tv Street Signs CNBC August 2, 2017 4:00am-5:00am EDT
hello, welcome to "street signs. i'm carolin roth these are your headlines rio tinto in the red, despite plans to return $3 billion back to shareholders as the miner increases its share buyback and declares a dividend of 110 cents per share >> when we have more cash available, we will do it we benefit from stronger cash flows is implemented today $3 billion of cash returns today.
commerzbank swings to a loss in the second quarte dragging the shares lower, while socgen suffers as the french lender sees both profits and revenues decline the bank's deputy ceo tells cnbc emerging markets are helping >> we have an advantage from the improving environment in central europe, from the dynamic in africa, which has compensated the still negative interest rate environment in the eurozone, and the low market volatility. >> an apple a day keeps the bears at bay the iphone maker's better than expected earnings boost european suppliers, and set apple shares up to open at a record high. good morning, everyone it's hump day, that means it's wednesday, of course the stoxx 600 is not doing too much this morning. we're off bay fraction the german and french markets
are higher, but seeing pressure when it comes to the ftse. that's in part because we're seeing the mining shares on pressure rio tinto off by 2.5%, this on the back of a disappointing dividend the divi not as big as some expected revenues were a touch lighter than anticipated by in large, we are not seeing too much selling let's show you the picture one by one the ftse 1 00 off by a touch off by 0.2%. xetra dax inching a bit higher, up by 0.1% in germany, the diesel summit is in focus we'll talk much more about that during the show. the cac 40 off by 0.1% when it comes to the sectors i already mentioned that we have some of the banks under pressure as a result of the commerzbank missing, socgen missing on expectations basic resources leading the charge to the down side, off by
0.8% let's talk more about rio tinto. shares under pressure despite the company raising its dividend and buyback plans. the miner says it will return $3 billion to shareholders by the end of the year. this as first half net profit jumped despite wet weather impacting iron ore and coal production the ceo told cnbc that the company had been transparent about its impacted guidance. >> we have been totally transparent in relation to operational issues we had the first half of this year. it was mostly weather issues on the east coast and west coast. it was disclosed two weeks ago, quarterly volume results there was no surprise to the market and now we are working on the second half. and we are confident with the guidance if you go back to the question of iron ore guidance, remember the beginning of the year, the only thing we said is on the back of the weather issue that
we experienced the first half of this year we would be at the bottom of the range of target. no material change from that >> let's dig deeper into the world with the head of commodity research over at commerzbank listening to some of the co, rio tinto's co's comments, he said he's confident about the outlook for china but price volatility will be a feature of the market. we've seen the iron ore price rebound year on year do you by in large agree with his comments >> i think the current price trend is only and partly explained by the fundamental trends of the underlying chinese economy and world economy and attributed to the expectations, probably political expectations and also continuing speculation in china so i think the price especially for iron ore and steel, which
reached new multi-year highs recently, at the moment are probably not sustainable at current levels i wouldn't be surprised to see the prices coming back already in a short to medium term perspective. and i would not be surprised to see the quarters in china as much weaker than the current data suggests for the second quarter and the first half of this year. >> let's switch over to the oil markets. we are seeing a bit of softness in the markets this comes off the spectacular gains we saw in july wti alone up by 9% has the rally gone too far what do you think it is? >> yeah, definitely. it's gone too far. unfortunately for opec, any price rally is also a reason for the future price falls, because it's not the opec reaches that will be setting prices, it's all about the shale oil companies.
