Im francine lacqua. Manus and im manus cranny. Welcome back. Francine it is nice to be here. I havent missed anything, have i . Manus nothing much. Francine now we have this technology route. Big disappointment for the tech giants. Manus despite posting record thirdquarter profit, shares in the worlds most valuable company plunged more than 8 in afterhours trading as lackluster iphone sales left investors wondering whether the company can keep making its products. Francine lets bring in Caroline Hyde and paul. Thank you for joining us. Caroline, we have record earnings for apple but because we are seeing some weakness, analysts are concerned that this is the peak. Caroline a record thirdquarter and yet you are about to see 60 billion of market valuation wiped off. That is three times the market valuation of arm holdings in the u. K. It is 10 times that of stmicroelectronics. The concern is, iphone sales disappointed. We saw 35 growth. You would have thought that would be fabulous. We expected more. Then, the forecast for next quarter. Sales are expected to the 50 billion, but it is only less than a percentage point growth. The problem is they are perhaps a victim of their own success. China also a key area of concern. Tim cook saying china is creating speed bumps. Everyone is worrying that we cant see growth in asia. Manus why is it these numbers from china do people doubt the ability of china . Why are we disappointed with china . Paul we saw a little bit with ibm. They signaled that china was lackluster relative to expectations. To the extent that investors were baking in a stronger china market to offset the weakness in other developing markets, that story is not playing out to the extent investors think. We are seeing a little bit of a reset for expectations. Francine is this the unraveling of the tech rally . Paul i dont think so. The bulls are seeing some strong numbers out there. The pc business continues to face headwinds. Overall, when you think about tech spending, it is one of the growth areas in the economy. A couple days ago tech was thought of one of the few areas where you can find organic growth. Caroline there is an issue of how much people are being too over concerned. We were speaking to the leader of arm holdings. They are saying, we Just One Bank 54 license just won 54 license contracts. Only a quarter of them are in smartphones. When we are looking at apple perhaps sales have been a bit lackluster. 1. 9 million is how many not a 5 million have been expected. They are trying to rejuvenate a whole new category. Manus nokia may has well have never happened. After you see this kind of quarterly numbers, is that the low point for microsoft . It is essentially about cloud. Paul it is. When you look at microsofts numbers over the last several quarters there, the core Enterprise Business is facing headwinds. You think about some of the bright spots for microsoft, and for sap and amazon. Macleod really stands out the cloud really stands out as an area for growth. That is despite the fact that the Cloud Storage business is facing tremendous pricing pressure as these Big Companies move for market share. They know this is a longterm growth story for them. Amazon released last quarter some profitability figures for their Cloud Business and it showed quite profitable for them. Caroline what many never knew is that microsoft acquired the cloud or at least used to and that was an unheardof realization, that microsoft is very dominant. I think it was amazon as well, supplying to the likes of apple. I think where many people are going with this is microsoft is concerned with a share selloff. This is the second biggest tech stock in the world, certainly in the United States. We are going to see the tailwinds spilling into asia. Here in europe, it has tailwinds as well. The fact that apple is seen as the most lucrative business in the entire world, that is going to have ramifications. 78 of its sales come from apple. Francine it will have ramifications. We are expecting news from yahoo . Are we looking for more demergers . Paul with yahoo , the story is, theyve done a wonderful job monetizing their asian assets. Hopefully that gets favorable tax treatment. They have a big investment in yahoo japan. The problem with yahoo is, their core advertising business is showing no growth. Investors are concerned about that. Internet ad spending is a grower every year, yet yahoo shows no growth. Francine thank you so much. Caroline hyde and paul sweeney. Francine manus that brings us to our twitter question of the day. This takes us to the point. There you go. Is the tech rally on relevant link . Is the tech rally unraveling . Francine paul disagrees. Manus what is your twitter . We are all there. Do join us. Francine authorities have arrested four people in israel after they were tied to the computer hacks of jpmorgan. Elliott, this is partly about pumping and dumping. Elliott thats right, francine. This is a standard stock manipulation scheme, whereby the organizer encourages people to buy into a particular stock thereby sending the price higher, and that allows the schemer to sell their own holdings. They pump up the prices and dump their own stock. The israelis are alleged to have been involved in this stock manipulation scheme that targeted about five stocks and they walked off with Something Like 2. 