Transcripts For BLOOMBERG Countdown 20240622

Anna welcome to countdown. Im anna edwards. Ryan im ryan chilcote. Anna at 6 00 lets have a look at the tech sector. Lets start with apple, because i have a chart here that shows the afterhours move we saw this was even after the Company Reported a record thirdquarter profit number. Revenues were disappointing. Ryan this threatens to remove again that apple saw that huge rally of almost 10 . It could be one of the biggest losses ever. Anna more generally, this was the biggest tech rally since october. Will that change in the session today . We have lots to talk about. Apple was just one of a few tech giants that reported in yesterdays session. That came afterhours. Lets get Caroline Hyde and paul sweeney. Great pleasure to have you. Lets continue the conversation with apple and what it is. Caroline its phenomenal when you put it in perspective we could see 66 billion dollars worth of its market cap erased. In perspective, that is more than bmws entire market cap. It is a record thirdquarter profit, as well many people are wondering why. Yes, they still climbed 35 , but people want to see more, in excess of the 47. 5 million. The Sales Forecast is for the next quarter that missed analyst estimates coming in at about 50 billion. What we are starting to worry about is the pace of growth. If we say 50 billion next quarter, thats only. 8 growth. We had tim cook saying that chinas turmoil is creating some nearterm speed bumps. The issue is iphones are still their cash cow. What about the other products . The watch he spoke enthusiastically about it. Tim cook sales of the want to did exceed expectations, and they did so despite supply trailing demand at the end of the quarter. To give you a little additional insight, through the end of the corridor, the apple watch sale was higher than the comparable launch. Comparable launch periods of the ipads. Caroline doing better than the ipad and iphone, but bloomberg feels there is probably about 1. 9 million watches sold. You divided it by the overall average selling price, and you get about 1. 9 million. Analysts were hoping for 3 million, 5 million watches. The market is doing well but the ipad is continuing to slump. This is why its affecting asia trade this is why suppliers are feeling the heat. Ryan we had another miss on earnings for microsoft. Paul we did. The core pc business, which is facing headwinds, were down 9. 5 globally in the quarter. I think there is also concern that windows 10 while it is certainly a very credible upgrade, they not be a game changer or a catalyst for growth. The core pc business remains challenged. On the flipside we saw some pretty good numbers out of the Cloud Business which confirms what we saw from sap. A Cloud Business globally, when you think about amazon still remains a very good story but if you are microsoft it is still the core enterprise pc business that remains a challenge. Anna how do you think they look on that note the acquisition . That note youkia acquisition . Paul the ink was barely dry they are obviously out of the phone business that i think they are very much into the Software Side similar to what they are doing with their android business. The phone Manufacturing Business is not for everybody. Ryan take a stand on apple it sounds like it is the victim of its own success. Is that a fair statement . Paul i think it is. There was a record quarter, that i think the real challenge is that it is simply an iphone story. The iphone unit sales came in below what they were expecting at that is the thirdquarter forecast story. Ryan but they sell 200 million phones of year and they missed by a million should we be concerned . Paul if you are an apple investor, you are thinking about given the valuation is pretty decent relative to some other stocks exactly. There is a tremendous amount of cash. Still a very strong story terms of products in the marketplace but investors continue to ask about the next big category. Anna Caroline Connan that is one big question what is the next big category . They are working on a new version of the ipad with a bigger screen, moreover a placement for the laptop. That is Something Technology companies will crack, trying to replace what businesses use. Caroline that is what they have signed deals with ibm. Interestingly, we also know they are working on a new iphone. They want to launch the updated september. The update in september. We are seeing a bit of a slowdown in china and i think what is so interesting is we have see not one but two heavily weighted stocks in the s p 500 microsoft is number two after apple they came out and disappointed. There is another tech joy that has, too. Yahoo is down 3 , Marissa Mayer not getting any slack, because forecasts again missed expectations. We could see sales fall the next quarter. They are investing, getting into mobile and social features it is working. You are starting to see sales up 60 but i think its the same with apple. People are getting frustrated at the pace they want to see more products and more changes, quicker changes from orissa meyer. Marissa mayer. Paul the simple problem the issue is that they have done a tremendous job monetizing their asian assets. Alibaba and yahoo japan have done a wonderful job, but three years into marissas tenure there is no turn around on the core business. Ryan thank you very much for the insight. We will stay with that story throughout the day apples miss on iphone sales and projected revenue weighing on the shares of its asian suppliers. Lets get more on that and what is moving markets in asia with david ingles. David . David good morning. Just to pick up on your conversation, i think when apple starts reporting, we really look at how its supply chain it goes through the whole asianpacific. The parts are made in south korea. They make their things on the chinese mainland and other places then they ship out. What we have here, and some of our clients may be familiar with what it looks like, it is essentially it breaks down the supply chain of apple. You have apple in the middle and these are the biggest customers. And there are the suppliers. Top 30 22 out of the top 30 suppliers for apple as far as how dependent they are on apple as a percentage of their own revenue 22 out of 30 are here in asia. As he would expect, if apple is your biggest client and they are performing to par, you would expect the clients across the stock prices to fall. This manufacturer some get 50 off their revenues. Similar proportions of the revenue for a lot of the other companies. You have a touch screen maker in taiwan you flip the board and look at japan, similar. Not all are declining but a majority are. This one gets 50 of their revenue from apple over to south korea, and you are seeing something similar. When you look at this board, some of these companies are both viable and suppliers of apple a good example is samsung. One part of the business sells them chips in the other is a direct competitor. That is a fairly complex relationship. How is this playing out in the market . We have seen better days. We are down about 1 overall, slicing and dicing across the sectors. You see that apple is playing out as far as asia is concerned telcos are down industrials are down. For lack of better way to describe it we are extending the sell we saw