Transcripts For CNBC Street Signs 20240714

For their worst day in 2011 as net profit fizzles out in the First Six Months the brewer can turn it around in the second half. The impact cost has been much higher than last year in the first half of course we took some pricing in a number of geographies, but that will roll over in the second half. And beijing reacts to the social unrest in hong kong as chinas Affairs Office backs chief executive kerry lam and says the one country two Systems Practice will not change right, big news in the uk this morning the London Stock Exchange has confirmed its in talks to buy refinitiv in a deal worth 27 billion. It comes less than a year after a private equity bought a majority stake in the firm from Thompson Reuters at the time, it was valued at 20 billion. The lse will pay for the transaction by issuing new shares with refinitiv shares getting 37 of the combined group. And more in deal space today. Takeaway. Com and just eat struck an agreement in principle to merge. The all share deal is worth 8. 2 billion pounds and would see just eat take 52 of the entity. Take away. Com ceo would become the chief executive. So lots of deals to start off this monday morning. I thought we were going to talk about macro but actually were going to talk about stocks this is one of the reasons why the ftse 100 is reacting so positively today how do you think about these developments in light of the lse branching away from movement to acquiring an analytics firm. Its a big day and big week theres lots going on this week. But i think what were seeing here is really a search for growth, not just in one deal, but lots of deals around the world. We know that investors have been really focussed over growth the last few years rather than value so we see businesses looking to use cheap capital in many cases to go and boost their growth prospec prospects. Its not surprising to buy growth what were seeing from an investors perspective is that companies that are able to deliver on growth are being rewarded by shareholders and those that have disappointing growth are being punished. So its not surprising the chief executives are looking for growth. Dan, doesnt growth equal tech pretty much the high Growth Stocks tend to be the tech stocks the reason i ask is just looking at some notes that you sent us, you said that buying hot tech stocks is not something thats for us we dont want to buy hot tech stocks how can you be looking for growth on one hand and on the other not being involved in hot tech stocks . Thats a really important point. Youre absolutely right. We are longterm evaluation investors. Were absolutely not looking for expensive tech stocks with the promgs of great growth were looking for stocks that are undervalued based on their Current Business situation were looking for stocks with bad news priced and all the good news priced in really what i was thinking of is chief executives other investors are going to punish them for slowing of growth. And so thats what were seeing in the majority of the market. Were looking for something quite different. Were looking for those undervalued stocks with little bad news priced in. Speaking of undervalued and lot of bad news priced in, uk, where do you stand on wanting to own uk assets here. Again, a lot of news around brexit thats coloring the market expectation for whats going to happen in the uk but i think the important thing to remember with the uk stock market is actually its not a domestically oriented market 70 of the ftses earnings are from outside the uk, and so actually its a very International Market so what were seeing a brexit discount being overlaid on ukbased companies so we find that quite attra attractive its not cheap nothing seems to be particularly cheap at the moment. Its certainly cheaper than other markets. The u. S. Looks very expensive partly because of the growth oriented tech stocks you mentioned. Do you think we could be in a situation whereby the pound continues to trade weaker because its pricing in more and more risk around no deal and actually this morning is a good example of that sterling down. 4 but that equities can continue to perform not only because of that inverse corallation but because as you say a lot of the companies in the uk are trading at very heavy discounts relative to other indexes. Well, thats right. When were thinking about currencies, of course, we dont know where the next move will be, but seems to us that theres a strong link at the moment between the value of the pound and the political situation. So its not really surprising that with the new government that were seeing, the new noises out of westminster that the pound is trading a little lower. But to us again it looks good value. So over the long term, the sort of time periods most investors are thinking about, we expect the pound to avert to fair value certainly against the dollar so we expect increase in value of the pound. All right well pick up the conversation in a bit dan kemp, cio. Now, Chinas Hong Kong Affairs Office in beijing has condemned the, quote, radical elements among