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tv   Street Signs  CNBC  August 18, 2016 4:00am-5:01am EDT

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good morning, everybody. welcome to "street signs." i'm louisa bojesen. ier lead hooins this morning. a blow yoult set of numbers. sores second quarter forecast and up grades full guidance. >> necessarily is waking up and smelling the coffee. missing on the top and bottom line as china offset in margins. no fix it for brexit. do it yourself giant king fisher, a cautious outlook after the leave vote and also saying no evidence a brexit has
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impacted demand so far. fomc minutes dampening expectations of a dollar rate hike. giving tone to stocks. european shares trading higher. >> good morning. good morning. what a bumper morning it's been so far. a lot of news flow out. despite the fact we're in the middle of august market, this morning we're seeing buying back into european equities. we are called higher. yesterday we didn't see the same type of momentum kept throughout the session with our noses turning a little lower earlier in trade. hanging on to the gains. the polish market is trading a little bit off when looking at broader europe. glancing at the sectors as well and seeing where the majority of
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the buying is taking place this morning, you'll note oil and gas right back up there. financial services, basic resources trading higher as well. maybe though surprise given the price of oil at the moment. getting on to a commodity chat here later on in the show. about a half an hour's time or so. we hava guest on to cover exactly what is taking place in the oil market currently. imex and brent closer to 508 than 40. that rally there looking to be relatively in place for the time being. let's move on and talk about some of the bigger stories. nestle missing expectations. part due to an increase in pricing. organic sales growth slowing to 3%. saying while the chinese market continues to prove challenging, it's expecting a better second
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half. thereby confirming its full year outlook. analyst for consumer joins us on the phone know. good to have you with us this morning. nestle confirming full year outlook. organic sales growth slowing a bit and looking at underlying sales growth improving for the remainder of 2016. what do you make of the numbers. >> good morning. i think the numbers are clearly a bit of a mixed bag as far as we're concerned. as you've mentioned pricing in particular is quite weak. you're seeing in addition to the price competition in china deflation in most of the developed markets both of the u.s. and europe weighing on it. management did flag they've taken price increases which should start to benefit the second half. and they have easier comparisons as well. so they're still sticking to
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getting to around a 5% number for the second half. >> many of us are becoming more healthy. we're trying to choose foods that have less sugar, for example, more health conscious. that trend. how are they doing on the higher end premium brands. >> caller: in general the product seems to be doing quite well. if we look at the natural and organic arena they're seeing 50% growth in coffee matt. half of that business is growth. you're seeing strong growth in the organic and naturals for le lean. your continuing to see strong growth in the brand. >> what exactly are the challenges in china. >> there's a general slow down in the market in total. they're calling out market growth of around 0% plus minus.
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if you include e-commerce that might be slightly positive in their view given difficulties measuring it. it is the general economic slow down which is biting. they are seeing significant price competition as retailers and others try to drive sales growth so it links back to china slow down. >> they talk about pricing reaching record lows during the first half of the year. when do you think pricing is going to start recovering or is it going to recover in the near term. >> in the developed markets they don't expect any recovery in pricing in the material fashion. particularly in europe where you're seeing significant intense retail competition and dependent on capital growth in the u.s. where you're seeing significant issues. pricing in rising in the emerging markets where they're recovering effects valuation and impacts from what that means in terms of input costs. so it is starting to tick up, but from a commodity base, we're
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unlikely to see a material increase short-term. >> will i feel like i've been talking about this long-term target they have, 5-6% growth for a very long time. they've missed this target for three dwreers. what's the point of having a target like this if they keep missing. >> current ceo has used it as an ambition to drive the business. he's maintained it one to give long-term perspective and to keep salespeople striving towards an objective. it remains to be seen if mr. snider when he comes in will modify that. it might make some sense to broad tennessee scope of the range or potentially lower it in order to drive some more realism around the lower growth world we actually operate in. >> thank you very much. equity research analyst joining
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us from leeb rum. now treasury yields fell in u.s. stocks. edged a bit higher as the markets digested the fed minutes which were less hawkish than people had been expected. show a number of fed officials pushing for a rate increase soon. others deemed it appropriate to wait for additional information. with us in the studio is justin oliver. he's a deputy ceo at can cord annuity wealth management. good morning. >> good morning. >> what do you make of the fed message from yesterday, the fomc. was it really that much dubbish or with have been expecting too much from the fed. >> it's amazing how we pour over the minutes et cetera to try to get some sort of idea of what policymakers are going to do. again it clearly indicates there's a diverse -- divergence in terms of opinions about what monetary policy is going to do.
