Quite a nice return to form. We have had a couple of difficult days, factoring in the chinese story, and the s p has been knocked pretty hard. At 1 10 of 1 i dont feel does justice. Atwere down really sharply one point and then we bounced back quite strongly. You can see it here this is the recovery we saw yesterday on the s p 500. You can see its lower as a result of whats been happening in china. Equities back in form. The chinese devaluation is a storm in a teacup. Veryine Central Banks, rarely do they come out and have a press conference. Or briefing that they were stepping in when the market is distorted, they say. An amazing quote the Deputy Governor. He says, trust the market, respect the market, here the market, and follow the market. How much should the market now be fearing this chinese market, or indeed starting to trust at once again . Guy we are getting a few numbers coming out as we speak. The adjusted that income is 543 million. Thats the german utility below expectation. Adjustedo gotten a q3 ebid. Versus 496 million. This is really going to be affected by the story in china, the, which is a huge steel producer and a steel over producer. Caroline and the chinese have cut their steel prices again, they are on track for a profit this year can they meet the target . Encapsulates the kind of questioning theyre going to be doing later on. This is the chinese of steel future, and it lays out the yuan, the price. Here, and youn can get a sense of the decline, the fact that the devaluation has taken place may be pushing forward this idea of more steel from china. We will be having a fascinating conversation with the german economist who is saying it is the end of an era, a new normal for German Companies after the roo and boom. Thyssenkrupps ceo. Later in the program. We will also be talking to the dhik economist a little bit later on. Some great guests. Caroline lets head out to hong kong for the date on todays asian trade. Setback or is live with the story. We are starting to see a bit of a turnaround, a reprieve . Zeb thats absolutely right. That rare briefing you talked about was certainly watched by the market, giving a bit of breathing room, some buffer against this perhaps the overreaction we saw in recent days. That we would see competitive devaluations. I want to start with a look at you sea of their it dropped 1. 1 today, to 6. 4708. It is having a proximal impact on other currencies in the region. Check out whats happening with the australian dollar. It is pretty much unchanged, but we arent seeing that dramatic 1. 6 move that we saw when this announcement came. We saw the Singapore Dollar advancing today, so all of this is showing a bit of breathing room. As far as equities are concerned, we are closely watching emergingmarket stocks today in the chinese equity market, that is a bit of a mix across the region in terms of chinese stocks. You see them falling for third day. Volatile trade on the shanghai composite. We are watching it closely. There is still concerned about the pbocs yuan weakening, concerned that will continue. These are shares that we will watch in the shanghai market. In hong kong, though, we are seeing in advance and hung thing index. The hang seng index. Tencent is advancing on stronger earnings number, very much in contrast to alibabas disappointing numbers. And check out the Energy Producers petro china and gad a nice share. One of the biggest movers to the downside was lenovo. Smartphone growth plans are not moving at the pace we would expect. Also keep an eye on emerging markets today, a healthy gain from shares. But the real story related to devaluation,uan because we do see a rebound after this twoday selloff. People are taking a bit of a breather, but Curious Movement out of china. Which way do we call it . Pbocs move affected the market . A lot of people asking that question. Caroline zeb eckert in hong kong, thank you. Guy we will get an update on the explosion a little later on. That huge explosion that we saw overnight we will try to get you an update on whats happening. There is another story coming out of china. Get a look at what we are seeing out of china. Elliott gotkine is here with us. Elliott, we have Companies Like nestle, walk us through the reaction of the last 48 hours. We look forward to hearing what these companies have to say, but as you were talking about with the smp, we have seen further devaluation of the yuan today. We are seeing a tentative recovery on currencies in asia, as well as stocks, partly held tencent, and the Central Banks decision not to cut rates. Perhaps we will see a bit of a recovery in some of the companies, particularly in luxury goods which were in the thick of things burberry and bmw took a hit. Other consumer goods stocks Like Unilever also took a big whack. Than the worlds biggest food company, which we will look at in more detail, nestle. Caroline what can we expect from those numbers . They are particularly probably would baby food in china. Elliott china is a very big market, obviously, some nestle has some waning demand for this gets a peanut milk. Big problems in india with its noodles. Nestle has the market for noodles there, but they are having a problem. The Indian Government is suing , accusing it of unfair trade practices and callousness with regards to , of food which Authorities Say contains seven times the allowable amount of lead. Is disputing that, but nestle india has already reported a worst quarterly loss in 15 years. India accounts for Something Like 7 of their 91 billion for swiss franc 91 billion swiss franc profits. In 43are expected to come billion swiss francs below. For the thirds, year running, its a granite growth target. Its organic growth target. Caroline it will be a big one. Guy i tentative rebound our twitter question of the day, when we focus on china. We will carry out talking about it today. Let us know what you think are we done with this story . guyjohnsontv. Caroline coming up on countdown, bailout blues the greek bailout Takes Center Stage as lawmakers in athens but on reforms, but germany dragging its feet on approving the draft, in finland saying the bailout will work. Guy it is 6 13 in london, 7 13 in frankfurt, these are the stories you need to them. Caroline Chinas Central Bank says it will keep the yuan table at a reasonable equilibrium level. The fixing rate dropped 1. 1 today after a slide of 1. 6 in the past two trading days. Guy explosions at a Container Terminal in the northern chinese port city have killed 17 people. Chinas Earthquake Centers say this is the largest blast, equaling a 2. 9 magnitude earthquake. So far, 32 are seriously injured. Caroline in greece today, lawmakers will vote on a package of reforms agreed on by creditors to release in a package. An aide package. A bridge loan remains an option if the full program isnt agreed to in time, due next week. breaking news on nestle we need to start getting you ready for those big corporate members. Elliott gotkine is standing by with the details. Elliott guy, we are waiting for these earnings from nestle. English risinge in premarket trading. Im trying to see if we got them out already. Certainly not on my terminal. 