Transcripts For BLOOMBERG Countdown 20240622

Countdown. Lets start with twitter and the roller coaster that was the share price. The initial reaction to the number bound bounce was positive, jack dorsey started to speak candidly about the shortcomings of the business that is when investors started to rethink and the stock fell. Fascinating roller coaster ride. Lets talk about what has happened in the u. S. More broadly u. S. Stocks calling time on the longest losing streak since january in yesterdays session. Stock was up, better than estimated reports. Ups, pfizer ford, coming in better. It paints a positive picture so far. Mma in europe talks yesterday help as well. Lets move to the question the morning on twitter, whats could threaten the m a wave . You could find me on twitter. Lets talk about what is happening in the asian session. Over to china now, as the countrys equity index swings. Our market reporter from hong kong joins us for the latest. Juliet it has been a fluctuating market. Asian markets followed in general, that positive look that the u. S. Experienced. You can see the strong gain coming through in australia, led by a curtail in the falling commodity prices. The s p up, as well as oil and gas players. A different story on the shanghai composite it had that 8. 5 plunge on monday, security regulators now looking into that volatility we actually saw the shanghai composite open higher by more than 1 . It is now down by. 3 . A little bit of weakness coming through in japan, the nikkei is down. Air china has come back online after it slump its slump. Shares falling the most in seven years. The age shares lifted listed in hong kong down by 7 . Banks did well yesterday on the cop as it shanghai composite. Still weakness coming through on the overall Mainland China sector. A robot maker is falling down by almost 12 . Japan retail sales are up. The big gain coming through in australia as iron ore prices rebound as well as gold. Anna thank you very much. Lets turn our attention to the united states. All eyes are on the fm oc as it releases its policy statement at 7 00 in the evening london time. What can we expect from the decision . We have a few clips from Industry Leaders in new york. Pimco reminded it was only recently that the fed acknowledged a need for the liftoff. For the First Time Ever she said the economy needs higher Interest Rates. I think that shows the fed is coming around. They do not like being at zero. As Stanley Fischer said, we will still have an incredibly commodity to have policy. We will still have with the. List off. Anna investors will be scouring for any hint about what the fed could do in september. What would be market look like of the market look like . If you look at the markets, i think it is about 40 price for a september rate hike. Some Officials Say it is a 5050 proposition. I would expect a modest reaction. I would expect some continued volatility and equity prices. The real interest is in 2016, there is a risk or higher inflation for higher inflation. Anna you have breaking news for us, caroline . Caroline we talked about a slew of earnings, the last time we saw two cement makers join forces, the breaking news is the french one is missing its own forecast. On a standalone basis, if you look at the overall earnings they are 4 below its target. On a standalone basis, they would have missed there for your earning target. It was 3 billion3. 2 billion. They say the forecast is not matter because it is due to the merger. In the Second Quarter lafarge took an impairment on its assets to the tune of 250 million euros. The net income is coming in at 182 billion euros million euros. Lafarge missing meanwhile the other coming in line with estimates. They are overall saying they see the Global Economy recovering gradually. Anna lets get back to our conversation about the fed. Good morning, we listened earlier two points about the fed, there seems to be a 5050 chance whether they move in september. How do you assess that . Our forecast aces same, which is the fed will hike in september december. When you look into the latest talks from mrs. Yellen todays statement will add to that. That means they leave the door open for a september rate hike but it does not mean a precommit. I think that is unlikely. You could see the fed going for an earlier hike, but that would mean they are likely to form a lazy rate hike. That is where you come up with a statement on the day of the rate hike and they, we have hiked rates, but we will be transparent. We will be slow in the rate hike. The question is what is priced in at the time. Once a rate hike is delivered you could the a scale back of the u. S. Dollar, not broadbased but selectively against the 10 currencies. Currently you see the headlines coming in that emerging markets are trading at 15 euros lows 15 year lows if the fed hikes Interest Rates, how does that affect the outlook for emerging markets . I think emerging markets are in a difficult situation. You have the capacity of over declining returns in investment and then if they fall below funding costs. You see that in brazil. In brazil, you see that the Fiscal Authority tries to act against that. You