We are also seeing the effects of brexit. It is hard to see what the catalyst for change is here. The world is a volatile place and that is just a reality. Erik and bigname guests help us track global news and Global Politics and policy. The Democratic Party is trying to reach out broadly to americans. We have been seeing, since the beginning of the year, a significant pickup in the rate of money supply growth. Erik it is all straight ahead on bloomberg best. Erik hello and welcome. I am erik schatzker. This is bloomberg best. Your weekly review of the most important Business News, analysis, and interviews from Bloomberg Television around the world. Lets start with a day by day look at the top headlines. For almost two years, yahoo has been under pressure to separate its core business from its investments in asian tech companies. And on monday, the big announcement finally came. It is official. Verizon is buying yahoo s operating business for 4. 83 billion in cash. This is like the merger we knew that was going to happen for like seven months. It finally happened. There is a noncore a. P. Component of yahoo that will remain within the Yahoo Holding company for the time being that will be sold off, but probably not for another month or so. Of course, yahoo will maintain its stake in yahoo japan and alibaba. Yahoo will have to decide on what it plans on doing with those at a later date. Jonathan actually identify the assets that verizon has. That can make a job of yahoo , that others could not. Yahoo gives a skill that takes us out of the millions and into the billions. So combining those two is the right start for us. We also have been investing in content assets across verizon. So you have seen us go from just licensing linear content and moving into ownership. You say you plan to stay. What role do you envision for yourself . Immediately, i have got two priorities seeing this transaction through to close, but also watching the value of our asian assets and equity stakes we have there. And then moving forward, we will ultimately figure it out. But i love yahoo . It is very important to me to see it into the next chapter. Emily so you came here with so many possibilities, so much hope. You wanted to restore yahoo to greatness and build out news and original content. How do you personally feel about this outcome . I feel very good about it. I think yahoo is a company that changed the world. And not very Many Companies get to change the world. Apple shares gaining in afterhours trading, with a slowdown that was not quite as bad as expected. Thirdquarter revenue fell 13 , marking the first backtoback Quarterly Sales declines since 2002. But actual iphone unit sales beat analysts estimates, topping a 39. 9 million average estimate. Not quite as bad as we expected. The forecast for the coming quarter looks quite good, which means they think that last quarter was the low point. It seems like it. There are some highlights that they are pulling out. They are still talking about pockets of opportunity in china, and that is obviously a strong point because that market, as a whole, is flat. They are finding that opportunities. They highlighted some initial penetration into india, which has not been the easiest thing because of the legal issues they have had to hurdle. Again, the iphone sc is a new product line, it is cheaper and finding new opportunities and new audiences as well. Scarlet we are minutes away from the july decision when the Federal Reserve is expected to leave Interest Rates unchanged. Lets go to mike. Michael no mention of Economic Activity overseas or the dollar, and certainly no timeframe for future action. But if you are feeling hawkish, there is this inserted into the second paragraph a statement noting that nearterm risks to the Economic Outlook have diminished. That suggests that members may feel conditions for a rate rise have grown more favorable, and investors certainly may take that, if they want to, as a sign that september could be a live meeting. Tom it is a pretty good america, and yet she is central banker to this troubled world. What would be your counsel to her for september and into next year . I think janet yellen not to be critical, but youre asking me, so i will be as well as all central bankers, are fixated on the fact that the lower and lower Interest Rates go, the higher assets go. Ultimately, that rebounds to the benefit of the economy. I do not think it does. I would say, janet, get off of this fixation of lower Interest Rates providing a push for economic growth. Francine Deutsche Bank says secondquarter profit was almost wiped out. Trading plunged and Deutsche Bank set aside money to contract. The ceo has been cutting risk assets and eliminating 9000 jobs. The sentiment is really bad and evaluation is really bad. And the results are really bad. We were expecting some pain because this is a restructuring. There is some turnaround. You see profit sacrificed, you see market share sacrificed. But the rewards in terms of capital and Balance Sheet strength just are not there. The idea that 2016 will be the peak year, and once we get through this year, everything will be fine, it is not convincing right now. Francine how much time does john cryan have to turn it around before he steps down . A good question. Management thinks they can do it on their own steam. For the next two to three years, they will generate capital on its own without emergency measures to hit its