the weekends protests and added they will not allow demonstrators in the territory to undermine the Central Government another turbulent weekend in hong kong. Tell us more about the commentary that has just come out from the chinese side. Reporter so, the headline is basically Mainland China defending the one country two systems framework with hong kong after, of course, weeks long protest in the city, china is basically saying that it was a result of western forces stoking panic and injecting fear into the city with the goal of basically containing chinas development. Now, all this is coming from the hong kong and mccal Affairs Office in beijing, really the top policy office on Mainland China regarding its relations with hong kong but the office also added those attempts by western countries will eventually fail i think this is very similar to its initial lines over the last few weeks or so basically saying that this is a result of external forces trying to really get into the internal affair between china and hong kong. Beijing also added that the most important thing to achieve at the moment is basically restoring law and order and handling criminals and violent activities and there was that big overhang question that not a lot of people really dared to bring up or speculate or come up with any answer is really the possible deployment of Chinas Peoples Liberation Army to hong kong given this degree of social unrest there was a question during that q a session after the suppressed conference, the answer is you need to go back to basic law, basically meaning go back to the constitution of hong kong. What does it say its basically saying that the Hong Kong Government can ask the Central Government of china to bring order to public or if they need with the Natural Disaster relief. So that doesnt really answer the question interestingly, though, when it comes to the market reaction, there was a degree of nervousness, especially when it comes to the hong kong stocks today. The hong kong index actually the hang sang index actually closed down about a percent, really underperforming its peers in the Greater China markets led by properties and financials and those two sectors will be really the most vulnerable sectors that we need to watch out for when we keep watching this protestrelated developments in the meantime, the most important factor to me at least the volatility thats shot up right before the press conference all the way to 9 now, that was the highest volatility in hong kong index in two months makes sense given that this kind of press conference on the hong kong issues by china is very much unprecedented and while that actually came down quite a bit down to 3. 5 of a pickup there back to you. Indeed markets, as you say, are rattled by the developments over the weekend and have been on going for the last month or so sherry, thank you as ever for breaking it down for us. From hong kong markets to european markets here the picture for europe is a little bit more positive than the initial signs about an hour ago we have got some green on the board here remember, we have a huge, huge week coming up we have more than 100 companies in europe reporting earnings we also have gdp data coming up. In the u. S. , all eyes will be in the fed meeting on wednesday and whether or not the feds go for the 25 or 50 basis cut point, what language they give and also on going talks between the china and u. S. When it comes to the trade negotiations plenty to watch out for. Stock europe 600 up marginally in the green up. 2 percentage point. Lets break it down by individual markets here. Starting off with the uk, right front and center leading the charge up at almost 1 firmer on the data a lot is on back of the deal activity that we were just talking about with just eat and takeaway. Com just eat is up more than 20 on the proez poed tieup between these two Delivery Companies also they have made a proposal to buy out infinitive. Up more than 10 so lots of deal driven activity driving the uk here. You can see that the other three indexes, though, are trading a little bit in the red. Lets switch and talk about sectors, though, because it has been a heavy earnings day yet again. We have autos right at the bottom here down. 9 percentage point. Autos and auto suppliers still continue to trade on the black foot after a couple weeks after weak earnings out of the sector. Household goods also luxury stocks under pressure after those caring earnings on friday. Today we have montclair trading in the red too chemicals bank more earnings out of bank. Later in the week, you want to watch out for the uk banks we have barclays, rbs to watch out for. Up at the top, Financial Services up 1. 