofucial is the bp. bp?s the stake of the thirdre are present one of bp reserves and they have attempted to profit. it is a quarter of the production and it is a good deal. you think back to when the deal was done and the shares are down since then. if you think about it, the
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largest oil company is a $64 billion company. march of last year, it was an $80 billion company. 1/5 of 64 billion is a lot less. the problem is that there might be more downward pressure. on sanctions, is today when the penny drops? >> it looks like it is going to be. we had obama, the chancellor, an french president, and unprecedented videoconference. >> wouldn't have been amazing to fly around the world to watch that? >> merkel is supposed to be on vacation and she made it clear that if she does not get a deal that imposes more sanctions, she will fly to brussels. i think we can expect more. that is fair to say. >> ep announces results in time.
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15% jump ina second-quarter profits. that is lower costs and they beenthat they have speaking to the chief executive officer. let's see what they have to say. >> it would be a little bit better. 20% better than last year. i think we were pleased with the underlying performance and the margins are under pressure because the volume in equity market and exchange markets are under pressure. we have been able to mitigate the headwind through a migration from advisory to mandate. and, also, by taking action. fallen.fault -- we have there is a set of challenging news -- there is a set is
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-- ofnging news challenging news. >> you have border issues with germany and the cost is 300 million euros. andhave the issue in france it is a life issue. is it fair? that and it has no relationship whatsoever. we have not been in discussions or negotiations. advanced discussions about double-digit settlements. why it makes sense. it makes no sense if you related to germany. it is a much bigger business and it has a relationship with the findings. we think that is fair.
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penalties, fines and your buddy went up the road and the size of the fines are rising. it is a real escalation. that, to some extent, we are already there. we have been the first to recognize the challenge, at times. we are not in denial. we have addressed the issues of the past. we protect the rights of the shareholders. >> is that your mantra? >> it is fair and equitable. we have to recognize that some things need to settle. >> let's talk about the regulators.
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numbers whole friday of -- variety of numbers. we must be getting closer to where you can give us some guidance and some barometer of where you see a changing. we have made good progress in the investigation that we initiated ourselves. we are continuing to corporate with all of the authorities. we are not in control of timing and those processes. we need to take time and we are not in control of that. >> the basis of the calculation is a great question. is it profitability. collusion in the marketplace -- >> i cannot discuss that. >> let's talk about regulation. weyou get the feeling that are at the high point of
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regulation, industry-wide. a i think we continue to see trend in regulation and, in many cases, we see it coming up in discussions or being implemented before. it is not helpful to create a framework that allows people and >> --. to count markets whenve niece is done? >> i think it will take some time. >> what does it mean for ubs? will you continue to do business openly? >> yes.
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to russia is fairly limited and, most importantly, i think that, unless there is a clear guideline coming from the authorities regarding actions against individuals or institutions, for us, it is business as usual. >> the israeli resident told his extendedo brace for an military campaign in gaza. we will have the latest next.
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>> it is time for company news. inbus has agreed to drop order for sue bird jumbos by the carrier. that is according to people familiar with it. they are struggling to keep customers and there is a drought. it failed to attract a new customer. malaysian air is facing a spike cancellations after the second disaster in four months. it is climbing above 20% in some places. refundid they will customers.
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morgan stanley is exploring the sale of the business, according to people familiar with the matter. be 700 million euros. it was started by three brothers in the market in 1973. it is now owned by a private equity firm. and, deutsche bank is the largest investment bank. the second-quarter profit fell 29% as the company paid taxes. the tax payments increased 49%. welcome back to count down. i am caroline hyde. joining us is ryan chilcote.
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the european numbers seem to be good and they are raising their forecast. they say that there was an increase from before. why they are seeing it. it is cheaper and no-frills. >> they its present up, to be fair. >> it is interesting that they just call it here in europe. outside of europe, it remains. i have not tried it out myself. at 7500 euros -- >> invite impact all of the kids in it. can pack all of the kids in it. units purchased by that and i guess i could say i have
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one. badhey have a bit of a reputation. >> it cost me $3500. it has an alarm system and a cd changer. that is a good value. >> they say they are sticking to their targets and are increasing delivery overall to earnings. >> the european car market will rise this year and more than the original. now,riginal was 2%-3% and it is 3%-4%. this is countering some of the problems in the market and we talked about russia. aguy named anderson sat down few months back and told me that the russian car market may fall this year. that is astounding.
