Speaks about relations with the u. S. And the nuclear deal. The United States in my view has shot itself in the front. Conversations about the Global Economy at d7 finance meeting. G7 finance meeting. I think we need to be thinking about what happens if there is more than a slowdown. You need countries that have the physical space to come in, stimulate their economies. It is all straight ahead on bloomberg best. Hello and welcome. This is bloomberg best, your weekly review of the most important Business News, analysis, and interviews from Bloomberg Television around the world. Lets start with a day by day look at the top headlines. Moneyline monday investors sifted through a slew of data from china. Chinas economy is continuing to slow with sluggish domestic output and trade tensions pulling growth down to the weakest levels since early 1990s. Gdp grew 6. 2 , matching estimates, but below the 6. 4 theme in the previous quarters. It is slowing on a quarterly basis. The take away from today is the activity numbers for june. We saw a pickup on the retail side of things, industrial output all headed in the right direction, all beating analyst estimates. A pickup in cosmetic sales, a turnaround in the car sale sector, it all points to an economy that clearly there is a long way to go before it is truly out of the woods, but it hints at stabilization after a rocky period. Citigroup taken off the busy week of earnings, topping analyst expectations, reporting profit and revenue gains despite a 5 loss in trading revenue. What struck me was the praise citigroup got for costcutting. How is citigroups costcutting better from other banks we have seen . For one, there is costcutting to improve efficiency and the amount of money you have to invest. Citigroup is benefiting from the fact that they are becoming more efficient in some areas and that is allowing them to continue to invest. The bottom line is they reaffirmed the common equity targets. That is a key metric for the company, despite the fact that they have these revenue headwinds, they are cutting cost. Earnings week for the big u. S. Banks underway. J. P. Morgan snapped streak of quarterly increases. Wells fargo posted its lowest lending income as the pain of Interest Rates hits revenues. Powerhouse balance sheets, but still problems with margins. Of there 33 in terms big interest banks. J. P. Morgan bringing down their guidance. Wells fargo which had already brought down their guidance couple times missing that estimate. The more negative than from wells fargo is on the expense side of things. They are coming into the higher end of the range, then flat expenses next year. Goldman sachs is a different story. The equity trading revenue for the business coming from. That coming through, as well as better fees. Wall street fell from a record and the offshore yuan weekend after President Trump reminded us that the trade war is far from over. President trump we have a long way to go in terms of tariffs. We have another three or 25 billion 325 billion we can put on if we want. This confirms that a clear path to a deal is nowhere in sight. You heard from trump there is a possibility of raising tariffs rurther, but a precondition fo beijing in talks to take all tariffs off the table. We hear china is prepared to whether this storm, the Global Growth slowdown, and are prepared to adjust fiscal and Monetary Policy as appropriate. Bank of america reported a record secondquarter earnings, missed on the Interest Income despite a beat on trading revenues. Fixed income trading revenue is unchanged from a year ago. That is surprising, because all the other banks that have reported, including goldman, they have sizable declines in fixed income trading. Bank of america held on to its revenue. That is a good sign. Equities is down, but everybodys was down. We knew net income would be under pressure. The fed has signaled it is going to cut rates. Longterm yields have already dropped because of that signaling. The numbers maybe didnt shock people as much. They were expecting it. The surprise was in income trading, fixed income trading. Morgan stanley is among the last of u. S. Banks to report earnings. They beat of course. We have all six banks out. What is your take . Muted trading environment, overall muted revenue environment. Estimates coming down out of this quarter. We got a little bit of excitement at the end of the quarter, but that immediately stated, so not enough faded, so not enough. We have had estimates come way down. Global news 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Keep two key things to watch, one is global and macro uncertainty. That tends to be an indicator for deals. The concern is, will not feed that feed into the u. S. Economy . Global stocks are rallying today after darvish comments from the federal dovish comments from the Federal Reserve and new york fed president. Better toaid it is take preventative measures than to wait for disaster to unfold. His comments posted Market Expectations for a 50 basis point cut this month. Speaking with fox news later, the feds number two said you dont need to wait until things get bad to have a dramatic series of rate cuts. A new york fed spokeswoman