have the response of downgrading. Anna coming back to the fed and the data question, as you said you do not think they will precommit the information we got was the weakest in four years. Do you think the situation in china is influenced the u. S. Data . It had been the employment complement which was just pointing disappoint. Disappointing. We have seen a decline in oil prices. They have shed eight thousand jobs in the oil industry. There is another factor when oil prices are declining and people are overly optimistic about how that will affect consumer ending a mean that it states, we are not understanding how that will affect a capex. Those numbers were week weak. A lot of oil Sector Investment has been in the united states, there are as well capex as well. It could come in week two as well. Anna twitter shares rose and then quickly fell on concerns of the companys slowing growth. Caroline is here with the details. Caroline if you look at the numbers, we see Second Quarter results beating estimates. Sales up 61 . The net loss is shrinking. User growth is stalling, up 1 360 million users. Compare that to facebook. Clearly, it is not keeping up with competitors. Jack dorsey is the interim ceo taking me home after the castillo costello. There is no word if jack dorsey will quit. The reality is we can see the share price, how volatile it is, we saw its bike up 11 and shanking back down after 12 hours and we thought down 12 again. Lets have a look at what the future means, what will they do to turn this around . They need to reach a mass market. This is what we are hearing from managing management. The focus is on new products, project lightning is one. It is all about getting realtime viewers. They get new viewers coming into experience a live event. That project at the moment is not bringing in new real user growth. They keep hemorrhaging people, people from the top, we solved two product executive stand on yesterday we saw two product executives stand down yesterday. The issue now is how the can jack dorsey steadied the ship study the ship. Anna thank you very much. A reminder you will have a real slew of Earnings Releases this morning. Here are some of the giants we will keep our eye on. Can the second biggest carmaker in europe make their earnings. We will talk about barclays earnings. The ceo was unceremoniously sacked earlier this month. Hotel, the oil giant, will it protect its dividend . We will see when those numbers are released in around 45 minutes. Coming up, waiting for the chairman to comment as barclays gets set to report. Anna welcome back. Here are the stories you need to know. Twitter reported secondquarter sales. Executives told investors they have a lot of work to do, and they should not expect progress anytime soon. Shares fell 11 in afterhours trading. It is decision day at the u. S. Federal reserve. Policymakers are expected to release a state it statement at 7 00 p. M. U. K. Time. Investors will scrutinize the statements for any hints that policymakers will move in september. Lvmh reported their strongest earnings in three years. The luxury good maker found a pickup in its fashions unit while the drinks unit return to growth. Total reported will report earnings this morning. The commodity is heading for the biggest monthly decline this year. For more on what we can expect from total and the Energy Crisis lets talk to the chief energy strategist. Good morning. A very busy week in the world oil. What have we learned so far . We think total will be a continuation of what we have seen so far. There will be a focus on cost cutting. Bp already lowered the amount of money they will be spinning this year. We have had chevron reporting friday it will try to save 1 billion by firing employees. We also have the Italian Company reporting that 9000 will lose john jobs. I think total will be in that direction, announcing it will be trying to contain costs. Anna containing costs, knows the prize that will be the emphasis. Hans when you look at oil, how is that impacting your universe . Hans we basically stick to our forecast. We pointed out that commodity accounts are the weakest in town. There are Lower Oil Prices and revenues. It is important to look at second and third round affects. We were talking about second round of facts, that is you have lower revenues and you need to bring your Balance Sheet into order. You need to cut your capacity. This is not only an oil story this applies to iron ore and commodity producers. It means when you are losing employment, income, economic momentum, domestic demand, the central bank comes into play and has to cut Interest Rates. I think that is the reason why you should continue to be short. The third effect is the impact of falling revenues on credit. Anna the weakness well documented. Looking at the individual companies, total, you gave us a suggestion of what could be the focus, refining and trading was key in a first three months, is that also key now . Yes. The trading boom of the First Quarter is fading away. The refining is going well total is the largest refiner in europe. It is booming at this point. We are seeing some countries like spain and the u. K. Having the