43 billioncting swiss francs in sales. We are looking for an impact from the recall of its noodles india, a big problem there. Also it has a bit of a stagnant frozen food business. It will try toat focus on growth. Numbers are down slightly this year compared with that 10 increase in the food sector in europe. We are still waiting for these nestle earnings, but as soon as i get them i will give them to you. Guy we thought the numbers were out. Lets talk a little bit about whats happening in greece. David powell joins us. David, lets pick up and talk to you about this sense we will get a little later on from the gdp data, and how that will be fallout fromthe the capital controls still in place. David unfortunately, probably these gdp numbers dont even cover the worst of what happened, largely because capital controls dont come until the last few days of the reporting period. In addition, there were many reports at the time that people were concerned about the possibility of bank closure, not being able to get their euros, and 20 on a bit of a spending spree, exhausting the numbers. Rogers, economic forecaster, great to have you on the show. Are you even going to be assessing what these numbers will be . It givescontext you a clue as to what the fouryear number might be, but they dont really cover the interior that we are looking at for greece now. July was the first month of this year that the Greek Economy shed more jobs than it created. Capital controls are having a Significant Impact on greek efforts. You look at the assumptions embedded in the agreement with the troika, a 2 contraction in the Greek Economy this year is looking like a fantasy. When you look forward and you think about how this is going to work, we still have capital controls in place, an election coming up toward the end of the year, when does the low point come . There is an election following the bailout agreement, that will create a new wave of turbulence. Siprass seem that t has signed up for it to the extent that he has had his referendum and led quite a significant uturn. It may very well be that he has the political momentum to carry through that period, in the can move into and they can move into 2016. But it has been the case with greece that we have had turbulence for some years, and it seems that will be the case. Caroline the targets that the creditors are looking at are potentially a fantasy. Is the worst over in terms of the economy for greece . Are we going to see a pickup, or are we waiting until the end of the year . Thed i would say that worst is probably behind us if only because things can do such a standstill during that period. Now that there is a third bailout in place, probably the same economic activity. People are thinking life has come back to normal compared to what it was like during that period, the trust has been reached. Guy do you think thats the case . People in athens are still 100 convinced that the bailout is going to generate any kind of economic forward momentum. They are still not convinced that greece will remain the eurozone. Are we bumping along the bottom . Is a low point, or do you think that we improve from here . Incredibly poor economic story for an incredibly long. Time . Tom i think both of those. But if i were the manager of a greek business and i had that uncertainty of the third bailout , might over me, a grexit as well just sit on my hands and do nothing. At least now they know that for the time being the euro is going to stay. We have some tourists coming in but they have to get back to work, so that should generate some of the economic activity. Caroline you look at the current news flow, the migrant crisis, really affecting tourism they seem to not be able to catch a break. Give us your outlook in the longer term political stability is a little bit better with Alexis Tsipras . Timom that is potential. The political situation does seem to change very quickly from one period the next, but one thing is that business is sitting on their hands is true in a literal sense. To have a lot of euros they can transfer abroad. If you are the operator of the factory, you you cant operate your factory, and that will impact not just july, but in august and september, and as long as those capital controls are Going Forward guy those go out of business after a while. You start to see that happen. Company saw a little bit of this coming. They can manage it for a long period of time. Timom one of the great benefits of the eurozone is that supply chain spring up around europe. It cant be produced in greece overnight and these businesses will start to go out of business unless they are able to get the access they need. Left to switch the angle on the conversation a little bit. Weve got german parliamentarians dragging their feet, weve got the finns having a bit of an issue. We will take you to the finish finance minister a little later on. But ryan joins us now. Ryan, do you have a sense of what you will be asking him . Give us a sense where things are visavis the german bailout. Ryan simply because of the this,ments program from that simply prohibits it doesnt concern the esm because costs are made and commitments have been made during the previous government. That any new liabilities of be a problem for the finnish government, starting from the program. Alice finlands current Economic Situation given the greek crisis . Situation isonomic so bad right now, analysts are upset from some time ago that they will have to make painful decisions. Also the gdp has been stringing for three years, and the cost competitiveness has been deteriorating all the time compared to sweden and germany. That also increases the position of the population against anymore substantial bailout money or bridge funding or more money to save the greek people. Caroline raine, thank you very much, live in helsinki and we look forward to that interview. Guy i want to break in and get the nestle numbers. The company is just reporting figures lets get the details from elliott. Elliott two of the main takeaways organic Sales Beat Estimates coming in at 4. 5 growth. Important is that they are confirming their outlook. Analysts had been concerned that nestle wasnt going to meet its targets for this year, perhaps for the third year running, that is not the case. They are reconfirming their fy2015 outlook. Sales came in just a smidgen below the estimate. 42. 8 billion swiss francs. All in all, it seems on the surface to be a pretty up beat set of earnings. The noodle issues are still going on in india, where their noodles have been recalled by the government. Guy elliott, thank you. Elliott gotkine. We will come back to these later. We have some ceos coming up later on the program. Caroline is is all related to the repercussions from china, and we want to quickly bring back our guest, tom. Give us a sense, tom, of what the instruction is from china. Thatthe risk for china is there was a chinese slowdown in crisis. German economy has benefited quite substantially from construction booms in china, a lot of Machine Tools that china needs to build its flats and houses. For the eurozone is really that slowdown is managed stably and sensibly. Weaker you want as part of that, i think thats better for the eurozone economy than a more severe slowdown. Caroline it was a great fact you brought up with the euro remaining weaker. Its down 13 . Tom the euro has depreciated so much against the dollar compared to a year ago, that a small change in the yuan is fairly minor when you look at the grand scheme of things. And the chinese dont compete directly in that many markets. Japan is far more sensitive in terms of that. Guy david, is this in some ways good news for the eu . Doing the seems to be heavy lifting at the moment in terms of the Global Economy. It has been strengthening. You look at whats happening in europe is europe significantly less affected . David i would say its not a huge story for europe. I agree with everything you just said about the magnitude of the move being quite small. Certainly when it is put in the context of the depreciation of the euro, it is a small move. In terms of what europe will be feeling, the majority of the depreciation of the euro took place around the turn of the year, so the second half of this year the full impact will be seen. There will be a delay of about 69 months before the effect is really felt. Caroline we will be giving a great sense from the impact from china in europe. We will be speaking to the chief economist in germany. But forrts to china, the time being, thank you very much. We will be coming back to david powell later. Yuan ising up, how the causing a Ripple Effect in currency wars. Bot this is a great place to work. Not because they have yoga meetings and a juice bar. Because theyre getting comcast business internet. Comcast business offers convenient installation appointments that work around your schedule. And it takes done. About an hour. Get reliable internet thats up to five times faster than dsl from the phone company. Call 8005016000 to switch today. Perks are nice. But the best thing you can give your business is comcast business. Comcast business. Built for business. Guy it is 6 30 in london, 7 30 in brussels. These are the stories you need to know this morning. Caroline that Chinas Central Bank says it will keep the yuan stable at a reasonable equilibrium level. Of fixing rate dropped 1. 