Sale. Toyota beats Second Quarter estimates in the u. S. The hour is in and the truce in gaza continues to hold as israel removes its troops from the strip. Announcer youre watching worldwide exchange, bringing you Business News from around the globe. Welcome to worldwide exchange. Were expecting the composite services pmi out of the eurozone this morning. Weve had the individual ones. Its coming at 54. 2. It was forecast at 54. 4, so its a touch weaker than specd. It does fall on the Italian Services pmi. That is from 52. 9 back in june. Theyre pretty much in line as expected. 50. 4 in the last ten minutes or so. Arrived from last months 54. 2. 56. 7 versus 56. 4 in june. Were around 20 points lower, not much of a reaction, but a touch weaker on that. Lets give you a look at what else is on todays show. India says it has to bring down inflation, but the question is how. Were live in mumbai to discuss how they do that. Plus we ask how companies are doing with the flux in prices. Also, a strong Economic Indicator. Were live from an auction that experts believe could speak to the wider u. S. Economy. We also have a lot of earnings news out of the day today. Credit agricole took a 6. 7 million hit with banjo espirito. Deutsche post beat Second Quarter numbers, but then said an economic recovery in europe and north america boosted trade flows. Intertell continental, down 3 this morning. Amid Political Uncertainty in key markets. Revenues for the Hotel Chain Group declined 3 in the period. Weve got bmw shares up over 3 this morning. German luxury carmaker bmw announced a big jump in Second Quarter profits. The worlds best selling automaker raised its u. S. Sales outlook for the year. The domestic front suffers on the back of the consumer tax hike in april. Joining us now is the japan korea forecast at ihs automatics. Yashiki, thank you so much for joining us. We saw the strength in the u. S. Markets rising. Weve seen strong numbers as far as july. Do you expect this could continue as we push into q4 . Well, i would think so for the u. S. Market its been quite strong for the moment. And the rest of the to be the refreshment is coming over. So in addition to the half, the Second Quarter of this year as well as for the rest of the year is going quite strong for the moment for toyota. The pickup truck is quite strong due to the Housing Market and stock market is doing quite well in the u. S. Markets. So that is why i think its the most of the year its strong for the moment for toyota. It contrasts quite dramatically as far as domestic sales are concerned, down 9. 6 . We saw less of an impact filtering through. The portfolio for toyota because they have a strong presence in the market as well as the other automotive market, as well. Probably, i think, its a presents in market for china, but in japan, the domestic market is better than expected performance to be a tax increase in april of this year and a better performance situation is pushing up towards the performance. That gradual approach as far as emerging market sales are concerned. Theyve got lower priced vehicles out there and limits the ability to make a high impact and increase sales in that region, too. What are they doing to address that . Well, i think think it has the brand in smarter markets especially for the market with malaysia market with a strong presence. So utilizing those brands, in mistaking some of the strategy and probably upper segment like compact and mid sized issues, the pickup trucks, they have more strength and more forecasts in the future, the strategy for toyota. So they can the best allocation of the resources for better performance in the vehicle and portfolio using some the of the different brands to the group. Looking at investment as far as toyota is concerned, what about in green cars . We saw an 11 slump i believe in sales in the first half of this year in the u. S. So the prius, we know the fourth generation is coming outs next year. What is that going to look like, indeed, for the company . Well, i would think starting from 1997, the preyouus has been the subgeneration. Now coming in with a toyota new global act, the new technology over the platform sharing within the same segment of the vehicles has a platform and component coming out. Its a part coming out. Its the situation so that they can have the lower cost over the making or producing the vehicles that maybe bringing up to the strength for toyota in the longer term. And also for the strength in hybrid technology, the key for toyota in the medium term, as well, to cope with the different situation of the trend, of the consumer trend. Also for the ev situation and the focus and also for the longer Term Technology of the fuel cell vehicles which is also coming in within this year. That will be the driving growth in the longer term future. Were not talking about the five year or tenyear, were looking at the future, 35 years for the longer term, the strategy. That is bringing up the longer term, the strategy of the toyota for the Sustainable Growth and also for the as well, of vntga for the end of next year. Thank you so much for your thoughts. We had a pretty lackluster day in europe yesterday. Right now, were seeing taking the stoxx europe 600 up 6. 1 . With talks that have been moving the markets this morning, too. We have that lead from the markets yesterday to the Energy Sector in particular outperforming and seeing some of that strength filtering into the europe markets, too. Right now, the ftse 100 higher by. 4 . Slight gains for that services pmi better than expected. It was italy, actually, that came in much weaker than expected. So the performance for that market was dented in the last 30 minutes or so as a result of that. But lets have a look at the top stocks that were following this morning. Telefonica shares down 1. 5 after the firm offered 6. 7 billion euros to buy vivendis brazilant unit. Vivendi shares, meanwhile, as you can see, trading just over 4. 2 higher right now. We move into the German Markets, trading lower this morning by just over 8 . The firm issued its second profit warning and announced the departure of its ceo the. First a profit warning just over a month ago. Look at the foreig Exchange Markets, too, the dollar, thats continuing to stabilize as far as the last couple of sessions are concerned. Slightly under pressure this morning. Just under 0. 1 lower as we saw that weaker pmi in the Services Sector in italy. Relatively unchanged in the trading session today. We have the rba standing pat on rates right now, very little to push the currency lower. Services pmi today, too, but relatively unchanged. Weve got the ism data to look out for. Have we got a bit more about the future timing fed rate hikes so were thinking about that more later in the show. Coming up on worldwide exchange, taking out. Chinese port giant whd surges in its market debut. We have an exclusive interview with the firm later. Stay with us. Over 1. 2 billion eyeballs are on us during the two weeks at wimbledon. True tennis fans want to know whats happening. They dont want to just see whats happening, they want to know and understand why its happening. Anybody can just put data up, but we want to get a reaction, make it far more interactive. We rely on the cloud to provide that immersive digital capability. Give fans more then just the game with the ibm cloud. The ibm cloud is the cloud for business. Welcome back to worldwide exchange. We know theyre anticipating having fresh elections in bulgaria. But this morning saying hes appointed a professor bliznashki as the interim Prime Minister. This after the attack on the couple of banks over the last couple of months. There are concerns about what else could happen as far as the bulgarian sector is concerned. The former Civil Servant is the interim finance minister. Theyre going to work to increase aid and review the 2014 budget to come up with new forecasts for the year. This is the interim government now ahead of fresh elections in october of this year. We know its a combination of financial concerns for the Financial Sector combined with political concerns in the country, too. Lets take a look at some of our other top stories today. Israel and gaza have entered a 72hour truce. It began three hours ago and israel said it would withdrawal completely from the gaza strip. This comes as the Israeli Defense forces say they have decreased their mission. Officials are now expected to attend talks in cairo. More than 300 ukrainian troops have moved into russia. Kiev denies troops that the soldiers have defected. The intense fighting