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he said next year, as well. it looks good. >> it looks like they are taking market share and they have the local partners in the local markets. it looks like they did a little the better in russia and other emerging markets than the hot and they were helped by the improvements in continental europe also >> sales are not just falling in russia. it is out here you. >> currency, isn't it? a lot of countries have weakness . you get less bang on the bottom line. >> thanks. thatyahu has said disarming hamas and other militant groups must be part of a solution for interest. more than 1000 palestinians and 50 israelis have been killed so far. elliott gotkine is live in tel aviv. netanyahu is also warning that war could drag on.
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>> he is. address.a televised and the israelis are bracing themselves for a long campaign. that means that netanyahu is bracing himself for more , in somec pressure and quarters, international condemnation. in one incident, a hospital and a park were hit all stop the military says they were struck by rockets from militants. the palestinians blame israel. increased the number of casualties, including children, as well. netanyahu says that they are there to destroy the tunnels and that that is an imperative step in the demilitarization of the gaza strip. >> netanyahu is not backing
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down. is hamas? >> no. the political leaders spoke in a charlie rose interview that is going to be broadcasted on bloomberg television this evening, saying that any talk of or trust between the parties, israel has to lift the siege on gaza. >> why do you not call for lifting the siege? why don't you give the right to live for the palestinians as the other nations. it is the last occupation in the world. >> deliberately ambiguous when they talk about the israeli -- of gaza.f hamas >> the economy is a bit of a disaster. how is israel being affected?
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been a bitw, it has of guesswork. we have an indication from the bank of israel and there was a surprise interest rate cut. was of the reason for that because of the conflict going on in gaza. she was looking at the previous one. it locks up 0.5% from the israeli economy. yardstick,large -- that is what we can expect right now. it is 2.9%. ,t is a bigger problem for them unless they are directly in the line of fire, if you like to stop it is the strength of the shuttle that we were chatting about yesterday at a high thenst the euro and european union is the main
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export market. even the interest rate cut did not do anything to weaken the shuttle will stop >> thanks will stop elliott gotkine is the middle east editor. deutsche bank released standings on russia and the middle east. they say that there are various risks that could have an impact thehe projection and deterioration of the ukraine crisis could lead to a spiraling of sanctions. the russian reaction poses a risk to the development of the european economy and there is a continuation of the natural gas delivery. furthermore, companies are aware of this, aren't they? >> you get into the numbers and the russian deliveries are down. they are down in argentina. it is a key market. that theynteresting are focusing on a major problem of russian oil and gas not making its way to europe. i would like to see if capital
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markets restrict companies and what that means. ona full interview bloomberg. more to come on countdown. stay with us.
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>> welcome back. countdown. mark orton. let's go to jonathan arrow. every major is down. what one is writing right now. bbva adjusted their quarterly. that is above where many people will be. is 120ian projection nine. another major on the move lower. shoe
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-- buys youu 169 169. look at that. higher. higher. higher. the best-performing currency markets. the united states has determined that russia has violated an arms control treaty. the embargo administration official says that it is 500 kilometers and the new york times says that russia tested a missile. they will impose more sanctions on russia after the european union announces sanctions. -- tony lincoln says that he expects to be working with the rebels and the ukraine. several european leaders were
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spoken to about the ukraine and gaza. fighting curves and mortgages. they may raise interest rates to rein in the housing market will stop that is according to a report from the imf that says that there is no sign of a bubble and the u.k. must tackle the homes to avoid financial risk for the housing market. ubs revealed the second quarter and cost-cutting. europe, we this in are joined now. good to see you. thank you for joining us. we are talking about deutsche bank and let us start with ubs. .t has been cutting costs your early thoughts? >> it is a bit more mixed, i would say. from cost-cutting
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charges in theer corporate sector. thing that a the bank does when it is in a defensive mode, almost, it you like. hand, the results are a touch week, i would say. the revenue generation on growth that you would like to see in a vibrant growth story. >> what about the net new money? we had a net new money outflow that some viewed as a bit of a surprise. wasent up and be as mitt 8.6 billion. >> it is a decent number and, again, the flip side is that the margin is a bit lower again and well below the target that ubs
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had. for me and ubs, that is the single most important figure. that is in the wealth management business. >> will they have issues attracting clients for the wealth management business? we are going to get russian people close to the russian president. the u.s. has come out what these blacklists before and they go after the billionaires. thinkingy, they are that it is safe to put their money in a place like ubs when the government come after it. you think that is an issue for them? they say they are committed to the russian markets. , it is a bit of a tricky question and they have a temporary impact.
