tv Street Signs CNBC July 29, 2016 4:00am-5:01am EDT
kmurpz economy. >> comment. considering a rescue for monte dei paschi. this as the giant beats expectations despite numerous headwinds. >> go political and the two factors are more converging and affecting one to each other so i think that i don't see any relief in the foreseeable future. police borders signs off on a multibillion dollar investment in the uk. despite the uk saying it wants to review the deal. yen jumps. qe has nots run its course and sees room for further cuts into negative territory. >> hillary clinton takes aim at wall street saying america's biggest bank should be more
patriotic. >> i believe wall street can never, ever be allowed to wreck main street again. >> a warm welcome once again to "street signs." it's prid and the last trading day of the month. luisa is on the road today, but she will be joining us in less than an hour when she brings us an interview with the london mayor. let me give you a look at the european markets this morning. the oil and gas narms are dragging lower there. another 1% losses for the oil majors. down more than 15 percent. actually interesting the market haves held up so well despite that. gains over the ftse mib. hopes of a potential deal ahead of the stress test results today
for monte dei paschi so that's lifting if sector here overall and giving you a look at the sectors. banks very much in focus. improve returningses are taking the stock higher. not changing the strategy on brexit, but we did see a 50% cut in the dividend and that was 2 p down to 1 p. you have to worry. here we are. that's the overall performance. the auto which is the household goods the biggest lose r there on the downside. let's bring you the update on the individual pmplts r performances on the banks. barclays trading lower. reducing the banks on wanted assets weighed on earnings. the bank dividend.
not changing course due to brexit, but that europe's banks were facing testing times. >> the european banking sector is challenged. if you look at the top 12 banks across europe, on average they're trading at a 50% discount to book value. that's not healthy for the financial system. that's not healthy for the european economy. the banks need to get into a better position of profitability. i think a lot of progress has been made around capital levels and liquidity, but we need a healthier banking system across europe if we're going to get the economic growth we're all looking for. >> ubs has beat expectations. carolyn is in zurich. at the same time being penalized if you're holding cash.
it's a problem. >> reporter: it is a huge problem, julia. it's a problem that's not going to go away very soon. ubs sounds like a broken record and that's no criticism of him. every quarter he speaks about a very difficult environment. he saying 2014, 2015 was tough for the world's biggest wealth manager and then they got into 2016 and that seems to be even tougher it seems because clients are still not active when it comes to buying products. ubs doesn't want to push them into products either. they want to keep the profitability high. volatility when we see for example after brexit it also detear s clients from tradin the gross margin even though the company doesn't want to look at it, it has also declined somewhat. despite that inflows have held
up. 2.4 in wealth management americas, but coming back to the future, tells me it's not looking too rose si. >> the reality is the future and the front on the micro and the go political and the two are more converging and affecting one to the other and i don't see any relief in the foreseeable future. >> reporter: it's worth noefting within the investment bank, which is becoming smaller and smaller and ubs we actually saw it doing pretty well. that was in part because of brexit. said the brexit impact was too early to say anything about that. >> we are prepared for any kind of scenario. we have very present -- material presence in europe in terms of locations where we could shift
some of our businesses, but it could well be the uk has a passport into europe and nothing changes. we are flexible and ready to respond once the rules are determined. >> reporter: i guess like any other bank executive out there operating in london these days just taking a wait and see approach. meanwhile shares in ubs may see a bit of a pop today. that might ju-- >> thanks. i've got a quick question for you on the degeneratiividend. they're relatively pretty high. what's the possibility throughout the rest of the year. >> reporter: that's an interesting question. many investors are very curious about. they would like to see a higher dividend this year. it's been 60.