target. Deutsche bank is too big and important to say, we will keep going and it will take two years. I think shareholders may put pressure on him to act sooner. Mark three big banks today out with better than estimated earnings. What was the reaction . Shares of bnp paribas, credit suisse, lloyds, all falling after announcing cost cuts as they struggled to boost revenue. Why did the shares decline . It was a tale of lowered expectations. They beat slightly against those lowered expectations, but certainly there are still issues across the board. Credit suisse was 1 . Lloyds, still under 10 . Mark lets get back to credit suisse. It was an unexpected profit. Is the tijane thiam turnaround bearing fruit . On one side of the ledger it is. On the cost and capital side, he is definitely starting to make some progress. He talked about it being a first step. On the revenue side, it is a tough picture. Francine do these profits and results mean we dont need to raise capital . Can those rumors be laid to rest . We have been very consistent in saying we do not need to raise capital. We have been very clear. We have raised 6 billion. We have the highest ct one ratio we have ever had at 11. 8 . We have showed that we can pull many levers to drive that forward. We said we could do a billion and disposals. Look, you never want to [indiscernible] within a reasonable range of outcomes, we are in a perfectly adequate capital position. Mark the bank of japan keeping key monetary talks unchanged. In addition, the central bank plans to review its policy due to the uncertainty of inflation. I think if there was a surprise for anyone, it is going to be this review. What did you take away as far as the review is concerned . I think a review makes sense. They are closing in on 40 of the bond market owned by the boj and moving toward 50 and 60 on the current plans. It has not worked so far. When you take a look at what the boj did, we are used to them surprising on the upside, and this is a surprise to the downside at the end of the day. Alex, that is true. The steps they took were pretty minimal. They had to do something. They did the bare minimum. The real dark horse is the comprehensive policy review that governor kuroda has to start looking at in their september policy meeting. We are really at a crossroads here. Does he let the government take the wheel for a while, or does he double down and hit the gas pedal even more . What do we expect to hear from shinzo abe about potential stimulus after the boj nonmove . The key thing to look for from the Prime Minister is what is the actual amount of new spending . Some of the figures that came out this week were massive, and they likely include foreign projections, loan guarantees, and things like that. We dont know the size of the supplementary spending for 2016, and that is the key when we talk about stimulus. Erik still ahead on bloomberg best, even more earnings analysis. We look at tech giants like facebook and what the slump in crude means for Oil Companies. And up next, more of the weeks top business stories, including the change at the top of a big European Telecom supplier. This is bloomberg. Erik welcome back to bloomberg best. Im erik schatzker. Lets continue our global tour of the weeks top business stories. The ouster of ericssons ceo. Last week, Hans Vestberg assured us that he had no plans to leave the phone equipment company, despite mounting pressure from shareholders. As it turns out, the board had other plans. Mark big changes at ericsson today. Shares of the Swedish Telecom equipment giant up today on the news that Hans Vestberg has been ousted. He had been chief executive for over six years. He came under scrutiny and probes. The companys profits and revenue have taken a hit in the face of stiff competition. How much of a shock is this . Mr. Vestberg has been under immense pressure in recent months. He has. Although the actual day is always unexpected, and the timing might be awkward because last week, they promised to double down on cost cuts. The truth is, he has been under pressure for months, and increasingly, the company failed to deliver on profits and sales over the last four quarters. Nintendo shares are falling by the most since 1990 today. Hopes that pokemon go would revitalize the stock are disappearing, as investors realize the company has limited stake in the game. How much shock should this be to investors . And or, should nintendo have spoken up sooner . Nintendo said it was no secret that it only had a 13 economic interest in pokemon go, and that investors should have known this all along. Obviously, they got concerned about the way their stock had gone up since the release of that game. It has more than doubled since the release of the game. I think they wanted to deflate some of the hype, so they put out a statement on friday reiterating the fact that they only have a 13 economic interest in pokemon go, through various other companies. Scarlett what is interesting is that the company will be reporting earnings soon. Why did they not wait until the formal Earnings Report to clarify anything . It is a bit of a mystery. I think it has to do with they were very concerned about the runup in the stock, and there may have been concerns about potential action from shareholders in the u. S. , maybe. Ab inbev raises its bid for sab miller. Sab miller shareholders will be entitled to receive more per share than the previous offer. The shareholders pushed