tv Worldwide Exchange CNBC July 24, 2015 4:00am-6:01am EDT
welcome to "worldwide exchange," everyone. i'm seema mody. china knocks the wind out of asian markets after factory activity hits a 15-month low with the pmi data suggesting a broad slowdown. shares snap a six-day winning streak to end the session lower. plunging commodity prices take their toll on the miners. south africa's will ax 6,000 jobs but angelo american digs deep despite a $3 billion loss.
>> we actually hit -- we set for ourselves in terms of cash flow and process from sales at this point in time. so that's helped us continue to maintain the dividends. >> investors fear more cost cutting at air france klm. shares take off after europe's second largest carriers despite slipping deeper into the red. amazon delivering for investors. the online retailer surprises wall street with ads 92 million profit in the second quarter as its bet on the cloud pays off. shares skyrocket after hours. welcome, everyone, to the show. some economic data could bring to you right now, eurozone july pmi manufacturing coming in at a 2.2 versus the reuters estimate of 52.5. the flash composite pmi at 53.7.
interestingly enough, the weaker euro, price cutting not helping foreign demand at this point. this after the german pmi number disappointed. we were looking at the euro in session lows and right now it's remaining in a similar position. euro trading at 109.47 against the u.s. dollar. eurozone business waning at the start of the second half. we are looking at the flash composite pmi for the broader eurozone at 53.7. now, shares of pearson are continuing to rally after it raised its dividend despite a fall in the first half operating profit. it comes after the uk publishing group announced the sale of its financial times due to japan rival nikkei for $844 million pounds. the group is due to hold a press conference in tokyo any minute now. we will bring you that when it happens. as you can see we're just waiting for the leaders to take the stage. in the meantime let's discuss
more about this deal catching many by price. catherine is joining me around the desk. how are you doing this morning? >> as you said this did catch people by surprise on a number of matrix. first, starting off with that price, really chunky evaluation. a lot of analysts in the media space have been saying that pearson would struggle to get that. it's really surpassed that. even with the 50% stake in the economists the london bridge office which is, of course a really valuable property asset, too. it looks like the amount they're willing to pay has really been more than people expected. and, of course actually it was nikkei itself that was come as something of a surprise. the german media group, of course -- >> and then the japanese nikkei swooped in at the last minute and said we're going to offer you a higher bid.
>> of course and came in with an all-cash offer which is hard to turn down for a company like pearson. and, of course bloomberg being interested and other groups too. >> all right, catherine, the group holding that press conference is starting right now. let's listen in to what they have to say. >> translator: and to your right, mr. hido tonomura senior managing director. and seated to the left mr. dieskai owakowa, who was in charge of negotiations. in the interest of time we would like to hold this press conference for an hour.
at the entrance we have placed a copy of the press release both in japanese a english. this has been released last night. and the process that led nikkei to acquire financial times is described on this press release. now, the chairman of the nikkei is going to give you an overview of the basic thoughts of nikkei acquiring financial times. thank you very much ladies and gentlemen, for taking your time out of your busy schedule to attend this press conference. it is, indeed a great pleasure for me, as chairman to be nouns the acquisition of financial times. yesterday, we have reached an agreement with pearson. the parent company of fm times group. to acquire financial times.
now, for nikkei to continue growth, i have always thought that we have to have global coverage as well as digital coverage and global coverage is something that i have come to emphasize in the management of nikkei in the past several years. ft and nikkei have long collaborated in terms of exchange of human resources and joined and collaborative editing of various articles. in facilitating communication with financial times, i have come to realize that the philosophy and values of financial time is exactly the same as ours so i have come to think that they are the best partner for us to go global. now, in the past several years, i have used every opportunity to
approach the top management of pearson that we are very interested in running financial times in the future. now, pearson had decided to sell their shares in financial times and had approached us for a possible acquisition. financial times has a history of 127 years and has won the great trust and confidence of subscribers throughout the world. not only europe but throughout the world. and there is a global trust, a financial trust, that financial times that has been developed under pearson for more than 50 years and we should not compromise brand value and we feel great responsibility to continue improving their brand. and, of course the trust of financial times is based on the fact that their reporting is of
very high quality, as evidenced by this very insightful coverage and also this is an indispensable media for the key individuals of various countries in the world not only in the financial sector, but in various financial circles. now, the creedo of financial times is without fear and without favor. so do not be fearful of anything and do not play up to the specific segment of the leadership is the creedo of financial times. and i believe that the value of financial times and nikkei is very similar. we have this creedo of fairness and impartial and with this value system that we can share, i am pretty sure that we can join hands and proceed hand in
hand. this makes me decide to go for the acquisition of financial times. now, the policy of the editorial department of financial times that is headed by mr. lionel barber is something that we wholeheartedly trust. and what is most important for a media is that the independent of the editorial rights should be insured. and so even after financial times comes under the umbrella of nikkei after we complete all the procedures for acquisition, the journalists and the employees of financial times should concentrate this effort to pursue high quality journalism and continue their work as they have used to up to now. i trust mr. john ceo and other members of the top management of financial times very much and
when i met him for the first time, he told me that the -- before being a manager of a company, he is a journalist. and he asked me that i have the same behavior and attitude. and so amongst the leaders and the employees, the financial times, there may be some concern that nikkei on asian media coming to acquire financial times may result in making financial times lose the partisan aspect of british media. but fd is going to be ft. it remains unchanged. i have already communicated fully to mr. litting that ft could become even much stronger as financial times as they used to be is important for nikkei as well. and the speed of global economic change is accelerating and
requirement of the subscribers for a timely report is getting much more demanding and so we should have this friendly rivalry between financial times and nikkei and become a true global media that covers both asia, europe and the united states. >> all right. this is the chairman of the nikkei addressing the press on the opportunity in the ft and why the nikkei is buying the ft group. the chairman saying to grow we need global and digital coverage and that it is a great pleasure to announce this acquisition. the ft and the nikkei has the same values and the ft has won the great trouble of global subscribers. but perhaps the real roud route of this deal has to be the coverage. >> the credibility that the ft has a as a brand. ironically, that is something that some journalist has expressed some concerns.