1 today after slides of 1. 6 and 1. 9 in the past two days. Guy greek lawmakers will vote on a package of reforms on which creditors agreed to release an aide package. They are saying that a bridge loan remains an option if the program isnt agreed to in time. Explosionseanwhile, rocked the hazardous chemical storage site in north china. The countrys official News Agency Says the blast killed 44 people. Center sayshquake the largest blast equal to 2. 9 magnitude tremor. Guy lets get more of the details of that explosion. Are aerospace industrials reporter joins us now from beijing. Out what has happened and why this explosion was so large. Probably one of the reasons it is a hazard site. The reasons havent been pinpointed yet, but the authorities flagged it as a hazardous chemical storage site. The measures that we have seen coming out of the accident manyight, smoke billowing, times over buildings and shattered windows. It has been quite startling. Its fair to assume that there was some chemical involved in the fire. Caroline this is one of the worlds sports. Worlds busiest ports. Is a government trying to calm people . Clement the governments reaction has been pretty standard, as with past disasters. It is the 10th largest port in the world and it handles large shipments. It is the important gateway to northern china. And it15 million people, also figures prominently in the central governments to develop the area governments plan to develop the area. It is pretty evident you see a lot of pictures coming through of burge rows of vehicles in storage, in the port area. It also houses a lot of storage areas for things like cars. Shipments that we dont know the scale of it, but their shipments have been disrupted. Guy thank you very much. This explosion we will be talking about it a little later on with one of the worlds biggest container shipping companies, presumably with exposure into this port. We will get their perspective. Caroline this is yet another issue confronting the economy of china, that has been slowing down lets talk about the is the down, joining us chief investment officer, patrick armstrong. Good to have you with us. Talk to us about the ramifications we are seeing from china. We are starting to see a bit of a calling in the market a cal ming in the market. Is the worst over . Patrick the have been talking about this for the past few days. A couple days ago it was a bit more worrying, but now the markets have digested this. Ident think its the materials people are worried about. I think they were worried that this was a headlining of the week chinese economy or the beginning of a currency war and i dont think its that. I think at some flexibility in exchange. China has been very aggressive on monetary policy. And you do want your currency to weaken in sympathy with monetary policy. They dont wanted to slow so much. Guy its a pretty big leave, though, isnt it . They almost hinted that they wouldnt it has some alarm bills ringing. Alarm bells ringing. Patrick there is weakness of the chinese economy but i think everyone knows that. They arent achieving their 7 and i think they probably still have in the back of their minds that they wont. Next and iulus is will be shocked if that doesnt happen in q4. Andink it is much needed, they want to rebalance the economy. I think you will start to see the fiscal labor being pulled. Caroline we have quite dramatic statements coming out, particularly german economists, calling for the fact that this was a new normal that germany was about to be feeling. We are hearing from the dihk saying that the 5000 businesses that have logistics in china are going to feel the repercussions. How much are European Companies going to be hit by a weaker you want in the grand scheme . Patrick probably germany is one country in particular that has benefited from china more than the rest of europe, and it will suffer economic slowdowns. That germany is an exporting country. Its not the end of the world. Guy is this affecting your investment story . Are you changing anything . Patrick what we decided to do after the u. S. Open was showing the markets overreacting. By the end of the day, both of those worked out very well. Markets arethat just overreacting. Caroline we saw massive move in the dollar, down 1 yesterday. That peopleelement are now postponing whether they think the Federal Reserve will move . Patrick it has us thinking about that as well. We are expecting the september rate rise. I am still leaving that its 5050, but slightly more likely than less likely. If we do get past this week without much contagion, without markets paying much notice, it will probably have less impact on the fed. It is actually weakening versus europe because Market Participants are worrying about not raising interest rates. Guy what is the tradeoff is decision . In patrick there are Deflationary Forces guy so how do i make money off that . Patrick right now, i would be happy to start showing the euro versus the dollar again. Of asset in terms closures when you are looking at asia, is there something that you think the time is not ready . Or do you think the likes of korea and other supporting economies to china will eventually have a pickup . Patrick i think there will be a time to buy asia and i think it will be q4. The market is satisfied i think you will start to see china achieve. But until then it is the falling knife. Guy you have europe portfolio, of my divergences centralbank policy, you still have qe in europe and japan. Europe is just cheaper. The u. S. Is doing on the heavy lifting in terms of the economy its the only engine firing at the moment. Patrick more important than it is a crazy multiple for the s p 500 and you cant have a premium if that is raising interest rates. I think that will create a stronger dollar, and you are getting much better valuation. Caroline we will be asking you where to go in europe next. Us. Ick stays with guy pebble beach, californias famous dog course this week is swamped with drivers of a different kind. We are talking about fast, exotic cars. One British Car Company is looking to make a big splash. Has justs bac expanded into the u. S. And sees a big market. Im not in california, as you can probably tell instead, i got to go to sunny north wales. The surprising thing was i wasnt disappointed. If the beginning of june we are in north wales. There is a Severe Weather warning, which is perfect, because we are here to drive this. The bac mono, the car with virtually no practical purpose. No storage, one seat. As you can see, no roof. Which is great, because it never rains here. Honest. What it does have, though, is this. [engine roaring] guy while its carbon fiber looks at it first thing you notice, the figures arent far behind. 