8 no doubt lse is driving that basket higher. Tell come is up here Deutsche Telecom is a big mover after the approval from the department of justice for the tieup between t mobile and sprint so thats giving that sector a bit of a boost this morning. But on to travel, as ryanair reported First Quarter profit that beats expectations. The Budget Airline backed its fullyear guidance but warns it expects average fares to fall 6 in the first half due to overcapacity and brexit concerns extreme weather, technical faults and strike action led to severe disruptions across the british transport network. Travelers were delayed and stranded at Heathrow Airport and gatwick. Flooding and strikes caused chaos on the rail network over the weekend alongside partial closures on key London Underground lines. And luft han sa is considering a shift towards a holding structure. The Airline Executives are actively discussing the issuiss. A Company Spokesperson said only that they regularly review group stock shares and lufthansa reports earnings tomorrow. Lots of travel news over the weekend whether its earnings, whether its travel disruptions. Meanwhile, an american teenager won 3 million playing a Popular Online video game after he took home the top prize at the firstever fortnight world cup. Three day event in new york fit in more than 100 of the globes best players around each other 40 Million People attempted to qualify for the tournament, wow, which featured 13 million in total prize money. 40 Million People wanting to participate in fortnight competition. Thats crazy size of a small country there. If you have any views on anything we discussed from brex it to the deals this morning to earnings to travel disruption to fortnight, get involved in the conversation as ever, you can tweet us or tweet me directly. Also coming up in the show, dont go anywhere, heineken profits disappoint in the first half sending shares sharply lower, but one broker calls it a buying opportunity well discuss the outlook for the sector after the break we call it the mother standard of care. Its how we care for our patients like job. His team at ctca treated his cancer and side effects. So job can stay strong for his family. Cancer Treatment Centers of america. Appointments available now. Cancer Treatment Centers of america. Applebees all you can eat is back. Now thats eatin good in the neighborhood. Welcome back to the show some more Company Earnings for you. Restructuring costs hit sonofi as it posted a loss of 87 million euro however, the french drug maker raised its full year outlook saying it is now targeting earning per share growth of 5 switching to banking they dropped from trading and lending. Net Interest Income fell 1 from last year but was nearly 3 higher when compared to the First Quarter. The results come after competitors cut their income forecasts citing challenges from the current low Interest Rate environment. And heineken shares are on course for their worst single day performance in a year. Thats after first half operating profit missed expectations as higher input costs off set a rise in beer sales. The dutch brewer backed and flagged continued volatility and economic conditions. Speaking to cnbc earlier the ceo said beer sales would support the brewers second half numbers. The input costs has been much higher than last year in the first half of course, we took some pricing in a number of geographies but that will roll over in the second half and that is the main reason why we can be confident to maintain our guidance for a mid single digit organic operating Profit Growth for the full year. That said, the revenue was up a healthy close to 6 . And the heineken sales 7 . So, that backs up our confidence for the second half of the year. Heinekens miss is at odds with results from other large Drinks Companies which has so far reported better than expected earnings. Similarly, ab topped expectations has beer sales grew at their fastest pace in over five years the Worlds Largest brewer saw Strong Demand growth in latin america, europe and africa and to set it up for us, francois joins us on the show and dan kemp is still with us for further analysis just picking up on the heineken results here, you know, is this about higher costs or is it really glossing over bigger issue they have in that they have a lot of exposure to mature markets which arent growing as fast as emerging markets. I think its probably a combination of both. If you look at the top line gross of heineken and compare to abi for the first half, i think they are fairly similar. So from that point of view i would say that heineken is doing a good job its a little bit surprising that abi is not showing the same cost pressures that heineken is siting in its half year statement today. So i think that costs are definitely like points that disappoints to markets today its always a question about costs like when you lock in longterm contracts, is the timing issue or is it something more structural. I think if you look at markets, i think heineken was doing exceptionally well in Southeast Asia very good results there. I think heineken has made its portfolio much more geared towards emerging markets where growth is still happening, but europe is like a big market for heineken and if we look at the weather last year, which was really good in the Second Quarter, and we look at the world european teams playing, the comparisons for europe in the Second Quarter always going to be difficult and have to put a