tv Street Signs CNBC August 19, 2016 4:00am-5:01am EDT
hi, everybody. good morning. it's friday. welcome. you're now watching "street signs." i'm louisa bojesen. your headlines today, brent back in bull market territory. $50 on the back of a surprise drop on u.s. crude stocks. this helping energy stocks to outperform. all bets are all. william hill sits at the top of the stocks 600 as the cheer the news a bid from rank has fallen through. under investigation the ceo of monte dei paschi accused of
manipulation. and the bond market is apparently broken. that's a stock warning from a hedge fund saying the tend of the current bubble will be sudden, intense, and large. my name . hi, everybody. happy friday to you all. we made it through another week, which has been really eventful in terms of market expectations. in terms of what we heard from the fed. those minutes still being digested to some extent. let me show you what the european equity are doing at the moment. lower by .70% or so. we're just coming off just a tad here in the morning session. and just digesting what type of a week it's been. let me show you what's going on with regards to the main equity markets. kwibt a red out there.
the wig is now negative as well. looking at the norwegian market, the obx trading a bit higher on the back of oil. when oil goes up, the obx does the same. the sectors out there and where we're seeing the majority of selling at the moment, financial services, autos, insurers off by right around 1.are 5% being the main sector to just trade in negative territory. i was just talking about brent. for good measure, let's show you the price of oil at the moment. 48.17 on brent. the full story is that imex is higher somewhere in the region of 8.5 on the week. brent a similar amount as well. you've got oil though, higher by more than 20% since august. that is in the bull market as
its called for oil. now, john williams has become the latest fed official to signal a hike in september. the san francisco fed says the bank should raise rates sooner than later given the domestic momentum we're seeing. he warning the u.s. economy could overheat equating the situation to a party at which the host fails to remove the punch bowl. if i hear this metaphor one more time, i'm going have a melt down. the new york fed president echoed the positive assessment of the u.s. economy highlighting positive signs in the labor market. steven say we'll is with us at the top of the morning. good morning steven, i had a shock when i saw you, given the facial changes, but it suits you very well. >> compliment indeed. thank you very much. >> the fed. you think they're going to hieng
in september. >> we do. now, i promise i won't mention the punch bowl. >> please. >> the word we would focus on here is complacency. we think the market is too complacent. if you look at the futures, only about a 20% chance of a rate hike in september. we actually think the fed goes. we agree with the what we've seen. we think there's likely to be a hike there. the key reason for this is labor market. that may reading very low may reading really distorted their views, created some fear about decline, but it's coming back and coming back kwiets strongly. our scenario is the fed hikes and the dollar rebounds on the back of that. >> by how much. >> we think it could be fairly substantial depending what currency you look at. the big move is commodity currencies. the reason i say that is there could be a second back here.
what our mod else are telling us is currencies like aus trail yen dollar and new zealand market are driven by equity market. we have a new s&p 500. if equity markets are also hit by fed rate hike expectations, that's a secondary factor or second double whammy with currencies like the aussie dollar. so we could see quite substantial moves in 4-5% in dollar against the aus trail yen dollar and new zealand dollar. other currencies such as yen would also benefit, but the biggest impact will come against the commodity. >> what is the impact going to be if that happens to the dollar. the emerging market currencies are going to be the nonbeneficiaries of this then. >> that's a similar scenario. emerging markets as you know often correlate to risk. equity markets as well so a
similar scenario. because the market is come play sent at the moment, not pricing much in, the market is short dollars. if that changes and a couple of key events to focus on, we think the dollar will also rebound against emerging market currencies as well gl we've got janet yellen speaking at jackson hole, right, that takes place next week. >> yes. >> i guess it's also an issue of how she's going to be on -- how dubbish she's going to be in comparison to how she's been in the past. >> it's interest accident. jackson hole has a history of telegraphing fed events and fed signals so there's certainly a precedent there of an announcement. what she won't do is promise to mike because she can't can't. what she will do is reiterate what we've heard from dudly and williams. we think the market will take that as a hawkish signal.
