The french carmaker grapples with the auto market slowdown. This follows as nissan reported a 99 plunge in profit. Plans to carve out phone towers into a separate unit and will consider an ipo to cut that. Plus, delay delivery. Amazon forecasts income below expectations. Alphabet and intel jump in late trading after beating expectations. Good morning. Matt good morning to you, less than a halfhour hour to the start of trading. Take a look at the bunds. This is something i was talking about. You saw a reversal in the bond yields. As we were heading into the ecb meeting, yields were coming down. Investors were looking for the possibility of a cut. Then we interviewed the german finance minister where i circled in red. And you saw but yields go up again. Thats because he says there is no crisis. He sees it coming back to the economy once these manmade problems, as he describes them, are solved. Meaning once the char not u. S. U. S. China trade war is over, he sees it coming back to germany. Investors were relieved and started letting go of the paper, yields rising. Look at the stoxx situation. We dont see futures falling here. But we do see asian stocks coming down. We have cac and dax futures up a little, ftse futures down, but relatively little change as we wait for the u. S. Gdp number later on. Anna really interesting charts. I thought it was the euro, very similar pattern. A lot of volatility provoked by the ecb meeting. About whats going on with asia equity markets because European Markets look for positive in the futures and the u. S. Futures point higher. In asia, things look gloomy. The earnings story very much to the fore once again, u. S. Gdp data later on. The futures dewpoint higher so perhaps weve got intel and alphabet outweighing the negatives around amazon. Well talk about that. Just want to draw your attention to the british pound, down 2 10 of 1 , as the initial response to the Boris Johnson premiership has been a no from the other side of the channel. More on brexit later. Lets get into the markets now. Matt absolutely. Lets go to mark cudmore, our managing editor out of singapore. First off, what do you think about u. S. Gdp today . I think its the mliv question of the day. What number keeps the fed cut alive . Its a balancing act, isnt it . Mark yes, very much show. Generally, the number is expected to be stronger than the Consensus Forecast of 1. 8 . Not just on the whisper function of bloomberg, but nearly everyone i speak to say they expect to slightly beat that forecast. Thats partially because the data has been more mixed. Weve had strong numbers, even though we had the worrying pmi. Its been more mixed than the data recently. Clearly, the u. S. Is slowing down, but maybe not as rapidly as some thought. But its definitely going down. Its going to be a weaker number, but not as weak as Consensus Forecast. It makes it tricky. If whisper number is 2. 1 , does it need to be higher than that to boost u. S. Yields . Anna interesting lines suggesting the fed and powell have a lot of explaining to do. Be interesting to see how they rationalize a rate cut. 20 hours on or so from those events, whats your narrative in regards to the ecb . I see some suggesting the ecb wasnt dovish enough, not delivering on rate returns, but some suggest dovishness on the european economy and the gloom and doom that weighed on assets. What was your thinking . Mark i think it was very dovish. I think there was some confusion because we saw its hard to be gloomy today. That was about him talking back from a month ago when he was less negative on the european economy. He had no problems being gloomy yesterday. He said the outlook is getting worse and worse. And given the recent data weve seen, not just the pmis, which were really appalling, particularly in germany, but also the expectation index plummeting to a decade low. Were now seeing the heatwave and drop in europe. Germany is a bad place. The european economy is in a bad place. Draghi made that clear. It was a misunderstood statement saying it would be gloomy, when he didnt mean today as in yesterday, that caused confusion. Matt why did we see bundy yields rise bund yields rise after the schulz interview . It seemed investigators investors thought they could let go of their security blanket buns because its not that bad. The finance minister isnt considering extra spending. Mark i think there was two parts. Definitely the interview with the finance minister was a part of it. I do think hes optimistic, given the german pmis, given the iphone. Weve already seen forecasts of gdp drop 20 from around 2 . Its incredible collapse that keeps going. I think its impressive how optimistic he is. He also says it will be fine once the manmade problems go away, manmade problems being brexit. I would like to know when those go away. Im not sure anyone believes they will have a final resolution. And then of course, we have the u. S. China trade war. Again, i agree with him. Im a structural bear there and i will become bullish if the trade war gets resolved. But i dont see that happening. Its positive that there are facetoface talks next week, but thats as far as weve got. Lets see if we get the tears removed. Maybe we will be. It will all be fine when the manmade problems go away. Weve had them last year with no sign of being solved. Its a little complacent on his front. And we followed up from the confusion, the misplaced quote, saying its hard to be gloomy peoplerom draghi, thinking hes not too negative on the economy. Far from it. That was taken out of context from something last month. Anna thanks very much. Mark cudmore. Remember, you can join our debate. Get involved with our question of the day. What kind of u. S. Gdp number keeps fed rate cut bets alive . Is