bit of pressure on. Ill draw an analogy to the banking system, in beer, you have the beer makers and then you have the challenger craft beer makers as well. Do you see these smaller craft beer makers taking away market share from the more traditional beer makers like heineken and is it forcing them to become more innovative with their own products. Thats a very good point. My first reaction would be yes if you look at the United States, you see that craft beer is now a large part of the market you see other countries following suit question is like whether heineken and ab were affected by that or can they use this to their advantage. I think if people started to drink less but better beer it could benefit heineken and abnf as well. Tastes are changing a friend of mine came over with 0 alcohol heineken beer what i thought was interesting is that a sixpack of the 0 beer costs 4 pounds 50 a six pack of normal beer costs 5 pounds i found it remarkable theyre almost costing the same thing, one clearly has alcohol and the other doesnt. Surely that should be Good Business for heineken from a margins perspective. It should be very good because there is a tax of course included in the alcoholic version but shouldnt be there in the lower alcoholic or nonalcoholic version or lower tax. The interesting point here is that if we look at brewers and we look at the last 20 years, i think standardization and cost cutting has really been the focus of the big brewers trying to get them all to the big brands i think were in an environment with craft beer where innovation reflects ability is much more important. That requires a different skill set. I think what heineken is doing in zero percent alcoholic beer shows that heineken can do that. Its good to see that a large two brewers are shifting towards innovation and preparing themselves for the future to come because i do agree with you the future is going to look different from the past in beer. And dan, lets talk about the reaction to the stock price today because, you know, the shares are trading down 5 on this miss, even though the future perhaps doesnt look as bleak as the price action would suggest. Thats right. And this was what we were talking about earlier, that as the market looks for growth businesses disappoint for perfectly good reasons and maybe things that will be reversed over time, we see businesses being punished for that, which is also fueling that search for growth whether its in new lines, nonalcoholic beer, or in m a activitactivity what that says to me is that in a lot of these stocks which have expected growth, theres a lot of good news already priced in thats a dangerous time for investors. First of all, when you think about the winners in this space, are you thinking about the Growth Potential in terms of Geographic Presence . I think Geographic Presence is definitely important. If we look back at bought sba miller and look at the african markets. You have very low per person so, if wealth increases in those regions, same is true for Southeast Asia, you see first people drink more beer and then at some point they will drink better beer with higher margins for brewers as well. So geographically i would say that there are some areas that are very interesting and that some brewers have positioned themselves very well. Francois, thank you very much for joining us on the show today. Senior analyst on the Beverage Industry and dan, thank you very much for your input on this earnings season so far dan kemp, cio of morning Star Investment management. Switching to the uk, the chancellor is preparing to announce 1 billion pounds for no deal brexit. They earlier written that additional spending will focus on a Public Information campaign to ready individuals and businesses for a no deal scenario the uk is set to leave the eu on october 31st but the eu is not as prepared for a no deal brexit as the uk is according to the confederation of the british industries, cbi the business body said the block has taken limited steps to ready itself for the limited scenario and the uk has taken a more responsible approach but urged both the eu and britain to accelerate no deal brexit preparations and french car maker psa says it will move production out of some vehicles out of a plant in the northwest of england if the factory is not profitable after brexit ceo told the ft that the company has already selected an alternative to its site in cheshire im sure many people in the Business World would agree with him on that. Also coming up in the show, Oil Prices Ease as european, russian and chinese officials meet with iran to try to salvage the nuclear deal with tough food, your dentures may slip and fall. Fixodent ultramax hold gives you the strongest hold ever to lock your dentures. So now you can eat tough food without worry. Fixodent and forget it. Welcome to street signs im Joumanna Bercetche and these your headlines. Data deal. Lse shares are set for their biggest oneday gain in over three years after the Stock Exchange confirms its in talks to buy Data Analytics platform in a 27 billion dollar deal. Just eats