around donetsk is causing others to flee the city. Japanese cabinet secretary says 40 people will be targeted by russian sanctions. Translator the targets are directly involved in the destabilization of the eastern part of ukraine and the annexation of crimea. We made a comp hence ifr assessment based on sanctions by the u. S. And eu. Meanwhile, switzerland has made a list to prevent 26 visits and 18 entities from circumventing sanctions. It is the countrys fourth travel company to go bust in the last three weeks. A trio of supervisors made up of the european commission, tecb and the imf has been suspended. Ireland and portugal, visited by the troika exited their bailout plans earlier this year. The managing director at tele Intelligence Joins us now. What do you think of this, disbanding the troika . I think its going to be a tough sell in berlin, first of all. It will be a huge boost for the Prime Minister who drove the troika out of athens. Some monitoring will be in place. That is my concern because when you look at the current cabinet in greece, i dont see much there. There is reform fatigue, so can the greeks a reform plan that can be sold to the germans. Theyve got such a slim majority now in parliament, as well, the ability to pass anything they come up with a plan. I agree with you, i think it would be next to impossible to do this and im concerned about the prospect, as you said, the checks would be biannual. I still feel that that is too long. It is too long. Even know, yesterday, the Prime Minister was suggesting that for the next review in september, they will be asking for further delays because theyre not going to be able to deal with the conditionalities. The new Prime Minister sent out state tax removing huge mistakes. Theyre still struggling there. There is a huge political backlash. It was a mistake regarding the line, you couldnt make the same mistake with greece. In light of what weve seen in portugal in the next couple of weeks, do you think it was a mistake not to have an emergency credit line . I think its still too early to say. And if something goes wrong in the second half of the year, meaning there is a change in global sentiment, then they might regret the idea that they didnt give it. We are not there yet. Were looking at growth at 0. 3 i think of the bank of italy this year. It continues to stag nate. What about reforms . The sent i got from being there last week was frustration. On the economic front, hes talking about change. If there is a chance to do change, but the problem is that these economic recipes, if i can use that term, is still not clear to anybody. This, even if it talks about change is very left wing idea. We havent seen anything core yearend and time is running. You said last week the two articles for the constitutional reform, where is that in terms of progress . A lot of the criticism ive seen but my understanding is he needs this in order to push future reforms. We need the reform of the constitution to facilitate policy making. Policy is being done. But this is the first round of voting, of four voting rounds, which will take at least one year. It is a major piece of reform concerning a huge amount of physical capital to partner reform while basically not paying enough attention to its own economic front. That is a concern. And once we get to september, october, then it could become very, very difficult in parliament to get anything done. On the political front and then on the economic front. It doesnt look like brussels is going to be any help as far as giving more flexibility, seeing the pushback as far as theyre concerned. But based on what you said there, its going to take a as far as the constitution is concerned. Rbs did a survey in the First Quarter of this year based on what would i it take to make them sell out. 67 said lack of reforms. So given the atmosphere that we appear to have in the euro scope, saying if we dont see enough on the reforms. Absolutely. You just mentioned graggy. To berlusconi, a long list of reforms, most of it is soon not to be done. Legalization of Public Service at the local level. Investors in this date are not paying much attention to whats going on in italy. The focus, then, to realize despite the emphasis, to the lever. Well have to wait and see. Now lets take a look at some of todays Corporate News out of the u. S. Iags Second Quarter profits rose 35 . It gains from one of the last in a series of divest manies it was prompted to make in its u. S. Government bailout. It will pay to settle claims it misled investors about the state of its Financial Health from 2006 to 2008. This is one of the largest settlements stemming from the financial crisis. Aig trading in the German Market session higher by 4 . Jpmorgan says it set aside 4. 6 billion in Legal Services as of the end of the Second Quarter, up from 100 the million in the first. From the region, including the impact of current and political new sapgdzs against moscow. We have a look at how jpmorgan is performing in the German Market session higher by just 0. 5 . The wall street journal says goldman is tough on regulations has forced it to set aside more capital. Thats hurt profits in its prime brokerage business. Its pulling cash out to comply with the new rules. Is traders are unwilling to take good risk, an interesting comparison from the two banks. Fwloo flash floods rolled through the mountains of legislation. But its doing little to change the situation in california. Many residents have taken to socalled water hogs. The entire state of california is in whats called severe drought, 1100 , but more than half is being classified as exceptional drought, the most extreme conditions. So water restrictions are going in place. Billboards like this bun from lawn dude suggest watering twice a week. This, as los angeles water officials have finally reopened a main street sunset boulevard after losing 20 million gallons in a flood. Residents can now be fined for things like this, watering so long it trickles doubt the walk to their street. How bad is it . People are drought shaming their neighbors. This is a post that i did just outside of the country club. People clearly dont know that california is in a drought right now. Mike bud is using a new app for things like reporting water violations in california has become surprisingly popular. Pictures showing up in geotag that a map from all over. The company says its user base has more than doubled in the last month. The goal is to turn this content into actionable cop tent so that the regulatory agencies responsible for enforcing water regulations can mop tore this if they wish. Do you feel bad ratting on your neighbor . I wouldnt call it ratting. I dont like that term. I dont care about who you are as a person. Its that this is better for us as a country, as a world, because one of the worlds most abundant resources is being who knows where it can end. This has gotten half a Million Dollars in funding to start and is now doing their second round. And the drought shaming phenom has surprised its ceo if no one else. Breaking news, the foerp Office Minister warsi has resigned over government policy on gaza. Its getting a lot of criticism. She now says shes going to resign. Well take a quick break next on worldwide exchange. On the uk Services Sector and well be asking if this will finally bring a dissenting voice. Taus st. Welcome back to worldwide exchange. Credit ago recoal says it regrets being misled by the family. The largest foreign shareholder writes down the value of its stakes in banjo espirito to zero. Vivendi received a 6. 7 billion bid from its brazilian unit. They jump on the offer despite saying none of its units are up for sale. Toyota sales in the u. S. Beats Second Quarter estimates. The truce in gaza and israel continue to hold as israel withdrawals its troops from the strip. The eurozone pmi this morning slightly weaker than expected. We have now got the uk services pmi coming in at 59. 1, rising from 57. 7 back in june. That reverses expectations of 57. 9 to significantly higher than that. Trading at the session highs, higher by around 0. 1 in the session today. Jack, great to have you on this morning. Such strength coming from the Services Sector here. Well, i mean, i think this is probably the back of a lot of strong data weve had over a number of months. This is going to be tied up to the volatility thats going to come in as we near that turning point for the Monetary Policy. Mortgage markets and Housing Markets. Theres an indicator that we see some slight weakness feeting into the numbers in consl addition for the second half of this year. Where does this put us for your estimates . We think theyre going to be very strong Going Forward. We just revised it up from 0. 