took the unusual step of clarifying williams remarks, saying they were from an opening speech on 20 years of research. It was not about potential policy actions at the upcoming fomc meeting. They must know this is just before the quite period, that the end of the month is an important meeting. Are they trying to send that kind of signal . The markets heard it. Investors dont read their speeches, they just trade off of the headlines. John williams was going to make an action of speech about how people make policy when you are close to the zero lower bound. It was, as the new york fed tried to later clarified, a summary of 20 years of academic research. A headline comes out saying williams as you have to act quickly. He was asked late in the interview, would you consider 50 . If we needed to, we would. The headline says, fed would, and everyone trades on that. It is irritating as a former practitioner. Liability went from roughly 40 from when williams spoke to 60 after he spoke. After the clarification, was down 30 . Down to 30 . If you are a sucker that had to pay out, your loss is real, it is not just something you learn in the classroom. Still ahead as we review the week on bloomberg best, an interview with the foreign minister of iranian, plus comments from the g7 finance gathering in france, and more highlights from a whirlwind of reports. European banks reassure investors they are moving on from moneylaundering scandals. It is important for us to be viewed as a safe bank. This is bloomberg. This is bloomberg best. Lets dig deeper into one of the weeks biggest stories, corporate earnings. Our round up of the weeks results continues with some european banks. Square bank have beaten the streets. Net income is the big headline. 50 lashes payout policy to of annual profits. A probe continues. This is a massive headline. You are cutting the payout rates to 50 from 75 . Is that in any way tied to your concern about Money Laundering vacations laundering investigations and what you might end up having to face in charges . The change in dividend policy is on the backdrop that swing back will continue to be square bank will continue to be a low risk bank. We have seen in the past 18 months that longterm interest with and the fx, together increased Capital Requirements coming for swedish banks in september pushing down the buffers to levels we dont find acceptable. It is important for us to be viewed as a safe thing, a safe bank, but you have to recognize we are in a special situation at the same time and you have to take that into consideration. Build asponsible and safety buffer. Secondquarter operating income missed the lowest estimate. The biggest nordic bank by assets is under pressure from investors to improve revenue after years of focusing on cost cuts. They say they need to review capital and dividend targets. Should investors prepare for a dividend cut . I am not going to comment on right now. When we look at where we are in recent years we have derisked the bank. We have invested heavily into digital and complaints platforms. We concentrated the business into the nordic markets. We are in a new phase of customer focus. We expect soon to have better clarity on our Capital Requirements. It is in that context our shareholders and investors ask for this. I think in the fall is the right the, because we have visibility from the Banking Union and requirements we get from there. Scandal plagued Deutsche Bank is in talk with denmarks regulator. Thanks as extra Compliance Costs and a tougher trading environment forced it to lower its outlook this year. Dont the bank has been in survival mode since its estonian Money Laundering scandal erupted last year. Let me ask you what you expect as far as Capital Needs for the remaining year, for 2020. So the dialogue we are having with our local regulators is about some of the complaints issues we have found. Theo anticipate midsingledigit billion range is what we write in our report. That is what we are disclosing. This is not something that will come out until we have for notification of this. Firm notification of this. Ericksons earnings have missed analyst estimates for the first time in six quarters as it says the rollout of 5g mobile networks in asia equipment vendors adjusted operating profit rose and actually achieve a competitive cost structure. We are delivering according to that plan. The trenchcoat maker is up to the most since 2012 after new designs went well with the chinese market. A rebound helped store sales grow four percent, double what analysts expected. Should we still be calling for very a trenchcoat maker . It is known for forging alliances with popculture icons. In paris, he really opened up this parisian couture house to people like kim kardashian, who had millions of foresters of followers on instagram, and beyonce. He brought some of them to burn very. His designs are bringing attention to the house, but that message is being amplified on the internet. The worlds most comfortable distillery profitable distillery beat expectations with net income growing 27 in the first half. Revenue was up 70 . 