Misses expectations. Casp casp the ceo the tariffs are entering into the game. It will be a loselose for companies and regions. Best in a decades. Zurich hales a strong first half and strikes a bull iish tone on the outlook. The ceo says cost cuts have begun to pay off the change in portfolios in Property Casualty and we continue to shape our life portfolio to be neutral to the Financial Market situation and to provide risk coverages to our customers. A warm welcome to street signs. It is thursday, it does feel like friday after some of the market gyrations weve had over the last 24 hours. Yesterday was a tumultuous day across the board, across all different asset classes. Lets talk about some of the u. S. Equities price action the biggest comeback for the year across wall street. At one point dow was about 2 weaker, almost 600 points lower on the day it spent the rest of the session clawing back up slightly ending in the red yesterday below the flat line. S p and nasdaq did manage to end up in the green. 68 of the s p 500 components were down more than 2 from lows yesterday. A lot of volatility, but still managing to end up in the green. We saw some stabilization in fixeded income as you can see behind me, theres more green on the board, in europe today, this is the second day of stabilization when it comes to asian equities the stoxx 600 is still down 2. 5 this week. So yes we are rebounding a bit today, quite a lot in the context of the past couple of days, but still notably weaker on the week. Let me take you to individual indices. All of these indices are trading in the green ftse 100, the relative underperformer 7,200 is where were at. About 0. 10 firmer a lot of stocks today in the ftse 100 are going x dividends, so barclays, lloyds, theyre trading at the bottom of the ftse 100 because theyve gone x dividend theres a technical adjustment going on there xetra dax up 0. 8 . A bounce higher. The dax was down 1. 8 on the week, giving some of that back cac 40 up 1 the italian index up a third of a percentage point keep an eye on italian Political Developments theres more tension between liga and five star turning to sectors, every sector in europe is trading in the green. Those are the most exposure to china are rebounding quite a lot. So basic resources is up 1 . Some of the steel names there rebounding some miners seeing a bit of a lift chemicals up 1 . Construction materials broadly a much more positive session for europe technology, 1. 6 firmer led by Semiconductors Semiconductors have had a rough ride over the last couple of sessions let me take you to the price action in fixed income this is where the party was at yesterday. There was so much going on in this space tenyear note treasuries, 1. 72 at one point we rallied 12 basis points this is the lowest yield level since the election and the fear gripping fixed income markets permeated into all other asset classes. Yesterday we started off with a surprising 50 basis points cut out of new zealand we also got a surprise cut out of thailand on the back of that fixed income it started trading with a strong bid. That continued for most of the session and somewhat stabilized towards the end. You can see the tenyear bund, just off its alltime record lows we saw that almost every day now were at minus 57. To put that into context, we are still about 17, 20 basis points lore than where the deposit rate is deeply inverted curve there. Gilts in line with all other fixed income the tenyear italy also rallying today we are seeing fixed income come off a bit to the tune of 2 or 3 basis points. Huge moves there lets talk about the asian markets price action yesterday you can see a lot of green on the board. We have seen some positive momentum nikkei 225 is up the shanghai composite is up 1 . We had better than expected export data. Exports up 3. 2 . The analyst expecttation is that they would drop 2 stronger exports data. The fix came in above 7, but not as weak as some had anticipated. One equities in europe we are watching closely is adidas it posted Second Quarter sales slightly below analyst expectations at 5. 5 billion euros but they expect sales growth will pick up in the second half of the year and it reaffirmed its fullyear guidance the ceo told cnbc he, too, is concerned about trade tensions between the u. S. And china only 20 of our total manufacturing capacity is in china. So we will only see in the shortterm very little i8 pact f impact for the consumer. Its much more concerned about the potential weakening of the renminbi when you have 25 of your business in china and the local currency, the moment china weakens their currency is tt itd impact our results so a currency war will have no winner for companies or regions. Chinese exports in july grew at the fastest pace since march growing 3. 3 from a year earlier. Imports fell by 5. 6 , but that number, too was also better than the forecast eunice yoon is in beijing and will examine the trade numbers reporter chinas trade number for july surprised to the upside exports rose more than 3 . Imports shrank but less than it expected it appears Global Demand is holding up though exports to the u. S. Contracted showing President Trumps tariffs are taking their toll. August data will likely be supported by a rush of shipments as factories place more orders ahead of the september 1st deadline for the next round of tariffs. Most analysts believe import also continue to be weighed down by the slowing economy this morning the central bank set the yuan weaker than the 7 mark but beijings message is that the authorities here dont want the yuan to become a weapon in the trade war. The global times communist party paper quoted a researcher as saying further depreciation will not be fast to the 7. 