there strength in that number that could mean the market rethinks its assumptions about rate cuts . Reach out to us and the markets team, ib tv function. Heres debra mao and hong kong. Debra anna, the European Union has a merely rejected Boris Johnsons demand for a better brexit deal. Johnson seems to be ruling out cosmetic changes. He is calling for the irish backstop agreement to be scrapped. Neither side back to down. Britain will be on course to drop out of the eu october 31 without an agreement. Now an crisis and has no plans to add stimulus to the economy, according to the german finance minister olaf scholz. He says it could fuel inflation without feeling economic growth. He says a reduction in global tensions will reduce the outlook for 2020. If this manmade problems, which we have are solved, and something we can expect will be this year, we will have the better growth rate world right, worldwide, and this will have an impact on the european economy, and especially on the economy of germany, which is a really global society. Debra iran reportedly testfired a mediumrange Ballistic Missile that travels 1000 kilometers. Thats according to cnn. It said the tests didnt pose a threat to shipping or u. S. Bases in the reason. Whether its the next move in ask leading tensions with iran, we spoke to mike pompeo about relations with tehran. Ive talked about this before. Comes to new york, drives around in the most wonderful city in america, speaks to the media, talks to the american public, gets to put iranian propaganda into the american airwaves. Id like a chance to speak the truth about what their leadership has done and how it has harmed iran. Debra global news, 24 hours a day on air and at tictoc on twitter, powered by more than 2,700 journalists and analysts in more than 120 countries. This is bloomberg. Matt thank you. Coming up, failing to deliver. Amazon takes a hit with next a shipping plans. But alphabet and intel pump in pop in late trade. Well talk tech next. Remember, Bloomberg Radio is live. Tune in. This is bloomberg. Anna welcome back to the European Market open, 16 minutes until the start of cash equity trading this friday morning. Heres a look at what to watch out for. Crucial day for ubs. This was Supreme Court rules whether it the bank must give account statuses. Play aision is made to major role in the appeal in the tax penalty. We get data later on today. The numbers will be closely watched following the slump in pmi figures, negative numbers coming out wednesday. And renault lowered its sales outlook. Today after 9 00 a. M. , well bring you an interview with the ceo. Matt . Matt moving on to u. S. Earnings, twitter reporting secondquarter results later in the day. More importantly, maybe more importantly than earnings i guess thats debatable we get the u. S. Secondquarter gdp print at 1 30 u. K. Time. Analysts see growth at one point a percent, the slowest since 1. 8 , which would be disclosed since 2013. Alphabet came in slower than expected. Common concerns about slowing growth. The stock rising and after hours as alphabet beat expectations for secondquarter sales. It also announced a plan to repurchase 25 billion in stock. No big deal. Meanwhile, amazon warning investors one day delivery has a big price tag. The results were marred by a surge in costs, tides of faster shipping. Joining us to discuss this and more is alex webb. Alex, its been a mixed picture for faang, and yet we see nasdaq futures rising, so investors look pretty pleased abroadly. Alex yeah, its been difficult for facebook and partly amazon but people know they are invested in the future. I think the bump on the google side partially to do with the negativity from facebook, thinking that might have implications for alphabet. And they are all fine and dandy and still going, the reaction was still strong. Theres also the 25 billion buyback, the size of very Big Companies in and of itself, helping the shares. Anna tell me your thoughts on alphabet after these numbers, comparing this month to last. Around, we were really concerned about what was coming down the pipe. There has been more clarity on that. It will take longer than expected. But that business is growing. Its not subject to the same regulatory overhangs. It remains considerably smaller than amazons business, but investors are looking at what they are not yet monetizing, things like google maps. The advertising is embryonic. That gives them an opportunity to grow that. I think investors see a lot of upside. Matt amazon stock has been very high, almost at a record high, after climbing 33 so far this year. Are investors willing to give jeff bezos a pass, considering his history . Alex yes, i think so. The way weve come to understand amazon this year is different than the way weve seen amazon historically. Its been all about topline growth at the expense of the bottom e line bottom line. In recent quarters, it outperformed the mac cloud. Is wemazon is doing now are going to reinvest profits and gain shares. They are seeing a nation threat from Companies Like walmart, who are doing more deliveries, and so they are trying to get ahead of that with one day deliveries, trying to fend off that nisi and eat nation and threat nacient threat. Anna lets talk about how they are threatening these text tightens differently. It wont be the same regulations that get them all. Alex what weve got in the u. S. , the doj will be investigating two other companies. And the companies are amazon, google, facebook, and apple. The apple and amazon stories are different than facebook and google. The two are essentially advertising companies. They use the data to sell and push better ads toward people. Amazon is ecommerce. Apple is more to do with online stores. The data piece, its easier to unpick that. The way google and facebook have bytinued to grow revenue is eating more data out of the data they have. That is vulnerable to investigations when theres so much public conversations about Consumer Privacy. Going to right, were talk about Consumer Privacy later on Bloomberg Radio because we are going to be joined by someone to talk about whether these rules hurt Smaller Companies disproportionately. Alex, thanks so much for joining us. You can get all that work on the bloomberg terminal. Theng up, we speak to twitter ceo as the Company Reports secondquarter earnings. Dont miss that interview later on today. Twitter coming out with earnings in the u. S. Lets get to Bloomberg Business flash with debra mao in hong kong. Baer persuaded a judge to flash a jury verdict 287 . 