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at the same time, switzerland is not in the eu and it is a traditional advantage of the private banks. that is what somebody has built a franchise on. he has made a huge torsion onshore, if you like. they are the global number one in this business and they are diversified. yes, there could be an impact from russian sanctions. for some time. i would not expect it to be more significant on the franchise. it needs to be self sanctioning. comingseeing trading are youcertain volumes,
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impressed by the fact that we have trading up and equity trading? this is a company that is putting off a lot of big bets on the market. >> that is the point. deutsche bank was surprisingly robust with the refugee numbers of sales and trading had nice results there. i think it is a nice set of numbers from deutsche bank in , so, yeah.t and shaking andntiment there are concerns about russia. will we start to see a market impact and, at the moment, everybody seems to putting geopolitics aside.
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it has been quite reluctant. it is wide ranging and strong sanctions. individuals and companies there that's even broader impact. banks and deutsche bank would be less sloware a little out of the region. it really has not gone far make you think there is a huge breakdown in the commercial set up in europe at this stage. the threat remains and it seems to have potential. so far, the market does not trade it or believe in it. >> what about the allegation? there is uncertainty and the
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bank admits that the litigation costs are unpredictable. is a time of possible impacts. manipulation and mortgage-backed securities probes. how much will that continue to weigh on the company. >> it weighs on all investment banks. they are the focus. it is like an ongoing tax imposed on the bank. it is there for some time yet. the market seems to be taking a lot of that on the chin. that deutsche bank is
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down 19. >> yeah. equity and debt. in the short-term, i would prefer ubs. probably go with deutsche bank. the debt is in the investment bank and it is a less important business for them. they are much more entrenched in they say go with deutsche bank. once thank you. the europe auto digital. >> roadblocks for the russian car market. they have been banished from a
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mcdonald's restaurant. we cover it all next.
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>> welcome back.
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next is european sales and the pressure unit delivery fell. hans nichols has been going through the numbers and looking at the auto sales. the headwinds from the situation in the ukraine. and the sense of a broader market. carmakernot the only exposed to russia. >> they are not. they have the biggest exposure through the units there. it is down, as you said. the numbers were down 13%. and thed line is worse company confirmed they can expect that. it is not just them who has exposure. they have the most. volkswagen has 12%. and they willsure
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think of russia. seller andf the top what it has done. you take a look at the numbers and it is 17,000 to 12,000. that gives you a sense of the headwinds that the brand is facing. is not alldd that it bad news out of russia. it looks like luxury is holding and you saw the first month numbers that were up. they were basically flat. the auto sales in russia were down. we talked about the morning and it is important. it is a proxy for what is to come. you look at the sales declined and if that is what they are expecting, it has implications across sectors. to energy.e
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the numbers are disappointing. they were able to overcome it elsewhere in europe. >> thank you. becoming embroiled in a food scandal in china. they are pulling items from the menu. across 1000 outlets in the country. let's go over to hong kong for details. good morning. >> the only thing you can buy a mcdonald's in china is a fish sandwich because the chain pork, and chicken from the shelves and a host of products from hong kong stores. the is on a recall from aurora, illinois company that is investigating their shanghai unit. afteras been in the news
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a local television report found workers repackaging and selling chicken and the that are past the sell by date. this recall has spread to all products. the company says that there is an abundance of caution and, with the food scares we have seen, no one is taking any chances. we should note that mcdonald's spoke out and said that they are fromng off also applied the supplier. they are conducting their own internal investigation and the chinese authorities shut down a shanghai plans and detained five in connection with that. it is certainly unsettling the volume that they do in china and, in asia every day, you have to wonder how long the spoiled products have been sell to
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consumers just sold to consumers. products have been sold to consumers. >> the entity relationship with the food supplier within days of the report and mcdonald's is taking the same step. but thanks. see you soon. if you like high end luxury shoes, we have a french shoemaker. entertainers and athletes. caroline reports. >> it is the start of trading a short stroll from the plaza in paris. shoes are being made by hand. the cream of the crop. >> these are shoes.