for example, the ft has broken stories like the olympus scandal and the nikkei has been known as a slightly more established voice in japan. in fact, you even have the olympus whistleblower saying they weren't kind of as eager to look at that scandal as the ft were. so that is interesting that the chairman is really putting that emphasis on the continued editorial of the ft there. >> absolutely. i also have questions to what happens numbers for pearson. they have been in this consolidation mode. it will be interesting to see what happens. now, switching focus to china, china's factory activity dropping to a 15-month low in
july. this is the fifth consecutive month reading below 50 signaling the sector remains in contraction territory. new order and new export orders fell in june. shanghai stocks paring early gains to end the session in negative territory. let's talk more about this data with john zu greater china economy at hsbc. a pleasure to have you on the show. how are you doing? >> i'm good, thanks for having me. >> thank you very much. china manufacturing activity disappointing the street once again. when does the data start to surprise to the up side? >> i think you perhaps have to give it a bit of time. these stimulus always take some
months. the lag certainly variable. i suspect it will be in q3 oq4 before you see the data turning up as a sustained pace. >> do you expect the pboc to reduce the amount of cash to maintain its economic growth at 7% going forward? >> yes, we do. so we're expecting the pboc to cut rates again in q3 and also to cut the required reserve ratio again in the q3 and q4. so we think the pboc should be more aggressive in monetary policy easing but also we expect the government to really ramp up some of the infrastructure program and to provide a much more direct stimulus to domestic command. so both monetary policy and physical policy have roles to
play. >> clearly, the pboc needs to take a step back and we need to do something more given that this economic data continues to disappoint. >> i think it's not quite the time to go that unconventional. at the end of the day, they still have plenty of conventional flexibility. interest rates a long way from zero, so china is not in the kind of liquidity trap or the zero lower bound that many other central banks are in. so you have to remember unconventional effects, both the fed and the bank of england had several rounds of qe before you saw saw, really, any impact. it's worth the conventional
policies before you have a better idea of how to transmit into the economy before you have that option. >> i want to get your thoughts on the movement that we've been seeing in the chinese equity market. is the sell over? >> when i look at it from a macroeconomic perspective, my worry, i suppose, would be whether this has a big impact on the rest of the economy. and i have to say, in perspective, china stock market is still relatively small if you compare it to the size of china's economy. the stock market simply doesn't finance that much economic activity in china, unlike perhaps more advanced economies with much more developed stock market. so in my view i suppose the impact from my perspective is relatively small, both in terms
of impact on say, corporate finances or on house holes' welt. at the end of the day, the stock market still plays a relatively minor role in china's economy. >> when you have a company like apple reporting double digit sales in china, it doesn't seem like the volatility in the stock market at this point is impacting consumer demand. john we're going to leave it there. thank you so much for joining us. we're just getting some news here on an ipo. according to the dow jones, china railway signaling to list on the hong kong exchange on august 7th. the china railway signal to sell 1.5 billion shares in range from $6.30 to $8 dollars and hoping to raise $1.8 billion in this ipo. coming to a sen ma near you, jurassic world 2 gets a release date with leading man chris pratt returning to the screen.
data of course, not helping the bulls out there. in the meantime we are looking at the stoxx europe 600 index higher, just by 0.3%. as you can see on the chart, we are at session highs, despite eurozone pmis coming in weaker than expected. specifically in france and germany. let's take a look at how european markets are trading. too many things happening here in the uk. first that lawsuitly hawkish mpc meeting minutes and yesterday lackluster retail sales. that sent the pound lower. right know we are looking at the xetra dax, the german markets at 11,531. just up about 20 points. cac 40 seeing a gain of 20 points and the italian markets posting a gain of 123 points. but we are higher at this point on friday. a number of earnings out of france to bring you up to speed with. sales shares are at an all-time high after fourth half operating profit hit 473 million euros,
far above analyst expectations. both jpmorgan and barclay's have raised their price target on the stock, up right now, about 7.9%. the systems in the green after strong revenue in the second quarter. the results, which came in after the bell last night, prompted the french software services company to upgrade their 2015 revenue outlook and you can see the stock winner today up about 1.7%. switching focus to airlines air france klm announcing a 300 million cost savings program. this after europe's second biggest air network posted a net loss of 79 million euros in the second quarter. let's get more on this story with stephane pedrazzi live in paris. stephane. >> hi, seem maa. happy friday. the market consensus was more or less a break even for the airline in the second quarter. all the gains from lower has been fed by negative currency
effect. air france klm spends roughly 42% of its profit in dollars. a gift from 25% of its revenue in the u.s. currency so it's suffered from the weaker euro. it also suffered from the competition of airlines in europe and from the competition of gulf carriers on international level. all in all, air france klm wasn't profitable, but decided to implement some additional cost reduction measures this coming on top of the 2020 plan that the competitor is already working on. air france also asked the pilot of its french unit to accept the new productivity agreement by the end of september. the dutch pilot, the pilots of the dutch unit have already accepted the productivity agreement without an agreement said the ceo. severe measures will be to be implemented in october, including some cutbacks on routes on the long hold net worth. all in all, air france confirm
its full year financial target and because it has announced additional cost reduction measures. the stock is trading higher this morning despite the loss which was wider than expected. >> absolutely. one of the bright spots. but on the down side stephane down just about 0.1%. its first half operating profit missing expectations as the french food food giant dassa u suffered a hit on its baby food unit. >> it decided to sell its baby food unit in china, trying to restore the ground on its own. then it decided to pull the plug. the french group will get a new stake in dumex dairy.
dumex suffered a sharp decline in sales reputation over the last few years after a company nation scandal in china. this had a very strong impact on the reputation for them. dane thought it would restore the brand reputation on its own but eventually decided to sell it. danone consumed 4% to 5% organic growth target for this year and believes the price of raw materials, which is very important for danone will see a limited drop this year. back to you. >> thank you so much. shares in amazon soaring 17%. that is one move that we are watching today in after hours trade after the online retailer blew past second quarter earnings and revenue estimates. our own john forest has all the details. >> amazon delivered blow out
earning results for the quarter. on the top line revenue came in nearly $1 billion higher than analysts expected in the consumus at $23.2 billion. and then there was a profit nearly a half a billion dollars worth of operating profit from amazon compared to a $15 million loss in the same period a year ago. so what was the cause for that? mainly it was the core commerce business. north america performed well. growth was strong there, particularly in electronics in general merchandise. also the international business which had been troubled lately turned in growth. but one stand out area this a lot of investors were looking at was amazon web services. that's the cloud business where amazon has been a pioneer and a leader and that business in particular turned in strong operating profit results. not only was revenue for that business up some 81% year over year to nearly $2 billion but operating profit was at about
21% up from around 8% a year ago. so despite the fact that this cloud business is supposed to be commoditized, it's supposed to be dog eat dog, microsoft is trying to chase down amazon in this area not only is revenue growing at a strong clip but profitability growing, as well. that was enough before the call started in the afternoon for amazon shares to get up some 18%. we'll, of course have to see how they trade from here. for cnbc i'm jon fortt. >> after a disappointing set of numbers from the likes of apple, microsoft, amazon really killing it, up about 17%. that will be one of the stk e tech stocks to watch today. again, its cloud revenue coming in higher than expectations. still to come on the show as commodity prices continue to slide, our next guest says there may be reason for hope. we'll discuss right after this break.