1 billion to 87. 1 million, down from 2 billion. Baer could be liable for hundreds of billions of dollars. Frost bank announced a second vision fund. Its aiming to raise 108 billion, making it bigger than the first. Investors are expected to include apple, microsoft, and foxconn. They will inject 38 billion itself. This is part of the strategy to extend his reign as the most influential investor in the industry. Sells the most in two months after the boeing 737 max 8 are gets worse. They scrapped the plane from its schedule until early 2020. It was the. Biggest operator of the granted max jet meanwhile, boeings defense unit race amidrew from the a dispute over bidding rules. And thats your Bloomberg Business flash. Matt and anna . Anna deborah, thank you. Minutes to go until the start of the cash equity trading. Nine minutes or so. Up next, we look at the stoxx were watching. Slightly cooler here in london. The stockmarket market getting ready to open up for friday. We will bring you the stocks to watch and the market open shortly. This is bloomberg. Matt we are just about five minutes away from the start of trading. Lets get your stocks to watch. Tom steel, our reporter, paul jarvis is covering caring. Tom, whats the story with the towers . Tom all eyes on the towers this morning. It announced it could possibly lift its business of over 60,000 mobile antennas across europe. These businesses have been trading at doubledigit valuations and vodafone has earnings of 900 Million Euros a year. This is going to help them pay down their extensive debt and pay for 5gs rollout across europe. Anna and paul, lets come to you on caring. Gucci not quite so gucci. Paul thats right. Were expecting them to be one of the greatest movers. They are announcing their secondquarter results. They were in line with expectations. But what they did disguise was the below power performance from gucci. It is up 12. 7 . The market expected more like 14. 5 . Outperformance field the meteoric rise of kering, so news its slowing is not taking well by investors. Anna indeed. Thanks, paul. Thanks, tom. You can get all the latest stocks to watch. First go is the function on bloomberg. Reynolds selling. Renault selling. Pearson guiding higher. Vivendi, also news flow there. This is bloomberg. Anna a minute to go until the start of the last cash equity trade session of the week. Good evening good morning. This is the cash equity market. Lets look at what is going on. 5 ,sia session weak, down concern about the Global Growth story and earnings season seems to be dominating. The pound is weaker. Eu 27 hear a no from the in the face of what Boris Johnson wants to achieve. This is the euro against the u. S. Dollar. A lot of volatility in this caring this pairing. And that interview with scholz. Nasdaq futures point higher. This gives a picture of the tech sector, the u. S. Earnings season. Because weve got a mixed after our picture coming through. And the some of that seems to be expectation of the nasdaq goes higher. European market seems flat to positive. European equity markets opening up to the final trading day of the week. What does that have instore . One of the things on the radar is a u. S. Gdp. Is there a level of gdp data that changes the markets thinking significantly on what the fed is going to do . That is the market live question of the day. If you want to get involved, this is what weve got at the start of the european trading day. The ftse 100 up 2 10 of 1 . Euro stoxx reflecting the bullish. Its strong compared to what weve seen in the futures. The pound is weaker, down 2 10 of 1 . We see these things moving against each other because of the outsized waiting of nonpound earners on the ftse 100. Lets look at the sector picture and see if well get clues here. Weve got health care in the green, financials looking mixed. Telecom is one area of red, generally green. Utilities very green this morning. Staples also pretty green. Consumer discretionary looking fairly negative. Not such big clues as to market thinking in the sector break down this morning, according to the imap. What do you see in the individual movers . Its as far as the spread, 315 and 257. We do see nestle as the biggest gainer, the most power behind the stoxx 600. It came out with the sales forecast, so its not quite as quick as the streets had anticipated. But theig on volume outlook wasnt great, up only a third of 1 . Today continues to slide after his 5. 6 billion plan to return money continued to climb, i should say, after its 5. 6 billion investor return plan. On the downside, we see anglo down 4. 