benefit best numbers in to years two years. Analysts are expecting the profitability will be up. Anna thank you very much. Thank you for spending the last 20 minutes with us, hans. Lets move on to big banks. Barclays is set to reported secondquarter earnings in less than one hour. The bank is currently under the leadership of John Mcfarlane, he assumed control after firing Antony Jenkins. Analysts are now saying any comments by the chairman on the strategy will trump earnings. That will be the focus, strategy and perhaps the details of numbers. Lets have a conversation about barclays. Lets bring in julia. What are the challenges that the european banks and barclays are facing . Julia you have seen all of them have to come run with strategy changes and say what are we good at, where are we good at, and what can we cut . That is what mcfarlane said, we have to figure out what we are good at. We are seeing regional businesses unwind, banks are trying to trim down and focus on what they are good on. He said we have done well where i want to come of this proves my strategy is good. He says he likes the shape of the results. Anna what are the european banks doing . Are they specializing . Julia theyre choosing what to specialize in. We have seen them bring in conservative management. Theyre taking out the guys who are fixed income traders running it. You have seen them replaced with conservative figures coming from more of a managerial background. You have seen the Management Change to a conservative management and lets focus on debt trading. Anna specifically on barclays the focus will be on strategy this is a business without a permanent ceo. Julia also, will they talk about a rundown of the noncore assets . Anna thank you very much. A lot to look out for at the top of the hour. Coming up on countdown, we get earnings from peugeot. Can it build on the momentum . We will find out after the break. We have a big focus on carmakers. The chief executive took charge last year, he is seeking to sustain earnings after they posted their first profit in three years. We will get more details on their strategy after the break. eeeeohmumohweh hush my darling. dont fear my darling. the lion sleeps tonight. hush my darling. man snoring dont fear my darling. the lion sleeps tonight. woman snoring take the roar out of snore. Yet another innovation only at a sleep number store. Anna welcome back youre watching countdown to co countdown. Peugeot reporting operating income coming in it 1. 24 billion at 1. 24 billion. They are confirming the midterm forecast and giving details about what is happening in china. They are cutting their china Market Forecast to 3 versus 7 . That is echoing what we have heard from some of the other automakers with regards to exposure to china. It is a developing story, the weakness in the Chinese Market for some of these european carmakers. More on that later. Lets get to the chemicals business, the second order numbers are out. Caroline has those numbers. Caroline this is the German Company in health care and materials. We are seeing sales in the Second Quarter rising significantly. Revenue at top. 9 billion 12. 9 billion. Bayer is also making disposals getting rid of its diabetes unit in particular. Analysts confused as how they will break that out. Earnings at 1. 8 3 billion euros. Many exciting strong numbers from this company, indeed it is. They say earnings are targeted for the high teens percentage of the fullyear. Anna thank you very much. Be sure to stay with bloomberg television, we will be speaking to bayers ceo later on. That is coming up on on the move. It is decision day at the federal reserve, following a tuesday meeting, policymakers are set to release a statement. Economists seeing no chance of a Interest Rate rise at this time they are listening for any hints about rates moving in september. Lvmh saw a pickup in sales in its fashion and leather goods, while the drink unit returned to normal. The ecb approved proposals yesterday for a trade rules to end the full closure. While the central bank is not fully responsible for regulations, policymakers are concerned a reopening could worsen the Liquidity Position of greek lenders. They say trading could resume friday with restrictions by restrictions in money in greek bank accounts. We have had numbers come out from the show joe. Caroline is in paris, hans nichols is in berlin. Caroline, lets get how peugeot has been tearing faring. Concerns around china . Caroline absolutely. They have come a long way since 2013 when remember they were on the verge of bankruptcy. Since then they have signed an agreement in 2014 with a chinese partner. We had a new ceo takeover who has been closing one factory and freezing employees pay good earnings as a result. 1. 