280 break horsepower, a top speed of 170 miles per hour, 060 and three seconds, but it feels faster because of where you set. Wrote legal,t be but inside the cockpit you feel at a race driver. Come back here. Guy and that has got these guys excited. These potential customers have traveled from around the world to see what the mono has to offer for a 110,000 pound price tag. Serious money, yes, but these guys are serious about the sport. They might already have a lamborghinis and ferraris, but the motto was different. There are only three functions you will need. Started, paddles. Guy with the talking over and the track drying, its time to see what it can deliver. The feedback is good. The car is precise is easily pushing everyone to go faster. Everyone, that is, except me. Ive never driven a racing car. If time to pick up the pace. Yeah, i was definitely the slowest guy around that track. Caroline looks fun, though is north wales and it was like a hurricane when we got up in the morning. But i would rather be in california. Coming up, we hear from the cfo of the multibilliondollar steel company, thyssenkrupp, to talk to us about todays earning results in steering the company around. Caroline welcome back. Its 6 45 here in london. Lets go to a company that knows a thing or two about exposure in china. Guy it earns around one third of its revenue from business in china. The Companies Reporting profits this morning that beat estimates. That was ahead of expectations. Caroline we are joined live from their Company Headquarters in germany by the cfo. Welcome to the program. This is all about costcutting give us a sense of whats happening in your market. The fact that we are seeing china devalued, further reducing their steel prices, how much more tough does this get for your business . Good morning. Let me give you two quick remarks one is that we are one of the biggest steelmakers, and the rest is an industrial. Our exposure to china directly is 7 , and this is more hour elevator business that we do. What we do see in developments in china overall, we are positive about opportunities for us. Then you come to the two major factors. What we see is a stronger intake from this year, and it will be on a level i can the previous year. We see a development currently in this market. What weart currently see is in the market, a slowdown, but still growth, and we see it shift from the international oriented to the local producers. In that environment we definitely think we can keep up. We see growing development in china to be seen it adjusted later on. Guy guido, if i look at whats happening in china, at the moment you are exposed to the , you are very exposed. As he say, maybe making a shift towards a domestic story there is an awful lot of steel being produced in the country and it looks like that will only increase in the price will only come down. To you not worry about your margins there . Guido and are steel business, we are not in china. We have are steel business mainly in europe, to european customers, and located here the center of europe. Most of our customers are not more than hundred kilometers away. Then ate hundred kilometers away. 800 kilometers away. Caroline talk to us about what the environment is in europe. He talked about potential consolidation in europe, perhaps as everyone seeks cost cutting. Where are you in terms of consolidation . Are you talking to other partners in europe . Guido but we do see in the european environment see in the european environment is overcapacity. And we do see an overall industry were just a few. Ompanies are earning money therefore the discussion about innovation to overcome the overcapacity issue has always been there. What we are doing and you can 3ee it reflected in our q numbers, is to put ourselves in a strong position. In the corridor where we could report a 50 margin in steel shows that we are pretty successful in progressing. Guy can i bring it back to the whole issue of china . The chinese are clearly determined to make sure that they are on the front with the story. They had enough a lot of capacity in that capacity is getting cheaper. I appreciate the fact that your business is less exposed to direct deal and that your customers are the likes of but do you worry Going Forward over the next few years that you will find life tougher in that segment of your market . I struggle to see how it could get any easier. Overall,e steel market to whatever region in the world, has never been easy along with the last years. What you still do see a major part of the steel prices the raw material. Therefore you talk about 60 70 of steel price determined by the raw material. If you really have overcapacity in to go down, you arent making nowhere. The carbon steel, a product that in general is being viewed more and more locally. You do see exports across countries and along the distance in times of overcapacity, but in general, you have been seeing that temporarily, because otherwise you do not really make a lot of money. Costs matter if you talk about the cost of steel. If you transported from china to europe you are talking like 50. That is important transportation cost, so higherpriced materials that much. In the mental longterm, the issues of overcapacity have to be solved where they are. Caroline in terms of overcapacity, you are looking to still continue to reorient hate your company. You were looking at assets in brazil. Withre these talks going your italian and brazilian units . All, with ourf figures, we have made a step forward by closing the transaction selling vdm. Reduced shareore in the volatile steel related businesses. There are two assets which we have clearly highlighted that are nonstrategic brazil and italy. Coming to brazil, the brazilian market environment is currently not a very good situation. Therefore you could see in our figures that it is partly reflected. Operationally we are making Good Progress and this is what we can focus on. We want to further continue to ramp up plan to make it more efficient and be competitive. We produce very good quality over there, and we are interested to see the market in a good environment. Guy when you look at your spreadsheets, what number for the eurodollar do you put in . Guido all, speculation on that one is very difficult. Besides the one number you should shoot for, it is important to have a balanced approach and see what do you do in case america goes one direction. That is what we want to have a footprint that will always balance these changes, more just from translation, producing and selling more or less in the same current, not having the exposure besides the translation of the figures. I think you should be ready for volatility, more important than to shoot for the right number. Guy seems like prepare for everything. Guido, nice to talk to you this morning. The ceo of thyssenkrupp. Caroline lets talk about some of the top stories this morning. The china Central Bank Says it will keep the yuan stable at a reasonable equilibrium. The right to dropped 1. 1 yesterday after slides the previous two days in excess of 2 . Guy hazardous chemical storage cityin the chinese port exploded it killed 44 people. It was a 2. 9 magnitude earthquake. Caroline and greece today, lawmakers will vote on a package of reforms with creditors in order to release an aide package. They say a bridge loan remains an option if a full program isnt agreed to in time. Guy lets get back to patrick. Patrick, listening to the cfo of thyssenkrupp, a huge steelmaker, he sounded fairly positive. Are you surprised at how positive he sounded . Patrick i think the Global Economy is doing ok. Youre seeing a bit of a slow down and emergingmarket, and commodity exports are suffering, but the western developed world is doing all right. Germany is taking a long. Its not surprising. Caroline what about pricing point . Are companies such as this steelmaker, the luxury companies, going to have to reassess what their price point is in china . Patrick if you have a big part of your sales going into china, thats the issue people are worried about, and i think that will wane over the next 612 months as people get adjusted. China is still growing. It has a very powerful demographic behind it. That will be a growth economy you want to have exploration and. Guy if you had big exposure to china, that was seen as a positive will that carry on . Patrick Union Chinese exposure of you are going to be a global company. You can just ignore it because of the hiccup. Guy so its a storm in a teacup . Patrick i think so, yeah. China will grow faster than the developed world over the next 5, 10 years. Twitter . Are you on patrick the company is. You agree that perhaps china is a storm in a teacup. Patrick armstrong stays with us. Guy coming up, more on the Ripple Effect. Plus, we are going to talk greece and the bailouts. You have seen how twitter question let us know what you think about the yuan devaluation. 