on wall street. I just want to say new zealand has a record high one day ahead of the rbn. That is their policy decision where they are expected that is what i have for the moment, back to you. Ryan david ingles, thank you. Anna lets stick with the Technology Theme and tell you that we will be speaking to one of the key suppliers of apple. David is taking us through what happened to the share prices and other suppliers, and we will speak to arm holding. We will be talking to them a little later. Also on the Technology Theme, lets talk about what our twitter question is. Is the tech rally over . I disappointing report from apple and microsoft and yahoo get in touch with us on twitter. Ryan it is 6 15 in london, 7 15 in frankfurt. Anna here are the stories you need to know. Although apple posted its best thirdquarter profits ever shares fell 8 in afterhours trading. The results fell short of shipments projected. They also missed estimates for a revenue forecast. Got new shares also fell in afterhours trading after Sales Forecast came in below estimates. Burress and meyer had been hoping to boost profits but secondquarter revenue remained slack. Microsoft shares also took a tumble in late trading after they posted their largest ever quarterly lost, leading toward a seven massive writedown for gnocchinokia. New Yorks Laguardia and jfk airports authorized a strike it is set to start tonight and continue tomorrow. Most of the employees are for Delta Airlines but others are for British Airlines and united. Ryan php is powering ahead with boosting its iron ore output despite falling Commodity Prices and that it global rut. Paul allen is standing by with more. Paul they arent troubled at all they are filling in the production boom as was predicted, and bhp Fourth Quarter numbers bear that out. 60 million tons produced up 14 on year, and beating bhps own estimates. There will be more in the coming year for 2016. Strong members also from the other divisions, particularly petroleum and only copper was down slightly. We did see bhps shares decline in trade this morning it was nothing to do with production numbers, though. Varied in the report, they said it will be a 650 million head to underlying profit. Really, nothing to do with the production, and they are completely undeterred about what higher or price is doing. They seem quite content to keep playing the volume game force long as they need to. Anna paul the governor Glenn Stevens spoke a little while ago in the early hours of the morning. Commodity prices continue to weaken and he has been saying that further cuts to the Interest Rates in australia are on the table it would be the first time this year and there is speculation that it could continue. Paul yes. There was a lot of shadowboxing around this Glenn Stevens took questions after his predictable speech in which a number of people tried to get information out of him to which he laughed it off. Central Bank Governors do play their cards close to their chest, let in terms of the Australian Dollar the headlines have been framing this in the context of oh the horror. But this is what the reserve bank of australia wanted. When stevens has been talking down the dollar four years, cutting rates consistently and saying he wants to see it and a lower range. That is what he got heading towards a sixyear low. He also pointed out in the speech that this has had a beneficial effect and they are beginning to see the expansion rate of a lower currency. Services are up half a percent which contributes about the same to gdp. He points out that it is the same contribution for the iron ore exports over the same period. The Australian Dollar is not at all troubling the reserve bank of government quite the opposite. Anna thank you very much. Paul allen. Ryan a busy day in greece the Prime Minister heads to the parliament to try and pass a second batch of measures required by greeces creditors. There is a lot of action in athens as the ecb gathers to discuss dla. We are joined by simon french. Another thing the ecb is doing is preparing to send another team for this bailout to assess how well those greeks are implementing the reforms, the austerity that they promised. How do you reckon that will go down . Simon it will be very popular with the greek people. The greek Prime Minister spokesman said a deadline of the 20th of august, trying to have a Technical Team on the ground having gone back to the creditors with the recommendation. The reforms we expect to pass this evening and the third set of reforms sometime in early august to cover product markets labor markets, pension reform. Some rather contentious Structural Reforms that strong economies are struggling to implement. We arent out of the woods by any means. Ryan you guys say there is a 100 chance of a greg set. A grexit. Simon i think that sometimes economists give ourselves a bad name. This is fairly binary if you scenario plan this, and i prefer scenario planning you either have fast contagion where there is a debt writeoffs and other peripheral countries go we will have a bit of that. The spanish, portuguese, irish electorate look for the same source of relief so you have fast contagion. Slow contagion, if greece leaves the eurozone and they restore the drachma, you need a few years before you start to see growth. Or you get a model through eventually, the first or third scenarios lead to the greek people saying enough is enough. I think the German Administration has gone we will take the slow contagion over the fast. Anna has one of the messages been then, that we need to be a bit more german if they want to stay in the euro . The other conclusion you come to if you think that is what we learned is that they hear that message in followthrough. You dont think that is deliverable . Simon i dont. If you look at the uks experience the test that we had, we failed on convergence and integration. Those are the two areas where the peripheral countries are finding it difficult to align themselves to the northern core economies. When you had a big economic shock like the financial crisis the economies the different economic medicine and that is a fundamental structural problem with the single currency. Without fiscal integration, you wont be in a position to deliver. They dont have the political firepower. One of the scenarios in terms of kicking the can down the road is have a mario monti style technocrat government. That looked likely quite recently when Alexis Tsipras lost a lot of support i think we are away from that position formally but to get through this package, he is relying on opposition that is what you have to do. Ryan you mentioned of u. K. We have the bank of england minutes coming out this morning. What are you expecting and what does it tell us about where we are going . There is a lot of headwind. Simon four days ago, this was expected to be another very boring bank of england minutes session. But mark carneys speech last thursday really change that he started changing the narrative from looking at the data to putting a timeline on this the end of the year being ready for higher Interest Rates. We have been there before, but i think the constraints in the labor market this time we are looking for signs of that moderate core at the center of the mpc. Mark carney, Christian Forbes signs that they will join on the side of looking for higher Interest Rates. Anna is that what you think carney was signaling . I thought the interpretation was that at the turn of the year, he would get better visibility on inflation, for example and the Oil Price Shock will have dropped. We will just know more about whether we are in a position to have higher Interest Rates. To think he was actually signaling that rates will go higher . Simon i think he was. Weve had q1 2016 for quite some time and i stick to that view. Yes, there are two key factors that you will want to wait for december, the strength of sterling supporting deflation, and also what goes on mediumterm on oil prices, which are seeing downward pressures. Should those two factors come to pass, that it will again moved to the right, but i think carney is right and probably reflects that moderate core, closer than they have been. Ryan what does that mean for the pound . We have been stuck in this range with the pound having trouble to get back to 1. 