any price increase of wti towards $50 as was the case over the last days will be also taken as a chance for the -- by the u.s. oil companies to hedge their future production and therefore the prices are likely to decrease because production in the u.s. is likely to be hiked up stronger than was expected before. so i wouldn't be surprised to see the brent oil prices falling back below $50 over the next couple of days it will probably be also dependent on the daily numbers, but we're keeping our forecast for the end of the year at $48 we still think it's not about opec, it's all about shale >> the july rally, there's a couple reasons as to why we saw that happening in part because of the threat by the u.s. for sanctions against opec producer venezuela, but also very large positioning when it comes to hedge funds. you say oil prices will weaken from here on out
how quickly is the hedge fund community going to adjust positioning? >> that's unfortunate for opec that right now the price increases are massively driven also by the speculative interest, which yet again on wti as well as on brent increased to multi -- weak multi months highs. for me it's always a reason to get concerned about the future gains, because much of the positive expectations and much of the rebalance and other things which are yet to happen are already priced in. so the markets are probably only getting surprised if the data is coming weaker than expected, or in line with expectations. therefore i wouldn't be surprised that this change will happen quicker than we are probably normally would be seeing, because it's so much driven by the hedge funds. they keep changing their mind
probably on a day-to-day basis >> we also need to talk about bullion, about gold. it's puzzling because gold really has not made major headway despite the fact that the dollar index has fallen to a 1-mon 15-month low >> gold doesn't have a life of its own. if you're looking back over the last ten years, it was driven by two factors -- real interest rates and the risk aversion or risk awareness right now the risk appetite is high there's no interest for gold as a safe haven on the other hand the real interest trades are still very low. and they're likely to stay very low for quite some time. so i wouldn't be surprised to see the gold prices falling back below 1250 in the longer term i believe gold prices are likely to increase not only in u.s. dollar terms but also in euro terms
we expect prices to get above $1300 by the beginning of next year and increase further. >> before we wrap this up, i want to touch on sugar over the last five weeks the price of sugar has risen by 16%. i just wonder what's really behind the sugar high in the markets, excuse the pun. >> mostly it's been driven by the situation in brazil and by the interest -- sorry, by the exchange rate of brazilian real. that is also getting into the trends of the sugar prices brazil is the largest exporter of sugar, and it's all about -- much about the current situations than anything else. >> thank you very much for that. now, moving on to the banking story, net income at
societe generale fell 28% in the second quarter, strength in the international and retail banking quarters helped to offset weakness in other divisions. shares are down, off 4%. gemma, what is it that investors are focusing on? >> it looks like they weren't expecting the additional 300 million euro provision, which has been made and has hit the overall net profit that's an exceptional item but i don't know if there's concern that there's more finds and more exceptionals ahead. it doesn't take account the payment done in the first quarter of this year equities are also weaker than expected a lot of problems are well-flagged we know it's a low volatility client it hit other investment banks. the low interest rate impacts eurozone retail banking. it is not particularly clear why investors are upset what is interesting is when we talked to the bank they were clean to flag
the international opportunities. when you look at analyst reports, you speak to brokers, they're focused on the growth potential. i spoke to the deputy co about that i asked him about brexit that's one big international move that will really change the game for many banks globally listen to what he had to say >> the answer to your question, very much depends on what is the final outcome on the current negotiation. and we took as an assumption hard brexit scenario in this scenario we announced that we will move between 300 and 400 offices from london to paris. our situation is flexible. we have two halves one big half in london, one half in paris we are flexible. you can wait until the end of negotiation. it will take some months to inform people and ask them if they want to move. we don't -- we are not in a
hurry to decide that the other magnitude is this number between 200 and 400 from london to paris, because we have and the existing setup here. >> let's turn to one of the bright spots of the results, the international retail banking and financial services big growth estimates there it seems to me looking at results, the net income distribution outweighed french retail banking and global banking. is that the direction of the firm it's to push the overseas opportunities more than perhaps domestic opportunities flts t >> the current environment is the negative interest rate environment and the global banking market due to the low volatility environment it's fair to say today the environment is benefiting from this international retail and specialized financial services