what we do think is she will put it back or make it conditional. the key you want to focus on is payrolls. september 2 is the release. we're calling for another big number, 215,000. it's quite a big one. what that would do is put the three-month moving average up at around 250,000. a couple of months ago it was only 150,000. that's going to be the factor that changes the fed's mind and i think pushing them back to precedence of actually hiking rates. >> john williams the san francisco fed president talking act how if you wait too long, you risk overheating. he doesn't have a vote, but he has a relationship with yellen and people tended to watch what he says. do you think we are at a risk of direct overheating if we do wait a couple of months. another couple of months isn't going to make a big difference
in that arena. >> the point i would make here is the fed is bias towards tightening so all else being equal, janet yellen wants to go. what she said and made very clear to the market is it's the risk factors that have been preventing her from doing that. so downward concerns or potential fallback. and global factors. so unless something stops her, so unless there's anotherle surprise or shock, bethe momentum is to go with the fed rate hike. >> by all means, get involved. steven is staying with us a bit longer. get your questions in. bless you, someone just sneezed very loudly in my here. you can find us on twit, @louisa bojesen. we're also on e-mail, "street signs" europe @cnbc.com. now william hill is saying 2016
proflts to be at top of guidance. this expected with a better return around betting in euro 2016 championships. takeover bids from rifle rivals fall through. talking more about that deal a little bit later on the show. showing you william hill higher by 3.5% in today's session. they did walk away from previous bids. they were initially offered 339 pence per share. then 352. they've now seen them walk away from a potential three-way tie up. the ceo of monte dei paschi is being investigated for market manipulation. facing allegations of falls accounting dating back to last year after a group of shareholders filed a series of complaints. the two managers were brought into the bank in 2012 in a bid to repair the damage from the
purchase, but he left the bank last year following a series of cash coals. now, one of deutsche bank's whistle blowers who assisted in falls accounting has rejected share of million fcc award. speaking to financial times, he said he would not accept the payout. deutsche bank paid a $55 million fine last year after the fcc found the lender misvalue derivative at the peak of the financial crisis. as said, you can find us on em, twitter as well. get your questions through. especially questions this morning nice and early so i can use them. doesn't help when they come during the weekend of after the show. email@example.com. we're on twitter as well. coming up, on the program linked
♪keep on the sunny side ♪always on the sunny side ♪keep on the sunny side of life♪ hi, everybody. watching "street signs." let's check in on the markets in asia. good morning to you. >> it was rather a quiet session out here in asia on this friday. of course we are eyeing the jackson hole meeting next friday as well. and we are likely capping off a
week with the biggest weekly decline of the month. erasing some of the gains we saw in early morning session. let's kick things off with nikkei 225 down .6%. we did hit below that level as well this morning at 99.84, but we're now back up above 100 and this relative weakness of the japanese yen gave a major boost for some of the major exporters in japan, including toyota, honda, mazda all enjoying over 2% gains on this friday session. let's take a look at hang sang ind index. a profit taking coming through after hitting the nine-month high on thursday, of course. thanks to a strong set of results that we got from big heavy weights such as ten cent holdings. note that tencent holdings ways 10% of this hong kong.
and staying with tech names, samsung electronics another record high for this company after hitting all all-time record high on thursday session. investors are embracing this company's of course turn around plans and maybe a new phone that came out on this friday in south korea and the u.s. note 7, luisa, back to you. >> thank you very much. have a good weekend. joining us live out of singapore. -- sorry hong kong. steven is with us. let's talk about the pound. let's talk about the bank of england. about what the retail sales data told us yesterday. a lot of initial reaction from people on twitter saying brexit has done nothing, we're doing really, really well. >> did of a spike this week because the pound has been beaten up, not just since the
brexit vote the runup to it. the market and preempts and prices in risk. that's the base case scenario. now, i think we were shocked by those retail sales numbers as well, particularly from the p bank of england. >> they were super strong. >> yes, the point here is we thought they would be a double whammy, week again in june and july, which would scare the bank of england. what they've done is the opposite. they've rebounded so if you look at a trend in our retail sales, it looks like it's improving. not at all what we were anticipating. two factors behind this. the very warm weather we've had. unfortunately for us, we don't think it will continue. already raining outside. so that's a temporary effect boosted by the sunshine. secondly, tourism. much weaker pound now so that does encourage people to come to uk. come to london. that will continue, but it's a smaller effect.