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i think what we need to do is take a step back and fed policymakers are going to take absolutely no chances in terms of the recovery. they've been very slow and gradual. they don't want to make a policy mistake now, eight years into the recovery. so that would be sort of akin to running 26 miles of a marathon at 200 yards to go, stumbling and losing the gold medal. they don't want to take that or make that mistake. they're going to remain very cautious. it's a flip of a coin whether they push interest rates higher this year. 50/50 chance. >> looking at market expectations now, it seems we're reading into it and saying september might be off the table. what are we now, middle to late august, so we're a month away from their next meeting. what would have to change for them to hike in september? >> i don't think they will hike
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in september. clearly in the july minutes they're waiting for more data to come through before having confidence about pushing rates higher. you're going to have a maximum of two extra data points between them and september. it seems unlikely that they'll move in september. december is certainly a possibility. >> how confidence are you feeling about the global growth story at the hotel. just thinking about when heading into this year and expectations of no growth, slow growth arena. are we doing better than the expectations? being three quarters of the way through the year or are we fairing a bit worse? >> we're fairing slightly worse. it is a standout economy in terms of economic growth. europe remains slow. the uk as we now has been impacted by brexit. we've still seen japan str
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stagnating. emerging markets the growth story is slightly better. you have to be careful in the areas you're targeting there. the overall growth environment remains quite slow. quite anemic generally, but that's not a surprise. if we think back to 2008, 2009 there's a lot of commentary going out. recovers from balance sheet crisis take a long time to come through and that's what we're seeing. growth isn't easy. >> i think a lot of people out there, a lot of fund managers are trying to figure out where are real yields going to be. you mentioned brexit. real yields in the uk, how are we going to be looking at real yields? is there going to be momentum that pushing us further into negative territory. is that going to change? someone was saying on the channel who would have thought we continue to see buying into the debt market to the extent we have given everything else that's going on. >> we have that government support, haven't we.
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we have the government coming in and buying vast suedes of debt in the uk and europe and who knows, it might come into the u.s. again. it's notice nl to investors now are going into emerging markets: i think not because of what's the emerging markets are offering them, but because they're getting so little in terms of developed markets. and that's search for yield. that will will remain. >> justin, it's great having you with us at the top of the hour to help wake us all up. you're staying with us. you mentioned emerging markets. i know you want to get on to chatting about that. get your e-mails in. as i said get them in nice and early. your e-mail you can send to the e-mail address. streetsignseurope@cnbc.com. you can follow us @streetsigns.
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>> coming up on the show as bank ratings continue their negative trend. wel find out if there's light at the end of the tunnel for europe's lenders. all of that and much more coming up on "street signs."
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(music plays from one way or another )♪♪ ♪ i'm gonna find y♪ i'm gonna getcha ♪ ♪ getcha getcha getcha ♪ one way or another ♪
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♪ i'm gonna win ya ♪ i'm gonna getcha ♪ ♪ getcha getcha getcha ♪ one way or another ♪ ♪ i'm gonna see ya ♪ (inhales cigarette) >> hi, everybody. welcome back. you're still watching "street signs." i'm louisa bojesen. chinese house prices road by 7.9% in july. that's the fastest increase since february 2014. home prices soared the most up by 40% each. in japan, exports they fell at their fastest pace since october of 09 and july posting tenth consecutive month of declines.