1. Down next year by 0. 1. Over the course of the month, were not seeing a different picture. You talked about the consumer there and perhaps filtering in of expectations as far as the rate rise is a concern. We had ben saying last week that the Housing Slowdown was a good reason to expect a wider slowdown as far as the economy is concerned. Youre saying dont anticipate that . For two reasons, the psychological impact on the Housing Market in the uk. But also from our point of view, the anecdotal evidence is more procedural in banks trying to implement this as opposed to a structure change. To grip for the paper, theyll be a bit more flexible. Exactly. Some level of expectation out there that this will be the first month that we see dissengz in the ranks as far as the future rate rise is concerned. Then you see a rate rise. Exactly. Theres no guarantee there will be this time around, but if there is, data is ambiguous in terms of the uncertainty around things like the amount of in the economy which is going to weigh on the decision. While theres uncertainty, theres room and space. That changed from one voice, a majority voice is going to take some time. We think february is much more likely. They tent to move when they announce further data. Exactly. If you look back at decisions, more than half Inflation Report especially when the turning point in policy like this. It gives them a chance to communicate the markets and try to put their rationale forward. It is the magic word. Because as far as the markets are concerned in particular, a significantly long time, quite frankly, for pricing. It really is. In the past, its maybe not quite as clear as they could have been. And thats created volatility. You look at how quickly rates shifted overnight. What were hoping is that this inflation record coming out this month will be as clear as they can be and will gives a lot more information. If it doesnt, well have potential for volatility in markets as people trying and secondguess what theyre going to do. And what do you expect . How can they be clear from this Inflation Report . It makes it very important. How can they stall both markets and consumers as you were pointing out earlier as far as expectations are concerned, how can they adjourn score that its still data dependent . We need to be clear now about what data is going to be driving that. The macro policies they brought in are going to be successful in calling up the Housing Market. They need to be clear about what they think in terms of spare capacity. Something along the lines of an Interest Rate forecast. Just showing this is our expectation rate and this is a confidence ban around that. That could help. Well wait and see. Jack, Research Fellow of the niesr. Lets take a look at european markets this morning. Weve had pmis in the Services Sector for july slightly weaker as far as germany is concerned in line versus expectations in france. A touch better in germany. Right now, the ftse higher by 0. 4 . The sweat ya dax higher by 0. 75 . Cac 40 higher by just shy of 0. 8 and the ftse mib higher by 0. 4 . The bond markets this morning, very little reaction in items of spreads this morning. We have the u. S. Tenyear under that 249. I mentioned the services pmi and the ism data out of the u. S. It will be interesting to look at the employment component in particular. Some of the expectations are that we could see that. That will be interested to watch. In the Foreign Exchange markets, under a bit of pressure following that pmi was just tilted below 1. 34. The figure were trading around that level right now. Sterling, a touch higher, 1. 6880 and the aussie dollar, relatively unchanged. And the rba saying on hold. Lets take a look at some of other other top stories today. Israel and gaza entered a 72hours truce. The ceasefire began three hours ago. Israeli Defense Forces said their mission is destroying cross border tunnels. Israeli and palestinian officials are now expecting to extend the ceasefire. Nicholas from the wall street journal joins us on the phone from gaza. Can i ask you whether people are coming out into the streets now with expectations that this ceasefire will hold . I think everybody here is hoping this ceasefire will hold. This is the fourth week of this. There have been many ceasefires in the past we thought were going to hold and broke down. One of them broke down just hours after it began. Today, it seems to be holding up. It was a better sign that the palestinian themselves are the ones coming out with the egyptians saying they wanted the ceasefire. The israelis have said theyre leaving, theyve done what they set out to do in this campaign. We may be seeing the end here, but at the same time, were not out of the woods yet. A ceasefire has to be respected by both sides to hold. We had noises from some of the gulf states that enough is enough as far as the violence is concerned. Theres a sense of that actually hamas hasnt been weakened by this, in fact, its emboldened some of the extremist sentiment. What is your view . I think one of the dragging forces behind whats been going on in the last few days is the attacks that happened on the u. N. Schools. This caused the u. S. To put more pressure on israel, to stop the civilian casualties that were happening here and the u. S. Had Big Questions about why some of the weapons like artillery which were going to be extremely imprecise were being used in places where there were children and women. This put a lot of pressure on israel, pressure from the gulf states for hamas start to stand down and timely there seems to be some relief thats coming out of it. What is the expectation so far as the egyptians deal is concerned . What do you think the palestinians get from this . Do we see any kind o adjustments as far as the blockade is concerned . Thats the big question. Thats what gaza wants, is an end to the blockade. Altogether, about 1800 people are dead, mainly civilians and whole parts of gaza which are truly gone. This was on a level that was much higher than any of the two previous wars. And those two wars didnt get set out goals for them which was in this economic blockade against gaza. Its too early to say whether thats going to change with this one, but it certainly would be one way that you could conceivably see this war not happening again is if some resolution made on this issue of whether gaza was going to be blockaded or not. How much conversation is there, people have said they havent had time to repair and acknowledge some of the damage thats been done and the loss of life. I think youre right. I think people are really just trying to survive right now. Theyre not thinking that much about their emotions. Right after the deaths and during the funerals, you see emotion. But then very quickly after, people go into survival mode and shut down. Its been a difficult last few weeks here and it hasnt given people a lot of time to reflect on just whats happened. There are people that will go back and find the village they knew doesnt exist any more. The spokesperson for Prime Minister benjamin netanyahu, i asked what a victory would be and he talked about destroying the tunnels. If we look at those financially and morally, do you see any sense of victory . I think it would be really hard for either side to say that they got anything out of this war. Thank you so much for joining us, Nicholas Casey of the wall street journal. More than 300 ukrainian troops have crossed into russia following heavy fighting. The separatists have denied claims from moscow that the soldier ves defected. Intense fighting around donetsk has caused civilians to flee the city. Japan approved sanctions against russians involved in the ukraine crisis. People will be targeted by the move. The targets of these sanctions are people directly involved in the destabilization of the eastern part of ukraine. And the annexation of crimea. We made a comprehensive assessment to identify the targets based on sanctions by the u. S. And the eu. Meanwhile, switzerland has added 69 visits for a light designed at stopping them from circumventing International Sanctions according to reports from reuters. 