last year there was a special dividend of 25 on top of that. we won't get this this we're, but will we get anything higher than 60 hoppen. it's hard to say. a lot of people are buying for the dividend story. that will be in place, but will we see a sizable uptick in that, to be honest, i doubt it. >> thanks. now monte dei paschi is rallying on a report that a government minister has submittaled a rescue proposal for the troubled italian lender. >> reporter: it really is coming down to the last minute for monte dei paschi as a focus this morning on the fact that there is an alternative plan that has been put out by former industry minister along with the swiss bank headed up. this is an additional plan to the j.p. morganen plan which
would show the same shedding of the pls. while the offer that has been on the table for the last days is foreseeing a 5 billion capital hike. the one on the table last night, the capital hike would be lower. so of course forhe dilution affect only the shareholders. this morning, the stock is reacting in positive territory to the idea there is not only one, but two potential ways out for month depash on a crucial day in which the stress test is expected ta monte dei paschi be the only italian bank that fail and all of the other banks are doing well this morning. all the likes of the italian banks in positive territory with the idea that they will pass this very difficult test, but for monte dei paschi it looks as
though there may be more to wait before we know which plan gets approved, but we will be looking out to hear something from the board meeting that will be held today. >> back to you. >> waiting with baited breath. gina joins us now. the ceo of barclays said something interesting and said look the banks are holding back the european economy, irrespective of the share price falls we've seen. do you agree. >> i would agree request that. when you lock at the opportunity for rebound in the european economy it is the dependent on how healthy the banks are. you look for example at the italian versus the spanish banks. you heard this earlier. it was spot on. the spanish banks recognized many of thaz issues early on the italian banks have painted themselves in to a corner. those differences will eventually -- once you're
holding too many things at a price you can never sell at, meaning your capitalization is not real, that's p important because that will means the lending into the economy will be constrained. >> i make this point all the time if we look back over the european bank's history, 8% was sunk into capitalized and italy never did that and now they're captured bid fresh regulation. more broadly, why is there so much optimism in the market. >> to some degree we've come back to this idea that lower for longer might be a good thing. we still have a number of points along the way where we're going to see some opportunities for concern. you know brexit while it is now people are really no longer talking about it in the united states anymore and yet it is still ongoing and developing and we don't know what it means yet.
once we start to get definition around that there will be some response in the markets. there's still a lot of uncertainties in the market. it does trouble me. >> you think it's complacency. >> do i. >> fundamentals and some kind of recovery of earnings growth or is it stimulus driven. >> i think this actually has more to do with the fact we have an acceleration that was going to happen anyway. they reacceleration to the second half has been baked into the markets for some time now so now everybody is saying this is clearly evidence that everything is going to be okay. >> gina, you're staying with us. we'll talk more about in and how you make money in these markets. we have though take a quick break coming up on "street signs." we'll hear from london mayor khan. stay with us, we're back if two. ]
welcome back to "street signs." hillary clinton at the democratic national convention promising what she called steady leadership if she's elected president. >> tonight we've reached a milestone in our nation's march toward a more perfect union. >> reporter: seen on stage as a successful mom, hillary clinton is eager to be recognized as the first woman to head a major party's presidential ticket and also to be seen as tough. >> we will rise to the challenge just as we always have. >> reporter: together she said in contrast to donald trump's vision. >> he's taken the republican party a long way from morning in
america to midnight in america, but here's the sad truth, there is no other donald trump. this is it. >> reporter: more contrasts with trump. we will not build a wall. instead we will build an economy where everyone who wants a good job can get one. if you believe that you're working mother, wife, sister or daughter deserves equal pay, join us. >> reporter: hillary clinton selling herself to a nation where she is known by almost everyone, but like donald trump not approved of by most voters. i'm steve handlesman, nbc news, philadelphia. >> gina, how do you think she did and does she get the same post convention bounce. >> i think this should help her. her challenge is different from trump's, but the same in some
ways in that she struggles with her credibility issues. i do think that the level of support she got, particularly from the independent voice and that came through michael bloomberg, who we all know, michael bloomberg doesn't suffer fools. he threw pot shots at both the party right at the speech, but he tells it like it is. nobody is speaking to the center right now and that's important and i think hillary needs to bring herself back to the center in order to really engage the masses. >> a backup for the middle ground here. >> i think it's challenging because you have her challenge of gaining bernie sanders voters who are way off to the left, and you know, you saw quite a bit of, you know, criticism from that camp there, but bernie sanders has come out in her support so that's a strong point. >> so did barack obama and
michelle so bringing endorsements from them i guess helps galvanize the supporters base they had. how is she going to be criticized for being same old when she's trying to represent an image of change. >> one thing people do say about her that is absolutely true is she does work through problems. so while she's flawed. she's flaw instead a normal way. most people think donald trump is flawed in a very psychological and -- >> that's what's been alluded to. you couldn't have said it more clearly. >> she is seen as slippery. the clintons are seen as slippery. >> they are. the clinton years were good years for the united states. while you can argue that bill clinton may have not have been a perfect person and terrible husband and whatever you want to throw at him, he was a very intelligent and astute leader.