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let's head out to shri. >> reporter: let's talk about the japanese yen first t. dollar yen has been pivoting around the century markets. we haven't seen any big explosive moves to the downside in the cross, but i think from the perspective of corporate japan, it can probably handle rates at these kind of levels even higher. 95. it's when you get below that level, especially below the 19 threshold we should start worrying. implications for the bank of japan in the next meeting which is at the later end of next month. we do see dollar yen rates in this realm as we get closer to the meeting of boj. the housing data was interesting. it continues to point to a very bifurcated housing market in mainland china. you've got the speculative access in the cities and then you've got this huge inventory overhang in tier two and tier
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three. the challenge for the policymakers in beijing is not overstimulating that particular market. they do need to add policy support for the broader economy, but not fear of aggravates the bubbles. elsewhere, ten set big mover today and contributed towards some fairly solid gains today. hang seng trading now over 23,000. not a great deal of conviction otherwise in the markets. we seem to be buffeted by the headwinds and second guessing associated with the u.s. federal reserve and when that first rate hike is going to happen. or the next rate mike is going to happen, i should say. >> next, first, same-same. we're just talking about it. thank you very much. we'll see you soon. >> thank you. >> justin is still with us.
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justin oliver. talking about the fed there as well. what happens with emerging markets if and when we see a rate hike. are the massive flows going to don't. is that going to shift course. >> it's a concern. it's like a switch has been flicked. this time last year everyone was avoiding emerging markets as much as they possibly could. now all the right with the world and people are powering back into emerging markets. we will see -- we're going to have to see more divergence in terms of the particular emerging market economies that people are targeting because there are strong growers out there. india, indoe niecia, but there are areas you want to stay away from. >> a lot of people are liking india still and saying well, it's time to properly get into
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india if you believe in this emerging market growth. incidentally also, very separate, a lot of people saying, well, japan, you might want to get back into japan. they've been saying that for quite some time. india versus japan at the moment. i know japan is not an emerging market, but if we put that in the bucket of where to put our money at the moment. >> india definitely. you can see again there's a structural growth story behind that. the world's fastest growing large economy and it has some structural tailwinds behind it. the recent decision to unify a saelts tax still has a few hurdles to overcome, but definitely a positive development as far as that's concerned and there's no reason that growth in the indian economy couldn't reach double digit levels. in terms of japan, you're never buying it for the economic story. you're buying the japanese stock
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market because of the value its perceived to offer. again, there are attractions as far as that's concerned. i think we can all talk about the absence of structural form reform in terms of japanese economy. it has been introduced, but by the very nature, structural reform takes a while to come through. we've all been disappointed with the stimulus packages put through. not enough and i think more will come in septembe but if you're looking at the stock market, you know, the dividend yields on offer and japanese stock market is quite high. that's just unheard of in a way. so again, things like that on the corporate government's reforms. i think are all positive for the japanese stock market as well. sentiment still remains very hinged on the japanese yen. while the yen remains strong, the japanese stock market is going to struggle. >> you mentioned that there's
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some disappointment about stimulus not being enough and there would have been a time not all that long ago when we would look and say stimulus is a crazy thing to embark on. when do you think that will happen when we go through stimulus being positive to being negative give. we're already talking about whether there needs to be a change in the stimulus structure. >> i think it's a long way away. markets are focused on -- >> it's a completely different world. >> it is the a totally different world we're living in. monotarm policy is becoming increasingly ineffective. we've seen it in terms of the u.s. and uk. it's been treated as a supply problem. monetary policies are targets reducing interest rates and trying to get the banks to encourage them to lend. what if i don't want to borrow. you're going to offer me interest rates of 5%. do i want to borrow, no.