50. Simon and i think it will struggle in the short term simply because of the amount of structural weakness across the World Economy means that the pound can race ahead. Ryan simon french, thank you very much. Coming up on countdown, the bank of england minutes for the july meeting come out at night 30 this morning, but there is a desire to start tightening soon that could hike rates. More on that after a short break. It is 6 30 a. M. In london here at 30 a. M. In brussels. Anna apple posting its best profit ever in afterhours trading iphone sales climbed. The tech giant also missed estimates or revenue forecast for the current period. Yahoo shares also fell in afterhours trading. Marissa mayer have been hoping to boost growth by investing in mobile, social media, and video. Revenue remained relatively flat. Microsoft shares also took a tumble in late trading after the Software Maker posted its largest ever quarterly loss. Weighing in on the result was a writedown related to the purchase of nokias handset. The great Prime Minister will return to Parliament Today. Lawmakers are set to vote on a second package of measures demanded why the creditors. Ecb will discuss emergency liquidity assistance to give greece alive. Ryan 37 arrested four people in israel and florida. It was tied to the hacking of jpmorgan. We will hear the explanation for this complex story. It starts with pumping and dumping. What is that . Elliott pumping and dumping basically you encourage others to buy a stock. That is a pumping. Ishares go up. When shares go up, you sell the dumping. Two were arrested in israel. There allegedly involved in such a stock manipulation scheme. Theres been a separate case that the two arrests did place in the u. S. What is interesting is people from those allegedly involved in the money chest for business let involved in stock manipulation. They are old that is from the time at Florida State university. Additionally in a previously unopened memo from the fbi, the to them were alleged to have linked to the hacks of jpmorgan. There was a fifth person who is charged, but not arrested the simple reason hes believed to be in russia beyond the long reach of the u. S. Authorities. Perhaps has links to the underground russian cyber underground depending on how you want to describe it. It is located complicated. A very complex case. Tentacles extending here into israel and the u. S. And russia. Anna some of the details of the data from jpmorgan are quite staggering. Not least of which is the debt may have got a hold of of what they did or did not do with it. Elliott thats right. The metadata he got access to come it is intriguing. A threemonth period. Access to critical functions. They have access to tens of millions of emails. There were talks of gigabytes of data. They access to at least 100 service. You think when you or servers. You think when you hack into a bank come you still money. What happened is they believe authorities believe they wanted to disrupt it will details of customers names and use those names to send out these mass emails to encourage people to buy particular stock. They even tried to encourage people to take by the companys public in order to help pump though shares and allow them to carry on with something and dumping scheme. Pumping and dumping scheme. In 2014, they spent a quarter of a billion dollars on internet security. Anna thank you very much. Was elliott joining us from tel aviv. Ryan lets turn to the u. K. The minutes go on at 9 a. M. This morning. I dont expect the notes to show that the numbers are voting to keep rates on hold, but it gets more interesting. Several may indicate they think tightening should begin soon. That might mean this is the last month of anonymous a anonymit y. Have a listen. What listens to the governor speech over the last few days. I think he was clear that way. His of the future direction of Interest Rates. Anna George Osborne also expressed confidence in the installation expectation. It would be a challenge economy, but im confident Monetary Policy framework is robust and can deal with whatever is thrown them. I think it is worth paying attention to what was given to this committee in various speeches over the last year or two. The prices equate to inflation. They both point out that expectations are blinkered. Well angered anchored. Ryan lets get more George Osbornes comments from our guest. Global market strategist. Thank you for joining us. I want to ask you what exactly osbornes budget means when you look at the prospect of a rate rise and the pack . David i think it is might be prorate rise. Going into it, we were quite scared that the investment adjustment would be so aggressive and Inflation Expectations would be revised down. I think coming out of the budget you saw that slight relaxation. A balance between spending and tax raises. I think that the prospects are back because of the budget. It cleared the way it worked. Anna dont be scared. [laughter] what about the rape picture for the u. K. . Rate picture for the u. K. . Third quarter next year is when it is coming. Is that his plan question mark does that mean we will have more data . David the letter of those two. He used to say look, rates could go up. Or it could go down. Most the time it did very little. He is trying to show a few things. It could cut Interest Rates. Now he is appearing in front of all attentions. Ill try to push up as soon as it is necessary. I do believe it is the biggest data core inflation is simply too low. That trend is unbroken. Preferably a few ticks higher. Anna you say there are tentative time science signs. What are the clues . David a somewhat weaker labor force. Anna run that by me again. David youre the needless labor. We have seen a situation where it has been flat. There is a huge surge in employment. This of the a bullish sign for the economy. Far too early to say that is definitely happening. Ryan it had a nice rally. On the 13th come it looks like its stalled. David it is not much to deal with the u. K. It is a huge amount of exposure. It was also suffering from that. You either go through an active manager or you invest in smaller caps of structure. That is a better place to look. Anna a lot of questions about inflection points. Commodities. A lot yesterday. Today, Technology Stocks. Thank you so much. David stays with us. Take us through some of the stories of what is doing well. Cant stop and wont stop. White gold miners just keep digging why gold miners just keep digging. What happened was when prices were high, miners took on a lot of debt. But is happening is to service the debt, they just keep producing gold to pay off that debt. Anna that is whether not responding to lower isis . Tim to lower prices . Tim thats right. Thats exactly rate. As long as you could cover tax costs. That is what we are seeing in oil, too. Ryan and medicine. Another story. Tim yes. Greece buys more branded medicines than any other country in the european union. Something i would not have expect. 