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. The pboc lays out its plans for the currency. Caroline explosions rock a site near the tienjien port. Colleagues in germany dragged their heels. Guy welcome, you are watching countdown. Caroline i am caroline hyde. We are starting to see a slight rebound. Perhaps we are strutting to see people digest what is in china and talk up the yuan again. The last couple of days we had huge moves in the currency and this morning that has not happened. Last night the u. S. Markets came back and were down 1. 5 . And then close tire. Closed higher. There was a big spike and volatility and the market is getting all over the place. That then compresses back in as well and we start to see things calming down. The dollar has been reacting to this as well. Lets break some of the details merre getting out of sk. Caroline were still waiting for those numbers but this is a company that has seen some court of explosion. Tengion seeing an explosion that rocked the city throughout the late hours. Will get those numbers in a minute. What is fascinating . Someine you would expect profit decline with sales declined but also from the pboc, the statements coming out of the central bank. Trust the market. Respect the market. Fear the market. This is what the Deputy Government said today. Asia is rebounding. How much are we starting to trust the market and how much is china allowing the market to dictate currency . Guy some details coming through from willow mark. Theyre launching a Buyback Program aiming at around one billion. Some thing always strikes me is this is a company desperately in need of a stock split. Retail investor and that. Guy not a lot of liquidity. Later we will talk to the company. Caroline profit guidelines at 4 billion and they are going to launch a Buyback Program of at least 1 billion. Guy Neil Anderson coming up. A number of questions to ask them. What is going on and what is happening with the china story which they are huge in. Story we also that talked about on monday that we might see a merger between the companies in china, will that give a huge competitor . Interviewis his first of the day. Well also talk about what has been happening in this explosion. Lets get the details of that. Littleails are still a bit unclear about how many people have been killed or injured. What we can say is there are no large there is a large number of people affected by this. 44 is a number we think in terms of the fatality list. Lets get more of the industrial report from beijing. Can you update us on the numbers and what exactly has been taking place . You are right. 44 is the current death toll. Risen from about 17. Hundreds were hospitalized. Lots injured. Identifiers do not seem to be fully put out. There is still smoke billowing on state tv. Everyone is trying to ascertain how much damage there is. It is safe to say that it is somewhat disrupted. They are trying to be very careful about allowing Hazardous Materials in to the port right now. Note ninehat firefighters are also dead. Caroline a tragic story. We have to focus on the business angle. This is important. It is. It is one of the Worlds Largest ports it handles shipments of iron ore, automobiles, coal and crude oil. It is also a gateway into northern china. It is a major port in this part of the country. The city has invested prominently and the plan to develop the areas more holistically. A lot of Foreign Companies are in tengion. Not all are in the immediate surrounding areas. Guy do we understand what caused it. Im exactly what happened . Authorities have pinpointed a Company Called international logistics. It is a hazardous chemical storage site. Might havefire caused it but if you see the footage going around online you see like billowing balls of fire and cloud towers over buildings many times over and some of the footage actually shows the initial blast impact blowing people off the ground. You see makeshift Building Structures threatened and lots of new cars. Very dark. I think you can tell from some of these images that it is probably talks and related. Caroline we will be returning to that story and the implications. We just getting the numbers out. 1. 70quarter profit at billion that is a significant the klein from last year. Guy one issue that will affect the business as well is what is going on with the pboc. They delivered a press conference earlier which assuming that normally doesnt happen with this central bank. We are getting into d stabilization. Lets get the details of how this is affecting the wider markets. Good morning to you both. We do see a bit of stabilization in the markets. The thinking today is that perhaps there is an overreaction to this move from the chinese. Look at where the ram and is trading right now. Rate dropped 1. 4 . Yuan herring those losses. That has had a collateral impact on other asian currencies that also have rebounded following sharp decline. The aussie is premuch unchanged. Trading slightly higher right kiwi in new the zealand has a 1 move that it is trading around . 66. The currency markets are having a breather if you will and given this dress conference which took many by surprise, theyre stepping up the verbal support for the currency saying this move, this depreciation is unlikely to persist. Interesting to see the comments from the Deputy Governor saying to trust and respect the market. Everyone tries to interpret chinas motivation and what it means in the longterm. One of the most important is keeping the engine moving. Lets look at equities now. Rebounded ands your sink the broader markets moving as well from malaysia to singapore to jakarta. Higheri is now trading and in hong kong these are your movers. Of rallying, the tech name in the secondbiggest Internet Company powering on all cylinders and really doing quite well while alibaba struggles. And the oil producers. Some of the travel and leisure shares fell under pressure. And investor skepticism about its plan to involve from a pc maker to highvalue smartphones and mobile companies. Interesting moves today in the market across industry groups. And the pboc continuing to surprise us all as it did with that press conference today. Guy thank you very much indeed. The markets out of asia. Caroline lets get an update from the european perspective now of the file out or indeed the rebound. A littlearting to see bit of a rebound in asia. We saw the you but u. S. Managed to come off its loans. Features indicating that markets are set to bounce back a little bit and we have had some positive earnings. Although this depreciation is continuing, the pace of that depreciation has slowed somewhat and is giving some people hope on top of those results in the Korean Central Bank is not cutting rates in yesterday so there was some concern that perhaps we would see a race to the bottom in terms of other Asian Countries trying to devalue their currency. It looks like we will get some kind of a pickup as well in the European Market this morning and nestle may be among them. Up almost 2 following those results. I want to give you some of the headlines. Basically organic sales growth coming in higher than analysts estimates and overall sales coming in at a smidge lower than they had expected. And i have some breaking noodle news as well. Nestle has been having a tough time in india with its noodles. Now setin india has aside the order for nestle to recall its noodles. They will have to submit the report within six weeks and that has been causing big problems for nestle in india reporting its firstquarter losses in at least 15 years partly as a result of that and obviously there were accusations from the Food Standards Agency there that they were that they were set a time that they didnt meet and nestle noting that the same noodles are for sale and seemed to perfect we find in the u. S. And canada. Theyre suggesting those rejecting those suggestions. Authorities had been suing them to the tune of 100 million accusing them of gross negligence, apathy and callousness. Callousness not often a word seen associated with noodles. Guy . Thank you very much. Mentioning the fact that futures are higher this morning. Looking for the moment at the calculation that we have. Ask up 1. 