bidders. It is it the last call . It certainly should be the last call. I think that is what ab inbev said in their statement today. From what we have seen so far is that they are not considering the offer. Who knows what they will say. They proposed the last share offer. Scarlett sab miller has halted its takeover bid for ab inbev. Initially, shareholders were looking for more value following the brexit plunge in the pound. They have since signaled that they favored anheuserbusch. This is according to people familiar with the process. We have to be very careful in the characterization of halted. They have not halted the merger. They want to stop integration discussion. They want to stop the ongoing process of trying to put these two companies together. There is good reason for that. They have a new offer. It was bumped up by one pound. They are in receipt of that offer. Until they accept that offer or reject it, it will be improper for them to continue the process of sticking the two together. It is not as severe as it sounds, basically. It is just them saying, if we continue to integrate, that is a statement that we accept this offer. Actually, it is just a way of thinking about the new offer and putting things down while they decide. The biggest deal ever involving beer makers is moving toward completion. Sab miller recommends the ab inbev improved takeover offer. Chairman and founder has big ambitions, saying he would like to position it as the netflix, apple, and tesla of china. They also make tvs and electric cars. Something that leeco has been saying is that it is about having a streamlined User Experience that captures the user 24 hours a day. They had been making very good inroads internationally. This deal with visio really cements its business in the u. S. Moving forward, we have a dual headquarters strategy, and visio is an initial part of our entry into the united states. We intend to, over the next three to four years, list our business in the u. S. Market. David breaking news this morning, when oracle announced they will buy netsuite in a deal valued at 9. 3 billion. Cory least surprising acquisition in the history of software. David as i understand it, oracle really wanted to move into the cloud. Netsuite is the original Cloud Company founded by lee ellison. By the way, i saw that his family owns 45 of the common stock. Is that the same story . Cory netsuite is a truly cloud business. It was almost a side project, expertly run by zach nelson. I say, biased because he is a friend of mine. It will be curious when the filings come out to see if there are other bidders. You can see the market has been waiting for some kind of deal to happen and oracle is the most likely acquirer, with Larry Ellisons personal stake in the company. Erik you are watching bloomberg best. Im erik schatzker. There was an avalanche of Earnings Reports this week with Quarterly Results and forecasts from several of the worlds marquee technology companies. Facebook, samsung, twitter, and more. Here is a roundup of the highlights. Facebook shares soaring after hours, up as much as 8 . As facebook beats on sales, profit, monthly and daily active users. Is it as good as it sounds . Facebook has done a good job of getting the entire world on its platform. It is unbelievable. If you look at advertisers, they are following where people are. When you look at the actual ads on facebook, what you will see are less brand advertisers and more app install ads. In terms of trying to reach users all over the world, facebook has done an incredible job getting people on their platform. The fact that their ad revenue continues to grow at this time is also significant and it speaks to the investments they had made in mobile video as well as measurement. I think another interesting note is the activity that brands are now creating around messenger. So, the fact that brands are willing to create chatbot experiences speaks to the fact that they see that platform as a potential extension of their brand. Alphabet shares gaining after hours, as googles Parent Company proves its dominance in mobile advertising. Sales, excluding some payments to partners, rose 22 to more than 17. 5 billion. Adjusted eps up 20 from a year ago. It is clear that google and facebook from yesterday are really gobbling up most of the digital ad dollars. Which one is in a better position . They are both in strong positions. They both have made the shift, as customers are beginning to, to what we call the mobile mind shift, using their phone throughout the day for many activities in many locations. Google is going to be stronger on the broad variety of activities. Facebook, of course, is very strong when people are involved in social interaction with their graph of friends. Both of them are in a position to extend from a world that is advertisingcentric. This was a killer quarter. This was the Third Straight quarter of record profits for amazon. The question is, can it sustain that through this quarter and next . I think third quarter, you will see more of a slowdown. A year ago, fourth quarter, they did miss ecommerce Gross Margins due to underestimating demand for fulfillment by amazon. I think you are seeing increased investment. They also cited investment in content related to prime video. Overall, correct, this is now several quarters in a row of improving margins. It seems like the market has become comfortable with that, in part because you have Amazon Web Service going gang buster. Making more of that operating income. Correct. If you do checks, if you talk to competition, there are other competitors, but there is nobody in the market that has a product suite like amazon. It cushions more investment in the ecommerce business, which is quite ironic that it does that. Electronics rising about 4 10 of 1 after it announced buying back and canceling 1. 