82 of the prescription market for certain treatment in greece. Ryan and it is more expensive the branded drug. Anna move away on the labels. [indiscernible] anna yes. Lets talk about the commodity story little bit more, david. Cant stop and. Many of these commodity businesses just cant stop wont stop. Many of these commodity businesses just wont stop. David it will be negative for years. It is close. They will destabilize, you have i still think we have quite a bit further to go in commodities. Around that given what we have seen in the last two or three years, the other dominoes are more important. Look at westerly and canada are. Collateral damage was done youd look at where house prices are. Look at where the Financial Systems are. Economy is 500 of gdp in us to really a for the banking. Anna david stubbs, thank you. He stays a bit longer with us. Tim coulter, thank you. Ryan we are on twitter here. Is the rally over . Anna coming up hoping to fix the Money Transfer market for sm es. What will they offer to others . 6 45 a. M. In london. This is countdown. Ryan it is 6 48 a. M. In london. Anna apple posted its best their quarter profits ever shares fell as much as 8. 8 in afterhours trading. Other sales climbed to the result fell short of shipment projected by analysts. There was a revenue forecast for the current period. You have also fell in afterhours trading. Marissa mayer has been hoping to boost growth by investing in mobile, social media, and video the Second Quarter revenue remains fairly flat. Microsoft shares also took a tumble in late trading after the Software Maker posted its largest ever quarterly loss weight in result with a 7. 5 billion right down. The great Prime Minister will return to Parliament Today at lawmakers are set to vote on a second package of measures demanded of that countrys creditors as condition. Ecb officials will also discuss emergency liquidity assistance that keeps greeces Financial System alive. Ryan stantec money number has raised to help its expansion into the Money Transfer market for small and mediumsized businesses. What challenges do they face . Journeying us now is the cofounder and ceo of money mover and one of the firms backers. Gentlemen, thank you for joining us. First question i have asked if you want to get into the Money Transfer or getting into that money just for or in exchange market. There a lot of companies out there. I want to know what is different about what you do when you talk about specializing on small and mediumsized businesses and what is different from them from say us when we transfer money . The two things that we had done is looking at these services from a baking perspective. We come out it from a customer perspective. His book to business leaders. What do you want from the money just for service . That is what we have done. Anna if i want to make a payment to a supplier overseas, what about the software that comes with my inking . Why cant i just use my bae systems to make the payment . Make my use my Banking Systems to make the payment . There is that transparency and to the market rates in the cost. We tried to make sure what the two works thats what we do works. You can download information annual report things like that. Ryan what is the plan . It is now up and running. A big of the deal could this be . You sell the business at some point. This is a startup. What is the plan . Disguise the sky is the limit. Online trading and plant forms, we have got those elements. I think the banks are lazy. Transparency. People they lacked transparency. People want online access. Ryan you were wondering why banks didnt just move into the space. Basic customers moving way come individual customers to other nonbank foreignexchange companies. It is a question of trust. We have the investigation into interest rate. Do they trust their banks. We think not. Anna some hype is justified and perhaps some of it is not. What set this one apart . I have that expertise in the second. They see how it is done badly. They are redesigning and reconfiguring the weight transactions work. Im backing u. K. On to endorse. Entrepreneurs. Anna it is a little away from your comfort zones . That one completely focused on smes. I got some insight. That is one of the areas where i think theres a lot of scope for development. Ryan back up a little bit. Compared to other periods in u. K. History. I now is the best ever for a startup is right now the best ever for a startup . I think businesses are any good position in a good position. Ryan wellchosen. [laughter] open to the best solutions in the second ors. Sectors. Theres been a lot of exposure in the space. What is interesting about money mover and our market is that it is about 10 times the size. I think investor focus Technology Focus is moving from the personal space to the enterprise and never few people looking up but we are doing. Anna what would they get with sme they wouldnt get transfer was . Basket make certain compromises about the awareness of the they make certain optimizes about the awareness of the rate. Smes can i do with that. They need to note right now and when the payment will go through. They should have paid a yesterday. Ryan how did you two meet . Mutual interests. I was in a funding circle. I was interested in making this sort of investment. Anna cofounder spirit youre in three different companies. You want to be global. Absolutely. It is not just about the u. K. It is about making this global. Ryan you say there are many mediumsized businesses out there . It is staggering. When business person of and the people. One business per 70 people. Anna gentlemen, thank you for joining us. A lot. Thanks for bringing us the story. Ryan coming up, apple shares tank on the sales unit what will that mean for its suppliers . We will get a gauge from report earnings in a few minutes. Stay tuned. Countdown is back after this a very short break. eeeeohmumohweh hush my darling. dont fear my darling. the lion sleeps tonight. hush my darling. man snoring dont fear my darling. the lion sleeps tonight. woman snoring take the roar out of snore. Yet another innovation only at a sleep number store. Anna apple crunch. Ms. Iphones shares missed iphone shares could see the company slump. Ryan more tech troubles. We tech reports weigh on asian markets. Anna Alexis Tsipras turns returns. Ryan they prepare to send another team to athens to monitor austerity compliance will stop. Anna a warmup and the second hour of countdown. It is just gone 7 00 here in london. If you this hour, we are looking at if the company will look comfortable enough. Will it have enough his ability . What will they say about oil prices . That could be of interest. Lets like about technology. Arm is very topical. Carolina standing by. Caroline exactly, this is a chip designer youll see used in nearly every single smartphone on the planet. It is a miss when you look at arm holdings. The estimate had been 235 million pounds, only slightly shy. There dividend of 3. 