5 . Anglo american, with whom we spoke yesterday, sliding today. And the biggest point loser. On the stoxx 600 kpn has gone ex dividend. And then we see Louis Vuitton misses estimates, down 6 10 of 1 . Anna . Anna European Markets opening pretty mixed, fairly flat on the stoxx 600. Thats as mario draghi sets the stage for the ecb to deliver new stimulus in september. Parties also warning governments fiscal messieurs will be needed if fiscal measures will be needed if the slump continues. This outlook is getting worse and worse. And its getting worse and worse in many factoring, especially. And its getting worse and worse in those countries were manufacturing is very important. But because of value chains, this propagates all over the euro zone. Matt that was mario draghi. That, we spoke with german finance minister olaf scholz. We talked to him about Global Growth. We are in a situation where anyone of us has to deal with the world by development of the economy. We know, due to all the tensions we have within china and the united states, for instance, the not clear development and the question of brexit that has an impact on the economy, mostly in the way many corporates who are willing to invest, waiting for the next month and the next month and the next month. So i think anyone of us is waiting for solution and this will have good impact on the growth. Matt are you concerned we might be stuck in almost a japanese vicious cycle, where low rates beget though Interest Rates and low growth . No, i dont think so. Anyone is expecting we will have better growth next year and we will see it at the end of this year already. But this is due to what i said already. Whichs manmade problems, we have with good intentions are solved, and something we can expect will be this year, we will have the better growth rate worldwide, and this will have an impact on the european economy, and especially on the economy of germany, which is a really global society. And which is exporting and importing from all over the world, and this is what we should understand. Matt joining us now is sure to sing, managing director at ts lombard. You know somebody on twitter yesterday i think compared olaf scholz to an ostrich who is hiding his head in the sand in order to avoid the oncoming threat. Where do you think that hes right, that there is no crisis in germany . Unemployment is very low. Anybody coming into this country with any skills at all can get a job and maybe he doesnt need to spend anymore money. Im afraid i disagree, quite strongly, actually. They are in a recession toward the end of last year. Growth will remain quite weak. Expectations have been consistently downward. Youre looking at growth just north of 1 , which is a significant downturn from where germany was in just 2017. 1 is way below germanys potential growth rate. And at the same time, the headwinds that germany faces on a Global Economy basis is likely to disappear immediately. What im talking about, something draghi hinted at quite clearly yesterday, was that the Manufacturing Sector in germany is suffering tremendously. Weve seen manufacturing for just over three quarters now. It is still very much here. Consumers are the only bright spot. And construction, as well. But because germany is such an export oriented, manufacturing focused economy, we can see the signs of weakness from many spreading onto the services sector. Anna just pause that thought. Let me update viewers on a few early movers this morning. Six minutes into the trading day and some of these big names, reported numbers, are on the way. After gucci Second Quarter disappoints. Its down by just shy of a percent, as it stands right 8 , as it stands right now. Anglo american also fairly gloomy story this morning after one investor looks less keen. That stock down 4 . Also out of the asf, low rind levels posing a supply chain risk. This is where i wanted to pick up with you once again on whats going on in germany. This is what you described in german manufacturing, even before we consider what happens if the rhine becomes this big, dominant story. Schweta yep, so last year there was a lot of commentary about these temporary factors holding down manufacturing in germany. Thats probably why policymakers are buying more and more, to see if these factors are simply temporary or there is a more protracted underlying causes there. And it turns out it wasnt just about idiosyncratic factors. There was a proper global slowdown in terms of demand, in particular. Startocks like if you to see more temporary factors come through, it will put even more downward pressure on the Manufacturing Sector and i think the more important point to highlight here is the prolonged uncertainty. Deficits arent prolonged. This has been going on, this uncertainty around trade war. Its been going on for so long, it is becoming more and more entrenched and producers are feeling the impact and are sort of holding back from passing off the pressure to the economy. Anna thats interesting because matt was having this conversation with olaf scholz yesterday. He said it was manmade pressures. But they can become entrenched, cant say . Matt i mean, weve seen them become entrenched. If youve got a resolution to the u. S. China trade war, i think most investors would be really surprised. Schweta, on the others, we didnt see draghi cut. We dont need to spend extra money. From the point of view of an investor, there was a possibility that the ecb would be so worried it was going to cut, pull out too good bazooka and pull the trigger. That hasnt been done. Draghi could have come out with a cut and restarted qe already and didnt feel it necessary. Scholz had at, so point, right . The euro zone is not in a crisis yet. But there are significant Downside Risks. Weve seen these risks materializing, so clearly there is a shock to growth and there was a shock to inflation expectation. Why did draghi not cut yesterday and why did he not announce a qe package yesterday . One of the reasons is were not really in a dire situation yet. They want to wait for the macroeconomic projections that come out in september. And