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>> they started by making these shoes for customers and they include clive owen and kate blanchet. and rich french clients extravagant footwear. comes -- he upper three people and 50 hours to create the pair and the brand has launched ready to wear shoes. more and moreept of the feminine parts. >> the prices start at $5,000 and more than $10,000 for corporate. not told us how many they would sell because he wants the brand to remain inclusive. >> is small and we are trying to
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develop in a healthy way to not force feed it. london, hong kong, dubai, and other avenues in the u.s.. they plan more extensions. >> it can help. >> i know caroline hyde likes crocodile leather. does ryan chilcote like crocodile leather? >> i heard you and i am not a french stop i have fancy shoes. these are duty. only the finest. not that this is product endorsement. .> they look a bit old >> it may have been a boxing day sale a few years ago.
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some refer to them as bowling shoes. >> would you wear union jack shoes? is that a step too far for you? >> that is a step too far for me. >> show your allegiance to. >> play it neutral. >> cars and friendly vehicles. on the backside. one group of driver faces new charges to stop pollution. more is in the countdown newspapers segment that is next.
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chilcote and it is time for the newspapers segment. my pick is the times. by the two of you. >> i am outraged because i have a diesel car and the new york times has a story that says that they learned that boris johnson is going to introduce an additional 10 pounds charge on -- what is it now? in any case, an additional 10 pounds on top.
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i thought i was making a sound decision when i bought a diesel car. ever since i bought the diesel car, it is bad news. it is loud and stinky. i have to pay mark -- more. >> it is stinky because of the italian shoes. >> i would like to point out that the bread is italian and i was referring to the parent company. it is listed in france. he is out of that one. who is this? who is this? come on? it is a new superhero. it is a batman versus superman. ben affleck. who initiated? a big superhero. that is wonder woman.
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>> it looks like xena warrior princess. linda carter was in wonder woman and had a blue and red outfit. it is all dark. >> she has a rogue looked to her. >> she says that she is steadily femaled why do all superheroes have to do car cartwheelcore sets -- corsets. bookmakers, give us a feminist superhero. >> didn't she have a tiger that she rode? that was he-man. >> i like it. i like it. >> scantily clad.
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superman is skintight. there is not much left to the imagination. >> i am going to talk about shakira, actually. this is an a cappella group in oxford. that i out of the blue saw a few times in union and you ininoont i 20 -- in 2011. she said, how much do you like the new medley? and have been retweeted favorite it. it is a version of her favorite. >> is the one thing i cannot do for one -- love her money is saying.
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>> that is a french song, right? >> ok. countdown continues and we are just a few minutes away. in a matter of minutes, we will bring you the results as they come to us. right after the break if there is analysis.
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>> stepping of sanctions, the eu and the u.s. are going to impose harsher sanctions. >> we look at the london-based company exposure to russia. deutsche bank misses and weighs in on russia. they say that the ukraine crisis poses a risk to the economy. in rises. jump last year and we reinforce the capital position. the business model works in different scenarios.
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>> >> hello and welcome to john down. i am mark arden. we are getting some break in earnings across the bloomberg terminal. let us just build up and get some attention. we are going to strip out inventories and items. dividend is -- we are going to skip over that for now and we are waiting on for the number. the other thing that we are --ching our costs will stop
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our cause. they want to see it up. the net income is adjusted and the big number comes in at 3.6 4 billion and the estimates. the adjusted net income has gone up and beaten. that therethe fact were european concerns about exposure to this. give us a sense of how important this is for bp. effectively, is massively important because of a joint venture and they sold the stake and that. was got a 20% stake and it 20% of the $80 billion company. they have seen a 22% decline.