15 pence. This is a company that says were entering the second half of 2015 with a robust pipeline. This is a company that only sells licenses for its ip, then it gains royalties everything up time samsung or apple uses the chip design. They get money, they get royalty. Is the china slowdown that we saw highlighted in apples earnings starting to weigh on arm . Is this them hinting that they will not be affected by the chinese slowdown . As we see apple start to highlight this in the very own numbers. Overall, a bit of a miss, but talking confidently. The chief executive is coming in a bit later. He also lives in silicon valley. Looking around, i wnt t want to bring you those numbers. We saw a slump in their market value after hours they declined more than 8. 8 after hours. That is wiping out in much the entire market value of bmw. Weve seen a concern with iphone sales. Still, tim cook sounded optimistic. Tim cook what is going on with iphone to 35 growth is almost three times the market. If you look at a little narrower regional level, western europe grew 30 . Four times market, japan grew over five times market. We doubled in korea versus a shrinking market. Caroline he is talking very optimistically. China is the worry here. This is another concern, their forecast for the next quarter missed. We will see 50 billion brought in, that is still a hefty whack of sales. But it is only increasing by less than a percent on the previous quarter. That is a dramatic slowdown. Usually you see cap percent growth. It looks like it is china weighing on them. 20 drop. Tim cook said chinas turmoil could create some nearterm speed bumps. I also wonder my do they are trying to bring in new products. Iphones are still the key cash cow. They are trying to bring in the apple watch. We did some math, we think probably 1. 9 million watches sold. A billion dollars worth was added to that. You divide that by the average selling price. The mac doing pretty well, but only 12 of overall sales. The ipads are slowing. They cant offset the slowing in iphone growth. Anna caroline, thank you very much. Before return to our conversation to our tech revenue proceedings better than in the previous guidance. That is already sound policy. Their forecast as a pretext. We asked just a moment ago they were confident enough to give us that forecasts, and they do. They think it will be between 620 and 660 million pounds. It seems easy to go with a wider range. Perhaps that could be interpreted. Ryan they are saying they see fouryear sales up. They see the april disruptions is looking back. Mostly, a forwardlooking statement and mostly an upbeat one. 77 of the second half of the year is now booked. Anna we will talk more about easyjet in the developing airport story in the u. K. Later on. Lets talk to jasper. We are rejoined now onset. Paul would you like to stick with apple . There are so many other stories. Paul apple is the 800 pound gorilla in the room. The takeaway is some of the bears are warming this remains an iphone story exclusively. I think that is what we are seeing in the stock. The apple watch is too early to call whether this is a product that can be counted on to drive growth going forward. That is a story that will play out. David we are looking at the steepest post earnings drop since 2013. It is a case of apple being a victim of its own success . Paul i think so. They have had such a great tarack r track record it is a product refresh or a new category. I think the issue for apple is the numbers of very good and we will have a reset here. When you listen to tim cooks comments, and markets around the world the product is still wellpositioned. Anna there are plenty of other tech stories. David, lets get your look. Were asking today on twitter whether we think the tech rally is over. Weve seen strong numbers going into the season, but now they seem to be disappointing. David somewhat, yes. I still like the Technology Sector as one of the key overweights. Ryan you see this as an opportunity to buy . David i absolutely believe the board of Technology Center will benefit for the next phase we will see. That will be propelled by twioo main things consumer spending. They are selling key devices which are essential to our lives unlike late 90s. Of course also Business Investment. I think Business Investment to be the key driver of this search for productivity. Ryan you like apple . David honored individual stock basis, i w would not bet against these guys. Every time you doubt than the comella something. What about the apple tv . Talk about the watch they dont tell us numbers. They say compared to the iphone they are selling more. The iphone now is this cash cow. It is a first generation device. Everyone i know that bought it loves the thing. Ryan i think it is some of the market is very intrigued about. The whole wearables market it is a market that is waiting to explode. The question is, what is the product . Paul we heard the talk a lot about china. You just mentioned the economic backdrop and how you expect that to aid tech going forward. What do we learn . Sales are uop nonethelep. David most Technology Companies would tell you that its a minute will be a growth driver going forward. Clearly the market has taken a step forward. If you look at the technology across the board, they still feel like china is going to be in place for longterm growth. You go indirectly, do you joint venture . The longterm china story is still intact. Anna i wonder if microsoft has regrets for a move made . Perhaps a run nokia . Paul the deal just barely closed. It is another example of the phone Manufacturing Business is not a place to be for most companies. Google did a big step back when they went on the motorola acquisition. Now he with microsoft, i think it is still very much into the Software Side of the business. They just dont need to be into the hardware manufacturing side. Anna david, are you actively seeking Technology Businesses that are vacant the cloud . Big into cloud . David i think anytime you can find businesses that are pioneering the next phase is something you want to be involved in. However, Something Like technology, which can be disrupted so easily, you want to run a broadly diversified portfolio of technology names. Otherwise, making sure you have some exposure to different avenues with the future could go is prudent. Anna i love the stat that you say tech investment is well below the average. Is that because companies about investing . David that is net investments. If you want to write things off as well. There has been some skepticism of the economic expansion in the u. S. Throughout this recovery. Businesses included. Now once the federal reserve, once received from her wage growth, i think there will be no doubt that the expansion is now fully mature. You should see the Business Investment kick in. With a the factories . Will it the buildings . The underinvestment we have seen. I think is one of the keys to why technology will be at the forefront of business expenditure going forward. Ryan thank you very much. David will be staying with us throughout. This morning we speak to one of the suppliers of apple that is arm holdings. Simon joins us later this morning. You have to watch that. It is also our twitter question of the day. Anna is the tech rally over . Ryan coming up on countdown apple tumbles in afterhours trade. We will have more in what is moving the markets in asia right after the break. Ryan it is 7 16 in london. Anna here are the stories you need to know this morning. Shares in apple fell as much as 8. 