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lonmin says it will ax 6,000 jobs. angelo american digs deep despite a $3 billion loss. >> we've actually hit what we set for ourselves in terms of cash flow and process for sales at this point in time. so that's helped us continue to maintain the dividend. >> investors share more cost cutting at air france klm. shares take off appear after europe's second largest carrier despite slipping deeper into the red. amazon delivers for investors. the online retailer surprises wall street with a $92 million profit in the second quarter as its bet on the cloud continues to pay off. shares skyrocket after hours. now, china's factory activity dropped to a 15-month low in july below analyst expectations. this is a fifth consecutive
month of reading below 50 signaling the sector remains in contraction territory. both new orders and new export orders fell after expanding in june. let's get a look at how markets reacted with sri jegarajah who is live in asia. hey, sri. >> hi seema. the markets are slipping in the early session because before the release of this china pmi data because of the stumbling that we saw on wall street and the european markets overnight relate to the earnings disappointment. and that mood was compounded by the china data. 15 months a low for the pmi number. the private forecasters. also, when you dig a little deeper, the indicators the subcomponent of output and new export orders they were also pretty lousy, as well. all in all, this is a pretty negative print for the markets and it really seemed to be, as you pointed out, the catalyst for reversal in the shanghai composite and snapping six straight sessions of gains for
the market ending down by 1.3%. the caveat here is that some commentators are saying that perhaps the pmi numbers may have been distorted by the equity slide that we saw that began in june and persisted into july. so bear that in mind it's important to see if we have a continuation of this negativity in the future data sets. anyway broadly negative session for asian equities. i wanted to talk about currencies very very briefly. we're seeing that resurgent dollar. we know that is going to normalize interest rates and we are seeing some heavy asian currency depreciation. especially in the indonesian rupee at six year lows against the dollar as well. back to you now, seema. >> thank you so much. some breaking news in the uk uk mortgage approvals for home purchases coming in at 44,448 in the month of june.
that is the highest since march of 2014. so some better than expected data on the housing front. this, of course after that lackluster retail sales number taking some luster out of the pound yesterday. but right now, yes, we continue to see the sterling move lower against the u.s. dollar at 1.5481. angelo american has announced it will cut 6,000 jobs after posting a 36% drop. the global mining company ames to cut capital expenditure by up to $1 billion by the end of 2015 as it warns that metal markets will get tougher in the second half of this year. ceo mark kustani spoke to cnbc earlier about how angelo american plans to execute from this point on. >> it's been a tough six months but the good news is we're improving productivity and efficiencies. we were just out capital spends. we just received proceeds from our sale of the tarmac assets.
so we're actually ahead of the targets we set ourselves in terms of cash flow and proceedings from sales at this point in time. so that's helped us continue to maintain the dividend and we're going to have to do a lot more work in the next six months to get going forward in a tough market. so we have to be a better company come through the other side of these tough conditions that we see. >> to me, the risk today seems around the job front and we've heard from one of your rivals lonmin, all this comes after wage negotiations with the south african unions where you've warded off some of the opposition. we know there's been very fierce strike action by workers in the past and they negotiated a pay rise. now the reaction from the big companies, including yours, is to take jobs out of the system. how many opposition will you be facing on this to remove 6,000 jobs and how many of them will go from south africa? >> look it's a very tough environment. we've reduced the numbers in
south africa by more than 10,000 already. we've still got a long way to go. what we try and do is do it in the most sensitive way we can. we engage our stakeholders, including the governments and try and do it in the right way. but in the end, we have to make sure that we're competitive and that's the only way companies will survive and grow stronger in the longer term. so we have to take the long-term view, but we have to do it the right way. >> you've got all of these new economy characters popping out of the woodwork saying it's changing, the structure is changing, less reliant on manufactured goods. that's going to have an impact on longer term demand for commodities. you've probably heard this kind of chat before. do you think there's anything in it? >> well i think there is and i think that's also the case with china. but what we have seen over -- across the world is you have significant increases and will have significant increases in demand for infrastructure type projects across africa india, and other parts of the world
that also need to grow. so i think you certainly are seeing some significant changes in the u.s. obviously. china in particular. but then the rest of the world looking to catch up in terms of standard of living. that's where the infrastructure expenditure will go. the one thing i would say today, and many of the major commentators are starting to pick this up there has been -- there is no better time for governments, forestry to start reinvesting in infrastructure that's deteriorating. of course, commodities have never been cheaper and certainly the cost of money has never been cheaper in terms of investing in the long-term future of our kids. >> the commodity route is also taking its toll on platinum producer lonmin. the south african company is planning to close or mark off several of its shafts affecting some 6,000 jobs. lonmin says its business is loss making at current metal prices. the price of platinum is currently at a 6 1/2 year low. taking a look at other
commodities, it's not a pretty picture so far this week. you've seen gold hitting new lows and platinum at 982.8. there's a look at brent crude, just below $56 a barrel. wti crude, the one that we've been watching, below $50 a barrel at $48.64. a bit of a bounce today by 19 cents, but nothing compared to what we saw two weeks back when it was above 60. gold once again, down 0.6%. let's discuss more the outlook for commodities, david wilson from citi here to tell us exactly where gold prices are headed. that's what we want to know, david. there are so many factors at this point that seem to be working against gold fed policy, the lack of inflation and the stronger dollar. which of these do you think is the most important factor in driving gold prices going forward? >> i think it's a combination of those plus the removal of the last leg of the risk cushion that had been -- the greek situation, that was removed
relatively recently. you also have the pboc announcing its gold holdings that were some 2,000 tons less than the market thought. suddenly the markets looked to china with extra tons of gold sitting around in china, probably not in -- it's that combination of factors that push gold down. but i think the key change is the removal of any let's say risk cushion that had been there in terms of the situation in europe. >> the chinese, as you pointed out, are not buying as much gold as the market was expecting. it's indians show they're scaling back on their gold imports, will that be a bear sign for gold? >> definitely. we are coming into the wedding season, so nationally, you would expect to see some improvement in demand over the next couple of months. so, yes, i mean if we don't see that that seasonal pick up i think you have to argue that gold has to go on the down side
in this short-term yes. >> give us some price targets here. we're seeing gold hover around 1100 i believe. is this just a temporary blip or the start of a long-term secular down trend? >> i think we see more of a down trend, particularly over the next couple of months particularly ahead of the market expectation. i think we can easily see prices over the next two months reaching below $1,000 grounds. >> in the meantime as we discuss whether janet yellen will raise rates in september, that will have a massive influence on the gold trade. do we continue to see these big swings in the gold price? is the volatility the new normal? >> i think for the time being, yes. until that rate hike is -- you know, hits the market and is absorbed and then the market begins to focus on other issues i think ahead of the timing of the rate hike, yes, we see a lot of volatility. >> platinum, that trading at a multi year low. south africa, 90% of its production comes from that
region. but they don't seem to be scaling back on production. >> no it's interesting, you have the new story on lonmin announcing some cutting its capacity. and that's the first we've seen announced despite the long downward trend in prices since july of last year. and i think -- i mean what's been disappointing is chinese imports in the first five months of the year were massively disappointing, partly due to overstocking in the first half of last year. and this combination with a lack of, what a very strong rebound in mind production last year have undermined towards platinum. >> so are fundamentals along enough to drive commodity prices lower or at the end of the day, is it just a stronger dollar? >> when you look at platinum the fundamentals are weak and the dollar is clearly adding to that negative sentiment. >> taking a step back though david, what message can equity traders extrapolate from this fire sale that we're seeing in commodities? we're looking at brent crude
wti crude, as we just point out, platinum, copper at a six-year low. what do equity traders, what can they grasp from this? >> i think the interesting thing, if you start to look at fundamental positioning in commodities, we've seen the move net short. we could see any short-term dollar weakness, which we saw on tuesday a slight rebound in some commodities on the back and a slightly more weaker dollar move. obviously, we're seeing companies cutting costs significantly, so that in itself should help companies performance. i think, though when you look at commodities such as copper we are already seeing supplies struggling because of falling oil graves. most of the big miners reported production growth in q1. it's all coming out in q2.