40 2 billion euros, well above estimates. In a press release this morning they say one third of this comes from the economy environment and the rest comes from. They are benefiting from a recovery in europe. They are second behind. I can. Volkswagen. One thing to look at is the Iranian Market used to be be secondbiggest market for them. They had to leave the market in 2012 because of sanctions. Now they are looking at coming back. That may be a glimmer of hope for them. They are planning as much as 400,000 vehicles in iran by 2025. Anna what are the challenges . You mentioned the chinese story there is more clarity, isnt there . That china had to lower their forecast for the year. It was 7 now it is 3 . The big concern here is in june, car sales fell for the first time in two years. The second challenge for peugeot is the lack of new models. They spent so much time trying to find a partnership there are not releasing new models before next year. Meanwhile, many competitors are launching plenty of new models. The last challenge for them is the european challenge, they still have production at capacity in europe, they are looking for new partners in order to share the capacity in europe. Anna thank you. Hans nichols in berlin, lets go to you. Vw will report later on today. We have been talking about goals, what are we looking for now . Hans we know how many cars they sold in the first half 5. 0 4 million cars, they are the biggest auto manufacturer. We will be looking for the china story, the brazil story a little bit for the russia story, it physically, bulls where are they on profitability . They want to bring profitability up by 2018, up to north of 6 . The problem is, they are not there. When you look at profitability, they are at 2 . Last quarter they were at 1. 8. That is one of the challenges. Bulls wagon is a massive company, it is fun to look at earnings because they give us an overview of what is happening, not just with the Global Economy as a whole. Remember they have 600,000 workers, 12 brands, and 5 billion 5 million autos sold in the first half of the year. Lets take a look at exposure. You basically see them roughly equal in europe ended asia and in asia. They have had criticism for not having more auto sales in north america, a market has that has shown resilience. The other big question we have on this is how will they be affected by russia and china . We know the russia, who saw sales down, the predictions are for 36 decline from 2015 from. 14, you look at polls wagon they are done down 46 in that market. We will be looking at brazil, china, and the russia story has already played out. The key for their future is what will they do in north america . Where are they on profitability . Then we can plan the next story, clearly, a road trip between you and i heading to iran. I will drive using a beetle. You can use the overland route. Anna will they get the insurance . I have not witnessed your driving. Thank you very much. Sticking with ours, stay with bloomberg, the cfo of peugeot will be with us to take a look at earnings. Jean baptiste dish a teal will join us. A reminder of the twitter question today you can get in touch with us what could threaten the him and a wave in europe him and a wave. The belgian maker of chemicals and plastics agreed to buy another company for 5. 5 billion u. S. Dollars. What could threaten this . Could we see higher rates in the u. S. . Could that happen in september . If we see that followed through that suggestion of a rate rise could that threaten the wave . After the break, Internet Explorer is outcome of the start menu is back in. The microsofts new operating system. Dont miss out. Anna welcome back. The time in london is 6 43. Here are the stories you need to know peugeots earnings more than tripled. Your apostle secondbiggest carmaker sold more cars at higher prices in its home region. Microsoft windows gets a new look with windows 10. It is being offered as a free upgrade for existing pcs. Previous upgrade boosted sales, but some say this launch will be different. Component makers including intel have not factored in a jump in demand in pcs into their forecast. Lets take you on a trip down memory lane looking at the best and worst of windows. [typing] microsoft windows, the king of the pc. Love it or hate it, windows is one of the most profitable products ever made, with 1. 6 billion years users. How did we get here . Our story starts in 1981, a sub Small Software Company Called microsoft hit it big with msdos. That was sufficient for the time, but the average user wanted something more sensible accessible. They put a graphical face on dos. Cut to 1985 windows 1. 0. This first version was revolutionary. It brought us things we know and love dropdown menus scrollbars, dialog boxes. It also used a mouse to help a mouse. To help users get to know the mouse, they created a game. The next windows included overlapping windows. One year later, they became the largest pc software maker. In the early 1980s 90s, microsoft sold millions of copies of windows 3. 