27,000 russian holidaymakers have been stranded abroad without a flight home after their holiday firm suspended operations. It is the countrys fourth travel company to go bust in the last three weeks. Still to come on the show, the India Central Bank will back inflations. Weve got the latest right after the break. Where the reward was that what if tnew car smelledit card and the freedom of the open road . A card that gave you that im 16 and just got my first car feeling. Presenting the buypower card from capital one. Redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac with no limits. So every time you use it, youre not just shopping for goods. Youre shopping for something great. Learn more at buypowercard. Com developers are all about speeds and feeds. Its all about latency. Its all about how fast does it run. I often sit with enterprises who ask me about how Mission Critical and hows the performance of the cloud. And i tell them, if you can make gamers happy, you can make anybody happy. Speed is made with the ibm cloud. The ibm cloud is the cloud for business. Indias central bank pul put policy key rate on hold, as expected. Mumbai correspondent for cnbc tv joins us now from mumbai. What else did they have to say . Well, actually, you know, cpi inflation, this is basically continue to keep in mind for the rbi this time around. We did mention that it deteriorated the target of 8 for cpi for 2015 and, in fact, reminded the markets that we have a 6 target for cpi for 2016 and that could mean a primary concern in terms of achievement for the rbi. The upside ricks still remain for cpi data. This is more balanced as opposed to what it was in june. So overall, what we take away is that the political concerns globally, the risk in crude prices as well as what exactly is taking place in the monsoon, considering that the monsoon isnt over completely and the fact that it could have on food prices Going Forward and the complete impact we could see on food prices, they sort of risks remain in terms of an upside price inn flagz and hence the rbi was more cautious this time, did not move on rates this time and most of the market is now assuming that there is the possibility of further rate hikes as opposed to any sort of rate cuts. They need to get to the 16 market, 6 of cpi. Then there is a possibility that there will be very little maneuvering in terms of trade. Thank you. Senior economist at lombards Street Research joins us now. Good morning. Morning. Weve seen inflation come off in recent months. It makes sense for the rbi to paut here and see what happens as far as the monsoon season is concerned. Thats exactly right. I think the rbi will have to maintain in terms of raising Interest Rates. What is interesting is the liquidity ratio, but its to disappoint again and have reduced it by 25 basis points in the last Monetary Policy meeting. And this reflects the coordination between Monetary Policy in the sense that the reason they could do this is that the central bank was fairley keen in terms of Fiscal Consolidation target. So that means banks have more resources to release to the productive sector which means good for the economy. But in terms of actual reduction and the policy rate, i think it cant really do that because the food inflation pressure so much there and as the economy recovers, the demand side puts pressure on the supply side and there hasnt been that much on the supply side. There is a suggestion, too, that the government is putting some level of pressure on the rbi to support businesses, so the liquidity measures are risk. Cant do a lowering of the repo rate. And interestingly, more recently weve seen an increased coordination between fiscal policy and Monetary Policy. In the past, weve seen that the government will put pressure on the rbi to keep rates low, but now it seems that the government is so much in sync with the rbi inflation targeting approach to its inflation. That is positive. Its been a target of, what, 8 by january 2015, 6 on the following year. Were down to 7. 3 the right now. How confident are you that they can keep to those targets, particularly given the other elements we mentioned . Towards the end of this year, we would expect some moderation in headline inflation supported by relatively weak demand. And also the basis that it helps keep inflation low to the end of the year. So the central bank seems on target in terms of meeting its 8 headlinen flagz target by early next year. But will it be able to meet the 6 target in the following year is the key question. And i dont think that is in the scenario, unless and until you see more supply side now push in the economy. Examine thats probably why the Monetary Policy, of course, is a bit hawkish in the sense that the point the fact that in the longer term, we have a tough task to do. The impact of the currency right now, we are just showing the price performance, 60. 74 is the level. A that keeps it straight, doesnt it . Thats right. They will start to come through as we see upside pressure on the dollar and the fact that the rupee appreciated it tremendously in the run up to the election. There are down side risks to the currency and that means the upside pressure on inflation front and given the geopolitical concern, we see a price pressure on oil prices and the importer of oil, so that keeps inflation keep a floor on inflation. Thank you so much for that. Now, in australia, the central bank could pass on Interest Rates making it a full year since its last cut. It appeared the policy was meant for the economy to cope. It said that the Australian Dollar is offering less help to the economy in achieving balanced growth. The reserve baj is set to announce its quarterly Monetary Policy on friday, a far less aggressive tone as far as the currency strength is concerned. We were just talking about israel, we were speaking to the wall street journal in gaza. There are comments from the Foreign Ministry saying all Israeli Ministry forces have withdrawn from gaza. So all forces now have withdrawn from gaza ahead of the talks in cairo while trying to broker aed broer ceasefire. Shares in the worlds Biggest Company jump eed 11 . This is the firms second attempt on an ipo. The chairman and ceo gave cnbc an exclusive interview saying he learned lessons from the failed ipo attempt back in april. Translator to list in hong kong, we have to obey the market rules there. We must place the ipo at a reasonable level based on investors demands. In our second attempt, we make some adjustments and receive positive feedback from investors. They are confident that we will succeed. People find it a bit surprising how quickly you move to list. Its only been, what, three months. Why did you rush it through . Translator to list our business in hong kong has been part of the original plan. Three to four months later, we pushed through the ipo. Going public is crucial to our extension. Theres been suggestions that maybe you havent given it enough time, maybe you should have allowed the smithfield acquisition to pay off in terms of synergies, in items of more operational efficiencies. Why didnt you do that . Maybe you could have demanded a higher payout. We made adjustments and think we did the right thing. Regardless of the ipo pricing, we are confident about our future. Investors welcome the move. Its a winwin deal. The concept is to take advantage of a long running reputation of an american brand. How is the synergy and how is the intertwining of the company . The rationale behind our acquisition is that smithfield is a well known brand with a rich history. The acquisition is good for a start. The complimentary areas in the industry between china and the u. S. China has a huge market. Were able to produce synergy. Our q1 report is a demonstration of this synergy. It is approved that the acquisition is the right move. The listing comes at a time when food safety in china is crucial. What has the wh group done to guarantee the products are entirely safe . The osi case had a big impact from china. Wh group has a strict internal control system plus an inspection system. For instance, we make sure we check every single day. All finished products and imported materials have to go through our stringent inspection and check. In other news, indonesia failed to gain traction in the Second Quarter. The economy expanded by 5. 1 on the year slightly below the countrys First Quarter growth. Thats the slowest annual pace of growth since 2009. 