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3, no. you have to pay me to borrow. >> you might have to borrow. >> in you have to borrow, then clearly that's not creating the new demand that governments want to get. i think they have to look at new ways of stimulating economy, whether it's helicopter money. probably a debate for another day, but in terms of we have to have monetary policy and fiscal policy moving together. that's the only way. >> i would love to see what the world looks like, the economic world looks likes if we didn't have stimulus. i have no idea. maybe it's a good thing in the long-term. maybe it's not a good thing. i have no idea. it's easy to say it isn't the right thing, but i'm not sure what the other option looks like and whether there's a better option. >> again, that's the whole thing about qe. people can argue whether it's been effective. you don't know what the world economy would have been like if we hadn't had qe. you had the control where it's
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not introduced and you have a economy where you do introduce it and compare the two. we don't have that option, but you're right. >> i was speaking to a friend of mine who is a scientist not all that long ago about proof, basically that parallel universes exist. it's a bit woo woo, but if you're a scientist you're looking at deep matter and things like that, dark matter, you kind of might believe there's a parallel universe, maybe they're doing there. this and thinking about how our universe looks in direction. thank you justin for being with us. well, vestas has breezed past the street. hitting revenues of 2.6 billion. the wind energy company has raised full year guidance and announced a buy back program. speaking to us a bit earlier,
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ceo explained why they've taken the share buy back root over dividends. >> always the question with investors prefer extra dividends or share buy back. we think this is a good balance with consistent dividend policy and then from time to time when we have the opportunity and balance sheet to do a share buyback program. a report by fitch has found that global bank rating trend were negative in the first half of 2016 driven by a raft of downgrades. the agency changed 65 ratings during the six-month term making it one of the most volatile periods seen in the recent years. fitch is with us this morning to talk about this latest report. good morng and welcome, bridge et. tell me a little bit more about this global bank trends report and what the findings actually
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were: generally every three to six months wegator the actie ers we have taken, look at them and assess them. this time around a high number. we don't like to bump ratings around on banks. it's not very helpful though the markets. having 65 which is almost 10% of the rating population for the banks we rate globally, was quite a lot. the negative trends were mostly in emerge ing markets. they were largely driven by the sovereign events. changes in operating environments because of the low commodities prices, which are pushing down the structural strength of those economies and the banks are very tied to the economy. >> just about to ask that precisely if you mean on a bigger scale, like you say, the sovereign rating, do bank ratings necessarily follow. do they always follow?
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>> it depends where you are. so banks are very tied to the economy. with more than half of the banks in emerging markets and you've actually got some type of rating compression there. you've got a narrower scale to play with, if you like, so the strongest banks will be very close and same level at the sovereign. the weakest bank there isn't much further for them to fall so when the somvereign ratings go and you happen down the banks tend to. if you have a full range of a scale so triple a country or double a country like in western europe you've got more room. actually with these actions that we took when we underlined them, western europe was interesting because we actually upgraded in the period despite autothe negative news on the earnings side, we upgraded 16 ratings. >> what led you to do that, why that change to the upside?
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>> it's really a combination of factors. the very strongest, those in sweden and netherlands, it was the progress was really been made since the financial crisis and restructuring and there is this real slow creep of good news actually that's coming into banks. we forget about this so from a creditors point of view, we're less concerned about earnings and more the strength of capital. this has been pretty strong in these markets. >> very interesting. thank you very much. bridgette, head of financial institutions at fitch. take a peak at world markets live. it's our blog. runs through the entire trading day. we'll you're doing that, we'll take a short break. we'll see you on the other side of the break.
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hi, everybody. welcome back. you're still watching "street signs." i'm louisa bojesen. a blowout set of numbers sending shares at vestas to a record high. upgrades full year guidance. nestle wakes up and smells the coffee. missing on both the top and bottom line. no fix it for brexit. the do it yourself giant king firs first namer issuing a cautious short-term outlook at the leave vote, but no evidence brexit has affected so far. dampening expectations of a september hike. giving european shares trading higher. >> hi, everybody.