also, because they have been orchestrating this emphasis on a package, which includes guidance, Interest Rate cuts, tiered Interest Rate systems, and qe. But it takes time to generate consensus and come out with the technicalities associated with these measures. I guess the Euro System Company needs more time to flesh out the details. But the message was clear but there will be more stimulus and it will be in a package and the ecb is more committed than ever to meet and its mandate. The different question is how successful the ecb will be meeting is slightly mortified inflation target, but the commitment from the central bank is quite clear this time. Itt alright, well certainly gives us something to talk about today. Hweta stays with us because theres a lot more to talk about. Theres a lot more data points coming out. Were going to bring you the stocks on the move so far, including kering. And ray hordern will come a. I earlier said Annmarie Hordern will kill me. Kering that owns gucci. Shares are down 8 . This is bloomberg. Matt welcome back to bloomberg markets. This is the european open, 14 minutes into the session. The ftse is gaining 25 . That could be due. 25 . That could be due to weakness in the pound. Let very little weakness in the cac. Lets get individual top stock stories now because there are individual movers out there. For that, we go to dani burger. Dani i think gucci might need to step up efforts because slowing sales at the luxury retailer is part of the reason 8 ,ng is down, more than the biggest decline since october 2018. Gucci has grown at a breakneck pace, but their tough comparables are slowing this year. Therehough lvmh beat, definitely worries for investors. Pearson, looks like paper is out. Who reads textbooks on paper anymore . Digital conversion helping the company raise their outlook. Those shares up 7 . That will be their biggest gain since 2018. To the downside, angloamerican reporting earnings. We learned one of their biggest shareholders exited its 20 position. Is the feature really stable . Blood comes for this company, trading at record high prices . Anna dani burger with your movers, so many to choose from, unusual for a friday. The ecb didnt deliver a dovish turn markets expected, but will the fed . Point, analysts predicting a rise of 1. 8 , the slowest growth rate in two years. Us. Ta is still with the marketyou about live question of the day, which is whether there is a level of gdp that changes the markets thinking about what the fed is going to do. What is your expectation . Shweta i guess for the u. S. , the expectation for Second Quarter, there are Downside Risks for that. We think the growth rate in q2 and q3 will be quite weak, around 1 . One of the reasons is that the inventory is very much in the u. S. Uptickere driven by an in the inventories and that gave net export growth and that has to come through. Q1 will be week. At the same time, we have a strong dollar in terms of the level of the dollar on an Exchange Rate basis. Thats weighing on exports and corporate earnings and that has repercussions on plans, employment gains, and at the same time, theres uncertainty. The combination will keep growth subdued and that gives the fed and of reason to cut in july or in september. Matt do you think at least part of the reason the fed cuts is to take a little pressure off the dollar . They wouldnt say it, obviously. Shweta they would not explicitly mention it. I guess the way to think about it is strong dollar is definitely not helping the u. S. Economy. And also, you can see that in Inflation Expectations. Core cpe inflation are very much below fed targets, around 1. 5 to 1. 6 , definitely below 2 . At the start of the year, they were closer to 2 . The strong dollar is definitely weighing on the u. S. Economy and inflation, and the fed has an inflation mandate. So there is strong reason for the fed to cut. Anna interesting to see. I was looking at green light capitals David Einhorn shorting corporate debt. You see rating agencies being too complacent. With Interest Rates set to go lower, you can see why people are thinking the credit cycle is going to be extended. What do you make you mentioned the things that are weighing on corporate and corporate profits what do you make of the credit cycle . Shweta thats exactly what the fed is likely to do. I did come across as quite bearish on the u. S. Economy, and we are for q2 and q3. But after that, you will see a snapback. Consumer spending is resilient. And from the fed, it sort of adds steepness back into the curve, especially on the short end. What that means is banks can lend at a reasonably profitable level. That is good news for credit creation for the economy overall, and that sort of pushes, makes the cycle last even longer, the cycle as we know is always already the longest cycle in u. S. History, and the fed is making it longer and longer. Matt is there a risk that the fed blows up a bubble with this cut . Is there a risk that asset prices climb out of control . Shweta that is definitely a big risk. Disconnectthis big between inflation, real economy inflation, and inflation of asset prices. Matt this is one of those things that olaf scholz was talking about yesterday. One of the reasons he doesnt want to spend is hes worried about inflating asset prices that shouldnt be. Shweta right. The case of the euros on euro zone, youre not really left with many options because its only the central bank thats actually doing something. Fiscal policy in the euro zone is expansionary, but nowhere comparable to what it should be. But given those constraints, the Central Banks hands are tied. What else can you do . You cannot just sit back and let Inflation Expectations plunge and push the economy into a deflationary or