787 dream liners were grounded in japan last year. Temperatures contribute to the lighton ion battery. Forcing the flight to make the an emergency landing. That incident followed similar incidents on the Japanese Airline flight that led to the entire dream liner suit last year. The paper says the countrys transport safety board will release a final report on the incident in september. Now, we have to take a quick break. Still to come on the show, data driven. The market is focused on the feds first hike. Our next guest says it will be a vaccination painful but necessary. Welcome to worldwide exchange. Im julia chatterley. Credit agricole writes down stakes in banjo espirito. Shares in vivendi jump on an offer despite the firm saying none of its units are up for sale. Toyota moves up a gear. Sales in the u. S. Beat Second Quarter estimates. Four hours in and a truce in gaza continues to hold. This as israel withdrawals its Ground Troops from the strip. Display youre watching worldwide exchange, bringing you Business News from around the globe. If youre just tuning in, thanks for joining us here on worldwide exchange. Look at how the futures are faring ahead of the u. S. Market open. Right now, higher by around 8 points to the dow. The s p 500 higher, too, and the nasdaq a couple of points higher right now. Were still waiting to decide, the dow snap ago fourday losing streak. Yesterday we saw Energy Leading the markets higher. Disney reporting today, goldmans, contributing half of the gains we saw yesterday. We saw Goldman Sachs suggesting yesterday theyre going to be shedding some of their nonprofitable hedge fund as a result of banking regulations Going Forward. It comes at the same time as we heard from ihsbc saying right now there is little risk points making that decision to National Making good decisions and risk averse. Looking at the european markets this morning, weve got gains across the board. The ftse higher by 0. 5 . We had stoppinger services pmi for july from germany this morning, a touch better than expected. Looking at gains for the portugal market and in italy despite weaker than expected pmi from that country. That data from italy continues, weve been questioning the reform progress this morning on the show. Lets have a look at some of the. Top stocks moved in the markets today. Telefonica shares trading lower by 1. 5 after the firm offered a 6. 7 billion euro bid designed with vivendis brazilian unit. Shares trading higher, also, 3 off the back of that. Inching lower by just shy of 8 . The firm issued its second profit warning and announced the departure of its ceo. So concerns again for investors in that sector. Lets have a look at the industrial performance of the fx Exchange Markets this morning. The euro under a bit of pressure off the back of weaker than expected pmis in italy. Overall, a touch weaker on the composite, now trading below the 1. 74 level. In australia, the Central Bank Standing pat there as rate hikes are a concern. We did see a touch of weakness there as a result of the nine. Year low in the china hsbc services pmi. The market itself, in asia, broadly shrugging that off. Slightly higher, 6879, 1. 6879 for us uk. That leads us over to what were expecting from the u. S. To give you a look at the agenda today in the United States. The july ism Services Index will be out. Factory orders, as well. Weve got lots of earnings, cvs caremark, actavis, adm, coach, Liberty Media, mgm resources and time are out before the results. After the open, disney, active vision blizzard, zill low, groupo and taketwo. A first on cnbc interview will be at 4 00 p. M. Eastern. Now straight to markets, dan from tia crest joins us from new york. Thanks for getting up so early. Pmi today is going to be quite important, not just theover all numbers, but the individual components, too. What do you expect from the markets today . Obviously, we want strength. We want a feeling that could support earnings. But we want so much that we think the fed is going to advance today that theyre going to raise rates. I think this back and forth between the two, hopefully the better than expected growth, at the same time worries about rates. Is it going to be a theme for the market i think probably for the next several months. You say the this will be like a vaccination. What do you mean by that . You dont want to do it, but it hurts initially, but anytime weve talked about Interest Rates in the past, its sold off. But its recovered. Economics growth is still there. We have to get through that, take the shot, and once we get through that, things will be just fine. The Market Pricing is less than the feds current forecast. The pace of hikes is going to be crucial, isnt it . Absolutely. But i think the thing to keep in mind, in the past, when youve had the fed increasing rates, its taking place when Economic Growth is improving. The only times you had negative correlation between rising rates is when inflation was quite high. And the fed was hiking rates to bring inflation down. Clearly, thats not the case today. We think its going to be one of these generally speaking positive situations where the increasing rate, growth is strong, again, thats generally good for the equity markets. Do you think this service behind the data here . Well, you know, theres always the criticism of Central Banks and thats probably even more so the case given the uncertainty the fed seems to feel about the liquidity. They probably in et retrospec, in terms of the impact on the market and in terms of inflation, it shouldnt be too significant. Investors for the most part have anchored their inflation spec ages around 2 . So even if they do hike a little bit late, inflation gets a little bit higher than maybe they had anticipated, its not going to be something that gets too far out of line. Im less worried about the Inflation Impact behind the curve. Im actually more concerned about sentiment. Theres always going to be this fear that he data point we get is going to jolt the market. You know, conceivably, i think its always a matter to anticipate how the fed is going to react with the data relative to how investors are going to react. The pace of the increase is going to be significant. But so far, it will definitely give you the message that its negative potential if they are behind the curve. Its going to be more in the fixed income market. We have to also go through that adjustment with Interest Rates going back to normal. Absolutely. Were going to talk more about the high yields market and how we trade this. Stay right with us. Were going to look at what else is going on in todays top stories. Jpmorgan says it set aside 4. 6 billion in reserves at the end of the Second Quarter, up from 100 million in the first. In an sec signing, the bank says it has 56 billion in exposure to russia. Jpmorgan trading by just high of 0. 5 . Goldman sachs shedding from less profitable Hedge Fund Clients and others as it adapts to the banking rules. Goldman thes told customers regulation forced it to step aside capital. Goldman is pulling its own cash out to comply with the new rules. Blackberrys ceo says the company has closed a book on a long and painful restructuring. If not, they will be adding in areas such as product development, sales and customer service. Blackberry cut its workforce by around 60 over the past three years. Blackberry shares also trading slightly lower in the German Market session now by 1 . Still to come on the show, flash floods reek havoc stateside, drought mixing. Find out what that means after the break. Welcome back to worldwide exchange. These are your headlines. Credit ago recoal writes down the entire stake in bes. Shares jump. Jpmorgan says it set aside an extra 100 million in reserve for the Second Quarter. And a 72hour truce between israel and gaza continues to hold into its fourth hour. A welt of earnings news out of europe today. Credit agricole on the stoxx 600 says it took a 700 million euro hit on banco espirit desanto. Deutsche post is higher after a second set of numbers. The recovery in europe and north america the trade flows cuts its 2015 forecast by one off costs. Intercontinental hotel group shares lower this morning. They reported a drop in first half profit. Revenues for the hotel chain declined 3 in the period. Bmw stock up 3. 