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welcome back. we're just sitting tight waiting for some retail sales data in the uk. glancing at equity markets still hanging on to slight gains. some in the region of half a percent of so. the wig, the polish market trading a bit lower. a lot of people digesting what the fed had to tell us. a little bit more of a dubbish statement than people had been expecting. the data hitting the wires. the july retail sales for the uk raising by more than expected. on seems good weather and tourist spending. you're seeing a little bit of buying taking place there. sterling on the back offigures, 1.4 month to month. 5.9 upside year on year. looking for 0.2 growth month on month so the 1.4 a lot stronger than expected and we're looking at 4.2 year on year was the expected that came in at 5.9%. again retail sales data showing
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us the uk consumer is still out there buying. fuel month growth. 5 .4 year on year. that my friends is also a lot higher than expected. just glancing through some of these announcements. they're saying the good weather boosted clothing sales and the drop in the pound increased the buying scene from overseas visitors. after we had this eu referendum vote for brexit, people are coming to spend. uk shoppers defies the brexit shock as spending jumps in july reads the headline from reuters. that's what's going on and taking sterling higher by .70%. when it comes to what we can expect in the u.s., we're five hours away from the market open there. let's set ourselves up. the implied open seen on the
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right-hand side of your screen. so flat-ish to slightly mixed again. the fomc minutes showing chances of a september rate hike look small at the moment. a lot of the policymakers upbeat about the u.s. outlook and about the labor market, but they still want this open policy to be maintained. premier oil swinging to first half profit of $167 million. that compared to a $375 million loss during the same period of last year. the london listed oil producer also raising full year production guidance after recently hitting output levels. now expects to produce 68,000 to 73,000 barrels a day alone. saudi arabia could be pouring cold water on the oil this month. might boost output to a record level in august. global producers prepare to meet
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nelson cr next month to discuss an output freeze. urging cooperation of peck. managing director head of commodity research. travelled all the way just to be with us. >> good morning, luisa. >> we usually see you down at camera point so it's nice to have you with us in the studio. let's start with opec ands memb meeting in a month time. >> i'm feeling déjà vu. the strategy could be best described of the opec trying to copy their success of the ecb. do you remember this famous words by mario draghi four years ago. we will do whatever it takes and believe us or believe me it will be enough. opec is saying the same, but unfortunately, nobody believes. they don't have the means, and
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in fact they are going to fail so you just opposite side of the things and i think as there will be no agreement and expectations beforehand are just too high so we're likely to see a decline in the prices. >> why wouldn't there be an agreement and do you think an agreement is needed at this stage? we're not dropping off a cliff. we've been at $40 before. some would say it's a healthy level. >> it's a healthy level and i've been thinking how many times we've already adjusted our forecast since the beginning of the year, zero. the fact is that the markets right now and the oil price is performing like it should be. you know t, the oil has become just another commodity. it's not anymore a political instrument. it's not anymore been driven by the opec policy. it's been driven by the demand
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and supply and in the end is being also decided upon by the marginal producers and the marginal producers are coming from the u.s. i think the 50 level in the medium turn would be a healthy level. right now i think the prices should come back. >> why is it counter productive to raise prices too early. >> first of all, we see a spike in the saudi arabia production. so try to convince me to cut my production in the light of few rising production beforehand and the countries like nigeria might be saying wait a minute, we didn't get to our levels so it's very difficult to reach an fwreemt and even if they reach an agreement and implement it, who will be profiting from it? so it will be way to early. the only strategy the opec should stick to is wait and see. it will take them several years
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to see the prices rising to the levels more or less affordable or agreeable to, but there is no other strategy unfortunately for them on a sustainable basis after they change the strategy two years ago and after the market lost the confidence. >> what is an ideal price for oil. >> there's no such thing. ideally for me as a consumer it will be $1. for oil producers it will be $100. i think right now the levels around $50 would be a healthy level. rising in the next year as the marginal demand increases, but no way close to the levels we've seen several years ago so no $100 over the coming couple of years. >> gold. gold, gold, gold. december, january, time we're around what, $1,000 per ounce.