>> who do you think wins. >> i do think hillary wins. i just don't see -- the voter base that donald trump has amassed is not a voter base that tends to historically goes out to the polls. we'll see what happens this time around. >> we're going to talk bank of japan right now. we'll get your thoughts on that too. announced intention to expand monetary purchase. rates however remain unchanged. so let's check in on how asia is trading fog that decision. shri is in singapore. what are your thoughts. i thought dollar yen would make a run on 100 possibly even test it. let's not forget that expectations were rerated. i think the market was bracing themselves for some kind of disappointment and i think the policy response at the end of
the day when the dust is settled was prettidy minimus. there was disappoint and the markets reaction was is that all we're going to get, doubling up of equity linked purchases from 3.3 to 6 trillion. it was expressed. which is what the dollar yen is doing right now. at one point we were down 2% and dropped below 102. here's the interesting thing. there was no move on jgbs. they stood static. and there was no move on negative interest rates. there was no cut further into negative territory so there was a sigh of relief collectively from the financials from the big lested mega banks et cetera and at the end of the day, that is what shored up sentiments on the nikkei to a certain extent. we closed up by 92 points, but
nevertheless it was a heck of a day in term of gyrations and equities and implied volatility on the end was telling us we're going to see really crazy price action on the yen. that's what we saw. wasn't a great deal to go on from the press komps, but i think it's wait and see situation right now because that i have seem to have delivered his side of the story. 28 trillion yen stimulus passage. i think we got about 13 trillion of that cha is direct fiscal spending in measures so whether it's going to reflate the economy and get us to 2% without the help of a boj, big open-ended question. >> where is the third arrow. that's the open question here. where is the third arrow. never mind fiscal and monetary stimulus here. as he said, is that it? do we get more from him? >> to be honest, this was such a led down. for us.
we were positioned for a more -- for a stronger stimulus announcement and the commentary he made ahead of the meeting was one that presented incredible anticipation so he basically then shot it over and they fumbled. >> look at the reaction. the markets end up higher because the banks are relieved they didn't get further negative rights and 1.5 rally in the yen. well got away with this. more broadly making money here. somehow you differ to other analysts and people we get on. they're all saying par on to high yield at this moment and you're saying completely the opposite. we don't have a view on em debt. to be fair, do i actually think that play could work because the lower yields are the more the yield play works. i don't disagree with that.
we do have an underweights in u.s. high yields as you see yields lower you will see dollar higher. dollar is the enemy of oil prices. we still haven't realized -- we still don't have a good balance between supply and demand yet. i think that's still farther down the road. we haven't seen any commentary to suggest we're headed in that direction quite yet which means the trigger is going to be the dollar and dollar moves. behave seen dollar strength. that will hurt oil prices and while we were starting to see some support to the high yield market, i think it will come under pressure. >> watch oil prices down 15%. >> very quickly because i'm being told to wrap, taop trap. >> u.s. equity versus european equity. >> so they're the beneficiary of global stimulus. >> absolutely. >> great to chat with you. speaking to us from chant
global. >> moving on. uk government cast doubts on the plans, but unexpectedly launching a review into the project. meanwhile the french energy company posted a miss in first half profits, but a beat on revenues. gucci jumps 4.6% compared with a 8% drop in the first quarter. ab inbev took a hit. paid 1.77 billion dollars in hedging in relation to its may gentleman merger with sab miller. expects a deal to close before tend of the year yet no use on those talks between ab inbev sch sab miller have once again
begun. arcelormittal beats forecasts. revenues missed expectations and the world's largest steel producer says it is remaining caution about the rest of the year. natixis. nancy is live to give us the details. an incredibly challenging environment for them as with all the banks we've spoken to this week. >> reporter: that's right. starting to be a reoccurring theme here. when you look at the results this is a clear message this is as good as it gets in challenging times. that's why you're seeing the share price pushed higher this morning. resilient given the circumstances seems to be the key message here. i did speak to that tix is chairman. he was ceo of the group.