our view is don't expect retail sales to bail us out in the uk, but more concerning and this is the big one, look what's happening on the production and output side of the economy. the pmi surveys out at the beginning of the month have been dire. they've both fallen dramatically in the manufacturing sector and servicing sector. that's what the bank of england is responding to. we think will continue to respond to. one month of decedent retail sales is not going to change that view. from hour perspeive,e think the bank of england will continue to ease policy. we think there will be more kaunt taytive easing. maybe shaving more off the base rate, and unfortunately for the pound, it's already been beaten up. we think it will continue to fall. a good one to discuss is the dollar. we discussed the market being complacent with the fed. if it does surprise with a hike in september, cable should get hit quite hard given you got the
opposite effects coming into the market. >> going where, we're 131 now. >> we have an aggressive target of 134. it's being hit from two sides. these two big shocks which are not being priced into the market, particularly the dollar side. the market is short dollars where we think the market will be forced to cover that position. >> before we let grow,o, i want get your thoughts on the yen as well. a lot of speculation about whether this will continue and what happens, what's the knock on impact from a possible fed hike. >> this is important. the japanese have really take tennessee brunt of dollar weakness. the yen is super strong, falling below 100. dollar yen was yesterday. it's a difficult situation for japan because we would argue the dollar side is much more the determinant of dollar yen. our best guess is they probably
won't. the reason for that is if you look at very long-term valuation, we still think equilibrium dollar yen is around 80, between 80 and 85. yen is still relatively weak. in a world where there's a lot of focus on currency manipulation and advances of currency, we think they would struggle to kons vince other countries, particularly the united states that there's a moral need to weaken the yen. so w think they will remain frustrated. the yen will remain relatively strong until the fed effectively bails them out and that will be the catalyst to drive dollar yen higher. >> marlin writes in and says you're wrong. obviously wealthy foreigners will continue to spend in london. the trend is going to continue of overseas mo s money coming i >> that may be right, but it's not going to be enough. i think the bottom line here is if you look at the uk, the uk
starts with a very large current account deficit running around 5% of gdp. the largest in the world in the developed countries. so the uk has to fund that just to stand still. the way the uk has been doing that is been through foreign investment and gilding. unfortunately tourist inflows are not going to be sufficient to fund that deficit let alone push it into positive territory. >> thank you very much for your time this morning. head of global fx strategy. keep your questions coming through, your comments coming through on twitter. e-mail "street signs" europe @cnbc.com. >> anyway, thank you very much. spain's rajoy is poised on confidence vote. pp party agreed to reform a pact
with the party. spain has been without a functional government since december after no party won outright in elections back then. as both parties are still short of a majority, the socialist could throw in the works if their vote is a negative one. the german interior minister is due to issue an update on proposed security measures when he holds a news conference later on this morning. this kompls as leaders from german's 16 states met yesterday. speaking yesterday testimony chancellor, merkel rejected the concept that refugees has brought extremism into german. >> translator: we said very clearly the interpretation of islam that is compatible with the german institution and works, lives and part of the freedom to choose one's religion is a part of german.
an interpretation that is at odds of the constitution, that interpretation of islam cannot be part of german. >> now pressure on the board room ramps up an erickson. shares in the swedish telecom have been under pressure this year. due to increased competition from china. volkswagon is shifting down a gear. looking to cut working hours at core factory as well as three other of its plants across german. maersk is splitting into two. currently ongoing. >> we made the announcement in june that we were going into a strategy process.