17 . What stood out to you . Perhaps we receive weaker Consumer Sentiment at the lower range, but this company is in a league of its own, analysts are not phased by these fluctuations. A lot of people are fixated on the healthy profit earnings. Johnson and johnson released its secondquarter earnings and hour ago, reporting better than expected results. Pharmaceuticals led the way for johnson and johnson. Give us your top line analysis. I think our results solidify the first half of the first year in a strong way. Pharmaceuticals did lead the way. We continue to perform beyond the market in which we play. New products to market as well as line extensions. We are seeing improving trends on our medical device and seamer units. It was a good start to the year. Netflix tumbling after the streaming giant reported a prize loss of u. S. Customers for the second quarter. Renewing concerns about its Growth Prospects at a time of living competition. Netflix says it lost 130,000 customers in the United States as a result of higher prices and a weaker slate of shows. What is your reaction . I think price increases probably drove the subscriber loss domestically. I think they are bumping up against the ceiling on what they can charge and continue to grow. I personally believe they will keep 80 of their domestic subscribers. Competition starts to materialize. Disney plus in the fall, warner next year. More content at the end of next year. Microsoft shares popping after reporting fourthquarter results topped estimates. A continued strength in the cloud business. Another big quarter for microsoft. This was expected. What is the top line take away . Almost every line item was good. We did not find anything negative. The potential in the enterprise space is enormous. Tensions between i ran and the west iran and the west grew after the u. S. Withdrew from the nuclear agreement. Iran is accused of breaching the deals caps on enriched uranium. Do what is necessary. The europeans need to take the necessary action to the United States has basically in my view shot itself in the foot by withdrawing from this agreement. Is the necessary action europeans need to take . You want them to buy oil. What is the way out . It is up to them to decide. They made the commitment that irans economic relations with the rest of the world will be normalized. They made the commitment after the United States left the deal. They knew the u. S. Was leaving once they comply, it can be reversed. All the pressure, we would have built you think you can build Nuclear Weapons within a year if you wanted to . If we wanted ot, bu but we dont. The first admonition is, as christine guards the uncertainty is affecting corporate decisions, with reports hp and dell plan to move as much as 30 of notebook production only from china in a bid to avoid tariffs on u. S. Goods. Dells ceo declined to comment, but told bloomberg flexible ability in the supply chain is helping the company navigate through competitions. We have a Global Supply chain that has flexibility. We have 25 manufacturing facilities across the globe. We are balancing the needs of our customers with the environment that we are in. I think we have done a nice job of balancing the dynamics and we will continue to work our way through that. Hopefully the two governments will come to an agreement at the right time. There have been three tariff lists we have been able to navigate. By far we have been able to mitigate the impact by shifts in the supply chain. We have adjusted certain prices products, minority of just as a result of our inability to mitigate it. Try to keep their economies on the right trajectory to achieve their objectives. In the case of a significant slowdown, which part of the world do you expect to provide the biggest downward drag on Global Growth . Hard to say, because we dont know which shocks are coming. I think europe is in a situation where the policy tools are somewhat less ready at hand, tot less ready at hand, and clearly, as mario draghi has been saying, it is important that theyre not be an overreliance on Monetary Policy, that in the event of a downturn, especially a severe downturn that all policy levers, monetary, fiscal, and structural will be ready to be used. G7 finance ministers and Central Bank Chiefs met in france this week on a host of issues trade wars, Global Growth, cryptocurrencies, all are for discussion. Many of the attendees spoke of bloomberg. Here are some of the highlights from those conversations. If you dont know if you are going to be about to sell, then you dont invest because you only invest to produce, and you only produce to sell. You dont know at what tariff you will be able to sell, and therefore, you dont invest. This is what is happening. This is why we have seen the slowdown. Mostly because of a trade tensions which are moving into the territory of investment in creating uncertainty. Which raises the question of what is to be done about that. One of the questions back in the hased states, jay powell said that because of trade uncertainties we may become more accommodative in our Monetary Policy. We have seen a growth in a negative yielding debt around the world. So you are saying that the challenge to brothers because of diminishing trade. , central bankers are heroes but