so if i did, i see some of the significant copper bears talking about a supply surge next year. it's not coming. there is no supply surge on the mining side. we can see this in terms of treatment and refining charges which is getting completely crushed now. so i think a lot of people forget with copper that in the last 15 years, it's been typically a supply constrained market and that's where we're heading at the moment. >> absolutely keeping traders at the edge of their seats. david, thank you so much for joining us david wilson director of meltses research and strategy at citi. moving on caterpillar shares in focus ending the session lower after the heavy equipment giant cut its full year sales guide. despite meeting second quarter forecasts, ceo doug objectorman told cnbc the down turn in the xotty life cycle is account xwaing revenues. >> you have to pose a 90-year company and i am absolutely convinced at some point,
probably not in the too distant future, the $100 shares will look cheap and you look at this as a long-term basis. i don't want a lot of cash on our balance sheet in the short-term. >> we might have a twin. listen up nasa has revealed it has discovered 500 new planets and one of them is a lot like mother earth. kepler 452b orbits a star which is of the same class to our own and is at a similar distance meaning it might have the right conditions for human life. don't plan a trip though. the world is 1,400 light years away. how about that? back to this world right here, and maybe the number one threat to the planet but we'll tell you how you can benefit from it. that's coming up later on the show. more and more, data is visual. in fact, the number of mris has increased
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scrutinize these products. meanwhile, biogens in the second quarter earnings come on the back of disappointing results for its new alzheimer's treatment as the company's top selling production missed estimates last quarter. our next guest is a chief executive of a biotech firm which develops medical devices used to diagnose blood diseases. we are now joined by yossi polak. a pleasure to have ow this show. i've been so interested in watching the collaboration between health care professionals. how are using computer algorithms to make blood testing more efficient? >> well we were very surprised to learn that over half a billion -- conducked every year and the majority of which are still conducted by technologies of this 150-year-old.
now, we felt -- managed to bring blood diagnostics to the computer age. we came up with a computer baseded approach that is able to conduct those tests in just two minutes examine in a completely automated manner. >> where are you seeing the highest usage of your devices? is it in countries like india where the rate of malaria is high? >> soma layer ya is still a severe problems with over 200 million of new cases every year and over half a million deaths every year. and we're seeing a big part of this problem is in diagnostics. we already selling in africa and in india and we face a lot of success, but now we see the first application and we intend
to as additional applications to this technology and started with complete blood count which i believe makes this product very -- with a lot of value both to the xeting company sies to which point don't care. >> how important is early diagnosis of a disease in finding a viable treatment, yossi? >> so with malaria, two species. one of them without proper treatment, a person would die in just 48 hours. so that the world health organization twice the number of tests conducted in the world every year, which is half a billion should be conducted with better treatment in containing malaria.
>> it looks like we just lost the feed video and we'll touch back with him once we restore a connection. do we have it? all right. let's bring yossi back into the conversation. taushg talk to us about where you are seeing demand. >> the question you just asked? >> yeah, go ahead, please, continue. >> okay. so early diagnosis of malaria is critical because one species of malaria, if you do not treat knit time in just 48 hours, a person could die. so the world health organization estimates that only half the number of malaria are needed to treat malaria well are conducted in reality. which is half a billion in reality. our tenl is able to bring better
blood diagnostics to those rural places and in this way help save a lot of lives. >> yossi, you're one of the fast growing companies in israel. in the biotech space, would you ever sell diagnostics to one of the largerer u.s. companies? >> so it is hard to tell at this point, but assuming that it will continue to gain success and the markets will continue to be happy with it we definitely need to partner with a strategic organization in order to serve the market well and to provide all the demands in the market. which there will lead to acquisition or not is yet to be understood. >> if you have any news be sure
to bring it to us here on cnbc. now, switching to earnings sabadell shares are lower today on the back of weaker return on equity. this despite the spanishlander posting a 54% in net profit. second quarter net profit fell smort of analyst expectations as the german company contends. down about 3%. heavy losses for aggreko is 14% lower. full year earnings missed expectations on the back of oil and gas market weakness moving in the opposite direction, though, is vodafone. the uk operator on the back of bumper emerging market momentum and the recovery in europe. joining us now to discuss is catherine boyle here on set. >> thank you very much seema. i think it's that recovery in the key western european markets
which is why you're seeing such a return to form for vodafone today and people are getting into stock today. that's the unexpected element to this result. i think a lot of analysts have been expecting that strong emerging market growth just not quite the strength of the recovery in some of these western european markets. having said that you know this is not a runway success story by any means. driven partly by the hefty price they paid for buying some assets there this year. and, of course a very aggressive competition there from deutsche telekom, too. if the global talks progress it's something that i think -- >> that's the bigger question. that's what investors i speak to are concerned about.
what kind of collaboration can we expect? >> the company was very, very tight lipped about that today. but what we have heard in the past few months from liberty global is that he sees germany, the uk and netherlands, which is key. the the. >> we've been seeing consolidation in general in the telecom spaces. catherine, thank you so much. at&t's second quarter earnings beat forecasts. the average revenue peruser topped estimates. reports say the ftc has voted to approve at&t's $48 billion purchase of directv which will create the largest pay tv provider. that vote will be announced later today. at&t rising about 2% in after hours. shares of the company trading
higher by around 3.5%. wake up everyone. starbucks shares hitting an all-time high in after hours trade following the company's future earnings report. dom breaks down the details. >> starbucks stock is as hot as its coffee. the world's biggest coffee shot operator reported earnings of 42 cents a share which is a penny better than average estimates. revenues came in at $4.88 billion. which narrowly topped analyst estimates. total sales at stores open at least a year gained 7%. that's about a percent better than average analyst estimates. and to put a little whip cream on top, the company said it's going to buy back an additional 50 million shares worth of stock in its existing stock buyback program. during the conference call howard schultz soak about a number of different things including how currency fluctuations would continue to be a considerable headwind and that there's been a lot of initial success with its mobile
ordering and pay system at its pilot express store format in new york city. there's no doubt the stock has been seeing a lot of positive momentum. up 38% just so far this year. for now, that up trend continues. but some traders, of course, are wondering how long can it last without some kind of a pause? but starbucks, certainly a positive story on the heels of earnings. back to you guys. >> starbucks is not the only big mover after hours. amazon, as well. and find out how many jeff bezos made on the back of a the internet giant. that's come up. are you moving forward fast enough? everywhere you look, it strategy is now business strategy. and a partnership with hp can help you accelerate down a path created by people, technology and ideas. to move your company from what it is now...