5 and cac 40 up 1. 5 . But the overall number youre looking at for the euro stocks up around 1. 7 . Oil looking like you will see a fairly sharp open to the backside. And that very strong rebound yesterday. Caroline we are seeing borrowing costs rising in germany and the yields coming back off what had been a move into the debt market and guy and some really strong corporate numbers as well from the likes of netflix and elsewhere around europe. To the china question this leads us into this. The chinese devaluation and the storm was a storm in a teacup . Excuse the pun. We will take a break. Caroline coming up, bailout lose. The greek deal Takes Center Stage as voters vote on the reforms but germany dragged its feet and finland says the bailout will not work. And we will be talking to the mers group ceo. Maersk group ceo. Guy it is 7 16. What does that mean . A 16 in frankfurt. Caroline Chinas Central Bank says it will keep the yuan stable at a reasonable equilibrium level. It dropped 1. 1 today after slides of 1. 6 and 1. 9 in the past two days. Hazardousought chemical storage site in the 1960s. The news agency saying the blast killed 44 people. Servinga major port beijing. A 9. 9 magnitude quake. Avenue package of reforms agreed upon with creditors to release an 85 million euro aid package. Withheld it saying a bridge loan remains an option if a full eight program isnt agreed on an time. Guy for more on greece that scott to athens. Forward toas we look this debate, this the this vote what is the Political Climate like going into it . Indeed the Prime Minister has a difficult task at hand. Right now he is trying to keep his party as united as possible. Just yesterday we had the parliament speak once again presenting obstacles to the he is been a close political friend to the Prime Minister for many years. Members have been going around greece the past couple of weeks trying to measure their strength. 2530 lawmakers not to vote for the deal today. Some say the number could go up to the likes of 40 or 50. It is for certain that syriza will be divided before the elections this year. Some say they will be held in september and other say but tsipras says when is the best timing for the Current Administration to hold elections. The most interesting part may be willer the platform voluntarily leave the syriza party or whether the Prime Minister will be forced to force them out of his own party. See you as ever. Grateful for the update. Hes joining us out of athens. Caroline another government vocal in the greek crisis is finland. Thattubbs previously said finland may consider allowing greece to extend its debt repayments. Joining me on the line is a reporter who will be speaking with him. What are you going to be asking about his stance on greece . Is that theh stance possible next bridge funding is an option but it depends of course on many conditions. That is what the finance minister said yesterday. So this deal will not be concluded. It is increasing liability because the government has stated in its government that anymore liability cannot be accepted by finland. Guy in terms of the longterm feeling in finland these of the is greece, is a v there an expectation that it will remain in the eurozone and that it will hang together . The feeling in finland in general if you think about the has had ahat greece lot of help already from euro countries and finland and what the finns dont like is that it seems like these packages are not working in the feeling and general is that greece is not trying hard enough to achieve their goals. And a greek exit is not on the theda but in the government thin party the leader of the party who is also the foreign minister said and it bloomberg interview last week that this bailout package is not going to work and at the eu should start finding other solutions. Of discontent is high and very visible in the government. Guy we will leave it there. Thank you for the update. Caroline with us from the studio is sir patrick armstrong. And thisou like europe is where youll put your money. Which sectors and which companys . Our biggest positions are in european banks. They should not have been impacted by china but they are all down 3. 5 . European industrials is another valuation player. We think there is growth in the ozone emerging. The Global Economy is still ticking along. A lot of the industrials are trading at 14 to 15 times earnings and we think that is quite attractive. Do you care about greece . Guest there wasnt going to be much contagion even in a grexit scenario. There are a lot of headlines and it probably gets a lot of viewers but the real impact is not much to than the average. It will it is qe that will keep the euro lower and people worried about the end of qe and 2016 and i think that will be extended if necessary and being contrarian and tang a pro cyclical play in europe i think you will be rewarded for that. Weve taken abroad Global Industrial companies on the banks and it has very well diversified every country. There are pros and cons and Different Countries but the ecb its the banks to be lending so they will be pro financials. Guy thank you very much indeed. Lets change gear. Californias famous pebble beach course for has a different kinds of drivers. Some of the most exotic cars on earth. Its firstxported model into the u. S. I didnt get as you can probably tell to go to california. Instead i got to go to north wales. The surprises that i was not disappointed. It is the beginning of june and we are in north wales. There is a Severe Weather warning in place which is perfect because we are here to drive this. A car with virtually no practical purpose. It has almost no storage and only has one seat and as you can see it has no roof. Which is great because it never rains here. Honest. This. T does have is the carbon fiber looks might be the first thing you notice the facts and the figures are not far behind. Horsepower with a top speed of 170 miles an hour zero that itb three seconds feels faster because of where you sit. It might be road legal but inside the cockpit you feel like a racing driver. You come down through here into this banking corner. Guy that has these guys excited. These potential customers have traveled from around the world to see what it has to offer. But these guys are serious about the sport. Have a stableeady of supercars, portions porsche, lamborghini, ferrari but this is different. Have to start it with paddles up and down. And with the talking over the track drying out it is time to see what it can deliver. And the feedback is good. The car is precise and seems to be pushing everyone to go faster. Everyone except me. Ive never driven a racing car like this. Pace. Time to pick up the those guys were on the wall shouting go faster. Can i hear it over the wind. Caroline you get all the luck. Coming up on countdown, the yuan devaluation rippling through the market. The impact on the industrial story. We will speak to the director of the International Chamber of commerce very shortly. Caroline equity futures trade higher. Get excited for the 1989 world tour with exclusive behind the scenes footage, all of taylor swifts music videos, interviews, and more. Xfinity is the destination for all things taylor swift. Caroline welcome back. 7 30 on the nose here in london. Here are the top stories you need to know. Guy the chinese Central Bank Says it will keep you keep that yuan stable at a reasonable level. That is the official fixing rate. Rocked a explosions chemical storage site and the north chinese city of tienjin. Chinas Earthquake Center says the largest of the blast equal to 2. 