remember, over the last 10 years in which we have been dealing with the crisis, they brought down the rates to around zero. The rates were written the fed was reversing somewhat that now it has given it knows that it will start cutting rates going forward. The only problem is that you now need fiscal policy. You now need countries that have the fiscal space to come in estimates of their economies, invest some more. Doesnt mean they will lose control of their economies or their debt, it just that there is wrong in many economies and they should use it. Is one thing,licy but we need also to reflect on fiscal policy. It is high time that we build the right policy makes because what we see today is a slowdown in economies everywhere and also the need to address the various concretizecould together. Trade tensions come up between the friends in the u. S. , that is nothing, between the u. S. And china. One of the things the americans say is that the dollar is too strong. Do you think the administration will try to talk down the dollar . I am not commenting on Monetary Policy because the currency is their own domain. But i think we need to be thinking about what happens if there is more than a slowdown. I am not saying this is going to happen. Our forecaster would say that we are optimistic. We see a slowdown for this year with a modest recovery, but we also see a correlation of risk, and we need to have that in mind. For example, we need to reform the wto. We also need to reform the imf quotas. And we need to redesign fiscal policies. Because some of our economies have a large fiscal gap, and we need to use it to invest more and create growth. Some of us still have high level of debt and any to reduce that. Know that you had a oneonone with steven mnuchin. One of the things the administration has said is that they think the dollar is perhaps too strong. The think they will try to talked on the dollar, and what does it mean for the euro . It is up to every nation to take its decisions as a sovereign nation, but as far as europe is concerned, we think and we have the view that the Monetary Policy must remain in the hands of the central bank, which is an independent central bank. The ecb is independent and it is up to the central bank and only the European CentralBank Decisions related to Monetary Policy. This is the french position. This is the european position. And it will stay the european position. Maria you talk about the European Central bank, the market is already pricing in a rate cut. The worry that the worry that that could have serious repercussions on the european economy, the real european economy . In lowe are advantages Interest Rates for the debt for instance. It might be interesting. But the key question for the eurozone is the lack of growth. We have a level of growth around 1. 2 . That is not enough. You cannot explain to the people that the eurozone is a success because have stability but not growth. People are waiting for stability. But they are also waiting for growth and for prosperity, for jobs. I think that all the 19 members of the eurozone should think about the possible tools that they might use to feed growth within the eurozone and to have a stronger growth, which would make more prosperity and more jobs for everybody. This is bloomberg best, i am Abigail Doolittle. Lets resume our roundup of todays top Business News. Avoided aament post. Ck and filled a key ursula von der leyen has been confirmed as the next president of the European Commission the first woman to hold, europes most powerful policymaking post. She managed to get the nomination approved by the European Parliament but it was tight. 3 votes, a very i was told by senior members of the European Parliament that anything below 400 is actually very weak is actually a very weak mandate. She had a lot of challenges ahead trade, the relationship with President Trump that has become rocky over the past months, and of course, brexit. It is not the end of something. It determines the beginning of the future relationship between the United Kingdom and the european union. And we went to be partners. They are our neighbor. We have common interests. So i will put a lot of emphasis that we will have if necessary, a brexit in a good way, knowing that we have a common future. Abigail facebook back in the hot seat. The executive responsible for its proposed Cryptocurrency Libra spent much of the morning appearing before the Senate Banking committee, trying to reassure skeptical lawmakers. Trust is primordial and we have made mistakes in the past. We have been working and are continuing to work really hard to get better. Not a real warm reception here for david marcus this morning. Thatally, to the extent of he was hoping to limit the discussion to facebooks cryptocurrency plans, it very their. Veered away from the top democrat on the committee, sherrod brown, basically said that because of facebooks track record, the record, the senate would be a delusional to trust facebook to go ahead with this project. Everyone had a swing at facebook here. They were also talking about they were also talking about libra, which is in that context in facebooks plan to do something that has never been done before and potentially change the way the world uses money. The bank of korea has lowered and we waitk rate to see if the Federal Reserve takes the lead. I think 10 out of 25 economists got it right. A sign that exports have created an urgency for policymakers that it could not wish to address. This comes less than a year after a hike. What is next for the central bank . Of course, the big question is will they cut rates again, and if so, when. It is kind of exciting and fun when rental banks do something went Central Banks do something unexpected. The slumping exports, six months in a row they had been down, there be ok cutting its 2019 gdp 2. 