8 million. Theres another Court Hearing tomorrow in israel and u. S. Authorities may seek to extradite them. There was another case where a couple of americans were arrested, allegedly for running an unlicensed Money Transfer scheme. One of the people involved in the stock manipulation scheme and one of those americans were Old College Buddies at Florida State university. According to a previously unreported fbi memo, those same people were also implicated in the jpmorgan hack as well as other similar incidents at e trade and fidelity. We understand from is really police that 10 u. S. Law enforcement agents have been working in israel to help oversee this. The tentacles of this whole scheme extend both into america, israel, and russia as well. Manus elliott, lets talk about the jpmorgan data snatch. Some of the details that were stolen, quite staggering. Give us a little backdrop on that. Elliott talking about over a threemonth period, the packers having unfettered access to jpmorgans main data center, which controls key things at the bank and the Financial System. They had access to at least 100 servers. They walked off with 40 gigabytes of data. When you hack into a bank, you probably expect them to go for the money. What seems to have happened is that they scooped up all these names and email addresses to be used potentially for this stock manipulation scheme, to target these people to try and get more pumping and dumping going on. Thats kind of the extent of it. It is even more embarrassing for jpmorgan. In 2014, they spent a quarter of a billion dollars to ensure that hacks of this nature didnt take place. Some people might be left wondering, if this can happen to jpmorgan, it could happen to other banks as well. Francine it certainly can. Elliott, thank you. Manus heres a look at what else is on our radar on the pulse. Prime minister Alexis Tsipras has returned to the Greek Parliament, seeking support from the opposition to help him overcome his own partys rebellion against the terms of the third bailout. European Central Bank Officials will hold a telephone call to discuss the emergency liquidity assistance that keeps the greek Financial System alive. Francine the bank of england publishes the minutes of its july Monetary PolicyCommittee Meeting in just under half an hour. Investigators will be pouring over every word. Governor mark carney last night said the decision as to when to start the process of raising Interest Rates will likely come into sharper relief around the turn of this year. Manus chancellor George Osborne has announced hes seeking a further 20 billion pounds in savings from the u. K. Government. Each is being asked to come up with saving plans between 25 and 40 of their budgets. We are going to ask other Government Departments to make savings for efficiencies. By giving people power over their lives, there will be significant savings for the taxpayer. It will be part of our plan to eliminate the deficit. The best thing you can do for working peoples deliver that strong, stable economy. Francine lets look at what is coming up. At 9 30, details on the bank of england meeting minutes. Manus and at 10 30, we will be speaking with the ceo of eleanor, the telecom and media giant which missed profit estimates earlier this morning. Francine at 10 40, we will be joined by david moore. That is all still to come. We are just getting started. Manus welcome back to the pulse. We are live on bloomberg tv radio, streaming on bloomberg. Com, your tablet, and your phone. Francine in greece, the bailout package reaches its second hurdle. Those are being debated right now. You can see live pictures from the parliament in athens. A vote on the first set split the governing syriza party. Manus bloombergs european editor joins us from athens. It is going to be a long day of political rhetoric and jockeying in parliament. Where are we . Is tsipras going to have to reach across the house for support . Ben almost certainly, it will pass. He managed to get the first package of reforms through last week with the help of the main opposition parties and no one is expecting him to struggle to get it through today. The issue will be the scale of the rebellion within syriza. Last week, there were 32 syriza lawmakers who voted against the measure. That is 1 5 of tsipras Parliamentary Party. That is raising questions about what the governing coalition what it is going to be like going forward. First, they have to get through these reforms. After that, there are Big Questions about how and if tsipras can continue governing. Francine theres another decision today on further emergency liquidity assistance for greece. Can you shed any light on that . Can they increase it . Ben well, the consensus is that greece is managing to check off slowly but surely the barely us the various actions they need to do before the bailout negotiations. They got the first package last week. They got their bridging loan. They paid the ecb on monday. Policymakers are operating on the assumption that greece is making progress and it is going to be able to deliver the measures required to start this new bailout program. Francine thank you so much. Manus lets get a little more on this story with barclays chief u. K. And senior european economist. Fabrice, welcome to the pulse. Politics at play today. Is tsipras getting weaker each time he goes back to parliament . Fabrice he is getting weaker and stronger. In the open in polls, he has the strongest approval rate ever. From the voting perspective, he has strong support by the population. What he faces now in parliament is rebellion by some members in his party. That is nothing unusual. Look at other governments across europe. What we are looking at here is a possible recomposition of the majority within the parliament with some rebels within the syriza Party Falling out. Tsipras possibly will seek support for more center parties or reformoriented parties. That is a process that will last over the summer and further. That is an ongoing process. We are also talking about possible snap elections in september. Those are the kind of risks we are facing. Francine on the snap elections how much of a concern is that . He seems to be losing control of his own party while gaining support from the opposition. If we face snap elections, that puts the bailout in turmoil. Fabrice it does, but syriza seems to be in a more favorable position. He is the man in charge. He has the popular support. If he decides to exclude some of the party, then those mps will lose their seats. In terms of the balance of power, i would be less worried about tsipras losing