1 or 7. 2 levels it will not take long before the rate returns to below 7. In other words, only stable movements for the renminbi eunice yoon, cnbc business news, beijing. Speaking of china, china would like to make a deal badly. That is according to President Trump who says the trade war with china will benefit u. S. Stocks in the longterm. He also insisted the recent equity selloff was not a surprise i think the Market Reaction is anticipated i would have anticipated it i would have anticipated more, but ultimately its going to go much higher than it ever would have gone china was like an anchor on us china was killing us with unfair trade deals. The people that allowed that to happen were a disgrace china was taking hundreds of billions of dollars out, stealing intellectual property, targets our farmers, all of that is ending. They understand that that was President Trump and his thoughts on the stock market lets bring in our next guest. Its great to have you with us look, you are a specialist in fixed income yesterday was probably one of the craziest days ive seen in fixed income space what do you put it down to and what do you make of the price action weve had its one where investors are wondering whether we will go into recession or not. Our central theme going into this year is that the globe would have a soft landing, were experiencing that now. Growth is slowing, not to vegs, b recession, but the major risk wildcard is trade. If things escalate further that could put u. S. Growth slightly negative german Industrial Production youve seen dipping negative and so that has bad spillover effects. So thats what is gripping fixed income markets it looks like the major catalyst was the series of tweets, recent escalation of tension between the two sides. The u. S. Threatening to impose extra tariffs, china responses with a currency devaluation, the markets look at that and say things wont get much better almost every analyst out there puts out research saying 0. 2 , 0. 3 of gdp. This will not tip the u. S. Per se into recession if youre growing at that rate no, if you take the full amount of the tariffs that potentially could take three quarts over a spepercentage poit off of u. S. Gdp. Its more a fear gauge people are finding safe havens is there a fear in your mind that the tail ends up waging the dog . People start seeing these signals that have meant x becomes y, and that then becomes a selffulfilling prophecy that is the fear that we talk ourselves into recession based on the data were seeing from the company level, we dont see Major Economies tipping into recession. Were still seeing good growth from a Company Perspective not all companies are meeting or beating earnings, but by in Large Companies are growing slowly so were not seeing that data yet. Why such an aggressive move into fixed income yesterday . Safe haven. I do think in the period where youre seeing that volatility, in the period where equities are still at the highs, despite a little bit of a selloff in the last week, equities are close to alltime highs people want to put money in an area where they think its safe. I want to take it back to the currency one major catalyst was the f fixi fixing, and today we had a fixing through 7, a psychologically important level. What does that mean for simply just chinese demand for dollars here their currency is weaker versus the u. S. Dollar. Were looking at a stronger u. S. Dollar in the past pobc would recycle some of their dollars and invest them back into u. S. Treasuries are there signs that is fading do you expect u. S. Treasuries to move into the next leg of this potential trade war as a weapon china could use . I think they hold so many u. S. Treasuries it would not be in their interest to do that while you may see a slowing of those purchases, i dont think theyll start dumping those u. S. Treasuries if theyre running out of options it could be something they may consider. Well pick up the conversation in the next segment. Coming up, just a week on from the feds first rate cut in a decade, President Trump renews his attack on the central bank more after the break these folks, they dont have time to go to the post office they have businesses to grow customers to care for lives to get home to they use stamps. Com print discounted postage for any letter any package any time right from your computer all the Amazing Services of the post office only cheaper get our special tv offer a 4week trial plus postage and a digital scale go to stamps. Com tv and never go to the post office again danny s voice of course you donte because you didnt . Your job isnt doing hard work. Its making them do hard work. And getting paid for it. vo snap and sort your expenses to save over 4,600 at tax time. Quickbooks. Backing you. Welcome back President Trump ramped up the pressure on the fed for further rate cuts. He said the central bank was too proud to admit mistakes and called for bigger and faster cuts he easteven accused the fed of incompetence. Charles evans says