5 . St to 2. 2 from in the background, a u. S. China trade war that doesnt and, depressing exports around the region. Japan. Also going headtohead in their own trade war, cutting their 2019 cpi forecast to 0. 7 from from 1. 1 in april. That is the reason they are cutting rates. This companys shelving of the years hottest offering has taken the wind out of the sails of the Hong Kong Ipo market, and even its own plans to clear its debt pile. Start with hong kong itself. How important was this deal for the exchange. It was definitely important for the hong kong exchange. They could have doubled or first sharees the fundraising in hong kong, about billion dollars, looking at about 8. 3 billion and 9. 3 billion in fundraising. So from a numbers perspective, it is very important for the exchange. Why, is the big question. Weaccording the people spoke to, there was not sufficient demand for the ipo. Investors and pension funds, they thought the valuation was too rich. They also had concern over Growth Prospects. Ab inbev agreed to sell its to anotheroperations company for 11. 3 billion. Carlton and unit in breweries account for about half of the beer market in australia. The company said it is still considering an ipo of its asian subsidiary. Is this ab inbev not trying to tell investors that they are serious about cutting their debt pile . It is interesting that they the ipo quickly after plans to do this. It makes you wonder whether this was plan b, if the ipo of their asia as a didnt come off, whether they were expecting that, whether they were concerned about it. But they dont have really huge pressure to do the deal quickly, so the timing is quite interesting. Dozens of people were arrested as protests continued in hong kong. The latest and most come amid reports that beijing has rejected chief executive carrie lams offered to resign. Are there any signs that protests will be dying down . They have been keeping the momentum quite well. May have tens of thousands in the suburban areas of hong kong, and they have been trying to mix it things up. They are not occupying one location, they are going around to different facilities each weekend and managing to get very sizable crowds. Violence. To into little scraps every night. We saw this again last night. Two policeman had their fingers bitten off. Night. Two policeman had their fingers bitten off. Some gory scenes there. But they settle for the week, and then protesters are right back out there the following weekend, still attracting sizable crowds. So even if beijing is upset lam. Carrie the problem is for them, if she steps down, it reflects badly on them and provides an example where mass street protests can remove a leader that they have essentially appointed. For them, that is a line that they cannot really cross. Broadcoms acquisition of symantec appears sidelined after price. Surrounding but there is a report that indicated broad come is still very keen on the deal. Where do things stand . I dont think it is dead i think it is stalled,. What we understand happen is that everything was done and go. Y to the people we spoke to said everyone was flying down to announce this thing on tuesday, materials are being shared between the two sides, it was essentially down. Then at the last minute, brought, found something they didnt like in the due diligence. We dont know what it is yet. And they cut the price. They said that 25 billion had agreed was not sufficient for the risk of taking on the asset, so they tried to reduce it. The question is, can broad come come back with some kind of offer in between what they originally said to get symantec over the line . This company has won them a ruling blasting a jury verdict of 25 million from over 80 million, over claims that its roundup weed chemical causes cancer. The judge to reduce definitive damages also rejected the companys request for a new trial. Bayer had vowed to keep weedding its popular killer. How good is this news for the company . The reduction in damages . On the surface, it looks good. 25 million is nicer than 80 million. But the judge rejected a new trial, so they have to appeal this case, which will take quite a bit of time. This is the second of three trials that bayer has already lost. So i think given fridays news, this is the best Case Scenario for bayer. Irans revolutionary guard said it has seized a british world tanker on the strait of hormuz. The u. K. Government says it is seeking more information. The u. S. Government says this is the latest episode in escalatory violence by iran. This only goes to show what i am saying about iran trouble. Nothing but trouble. 