soars after agreeing to a 10 billion all share merger with takeaway. Com helping deliver the ftse to 11 month highs. Heineken shares are on track for their worst day since 2011 as net profit fizzles out in the First Six Months ceo tells cnbc the brewer can turn it around in the second half the input cost has been much higher than last year in the first half of course, we took some pricing in a number of geographies, but that will roll over in the second half. Mixed trade in europe ahead of fresh talks between washington and beijing as investors eye potential rate cut from the fed later this week good morning to you all. Lets check in on how european markets are faring, this after more record highs for wall street on friday nasdaq and s p new record highs. Over night, asian markets traded softer all of the dwrurpen indexes are trading in the red ftse mib down. 2 percentage point. A lot of green in the british index. The uk index, ftse 1030 is up more than 1 this morning. A lot of deal activity there driving some of the gains. We have just eats up more than 24 . Lse group up more than 14 now after news that its looking to buy Data Analytics firm. Thats two of the stocks we have been looking at in the uk broader index. Generally speaking we are seeing a bounce for the ftse this morning. Its a big earnings week coming up so far on average, the average beats has been about 1 . So nothing not huge beats versus expectations for this earnings season so far. Switching to Foreign Exchange and here were seeing a bit of pressure on the euro, and were trading down at around 111. 20 still pretty much close to where we were just before that ecb meeting last week when they sounded dovish the market since then have struggled really with the reaction function and what to do with that guidance out of the ecb euro holding in around that 111 mark cable a lot of focus today down. 4 Percentage Points weaker 123. 30 again, a lot of talk over the weekend about the socalled war cabinet thats being put together by the government to help prepare for a no deal brexit the chancellor is talking about putting out extra money to help businesses and corporations think about no deal brexit preparations so we really are getting into crunch time there. That is the picture for currencies of course the dollar is very much in focus ahead of the fed meeting on wednesday this is the picture for u. S. Indexes, s p, nasdaq all seen marginally negative. Personal and income spending tomorrow but the main catalyst will be the fed meeting on wednesday. On to geopolitics, oil prices have moved lower after iran described an emergency meeting with european, russian and chinese officials over the nuclear deal as, quote, constructive all remaining parties to the agreement gathered in vienna to discuss the state of the accord amid a growing number of confrontations so hadley joins us with more hadley, oil is trading softer on this they said the talks have been constructive but yet it doesnt appear as though these two sides are any closer to passing back or exchanging the vessels that were captured in the last couple of weeks thats right, joumanna. At the end of the day what we heard from the latest meeting of the remaining signatories was essentially the iranian saying this tanker tit for tat was violating their ability to export oil we heard from the british secretary saying that he wasnt buying it. Teheran at the end of the day must abide by International Rules and regulations if they want to, quote, come in from the dark lets hear from the Deputy Foreign secretary of iran. Listen in. Both sides, as i said, had complaints about each other. We raised this today i think the atmosphere was constructive and the discussions were good. I cannot say that we resolved everything, but i saw i can say that there are lots of commitments to the jcpoa and its survival. Irans foreign secretary, Deputy Foreign secretary, essentially saying that the conversations were good but as you say it doesnt seem as if the dial has been moved forward in any real day because at the end of the day it doesnt have anything to do with u. S. Sanctions. Theyre still full on. And it doesnt seem as if the europeans as well has moved forward with this system of payments they hoped to have in place that would help teheran out as well as the fact you have the second british warship here in the persian gulf essentially to protect the uks shipping lanes as well. And the fact that irans already pushing back on that one and saying that it sends a hostile message. Joumanna. Perhaps not as constructive beneath the surface as some of the comments would suggest hadley, thank you very much for breaking down the developments at that all important conference about iran over the weekend there. Now, moving on, the nomination period for countries to submit candidates to replace Christine Lagarde has opened the imf expecting to appoint a candidate by october the 4th now, the eu has announced a short list of candidates for the imf. Sylvia, as ever, has more. Sylvia, who can we expect . The European Countries have short list of five names as they search