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we're now have 1350, something like that. >> everybody is talking about gold right now. been a stellar performer. again, here i would say that the chances for the gold because everybody right now is in and net land is extremely high. prices would rather fall. despite the whole positive or supportive environment for gold. we have all kind of crisis, you just name it. the banking crisis in europe, probably looming with liquidity. 1 trillion euro it cost the banks around 4 brett lawrillion year. we have u.s. elections. we have seration in italy. we have all kind of crisis. so in the long-term definitely you need to stick to gold. for the time being, i would be rather cautious. >> i'm thinking back a number of years ago when gold was a
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darling as well. and i recall speaking to a large fund manager saying i hate it. you can't eat it. you can't really do anything with it. people for some reason pile into it when they don't know what to do. it's more i don't know where to invest so i go to gold, but i don't know why i'm investing in gold. >> definitely. you don't have reason to hold the gold. just because of this historical role. the way how it has been performing and acting during the last crisis just makes it a viable investment in the current base. everybody is saying it doesn't build as an interest. it doesn't give you money, but it doesn't cost you money either. so if you put the money right now in a big institutional client, it cost you money to hold the money. with gold, you can keep it in your treasury so i think there are temps reas ting reasons to gold in a longer term.
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it's strategic, but for the time being, it's a little bit pricey. >> your price target by the tend of the year. >> it will be 1350 so around current levels, but i wouldn't be surprised to see the prices probably $100 lower, but rising over the coming years. >> fantastic seeing you in person in flesh in the studio. >> thank you very much. >> managing director, head of commodity research from match bank. hillary clinton hiring fire eye. expected cyber invasion employed the same technique as the russian intelligence agency. denied any claims of russian
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vomit involvement. meanwhile, donald trump receiving first national security wreefing. hits the trail in north carolina today with his newly revamped campaign staff. nbc edward lawrence joins us from washington. edward. >> reporter: good morning, luisa. donald trump receiving that national security briefing. advisers saying it was professional still trump questioning the people in charge of the information. this is the donald trump hit the reset button on his campaign again. shuffling the folks at the top of his campaign because of struggling poll numbers. just outside trump tower fresh off her promotion to campaign manager she says she advised donald trump to stick to the issues. that's exactly what he did in an interview last night. hit hillary clinton on her policies adds secretary of state in iraq saying the way the u.s. pulled out of iraq led to the formation of isis. returned the favor firing back saying donald trump has extreme
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campaign issues and this is the type of candidate that he is. this is not the type of person she says we want as president. hillary clinton trying to ride the momentum of recent poll numbers and highlight and try and capitalize on the restructuring of the donald trump campaign. for the very first time in the national election, trump campaign will buy advertisement, television adds in five battleground states. virginia, north carolina, ohio, pennsylvania and florida. >> good to see you this morning. was we've been talking about treasury yields falling, u.s. stocks falling as we dejest the minutes fr the fed. fed officials pushing for a rate increase soon. others deemed it appropriate to wait for additional information before adjusting their monetary policy. lee is a ceo of the wealth consulting group.