they were rather more upbeat on the retail side when you look at some loan growth. more upbeat. particularly when it comes to the low interest rate environment there's still some corns there. you have to reduce cost. you have to control the levers on which you have power. i did ask, i said look, is it in fact the low rate environment is a net-net win for banks or are you still concerned about challenging going forward. >> mr. draghi said interest rates, low interest rates and accommodative plea of not guikc would be there for a very long time. he didn't say what a very long time means. our assumption is that it could last for some time. 2017 for sure. 2018 maybe.
2019 maybe. so we have to adapt this environment. we don't have any choice. this is what we are currently doing. >> reporter: so saying look, this is the environment we've got to deal with. he was not quite as enthusiastic you might say when you look at the board member says overall this has been a net benefit for the banks, but he did say this is an environment we're operating in and when you look at the underlying fundamentals there are optimistic signs. they did see overall growth for demand in consumer loan. nevertheless, this banking group is constantly revaluating their restructuring plan. back to you for now. >> thanks nancy now we're going to take a quick break. check out world markets live. plenty more to come up on the show. we're going to be talking tech in just a few moments time. stay with us.
welcome back to "street signs." i'm julia chattily and these are your headlines. barclays stays upbeat on the bank's core business, but cuts the dividend. ahead of stress test he says he's worried the sector is holding back the european economy. >> the european banking sector is challenged. if you rook at the top 12 banks across europe. in on average trading at 50% discount to book value. that's not healthy for the financial system. that's not healthy for the european economy. eds sores in paris on the news it signs off on an investment in the uk. comes despite the uk government saying it wants to review the
deal. u.s. tech heavy weights amazon and alphabet surprise to the upside. record projects while jumps in the surge market. hillary clinton takes aim at wall street in her nomination acceptance speech saying america's biggest bank should be more patriotic. >> i believe wall street can never, ever be allowed to wreck main street again. >> whack back to "street signs." let me give you a look at the futures this morning after a mixed performance on wall street. cleesing near session highs in fact we did see the dow falling for the fourth straight time. the nasdaq as 2016 high thanks to the results from the tech sector in particular yesterday, and, of course, after hours from the likes of alphabet and amazon also in play today.
right now tilting to the downside. the dow and nasdaq relatively unchanged at this moment though tilting to the upside. let's give you a look at the european markets now. pushing into positive territory. ftse 100 taking back some of the losses until oil sector and basic resources. we also have gains for the italian markets as well. 1.6 as i mentioned. monte dei paschi seeing a bump today on hopes of a potential deal before we get the results of the stress test tonight. the board of nps meeting today. a case of watch the space on that one. sony has cut the sales forecast to 48 billion yen down from 51 billion. also downgraded smartphone sales. sony reported first quarter operating profits down 42% as the impact of a japanese
earthquake hit factories. meanwhile china's biggest internet search form baidu reported worst fall in profit,s. shares are on the nasdaq fell 1% in after hours. >> google parent company alphabet beat the street in the second quarter after a boost from mobile and video ad revenues. youtube continued to shine grabbing more advertising dollars. shares briefly traded above record high after hours before reporting over 4% higher. it's another big beat for amazon too as earnings topped estimates for the second quarter coming in at a record 857 million dollars. in the companies fifth straight quarter of profit it was once again boosted by revenue from
aws cloud business. amazon also said it would double the spending on video content in the second half of 2016. sharing rose sharply in after hours trade. tech london advocate joins us now. relaying some of the concerns we saw from alphabet about the advertising business seeing incredibly strong growth. >> i think they posted quite impressive results. especially after last quarter they had an earnings miss. you're seeing the growth of mobile continue. you're starting to see cloud computing take hold which is encouraging given all the bets they have out there. >> you look at everything other google basically in alphabet and the question for these guys is the story always going to be about advertising revenue and the search function, video, now you're seeing something for the future. >> yes, which is really