for the next imf chief. Who do we have on this list . The former president of the euro group and also former dutch finance minister the Current Governor of the central bank of finland and he also served as european commissioner for the euro. The spanish finance minister, also the portuguese finance minister but head of the euro group and then finally chief executive of the world bank. When it comes to giogivi, its a clear stumbling block. Should not be older than 65, at the moment, she is that age. France, which is the country chairing the discussions among the 28 European Countries is putting pressure on the imf to change those laws to allow for an older candidate but the imf board is reportedly against that idea but at the moment f you look at this on going conversations across the 28 european capitals, what we can see really is that they agree only on one thing and that is the fact that they want to see a european leading the imf. That has always been the case. It has always been the case that we have seen european as being the managing director of the imf. Theres this unwritten rule that the u. S. Gets to appoint the chief of the world bank and the europeans get to appoint the head of the imf, but in that context, though, a european minister told me last week that none of these candidates stands out. So theres an impasse at this stage and the different capitals are discussing who among these five names should be the next imf chief. The talks are on going the aim is to reduce these five names to one by the end of the week joumanna as you mentioned the 73year history of the imf, its only ever had an european md of which half of those years it was taken up by a french person. So, that is the backdrop sylvia, thank you for breaking it down and bringing us that short list police in moscow have detained more than 1,000 people in one of russias biggest political crackdowns in recent years. Thousands of antikremlin protesters gathered on the streets of the russian capital on saturday despite authorities declaring demonstrations illegal. Riot Police Responded by rounding up and beating back protesters on sunday, the jailed Opposition Leader who had called for the protests was rushed to hospital after suffering an allergy attack now, coming up on the show, the Tour De France welcomes a new winner, its youngest in over 100 years. Stay with us to find out whom. Some big news from mr. Clean. Stop struggling to clean tough messes with sprays. Try new clean freak it has three times the cleaning power of the leading spray to dissolve kitchen grease on contact. And its great for bathrooms just keep pumping the power nozzle to release a continuous burst of mist and make quick work of big jobs. It even works on stainless steel. It cuts through 100 of dirt, grease and grime. Available with easytoswap refills. To get three times the cleaning power, try new clean freak from mr. Clean. Welcome back to the show the market is focussed on the meetings taking place between the u. S. And china this week but we also just had some comments from the japanese economy minister who said that they are also planning on having ministerial level talks with trade representative lighthizer on august 1st and 2nd but those talks will occur in washington, d. C. You may recall that there were talks taking place between japan and the u. S. But they were put on hold due to the japanese elections, which are now obviously out of the way so they are resuming those discussions. And no doubt agricultural tariffs and exports from the u. S. To japan will be high up on the agenda there now, industrial profits and china dropped 3. 1 in june from the year before according to the countrys National Bureau of statistics the data adds the fears of manufacturer slow down driven by the on going trade disputes between washington and beijing the bureau said auto, oil processing, and steel have taken the brunt of the declines. U. S. And chinese trade negotiators are set to meet in shanghai on tuesday. They will be the first face to face talks since president s donald trump and xi jinping agreed to restart discussions in june meeting speaking to cnbc on friday, larry kidlow dampened expectations of a major breakthrough this week however i wouldnt expect any grand deal i think talking to our negotiators theyre going to kind of reset the stage and hopefully go back to where the talks left off last may. Kudlow was asked if President Trump wants to weaken the dollar in response to what he says is currently manipulation by other countries. He tweeted last week the dollar is the dominant currency in the world what the president , this might be your misunderstanding, what the president is concerned about is that Foreign Countries maybe manipulating their own currencies lower to try to gain some shortterm temporary trade advantage. That we do not like. But its not a question of bringing down the dollar and i will say this, just in the past week we had a meeting with the president and the economic principals and we have ruled out any currency intervention. So, i just dont agree with your assertion. The