9 on the richter scale. Guy greece has agreed on a package of reforms. The German Government has withheld support withheld approval of the draft bailout saying a bridge loan remains an option if the full program is not agreed on in time. It quick we can get check on have futures are lighting up. Guy things got really slammed yesterday. Industrials got hit really hard and everything was really knocked around on the back of the china story. What youre looking at here is the fair value calculation and you are looking at a 2 upside move for european equities. The ftse, the cac 40 and the dax all looking like they will open sharply. Im not sure there are any dividends in today but certainly continental markets in particular, the dax looks like it will have a positive start for the session. Caroline the move to devalue the currency is one group that could face a new normal and that is according to our guest joining us now from berlin. Saids your colleague who there is a new normal in germany by industrial companies. Talk to us about this headwind that a weaker you want it give the exporters of your country. Economy will not grow as before. The German Companies know that the German Companies in china know that but they still want to hire and they still invest. German companies here know that the export growth to china will slow it down and the devaluation is part of the story. Guy is it likely to be something for a long. Of time or a short period of time . The new normal imply something that will be here for a while. Grown chinese economy has very fast it a percent to 10 in recent decades. It was possible for a while but not for longer. Realistics much more and in some years may be only five will be realistic for china. Caroline china is germanys third biggest export market. Will it try to reorient itself . The chinese economy will still grow faster than other economies around and exports will grow faster. So it is only a question of time when china will be the most important trade partner of germany. Guy do you think that wages will fall as a result of this or that unemployment will rise echo rise . On track to get a magnitude of the importance of what is happening. People terms for real and real businesses, what does it mean for them . German economy in german exports will not grow anymore. The amount to export from china will slow down a little bit for but exports will grow and prompt industries to rease because of that it talked was about the flip reverse of it the fact that imports are becoming cheaper from china it seems that china is your sixth biggest market. Any benefit to the companies represent . German companies which import from china could benefit but it is not only the chinese currency but also other currencies compared to germany are more watchful now. If we look at the euro, the euro has still depreciated about 13 against the yuan. How much and a grander scale do you think they could keep on going . Development is more a sign of a strong dollar than a week runin be in our view. So the german importers from china could benefit but it is only a small part of the story. Guy we will leave it there. Thank you for your time. At bhk in germany. Caroline just 25 minutes to go to the European Market opens for the day and we want to take a look at what to watch and scotland. I have to pick up first of all on the fact that back in june, you upped your emerging market exposure. You went some 17. 8 in terms of your portfolio. He took on board a singaporean bank. How have these investments been hit and do you think there will be a bounce back . A sort of modest to overweight emerging markets. It is not the biggest position we have put it is overweight. If i had my time again perhaps we wouldnt have done that. But that is the nature of what we do. Look out over the balance of this year and into next year the real key is whether that economy is recovering or not. I think that is a far bigger question than the direction of the chinese currency. Certainly there are indications of a recovery. Then certainlyt in the past emerging markets have been very sensitive to those Global Economic trends. If we see u. S. Economy picking up the second half and europe the same then that demand should drive exports from emerging countries and that is very closely related to earnings of Companies Listed in emerging economies. Areany of these countries exposed to the resources that are falling in price so aggressively at the moment it and that trend does not look like it is fully over yet. That is right. The area with focus most of our attention on are the banks. If we look at banking stocks globally as well as the emerging markets we think they trade on very low valuations and are not really priced for economic recovery in the second half of the year. So the additions we made were in the banking sector. Wene give us a sense should point out in terms of the eurozone we are going to see a rally today. Which areas of europe . Is it about banks and europe, too . It is. We have a very positive review in the biggest overweight position we have is within europe. And i think the real key here is the economy and the signs that there is a domestic economic renaissance. That is crucial. It is not all about the euro. At the beginning of the year the consensus was that qe would lead to a decline in the euro. It already happened as we got to the announcement. Perhaps the new news has been that qe is having a more pronounced effect on domestic economic conditions. So all of the upgrades to gdp for 2015 have come through consumption not net exports. That is key. That favors more domestically and front and center there are the banks. We have had a pretty good earnings season and the Second Quarter for european banks. Guy are you comfortable putting more money into equities right now and are you couple putting the bulk of that money to work and europe . Yes on both counts. I think the equity cycle globally is long in the tooth. We have had a very long run, but we came from an extremely depressed position. I think there is further potential for gains in equities and relative to the returns another assets, equities still stack up reasonably well. Gains forhave huge markets but certainly respectable performance. Think all of that i do that continental European Markets are the place to be. They do offer the potential for multiyear recovery and earnings from a depressed point. Caroline in the place were leaving out is the u. S. Have you changed your opinion of what the Federal Reserve will do . Not exactly. The call from us is still for a september hike but it would be fair to say that the conviction around that has become less strident than it was before the move. Confident but still a call for september. Fine. S. Stock market is but valuations are a lot fuller than elsewhere in the world. The prospect for earnings are less interesting to us than they are in other countries and i think the prospects for the overall market are not as good as they are in the international markets, europe being the top of the list. Guy every time we think we should be rotating out, you keep coming back to this view that the dollar keeps getting stronger and the u. S. Economy is doing better than we thought. Are we underplaying the u. S. I know valuations are really stretched but are we underplaying the potential . Certainly you would have to say the worlds most Innovative Companies are in the