8 in afterhours trading. Iphone sales fell short of shipment projections. The tech giant also missed projections of a revenue forecast. Shares also fell in afterhours shape tradings. Ceo has been hoping to boost growth, but secondquarter revenue remained rather flat. Microsoft shares also to get tumble in may trading after it posteds largest ever quarterly loss. This was related to the practice of nokia. The great Prime Minister Alexis Tsipras will return today. Lawmakers are set to vote on a package of measures as a condition for aid talks. Ecb officials will also hold a call today to discuss emergency liquidity assistance. More than 1000 Security Officers and baggage handlers at new Yorks Laguardia and jfk airports voted unanimously to authorize a strike. That is set to start tonight. Most of the employees work for Delta Airlines. Others were you British Airlines, and united. Ryan stocks in asia retreated as apple tumbled in afterhours trading. Shanghai down the little more than a half of the percent. Lets get more on markets with david inglis. David a good morning. Absolutely. Were seeing right now and were just about closing up shop at this point. It is just an extension of the selloff we saw on wall street. That is what we woke up to. We are down 1 overall for the regional benchmark. Of course, on the very east end extremes, you have a few bright spots. I want to focus on new zealand, i think that is about a six or seven day of gains. Announcing its Monetary Policy direction. Generally speaking, i dont know why we expected to bring rates down. That is just a done deal. We are up. 9 . Everything in the middle is really taking a hit. We woke up in asia, it seemed as if there was a positive commodity, as the hours went on things just started to decline. Gold is now down, oil is also taking a tumble. I just want to mention what he is saying this more for the fx markets was that they were considering more rate cuts. You signed immediate drop in the aussie dollar. China is behaving itself only down. 3 . We do have more companies coming online now. Only a total distance, that is a story across, sector wise people are selling off at this point. A lot of these areas in asia you take a look at telco is down, tech stocks are down. Industrials are down. Parts makers in japan and in china, all seeing declines. Of course, the big Financial Brokers so wanted so forth. We have seen better days than this. Ryan thank you. Anna thanks, david. Lets like about the spanish utility. They came in above estimates. The business generates markets and electricity not just in spain but in the u. K. , and portugal. Ryan sales coming out ahead as well. They came minute 16. 9 billion euros. Anna we were looking for a bit of acquisitions in the u. S. We wanted to get an on that, and whether the trending spanish elections will have an impact on the business. Lets pick up with the david. Ryan david stubbs with jpmorgan. Thank you very much for sticking around with us. Going back to asia, where a great the door to spain. There is been a lot of volatility on the chinese stock markets. Equities asian equities, do you like them . David certainly, it is silly positive view towards japan. I think it is more relevant than china for investors. I think that everyone should know by now that there is a big Corporate Restructuring story in japan. What is not as known is that is already playing out in market returns. Those companies which are making efforts to improve Corporate Governance and improve shareholder value are being rewarded by the market. If this continues, which is still very cheap on several measures, if you pair that with the aggressive Monetary Policy we still like investing in chinese shares. Anna are you more excited about more easing in japan . Or is it about how it moves away from fixed income . David there certainly are a lot of tailwinds. The bank of japan was buying everything it can get its hands on. It is now a much more diverse and more exciting story. Yes your Pension Funds changing, and of the big buyer in the market. The real successful longterm japanese equity returns will be how the companies themselves change how they run and how they address their shareholders. 44 the rest of the g7 is only by 21 . You do the math, and it gets pretty exciting. Anna what about australia . A lot of focus on countries that rely so much a commodities. David my longterm pessimism this in the place with affiliate. This is an economy which has been overly reliant on commodities were too long. Now it is suffering because the Mining Investment has been falling. The nonmining economy is really not strong enough. Lets be clear, there is to lay long way to go. Mining investment in australia is still well over 6 of gdp. There is a lot further for this to go. We have seen some inflation a touch weaker than expected. Of course, governor stephen saying maybe rate cuts are back on the table. I think they firmly never left the table, frankly. This is been a long and protracted rate cutting cycle. Every few months policymakers say it is not. We was a significant policies then. We go to the Australian Dollar. At some point this is a great opportunity for the nonmining parts of australia officials equity markets. Anna when the australian economy might lose out airlines might gain, of course. Reporting their numbers today, we are looking out across all of these airlines and see what they have to say about their fuel bills. Not a great deal of detail, but what are you looking for . The hedging david a lot of them hedge tgehe fuel price. You have a pretty impressive performance industrywide in terms of revenue. If the revenues are going up that is a business you want to invest in. I think in terms of the thing that we need to discuss with japan itself we change Corporate Governance. It is an industry that has suffered from boom and bust cycles and how much it supplies to the market. Simply how many planes do they buy . Now with a load factor which is a percentage of the capacity they are utilizing, it has been high for a couple of years. It says to me that were seeing a much more prudent willingness to put on and supply new roots and capacities. That is a sign that i am excited about. Anna a lot of airlines this time. Thank you very much. Ryan moving on, coming up on countdown. Commodity prices low. Our next guest says it is all because of cheap money. Stay with us for more on that. Ryan it is 7 30 in london. Here are the stories you need to know this morning. Anna although apple posted its best profit ever, shares fell as much as 8. 