steady, reliable, dependable dollar is attracting money from all over the world and that, along with our incentive policies on taxes and regulations and our hope for trade barrier reduction, thats bringing money to the United States in bundles. We are the hottest economy in the world. I expect us to stay that way well, some deal news from across the pond now. Pfizer is close to a deal with generic drug maker mylan to combine its off patented drug businesses a cnbc source says a deal is expected to announce today and would see pfizer die vest its business and combine with mylan. According to our source, pfizer shareholders would own majority and mylan investors would hold slightly over 40 of the new entity. The u. S. Justice department has formally approved the 26 billion merger of sprint and Deutsche Telecom owned t mobile. As part of the approval, sprint will sell assets worth 5 billion to Satellite Television company dish the Company Expects to close the deal in the second half of this year but need to overcome a lawsuit from 13 states before completing the merger. And its another busy week for central bank watchers with the bank of japan set to meet today and tomorrow followed by a highly anticipated fed decision on wednesday nonpharm payroll caps off the week on friday as well and lets not forget about the bank of england wedged in the middle on thursday lets bring in nick ford thanks so much for joining us. Before we look to the week ahead, i want to ask your take on the gdp data on friday. Looking at the numbers, u. S. Consumption up 4. 3 . The u. S. Consumer still really holding up strongly even though were possibly looking at a fed thats about to cut 25 bases points who are the fed cuts rates for well, i think the gdp figure was strong as you say because of the very impressive consumer data the fed is very determined to keep this economy rolling. If you look at past history, particularly in the 1990s, we had a rate cut at a time when things were going well prior to that, rates had been going up but in 1995 we had a rate cut which actually turbo charged the economy for another five years so, we have five more years of growth from that so, i think investors should look upon this meeting anticipated 25 bases point cut as a big deal. But is it a one and done . Or do you see this the beginning of a full cutting cycle . Because theres a big difference between the two. And i suspect that powell can go either way this wednesday when it comes to the language and guidance if i had to bet, i would say theyre one and done to some extent this is a little bit like pouring care seen on a fire we already have a very strong economy. And this rate cut will really turbo charge it a lotfurther so, its very positive for the economy and a very big deal. Investors should be thinking about the impact on corporate profits from here, the extended cycle and if you look at history, when you have any flexion point in rate movements from tightening to an ease, when this has happened when the s p and nasdaq are flirting with record highs, its often a very good sign. Over the last 14 years theres been 17 occasions when the fed has changed tack like this with the s p and nasdaq very close to highs. In the ten years following that 1984, the market advanced 36 and in 1995, about 25 so, the history looks quite good. Its a game of whats priced in the market is certainly not pricing in one Interest Rate cut of the fed and pricing in a full easing cycle up to 100 bases points by the end of 2020. If powell signals they cut once and are going to be very cautious about future Interest Rate cuts, can stock markets continue to go up here given how much easing is already priced in, wouldnt that be disappointing . You have to look at inflation as the main gauge to get a sense as to whether or not there will be further cuts. Inflation is incredibly well behaved at the moment and the fed is seeing inflation below target i think powell would like to see a higher rate. Until it gets out of control, theres no reason for the feds to jam the brakes on when you jam the brakes on thats when you have problems with the stock market. What struck out to you for the season to far in earnings . So far its gone pretty much according to what we expect. Investors know that the economy has slowed down in recent months it hasnt been that surprising that companies have slightly lower guidance you look at the guidance for the Fourth Quarter of this year, its come down for the market as a whole from about 6 growth to about 5. But interestingly if you look back about ten days ago, honeywell, Large Industrial conglomerate reported rather disappointing outlook but the shares still went up 3 . I think its a reasonable assumption the market has priced in slightly less optimistic forecast at this point. Indeed. I was looking at some of the numbers here, the biggest epsb come from tech yet again that sector, that industry continues to bring in the numbers. And despite widespread skepticism about the numbers that the tech, the big tech can come out with and a whole slew of regulatory issues the numbers are still there. Do