in the future it's the area where the growth potential is bigger we will allocate resources to that part. we want to -- our strategy is really focused we have said clearly we will develop in europe, the borders of europe, africa and russia in this business so they will benefit from the biggest part but we are not giving up the other potential. we still have strong potential in our global finance and advisory capability. in the long-term we consider that we will allocate capital in that part. >> looking at the international retail banking arm and financial services, russia is a big component of that. we have been lucky with regards to rebound in the economy. are you concerned about the geopolitical dynamics and perhaps ongoing intentions and increasing tensions with the
u.s. administration? >> russia is just representing nearly 10% so it's a significant part, but not a bigger one the current situation in russia is improving locally and internal internally this is visible in the second quarter market we guided the market to be 5% to 10% of return on equity in russia so we are benefiting from the improving situation in russia. on the other hand you're right to say that the new potential decision under the president of the united states regarding new sanctions will impact. but it's too early to say how. the only thing i know it will create additional complexity to manage these sanctions, which is the difference between europe and the u.s. we will comply and we're ready to manage this complexity. >> this is a company in the midst of a dramatic tra transformati
transformation, shedding some businesses, buying others, doubling down on areas of growth and managing the transition in others so you're seeing a lot of effort to cut costs, still the transformation does have expenses digitalization is one expense. just the simple merge and acquisition cycle of refining the portfolio to where they want to get it is also costly if we do look ahead, analysts and the company itself seem optimistic about the untapped opportunity in emerging markets like africa where socgen are in the top three with regards to market share and has lots of plans to roll out more in the region to capture more of the retail consumer base >> gemma, thank you very much. moving on, hugo boss posted a strong set of numbers in the second quarter with sales and net profit beating expectations. this follows moves to close
stores and cut costs the fashion house is crediting strong stales s strong stales ales in ath lee lr do e-mail the show, the address is firstname.lastname@example.org. you can also find us on twitter, cnbc as soon and myself at @carolincnbc micong up after the break, apple carries on these days families want to be connected 24/7.
that's why at comcast we're continuing to make our services more reliable than ever. like technology that can update itself. an advanced fiber-network infrustructure. new, more reliable equipment for your home. and a new culture built around customer service. it all adds up to our most reliable network ever. one that keeps you connected to what matters most. welcome back shares in apple topped record highs after hours following a strong third quarter earnings report the company saw its net income
rise compared to the previous year, revenues beat estimates. better than expected iphone performance helped results with sales rising to just over 41 million units. lower average selling prices caused revenues from the device to miss estimates. despite apple's solid third quarter earnings, not all remain sold on the stock. speaking on cnbc earlier, two market participants took different views on the company >> ultimately the question is are people going to pay $1100 for a new phone or are they not? is this the new iphone super cycle or is it ot? if it's not, which i think so, then, you know, ultimately we'll have to wait and see >> we like apple here. we were recommending it about a year ago under 100 we liked it more now now it's getting to fairly valued, but fairly valued with good momentum and earnings
growth here. >> our technology correspondent arjun kharpal will weigh in on that discussion. do you think a whole host of consumers will pay $1,100 for a new phone? >> there seems to be pent up demand for a new iphone. a few consumer surveys have suggested demand is strong for the iphone 8 or iphone x, wf whatever they name it but this is a different device if we believe the leaks. there was a sense with the iphone 7 and 6s they were not radically different devices. people were upgrading to them, but this is a complete overall of the iphone and new screen technology, new sensors under the hood that's something that could appeal to consumers looking to upgrade, and there's a lot of consumers still on an iphone 5 iphone 6, they say i'm not keen on the 6s and 7 and looking at this device and saying i haven't upgraded in two, three years,