at the same time we said we're coming out with sort of a result of that process at the tend of september. so we're in the midst of our internal processes in that regard and we're going to come out with the announcement at the end of september. well, linked in shareholders, they're set to vote on a merger with microsoft later on today. could see the social media giant acquire the website. meanwhile it's game over for 888 and rank who have abandon their take over the bid for william hill. the three way tie up would have created the uk gambling company with 100 million pounds per
year. rejected 3 billion pound effort on grounds both bids undervalued the business. director of pen mere gordon to talk more about this. good morning. >> good morning. >> so why do you think that the revised offer was rejected? was it really that much of an undervalued offer for them. >> it's a combination of factors. the headline price did undervalue it. we think fair value would be somewhere between 400 to 450 p. this is obviously a stock and cash deal. either elements of that would have to be higher for the board to recommend this. the more fundamental problems with this offer as well which is that there are projected synergies of 100 million, but synergies for three-way netwome
particularly this market are difficult. we're talking play tech, ohm bet and the list goes on and on. all of the players have a variety of these and trying to integrate these would be very difficult. then on top of that, it's actually been very difficult from historic experience to generate any sort of meaningful revenue synergies from land based casino operators like rank to online business. despite the recent wobble with the launch of the new app, they've been very strong online. they only generate 13% from their existing retail customers on the high street on their online business. that's not a huge synergy. trying to apply that across rank is going to be much harder. >> i'm not smart enough to bet or gamble at all. when looking at the consumer groups out there, are they
completely separate consumers who use the platforms or is there consumer synergy as well. user synergy. >> there tends to be overlap, but very little brand synergy in the sense that if you're gambling at a casino, there's absolutely no reason that you would necessarily use a rank digital app for your gambling and they have a small digital presence as such. most online are mobile based gamblers will have apps from most of the major providers and flip between them. >> i was reminding myself about the other deals we've seen in the sector. patty power, bet fare, lad brooks and coral combining. gvc holdings taking over brad win party. is this going to be the end of
the consolidation trend we've seen in the industry. >> there's a little bit of consolidation to come still. someone is going to have to pick those up. that's part of the competition commission approval for the deal. it's an excellent deal and there may be a deal in the future between william hill and888. one of the skpshs they've explored it previously the other way around. one of the issues with the three-way deal with us the complexity of trying to implement a three-way merger. not sure what rank brings to the policy there. very solid company. not much synergy with 888 and william hill. the real synergy is in the online business. 888 is 50% casino. they've got a very small sports book. william hill sports book would add significantly to that. >> thank you very much. director at pan mur gordon.
hello, everybody. welcome back. you're still watching strien ii signs." i'm louisa bojesen. brent back in bull market territory. rising $50 per barrel on the back of a surprise drop in u.s. crude stocks. this helping energy stocks to outperform. all bets are off. william hill sitting at the top of the stock 600. cheer the news a bid from 888 has fallen through. under investigation, the crow and former chairman of monte dei paschi accused of market manipulation and falls
accounting. the bond market is broken. that's the stock warning from the hedge fund investor who says the end of the current bubble will be sudden, intense, and large. >> hi, everybody. welcome back. special good morning to shawn. good morning to mark carnen as we're five hours away from the implied open. downside in europe this morning. little bit of selling taking place. underperformance taking place on the ftse mib. that market with renewed worries about the italian banking sector once again. you have the price of oil rebounding. up in the region of 8.5 for the
week for imex. oil up 20% since august which means we are now in a technical bull market as i was saying earlier. paul singer is saying the bond market is broken: a literal to investors obtained by cnbc the boss of the fund mkt writes we're experiencing the biggest bond bubble in world history. as investors continue to rush in despite low and negative yields. the man who is known best for suing argentina over debt restructuring warning the end of the current environment will be surprising, sudden, intense and large. singer is one of the big names to be taking to the stage to discuss market conditions at the delivering alpha conference that takes place next month. co-hosted by cnbc. kate kelly takes a look at what a year that he and other big hedge fund managers have had since their last appearance. >> reporter: some key figures from last year's delivering alpha hedge fund conference are
set to return this year. paul singer and carl icahn the activist and former corporate raider. sing erp known for elaborate investor letters just issued one in recent weeks. believes market prices in many assets have been distorted, but on the july 28 reviewed by cnbc, he was perhaps as bleak as ever. in this market, he said, everyone is in the dark experience doesn't count for much and extreme confidence may be fatal. he also noted that we're in the biggest bond bubble in world history and the global bond market is his words, broken. likening the current picture to the run up of 2008 when they knew reversal was inevitable. he said some sort of reversal here and possibility of uncontrollable inflation are very likely and it's a question of when. singers fund is up 6% since
july. long time settlement on argentina government. he also benefitted from commodities and performing debt while being dinged by event arbitrage. article icahn is down 18% through the second quarter thanks in part to his short positions in his portfolio. speaking of shorts last year at delivering alpha made some bold comments about the etf business specifically high yield etf and his words would blow up at some point in the future. he didn't identify a clear timeline, but delivering alpha, the index is down 5%. this year will be interesting to hear them talk about the markets and also about politics. carl icahn being a big trump supporters. paul singer being in the never trump camp. back to you. >> chief strategist ema shares at black rock.