encouraging because something like 99% of revenues are from google search. so investors are saying where's the diversification. they've come out with moon bets like fiber, boston dynamics, but they're all loss making. yesterday in the results they started to talk about cloud computing. they've made some changes. they've hired 2,000 employees. they're taking it seriously and saying look we can build a strong enterprise system that's going to compete with amazon, with ibm. >> to what extent can they challenge amazon then in the cloud computing space. this was a key area of strength in amazon as well. >> yes, amazon web services continues to deliver. i was watching the results come in last night. they beat on every measure imaginable so amazon is incredibly strong going from strength to strengt and a company that didn't quite care
about quarterly profits now posting profit after profit. they are the ones to beat, but don't underestimate google. they have the money. they have the people power to really build a competing business. it might take some time, but they've got a brand and they've got other businesses and other aspects. things like ma machine learning. artificial intelligence, that's going to help them build and shape their cloud computing business. >> i spoke to eric schmidt a few months ago. i just i look at the possibility of a tieup between yahoo and verizon and the increasing strength of facebook particularly in this space. i wonder whether they're at risk here in some way of seeing those ad dollar canal bliezed by facebook. >> facebook delivered incredible results this week. it has been quite a week for
tech stocks. it has been one of the best quarters we've seen in a very long time. facebook, yes, it's really you see this competition emerging between facebook and google and they're going after the same dollars, but the good news is that market keeps growing and expanding and i think for both google and for facebook, there's plenty of room to grow. they both have good properties within them. if you look at youtube for example in terms of what alphabet has. if you look at what's app and instagram et cetera they've got the right properties to keep growing. verizon buying yahoo could be interesting. you're seeing the big ones going to other areas. the tell co-s are shart saying look, our core business is going to struggle to have the goet, but if you can bring in yahoo, that could revitalize verizon.
time will tell. b >> what mark zuckerberg was saying when he was talking about the challenge of targeting with ad revenues and generating ad revenues is they're getting better at matching buyers and sellers. they've all been very targtsed about how they do that and that's an all gor r-- all gor r base they're not using. >> that's what facebook is getting right and coming back to alphabet or google, i was reading something like they have indexed over 100 million mobile apps. they can do the sponsored links and drive revenue from it. facebook and google leading the way on how they monetize mobile and mobile search. twitter is wonderful. it's a very important social media platform, but they still struggle to monetize and they have a lot of catching up to do.
>> top pick here, very quickly. >> for the future. >> amazon, by far, followed by far, but amazon my top pick. >> still king. >> yes. >> great to talk to you. let's move on, hillary clinton has made history by accepting the become nomination. speaking at the party's national convention, clinton sought to highlight the differences in leadership style between herself and gop rival, donald trump. >> live will be a president for democrats, republicans, i went dependents, struggling, striving, successful, for all those who vote for me and for those who don't, for all americans together. >> clinton also took aim at wall street calling on maj corporations to pay their fair share of taxes. >> i believe american corporations that have gotten so much from our country should be
just as patriotic in return. many of them are, but too many aren't. it's wrong to take tax breaks with one hand and give out pink slips with the other. and, i believe, wall street can never, ever be allowed to wreck main street again. >> nbc's tracie potts is the in philadelphia. how do you think this has gone? it began with the anti-sanders hacking scandal and how does she finish it. >> reporter: well, interestingly even donald trump who watched part of this convention said sure they're probably going to get a bump in the polls the question is going to be is it going to last by the time we get to september and the first debate between these two.
look, that speech that hillary clinton gave last night was political lly challenging becau she had to position herself somewhere on the political scale, further left towards the bernie sanders supporters they're desperately trying to hold onto. for the right toward moderate republicans who don't like donald trump and could possibly be looking at the democratic party this year and she ended up staying a little more left of center. if you take a look at the policies she talked about, child care, family leave. she really positioned herself as a fighter for working families. she talked about in the first 100 days a jobs built that would support jobs and infrastructure, very similar to what president obama did to bring us out of the recession and republicans don't like hearing that. what they hear is money, money, it's expensive. it's spending a lot of tax money that we don't have. it's not balancing the budge.