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another person glad to have in the studio. we usually speak on the line so welcome. >> thank you. >> so the fed's minutes. we're talking about whether or not they're more dubbish than anticipated. it was exactly what i expected. the election. typically the fed does not move and want the surprise investors and so right now the futures markets have a less than 20% chance of a rate increase before the election so maybe december is when we get one. >> this goes hand in hand with the data do you think or are we looking at data that supports this fed view now or are they just being cautious. >> sure, the data has a lot to do with it. they've been saying that for a long time. the labors numbers look good. the inflation numbers not very high. i think we need a little bit more data to support a move. >> in the meantime, it means we're back in risk on mode. >> short-term we think so. we've had a target of 2240 on s&p so we're close, but when we
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get to those levels, i think it's dependent on earnings. we need earnings to support a higher stock price, stock levels and what i'm concerned about, we haven't had a bear market since 2009. when i talk to investors about you know their expectations of a move, we haven't had a move that bad, that low in a long time. i would be cautious. >> i was again listening to one of our guests talking about who would have thought that to hedge yourself against the eu referendum vote for example you should have bought ftse. to hedge yourself against a weaker climate, you should buy into equity markets in general. we continue to kind of ride on this wave of optimism, but yet is it supported by the fundamentals at this stage or is it rebalancing. >> we're in a slow growth environment globally. the u.s. seems to be the best place to beight now, but i oom to go on the upside
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for the equity markets especially in the u.s. we're warning clients to be bracing for volatility. make sure not to sell on a panic at the bottoms and use these opportunities as ways to get into market if you have dry powder and cash. >> anything in particular you like at the moment. >> just being diversified is very important. we're still overweight in the consumer staples and utilities. we're starting to see a rotation out of those sectors into more names in the technology area. we'll be shifting as we think it's appropriate. >> you mentioned technology. i wonder again whether we're going to be driven by increased mna as well. given the market mood. you tend to see more when there's optimism in the markets and we have seen a lot of our performers coming through from the tech sector. >> yes, we might see more activity going forward. in fact, we're talking to an fund manager yesterday thinking about using the product in our portfolios and the prospects for an mna type of opportunity might
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be something that investors might want to look at in terms of increasing allocations which is another idea we have been suggesting to clients. >> thank you very much. how long are you in town for. >> leaving to the airport right now. >> hurry. got to catch your flight. >> ceo of wealth consulting group. coming up on "street signs," could clash of the clans. take a look at the blockbuster numbers and the future of search and we'll be back with more in the tech sector right after this.
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hi, everybody. welcome back, you're still watching "street signs." i'm louisa bojesen. louisiana continues to suffer from the worst flooding its seen
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since hurricane katrina. climbed the lives of 13 people and damaged around 40,000 homes. pledged to use all resources available to support what the red cross has called the worst natural disaster to strike the united states since super storm sandy. a wildfire in southern california has destroyed dozens of home. the blue cut fire began in the mountain canyon pass and has stred. firefighters continue to battle what being described as an unusually fierce blaze with an investigation into the cause now underway as well. in business, uk july retail sales have soundly beaten expectations to rise by 1.4% month on month. this driven by warmer weather. heavy discounting and a weaker currency that boosted overseas buying on the year. retail sales rose by 5.9%. you saw that bounce taking place
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in sterling off the back of those numbers. sticking to the uk, king fisher has reported a rise in sales to $3 billion. said brexit has created uncertainty and while there's been no clear impact so far on the business, it remains cautious in the short-term. shares in ten cent have been rallying. smash expectations on top and bottom line. second quarter profits jumping 47%. total revenue up 52%. online advertising on wheat chat was another source of strength. analysts expect biggest online entertainment and social media group to see further upside from the recent acquisition of clash of cans. super interesting.
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social media site priinterest i offering video ads. >> launching video ads called promoting video and beta. take action with click to buy and learn more buttons. the social sharing platform is well positioned to use ads to drive purchases. pri pinterest says comes from business. reported that 55% of people on pinterest are there to find or shop for products compared to 12 of other social networks. early results with brands are positive. promoted videos are four times as memorable as nonvideo ads.
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and now pinterest can tap into the $10 billion market for digital video marketing. which has been investing in video content. now we'll have to see if these ads help to grow pinterest $11 billion valuation and help it move closer to an ipo. >> start of the special themed week, we're taking an in depth look at the evolution of internet search and to help us with that is the ceo and founder of twigle. he joins us from tel aviv let's start with you and twigle. what does it do? okay. good morning. thank you for having me. so what we're doing at twig sl we're teaching computers to understand people.