2 today after the german luxury carmaker announced a big jump in Second Quarter profits. The firm benefiting from the continued Strong Demand in china. Optimism is through with toyota by a strong numbers in pickup trucks and suvs. Now, over in the u. S. , iigs Second Quarter profits rose 13 beating forecasts. A series of sigh vest temperatures it was prompted to make in a separately, aig will pay to settle claims that it misled investors between 2006 and 2008. Aig trading higher by just shy of 4 on the German Market session. Flash floods trek through the mountains northeast of los angeles this weekend cutting off thousands of people. But there is little being done to change the drought situation in california. Many residents have taken to shaming socalled water hogs. The entire state of california is in whats called severe drought, 100 . But more than half is being classified as exceptional drought, the most extreme condition. So water restrictions are going in place. Billboards like this one from lawn dude suggests watering twice a week. This as los angeles water official have finally reopened a main street sunset mrfrd after losing 20 million gallons in a flood. Residents can now be fined 500 for watering so much it trickles down the sidewalk in your street. How bad is it . People are now drought shaming their neighbors. This is a post that i did outside of the country club. People clearly dont know that california is in a drought right now. Mike bud is using a new app to report things such as accidents or crimes. But reporting water violations in california has become surprisingly popular. Pictures showing up in dpeeo tag that a map from all over. The company said its user base has more than doubled in the last month. The goal is to turn this content into actionable content so that the water municipalities, the enforcement regulatory agencies that are responsible for enforcing water regulations can monitor this if they wish. Do you feel bad ratting on your neighbor . I wouldnt call it ratting. I mean, i dont like that term. I dont care about who you are as a person. Its that this is the better for us as a country, as a world, because one of the worlds most abundant resources is being wasted and who knows where it can end. This has gotten 500,000 in funding to start and is now doing a second round. And the drought shaming phenom has more than anything else. I dont know whether anybody in the uk would snitch on each other if you were caught using a hose pipe. What we are asking today is what is the most annoying thing your neighbors do . Let us know by email. Worldwide cnbc. Com, cnbcwex. Still to come on the show, today marks three years since s p downgraded the u. S. Rating. Just how far have we come since then . Well take a look back right after the break. Stay with us. What if there was a credit card where the reward was that new car smell and the freedom of the open road . A card that gave you that im 16 and just got my first car feeling. Presenting the buypower card from capital one. Redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac with no limits. So every time you use it, youre not just shopping for goods. Youre shopping for something great. Learn more at buypowercard. Com today marks the anniversary of the s p 500 downgrade iing t news comes take a look at what president obama had to say about the actions following the downgrades. On friday, we learn that the United States received a downgrade by one of the Credit Rating agencies. Not so much because they doubt our debt, but because after the wrangling, they dont our political system. The mcs, on the other hand, continue to believe our Credit Rating is aaa. Warren buffett, who knows a thing or two about investments, says if there were a quadruple a rating, id give the United States that. And Warren Buffett knows. You can have a look at how the market has perform since then, nasdaq higher by 59 , the dow jones 36 higher and the s p 50050 higher. Steady basis point higher than where we were despite the pick up for 2014. 30 basis points lower at the point where they received the downgrade. So a lot of water under the bridge. Lets take a look at how the markets are expected to today. Nine points lower for the dow and for the nasdaq, around 3 points lower, too. Still plenty of time before the markets open. Daniel, were talking about the high yield market and the movement. Weve seen some of the outflows that weve been talking about in recent weeks. Theres still value there, isnt there . I dont know if id use the word necessarily value. I think when youre looking at the fixed income market value, its a matter of what are the risks of rates riding. But at the same time, what kind of income are you getting to campaign for the price declines that are likely to take place. In this, i think what wove seen in high yield is a bit of in the mines, but in a good way. With treasury yields and uk yields still low, but knowing we need to move to a higher environment, that that process is beginning to take place. So expected. We know its going to be an adjustment in items of whats going to happen with fixed income prices. If you focus on the income, high yield looks attractive, but not necessarily good value. But if youre saying its a kaariry in the coal mine, perhaps recognition as far as relative value in the markets right now. Do you think we can see this push wider . We did see a bit of consolidation yesterday. In terms of spreads, its a little less clear because a lot with the spreads are indicating is the relative credit risk. And if you think about the credit risk of the high yield market, not necessarily underpriced. Across the board, across ratings, moving up, high yield reflecting that sooner than weve seen it in the core markets, but a signal that perhaps this is coming for treasuries, for gilt. Again, moving at 3 for the tenyear treasury at the end of last year. Maybe higher than that. Were still below that. Maybe thats telling us that thats going to start happening. Back to the equity markets, you believe that the fundamentals are still positive for u. S. Equity is right now. But what about the silver black comments about a 30 reduction in buybacks in q2 relative to q1 is . What are your thoughts on that as far as the distance that could make as that trend continues . There are fundamentals and theres other things to keep in mind. Valuations are a part of that. So on a relative basis, the u. S. Looks good, maybe perhaps better opportunities outside the u. S. Emerging markets, certainly it looks like its a value. Japan, a lot of potential there. So i think thats something you want to keep in mind. Particularly to the activity with the buybacks, they tend to be hartley correlated with the markets. Weve had a slowdown in the appreciation of the market over the last quarter. So not the same rate of appreciation weve had in the year. If the market starts appreciate again, i think its a policy and buyback active. What are your thoughts there in terms of investment potential . Well, i think that the challenge or the potential with emerging market in general right now is the outlook in terms of Economic Growth and the value age activity. That will tell you your medium term expected should be recently positive. We havent necessarily seen the turn around in Earnings Growth that we would like to have behind that. Taking advantage of what are really good valuations, that again with these pmi numbers, not necessarily convinced that the economy is turning around and were not necessarily going to see that reflected in earnings for these companies. Great to talk to you. We have to take a quick break, but still to come on the show, the big three continues as disney prepares to update investors. How long can the media giant benefit from frozen revenues . Well preview the numbers after the break. Welcome back to worldwide exchange. Credit ago recoal says they regret being misled by the family as Banco Espirito writes down the stake of its value to zero. Vivendi receives a 6. 7 billion bid for its unit from telefonica. Shares in vivendi jump on the offer despite saying none of its units are ul for sale. Toyota raises its forecast after sales in the u. S. Beat second kwarpter estimates. Four hours in and a truce between israel and gaza continuestrip. Display youre watching worldwide exchange, bringing you Business News from around the globe. If youre just tuning in, thanks for joining us on the show. Right now, the s p 500 lower by two points. The dow jones pushing to the down side here 16 points lower and th lower by 6 points. The services pmi and the ism service data in focus today. Plus, the Market Reaction rt part rt numbers. Still concerns about the timing of fed rate hikes in the future. European markets this morning, gaining across the board. The ftse 100 higher by 0. 4 . Weve got the German Markets higher by 0. 5 . Weve seen a Stronger Services pmi number out of germany today, weaker in terms of italy and inline in the french markets higher by 0. 4 . One of our top stories in europe today, Telecom Italian shares are halted after falling. Its comes after telefonica, the largest shareholder in the group offers va inventory da to buy vgt. Vivendi shares are higher by 3. 