so it's not clear if she was able to even though she said she would be a president of everyone, it's not clear she really positioned herself to draw in a lot of people who are in the republican party disallusioned with donald trump, but not quite ready to go as far as the democrats have. >> huge challenge in uniting the party here. she now has to face off i think with three debates, trump versus clint he clinton here. i watched her last night and as strong as some of the comments she was making she's not just the same level at car missmatic as donald trump. >> i think she'll do fine in the debates because shooe going to try to stick to -- first of all, she's got a lot of experience. she came this close to beating barack obama in the primaries so she's a skilled enough debater to know how to defend herself
and try to stick to the issues. that's the thing with donald trump. he doesn't always stick to the issues. he does sort of try to sometimes he sucks the air out of the room just because of hid stys style. so it's going to be a bit of a challenge in terms of style. what she did here she did squarely take aim at donald trump in what the democrats would probably describe as a substantive way by trying to draw distinction between a leader who tells people rely on my ooem going to fix this. versus a leader who says we're stronger together. we're going to work together to fix the problems. that's where they tried to draw a vast drimpbs between what this party is doing ask the republican haves in their nominee this year. >> makes a great point. tracey thanks for that. head of political risk joins us now. what did you think of the comments tracey was just make tlg about this idea that hillary
is going to promote this idea of we do this together. versus trump who is saying i'm the dude who can do this. >> that's pretty much the whole point of the campaign for her at this point. shooets trying to bring together a party pretty much fractured at this point, you saw that last night as far as the hoot skpts boos from the sanders votes. so bringing those people on board and also reaches out to folks who are a little busy disenchanted with donald trump. specifically republicans who feel a little bit weary of his candidacy. bringing those guys on board. she tried to do that a little bit last night. some of the comments toward trade, toward business. >> do you think donald trump has -- is in danger of being his own achilles heel in a sense. it's kind of fun nny comments i
you're a tv personality and you would laugh. as a presidential nominee? >> it's nothing we've seen before. i think many commentators out there have said most of these comments would sink most candidates, but donald trump is able to get away from it. he's almost the teflon candid e candidate. does sh get worrisome over time and is hillary clinton able to capitalize these on the debates. if he makes a mistake and she calls him on it, he's going to look really bad and that's going to be the narrative coming out in september. right now he does pretty well, but long-term it's a really dangerous streak to employ. >> do you think she gets a poll bump as a result of this and as tracey pointed out, can she sustain that. >> the big question is can she sustain. i think she will get some type of bump. generally we're looki ing at 3- points. trump got 5.
if the party can come together, it kind of remind people of the reason they joined the parties in the first place. you know what, in is a person i can actually support. i do think shooe going to get a bump. >> if you look at the electoral college votes it's hard for her ho lose. >> she has the advantage. if she can hold onto pennsylvania, if she can hold onto kban, wisconsin, in the midwest region. she's looking decedent. he's going to have to pull off a sweep of all the swing states. that's going to be difficult to do. >> we wait and see. good to chat with you. deputy head of political risk. i mentioned earlier on in the show. louisa bojesen spoke with london mayor. >> i'm quite clear, but america is a gareat country. i've got friend in america and love visiting. they've got a big choice in
november. one is extremely experienced. brilliant woman, has a huge amount of and most qualified candidate to run for the office of the president of the united states. the other guyless experienced, less optimistic, slightly more scary. i know which candidate i'm backing. >> we'll hear more for sadiq khan in just a few moments time. can it keep it's lead in the anglo french race. we'll discuss right after the break. stay was.