welcome to the second hour of "worldwide exchange." here are your headlines from around the world. amazon surprises wall street with a $92 million profit in the second quarter as its bet on the cloud continues to pay off. shares skyrocket about 17% after hours. china knocks the wind out of asian markets, though after factory activity hits a 15-month low with the pmi data suggesting a broad slow youn. shares snap its six-day winning streak to end the session lower.
wake up and smell the earnings. starbucks third quarter profit jumps 32%. and a gunman kills two and injuries nine others at a movie theater in louisiana. police say the the man fired randomly before turning the gun on himself. you are watching "worldwide exchange." we saw all major indexes yesterday falling lower despite u.s. economic data. it will be interesting to see how and where traders take their queues from. a negative session overnight in asia. stocks in europe are higher. u.s. futures higher by around 51 points. nasdaq up 42 and the s&p 5008.
nasdaq helped by that massive move we're seeing in amazon. despite down beat economic data germany at this point investors seem to be shrugling off that data. also better-than-expected earnings is keeping investors interested here. xetra dax seeing a gain of around 14 points. it was a down day for european stocks. french markets at r5,114 up around 28 points. we're seeing the uk index slightly higher by around 28 points. what about commodities? well, of course it has been a stronger dollar that has been pressuring commodity prices. we've been seeing the euro trading in a narrow range this week.
across the eurozone, it is trading down 0.4% against the u.s. dollar. i also want to point out the u.s. dollar against the japanese yen. 123.95 the u.s. dollar versus the yen. we saw the pound reverse against the u.s. dollar and it continues its down trend down by 0.15%. asia, a big focus for us. china's factory activity dropping to a 15-month low in july. signaling the sector does remain in contraction territory, both new orders and new export orders fell after expanding in june. let's get out to sri who is live in singapore. sri, it's getting exhausting here. the data continues to surprise to the downside.
>> that's right. whichever way you slice and dice these numbers, especially when you look at the self-components, the other indicators, it made for a pretty dire reading in terms of the sluggishness that is still persisting in the chinese economy. so the headliner was the main take away here. 15-month low for factory activity in the month of july. the caveat here is that i think you have to be careful with these numbers, as always. they may have been distorted by the collapse in equity prices over the course of june and well into july. so bear that in mind when you look at the other data sets. but here and now, the mood was down beat before the data hit from china because of the earnings disappointments in europe and the u.s. thern the china data really compounded. after china markets proffered,
up to today we were rising for the sixth straight session. that winning streak has been snapped by the data. that seemed the be the catalyst to take profits on the market down by 1.3% for the shanghai composite. you see a lot of action there in the currency markets. especially with the indonesian rupee against the u.s. dollar. this is important because the last time that we saw this -- excuse me, these markets are getting me choked up. in the last time we saw these levels it was back at the time of the asian financial crisis. so quite ominous when you look at the trajectory in the downside for the indonesian rupee. a lot of people are telling me that indonesia is probably the most vulnerable as we get nearer the fed normalization. so expect to see more despreshgz for the currency and possibility for the capital outflows for
when the fed does hike rates. >> i would think the drop in oil prices is very good for these companies like indonesia and india. that's something that we will continue to watch. and second going forward, if you have allergies, let me know. you can get zyrtec, claritin, these are all great things to use. >> we're a walking pharmacy at home. we've all giet sinusitis. >> i'm just giving you a hard time. >> happy friday sri. >> that's all right. anytime. have a nice weekend whether it comes. >> all right. here we go. shares in amazon soaring about 17% in after hours trade after the online retailer blew past second quarter earnings. jon fortt has all the details. >> amazon delivered blow out earnings results for the quarter. for amazon that means a couple of things. revenue came in nearly $1 billion higher than analysts
expected in the consess yun at 23.2 billion. and then there was a profit nearly $500 million worth of profit compared to a $15 million loss in the same period a year ago. so what was the cause of that? north america performed well. growth was strong there, particularly in electronics in general merchandise. also, the international business which has been troubled lately turned in growth. but one stand out area that a lot of investors were looking at was amazon peb surfaces. that's the cloud business where amazon has been a cloud leader and a bionear. that business turned in strong operating revenue results. operating profit was at about 21% up from around 8% a year ago. so despite the fact that this cloud business is supposed to be
commoditized, it's supposed to be dog eat dog, microsoft is trying to chase down amazon in this area. not only is revenue growing at a strong clip but profitability growing, as well. that was enough before the call started in the afternoon for amazon shares to be bid up some 18%. we'll, of course have to see how they trade from here. for cnbc i'm jon fortt. amazon stock surgeon was welcome news for shareholders and founder jeff bezos. the ceo earned almost $7 billion after the bell. wow, he is doing just fine over there. the company leaped over walmart in terms of market cap. amazon is worth $244 billion. check out the difference in employment between america's two largest retailers. amazon employs just over 154,000 while walmart's work fort is 2.2 million strong. moving on to another big
mover, starbucks second quarter proves rising 22% beating estimates as new food drink and technology attracted more customers. starbucks authorized a stock buyback program. shares riding about 4% in after hours trade. so who names to watch and one more to watch, visa as u.s. card holders spent more. the company is seeing double digit growth in payment volume. visa says it's in talk toes reunite with visa europe. after hour trade, visa was up about 5%. you can see here in europe visa is up about 6.5%. earnings, a big focus for invery fasters. still to come on "worldwide exchange," how has the greenback impacted earnings so far? we navigate the headwinds, next.
growth in visit volume. surgeoning to a 22% rise in third quarter profit. from american express to coca-cola, fx headwinds. all this week, we've been speaking to ceos and cfos about the currency xwangt on their company's results. take a listen to what some of them had to say. >> i think if you look at our results, you have to look at them on a contact currency basis. and they were very good in the second quarter. so our sales were up 6% cooperating income was up 6% on a constant surnt currency basis and we were able to show margin improvement of about 30 basis points. >> the reality is that some of the drops you've seen in commodity prices many of the commodities are in dollars and we have to look at the currencies. when the currencies weaken for example, then you have to offset
at this pricing. so it's not necessarily that the lower commodity prices go to the benefit of the consumer. you have to look at it by company. and what you will see is that taking the effects of the currency and the lower prices the overall effect for us is -- >> for syngenta in the first half the currency master blue our top line 1.1 billion backward and we're breezed that we were able to offset all of that currency impact say, for $50 million we're contained for that number on the back of really strong sales performance. >> so how much longer would the stronger dollar be a concern for some of these big multi nationals? david pierce is joining me here in stooed studio. a pleasure to have you on the show. >> thank you for having me. >> absolutely. does the dollar strengthen from here? >> yeah i think it does. we're looking for the dollar to strengthen throughout the year.