his seat than about the majority to be recomposed. Manus today, the ecb had a discussion on whether to increase their funding again to the greek banks. My question to you is this everybody has told us for the past couple of weeks, you need to see the banks restructured in greece. Is greece ready for that . Will the ecb want to see restructuring first . Fabrice the sequence for the ecb is, they want the process to stay alive, and the process of discussion, negotiation, and setting up an economic program. The third economic adjustment program, we will not see it before probably the end of august or september. That is weeks of negotiations to define the targets. As we speak, the economy is freefalling. It hasnt stabilized yet. You have to redefine all the targets. That will take weeks. What the ecb is looking for is for people to talk to each other, for having a credible outlook for an agreement to be reached later this year. If that is in place, the ecb will stay in its mandate as long as the eurozone stays the eurozone. Francine is debt relief now a given . Fabrice i think it has been a given for longer than we think. Francine despite german opposition. Fabrice german public opposition. We never know what is discussed behind closed doors but it was probably unreasonable to think that without debt relief, greek debt would be sustainable. From that perspective, you mentioned sequence. Seek is is important. Merkel made a strong point of this. She doesnt want to talk about debt relief before the First Successful review of the program. That gives you a hurdle that the greek government needs to pass before they can talk about debt relief. Manus Pierre Moscovici last night said, that there is a place for greek debt relief. It sounds as if europe is splintering. They all are calling for more. Is that realistic . Fabrice just calling more europe for the sake of more europe lacks substance. Manus they talk about fiscal union. Fabrice you have to realize that the debt relief is a fiscal transfer. Once you take the step of debt relief, you open the door of a fiscal union. Some leaders are calling for more europe, because that is basically what we are talking about. A union, a fiscal union in europe. You cannot engineer debt relief without having this discussion. Some parliaments will insist on keeping the control, on how much transfer they will allow at the european level. This discussion needs to take place at the same time as we are talking about debt relief on greece. Francine we also have to talk about the u. K. We are expecting bank of england minutes in about seven minutes. We are looking at a rate hike, but more visibility at the end of the year. Fabrice what will be interesting to see is whether the finely balanced decisions are still as finely balanced as they used to be. We expect discussions around the outlook for the u. K. To be a bit more lively than they used to be in previous months. However, we dont expect any members who have taken the step to vote for a hike in july. The most hawkish of them has been pretty clear that he wont vote in july. That implicitly means he will vote in august. Beyond these minutes the next meetings will be interesting to follow with how many votes we get in august. And then, how fast will devote move towards the end of this year . Francine thanks so much for that fabrice. Manus easyjet say sales are helping him recover from the spring. This morning the Lowcost Airline carrier announced pretax profit for the year ending in september set to increase as much as 14 . Francine for more, we are joined by chris. Great to have you on the program. What do you make of the results . Chris certainly an improvement over what we saw a quarter ago. They warned that the spring quarter was looking really soft. There were problems with an air Traffic Control strike. A few other things. Now, they seem much more solid. They are on a more bullish outlook. Manus when we look at some of the things that are going to help airlines, what is the main thing . They are going for better airport locations, a bit of an energy boost. What do you think is going to drive it . Chris very targeted expansion in some major cities. They are continuing that drive to attract more business, adding capacity in amsterdam for example. They are finessing their exposure in italy. They are getting into venice and a few other places. They are spread across the board. The summer bookings are looking good on what the ceo called beach destinations. That helps with the summer, but the yearround focus is more broad. Francine what can you tell us about london heathrow and expansion plans and the tories . Chris graham brady, who heads the 1922 committee of backbenchers, had a briefing last night where he reckoned 600 of 650 mps might vote in favor of an expanded heathrow. So in numbers raw numbers, it is looking very positive for them. Manus ok, chris. Lets see how those mps vote. The minutes from the bank of england next. Francine welcome back. The bank of england minutes that weve all been waiting for, no dissent. Manus that runs against the Bloomberg Survey. The Bloomberg Survey had 65 . You have carney speaking last night, a little bit of a move in some of the more hawkish comments. A little bit of a surprise. Francine the bank of england says a number of policy makers see rising inflation risks. Lets have a look at dollar versus sterling. 1. 5630. We had quite a high last week. Manus last week, we had mark carney raise the flag that raising rates would be on the agenda. Last night, what he did was weve still got headwinds. Last night, weve got a wee problem. Francine we are also hearing that according to some members the rate vote is more finely balanced. However, because of greece and the turmoil we saw in greece, it risks a material impact. That means that the greek risks are material for no rate change. Lets bring in jane marie and fabrysice montagne. We spoke about it just before going to break. No change. Does that mean we will get an In