trade headwinds could justify more accommodative policy on wednesday he signaled tensions with china might precipitate further easing. The yields on u. S. 30year treasuries is approaching the lowest level ever. The yield on tenyear note is falling below the threemonth note that historically indicated an imminent recession lets bring back our guest we were talking about the inversion of the yield curve to willems point, the tail waging the dog theres a lot of scary signals out there. My question to you is whether this is a new paradigm and people will have to get used to the fact that curves everywhere are inverted twos and fives is already inverted in the u. S. Yes ne in germany we have the bund trading below the deposit rate is this part and parcel of this new paradigm as a function of Central Banks having bought trillions bo s worth of bonds o the last several years that and markets looking forward as well. While the curve may be inverted, the expectation is for more rate cuts in the u. S. In europe, you know, most likely they will be announcing more qe. That will bring rates down across the entire german curve, all of it is negative now. So i think its one where while there may be room to go slightly higher in yields, i dont see them breaking out soon especially in a period of low growth and low inflation because we have people every single day commenting, looking at these moves saying these are silly levels every day were moving more negative ireland tenyear bonds trading in negative territory. These are countries who had to get bailed out a few years a ss at the peak of the sovereign crisis what would you tell investors who are looking at these numbers saying this makes no sense its one where its taking a view the next 6 to 12 months if you think the world is going to recession in that period of time, these may not be bad areas to be in theres the potential for them to go lower. If you think the world growth stabilizes, its okay, these may be just shortterm moves did you see the pimco note that said negative rates, question mark . I wonder if you think there is an if and when question about u. S. Treasuries moving to negative rates never say never i never thought the entire german yield curve would be negative i think there is proper inflation in the u. S so it may take a lot more to get there. But, i mean, if the fed embarks on quantitative easing, which i dont think thats likely, but, you know, in the next one to two years if things get worse they can, you can see it get lower from here. If you see investors, those less used to working and operating in the fixed income space moving into slightly riskier fixed income assets because theyre looking for yield and the market is getting more and more crowded, is there a signal you would advise people to look for as the moment for them to get out of those assets . Would it be language from the fed . Something else i agree with 15 trillion of negative yield and fixed income assets globally, absolutely people are looking for a yield right now. Were not seeing necessarily signs of frenzied behavior were not seeing signs in the credit markets of deeply distressed names that should be going bankrupt getting financing and perpetuating themselves out yet, but if you see triple c credits trading close to double b rated credits, thats a sign of too much exuberance in the credit markets both Investment Grade in the u. S. And europe have come under selling pressure do you think this is therefore a buying opportunity in that space . Yeah. Absolutely we think that, you know, markets like these now represent buying opportunities. Our view is over the next 6 to 12 months credit markets probably go tighter, especially in europe, if theres more qe, most likely people will have to shift into corporate debt. That will cause the market to go tighter. The trade in europe is essentially buy the things that you think the European Central bank will buy. That and even if they dont buy them, it will force other investors to buy those to get some yield all right thats the game for the last couple of years. We will continue the conversation in a bit. Thank you for joining us thyssenkrupp cut its fullyear profit outlook and announced a review of three underperforming Business Units they reported a 32 fall in adjusted Third Quarter earnings of 226 Million Euros alongside stagnating sales our next guest joins us now. Is there something about these numbers that speaks to a wider challenge in the steel market . Yeah, for sure. Steel is very much exposed to the Global Manufacturing slowdown a big issue in the steel sector is the slowdown in the auto sector we talked about weak german numbers, dropping car sales, european economy, that takes in 30 of total flat Steel Production in europe thats a big driver of the slowdown were seeing. This is the fourth profit warning in four quarters for this firm. The shares are down a third on the year, we saw a pop this morning. Why would investors see positive signs out of these numbers there has been some signs that we are near a turning point. A big issue was very expensive Raw Materials, in particular iron ore we are seeing those prices dropping and dropping fast theyre down 20 in the space of 20, 25 days. That will provide some relief in terms of cost structure. With then you think about st, there are two main Raw Materials, you have iron ore, and you have coal. So