>> is that based on fell policy or a combination of something else? >>. >> everyone is expecting to have an interest rate hike in the u.s. but the economy is doing well. despite what you have heard in the clip that you just played about a number of companies whose earnings are down because of the stopping dollar despite that the economy is relatively strong in the u.s. add to that the uncertainty we're seeing around the world right now, the u.s. dollar is still the go-to currency for people that are looking for a safe haven for their money. >> you think it's a better safe haven bet than the japanese yen? >> yeah it is. not that the japanese yen is a horrible currency or japan is not strong but just the sheer size of the u.s. economy and the share size of the investment market in the united states versus what's available in japan is stun interesting different.
if everybody put the samt amount of money in the japanese yen versus the u.s. dollar it would balance japan. >> absolutely. >> japan is really happy with their currency right now. it stimulates their economic growth. but they're -- you know at the end of the day, they're an export country. >> and that's why you've been seeing a rise in tourism. speaking of europe i want to talk about greece taking another step towards a bailout. you think that would strengthen the euro bull trade, but that doesn't seem the be the case. >> yeah. greece is a continuing problem for the euro. and it is -- the problem is people rpt really sure what they're going to get with greece. even if we go and they're able to get an $88 billion bailout and are able to get the money they need to continue to grow people are just not convinced that the underlying economy in
greece is going to be able to support that they're going the be able to pay those loeps back and that the people of greece are going to be willing to step up to the plate and pay the taxes. >> so do you think a greek exit is being priced into the euro dollar trade? >> i think that people are looking at a possible greek exit but i think the people are still uncertain about where the euro is going to end up. a year from now, are we going to see other countries that are going to want to look at possibly getting out? there is no certainty in the market right now that the euro is there. it's going to be there forever and it will never change. i think there is still a lot of uncertainty around the euro. then there's xwand with that there's a lot of uncertainty about what's going on in the economy, as well. it's not just the euro. it is the actual underlying economy. if you look at the economy of greece, they're not adding to the strength of the euro. if you look at the economy of
spain, they're not adding to the economy of the euro. they're dragging the euro down. it's about the economies that back that up. >> absolutely. economic and mrig of course both factors being put into place here when looking at the euro lsh sdorl trade. china trade, manufacturing once again coming in lower than expected. how does that change your outlook on the aussie dollar going forward? >> the aussie dollar has always been known as a commodity based currency because they produce so much commodity, gold silver, different meltses and stuff in australia and they also are a huge supplier to china. a lot of their -- you know a lot of their animal products and things like that all are shipped to china because there's a lot of demand and these produce a lot of things like that. with what's going on in the chinese economy, the stock
market having huge swings over the last few weeks, that really hurts the australian economy. and when there is not money flowing into australia, that's why we've seen the australian dollar weaken so significantly over the last year. and i think that is probably going to continue. weak demand out of china, i think that's going to continue to weaken the aussie -- dollar. >> yeah. definitely not a good day for the aussie dollar. we're going to leave tlit. david pierce director of gps kachtal markets. have a great friday. >> thank you. and a look at some of the other top stories at this hour. police say three people are dead and several injured after a man opened fire in a movie theater in louisiana thursday night. authorities say the man fired randomly before turning the gun on himself. louisiana governor bobby indal is praising two teachers for their actions. one jumped in front of another person saving their life while the other managed to pull a fire alarm.
moving on the incident comes as u.s. president barack obama begins a trip to africa where he will visit his father's homeland of kenya as well as ethiopia where he will address the african union. ahead of the trip the president conducted an interview with the bb saying in which he said the lack of better gun laws were his source of continued frustration. still to come on "worldwide exchange," luxury is in the limelight as m&a heats up. our next ges guest says fashion will be the next to ride the wave. stay tuned for more.
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seven out of ten power outages in the us are caused by weather. but utilities can now predict where the power will go out, within a few city blocks. working with ibm they're combining micro weather forecasts with detailed data from local sensors. to predict where outages are likely to occur. and send crews exactly where they're needed, when they're needed. ibm analytics from the internet of things
is making energy smarter every day. if luxury brands want to gain market sharts they have to get the attention of the henrys. that's according to analysts it's an acronym. bernsteins says henry spend up to four times as much as their wealthy counterparts. how can retailers cash in on them? we'll speak to the ceo of maxus fashion.com. let's talk about the demand we're seeing for luxury retail. how do they target the younger audience more? is it through technology? >> it's through the access of the product. i think there's even more access
than any other time in terms of luxury on the internet. you can see it's quite impressive. on the internet when you think of it it's just 5% from the luxury market. >> okay. >> that's going to grow some 14% in 2019. so the internet the literally very much -- it's going to help clearly, drive the growth. >> how is luxury impacting the landscape? is it just e-commerce or are there other ways? >> look the device there's a mobile device maturation. for luxury customers, three out of four luxury customers have a smartphone. half have a tablet. so just on the device in itself it's very accessible. the people are extremely mobile. they're very global. and they're on the internet every second of the day. so this is why the internet
opportunity in the luxury market is going very fast. we were operating with just stores six years ago. 100% of our business with stores. now we do 85% of our business online. >> the wider luxury market 222 billion euro webs but the most overlooked detail is the penetration of online sales, which is below 10%. >> yeah. so today it is 5.5%. it's an amazing opportunity. but what the company is also saying is that the internet situation is going to go from 5.5% to 13.7% in 2019. so one of the highest growth maturation out of any sector today. >> but as these luxury players try to play a stronger role in
technology, you can see a lot in this space. do you see m&a continuing to be a bigger part of the luxury retail story? >> i think the buyers entry are high. i think luxury brands are very careful in the way they distribute the product. at matchesfashion.com, we are in a good place because we have those strong partnerships with brands. literally, there's very very few players. so it makes sense that it's complete at one point. >> which luxury brand does the best at targeting the younger, millennial audience? i think it's a hard question, but just curious. >> look i think every brand understands now the opportunity of digital more than ever. i think it's still times a bit hard for them to literally change the culture within a brand to understand the customer is already there on the internet
and that internet obviously helps enlarge the demographic in terms of customer profile. so we literally see there's an improvement in the brand's behavior into reaching those kind of customers. and they use the internet they use people like us literally, to do that. >> a pleasure speaking to you about the health of this industry and the intersection with technology. very interesting. coming up on "worldwide exchange," earth might not be known as a lonely planet for much longer. we explain why, after this break. "worldwide exchange," we're back in two minutes.