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and the space we're focusing on is e-commerce. our goal is to actually bring searchers as close as possible to the positive aspects you can get from a shopping experience offline in a brick and mortar store. when you go into a brick and mortar store, we take many things for granted such as we can converse and ask for particular things. i can walk into a store and say i want a shirt and describe that shirt. i can specify i want a high collar and want that shirt to go nicely with a blue suit and i can say that i need it for a particular event such as a wedding. the positive experience would be one where the salesclerk actually understands me and gives me back products that are relevant. we're trying to replicate that kind of positive experience online by helping computers understand people better. it's very difficult to do and
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that's the challenge we've set upon ourselves. >> so you use data in order to optimize search, is that how i'm supposed to understand this? >> well, part of it is behavioral data. what we actually use is advanced techniques in artificial intelligence and natural language processing to actually understand the language that people use when they search for products and when they describe what they want. we also use that our advanced technologies to actually understand how products are structured. the product data behind products so we understand what a high color means. how high it has to be. we understand what kind of shirt goes with a blue suit and we connect these two things. we actually allow people's language when they describe what they want to connect to the language in which products are described. >> it wanted to ask about machie
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learning and how your technology and the new search technologies could do for advertising because as a user, if we're asking, you know, e-commerce sites for more specific details around products, surely the data being able to be garnered around that is more complex. so what does this do for new advertising models then? >> well, i think a good advertising model in general and google proved this many years ago, a good advertising model is when advertising works both for shoppers or customers and it works for the businesses as well. that's targeted advertising. in the case of search, that means when someone actually gets an advert in the moment it's right to get the advert. keyword based advertising on search filters ads only to those moments when a person should see a relevant ad based on the key words they express. our technology can take that a step further and can allow advertisers to focus on things
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like use cases. things like a particular event that someone would want a jacket for would be described in language and then the person would know that i'd be going to a wedding and various other adverts would be focused on these. the core of this is actually the minute you have a technology that can understand people better infinite possibilities are made possible. you can focus advertising better. you can sell products better. you can provide information better. this opens a world of possibilities including advertising. >> we've got to go. thank you so much. ceo and founder of twigle. >> now, stay with us for one second. i want to tell you about a group of u.s. olympic swimmers in hot water after a brazilian judge issued a court order preventing them from leaving the country. gold medallist reported they were victims of an armed robbie by men carrying police badges.
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discrepancy in the statements are prompted the police to chase further questioning. lochte has already returned to the states, but the other swimmers remain in rio with pictures from global news showing two of the athletes being removed from the flight and escorted to the police station. it was a clean sweep in the women's 100 meter hurdles. won the race in 12.4 seconds. making her the first track athlete to secure gold at the rio games. elaine tompson held off world champion to win the 200 meter. first jamaican women to win since 1988. gold. she won both in the same games. and the brazilian men's football team trenched honduras in the olympic semifinals. kicked off the scores banging
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the first goal 15 seconds into the game. brazil now faces germany in the finals. and let's throw great britain's hoik team. the result means that gb is guaranteed at least a silver medal. best ever olympic result following the bronze back in london four years ago. facing the netherlands aiming for a third straight olympic gold in friday's final. i was running when i watched that. >> inspiration. >> exactly. thank you for being with us as well. that takes us to the olympic medal tailly. we're done for today. "street signs" see you tomorrow.
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good morning. divided minutes suggest a split view on rate hike. the call of the consumer. ready to roll out quarterly results. plus trouble in rio. two u.s. swimmers pulled off u.s. pound return flight. this is brazil investigates a reported robbie targeting ryan lochte and his teammates. it's thursday, august 18, 2016 and "world wide exchange" begins right now.

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