1. Windows mania hit an alltime high in 1995 with windows 95. Microsoft sold 7 million copies in the first five weeks. Windows 98 was essentially an acrosstheboard upgrade, but not everyone was happy. You told us windows 98 would be faster. It is faster. Y2k, windows put out a new addition no one bought. They put out a new option for business. The 2000 one successor, windows xp with fast stable, and tuned for the internet. That was a hit with kids consumers. Windows vista ended up being a terrible mess of glitches. It took two years to fix the mess it made. They released windows seven. They try to release windows eight, doing away with a traditional desktop and replaced it with tile, which attempted to bridge pcs, tablets, and smart phones most people are confused and went back to desktop. What about windows nine . What about it . Today we have windows 10, it is free. This will also probably be the last Time Microsoft uses a number. Going forward, it will just be windows. Anna fascinating trip down memory lane. It is a big day for microsoft. It is a sign that microsoft is changing its game. It comes as a free upgrade, the release also marks a goodbye to Internet Explorer. Caroline hyde joins us. We also have the president of Microsoft International to talk us through the new release. Thank you very much. We had that lovely trip down memory lane, 20 years ago we saw people standing in line to get their hands on the latest operating system from microsoft, not the same environment today. You must be excited. It is exciting. Windows 10 is the best version ever. The great news, we are providing a free upgrade for all users. It is all about a more personal product. It is about bringing the best of windows across all devices with one experience, one platform. You can access your favorite apps on your phone, tablet, pc, exactly the same way. Ucb start button again, people love it you see the start button again, people love it. I can go back and forth with my apps. I could do that across all devices, including the tv set. Caroline it seems consumer focused. Are big goal is to have one billion users. It is the best version ever, for consumers and businesses. Actually enterprise would love to see a lot of new services for windows 10. They will be able to accommodate Enterprise Apps on cloud. We use different platforms. Anna this is coming as a free upgrade, how does this play into the money you make . Where are the sales coming from . As of today you will find more than 2000 Devices Available running windows 10. He will be available on many hundreds of new devices. You have all of these users buying devices, pcs, tablets phones. Anna you are giving it away for free. You are taking a leaf from apples book. You are hoping that apps will be developed on the back. What if that does not work out . You still have a lot of your Business Alliance on the sales of the software. Today we have 1. 5 billion people using windows on the planet, we are going to reach out to another billion in the next two years. We are available in 111 languages. You get access to all of the apps, you already get hundreds of thousands of apps including newly designed for window to windows 10. Caroline what have you learned from past mistakes . Making it more familiar with a start button . We tried to buy find the best experience. For the consumers, it is familiar. You can find the best way to use it you get a continuing experience. You can use it back and forth between your keyboard and mouse, and tablet. You have a right interface. You can have access to innovative experiences, if personal digital assistant is available. Caroline it sounds as though this is a hardware play. How much is cloud factoring in . We have heard it is all about cloud and mobile phones . Is this what your operating system will provide . It is cloud a cloud first operating system. The First Time Ever for the First Time Ever as a user you can have continuous updates of innovations and security updates. It is the most secure os in the world. As an example, you get access to all of the patches defending you against malware, fishing, and all of the bad things. Caroline that is free therefore you are stamping out sales. We want users to love windows. As they use as they love us they will use more apps. We have a big demand for our Cloud Service business. We are on their way to 8 billion in cloud revenue. Anna can i asked you about the ask you about a mobile phone business. You said in certain geographies youll narrow the focus of your mobile business. Will you be jetting out to certain countries in europe . Where will you be leaving . At the core of him playing individualization, we have a strong vision of mobility of experiences. We are focusing on the phone business to enable windows. We will be addressing if you specific Market Segments like business users, highend, and also value phones. With that, we will enable the mobility of apps and experiences across all users. Caroline good luck. Anna the president of Microsoft International. Caroline, thank you to you as well. Lets move on we will talk about what is on our website at bloomberg. Com. Well talk in just a moment about mark carney and how we have to brace ourselves for what will be a deluge of data on super thursday. Brace yourself is the headline. An unprecedented amount of data coming from the central bank. Mark just the amount just the amount of information is unprecedented. There will be the policy decision, the votes, minutes, as well as a raft of forecasts. Anna for all of those journalists it will be a lot to read to through. Working in out instantly. More losses for gold . Tim it seems to be. The consensus is gold is a oneway trade, just like it was on the way out for so