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>> we see oil prices and there was cleared concern about reductions in europe and european prices. and it is an issue not helpful for refining, as well. timewas a good move at the and this was bob dudley trying to get over all of the problems. this was the next big move. there was access to the reserves and the arctic. they talked about it being a treasure trove. they have been in the doghouse and the u.s. went to town. in addition, they have also restricted access to american capital markets to make it more difficult to raise money. >> is there an argument that -- isill go from 2010
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there an argument to be made that they have gone from one pr from an investment perspective. >> it was celebrated by investors and they had a huge hit. the company was starting to get back in favor with investors. you can see that in the share price and the value of the shares of stock that is when we started to bump into trouble. completelymost replacing the problems in the gulf. those have not gone away will stop -- gone away. >> is not where it was before the explosion in 2010. they are a couple of pounds
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below that. >> if you are a long-term holder and bp, you are upset. the share price is down. , youu bought on the dip are doing well. >> before we come back to russia, the cost is $42.7 billion. >> it is interesting to break into these numbers because they said that the underlying net income was a quarter billion dollars and bp received $700 million in july. they sound relatively positive involved of the minutes statement that they are on track to meet the target and that underpins the long-term argument. andhey reported earnings beat expectations, this fight all the talks of sanctions stop it was very profitable. ands $30 billion of sales
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it is the biggest publicly-traded oil producer. and at 2ction chain billion barrels of oil. it is down and it shows that the issue of maintaining production levels is a problem for oil companies. perspective, in they mention the cost of the this is probably that. they keep it. >> it 10 billion by the end of the year. >> they killed and it is a pretax charge. reporting the
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interview with the ceo. good morning to you. tell us more about your chats. thought they were being terribly good form. there is no future prizes. year, theme last tipping quarter billion swiss francs in litigation and they are not done yet. it was the germans and money is coming into the bank. justminds me that it was more than a tech.
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they are not trading and the gross margins are down. they both have the same issue. advisory toing from what they call business. of litigation.ue >> it is not a fair go. the matter is in discussion and we have been in discussions and negotiations. why it makes no sense. it makes no sense if you are related to our settlement with germany, a much bigger business.
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you have an appeal to this decision that we do not think is fair. >> there is a real inflation in fines and penalties. the guilty please are rising. can you see the europeans going? there is a real escalation in litigation and fines. >> i would say that we are there and that we have been one of the first to recognize the challenging times for. we have not been in denial and where weeen addressing can address the issues of the past. on the other hand, would protect the rights of shareholders when we feel it is necessary. >> it is settled when it is fair and equitable. that some recognize
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things were wrong and it is fair to settle. ubs will beh think very interesting. we were joined at the briefing in they say that the highest france was 70 million euros and the wealth management missed. the money out the door is $2 million. the asset management prices dipped. the investment banking paid 579 million francs. where are we? in a big cycle of investment banking. have we trust? they pulled the plug too early. >> thanks. see you later. tensions andobal optimism.
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>> time for company news. dropping the order for jumbos.
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that is according to people familiar with the decision. they are struggling to keep customers. they failed to attract a new customer in two years. anaysia air is facing increase in passenger cancellations and they passenger carrier had the second disaster. that it wouldid refund the fair to customers. that is including nonrefundable once. --eans group has explored hired morgan stanley to explore the business and the sale would 700 million euros. brothersarted by three in 1973. it is owned by a private equity firm. deutsche bank, the largest
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investment bank, has been reporting concerns, in terms of sales. and the company paid more in tax. the net income through june decreased and the tax payments increased 49% in the quarter. welcome back to countdown. i am caroline hyde. i am joined the mark barton and ryan chilcote. >> yes. we have a guest. optimism is at a five-year bull run at a time when you might benk that investors might fearful. what is driving this approach? anderson is the head of global equities and a man who has a glass that is always half full. >> i don't know about that. >> let's start with earnings and bp. it was the most important thing
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will stop >> the cost efficiency in the business and the asset base. it is going on. the people are very focused on the issues with the european refining margins being low and the gas prices being lower. companyut half the minimize the assets that they have. >> do we need to be worried about the earnings statements. any future corrosion could inversely impact the business and the investment in the reputation. >> yes. they have a kitchen sink there. at value and we have to remember that bp is a share with
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question exposure and hedge funds can see it as a short opportunity to be negative or more pessimistic. this company is putting out lots of cash and it is respectable. there are risks. this is a way of expressing the concerns that they have about the risks. >> would you use renault. -- renault? there is an increase in delivery . is that enough to make you back off? are they expose? >> look at renault. they have a number of exposures. it is 35% each. these concentrations. with renault and russia, they are hedging production with the sales and there is no exposure in russia. >> is a high-margin market for
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them. >> they get a consumer perspective. >> that is a more aggressive impact. 2011 and it has risen. andre at the low this year it is outperforming the stoxx 600 by 2%. it is the third best european carmaker. is all the good news in the price? >> they say that the expectations for growth are higher. it could be a 3-4% production growth. they are very exposed to europe. we think is a cheap stock and, despite the gains, we look at the relationships and the costs that come out. renault has more to give. >> you are looking at a particular stock on an individual basis.