you think that the tech sector can continue to grow in this environment where, you know, people are talking about a slow down in the Economic Growth backdrop i think were in a golden age of Technology Innovation in the u. S. As american corporations are under a lot of pressure to streamline their operation, boost efficiencies and to deliver better earnings for shareholders so from what we can see from cfo surveys, the intention to continue investing heavily in technology is still there and there are some incredible gamechanging u. S. Based technologies out there, Artificial Intelligence is one area that the u. S. Is a real leader and pioneer so, an awful lot of good things going on and with softer service being a key new tool for companies to streamline operations probably be a lot more to go for. Great, nick thank you very much for joining me nick ford u. S. Fund manager from miten. On to sports Colombias Egan Bernal is the first south american to win the Tour De France he beat thomas into second place. Adam joins us in the studio only 22 years old quite a feat for such a youngster. Incredible achievement. Very uncharacteristic in the Tour De France, experience counts for such a lot. Its a tough race to try to win. Geraint thomas couldnt retain his title but was more than happy to hand it over to his teammate egan bernal the procession riding into paris, nobody challenged bernal and crossed the line arm in arm, essentially ceremonial baton handing over bernal is so young at the age of just 22. Hardly surprising because they have the biggest bud jets. Im surprised to hear about a colombian winning this title where did he do his training did he do his training within colombia there havent been that many high profile cyclists coming from that part of the world . Thats absolutely right once you show any proficiency for cycling, then you end up going wherever the mountains are. A lot of these guys train somewhere else chris froome wasnt at the Tour De France, he did a lot of his early life was in kenya before moving back to britain you go where the mountains are but if you got a hunger for it, then that can be you can find the access anywhere. Maybe i need to start using my weekends wiser. Go to the mountains and start training. It was also a formula 1 weekend to forget for mercedes at the german grand prix with drivers Lewis Hamilton amongst those to spin out during a chaotic race which was eventually won by red bulls max. Adam, tell us about this chaotic race it would appear over the weekend. It was brilliant for the viewers to watch because it was everything that you wanted from a formula 1 race with drivers spinning out, overtaking sebastian vettel, for example, his home grand prix starting at the back of the grid, worked his way up to second but all the drama was happening at the front. Lewis hamilton despite being under the weather looked to be in control he spun out. They didnt know what tires to put on his car he wasnt best pleased with this this is the ferrari driver looking good for second place but he spun out in a very dangerous bit of track and ending up quite ironically under a mercedes advertising it wasnt a great weekend for mercedes celebrating 125 years for being in motor sport they had special White Mercedes cars the track there had slightly different tarmac on it they ended up skidding off on this drag racing Lewis Hamilton had an embarrassing pit stop. He did finish 11th but was promoted to 9th. He did slightly extend his lead in the drivers championship because teammate spun out. But, picking up his second win of the season is max verstappen. It helps if your pit crew have got the right front wing. That appears to be helpful in that situation its still very early on in the season. Getting towards the half way stage. Hamilton can still make a comeback. Definitely doing well. Adam, thank you for breaking down the weekend extravaganza in sports. Quick look at u. S. Futures before we head out the three majors just looking to open up a little weaker this after s p and nasdaq making record highs on friday big week ahead with the fed coming up and more earnings. That is it for our show today. Im Joumanna Bercetche, Worldwide Exchange is coming up next. Stay with the channel. Lets go lets cowboy up exhilarating speed. Woo precision control. Woo maximum reliability. Access denied. [ repeats ] access denied. If its not xfinity xfi, its not good enough. For wifi with super powers, get xfinity xfi. And go see, fast furious presents, hobbs shaw. August 2. It is 5 00 a. M. Here at cnbc here is your top five at 5 the week has arrived investors bracing for the busiest five days of earnings. Apple, verizon, gm, exxonmobil and, oh, about 150 more Companies Set to open up their books. The pressure is on the fed holding its twoday policy meeting this week the markets expecting some say needing the first rate cut in more than ten years. Now a former fed chair weighs in on route to china, high level u. S. Trade negotiations heading back to shanghai this week for the first high level talks since that trump xi face to face last month what you nee