maybe this is the time so they could be a catalyst for what some analysts are calling a super cycle for the iphone >> we saw that iphone selling prices dropped to $606 that could be a fly in the ointment if apple was hoping that a lot of people were going to upgrade and weight for the iphone 8 it seems like, no, a lot more people than thought bought new iphones now at a lower price are these consumers really going to buy a new one in two months >> no, those are the consumers looking -- if you sweep the wed now, so many deals on iphone 7 or 6s at cheaper prices. that's where you have seen the average selling price come down. inventory needs to be moved to make room. you have consumers maybe on older models thinking on getting a good deal, on a two-year contract or one-year contract but there's a large sway of apple users who will want to upgrade. the price point, yes, we heard on top of $1,000 potentially
if you look at the broader smartphone market, it's tepid growth at the moment one area we are seeing very solid demand and growth is it that high-end segment. so if you look at the samsung galaxy s8, that is a high-priced phone. but selling well and selling better than previous models because people are looking for that cutting edge. as we are doing more and more on mobile phones now and new technologies, new applications are being used by the mobile phones, these high-end devices are becoming important tim cook spoke about augmented reality, that being profound he said in order to use the new augment the reality applications, we need better hardware that's what apple is trying to stoke, better hardware could boost its services revenue because of the new applications to be run on these new high-end devices. >> speaking of services, coke promised at one point this will be a stand-alone fortune 100
business based on revenues it already is. it overpowers facebook's revenues where are the services revenue going to go? will we see a spinoff of that business what is expected to happen >> it can only increase. we've seen what apple has done, slowly bolting on new services you have seen apple pay, apple music come to market, apple dabbling in original content it's interesting to see where they go with that, whether they wrap that in to the apple music service or create a stand-alone netflix-style service. there's a lot of availability for apple to go into new areas and new segments they've been talking about the potential of imessage and what happens to imessage. we've seen with the likes of wechat in china, that's a one-stop shop for music, payments, loans. it's interesting to see how apple develops out the imessage department there's plenty of room to maneuver this is something that can only increase in terms of revenue and
scale. as apple garners more users, perhaps on those new devices, that's bright spot >> are you going to splash 1,1,1 00 on that new phone? >> not me. i just entered into a new contract >> i wonder if the high iphone8 will drive inflation up. tim cook had a lot to say about apple. head online to read our full interview with him we're back after a short bakreak
welcome back to "street signs. i'm carolin roth these are your headlines rio tinto in the red, despite plans to return $3 billion back to shareholders as the miner increases its share buyback and declares a dividend of 110 cents per share >> when we have more cash available to distribute, we will do it. we benefit from stronger cash flows is implemented today $3 billion of cash returns today. commerzbank swings to a loss in the second quarter dragging
the shares lower, while socgen suffers as the french lender sees both profits and revenues decline. the bank's deputy ceo tells cnbc emerging markets are helping >> we have an advantage from the improving environment in central and eastern europe, from the dynamic in africa, which has compensated the still negative interest rate environment in the eurozone, and the low market volatility. >> an apple a day keeps the bears at bay the iphone maker's better than expected earnings boost european suppliers, and set apple shares up to open at a record high. we've got some bank earnings crossing the wires from standard charter. emerging market focus bank underlying income of 7$7.2 billion, up 6% year-on-year.
underlying expenses of 4$4.8 billion, up 5% year-on-year. first half eps, 29.2 cents the net profit of 1$1.2 billion i'm looking at the pretax profit of 1.92 billion. that seems to be a little bit better than expected looking at a deutsche bank forecast so that seems to be a bit better than forecast. the underlying basic earnings per share of 34.4 cents, it says it is on track to deliver an additional 7$700 million in planned gross cost efficiencies in 2017 and 4$400 million in 2018 the underlying return on equity 5.2%, up 5.1% in the same period last year. the board has decided not to declare an interim dividend on shares this was in line with expectations
the board will consider at the end of the year whether it is appropriate to recommend if the balance sheet quality has improved in terms of some of the commentary, saying the economic environment has shown signs of improving, though geo outlook remains uncertain. the group is now more efficient, better at managing risk and balance sheet quality has improved let's get instant reaction from the head of uk banking practice at simon couture and partners what do you make of the statements >> i think they're pretty good results. if you look at what happened to the bank a couple years ago. when i studied banks and try to assess performance, there's always a number of external drivers and internal drivers you may want to look at them in order to judge this performance. when it comes to external drivers, of course we have to consider that standard charter is an emerging markets bank.