disinflationary spiral. The consequences or side effects of continual Monetary Policy easing can be distortionary. There is no doubt about that. So when you do not really have support from fiscal policy, you really dont have any solutions, so to speak. Monetary policy with side effects. Anna shweta, thank you very much. Shweta stays with us. Prime minister Boris Johnsons demands are rejected by the eu. More on brexit next. We just heard live from the u. S. Ambassador to the u. K. , woody johnson, commenting that President Trump is keen to negotiate a trade deal with the u. K. I guess we knew that. I wonder how he is going to be negotiating with orest johnson, not theresa may. More on that next. This is bloomberg. Anna welcome back to the european open, 25 minutes into the trading day, and the stoxx 600 fairly flat this hour. The weather a little calmer today. Will the perhapss politics be any will the politics be any calmer . According to the prime ministers office, Boris Johnson told the president the commission that the Withdrawal Agreement will have change to pass the british parliament. They are said to have rejected that, saying it was the best and only deal possible. Shweta singh is still with us. I was going to say lets leave the politics to one side, but its impossible. Lets focus on the economics. What are the strengths of the u. K. Economy that will see it through this perhaps tough patch . Shweta so far, its the consumer. Consumers have been the key growth driver for the economy. Its not per surprising because its not surprising because on a plum it rates are low. We can see that the pressure is also building up on consumers. For instance, all this arertainty around brexit starting to weigh on investors. There is a weakening there and that will start to weigh on their employment gains, right . And that will try to weigh on income, sort of temper consumer spending. With youre going to stick us because we have more to talk about. The brexit block didnt need to be long because everything we have to say you probably already knew already. Managing director at ts lombard. 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. Trading day, here are your top headlines. Uring slides at the flagship brands show a slowdown in sales. Vodafone surges after announcing plans to carve out phone towers. It will also consider an ipo to cut debt. Forecasts income below expectations as its spending on it next day shipping butes costs to search for google and intel jump in late trading after eating a street estimates beating street estimates. Welcome to bloomberg markets. 30 minutes into the trading day. Lets have a look at how things are shaping up. To the upside, as the camera goes a little bit road, apologies rogue, apologies. There we are camera there we are. This is a nike Services Business out of france. The numbers seem to be better than anticipated. Vodafone up by 7. 6 on the back of the news they might ipo the towers business. We also have numbers from vivendi up by 4. 25 . Lets switch to the downside because we are fairly evenly split. Were not seeing a great deal of direction. A week take on the spanish Banking Sector this morning. Weak take on the spanish Banking Sector this morning. Kering is also weaker, weighing on the particular stock. , one of thean shareholders is not as positive as he was. Lets get bloomberg first word news. Germany is not in crisis and has no concrete plans to add stimulus to the economy. That is according to the german finance minister. Increasing spending could fuel inflation without helping economic growth. Reduction in global tensions will boost the outlook for 2020. If this manmade problem we have is solved and is something we can expect this year, we will have better growth worldwide. This will have an impact on the european economy and especially the economy of germany, which is a global society. Iran reportedly testfired a mediumrange Ballistic Missile that traveled 1000 kilometers. They cited an official, saying the tests did not pose a threat to shipping or u. S. Bases. But it is the latest move in as good intentions. We spoke to mike pompeo about relations with tehran. And nestle is forecasting the fastest sales growth in four years but that might not be enough for analysts. Companyds largest food says sales should climb about 3. 5 in the fullyear. Of sales is the u. S. , which side strongest quarterly growth in eight years. Global news, 24 hours a day on air, on tictoc, and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Anna and matt. Matt thanks very much. Renault is no longer forecasting 2019 revenue growth. Instead, they see the yearly laste little changed from year. It is the latest automaker to have struggled over the past few months. They face a record spend on electric cars. Here to wrap up the Earnings Results is bloombergs dani burger. It may be no surprise they are struggling as we saw vehicle demand falling more than 7 . European demand is also falling. But me take you to some of the specifics of this company. Some were able to shrug off these concerns. For them, the story is the suv sales, but those are more expensive and more lucrative. That gave the Parent Company a record firsthalf in sales. Fell, but analysts say the company is on track. But then we get to the bad. Renault joined this list of carmakers today, cutting guidance or missing expectations. Time because they have been spending a record amount on electric vehicles. Hurt profits because they have also seen weaker demand across the globe. Finally, nissan has been the standout, but not for good reason. They have announced job cuts of over 12,000 and they missed profit reductions of 90 . They have an aging vehicle lineup and a weak demand picture. Now, some of the issues of the company