good morning. >> good morning. >> the bond market is in a massive bubble as we just heard there. the high yield area of bond market is going to blow up, is what singer is indicating essentially. do you agree with that? do you think we are in a massive bubble territory. >> what i can point to is if fact from an exchange trade and products perspective, we see investors being very committed to bonds. that trend has been evident this year and probably due to continue. if you go back to the end of june, so the first half of this year, we were at a level where flows into the product global landscape for fixed income were 150% of the overall 2015 number so the strong momentum there. it's exciting for us. it's good news. investors are realizing the benefit of using exchange rates for overthe counter asset class, but certainly strong momentum there. nevertheless, there is something
different happening. it's eight weeks since brexit so it's a good moment to take a breath and look at what global investors have done after the referendum and it's a very different picture from the first half of 2016. surprising on the upside. july was the biggest and strongest month for equity and trade in product flows this year and within that, we've seen very clear themes. u.s. equities emerging markets so i think if you take a step back, you can see and summarize investor's behavior by investors didn't panic after the referendum and actually embraced the buying opportunities out there and, certainly, continued to search yields in the market. which was something that is obviously going to continue and stay with us for a while. >> could it have been done to kind of positioning heading into the referendum that we were positioned for a majority of the market was positioned for a
remain, right? but then towards the ends, we became more positioned towards the leave so we were ready for it to some extent can the position you say into u.s. equities and emerging markets it's not fleeing from europe, we've had our own rally to deal with as well, but there's tl has been a lot of interest in emerging markets and safe haven flows into the u.s. as well. >> i absolutely agree with you. so for the u.s., there are a variety of things happening. i will point to the fact that for july, the monthly inflows to u.s. were at the highest since december 2014. so it's actually a pretty interesting statistic. there is rotation within developed markets. out of europe where we continue to see outflows to japan to a certain extent to the u.s. a relative trade to your point. i think also speaking with kate moor, the chief strategist for black rock for the americas, there is also a sense in terms
of what is happening at a corporate level, yes, multiples are high. last time they were this high business models were different. it's actually not unforeseeable to have a relatively positive view there going forward. emerging markets weekly interesting story so there is an idea that paradoxically you're moving away from the volatility you're seeing in developed markets. we have the u.s. election coming up as well. that is at play. there are clear signs in terms of oil which you talked about earlier in terms of brent going back to bull market territory. that's a tailwind for emerging markets. >> you're saying still that europe is continuing to see outflows in general. >> yes. from an etp perspective, that trend continues. we do see inflows in the corporate space, but i would point in that sense towards a structural trend that is
capitalizing on the ecb asset purchase problem from an equity perspective, the trend is clear and not decelerating. >> okay. we have to leave it there. thank you very much for being with us. chief strategist ema shares for black rock. keep your tweets coming through @louisa bojesen. we're on e-mail, "street signs" europe @cnbc.com. let's push on to politics. the clinton foundation will stop excepting funds if hillary clinton is elected president. former president bill clinton will also resign from the foundation's board if hillary secures the presidency. cyber hackers targeted the republican party and donald trump as well as democratic party staff. that's according to reuters. the e-mail account of at least one trump staff member was reportedly infected with mall
ware. meanwhile donald trump struck a tone expressing regret and apologizing for past wrongdoing. nbc robert lawrence joins us from washington. we're not used to apologies from mr. trump. >> reporter: call this donald trump 2.0. this was a softer even more humble donald trump from the moment he started speaking after the reshuffling of his campaign, things were different. gone was the unapologetic candidate for president. donald trump saying that in the heat of the debate sometimes he chooses the wrong words and regrets that. trump saying he will never lie and used the new change of tone to attack hillary clinton. saying hillary clinton continues to lie. clinton responded in a statement saying that donald trump started the campaign by insulting people and continues to do so. donald trump will be in michigan today campaigning. he started running ads in four battleground states. campaign spent $4 million to run campaign ads in florida, north
carolina, ohio, and pennsylvania, luisa. >> we've been seeing quite a bit of press about how donald trump's crucial pillar of support as the "new york times" writes in the headline. white men has shown quite a bit more weakness. not seeing the same type of support from this demographic as he has in the past. >> its something the campaign realizes too. rereached out last night to minority voters. he said trust him. over the 30, 40 years the democratic party has been pandering to the minority vote. when he gets in he will try to make the inner cities across the united states a good place to live. he will reach out to minority communities specifically mentioning the african-american community and hispanic community in the country. realizing he needs to broaden the base and trying to reach out last night. we'll see more of that at the campaign event in michigan today. >> edward, good to see you.