long. Now people are looking at it saying it has to be the other way. People are saying, rates are going up, equity markets are not doing badly why be involved . Anna thank you ray much thank you very much. Coming up barclays will announce its earnings for the Second Quarter. We will go to the chairmans comments on strategy. Stay with us here on countdown. Anna a slew of european earnings this morning. Barclays chairman will take center stage, we bring you the numbers first. Decision day in the usa, the fmo see announces its Interest Rate decision later. The economist at bloomberg say no lift off yet, but watch for signals about september. And how twitters interim ceo killed off a rally with some Straight Talking with earnings talks with investors. A warm welcome to countdown. I am anna edwards. Lets get to Caroline Hyde on the latest from the oil sector. Caroline we are seeing analysts being a little bit too negative. Total and their profit of profitability has slipped 2 . We are seeing them managing to bring in 3 billion worth of net income, we are also seeing sales coming in as well, beating analysts estimate as well. We also have Second Quarter sales coming in and indeed beating estimates this is on the back of refining. Refining is doing well, as is production. They say the refining environment remained stable at the start of the third quarter. They confirmed the target for 2015, investments could be anywhere from 23 billion. As i say, they are beating estimates significantly when you look at the overall profitability. Production rises 12 overall. They say they will raise production more than 8 in the fullyear. This is a Company Managing to weather the storm of oil prices despite the drop that we have seen more than 50 . We are in a bear market. Despite that, they are managing to make money from production, get more oil out of the ground and managing to refine oil. Anna that is the latest on the oil sector, lets talk about barclays. Barclays giving us their adjusted pretax profit, 3. 7 3 billion pounds. Their cet one ratios coming in at 11. 1 . Delving into the release a little bit, they talk about how 11 growth in adjusted profit has grown they say that reflects an improvement in core operating businesses. They are giving us a bit more detail, they attribute profit coming in at 2. 1 6 billion pounds. We were hearing about the noncore businesses talking about further rundown of those noncore businesses with risk weighted assets decreasing. Reflecting the fact this is a business in search of a strategy, or at least hone in on that, getting rid of the business it is not want to run anymore. They are in the process of looking for a permanent chief executive. We saw the chairman stepan step in. Q2 adjusted profits. In terms of risk weighted assets, i told you they were decreasing as those. Those have come down 75 billion pounds in december. 1. 8 5 billion is the adjusted profit. The first half total adjusted operating expenses 8. 2 6 billion. Mainly with regards to foreign exchange, the provisions of 800 Million Pounds in the first half of the year, particularly around foreign exchange. Lets remind us ourselves for this bit business has been. We have this announcement coming from a business that John Mcfarlane would step in as the ceo because they were going to be ousting Antony Jenkins. Theyre talking about 7 reduction in operating expenses. They are making another provision, making 850 Million Pound redress provisions in the Second Quarter. Lots of details to get through the chairman says he will adhere to the germane targets. That is the first clue on strategy. Lets shift focus and talk a little bit about what is happening in the tv arena. Lets get over to caroline. Caroline we are seeing an increase in revenue and profitability in skype. Revenue climbing to 11. 3 billion pounds for skype. This is all about television, but also getting in streaming. We are seeing operating profit 1. 4 billion pounds. 973,000 new customers have been added at sky overall. Anna thank you. For the latest on the numbers from sky is andrew griffith. Andrew, welcome. Those numbers just coming through. Tell us how the business is performing . What are you optimistic about . Andrew it has been a good performance. We have added almost one million new customers, we have gone through 12 million households in the u. K. For the first time. Germany is also performing well. That translates into the financials with revenues of 5 and operating profit of 18 of 18 . We are excited about the key things we set out, innovating connecting customers boxes, all of those are working. That is developed delivering record levels of customer loyalty. Anna tell us about the rate at which you are at a new customers . You suggest you have seen standout performance our customers not leaving the same as they did in the past . Andrew turn was below 10 , a real benchmark for us in terms of how well the business is performing. A lot of that is around the success on screen, seeing things like aim of thrones. Game of thrones. As we are able to connect customers boxes, initially in the u. K. , we are getting through over 7 million customers, we are starting to connect boxes in germany