6 billion worth of shares after that strong Earnings Report. Talk us through the different businesses, because we have been focusing on the smartphone business, which was big with the s7. It is the sexiest business. You have a comparison with apple. Apple reporting yesterday 40 million phones. When you look at what they reported for the mobile phone business and what they are pricing here, it has taken up the mantle of the biggest profit driver for samsung. Have a look at the breakdown here. 3. 8 billion for the mobile phone, so that is the galaxy, the hybrid, and the tablets. Semiconductors, that is where the margins are. For samsung, they are head and shoulders above everyone else. Out with its halfyear results. Revenue jumping 40 . At first glance, Revenue Growth accelerating. Profits going up 12 in the margins. But the thing is about this company, it continues to ramp up r d. It is so aggressive, isnt it brian . Brian absolutely. I think these results are not surprising, in the sense that these are one of the vendors we are expecting to grow from the smartphone space quite significantly this year. The question, as you point out, is how much does that come at the expense of are they spending more on r d, marketing . The rise in visibility of that brand name . They are expecting to be quite aggressive in this space and we do expect more of that. At what cost is the question here . Turning to twitter, shares plunging in extended trading after the Company Released earnings down as much as 12 . And the closely watched number of monthly active users edged up 3 million, to a total of 313 million. But will that be enough to boost ad revenue Going Forward . Will the newget better . I think it is important to remember that User Engagement has to lead to monetization. It is important to remember that twitter all of their latest efforts are in service of growing. But while volume is employed, thats important, User Engagement is more important. If their latest Live Streaming activity can capture the market, then while they may have less eyeballs, the quality of those eyeballs are more important. What you are seeing is in terms of monetization, cannibalization of their revenue from new products cannibalizing their legacy products. With a lack of user growth, you have to understand, are they trying to be niche or go massmarket with this live . And if they are trying to go massmarket, at what cost is it going to come . Phillips Second Quarter beats estimates. They are keeping its 2016 outlook. I see from your statement that you are concerned about higher risk due to volatility. Where in particular worries you at the moment . We see basically volatility all over the world. In the middle east, brexit, elections coming up in the united states. Maybe a positive is that i see china growth coming back. We definitely had a good growth quarter in china. But overall, the world is a volatile place and that is just the reality. David pharmaceutical giant eli lilly posted secondquarter earnings that matched estimates as sales surged. Revenue increased around 9 for the quarter. You either met or beat all the estimates. You are up nicely over last years Second Quarter. Those are the topline numbers. Take us behind those numbers and tell as what we should be looking at here. We grew revenue 9 . I think the important piece of that is that 8 of that Revenue Growth was volume. Of that 8 volume growth, six Percentage Points were the new products we have launched since 2014. So, price and rate had a negligible impact on the top line. In addition, we got good growth from several of our existing products, including our rapid acting insulin humalog. Jonathan Glasgow Smithkline up with earnings that beat estimates, driven largely by new drug sales. The stock is trading higher this morning. We will begin with the brexit effect. Im going to try to put a few things together, beginning with the impact of a weaker pound. Gs k seeing the cable rate around 1. 33, adding 9 positive impact on fullyear sterling revenue. Looking at your guidance for the dividend, expect it to remain about 80 pence this year and next. What are you going to use the extra money for . Great question. We have definitely seen a very strong tailwind effect from currency. It is dollar, yen, all of our business, 97 of our sales are outside of britain. We see the benefit at the top, and we get benefit through the structure of the p l as well. So that is very good news from that point of view. You are quite right. It is driving sales. It is driving margin and driving cover for the company in terms of dividend cover. Volkswagen reported a profit drop of 36 for its biggest unit. That is, of course, the volkswagen brand. We are seeing the audi and porsche brands are the biggest contributors. As you mentioned, the volkswagen brand has seen profit decline 36 in the Second Quarter. That seems like a big drop. On the other hand, if you consider the extra charges and costs triggered by the diesel scandal, that is still a pretty robust result, considering the really difficult situation that the