8 in afterhours trading. Iphone sales climbed 35 , but it fell short of projections. The tech giant also missed estimates for a revenue for the coming. Yahoo shares also fell. Ceo Marissa Mayer has been helping to boost that by investing in mobile, social media. Secondquarter revenue remained relatively flat. Microsoft shares shi you can tumble. It posted a loss because of its nokia burgess. Alexis tsipras return to policy Parliament Today. The ecb and the fishes there will hold a quorum today to discuss the emergency liquidity assistance that keeps greeces Financial System alive. Ryan we are just under a half hour to go. Its take a look at what is set to move at the open. Caroline hyde has the crystal ball. Buttery watching today what are we watching today . Caroline a second day therefore stocks on the downward trajectory. The reason is think of lower after u. S. Trade. We saw particularly poor numbers out of the tech titans like apple and microsoft. That is important. There the two biggest stocks on the s p 500. That feels he was some gloom. Think about some of the suppliers, asml the equipment maker, arm holdings, we just got numbers from them that might be a little bit of a concern. Equity set to fall lower. Have a little look that is the supply chain. Heres a look at what is happening in the bond market. Indeed, we are not seeing much in the way of movement. We see a little bit of an appetite across the border. That is dipping down. What the ecb is up to, theyre looking at the emergency liquidity eight. And whether they will extend that later today. What is the ecb doing in the bond market . They frontloaded their bond buying in terms of quantitative easing in may and june. How much of a doing in july, how much will he do in august . For the time being, theyre still going across the board anna caroline, thank you very much. Ryan Budget Airline easyjet reported this morning. We are joined now to about those earnings. We know we had a dip in the share price. They reported the spring sales back in may. They were soft of the people and dissipated. This time around . They felt that percent that was a real shock. He seemed to be back on track. Some are around of 77 already. There now projecting a potential gain of 14 , which puts them in a better place than they were a few months ago. They complain that the french air Traffic Control strike, the timing of easter and even the germanwings crash affected them. They are piling on capacity in some key places. Suddenly they seem rather bullish again. Ryan put that in perspective. That is good . Chris a healthy load factor will be 80 . They want to get above 70 . They could be looking at 90 but all the bookings are in. We still have august and september to go. This is the key. For european airlines. This is where they make all of their money. Anna when you mention some of the growth plans where are they . Chris quite a lot in southern europe, but also puts his like amsterdam. That is key for them because it goes right to the heart of the strategy of taking on Network Carriers in their own backyard and targeting the bigger airports. There has been a change of plan in italy, they went head to head and have had to tweak that plan. Barcelona, capacity going there to. Anna also, expansion in the u. K. , i think we have some sound from last friday will be spoke to boris. Taking the steam a little bit out of it. Boris i certainly want be resigning as an mp. I will be getting my powder dry and any other positions. I suppose a member sign from that or something. Io am not i dont think the tragedy is i dont think the heathrow third runway option is ever been credible. We need a better solution. Anna it looks increasingly like he is quite isolated in his opposition to heathrow. Chris he is certainly beginning to sound like a minority voice in the house of commons. We have graham brady who has the rather powerful role. He expects 600 would back a third runway. Boris has got that platform as mayor of london. We also know there was that goldsmith which said he could resign and for some sort of election you like to turn into a referendum. Ultimately, as graham brady said last this is a national issue, not just a local one. Anna chris, thank you for joining us. Chris jasper joining us with a look at those aviation themes. Ryan and the commodity story stays with us. It is at a 13 year low this week. It is all because of access to cheap money. Lets get more with colin hamilton. He is a global head of Commodity Research thank you for joining us. It is all Janet Yellens fault. Anna and others. Colin we have had cheap money for four or five years. For the last little while it is not been quite as good at driving industrial demand. All week, were fed overinvestment in that capacity. That is ok if you think demand will grow. 612 months the of heightened demand. Anna we spoke a little bit earlier with a story on our website about the gold sector specifically. That story talks about how gold producers need to keep pumping out gold because they took on a considerable debt during the boom years. In order to service that there have to keep getting the stuff out of the ground. Colin that is a classic trend. They will produce. It is a hard decision for the to take that capacity offline. We almost need that, it is classic game theory. If i cut my production it helps everyone else. Intent to be a lot more sticky than you would expect. Ryan gold just dipped below 1100. We could go below a thousand. What do you reckon . Colin gold was always going to be under pressure. We have been surprised by the severity of it. Were still perhaps a ways away. We expect the American Consumer itching of a lot of cash the moment. The Wage Inflation is still quite strong. Overall, we havent seen the same way. That is been part of the surprise. Anna if you look a commodities more generally, all Metals Trading now below their longrange expectations. Those are falling. All the commodities mind and extracted commodities, all of them are in that falling prices. This doesnt sound like it is turning around anytime soon. Colin the only thing they can turn it around his strong capacity cuts. Demand expectations continue to be run back. We are probably not too far off from a Global Industrial recession. That did continue to trend. Ryan a quick word of iron ore. Despite the fact that the price of iron ore is going down. The average price around 53 upon a ton. At what price to the deceased to be sent to go for them to get it out of the ground . Colin they can produce. It is the marginal players that are under pressure. Weve lost 200 million tons, and we will have to lose some more. It will be much more pressure. Ryan we get earnings on friday. Do you think the dividend in general and Energy Companies is under threat . Colin for many of these companies dividends are always tough to do. We see a key part of the portfolio there has to be pressure on them. Anna were you surprised at how the gold prices performed at the height of the greek crisis . Its not see the flight to safety. Colin we had china greece falling apart, and goal to did nothing. To be fair, we thought at that point gold would continue to do nothing. And the time sense, it is strange, gold is not reacting the way it used to. That is not the say it is not a safe haven. Ryan quick hit on oil . They will get inventory numbers in the states today, we got the number to yesterday from the American Petroleum institute. What do you see that going . Anna go much lower . Colin were still in that market with the surplus is speaking. We are still getting inventory. Ryan it feels a lot like the iron ore market. Colin we are trying to invoke some supply cuts. Anna colin, thank you very much. You are looking at a live shot of london. This is wednesday morning. It could be a fairly sluggish section. Vernon much to the center of things in the u. S. After hours trading. We will see will be pick up on that in the european session. We will be back. Ryan it is 7 46 here in london. Your the stories you need to know this morning. Anna although apple posted its best fiscal performance ever, shares fell 8. 