are seemingly so bad that analysts are saying it is starting to overshadow the november arrest of carlos ghosn. Anna thank you. Dani burger, setting up our next conversation. I am pleased to say that we are joined by the head of auto Macro Research at fitch solutions. Let me talk to about what is going on in the auto. Auto. What have you learned about how the sector is dealing with a host of headwinds . The results have been reflective of the number of challenges facing carmakers. It is a combination of weak demand in the major markets. Youve also got one off charges in the case of daimler. You have also got restructuring charges with forward. Ford. There are some things combining in this sector. Matt i wonder about that r d spend. How long will it take to pay off . It does not seem the infrastructure is even there to buy these cars. Annamarie its true. We are seeing quite weak demand for these vehicles. , but in aes look good lot of countries, it is from a very low base. As you said, infrastructure is a big part of this. Also, a very expensive technology. There are still relatively few models available. So we would expect over the next year or two when you see a lot of these carmakers to get these models to market and there is more choice, and hopefully, more infrastructure to go with it. Then we should start to see a turnaround. Anna who is going to deal with this lack of infrastructure effectively . Who is going to either benefit from it or fix this . To matts point, it seems very difficult to buy a car. You dont know whether to buy old or new technology. Annamarie it is a real chickened and a situation. And eggand big situation. Countries, in some you are seeing a combination of carmakers and governments coming together, in others carmakers themselves have taken initiative to there is not a clear path on howthe should be done this should be done. Ideally, you want to see a combination of activities and petrol providers being involved. I think you need accommodation of everyone. Ultimately, everyone could benefit. Matt dont we see these carmakers bouncing back . There are not too many outside competitors that have been able to come in and really make headway. Yes, and in many ways, traditional carmakers should have the advantage. They have got the production expertise. They have got bigger infrastructure. They should be able to a, a at relatively lower cost. Show it could so it could be a longerterm play about the they should have the advantage. Anna what about the market in china . You see upsides and downsides. It is difficult because the government just brought in a new admission standards and pretty much everyone was unprepared because it was a year earlier than it was meant to be, so theres not a lot of inventory that will comply with the standards. There was some a very shortterm upside does there are a lot of offers and consumers. So, yeah, china is going to be difficult for the rest of the year. Have got some cities saying we will raise the quota on the number of cars that can be bought, but again, you have got tariffs making the Economic Situation difficult, so it is a real challenge. Matt thank you for joining us, the head of auto Macro Research at fitch solutions. Up next, tears for draghi. Some may disagree with the statement that it is hard to be gloomy after his policy speech, at least that is what we are arguing. We will discuss central banking from both sides when we come back. This is bloomberg. It represents a revenue pressure for us and all of the banks if rates from here go down further. Negative rates do hurt business models. It is clear that negative rates have a negative impact on revenue and net interest income. The adversity we had for some time is not helpful for our business so we have to now assume that rates will stay lower for a longer time than expected. That is why we are very focused on mitigating actions. In an industry or market like europe where we have overcapacity, consolidation would be very natural. We have a Balance Sheet and a credit book. We are improving the number of loyal customers. It is something that is a significant risk to us. Clearly, the negative Interest Rate environment is not helpful for banks. Matt that was a selection of European Bank chiefs talking to bloomberg about the impact of negative rates on their businesses. Lets talk more about the ecb with our guest. We are joined by the senior european rate strategist at Toronto Dominion bank. Bit of a debate about how dovish mario draghi was. He was certainly not dovish enough to cut rates already and he revealed a lack of consensus amongst policymakers. What is your take . Good morning. Yes, draghi definitely didnt deliver with respect to his trade guidance. Lowered the bias for cutting rates and opened the doors for qe. Also looking at packages to help the economy. But that was something that drove the markets, but what was lacking in the press conference was the firmness we saw from and the toolsra they are looking to use. He was very vague on if they would be looking at the issuance limit or the cut size. That is what markets did not like. And do remember that markets go with a lot of expectations. There was a lot of buys to the positioning as well. So that is where markets got a bit disappointed. But the fact of the matter is that the ecb is ready to use. Ease. We could see a package of measures introduced as soon as september. Anna what do you make of the reaction we saw in the Banking Sector . We started by playing clips of European Banking chiefs, but now it seems the door might be open to tiering. And yet we saw banks under pressure, particularly on the periphery. All selling off, really weighing on those indexes. What is it that the banks are so spooked by . Pooja from the trade