4 . Now, the worlds bank has pledged up to 200 million to stem the spread of ebola. Mean while, it has isolated a patient with ebola like symptoms returned from africa. Nbcs kate snow has this report. After dr. Brantley walked out of that ambulance, his family rejoiced, just two days before choppers followed him through the streets, his wife, amber, expected the worse. His wife asked friends to drop everything and pray. But by the time he landed saturday, he had mistake a remarkable improvement after one day of a rare experimental drug never before used on humans. It really is a cocktail of antibiotics. And antibodies are proteins that the body actually makes in response to infection to ultimately help the body to clear the infection. Brantley received a second dose just yesterday at emory. Back in africa, lindsay reifle was getting her second dose yesterday, too, feeling well enough to ask for her favorite liberian soup. These two americans may save a lot of lives by consenting to experimental treatment. If they have to suffer through this in order to see tens of thousands and more lives saved, they would say im willing to go through what ive gone through. The two american patients will have a specialized room inside units in emory. Lab tests are done inside. If any contaminated materials are client of cyrus and incinerated. Still, images like this have Many Americans concerned. Dr. Donald seagall, a surgeon, says while he trusts the doctors at emory, it was foolish to bring ebola patients to atlanta. They could have taken the medical equipment and the experimental serum to africa and treat the patients there rather than bringing the patients here and potentially contaminating continental United States even though the risk is minuscule. Aigs Second Quarter profits rose 13 beating forecasts. The insurer reporting solid results from its core operations and a series of divestitures, it was prompted to make under its 2008 bailout. Separately, aig will pay 960 million to settle claims it misled investors about the state of its Financial Health from 2006 to 2008. This is one of the largest settlements in investor litigation stemming from the financial crisis. Aig trading higher over the German Market by 2. 7 . Disney today, the first Earnings Report from time inc. Will update investors this week. Time warner and 20th century fox will report later in the week. Time warner and foxs results and Earnings Calls on tuesday are a crucial opportunity for both companies to make their case to investors. Investors and analysts want to hear Rupert Murdochs plan to grow the stocks value with a focus on foxs stock buyback plan, the company debt, to help in the advertising business and successor plans for murdoch. Meanwhile, investors are looking for time warner ceo to set up plans to set up the media giant on its own for rapid growth, as well as for insight potentially offer stand alone Services Overseas which could be a huge revenue stream and on what terms. The other media giants reporting this week are sure to face questions about the impact as media mega mergers and will base it in. Disney is up tomorrow afternoon and via come wednesday and cbs on thursday. Back over to you. Joining us now on the phone, Senior Research analysts. Gate to have you on the show. The biggest mortgage on the dow yesterday, seems like its going to be a trade opportunity of Rising Program costs here related to a sports field. What do you expect from the numbers today . Well, i think disneys earnings could be lower than consensus here. But i think this is a tempest in a teapot. The bigger story at disney is theyre on a great trajectory. I think that they are spending this quarter on ramping up more sports in the u. S. You know, theyve got a hire contract with the nfl. These things are paying dividend over time. I think theyre trying to navigate whats been a chot choppy tv market. And i think their movie success has been great. The price i mean, the guardians of the galaxy this past weekend, tremendous success. Froed. They have a great sequel coming up in the next couple of years. Theres a lot of optimistic things about disney looking ahead. What about share price . We have seen gains in yesterdays session ahead of these numbers. Do you think theyre become ago touch shy of consensus . Do you expect to see a pullback in the share price here . I tell people if there is a pullback, id see it as a buying opportunity. I think this is a tremendous content company at a time when the value of content is exploding. Its the blue chip in a great sector right now. Id look for any pullbacks as an opportunity to add more to a disney position. Lets move on to Liberty Media, including that 54 had stake. What is expected to see from john malone, are they looking to acquire the that they dont already own . We know theyve backed off in the past. I think Liberty Media is an unusual stock in that it doesnt trade on earnings, it trades on what theyre going to do with deals. I think their Earnings Call will be an opportunity to get an update on their thinking. One of the lingering questions is will they go back to try and make another run at sirius. I think theyre setting the table to do a share split that i think could be used as currency in another run at currency as they let the debt settle from the last one. In the meantime, theyre spinning off into Liberty Broadband thats going to be part of an engine trying to capitalize on consolidation and cable that malone thinks needs to happen and wants to make happen. He basically put Time Warner Cable on a run by making a run at it through charter and i think theyre going to look for more deals on it there. An update to his thinking is going to be the focus at their Earnings Report this morning. It seems like theres an opportunity there. The stock trading, as you mentioned, on a discount 80 , 90 relative to individual assets. Do you see more upside in the price at this level, as well . Well, i think at this point, youre buying sirius, youre making a plan youre buying liberty, youre basically making a play on sirius. The value of the sirius is holding is 80 of the value. The bulk of the rest is the charter. We like sirius. Growth opportunities, share purchase, lots of free cash flow. But, you know, to see like separation between those two, its hard to figure that at this point. And what about as far as fox 21st century when we go those results tomorrow . What are you expecting to hear there if anything about future potential deals . You know, that is really going to be the most interesting day in the whole earnings cycle is how much of an aurm can time warner make that its more valuable alone than it would be as far as accepting foxs offer here. What can time warner do to trum up excitement, maybe looking at things that can happen at hbo that would be more exciting. Theyve already told us a lot. And its hard to see that a big company like this can turn on a dime. They need to tell us the fundamentals driving that target are still intact. People have been worried coming into this report. If theres any more pressure on that, their ability to consummate a deal could come into question. It will be a dramatic day with those two in the morning and time warner after the close. Thanks for that, barton crockett. A programming note, dits disneys ceo bob iger will be on cnbc just after the Company Reports earnings at 4 00 p. M. Eastern. Israel and gaza have entered a 72hours truce. Ahead of the truth, israel said its military would withdrawal completely from the gaza strip. Defense forces say they had completed their mission in destroying the tunnels. Israeli and palestinian officials are now going to talk in cairo in a bid to continue the ceasefire. So far, no comment from the israeli side on this, but we have heard from the minister saying this morning the forces have now completely withdrawn from gaza. Lets take a look at todays other top stories. Jpmorgan says it set aside 14. 6 billion in legal reserves at the end of the Second Quarter, up 100 million from the first. And s. E. C. Filing, the bank says it has a 506 billion from russia and will be closely monitoring the events in the region. Jpmorgan trading in the German Market higher by just shy of 0. 5 . Goldman sachs is reportedly shedding more profitable Hedge Fund Clients and raising fees on others. The wall street journal says goldman regulations have forced it to set aside more capital and hurt profits in its prime proek raej business in particular. Coldman is pulling its own cash out of its largest internal hedge fund to comply with the new rules. Well have a look at how goldman is trading in the German Market session higher by 0. 