8 . While sales climbed, it fell short of estimates. They also missed a revenue forecast. Yahoo shares also fell after the forecast came in below estimates. The ceo has been investing in mobile, social media, but it remained relatively flat. Microsoft shares took a tumble in late trading after the stock posted its largest ever quarterly loss. It was related to the purges of nokia. The greek Prime Minister Alexis Tsipras will return to Parliament Today. Lawmakers are set to vote on a second package of measures demanded by the countrys creditors as a condition for age of talks. Ecb officials will also discuss the emergency liquidity aid that keeps greeces Financial System alive. Ryan lets get more on what we can expect the ecb from pollock gordon paul gordon. Paul you can imagine as policymakers pick up the phone, they will be thinking when will this end . Right now the decision is whether they will have more assistance. The greek centralbank acts asked but then recalibrated. They expect to get a bit more today. We wait to see when a call comes through. As the other issue, what happens next . Bloomberg survey published today the just over 50 of economists exceeded the ecb will ease back on the collateral haircuts which were heightened as political talks broke down. They will reintroduce the waiver by the end of the year that is a swift process. For that, you up to see progress on the reforms. To that end they will be back in athens quite soon to set the monitoring process. Ryan thank you very much. Anna thanks paul. Lets bring in our next guest. Michael, good to see you. Give us the benefit of your insight. What is going on in technology versus the rest of the u. S. Market . You had a lot of technology news. We saw a record highs of the nasdaq over recent days. That wasnt the case in other areas. Michael i posted a chart where i identified some significant places between the nasdaq and the s p. The nasdaq is making alltime highs, the s p hasnt. More interestingly, it has been trending lower. The dow has done the same thing. Ive that suggests to me that this current rally is very vulnerable. I think those earnings are pretty much confirming that. The question is, does this precipitate a largescale selloff . I dont think it does. But what it does do is focus investors attention much more on earnings. I was looking at netflix just before i came on. 457 times earnings. Ryan and a bargain at that. I go michael you compare that to apple, and a know which stock would like to own and it is not netflix. I think it is indicative of some of the stretch valuations we are seeing. Ryan it is up over 500 . Most that was over a week ago. What do you expect the now . Michael again, if i was looking at commodities broadly, and natural gas was down, crude oil down, copper down, sugar, down, grains down. There is definitely a trend there. It does not bode well for inflation. That brings up another question the rate hike in september why . There is no inflation. Anna but they are looking at the labor market, are today . Michael the strength of the dollar is tied up all by itself. The dollar index is up 8 this year alone. I think you will see evidence of that. The airport last night, tim cook suggested that it is difficult. China sales are down 21 . That suggests to me that given china is selling down, you cant take for granted that you will continue to get the Earnings Growth that we have been seeing. Anna you mention the headwinds in the currency. Some suggested maybe that would not be such a story. It was still stronger than it was in the Second Quarter the previous year. Michael it is definitely a story. I think it is complacent to suggest otherwise. At some point, we could see that. Dollar yen could really top out given corroded comments yesterday. Ryan there is a lot of focus right now one Commodity Currencies really taking a hit. Australia, michael that brings in of the points to the fore. Why is the central bank pulling rates lower . We could see further easing in australia. That is a big problem anna i remember at the height of the financial crisis people talking about Central Banks could go into printed director ands. This seemed to be decoupled. And they realize there were linkages. Michael globalization. That is what we are seeing right now. Ryan it makes you wonder about the sanctity of dividends. Michael i think they have to look at the dividends. They may cut it. If the direction of travel is indicative, i think it is under threat. There was no sign a want to cut production. Rather get some revenue through the door. Anna when you start a play that getting towards the end of the year game, too early for that . Michael i have been talking up footsie ftse. Everyone was talking about that given how heavy it is in terms of commodity. Anna thank you very much. A look ahead to the days trading ahead. Ryan we will go over to jonathan ferro. What are you watching . Jonathan we have to talk about tech. What happens when it was a record profit when your sales of your most popular product search by 35 . Apparently, you take a 8. 8 plunge. The big question for the morning, is the tech rally unraveling . We will have a great conversation. That comes up later, number two we at the dark about greece. Another helping hand from the opposition. He has to contain a rebellion within his own party. Number three, bank of england minutes coming out the just under two bank hours time. Why do we care about them . Mark carney doused the debate with fuel with easily could be moving closer to that rate hike. A Big Conversation about that. But than anyone put their hand up and say it is time to hike rates. Anna the Technology Stocks in focus. That tells you everything you need to know. Ryan apple plays in the prospect of the worst lawson products alere jon welcome to on the move. Moments away from the start of european trading. Lets get straight to the morning brief. Apple posts a record thirdquarter profit but disappointing iphone sales sends investors packing and the stock plunges eight. 6 in extended trading. Tsipras extends a helping hand. He will seek support from the opposition. The rebellion within his own party continues. Looking for liftoff, governor mark carney has intensified when they will raise Interest Rates. A breakdown what you need to look ahead four. Dax futures down by 89 points. The run is over after nine Straight Days of gains. We snapped that yesterday and finished the day in the red. Let me kick things up with the bond market areas bund yields traveling a little bit higher. The bonds across europe have done pretty well. Spanish bonds were a nine day when he streak and monday and tuesday they gave up some of those gains. The headlines have been in the commodity market. The bloomberg Commodity Index trading at a 2002 low. Here is gold trading at