brand is in at the moment. Fords earnings came up short in the Second Quarter. The automaker is warning that its profit targets are at risk even though sales of pickups and suvs are surging. Fords european sales posted the biggest gains in four years, but the brexit could lead to a slump. There are a couple of different risks. One, we are seeing lower pricing and higher incentives in the u. S. And china. We are seeing softening in the u. S. Of the retail industry. Still at a healthy level, but it is down, overall, as an industry in the Second Quarter. At the same time, we are also seeing the effects of brexit, particularly of exchange and potentially volume in the u. K. , which is our biggest market in europe. And just a weak chinese r b, and that is important for us, given the profile of the vehicles we import into the country. Finally, we are seeing the lower auction values for small vehicles that we released in the u. S. Erik later, we will drill into oil earnings and what they mean for an industry struggling to find its balance. And straight ahead, some of the weeks most provocative conversations with leaders in business and politics. Tom steyer on the race for the white house. Alan greenspan on the fed and more. This is bloomberg. Ms. Clinton when there are no ceilings, the sky is the limit. [applause] erik this week, Hillary Clinton received the Democratic Party nomination for the u. S. Presidency. Billionaire investor and Climate Change activist tom steyer has been a longtime clinton supporter, and a major donor. On monday, he spoke with bloomberg about the u. S. Economy and the democrats platform. Tom well, i think that the Democratic Party in 2016 has done a very good job of trying to get to the actual concerns of broadbased american people. And a big part of that, and i give senator sanders a lot of credit for this, is raising the issue about inequality. About the fact that even though the country as a whole has gone forward, the gains from that, the benefits from that, have not been distributed fairly or equitably. And i think that is something where we are looking at 25 years where working people in america really have not had an increase in their wages. I think the Democratic Party is trying to reach out broadly to americans, and understand, listen to them, understand their concerns, and address those concerns. You are personally passionate, and have put a great deal of capital behind the environmental movement, and support for Hillary Clinton as an environmental candidate. How do you hope to see that play out . What do you hope to have a Clinton Presidency do . Tom if you look at 2016 and the platform we have agreed on, it is a quantum leap forward from four years ago. I think we have the most progressive environmental platform in the history of the Democratic Party, or the history of american politics. Erik Monetary Policy was again in the spotlight this week, with both the Federal Reserve and the bank of japan making rate announcements. On thursday, the former fed chairman Alan Greenspan joined bloomberg to offer his perspective on the challenges facing central banks. You said you are starting to see some indicators. What are the things you are looking at on your personal dashboard that would indicate inflation may be coming back . We are beginning to get a pickup in wages beyond the rate of growth or productivity. And that is usually the best indicator, but just as importantly now is that since money, at the end of the day, is what causes inflation we have been seeing, since the beginning of the year, a significant pickup in the rate of money supply growth. Over the very long run, it is the ratio of money supply divided by the real gdp capacity to produce, which ultimately determines the price level. That is a very rough indicator. It does not work for two or three years, and then it pops in. But over the long run, it has never failed. And we are in a situation now where, looking at the Interest Rate levels, the inflation rates, it is very clear we are our going to be moving reasonably shortly into a totally different phase. Erik meantime, economic stability in europe remains a major concern. Britains brexit vote has added to uncertainty about the future of global trade agreements, and turkeys leadership is trying to restore investor confidence. After a failed coup bloomberg spoke exclusively with the turkish Prime Minister about the measures his government is taking. The coup attempt had an Economic Impact on the turkish economy. S p immediately cut our rating. I think that was not an ethical stand. It was taking advantage of the situation. We have overcome a coup attempt. We have struggled to keep democracy running, and these agencies should not be rushing their decision. This was saddening for us. The turkish economy does not deserve this, if you look at the indicators. It is an ideological and political decision. We have no doubt about that. What we are saying to Global Investors is this has come and gone, and the national will and the will of the citizens has destroyed the plotters. Life is back to normal in turkey, and you can continue your longterm investments. We will eliminate obstacles before you. We are laying out the turquoise carpet in front of investors. We have all kinds of tax incentives, investment incentives, and we are giving priority to valueadded investments. You mentioned the government would increase investments in productive sectors rather than investment in