and italy that is a benefit of bringing the three skies together. Customers can get content wherever. They can catch up on demand, as well as live channels. There is more value in the description. Subscription. Anna can you react to the European Commission announcement where they said they wanted one market effectively and some of this television. They wanted u. K. , sky subscribers, and those who subscribe to other markets to take those two other parts of the continents. Is that something you see as a threat or opportunity . Andrew we have seen the opportunity moving into europe we consolidated germany italy, australia, and the u. K. We are probably one of the leading pay tv platforms. Primarily some of this is about those we buy content from, in terms of how the two contracts. If you think about us, we are able to distribute in more ways than before. Our tv service does not require a dish or satellite. It is often a payasyougo basis. We have a strong brand. We are spending the more of our own money on creative content. That is more of an opportunity, we have to work through some of these investigations. Anna you talk about the u. S. Competition, how do you see the threat from netflix . Andrew they are a strong competitor, but it is another proof point of what todays results showed, consumers are willing to spend money on great content. If you make it easy to watch you invest in original content, if you wrap all of that around with innovative platforms that drive more value, sometimes bundled Services Good value for money, then consumers who are making choices will vote with their feet. We added almost one million customers in one year. Like netflix, we are one of becoming benefiting from the trend. One of the companies benefiting from the trend. Anna do you think netflix customers would replace their service with sky . Andrew i think some would use both. Sky has more movies, you see them earlier on sky. A lot of our own original production you will not find anywhere else. Whether it is fortitude or last panthers that is the sort of thing you would choose us for. Consumers have never had so much choice. The reason we are growing is because we are offering a service they see value in. The customers we have our either buying more products or staying with us longer. Anna thank you for joining us. Also getting numbers from Taylor Wimpey announcing earnings per share at five point eight pence. That is an increase. Firsthalf revenue, 1. 3 4 billion pounds against the Previous Year of 1. 19. In terms of context they see no civic and disruption of the Housing Market. They see fouryear underlying build costs rising around 5 . We are joined by the ceo right now. Great to see you. Lets pick up on a couple of those things, we are talking about old costs rising 5 , is that abnormal . What is pushing the higher . I do not think it is a huge surprise. We expected that, we are confirming that is what we are seeing. Our industry has been growing strong we strongly. The supply chain and industry have done pretty well recruiting new people, the supply chain has opened up, it is generally in line with the overall growth. Anna you said you see no begin disruption of the Housing Market, lets explore that. We had a report yesterday that suggested demand for houses under construction is down by 27 across the industry in the Second Quarter due to higher prices perhaps putting some people off. The sales tax is putting some people off. Are you seeing weakness in that market . Not at all. That statistic stands out as a bit of an anomaly. Our sales rates are up 10 . The first half of last was a strong. Strong period. The First Quarter was particularly solid. I think we have seen confidence increase, the number of people buying has been good. Anna have you read the overall Housing Market at the moment . You mentioned some things at weighing in, how strong you see this performing . We see it as performing quite strongly, sustainably. If you look at house price increases of the last six months they have been 2. 5 , maybe 45 over the last 12. That is actually stable. That is a pretty sensible place to be. If you went back 18 months, price rise was too strong. We see strong sales rate, good customer interest, but it does not concern us too much. Anna do you see what do you think will happen when Interest Rates go up . Assuming it is in within the next year, what would your word of caution be around that . It is all about timing and signaling. We have seen more active management of Interest Rates during the cycle than we have in the past. Actually future Interest Rate could bring it forward. That is a healthy thing. You mentioned earlier mortgage relation, we are seeing that as a positive. They came in over 12 months ago its slow down the process slightly, but that was before the price growth. Price growth period. If we see changes being brought in and not coming as a shock, we can absorb these things. Anna can the government get anywhere close to its target . Can you believe the government will get close to the target it sets for building homes . When you look at planning regulation, are things changing quickly enough . Is that the areas of focus should be on . I think the government has not set a target technically. Most people would say to her thousand homes is a pretty good start. 