talk us through the developments in the coal space and also chinas role in that given the way that that economy has shifted away from an investment economy towards a consumption economy. Thats interesting. Thats the conception that china is moving away from investment or economic model to a consumption driven model but each time they run into trouble the first thing they do is stimulate all sectors of the economy like property and infrastructure thats what they did the past 12 months if you look at steel consumption, it was up 10 year on year. That drove the price of those Raw Materials through the roof iron ore had its own specific story with disruption in brazil. Now there are signs of china slowing as well with Raw Material Prices falling. Let me take it back to a year ago when the u. S. President originally introduced the steel and aluminum tariffs that was on National Security premise. Back then the assumption was that china was sitting on huge amounts of steel, stockpiling was taking place, and then dumping the steel into europe and other markets. Where are we now, 15 months on, 16 months on what does the picture look like . Are china still stockpiling . Is this dumping still occurring . Were seeing steel stocks, inventories within china, but expor exports have dropped surely some of the pressure on the Global Industry that we were seeing from the huge volumes that china was exporting are fading in the case of the u. S. , china exports very little steel to the u. S. Those tariffs were put in place against some of the u. S. Allies, mexico, canada, europe, but also turkey those are the main exporters to the countries, not so much chinese steel. Have you seen major trade flow changes in this period then weve seen a drop in imports into the u. S some of the steel that was going to the u. S. Is washing into europ europe and commodity complexes have come under pressure in light of the market price action weve had, are you forecasting a rebound in the second half of the year assuming that the trade talk narrative stabilizes . Were bearish we are going through a major risk off exercise that is hitting all of the risk assets and commodities. We think its too early to talk about trade resolution we think its more likely to happen next year, the Election Year in the u. S. So the answer is no. Were particularly bearish on copper and iron ore for the second half. Okay. Excellent. Very directional view there. Thank you very much for coming in thank you coming up on the show, well talk about fixed income. Tenyear bund yields fall deeper into negative territory but how much lower can european sovereign bonds go mi unee scuss that and mor congp xt 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. Welcome back to street signs. Im willem marx. Im joumanna bercetche. These are your headlines the market comeback continues with almost all of the european sectors in the green after the dow claws back from a 600point drop the flight to safety loses some stream as global bond yields come off lows after the u. S. Tenyear touched its lowest point since october of 2016. Adidas shares drop on the lack of a guidance upgrade despite double digit gains on the bottom line. The ceo thinks a currency war would be more parmfharmful thana trade war. Im more concerned if we enter into a currency war. In my opinion, that will have no winners. That will be a lose for companies and for regions. Best in a decades. Zurich hails a strong first half and strikes a bullish tone on the outlook. The ceo says cost cuts have begun to pay off we changed the composition of our portfolios i Property Casualty and we continue to shape our life portfolio to be neutral to the Financial Market situation and to provide risk coverages to our customers. After that roller coaster session on wall street yesterday with the dow down almost 600 points at one point and recovering to end the day almost flat, we have seen sentiment stabilize overnight. Asian Equities Trading up in the green. The picture for europe is one of positivity as well all of these indices are stabilizing, trading up. Ftse 100, the relative underperformer here, trading around the flat line a lot of the stocks in that basket have gone x dividend. Barclays and lloyds at the bottom here we have the german index up a half percentage point. Were in the heart of earnings season we were talking about thyssenkrupp earlier, that stock is up 2. 5 , one of the best performing stocks in the dax today on the market receiving their earnings with a positive reaction cac 40 is up 0. 9 . The italian index is up a half percentage point all sectors that had exposure to china are rebounding im talking about basic resources, tech, autos all of those are trading up in the green. Lets move on and talk about Foreign Exchange for the week actually were looking at a dollar, u. S. Dollar that is down to the tune of about a half percentage point. Yesterday was interesting because despite the price action we had in fixed income, equities, credit, all of those asset classes, the dollar ended the day flattish so interesting developments there despite the president s focus on what the currency has been doing here you can see versus the euro, the dollar is trading weaker 1. 1225 a bit of a flight to quality bid going to yen the yen is firmer versus the dollar cable, we have just high of 1. 22, making some gains this morning. 0. 