social spending, but more on the investment side. Are you planning any measures to encourage private investment and indeed Foreign Investment, rather than just Foreign Investment in bonds and stocks . But also maybe direct Foreign Investment into the turkish economy . We are establishing a Wealth Management fund. It is a structure that will finance largescale projects. We are going to finance investments through this fund, instead of the general budget, which will be cleared of problems. The deal with the e. U. , do you see a model realistically where the u. K. Can get access to a tarifffree market . I think people at the moment are jumping to it must be this way or that. I think the u. K. Is a unique case. We are the fifthlargest economy in the world. We have a trade deficit with europe, 62 billion pounds. It is not in the interest of the germans for us to impose taxes on cars coming over or on french wines. There is only one country in europe we run a trade surplus with. So, the u. K. Is a really powerful engine. We are number one in europe for foreign direct investment. For all of those reasons, it would be very difficult not to do a deal in the best interest of everybody. I will give you one example very quickly. Airbus bodies are made in france. Avionics in germany. You have got to have a freetrade agreement for aerospace. You have to do the same for Defense Products and automotives. When you break it down category by category, what i think it will come to is something that is common sense, in the best interest of all the people of europe. Right now, a lot has been said. I think it is time for everyone to go on holiday, have an ice cream, and think in a logical way about what is best for everybody. Erik you are watching bloomberg best. I am erik schatzker. Oil began the week trading at a threemonth low. As Energy Companies around the world rolled out quarterly earnings, the industrys travails were a steady subject of discussion on Bloomberg Television. Earnings plunged for bp, the first Major Oil Company to report secondquarter results. Profits fell 45 , missing estimates. Bp is being hurt by lower oil prices. Still, brent crudes 25 increase during the quarter provided some prospect of relief. There is concern about refining. What does it mean for the sector as a whole . What is happening is during the last year, the refining sector was providing a lot of cushion on protection, of too low prices. Refiners were making a lot of money. What is happening now is the refining engine is sputtering. For bp, it was the weakest Second Quarter since 2010, in terms of refining margins. How tricky is the chief executives road ahead . Debt rising, the Oil Price Rally is seemingly fading. There were some positives. The company is freeing up cash. It has 5. 5 billion worth of cash flow. It is hard to see what the catalyst for change is here. Oil prices seem to be in a rut at 50 or below. As you say, they added 6 billion of debt a year. It seems they will have to keep adding to the debt to keep paying investors. Absent a big rally in oil, it does seem like a bit of a slump. What caused the decline in prices . Down to 42 a barrel, where we are this morning. We would argue, because the fundamentals are not distinct right now, the market is trading off the dollar. If you make a picture of the dollar, and oil prices, going back to june 1, it has been trading in lockstep. What do we focus on . All the bearish news, and we dont focus on the bullish news. When the dollar pushes oil prices higher, we focus on the bullish news. I can turn around and make a bullish case as well as i can make a bearish case. Actually, if you look at positioning, it is kind of neutralized. The passionate bulls in the market have backed away. The passionate bears have backed away, which tells you the market and the fundamentals are really not going into any significant direction. Shell shares slumping, reported a 72 drop in profit. Bloombergs Ryan Chilcote is here to break it all down. Start breaking. Ryan we already knew oil profits follow oil prices. We know the oil price fell year on year, so it was no surprise there was going to be a decline. The problem with shell was that their production fell as well. They produced 120,000 barrels less than the market was anticipating. That does not sound like a lot when you are producing a few Million Barrels. But if you think about it, at 50 a barrel, that adds up to 6 million a day. Over a 90day period, that is 540 million. That explains half of the loss. Another big business at shell is the gas business. Dont forget, they are the largest lng producers out there. That, too, underperformed. Really bad news at all three of shells businesses. Good news that total beat estimates. What is behind that . Production is up, unlike at shell. Up by just 5 , but that helps on the margins. In addition to that, they are cutting costs. That is something investors love. They had a target of 2. 4 billion of cost cuts this year, and say they will beat that target. All of a sudden, people question oil demand. Do they have reason to do that . They have an underlying reason. If the World Economy is sputtering, oil demand should be sputtering. Actually, oil demand has been, on the whole, pretty robust, given the global economy. It is rising more than one Million Barrels a day, annualized. We dont see that dropping very much, even if china sputters even more. China is currently making 2. 