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we are getting broad and worried about russia. we getting worried about sanctions? it seems to not be concerned. off -- theas thrown market has thrown up all of these issues. the middle east had oil prices in the market looks through these issues. we are concerned about the low levels of volatility and it is not normal. you can explain it. we thought it would normalize. it will have more of an impact. ubs and deutsche bank reported this morning being down. they are about the same with costs. ubs is a bit cheaper. do you like either? >> no. the net income flows and the money flows, the number was decent enough. the gross margins and the fees
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earned were a bit like credit suisse. they are down and the bank dismissed that as mandate-driven. that means less high-quality business that can be put away. it was a stalwart of the bank. >> indeed. but the bank business cycle through. it was clearly year-over-year. quarter to quarter, not so bad. they cling onto this for the bank and it is doing the right things. is not quite as good at business at the thought it was. >> we will have more after the break. stay with us.
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>> the time is 7:23. the optimism is pushing the and the bull run that sees global stocks rising. where will it be in five years? >> like the start of the year how investorsd have been glass half empty around europe this year. the data has not been great.
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we have been surprised about how glass half-empty people have been about japan. it is a surprise and -- >> the optimism and pessimism is warped it? we saw the gains in the currency decline and we still wait for the third structural aero tube their fruit. in gains seem to be made 2013. it is all about reinflate in the economy and the inflation data is cool. --re is acted inflation expected inflation. should they gos to?
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>> we find some of the banks somewe discuss and we see of them. it ends with appetizing. there is a decline across pain and italy. up.strial production picks the spanish advertising recovery was good last week and it has beene, -- left behind. >> do you own russian stocks? is a listed company.
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the have a third of the employee base and it was hit hard. >> the year to date is 10%. >> the have seen no downturn and it is based in the ukraine. we worry about the geopolitical issues and it is a perceived risk. and thethat was bp political influence. >> why don't you earn more? >> is the risk of the unknown. we have portfolios and we want to invest and in russia, it is tough. >> 7:26 in london.
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loom on theen -- russian economy. we talked to emerging-market research after the break.
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>> let us go to jonathan ferro. >> thanks a lot. the fx market. it is pushing higher against the euro. and it is a pretty big data releases. against the dollar is the pound. i will do 30 days for you.
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it is the lowest since march. overing is moderately value. they have not determined that to be right. here overs one right the past 12 months will be the best performance. >> these are the top headlines. the united states is determined that the russian violated a arms-control treaty. the obama administration official said the violation is related to the crude missile with a range of at least 500 lawmakers. the new york times said -- there will be more sanctions on russia after the eu announce is on actions. the security advisor said he expects the eu to act as early as today in support of rebels.
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and the bank of england will be ready to raise interest rates. according to a new report. it is sad a while there is no sign, the u.k. must cap will -- avoid risk. the fighting in gaza enters its fourth week. benjamin yet -- benjamin netanyahu said the militant group must be part of a truce. more than 1000 palestinians have been killed so far. elliott gotkine is live in tel aviv. ofanyahu warning withdrawal the work could drag on. frombuffing calls president obama and the m&a -- to happenity council
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international cease-fire. he told israelis to brace themselves. as saying he wanted brace himself for more diplomatic pressure. more for theng operation being carried out in gaza right now. hospitalesterday, a and a playground was hit by shells. the ministry said it was hit by militant rockets falling short. the militants accusing israel of having carried that out. netanyahu saying the destruction that militants used to in full trade israel including an incident last night is the first step, and an imperative step of a materialization of the gaza. that seems to be now the ultimate demand of prime minister netanyahu. to sign any of court to avoid accord to here --
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avoid being back here. being repeated. pictures frome there. thank you for the moment. >> for more geopolitical hot potato to another, in brussels, eu leaders are meeting to sign off on a range of much tougher sanctions on russia that could be finalized by today. they may include restrictions on ask for us to russia and allstate on the businesses. ae eu is expected to agree on third tier sanction as well as perhaps a blacklist which is informally or colloquially known as a cronies list. president putin's personal allies. they could face individual sanctions. to discuss russia, emerging markets, we are joined by our guest.