guidance perspective, the ecb did deliver what was expected. But they have yet to accept the fact that negative rates are impacting the Banking System and that is why they were explicit about introducing tearing tiering. But i think markets are too greedy and are very cautious ahead of the fed meeting. But we need to see the fact that we have a central bank coming with a package to ease. And any debts right now have been an opportunity to create. So i would see this as a minor correction before we head towards the september. The september meeting. And i think it was required just because people are going long. Matt so much sovereign debt that is a nominally negative that is nominally negative. Would you still be a buyer of that . Pooja as long as you know that you have qe coming in, markets will keep buying wounds bunds. Qe,rly, the way we started we are not at those levels. The markets are not going to get the kind of yields that they got at the start of qe. But this entire easing cycle would support markets for the shortterm but it is not something that is sustainable. Does not solve the entire issue of the euro area. It is growth which needs to be targeted. For that, it comes down to fiscal policy. Anna that is the message draghi was trying to get across. A great story about how draghi was shouting at germany to spend more. From an interesting note peter chadwell and he was saying the interesting thing for him was that there is no longer any lower bound Interest Rate. This is something we talked about for quite a while. Is in thethat tiering cards, perhaps more so because they do not have to worry about the Banking Sector. Is this something that is in your thinking . Pooja definitely. Being so explicit about introducing tiering is a clear message that rates can go lower and stay at these levels forever. And you cannot stop markets from pricing in 30 or 40 basis point cuts if the data does deteriorate. These other signals we got from the ecb meeting. From a forward rate point of view, i think the governing council did deliver much more than markets had expected. But it seems there is not much consensus into what will be the exact package that will be delivered. I think that is what drove the selloff and the confusion. On, pleasure having you hope to get you back on. Kumra, senior rate strategist at Toronto Dominion bank. Talking to us about the exciting ecb meeting. Today, we have got the gdp number out of the u. S. Which should make a big difference in expectations. Up, mike pompeo tells us he would be happy to travel to tehran to address the iranian people personally. Our interview with the secretary of state is next. This is bloomberg. Anna welcome back to the european open. ,3 minutes into the trading day the overall story looks unmoved. The major markets look fairly flat. At the periphery, real weakness coming through. The ibex is down, italy is down by. 4 . Basic resources are to the downside. U. S. Secretary of state mike pompeo said he would be willing to travel to tell them to address to tehran to address the iranian people. Are mission was to create as much stability in the middle east as we could. Ranwatched to run teh engage in this behavior that had created enormous wealth for the leadership inside the enormous leadership. There were using that wealth in line ways. We put pressure on the regime and we are forcing them to make tough decisions. We want change in behavior from the leadership so that they can ultimately get what it is they deserve. How do you get that change in behavior . A foreign minister was saying the sanctions will quote unquote backfire. How do you get that change . Sec. Pompeo the foreign minister is no more in charge of what is going on in iran that a man in the moon than a man in the moon. Theleader has all of ability, it is all driven by the irgc, this leader. Those two are the decisionmakers. Those of the people upon whom we are trying to apply sufficient pressure to show them that the costs are not worth it. To convince them that if they simply behave like a normal laois and normal nation they can provide normal lives. Would you go to iran . Sec. Pompeo sure. Would you appear on television . Sec. Pompeo i would welcome the chance. They get to come to iran to new york, drive around in the most wonderful city and he talks to the american public. Gets to put iranian propaganda out into the iranian airwaves. To go andke a chance not to propaganda but to speak the truth about what is their leadership has done. I think the reason they wont permit that to happen is because they know the truth as well. Matt that was mike pompeo talking to bloombergs Kevin Cirilli in washington. Lets get to our top stock stories. Guest Vodafone Dani vodafone is spitting out the tower infrastructure. They also reported earnings in line, but shares are trading on track to trade the highest since 2018. , at one point, the shares were nestle, atrecord one point the shares were touching a record. Finally, vivendi, another earnings story. Shares are trading higher by more than 5 . It is the Universal Music Group which is standing out. Citigroup calling those earnings superb and that the sales process for that is on track. Anna thank you very much. Vivendi is one of the stocks helping to push the media sector higher. European equity markets overall look pretty flat, but be aware that the periphery is selling off, down by. 5 . His is bloomberg delayed delivery, amazon misses estimates and disappoints on forecast as costs surge. Amazon web Services Also comes statert and secretary of mike pompeo tells bloomberg he is ready to travel to iran as they apply pressure. Or is immediately rejects demands for a better brexit deal. Jeanclaude juncker says the current deal is the best and only deal possible