thank you very much. nbc edward lawrence joining us live from a very early washington. don't show the entire picture, but a life size nude statue of donald trump caused a stir thursday when it appeared in a new york city park. an activist claimed responsibility for the work saying it's our wish to look back and laugh at donald trump's failed and delusional quest to obtain the presidency. the new york park's department removed the statue saying new york city parks stand firmly against any unpermitted erection in city parks to matter how small. people getting a cheap laugh off of that. anyway, coming up, the virtual reality revolution is upon us. we'll be looking at the latest gadgets to hit the markets and whether revenues are ready to
roll in for the companies behind them. we'll be right back to talk more about virtual reality. how many of you have tried virtual reality? no, no, not yet. maybe you are tech savvy enough. i've tried demos if you're out covering the stuff at tech fairs and stuff like that. if you have tried it, got a head set or something, let us now on twitter @louisaboyson.
one of the tech world's hottest areas. gaming could be leading the way. companies from htc have already showed off the capability of their head sets. now gaming giant play station is getting ready to launch its own version. how do you make of the game. we're at the studios of vr world. one of the launch studios to find ut. >> we're having to rethink some of the ways we would normally do traditional approaches. such as sin mattics. the player is the camera. the head set they're wearing moves the camera around. we want to make them look at a certain thing. normally you would cut the camera and show them the item. can't do that. >> virtual reality is expected to go 180% a year between 2016 and 2020.
content must be king for it to kick off. >> you know what this is, this is your business. >> i think driving with the content will be the key for sony. they have already showed that most recent e-3 they're very keen on turning out new vr experiences and games to drive interest. this will remain the key driver for interest for them. >> vr world is a collection of five games and experiences. in one game, i was plunged into the depths of the ocean and attacked by a shark. >> i'm actually sweating right now. my heart is beating. >> play station is gaearing up o launch more powerful game station along with head set this year. this is only the beginning. >> it will be better. cheaper, lighter. more powerful. higher revolution and different kind of peripherals that will
help make the experience more immersive. >> the sharks are gone. >> china show me has unveiled first head set. it enters the vr world at a time when all the big tech players are fighting for a slice of the fast growing pie. sales of new products could hit millions. >> sales of this product, we haven't disclosed any numbers, but this could easily be in the multiple millions, even in a couple of weeks, of course, because it is a mass market product. we're going to introduce much more sophisticated product sboos the chinese market. i think it's yeaeasier to say o thing. the chinese market is around 4 to 500 smartphones sold every year. every one of these phones is in theory vr capable. vr could become mass market in
china faster than any other market in the world. >> andy hood is head of emerging technologies. our our cnbc contributor on technology. andy, you work for an advertising company. what do you do with this particular type of technology at the moment. >> akqa we're driven to find the application and uses for all emerging technology. all of the virtual reality technologies, our role is to find the problems you can solve and the opportunities you can create to do things for large orzations beyond gaming. >> and businesses are interested in it at this point or still quite early on? i don't know anybody who has a vr head set, but i'm not your traditional gamer. >> it is very early games. at the moment there's a lot of finding out what the opportunities are and finding out how people can get.