6 million cars a month. That means gasoline demand has got to go up a good 8 , no matter what. Wrapping up a big week for oil earnings, unless you are total, you are probably in a bad mood. Chevron and exxon both missing estimates. Chevron, a loss of 1. 5 billion. Exxons call is currently underway. What has been the big takeaway so far . A big concern about increasing debt. They are concerned about what is going to happen with refining margins in the third quarter. Rosol is still positive with 1. 7 billion. But lets remind ourselves that that is the good case. It is the weakest for exxon mobil since 1999, the time of the merger between exxon and mobil. That is the big takeaway. I think the analysts will be asking questions in exxon mobil, but also for chevron, about what is going to be the outlook for them in the second half of the year. Both companies at the moment are failing to make enough money from their operations to pay for capex, and investment in new production facilities, and also paying shareholders. I give you a couple of numbers from the presentation of chevron. The Conference Call comes later today. In the first half of the year, chevron spent 14 billion in investment in projects and also paying shareholders. Over that same period, they only made 5. 1 billion. We see a huge gap in what chevron is able to make and what it is spending. As you look at the majors, talk about the reserve replacement ratio. Who is managing the cycle currently . And managing to invest for the 1020 years ahead for the company . None. Not a single one. We are beginning to see these companies struggling, production coming down, and not one company is presenting an outlook that is convincing for the second half of the year or the next few years going ahead. This is the marketimplied policy curve. This is what it was the day after brexit. You can see we did not see 50 basis points for a fed fund hike until 1. 5 years out. One of the charts you looked at in your work is the relative rotation of different sectors. On the bloomberg, it is rrg go. Health care is in the leading sector, the upper righthand quadrant. Tech is improving as well. That is the blue line right here. Erik there are about 30,000 functions on the bloomberg, but we always enjoy showing you our favorites on bloomberg. Maybe they will become your favorites. Here is another function you will find useful. It will take you to our quick takes, where you can get important context and fast insight on timely topics. Here is a quick take from this week. There are five Major Energy Sources in the world right now. Petroleum, natural gas, coal, renewable energy, and nuclear power. Thanks to the u. S. Shale and fracking boom, and the fact it is now cheap, plentiful, and clean, it is natural gas that may be the future. Big Oil Companies are using technology that turns it into liquefied natural gas, or lng, the commodity that can be shipped all over the world, shaping the politics of Global Energy. Here is the situation. The trickiest problem with natural gas right now is in the name. It is a gas. Most gas travels through pipelines. That makes it fairly difficult if the u. S. Wants to sell gas to, say, korea. But a few things make shipping natural gas possible. First is the process of cooling it to 260 degrees fahrenheit, converting it to a liquid, and reducing its volume by about 600 times. It is like going from a beach ball to a pingpong ball. This makes it possible to transport gas, not through pipelines, but on really big ships, which leads us to a fleet of 250 million tankers, some the size of almost four american football fields, that can carry lng all over the world. The only problem is these ships are too big to fit through the panama canal until now. The 5 billion panama canal expansion project was finally finished in june 2016, allowing for faster shipping to key markets like asia. What does this mean for Global Energy . Well, a growing number of countries are trading in lng, with 34 nations importing it by the end of 2014, compared to just 15 in 2005. Here is the argument. Overall, demand depends on how fast countries will turn away from coal, the largest source of Power Generation in the world. One lng selling point is that it is cleaner, producing about half as much Carbon Dioxide as coal. Oil companies are pushing into the lng world for a greener future. Shells acquisition of bg group made the dutch giant the Worlds Largest lng trader. But not everyone is aboard the lng train. Coal is still cheaper. Renewables pollute less. Countries like japan, the largest importer in the world, is focused on nuclear power, after starting to get reactors back up and running after shutdowns prompted by the 2011 tsunami. Plus, some u. S. Gas utilities are opposed to largescale exports of lng, saying, longerterm, it could raise gas prices for american consumers. Erik you can find a wide selection of quick takes on the bloomberg. You can also find them at bloomberg. Com, along with all the latest Business News and analysis 24 hours a day. That will be all for bloomberg best this week. Thanks for watching. Im erik schatzker. This is bloomberg. Emily i am emily chang. This is the best of bloomberg west. Coming up this week, the end of yahoo as we know it. We will hear from the ceo, marissa meyer. Verizon beating out the other suitors for yahoo . The verizon executive Vice President and aol ceo both join us on the deal. Plus, facebook blows past secondquarter earnings estimates thanks to a surge in mobile ads