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what did you make of russia right now? not doinguation is any better. the ground on the ukraine, little evidence that are pulling back. eu and also and the the west is not too happy about cooperation on the ground. away?estors want to stay >> for a moment. we have gone through rounds of sanctions. the thementioned weapons testing. the rhetoric between the two sides is getting worse, irg -- firh -- right? this seems to be no compromise. the number one issue for putin is china and u.s. relations. central to pollutants hold thinking about the region.
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it is not like it's going to back down. >> has russia became self-sufficient? -- some are saying sanctions will not achieve the goals. an economynd, it is not doing well. not growing anyway. kevin big structural problems. lack of diversification. concentration on energy. red tape corruption. all of these things. russians taking their own money out of the country. russia needs the opposite. toin these globalization basically make russia a better place to do business. , it willinto a whole get worse. in the short term, sanctions could push russia into's recession. >> what are you expecting
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businesses, how they will react to russia? are you seeking advice? interesting metrics, a german , they are saying we support tough sanctions. was talking to unilever assaying it is a longtime story. we are not changing our views, our investments. people investing in russia in terms of businesses? >> it is a tricky one. i think they were mindful of the disaster. public opinion has shifted against russia because of america airlines. and the local media about all of these investments in russia. we are on was in a cold war scenario with russia. in the end, most businesses that are invested their in damage
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control. i do not think that people are -- [indiscernible] you were an auto manufacturer you would not think about building in russia, you would wait and hope things improve. you are right, in the end, maybe these companies will like to put more money photo it is a big economy. -- like to put more money. -- it is a big economy. it has good potential. >> will he go into a deeper recession? >> russia has moved decisively in the past six months. people have been surprised by that. the reality is that is what happening. to?f not russia, where >> i mentioned europe. europe is doing ok. poland is said to be doing ok and growth as ok. on the balance sheet perspective, poland is solid.
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and turkey. turkey has rebounded. growth numbers have looked pretty good. presidentialcky elections coming up. turkey has some very -- >> is is sort of positive? >> in the short term, it is. growth over the past decade or so. winess the hope is he will the presidential elections and will back down on some of the more controversial rhetoric. turkey is a pretty book -- turkey is a pretty good story. normal --ery onto per entrepreneurial. strong banks, very clean. very well run. great balance sheets. not a huge amount of the debt.
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has underlying reasonable growth drivers. russia is struggling. zero growth. turkey despite everything, it will grow 4%. >> back to geopolitics. our investors right to strive off geopolitical risks? they seem to be. if we look at merrill lynch, the number two risk is rising, the fear of fund managers. our investors right to be sure -- are investors right to be shrugging it off? >> it is all driven by liquidity. at the moment, investors do not care because they are not paid to care. we know and six-month's time or a year, people will begin to price back in geopolitical risk. that is when this will --
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>> not pricing in geopolitical. what level do we need to get to. example,sia when for the u.s. and the europeans began sanctions, trade debt and equity and that will help. >> something not on the cards? >> if you look at sanctions, it is new debt. in u.s. treasury has been reluctant to sanction existing. remember, investors will be .tuck with that you cannot sell it or by more or sell it. that will be a pretty low a blow. chris will have to have you back -- >> we will have to have you back when the fed takes the punch bowl away. >> russian problems. beating estimates. whether the hit on russian sales
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will hurt the carmaker. ♪
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>> welcome back to "countdown." i am caroline hyde.
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the russianes as units fell 8% in terms of delivery. hans nichols takes a look at auto sales in russia and the headwind of the political situation in the ukraine. hans, even though we saw 8% decline, you are pretty buoyant on the rest of europe? >> it was strong growth. the you look at russia, gravel part is not just 8% for the first six months of this year. down 13%.t was the trend line is down 10% for the year. that is what renault expected their sales to be down. is thef the brand biggest foreign brand in russia and house 30% of the market. volkswagen has a pretty strong position with 12% of sales. when you look at overall numbers , you get a sense of what we are
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talking about. look at the 2013 sales and 2014. 2013, they sold 17,000 cars in the first half. 12,000. you see the dramatic decline. it is europe's third-biggest market. not insignificant. we should add a coffee out. the luxury brand appears to be holding up. mercedes of almost 20% year over year. audi is basically flat. bmw is flat. the question is, will it be the lower-priced, downmarket brands that will suffer from partition -- sanctions or will it affect the top level brands, audi's, mercedes, the bmws? thank you very much. hans nichols. >> let us take a look at corporate stories. caroline is back.