you're watching "worldwide exchange" and i'm seema mody. here are your headlines from around the world. amazon delivers for investors. the online retailer surprises wall street with a $92 million profit in the second quarter as it betts on the cloud continues to pay off. shares skyrocket after hours. china knocks the wind out of asian markets after factory activity hits a 15-month low with the pmi data suggesting a broad slowdown. shares in shanghai snap a six-day winning streak to end the session lower. wake up and smell the earnings starbucks jumps 22% as
customer traffic accelerates. the coffee chain authorizing a stock buyback program. and some sad news, a gunman killed two and injuries nine others at a movie theater in louisiana. police say the man fired randomly before turning the gunon himself. slightly better than expected u.s. jobless claims seem be keeping a floor under the u.s. treasury yield. at this point, though premarket trade suggesting a higher open after the stocks closed lower yesterday. keep an eye on the nasdaq. it's been a volatile couple of days for the tech-index after disappointing earnings from apple apple, yahoo! and microsoft weighing on the index. today we can see the nasdaq outperformance with amazon
seeing a strong beat up 17% in premarket trade. what does this mean for european markets? earnings earn way. a lot of the big multi nationals benefiting from the weaker euro. pmi manufacturing data out of france germany, disapoipth to the down side. in the last half an hour we've been looking at the german markets. just in fact last half an hour they said dipping into negative territory. french markets, up 14 points and the ftse 100 at 6,664, up just about 10 points. morning approvals in the uk at a 14-month high. this after lackluster sales yet that, of course, pressuring the pound. a quick look at commodities. wti crude still bro the $50 mark. down in today's session by around 45 cents. we're looking at spot gold below
1100, down just about 0.6%. spot gold now on track for a weekly loss of more than 4%. in fact at this level, 1,083, this is at a 5.5 year low for the shiny, yellow metal. disappointing data out of china, not helping the copper trade. commodities taking a toll on uk miners. angelo america has announced it will cut 6,000 jobs after posting a 36% drop in first half underlying profit. cnbc spoke to the ceo earlier. we asked him why the company had maintained its dividend. >> it's been a tough six months but the good news is we've been able to take costs out. we're improving productivities and efficiencies. we've reduced our capital depends. we've just received proceeds from our sale of the first tarmac assets. so we're actually ahead of the targets we've set ourselves in terms of cash flow and pros
proceedings from sales at this point in time. so that helps us continue to maintain the dividend and we're going to have to do a lot more work in the next six months. we've just got a be a better company coming through the other side of the tough conditions that we see. california remains in the throws of a historic drought despite one of the wettest julys on record. san diego reported 1.7 inches of rain over the weekend. more rain that over the past 77 julys combined. a report by bank of america merrill lynch says the lack of water is the number one risk facing the planet. however, as with any crisis they also see opportunity. let's bring in beishe ma from bank of america merrill lynch. great to have you on this show. is it true that investors are seeing opportunity in this drought? >> yeah absolutely. california is a harbinger for
things for the rest of the globe. california is currently in the fourth year of drought with the last three years being the three driest years in recorded history, just in terms of surface water. the nevada snowpack is the largest water reservoir for california on average providing roughly 30% of california's water supply. as of april of this year it was at only 5% of its historical averages versus since 1970 it's down 15%. and we expect that to go down even more by up to 48% to 63% by the end of the ser century. if you look at groundwater level, for instance it's already dropped by 50 to 100 feet in certain areas of the state. >> so where exactly are investors looking for opportunity? is it in water treatment, water mrth, infrastructure or is it just basic supply? >> we really have to tackle it at all different angles. some of the lowest hanging fruit will be on water management. in terms of water metering there's still 219,000 households in california that are still currently unmetered.
if you install water meters and institute more incentives in toerchls using less water, you can achieve up to 15% to 20% of water consumption reductions within that. heading to water treatment, for instance globally speaking only 2.4% of water is being treated and we used currently. for california, that number stands at roughly 13%, but we need to be more moving towards practices such as israel for instance which are at 75%. >> what are some your top picks in the sector? >> we still need 11.7 been global le between now and 2030. california, between 2008 and 2011 has been spending $30 billion every single year. we need to look at infrastructure companies supposed to this space as well as water treatment companies building up these salnation
plans. >> melse, for instance which owns companies like all star we spoke about how there is lack of water that's being metered out there right now. currently, california has mandated 100% metering by the year 2020. so we expect that to be increasing. >> what about innovation? i would think california has brought a lot of innovative minds to help alleviate this problem. >> absolutely. globally speaking, 90% of all energy reduction is water intensive. on the flip side of that, water is a huge consumer of electricity. in a state like california water water, there is a huge upside there with regard to renewables. for instance, just in terms of
penetration, california is only at 10% penetration for renewables. we can see some great potential there. the really is the home of the solar installation which means they're getting six hours of full sunlight every single day. >> very interesting. california now in its fourth straight year of a drought. there is a business angle for every story out there. thanks for bringing it to us. now, you may have a twin. nasa has revealed it has discovered 500 new planets and one of them is a lot like earth. yeah, that's right. kepler 4052b orbits a star which is of the same class to our very own and is at a similar distance, meaning it might have the right conditions for life. but don't plan a trip there just yet. the world is 1,400 light years away. and it is official. a jurassic world sequel is in
the works, set to hit theaters in june 2008. the follow-up will see chris pratt return. the film had roaring success at the becomes office becoming the third largest grassing movie of all time. the reboot of the 1993 classic raked in $1.5 billion worldwide, one of the big outperforms this year. now let's race into full gear here. ferrari has filed for an ipo in new york. phil lebeau has all the details on what the company will have to do the impress wall street. >> well the paperwork for a public offering of the luxury automaker. we expect the flow to happen sometime after mid october and it will be listed on the new york stock exchange. we don't know the exact number of shares that will be sold but it will be about 10% of ferrari
raising an estimated $5 billion for fee at -- vice ler. about 10% will be those who get a piece of the company in the i ipo. another 10% will be considered by the son of founder enzo ferrari and the remaining 80% will be to fee at chrysler shareholders. we expect the separation of ferrari and fee at criesiat chrysler to happen sometime in 2018. meanwhile, mitsubishi motors is planning to end its production of cars in the u.s. following weakening of sales numbers. according to nikkei sources, the company will close its illinois plant which has about 1200 workers. mitsubishi ended its european operations in 2012. shares in tokyo ending the session over .5% lower. the company will report q1 earnings next week. still to come on "worldwide exchange," jeff bezos must be
channels they subscribe to. the google division says more than half its views come from mobile devices and mobile revenue has doubled year over year. taking a look at shares of google giving a big boost to the up side after, beating earnings on friday. stock sup 0.5% in europe. cnbc's julia boorstin sat down with utube's dr eo at the an ideal bid conconference. you can see that interview today on cnbc's quack alley at 11:00 a.m. eastern. investors are getting into a frenzy at amazon sending shares surging in after hours thursday as the company posted a surprise second quarter profit. let's get the full details from landon dowdy who is live at venezuela headquarters. it is that cloud revenue investors are dheering here. >> amazon had long been known for big losses as the company put money into expansion and new products. but the retail giant reported second quarter profit at 19 cents a share.