it's performance is heavily dependent on the fer poperformaf the market it operates in. china is the market for the bank we have to consider that the growth of the country has always been steady, but there's a current slowdown due to macro economic factors we have to consider that as an external factor. this has doubled the impact. since standard chartered is operating not only in china but other emerging markets, if china slows down due to protectionist policies in the western world or due to the corporate debt that the country has, of course it is going to create a lower demand for financial products in china, but a lower demand for financial products in other emerging markets which are commodity dependent to china it can profit a lot, but there's
also a good risk that's why we have to look at internal factors to understand what the bank is doing internally to improve performance. >> the loan impairment issue, that's one of the biggest headaches for the bank since its major restructuring. that led to that massive overhaul of the business and the new ceo, bill winters. in the first quarter of this year loan impairments fell a bit. now for the first half of the year we're seeing loan impairments at 5$583 million do you have more confidence that loan impairments have turned a corner >> i think they've done a good job internally to improve risk management practices we've seen it by the heavy reduction in the risk-weighted assets they sold noncore businesses and improved the risk management practices. it boosted not only taking rwa under control but boosting the capital requirements let's not forget they have 13.8%
in common equity tier 1. even if you don't weight the ratio by the risk, if you consider the leverage ratio, it's well above 5% i believe it's an indicator of a strong capital position. >> the key question for standard chartered is as a lender in the emerging markets, how do you make lending more efficient, monetize it, and some analysts have said maybe they're going into the direction of hsbc, which does a good job at monetizing lending how do you think a standard chartered are faring in trying to emulate that model. >> you nailed the right point. lending, for retail customers and for commercials and corporations is the entry point of the financial relationship. the problem is regulations are keeping increasing the costs of those loans. therefore the return on equity on the single loan has constantly gone down therefore there is a number of actions you might want to take or you might want to consider in
order to keep the entire business profitable. first one is price pattern of loans. a number of customers are willing to pay more and a number are willing to pay less. price differentiation is the key driver for performance, i think. second one, trying to improve the cost of the delivery go digital even in the emerging markets, clients don't go to the branch anymore. if you improve capabilities of selling products and serving customers on an online basis, of course the average profitability of thebusiness goes up most important i think cross-selling is the key driver of performance if the bank is able to collaborate for the different divisions to work together in order to increase the number of products held by the different clients, so use better the leverage of loans as an ent pry points to sell, trade fx,
derivatives, we will see earnings going up. i think from now on the bank and it's already doing that, but the bank's main objective is to drive up revenues. >> we have to leave it here. standard chartered down by 1.9%. one of the worst performers now. maybe the fact that profit numbers were not that great or it's not paying an interim divide dividend currently underperforming, off by 1.8%. gianluca, thank you so much. we did get some economic data in the form of the uk july construction pmi that was a bit below expectations seeing the july print at 51.9 versus a june number of 54.8 this is below what was expected at 54.5. this reading is at an 11-month low. it seems sterling/dollar is not suffering as a result. we are still up by a quarter of
1% on the day. the construction pmi not as important, not as significant as services pmi yesterday the manufacturing pmi was better than expected now in other earnings, weak markets and a restructuring hit of 807 million euros push the commerzbank to a greater than expected second quarter loss despite the loss, commerzbank said it booked the restructuring charges in full adding it expected a slightly positive net profrt profit in 2017 shares in ing are trading lower despite second quarter net profit beating expectations. the company also saw provisions for bad loans fall 25% the ceo welcomed the figures despite aggressive competition in some markets. generali posted a 4 % increase in operating profit for the first half of the year
beating estimates. a pick up in the banking business helped offset a slight decline in profits at the life insurance unit speaking to cnbc earlier this morning, the generali ceo discussed his ambitious asset management strategy. >> we are one of the main players in the life insurance industry and up to now we didn't have -- this is quite a paradox, a strategy for asset management. now we have the real strategy for asset management it's an innovative strategy. it's very different from the strategy of our competitors. so i don't think it's too late i don't think it's the wrong timing we fully understand that the fees are under pressure. but we are not looking for volume we are looking for asset class with high margin and high value added. this is our boutique asset management strategy. want to show you what u.s. futures are up to.