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>> let us have a look. it has beaten estimates. the stock has grown 4% higher this morning. strength online area. it is the next directory. this was set up in 1988. to get yourow deliveries in the next day. it is really pushing forward in terms of online. we saw online growth way ahead of estimates. growing 60% in the first half of. retail sales were up 7.5% beating estimates. stole a few of marks & spencer claims. it is the second biggest retailer in the amount that is sales into the u.k. in terms of clothing. is more than value
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marks & spencer. >> a 10 billion pound company. marks & spencer is seven .5 billion pound company. -- 7.5 billion pound company. >> you walked in? >> may be in the 80's. >> you do not buy clothes in the general. >> it is quite a new. -- i was walking and i saw it. in thes popular within city. there were many branches. there are more than 500 branches around the u.k.. a strong home where a very strong children's. shelf.s off the in fact, it erased its market. they said it will be up to 17% a stronger than they had expected. or 90s more than seven
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million expected. -- 790 million expected. overall, their sales are going to grow more than expected, closed 10%. yous a company that perhaps boys do not go into a regular basis of but the u.k. does. >> mine is a gucci. --and by the way >> i was not here on july 8. i did read in the newspapers, compared the thule. online sales at him and asked -- m&s wasn't down. beaten on every metric. >> they have redone the website trying to drive people to it. profit up by 0.3%. what about russia? we keep talking about russia. they own 20%.
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the company issued a disclaimer if you can call it that, buried in their earnings and they said pretty much everything but the kitchen sink. they said if the sanctions but, b,ater against russia -- and greater against russia, their business and earnings including the relationship. bob dudley will give a press conference this morning at 10:30 a.m. and declined our interview and will not hold that against home. i am still waiting to speak with you. lots of questions for bob dudley. all of them be about rose net. >> it is ahead of the ftse. oil companies are trading 13 times. >> relative. >> very good. a picture from a london. openy markets are set to quite high. and miserable day?
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>> did it rain? >> it rained last night. we have to get some color into the camera. ♪
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>> welcome back. will talk about her love of super graph. >> i do love them.
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like them. jon is here for sonata ruminants. to talk about the big macro things. >> you have bp. the market is edging. is theother side, this unknown. you have merkel and cameron and renzi all getting together. it will be a conference yesterday. they are talking about possible sanctions. ryan and i were talking about it. what was yesterday about? was a obama saying to these guys you have to sort it out? was it them trying to get around the table and saying we need to talk? g7 getting together saying we need to get together because the eu as a whole will be hard. andks -- >> the u.s.
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everything and maybe the separatists and czech republic. >> it is worth exploring. the g7 is a split. you have germany worried about energy and the french worried about defense and exports and the u.k. is worried about finance. can these guys get on the same page? and then the tragedy of mh17. >> and businesses are not getting on board. in the german newspaper, metro is claiming to be the biggest employer in russian by a foreign company, 20 5000 workers. they sell we support tough sanctions. you hear more big businesses backing the politicians. go for it. >> it is very important. we talk about bp. within the earnings, they could be concerned if sanctions go even further. what kind of sanctions what damage their relationship if it
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has not been ruined? "on quote only the most -- the move" is next. ♪
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>> welcome to "on the move." i am jonathan ferro. we are moments away from the trading day. on the one earnings side. the heavyweights. we have ubs and bp. on the other side, the potential for more sanctions to come out on russia. and europe and ukraine. ryan chilcote and hans nichols and manus cranny. a big day potentially. reporting earnings that beat estimates. it is the for the biggest stock on the ftse 100. one to watch.
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we will be talking about the disclaimer they made. warning investors about their relationship with russia's biggest oil company. over to you. >> we will be looking at renault and what their sales are doing. there are up across europe and down in a russia. they expect to be down some 10% for the year. they were down 13% in june. we will look at other carmakers exposure in russia. over to manus cranny. >> thank you. ubs delivered the numbers. traders, not trading as much. of credit suisse. the inflow into wealth management and we will talk about it. >> thanks. manus cranny. the fx market. futures pointing higher across the board. you had earnings on one


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