22 . The picture is one of dollar weakness in this mornings trading. U. S. Futures, i talked about that roller coaster session yesterday. About 70 of s p 500 rebounded 2 or more from the lows a lot of volatility. All three major are pointing to open in the green. More stabilization and a lot more positive sentiment in awaiting u. S. Investors later. Back here in europe, zurich reported its best first half earnings in a decade that is thanks to strong cost cutting measures that offset a weaker top line. The insurer posted a 16 jump in business operating profit during the period the ceo explained how he thinks the company improved their strategy we have been working hard we changed the business structure, we changed the composition of our portfolios in Property Casualty and we continue to shape our life portfolio to be neutral to the Financial Market situation just to provide risk coverages to our customers this has been fluid, and were happy to see all the promises that we made at the end of 16 to our investors and to our colleagues are coming through and were coming close to the end of this threeyear plan. Doueutsche telekom confirmed its 2019 guidance. Europes Largest Telecom firm by revenue was boosted by strong growth at tmobile ahead of the 26 billion takeover of rival sprint and adecco says it is on track to deliver targeted incremental savings of 70 Million Euros in 2019. But the firm posted a decline in Second Quarter revenues amid weakness in the auto and manufacturing sectors. The company also flagged that this slowdown will continue into its Third Quarter. In the uk, adecco said brexit uncertainty is hurting hiring sentiment. Speaking of brexit, the United States will be on the doorstep to sign a new Free Trade Agreement with the uk as soon as that process is finished. Thats according to mike mom poo he made those comments after meeting with dominic raab in washington, d. C. The United States is the best trading partner in the world our dynamic system of Free Enterprise allowing the two countries to do that together. America is our single largest bilateral trading partner. President trump made clear he wants an ambitious trade agreement with the uk. I hope we can make that happen as soon as possible after we leave the eu on the 31st of october. Moving on to italy, the senate voted down a motion tabled by the Fivestar Party to block a rail link with france in a move that deepens the rift with lega. It is fiercely opposed by five star which says it is a waste of money and damages the environment. Lega joined forces with other parties to reject the motion as it believes the link will create jobs and promote growth. Mateo salvini earlier said the government could soon collapse, while five start accused the party of disloyalty. Ongoing developments there in italy from the political side of thing it looks like theres a lot of daylight between the two respective deputy prime minis r ministers. This motion seems to be going ahead. You had one half of the government working with the opposition parties, the parties outside of government to push through something that was not wanted by the other half leaning on the opposition to get through their own agenda something that the Uk Parliament is considering as well so we did see not much of a reaction in the italian equity markets today. Theyre all trading up in the green, we have seen some big moves in european fixed income still with us is the senior Portfolio Manager of nonInvestment Grade credit at neuberger bermen lets talk about some developments in european fixed income are you surprised italian bonds have become a flight to safety, a quality bond people are piling into for right now its one of the few countries with positive yielding debt. I think in europe people have to get used to more negative yield force a long period of time. The entire german yield curve is negative with the new ecb change, with lagarde, theres a chance for more dovishness, not just cutting rates but doing more qe. Again and again and again this earnings season we heard from european banks saying this low rate environment makes our job difficult. Does that matter for the broader economy from where you stand therefore is there a knockon effect that we should be watching closely two things. One, european banks are still in better shape than they were ten years ago. The core ratios are up from a capital perspective. Two, where we would be worried is if you start cutting off credit were not seeing that yet. Were seeing the opposite. Were seeing a lot of credit put out in the market. Thats where i would get worried. Its an issue of demand, not ve availability there is not a lot of demand, particularly if you look at demand out of periphery countries, despite years of quantitative easing, Interest Rates, forward guidance, youre not seeing that much of a pick up in activity in peripheral lending. Part of it is uncertainty is bad for investment if you are uncertain from a physical or monetary regime point, companies will not invest at the same time it keeps things stable unemployment is still okay in regions where consumers are strong Consumer Credit youre getting availability there i get the technical argument, which is we may have a new head of the ecb at the helm of the ecb, more dovish, more qe to come clearly the ecb are intent on relaunching the asset purchase if you own bonds, thats a good thing. Isnt there