it's a brand new medium. finding out how it can affect prices and businesses and actually drive benefits and value, that's the investigation stage right now. >> so what are the kind of projects you're working on with brands in the virtual reality space. >> the key thing with virtual reality is the access it offers. when you can give people virtual environments and objects they can get access to, now you can find processes where the access of absence is the problem. you can solve that problem. you find the moment in education there are huge opportunities and in health it's being used to treat people with phobia and used to help soldiers coming back with post traumatic stress disorder. and using it to coach quarterbacks. has a big set of benefits just by providing access to people who wouldn't ordinarily have it. >> or you can, for example, if you're training to become a
surgeon, you can try yourself on operating before your actually operate. >> there was a live surgery done fairly recently with nvr so people around the world can see how a live surgeon would ordinary, reasonable, and prudent. >> you were trying the shark game. you physically react as if you're actually in the cage meeting the shark, right? >> that was the second time i had done it. i knew what was coming. i knew what to expect, but i still felt the effects. i was sweating. my heart was racing. there were times the shark was coming towards me and i had to step back. >> your body reacts as though you're actually in the experience. does that lead to ethical questions as well for businesses? will they careful how they tread? >> it's a very emotional reaction to virtual reality. the myth, if you like,s is the kbrd you're emercied in virtual reality because of the realism
of the environment, but actually it's because of how authentic the experience feels. when we were creating an experience to launch concept and the cars weren't being produced then, we were able to give people a direct experience of these cars through virtual reality. when we spoke to them afterwards, they didn't talk about what they did and what they saw. they talked about how they felt and used very emotional language. >> when is it that brands get to see a real revenue impact on the business? at the start, i can imagine it's very costly to develop this kind of content and have to pour a lot of money into that. >> of course right now there isn't huge mainstream rich. which is what's exciting about the vr launch. first time we're seeing it come to a more mainstream audience. in the next couple of years, there will be investments and learning from testing small applications in order to work
this out. >> andy, thank you very much. head of emerging tech knowledge from akqa. we need to talk about the olympics. four u.s. swimmers have been left feeling exposed after it appears that initial allegations of a robbie in rio weren't accurate. >> reporter: two american swimmers spent more than five hours by our count here talking to police. it's clear investigator have a lot of questions. what unclear is if they got all the answers they were looking for. after days of confusion, police now say lochte, jimmy fatiguen, were not robbed. instead police say the swimmers damaged this gas station bathroom, breaking amir error and a a soap dispenser. this footage shows the swimmers rooefing a party.
the swimmers then say they go into a taxi. by 6:06 a.m. they're at this gas station. this video shows them near the bathroom when an attendant walks up, they run out. brazilian officials say the swimmers tried to leave and the station called police. at 60:09096:09, a man approache cab. appearing to point a gun at the car for nine seconds. three minutes later the swimmers get out. another puts his hands up. at 6:56 a.m. the four men arrive back at the athlete village. both the video and police account are inconsistent with what ryan lochte told the today's show billy bush on sunday. >> we got pulled over in our taxi and the guy pulled out his gun, he cocked it, put it to my forehead, said get down. i put my hand up. i was like whatever. >> when lochte spoke to matt
lawyer, he changed some of the details. as for the gun, you said before it was placed on your forehead and cocked. he said no, that's not exactly what happened. police say two security guards pointed guns at the swimmers. they were then asked to wait for police to arrive, but police say they refused to st. lochte returned to north carolina earlier this week. >> the americans are gone now, but what hasn't left is the hostility. i have been covering this area and coming to brazil for more than ten years now and i have never quite seen a scene like this one. the u.s. olympic committee said all swimmers would cooperate with police. now back to you. >> well, the u.s. olympic committee ceo scott blackmon released a statement condemning the incident saying the behavior of these athletes is not acceptable.
we'll further review the matter and any potential consequences when we return to the united states. now, meanwhile in sporting event news. usain bolt powered closer to three gold medals in three olympic games winning the 200 meter. won with a time of 19.78 seconds. canada finishing second and france taking bronze. bolt will return to the track later on today with his jamaican teammates. britain's brownly brothers sweeping away the competition to claim the first two spots in the triathlon. younger brother imimproved to sale silver. south africa rounding off the medals to take bronze and in the decathlon, ashton eaton became the second man in history to obtain gold. smashing the olympic record
after scoring 8993 points in the grueling ten discipline event. claiming back to back world titles and breaking the world record twice. so the olympic medal tally. this is how it's looking. u.s. in lead with 100 medals in total. uk extending lead over china to china's 20. a lot of your commenting on that. commenting on my clothes today. look, i've worn this top in the past. it's cashmere. not that causal. the implied open. state side is a little lower this afternoon. have a fantastic weekend. i'm off for a couple days. have a lovely weekend. annout cp errom ining your y with mpleteps clean, a cll. theoaoahi fafety ar afoodsafe.g. itit n a qck fix 'ssion to keeauty
good morning. kruds climb. oil back in a bull market as oil prices raise from august lows. follow the money. investors pouring cash into u.s. stock funds for the first time in a month. ask what this says about the broader market sentiment coming up. plus an historic night in right knee. usain bolt blows away competition in the 200 meters to win eighth career gold. it's friday, august 19, 2016 and "world wide exchange" begins right now.