we are expected to open higher across the board the dow jones set to add 36 points the nasdaq set to add 43. the key question is whether the dow can breach that 22,000 level this morning given that apple numbers were much better than expected, shares up 6% at a record high. all eyes on that 22,000 level. the dow, in fact, notching another record close yesterday sixth straight gain. putting on the verge of crossing the key threshold. in the european session, a slightly weaker picture. the xetra dax off by 0.1%. ftse 100 suffering from the fall in some mining stocks, such as rio tinto off by 0.2% after the dividend was a bit lower than expected revenues missed somewhat the cac 40 off by 0.25%. commerzbank in germany and
socgen underperforming today a quick look at the fx markets. the euro hitting a two and a half year high we are up by 0.5%. this as initially overnight the dollar was moving off the 15-month low it had been trading at sterling 1.3234. up by 0.25%, despite the fact that the construction pmi was weaker than expected. the white house is defending president trump in a statement donald jr. issued last month about his 2016 meeting with a russian lawyer hallie jackson has the latest on a story that keeps on changing >> reporter: tonight new questions of credibility and contradictions with the president defending his response in that meeting between donald
trump jr. and that lawyer. the question is what happened on july 8th on air force one after the president left the g20 summit in germany. in the forward cabinet president trump huddling with long-time aide, hope hicks who acted as a go-between had his son as the president personally dictated a statement that was misleading. e-mails later showed the meeting was about dirt on an adversary >> he wasn't involved in that. >> he didn't dictate, but he weighed in, offered suggestion like any father would do >> the president's personal lawyer calls the report misinformed, inaccurate and not pertinent. the conflicting comments are
raising questions about why the president got involved, what the special counsel will make of this and whether the president's push to control the message is hurting him. >> if that's true, that's bad decision by the president which will make us ask more questions. when you get caught in a lie about one thing, it makes it hard to say let the other stuff go. >> reporter: signs of a trust deficit but the white house unconcerned. >> is this hurting the president's legislative agenda >> i think what's hurting the legislative agenda is congress' able to g ability to get things passed. rex tillerson says washington is open to talks with north korea. while staying firm on ets staite on nuclear weapons, tillerson offered a reassuring message >> we reaffirmed to north korea, what we are doing we do not seek a regime change, we do not seek
the collapse of the regime we do not seek a accelerated reunification of the peninsula we do not seek an excuse to send our military north of the 38th parallel we're trying to convey to the north koreans, we're not your enemy, not your threat, but you're presenting an unacceptable threat to us. president trump is close to taking trade action against china. according to a senior white house official trump could encourae launch an investigation into what he sees as china's unfair trade practices. opening such a probe would allow the president to unilaterally imposed tariffs or other restrictions to protect u.s. industries no break through yet in the french/italian dispute of the stx shipyard but both sides aim to reach a deal by late next month. finance ministers from both countries met for talks following french president's emanuel macron move to block a
takeover by the italian firm the italian finance minister says his country is not prepared to accept the 50/50 split france proposes the french finance minister stressed his country is seeking a long-term solution >> translator: i wanted to say this here in rome, because we are fully aware in france of the emotion provoked by the decisions exercised the preemption right on the shipyard i want to tell our italian friends, this decision is a temporary decision, and with the president of the republic and the prime minister our intention remains the same, to build a great european naval industrial champion with italy that covers the civilian and military sectors. it is diesel day in germany. auto industry executives and politicians meet to discuss tackling emissions we will speak to a german member of the parliament after this
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for all us sports fans out there, shares in william hill are surging after a 3% increase in revenue during the first half of the year. performance was bowl centered by higher betting in the uk shares are up almost 10% and this is really beg news, not just in this news room but across the world neymar jr. is on the move to paris st. jermaine his current club, fc barcelona gave him permission to complete the deal neither team has confirmed the transfer, but reports say it could be worth 197 million pounds that would be a world record
deal there's talk about middle eastern medicals and a grant grand unveiling. auto shares hit the brakes on tuesday sessions as sales fell for a feft straigifth stra in the u.s some brands saw a double digit decline. toyota bucking the trend that was the only company to post gains for the month phil lebeau gets under the hood. >> reporter: summer is traditionally the busiest time of the year for auto dealers but in july sales cooled off with general motors reporting a 5% drop in sales as the big three all reported weaker than expected business. toyota bucked the trend with demand for crossovers and suvs in general, dealers are taking longer to sell new vehicles. edmonds.com said it took an average of 2 1/2 months to sell