u. S. It there are plenty of reasons to buy u. S. Equities and certain parts of the stock market. As i say carol a girl which part . Caroline which part . Multinationals the businesses most interesting to me are on the b2b side. Some of the more traditional techbased companies. If we come back to the point at the beginning, if we see a bal economic recovery there is nothing particularly wrong with that. We do see better prospects elsewhere. Caroline lets check in ahead of the open of how futures are currently faring. We are seeing a tip take upwards for the day there it guy a used to be wednesday and it is now thursday but things like hsbc are going to be paying out today and that will knock a few points off the ftse 100. Caroline maersks container line reported a drop in profit. We will speak to the company ceo here on bloomberg. Guy let me tell you about the stories you did to know about this morning. Explosions rocked the north china caroline explosions rocked the north chinese city of tienjin last night. Guy in greece today lawmakers l vote on a package of agreed upon with creditors. They withheld the package sing a bridge loan is an option if the full program isnt agreed upon in time for a payment to the European Central bank do next week. Revenue increased 4. 5 on and at an organic basis. It helped fuel their sales after a lag for more than a decade. Overthis head of strategy at barclays is still with us this morning. We proved a little bit about the emerging markets story and a little bit what is happening in europe and the fact that you the u. S. E you up and europe over the united states. Can i get a sense of your . Houghts on the relationship the bond markets never seem to go away. Weve seen it once again. You backing up and prices looking more favorable. When does that the virgins come clear . Think it depends on the horizon over which people are investing. Lets say over the balance of this year and into next year, qe will continue to be a major damper on bond yields. Do see yields rising but in a gentle fashion. Oversaid, if you look out the life of a 10 year bond i would be very surprised if it cannot manage to get a better return from equities that some of the bond yields offered at the moment. It depends on syriza. I dont think we will see a major collapse in the shortterm. Caroline wonderful to have you on. Europe seems to be the place to be at the moment. Guy shipping giant maersks reports a drop in profits and has announced a massive Buyback Program. You, thank you for your time. Why buyback stock when you can invest in your business . We are investing quite heavily in the business but weve got a very strong balance we think with the price in share prices and someones it is not a bad idea to buy back stock and i think it is good for the shareholders to signal that we want to keep a good strong Balance Sheet and we do not want to be over strong. Caroline is china a blessing or a curse . Are you expecting exports to pick up . I think it is a statement from the Chinese Government that be an out of china will Important Pillar of the economy Going Forward. I dont think you should overestimate the impact but i think all things being equal this can only be good for trade formation to the higher cost countries. Is underlying good for us but i would not overestimate the shortterm effect. Guy give us a sense of the longterm effect. Re had been an expectation when you saw the news, what was the first thought that went through your head . I think we have changes all the time in macroeconomic circumstances and we try to keep a really longterm view but as i said before this is fundamentally good for the bottom line because export through china from the u. S. And europe is not overwhelmingly profitable. And the driver of our bottom line is the export out of china to other markets. Think it is good for us but as i said before these are shortterm things and we do not manage the company on that basis but it is good. Caroline competition could be heating up. This weektalk early that china cosco and China Shipping could be combining. Could you be about to face a much stronger competitor . Be the will maximum Third Largest carrier if they combined and generally our attitude is that we would like some commendation to happen because it would be good for the market. But the rates we are working with now if you take into account the slightly High Oil Price there on the same level as they were in 2009 where we lost 900 million this year. Line 1. 1 maersk billion on essentially the same competitive situation. We become a Much Stronger Company and we feel very confident that whatever happens uncommon nations and strengthening of individual competitors we will be able to have a very solid business year. Guy we have seen some very ienjinng pictures out of t this morning. Probably too early to get a full grip on what this might mean. Do you have information you could share with us you go we are in the port but we are not in the areas where the explosion took place. It andm is unaffected by that is what is important for us. The iis up to believe it is a state owned terminal and the government would probably inform about the consequences but our operations are unaffected. Caroline talking of ports, you are eyeing up greek ports. How are the talks going . I could not hear you. Im sorry. Caroline the greek ports. How are the talks going . With the package now being agreed to with the greek government as opposed i suppose privatization will be an important part of that and needless to say we will look at opportunities there we would be very pleased to buy a greek port if the conditions were agreeable. Guy congratulations on the numbers, thank you for your time. Its a great pleasure speaking with you. Caroline a few minutes from opening the markets. Seven minutes in fact. Lets go to jonathan ferro. Jon looking for the snap back. The rebound. The come back after the biggest sincedropped on the dax 2011. Some soothing words from the peoples bank of china. The market pops a xanax. You need to pick up the pieces and have a look at some of the sectors as well. The mining stocks taking a big beat down. A brutal 2015. One stock that really is glencore. Down 12. 5 in just two days. This Company Reports earnings next week. This was the darling of the Mining Sector 12 months ago. It was supposed to weather the storm of a commodity market route. Will besector that we dealing and. Do not miss that conversation. Then we have to talk about greece. German resistance. As ever nothing changes to guy it depends on who you talk to but i take your point. It is going to be a difficult story to navigate for the germans and the greeks. Looking forward to it, thank you indeed. On the move is coming up in the markets are very much on the move this morning. Caroline popping that is annexed as jonathan said. High this on a morning. Popping something else. You can see that we stayed here a little bit. The cac 40 in the dax are 1. 6 . The ftse 100 up around 0. 5 . Caroline we are coming up that is it for us on countdown. On the move is up next. See you tomorrow. Jonathan good morning and welcome to on the move. We are moments away from the start of european trading, lets head straight to the brief. In a rare press conference, the peoples bank of china steps up verbal support for the chinese currency. Bankhinese central confirms a disorderly evaluation. They voteance as german straggler hills drag they are heels. Dax futures are up after the two two Dave Reichert day route. Caroline a quarter of a trillion in excess, in excess of that was wiped out of the stoxx 600 yesterday. We saw the biggest move since october, today, a rebound. The laggards today, we have monster Companies Going ex dividend. Everyone is factoring in the value for these companies. , we will keep an eye on some of these companies. Nestle is one of them. Will the autos rebound . Amazing statements coming out of the chinese Central Banks