analysts had been expected a 14% loss. revenue beat forecast boosted by more than 80% increase in amazon web services which includes cloud computing, accounting for 80% of the total revenue. >> we continue to see really strong usage growth that's outpacing the revenue growth of 81%, obviously. we're excited about it from a distribution of customers, it is a global business. we have regions spread throughout the world. we have 11 regions at this point and have announced plans to launch a region in india in the future. >> amazon says its prime services athing new members at a rate it's never seen before. it is growth faster outside the u.s. thanks in part to the recent special one day prime day event, amazon prime which raufrs unlimited shipping. the company is upbeat about the
future for the third quarter above the after legion estimates. today in europe it's up about 18%. that increase adding nearly $40 billion to amazon's market cap to $2 6/6 billion pushing it past walmart to become the most valuable u.s. retailer and making it bigger than ge & jpmorgan. amazon's move if it holds up today, will make founder and ceo jeff bezos, as well he gained nearly $7 billion on paper on that spike. that puts his estimated net worth at $53 billion, making him the world's fifth richest person. >> and bezos is stealing the spot of larry ellison. >> have a great friday. thanks so much. >> thanks. you, too. comcast reportedly in early
talks with several new media companies for potential deals. comcast nbc universal unit held talks and has discussed raising its existing 14% stake in box media. shifting focus to a consumer story here starbucks shares shutting an all-time high following the company's q2 earnings report. dom has the details. >> starbucks says it's hot. the world's biggest coffee shot prater recorded earnings better than the share. revenues narrowly topped analyst estimates for 4.68 billion. total number of shares of stores open more than a year gained 6%. the company said it's going to buy back an additional 50 million worth of stock in its existing buyback program.
during the conference call howard schultz spoke about a number of different things including how currently fluctuates would continue to be a considerable headwind and that there's been a lot of initial success with its mobile ordering and pay system at its pilot source format in new york city. there is no doubt the stock has been seeing a lot of positive momentum, up an xwretive 38% so far this year. for now, it looks like that up trend continues. but some traders, of course, are warning how long can it last without some kind of a pause or fullback. but starbucks, certainly a positive story on the heals of earnings. back to you guys. and before we head to break here are your headlines at this hour. three people are dead and nine injured after a gunman opens fire at a movie theater in louisiana. china's factory activity hits a three-day low and visa sees double digit growth if payment volume helping the credit card issuer to a 25% rise in third
let's get you up to speed on data out of china. china's factory activity dropping to a 15-month low in july, below analyst expectations. this is the fifth consecutive month of a reading below 50 which signals the sector remains in contraction territory. orders fell after expanding in june. in terms of market reaction shanghai stocks paired early gains to end the session in negative territory. interestingly enough, here in europe, we are higher on the day after two days of lows. corporate earnings helping the story. greece not ago much in the limelight limelight. that helping european stocks. we're looking at the cac 40 with you, up 0.3%. in terms of pmi data the german number disappointing to the
downside. that's one of the reasons we're looking at the german markets underperforming basically flat, but down on the day. what does this mean for u.s. futures? we wrap up the busiest earnings day on the season. premarkets adjusting a higher open. dow open about 6/3. if s&p 500 up about 7. let's get you a run down on what you want this trading day. nur home sales, forecast to rise less than 1%. existing home sales grew at the fastest pace in eight years. in earnings look at results before the opening. i just mentioned amazon. i want to point out that the stock is now up about 18% in premarket trade. so a big move to the upside in shares of the e-commerce player. let's talk more with michael gurka. great to see you this morning.
a mixed set of earnings from the tech sector this week. microsoft, yahoo! disappointing the street. om zon, somewhat of a bright spot. would you be buying shares here? >> i really like technology here. i think the way the market has absorbed the downside this week is typical of a moment that looks to buy dips and, yes, i'm very positive off of most of these earnings. >> with the fed expected to raise rates in september, which sector do you want to be invested in? is it technology? >> actually it's commodities. the reason i want to be there in the afor mention reasons, is i think starting with the third quarter in the u.s., you'll start getting economic feetback of growth. and i think the reciprocal of that is watching the commodities
down double digits to almost 20% in precious metals and some of the alloys or greens. a critical level for me is the 200 day moving average on a ten-year chart in copper at 226. if i see a violation there, then i think the commodities roud continues. but right now at least, i'm looking for value because i think it's well overdone. >> and that china manufacturing data, that's fought good news for copper going failure. >> no it's not at all. that is the reason why it's acting as a magnate. that is a huge move to get down to this level. and i think it's warranted fundamentally from results just like you mentioned. what happens now is the market forecast surged from this bad news if they think it's long going, if they think it's going to be something more of a year or two, then you'll start to see this continued pressure. but if we think there is a snapback, i think that's one of the reasons why you continue to get bullish. >> tell us what you have to say
about gold. what's the bullish view there? fed policy the lack of inflation and the stronger dollar of course not helping prices this week. >> no. actually, i'm not the same way on gold as afor mentioned or at least as near i would be industrial medal owes grains. i think right now gold is a great example of why i'm still long in the dollar. why i think the euro will hold 110 at a good level of resistance. as the dollar strengthens, i think you'll continue to see gold get down near a thousand or some near 98 on. but i think a lot of it is dollar related and the emt on the fed. >> what message can equity traders extrapolate from what we're seeing this week? >> i think what equity traders have to be cautious of is just a continuous bag on the dip
because they have been too few and far between. first of all, i'm not going to complain about the volatility. i think it's been excellent. but those dips it's much easier to hold on to the longs these days. and i think it's the squeezes we're going to see that's going the be the biggest risk. >> quickly here goldman sachs saying this is the time to buy european stocks scale back on u.s. stocks. do you agree with them? >> well i would agree with the first part of that. i really do like european stocks on these levels. but to scale back on united states stocks i wouldn't get too aggressive yet, in one and out of the other. i full hardedly believe in the next year or two, the u.s. stock market is going to outperform. >> pleasure to have you on this show. we are looking at european stocks moving higher. that's it for us on "worldwide exchange." see you on monday. next up is "squawk box."
good morning. amazon shares are soaring right now. the company post ago spriets profit. the payoff, it now has a market cap greater than retail giant walmart. gold prices dropping again below 1100 this morning. and oil trading in new bear market territory. in other words after the bounce it made now down more than 20%. plus a developing story, investigators are calling on the justice department to launch a criminal probe into hillary clinton's use of private e-mails while she was secretary of state. it is friday, july 24th 2015.
and "squawk box" is beginning right now. live from new york where business never sleeps, this is "squawk box." >> good morning, everyone. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. breaking overnight a tragic story in louisiana. three people including the gunman were killed. nine others were injured in a shooting at a movie theater. witnesses described hearing about six shots in the screening of the movie "trainwreck." police say the 58-year-old man used a handgun and took his own life. investigators know the identity of the gunman, but they have not released it. governor bobby jindal calling it an awful night for louisiana. >> you heard me say this earlier tonight. they ran towards danger not away from