a car or truck once it got to the dealership the slowest turnover rate since 2009 what is hurting business? in reality americans have bought so many new vehicles over the past seven years that there's just not as much demand. meanwhile there's a dmrglut of s coming off lease driving down sales prices, especially on 3-year-old and 44-year-o-year-os that have low miles and are in good shape some companies are wondering whether tophase out slower selling models cadillac is revamping cars to better meet demand that means one fewer model one thing is helping automakers ride out the slowdown, it's the fact that trucks, suvs and crossovers remain relatively strong, and those are the most profitability vehiclle vehiclese
dealership. tesla set to release earnings after the market close with the carmaker ramping up production of the model 3 sedan. the stock surged by 50% sense january. shares dipped earlier this week after elon musk said the california company faces manufacturing hell to fill more than 500,000 orders for the model 3. germany has agreed to a plan to cut diesel emissions, that's according to reuters the report citing industry and government sources saying the government would not seek to impose costly changes to diesel engines, but will allow for german carmakers to implement software updates for 2 million vehicles, which would be cheaper. the news comes ahead of a summit gathering politicians and industry executives in berlin to focus on solutions for cutting pollution in german cities joining us on the line is sven
giegold, member of the european free alliance. thank you very much for joining us do you think software fixes will be enough to actually avoid a driving ban? >> no. very clearly these measures are not sufficient in order to solve the legal and security very clearly this is not enough to guarantee clean air as it is required under european law. therefore the legal challenges will continue. >> what do you expect from the summit what do you want to see? >> we want the cars that are on european roads correspond to european law this means the emission targets have to be fulfilled by each car, and on top of that, which is equally guaranteed under european law, air has to be sufficiently cleaned the deal, which has leaked yesterday and reuters has
reported about is clearly not delivering any of the two main objectives >> who do you think is too soft here is it the politicians, angela merkel but also the challenger, or do you think it's the automakers or all of them together >> i think first, of course, the carmakers have broken european law. this has been found by several inquiry committees at the same time supervisory authorities were complacent and responsible ministers were complacent therefore the guilt is very much about both this is in the end a question of democracy. is the state really guaranteeing the common good or is it too close to the sectors and the manufacturers that it is supposed to control at the detriment of consumers and the environment? >> it also seems we're too close
to the federal elections happening in roughly 1.5 months time 800,000 jobs in germany depend on the sector. that's roughly 14% of gdp. is there anything that angela merkel can do to get tougher on them without losing out politically? >> first of all, obviously 800,000 jobs is a lot less than 14%. germany has about 40 million people employed. but beyond that it's true that before the elections there's enormous power, but there's one good side. a lot of pressures by the carmakers now to receive new subsidies this is politically impossible before the elections. many germans and the majority of germans according to polls demand tougher action by the state for clean air. as well as more distance towards powerful lobbyists and that is something which we need all over europe, that the
state is truly making its supervisory function and that we do not rely on u.s. supervisory action in order to discover our breaches of law in europe. >> we have to leave it here. thank you very much. sven giegold joining us. quick look at u.s. futures the key question is will the dow make it past the 22,000 handle for the first time ever? it saw another record close yesterday. the apple effect might take us there. currently up by 37 points for the dow and 42 points for the nasdaq that's it for today's show i'm carolin roth "worldwide exchange" is up next. chances are, the last time you got a home loan,
that's why at comcast we're continuing to make4/7. our services more reliable than ever. like technology that can update itself. an advanced fiber-network infrustructure. new, more reliable equipment for your home. and a new culture built around customer service. it all adds up to our most reliable network ever. one that keeps you connected to what matters most.
. dow 22,000 in striking distance as the record rally rolls on we have your trading day set up. >> new overnight, the white house is weighing aggressive trade action against china details ahead. apple set to open at an all-time high after reporting a big earnings beat. we'redigging inside those numbers. it's wednesday, august 2, 2017, "worldwide exchange" begins right now. ♪ good morning welcome to "worldwide exchange" on