2 . So underperforming the broader index. Coming up, the next ken condition derby winner, why some of the worlds richest people are heading to new york to find the next great thoroughbred champion. Stay with us to hear the details. In india we have 400 Million People who dont have electricity and i just figured that its time i do something about it. What were doing right now, along with ibm, is to actually transfer data through a satellite from our wind farms directly onto the cloud. I think we could create a far more efficient system across the whole network where we could actually draw down different kinds of energy based on when its needed by the consumer. A smarter Energy System is made with the ibm cloud. The ibm cloud is the cloud for business. Welcome back to worldwide exchange. These are your headlines. Credit ago recoal writes down the entire value of the stakes in bes. Shares jump. Jp morgan says it set aside legal reserve for the Second Quarter. And a 72hour truce between israel and gaza continues to hold in this fourth hour. Weve had some breaking news from moodys this morning. Theyve downgraded their outlook on the uk Banking System to negative from stable. Theyre saying that the outlook change improved operating environment and banks stable Financial Fundamentals did not fully offset the negative credit implications of the resolution and the related framework. Stand pat as far as this framework on resell banking investment and investigation into whats going on as far as lending is concerned, too. The outlook on the Banking System, the exposure to the conduct and litigation charges and other costs that could restrain activity. Weve heard from the likes of barclays, hsbc and all concerned about the future get investigation expense. Moving on, the publisher of usa today is looking to leave its paper trail behind. Courtney reagan is at cnbc hq with all the details. Good morning. The deal could be announce announced as soon as today. It lets users check prices, models and users. Festing 3 billion. Cars. Com is owned by a group of publishers from classified ventures. Its estimated the site generates up to 500 million in revenue a year. The publisher will continue to sell adds on cars. Com for five years. Its been buying up local tv stations to offset declining add revenue and leadership. Times 1. 5 billion last year. It has a growing digital portfolio, including a stake in job website careerbuilder. Com. We take a look at shares of gannette in europe and it looks as if theyre up about 5 . Today in europe, things are looking higher. Mcclatchy up 10 and Graham Holdings up 2 . Finding the next philly or colt that could potentially win the triple crown is a dream for some of the worlds richest people. Morgan brandon is trackside. How much is one of these horses going to set us back . Oh, well, that depends on the horse, but youre looking at anywhere from several hundred to a Million Dollars for one of these horses. Were in saratoga springs, new york, where the auction is under way. This is one of the largest thoroughbred sales in the world. This is focused on yearlings, prized year lipgs. They are 1yearold horses that come from champion stocks. So hes got celebrities, billionaires, even royalty all here wearing jeans and all looking to bid on these horses. The average price just under 300,000 with several fetching more than a million last night. Keep in mind, these are horses that havent even been proven yet on the track. So this is the ultimate discretionary purchase. Experts here say this is something of an Economic Indicator for the broader economy. The sales have plunged 50 from 2007 through 2010. And have since begun to recover. It is still down about 20 to 25 from that mid 2000 peak. But thoroughbred racing expert Carrie Sherman says the high end has faired much better than the lower and the middle and thats largely to international buyers. It has actually dipped in the middle to lower end of the market. But it hasnt dipped at the top. It is absolutely sailing upwards because the weight of Buyers International buyers are coming into the market base d very far to the middle east or dubai. Individual new owners, from china, coming into the marketplace. The top is absolutely flying along. Her better would know. Hes an adviser to one of the worlds wealthiest course owners and that is altani. He says top notch pedigree are dropping more foreign buyers to u. S. Racing and as an alternative investment. But actually its another royal family that has been making the biggest betts here so far and that is the Sheikh Mohammed of dubai. He spend more than 3 million on seven horses to its advisers. Oh, is that all . All being quite cheap horses on a relative basis. We will cross to new york for a preview of the cvs caremark numbers. Stay with us. Welcome to worldwide exchange. Right now, the s p 500 lower by 3 points. Dow lower by just over 22 points having snapped a broader losing streak yesterday. The Energy Sector was leading the gains up. Exxon, mobile, disney. We saw yesterdays trading session. Right now, losing around 8 points on the nasdaq. Now vvs caremark will release its Second Quarter earnings before the bell today. Led by a Strong Performance in its retail unit. 75 of analyst rate the stock as a buy. Joining us now is analyst at bmi capital markets. What are you expecting overall . Break it down. Hi, julia. There is a lot of optimism around this name and we tend to degree. We are hoping that that growth increases top line expansion at the retail pharmacies, as well as some profitability expansion at the pharmacy benefit or the pdm. There is some operational items were looking for an update on, including whether or not obamacare or the Affordable Care act has helped drive additional traffic to the Retail Stores as well as on the pbm side or the 2014 selling season is starting to shape up lying. What about promotional activity . What impact is this likely to have . Well le listening for some color around the promotional activity in the quarter. This is something thats coming up in prior quarters. Were going to be listening for whether or not css caremark continues to plan any kind of pricing action as these what we would call promotion i cant tellal heat up for the anniversary in the coming months. This comes on the back of rite aid. We had wall greens in after Hours Earnings during their 2016 forecasts. The factor is here for cvs compared to what weve seen for men. Allya, this is a great question. When we think about cvs caremark, whether you look at the Pharmacy Benefit Management side, when we think of a mix of assets, positions differently compared to their competitors. The competitive advantage here relates to their distribution advantage. You know, by owning thousands of Retail Stores as well as operating nationwide mail pharmacy, we feel like this gives cvs caremark more tools in their toolbox relative to keep costs down as well as provide axes is to their consumers. Im going to jump in. We have to go. Jennifer lynch, from bmo capital markets, thanks for that. Thats it for todays show. Im julia chatterley. Youve been watching worldwide exchange. A card that gave you that im 16 and just got my first car feeling. Presenting the buypower card from capital one. Redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac with no limits. So every time you use it, youre not just shopping for goods. Youre shopping for something great. Learn more at buypowercard. Com good morning. Today brings a whole new round for the markets. Also, ebola epidemic, the concerns about that virus spreading growing. And a grow in the divide, s p making the countrys rebound from the more difficult. Its tuesday, august 5th, 2014, and squawk box begins right now. Good morning, everybody. Welcome to squawk box here on cnbc. Im becky quick along with Andrew Ross Sorkin and Brian Sullivan who is in for joe. Hes still on vacation this week. Coming up, the best day in two weeks. The dow closing higher yesterday for the first time in five sessions. This morning, if you check out the futures, they are slightly lower. Dow futures down by about 26 points below fair value. S p futures are off by 3. 5 points and the nasdaq is down close to 10 points. For the markets today, another round of earnings. Before the bell, well hear from adm, Liberty Media or coach. This afternoon, disney, taketwo interactive and more. July ism manufacturing is expected to tick up. June factory orders are expected to rise, as well. Thank you, becky. And welcome back, by the way. In Corporate News, remember the boeing battery problem that grounded the dream