an Inflection Point where the situation on the ground becomes so tenuous whereby eurozone action does slip into recession and that the feeling and the mood to want to own these less safe credits like italy actually shifts because people are concerned about the pick up in defaults, about rising nonperforming loans and about the knockon effects that could have on Business Sustainability thats the biggest risk now in owning corporate debt, if you start seeing economic deterioration, that will lead to defaults, thats the tail risk right now were not seeing that. I think if we were start moving in that territory, it would take a few years for that knockon effect to happen we had economists on this program eventually talking about a buy fifurcation of economies n europe, whats going on in different parts of the continent. But in terms of the spread between bunds, that was huge focus last year and people were concerned about the direction of travel in italy. When we have this bifurcation, do you see a similar bifurcation when it comes to the Way Investors view the sovereign debts of those countries i think so. Germany is still viewed as the safest country in europe italy, theres always those worries. You had up there the political insta tbility that continues there. People not knowing which direction of travel will occur that is creating that spread to occur. Italy has a lot of debt maturi g maturing, so investors will be worried about them rolling over that debt. One final question, its an important topic. The president is tweeting more and more and more about the fed and what they should do. If you look at whats priced into markets, after the fed meeting the market priced in maximum one other cut for the remainder of the year. After those tweets, after the twice action we saw, the market is pricing in two or double the amount after the fed meeting its almost as though the president is driving the communication out of the fed and is driving markets to expect more easing. Isnt this a very dangerous precedent . It is look, we have never seen this sort of jawboning in modern times by a sitting president and the fed. But that being said, i still think the fed is still looking at data. This rate cutting cycle looked like 1998, where there is three rate cuts, more like insurance cuts, and they stopped thats what markets are pricing in the one cut we had, two more cuts, probably no more after that well see how the president would react to that. Its a function of stock markets, isnt it . Thank you very much for joining us on street signs. Here at cnbc weve been talking quite a lot to top executives in some of the biggest banking and Financial Services companies over the last couple of weeks. As Interest Rates linger at these record lows we asked them how that reality will impact their businesses im not a big fan of low Interest Rates im a great believer of the importance of savings in the economy. The dovish policy by the ecb is not good news for sure for the Financial System it puts pressure on financial activities and insurance companies. Im not sure going deeper into negative territory or using the qe is the way to get out of the problems Interest Rates are low for a while. That is why we continue our adaptation thats why we stepped up the adaptation in this quarter to make sure that we can be ready in that environment to have a bottom line to grow. In the medium term its a challenge for all banks on the income side when you have Interest Rates approaching zero and in many cases below zero the ecb actions are not well described. Its really something that we can judge whether it will happen or not tiering has been discussed, but so far theres no real understanding of what it should look like. That was joumanna bercetches interview yesterday. Yes coming up, samsung gets out ahead of apple and unveils the new Flagship Smartphone line stick with us. Do you have concerns about mild memory loss related to aging . Prevagen is the number one pharmacistrecommended memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. My mom washes the dishes. Before she puts them in the dishwasher. So what does the dishwasher do . Cascade platinum does the work for you, prewashing and removing stuckon foods, the first time. Wow, thats clean cascade platinum. Lyft shares rose 13 in extended trade after posting a smaller than expected net loss of 68 Cents Per Share but shares pulled back after the Company Announced it would end its ipo lockup period a month early it said its price war with uber was calming down its amazing that a stock trades up when the expected loss is smaller than anticipated. Samsung have unveiled a new range of Flagship Smartphones, the gal laxy note 10, the 10 pls and the 5g the new models start at 950 and come with an upgraded stylus that uses air actions. Elizabeth schulze joins us in the studio a new range of phones coming out of sam shung thsamsung. We got the s10 phones released in february, but these note devices are popular among samsung and buyers heres a few specs if you look at the note ten plus 6. 8inch screen. This is a big phone. Noheadphone jack the phones start at over 1,000. 