we're here this morning because we've been talking to the mayor of london, sadiq khan. he's been here unveiling an open london campaign. london is open as it's called with a number of artists that are putting up art on the london tube stations in order to show that london is still open for business and open for cultural events as well. i speak to him about the impact of brexit. he was an avid campaigner to remain in the eu and one of the people in the audience said just before i spoke to him said look this london is open thing, when was london ever closed? i asked sadiq khan. >> i'm afraid after the brexit result there was a perception that somehow london was going to stop being open minded, outward looking. investors and business people and talent thinking about going elsewhere. this campaign is reminding the rest of the country and the rest of the world that london is very much open. >> i spoke to the chairman of the banks authority yesterday
and he was saying precisely talent is a big issue for him: being forced to move headquarters out of london after brexit. and worried about retaining and attracting talent. >> absolutely. for 1,000 years london has been open to trade ideas. european neighbors looking at us asking if we've changed as a country or a global city. i'm quite clear we haven't. yes they decide they want us to leave the european union. we will still be open to talent, to investment, to businesses. we still want the world leading talent to come here. we're unveiling posters today that will be on 270 stations across london. everyone is welcome. that's not going to change. >> what are you talking to david davis about. what are you talking to flip hammond about, the relatively new chancellor. >> i've been speaking to some of
the world's leading business people and world's chief executives with j.p. morganen to richard branson. senior government ministers. secretary of state in charge of our exit to the new trade minister to the new chancellor, phillip hammond. when it comes to negotiations with the european union, we need a seat around the table. we are the only region that voted to remain in the eu. we have special interest whether it's access to single market, financial services, whether it' cetera. this is a time to get london a time of how it is run. if you compare london to new york or tokyo, london gets to spend 7% of the taxes raised here. new york 50%. this is a chance to give london more say over how our city is
run so i'm pleased to say the government appears to be listening. >> in terms of some of the bigger issues that london is dealing with at the moment. you said the housing crisis remains the top of your agenda. why don't you just build more affordable housing prevent the big gaps that brexit has occurred where people are having difficulty selling their multimillion pound homes. other people are sleeping on the streets in westminister. >> one of the great benefits of new york or chicago or ra paris is you request pitch the best ideas. what we need to do in london is build generally affordable home. i met yesterday with government to discuss a passage that can kick start house building in london. the right source of homes being built. there's no point building homes that are used as gold bricks for investors overseas that lead them open. we need to build homes that are affordable for londoners.
i i'm afraiding housing in london is too expensive. we need to make sure we build genuine affordable homes to buy and rent. >> so the mayor of london who i was speaking to about 15 minutes ago and message being london is open and we want a big seat around the brexit negotiating table. >> we like that message. thanks. swis dropped a 22% drop as a string of natural disasters hit earnings. >> reporter: the numbers actually slightly beat expectations for the world's second biggest reinsurer. they were hit by a number of natural cat if is. chief among in the the wildfires in canada. i got a chance to speak to david cole. >> we had large losses during the quarter. that's part of our business. if the wind blows or fires
occur, floods, we're there for our clients. first quarter results first half we're below what we had given as guidance for the year. >> now, one of the most persistent challenges for the insurance industry and also for a big insurer right swiss re that doesn't seem to be going away any time soon. >> we do diversify. holding government bonds is a very important asset class for us. the recent developments in the uk of course have led people to think this low for longer will continue even for longer. at the end of the day, we try to be a long-term holder. not subject to bouts of selling. we do have a diversified portfolio. most important, we maintain a very high quality portfolio. >> that was david cole. swiss re have taken a fairly big hit over the course of the year.
not still down some 14% in the wave of selling that we've seen across financials down 14% year to date. back over to do you. >> thanks, gate work today. now french gdp has stalled in the second quarter. didn't match the forecast of 0.2% from the previous quarter. meanwhile french spending still down 8% in june due to a cut back on household energy consumption. french economy still in the drums. let's bring you top stories. barclays still higher. much as the cost of reducing the bank's unwanted assets weighed on earnings. the bank also halved its dividend as expected. we heard from the boj today, disappointing on their announcements increasing etf to
6 trillion yen to 3.3 trillion yen. no cut in rates. all down to the ministry of finance in the government with what they announce next week. that's it for today's show. i'll give you a quick look at u.s. futures as we head into the finish here. minor losses there so we wait and see for that session. that's it for today's show. i'm julia chattily. don't move a muscle because "world wide exchange" is up next. have a wonderful weekend. [child speaking indistinctly annocer:re youchildren in the rightareat r thr agegend siz ay be too late tcheck when you're on theroad. laring car rn and skidding founately, you're on the couch.
good morning. break overnight. a central bank striez. bank of japan eases monetary policy, but not by as much as expected. we'll tell you why coming up. >> if he can is tough. amazon and alphabet beating the street. plus the race for the white house. hillary clinton accepts the democratic party nomination for president. "world wide exchange" begins right now. . >> good morning. happy friday. and welcome to "world wide ex