12 hours ago, we were talking about the potential for both sides trying to find a way to words a diplomatic solution and an opening for talks. Look what we have just seen in the last couple of hours makes all about i think much more difficult. Obviously, following reports that two tankers, not just the one that we know about, but possibly two tankers have been seized. And definitely ratchets up the tension in a very, very narrow waterway that about one third of the worlds seaborne crude oil passes through. Caroline interesting to see where the groom is coming from. I saw in your notes that you were talking about the policy. I checked out the oeiras function on the bloomberg and yes, we have seen some positive sectors. Todays earnings season has tipped a balance of little. We see a little more gloom. You dont see it as you watch of communication coming through the season from corporate, but there does seem to be some gloom out there. Abigail there are about 30,000 functions on the bloomberg and we always internationally our favorite. Here is another function will go, youful quic can get important context and fast insights on many topics. Heres a quick one from this week. Say you have given up your lawabiding lifestyle to pursue a life of crime. You have just made your first big score perhaps from selling drugs, taking a bribe or other corrupt acts. You cant just spend it for deposit it into the bank without attracting attention from authority. It might serve as evidence for the crummy have committed. So you need to get the dirty money clean. There are three steps to any Money Laundering scheme. First, places were funds are moved from direct association crime. Then layering, or disguising the money trail, and then, integration where funds are finally able to spend without being caught. What are your options . One option is forming a shell company. It is plenty easy and there are many law firms which can help. It should take on the than sending up for a new email addresses. Launderers can send it to tax havens like switzerland, or places or you can set up Anonymous Shell Companies like the u. S. States of delaware and nevada. Once it is set up, make up fake transactions for goods or for. Ces which you paid suddenly, the duddy many looks legitimate. It also helps to find people in banking who dont care if you client. Ady , after the fall of the soviet union launderers sort out weak europe. Roughout billions have been funneled through banks in cyprus, malta, and the baltic nations of estonia and latvia. If you prefer to use the stock market, you can try mirror trading. In this method, use your money to purchase shares then you sell sharesm at the same amount abroad. E the trades functionally cancel each other out what you have successfully turned your rubles into clean euros. The second method is a backtoback deal where a russian takes alone in say, austria guaranteed by a deposit of dirty money back home in russia. She defaults on the loan, the bank in russia seizes the deposit, but she still ends up with the proceeds no strings attached. Or maybe you like to visit the casino. Another method of moneylaundering is mixing dirty money in with clean. Cash businesses like restaurants and casinos are particularly attractive it, and scheme is to buy casino chips, make a few small wagers, and then cash Everything Else out as winnings. Or finally, smart thing. Though you wont need anything blue to get your in this one, a higher a bunch of associate to deposit small chunks of the large hall youre trying to cleanse in different accounts in different places. But be aware, u. S. Banks are required to report any transaction over 10,000, so you might need to find a lot of smurfs. So there are lots of ways to launder money. Unfortunately for you, there is no guarantee that you want get caught. Abigail that was one of the many quick takess you can find on the bloomberg. On can also find them bloomberg. Com along with all the latest Business News and analysis 24 hours a day. That is all for bloomberg best this week. Thanks for watching i am Abigail Doolittle this is bloomberg. Hey im bill slowsky jr. , i live on my own now ive got xfinity, because i like to live life in the fast lane. Unlike my parents. You rambling about xfinity again . Youre so cute when you get excited. Anyways. Ive got their app right here, i can troubleshoot. I can schedule a time for them to call me back, its great you have our number programmed in . Ya i dont even know your phone anymore. Excuse me . what . I dont know your phone number. Aw well. He doesnt know our phone number you have our fax number, obviously. Todays xfinity service. Simple. Easy. Awesome. Ill pass. Emily im emily chang in san francisco, and this is bloomberg technology. Microsoft extending its lead at the worlds Biggest Company by market cap, and the only member of the trillion dollar club on the strength of azure. We will break down tech earnings so far and look ahead to next week. Plus, what a week it has been for big tech execs on the hill. Facebook and apple grilled by lawmakers. How these last few days have shaped silicon valleys future