950 for the smaller version one thing to point out here is that these are not bucking this trend of price in any way. This comes a month ahead of apples announcement for its expected iphones in september. Apple always has its big event in september we can also tell that samsung is competing with the number two player now, huawei a lot of features on these phones like the cameras, the screens, they are tailored towards those customers that might have been attracted to some features on the huawei phones and samsung saying we need to maintain our spot as the number one smartphone sellerment what kind of features are we talking about . Is this better camera resolution greater storage . What specifically . Storage is a giver in many of these phones theres four camera lenses on the back of that big phone so this is a premium device when it comes to what you can film. A lot of the promotions have been around how social media and youtubers can use these. You have the stylish there, which is a huge draw when you think about how different these are versus the phones samsung released earlier this year, they are pretty similar unless you look closely at the specs that gets to the core problem at heart of the smartphone industry now. How do these companies differentiate these devices even with these incremental changes, is it enough for consumers to say i will pay 1,000 for that device thats why smartphone sales have generally declined over the past couple of years. Last quarter was about a 2 decline. Another angle here is that, you know, presumably they are getting more and more involved with the screen, what does it mean for the overall margins in the space . We know the margins with respect to the iphone have been coming down thats why they want some people to say heres why you can justify paying 1,000. We need those extra margins. Its also why a company like apple pushed into high margin businesses which have nothing to do with hardware, but are services with apple they said we want to have revenue from our app store, revenue from itunes, all of these sectors that have much higher margins from the start versus relying on customers to pay higher prices for hardware okay. Lets talk about the market share angle here with these big players, huawei, samsung, apple. Huawei clearly under pressure in certain markets. Not just in the smartphone side of things. But is that making a difference . If we look at market share over the last 12 months, are we seeing changes are these investments bearing fruit for these companies . We have a nice chart up now samsung is clearly still number one. 23 according to idc as of last quarter. Huawei hasconsistently edge hider over the past few quarters that is an important development. While they maybe struggled in the u. S. , where theyre not really available, we saw in china, according to recent data, sales surged over last quarter huawei released new devices that have basically convinced customers there its worth it for me to buy it all right elizabeth, thank you very much for bringing us the latest on samsung. Lets get out to Allison Porter from the Global Tech Team at Janus Henderson investors. Thank you for joining us i want to take it back to the market price action weve had this week. Theres been a huge selloff in equity space tech has been impacted in certain areas because of the exposure to china. Have you detected that investors are distinguishing between those names that have more exposure than other names are they distinguishing between the highly valued tech names versus other names or is it just indiscriminate selling at this point . Good morning. Over this week, we have seen a reaction in some of the more highly sensitive names to china, like apple as you were discussing before. And some of the semiconductor names. Overall the sector is in line with the average over the last 20 years, of about 20 premium there is a big discrepancy between the least and the most expensive names within Technology People have been gravitating to some of those names which are sensitive to some of the trade issues, to regulatory issues some of them trading on 20 times revenue, they do look more stretched on a valuation basis now. Many of these issues, trade issues, regulatory issues, theyre being priced in. I want to drill down on that and try to push you for some names. You mentioned some software companies. Where do you see valuations being stretched in the face of regulatory threats in the software space, we wont call out individual names, but we think people need to be more valuation conscious we are talking about the large cap and f. A. N. G. Names in particular we think that they are being overly discounted. Regulatory change is a constant. Weve been with it with intel, microsoft, then mastercard and visa on the payment side now with facebook and google even if we look at the valuation of facebook and alphabet versus a mcdonalds and coke, mcdonalds and coke are growing at meta high single digit and 8n debt im afraid we have to cut it short there. Thank you very much for taking the time to chat with us that was Allison Porter from Janus Henderson investors. A quick look at u. S. Futures before we head out all majors pointing in the green. Thanks for watching our show today. It is 5 00 a. M. At cnbc. A wall street whiplash the global rate race to the bottom triggering some of the most wild swings in stocks in a year could today be round two recession red flags. Bond yields at yesterdays session lows sending their strongest warning sign since the financial crisis does that mean a slowdown is ahead . 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