200,000 homes is a good start. Literally today you had for the First Time Since 2008 that was sort of a peak in terms of planning, use the 200,000 planning commissions being given. It is not happen overnight the industry has to adapt, over time it will generally trend up to that number. I think they are doing the right thing. Are they doing it enough quick enough . To be honest, they are doing it as fast as they can. There does need to be patient patients. Anna thank you. We will take a short break here on countdown. Twitters a secondquarter revenue is up, why are investors not impressed . We will give you the lowdown after this short break. Anna will come back, you are watching countdown. Here in london it is 20 minutes past 7 00. Barclays reported a slight beat in secondquarter results. They reported profits of 1. 8 5 Million Pounds. Analysts say any comments by John Mcfarlane on strategy will trump any earnings progress. Total posted betterthanexpected profits in the Second Quarter. Output rose 12 . The production increase is helping total whether a crude price crash. It has led it to cut spending and costs. Peugeot earnings tripled. Europes secondbiggest carmaker sold more cars at higher prices in its home region and in asia. Lets turn our attention to the federal reserve, all eyes will be on the fmo see when it releases it policy statement at 7 00 in the evening, london time. What can we expect from the decision . We have a few leaders in new york. What was striking about her testimony last week was for the first time she said the economy needs higher Interest Rates. I think that shows that the fed is coming around. They do not like being at zero, as Stanley Fischer said, after they hiked first time, you will have an incredibly accommodative monetary policy. I think that is were the fed is, they will get off zero this year. Anna according to a bloomberg survey, people see no chance of a rise today. What would the Market Reaction look like . We were told a september liftoff is not entirely price done. Priced in. I think it is 40 price for a september rate hike, if you look at what fed Officials Say it is really a 5050 proposition. I would if the game honest reaction. Modest reaction. I would expect a volatility in prices. In my opinion, the risk is in 2016. Anna sticking with the u. S. , a very different topic it was interesting for twitter stockholders as the shares of rose and then quickly fell again on concerns of the slowing growth. Here with more is Caroline Hyde. Caroline up go the shares, up more than 11 in afterhours trading, Second Quarter results were ahead of estimates. Weve solve them pull in 61 growth. We saw them pull in 20 61 growth. Why did shares of think . Think . We suddenly sell reality biting 1 additions in user growth per month. Compare that number to the 1. 4 billion users a face book of facebook. Also no update on chief executive, castillo step down stepped down. The company has been listed but the temporary chief executive dodge questions dodged questions. Why did receiver shares rally up and then think all the way back down closing lower than 12 . We are expecting a volatile day when they open up today. What about the future, not looking rosy. They need to reach massmarket, this is both what the cfo and chief executive said. They need a marketing chief. What about the campaign without a marketing chief . That higher needs to happen. What about new products . They are trying to double down on that. They are trying to tune in on live events. It is not bringing in real users. Employee turnover we are seeing more people tending to leave. How will this ship the senate studies steadied . Facebook earnings are likely to grow. They will add it users, unlike twitter. 75 million new users is what we are expecting for this particular order quarter. Anna thank you very much. Coming up a big day for automakers, peugeot reported firsthalf earnings have more than tripled, exceeding estimates, can be w follow suit vw follow suit . We have already heard from them earlier this week about how many cars they delivered in the first half of the year, more on that story when we return. The only way to get better is to challenge yourself, and thats what were doing at xfinity. We are challenging ourselves to improve every aspect of your experience. And this includes our commitment to being on time. Every time. Thats why if were ever late for an appointment, well credit your account 20. Its our promise to you. Were doing everything we can to give you the best experience possible. Because we should fit into your life. Not the other way around. Anna welcome back youre watching countdown. Here are the stories in each know this morning. The bank posted a profit of 1. 5 billion pounds its estimate at 1. 8 billion. Any comments of strategy will trump earnings. They fark Antony Jenkins earlier this month. Fired Antony Jenkins earlier this month. The production increase is helping. The milk or maker of chemicals and plastics has sold its industry. They will receive 75 and . 25 a share through the offer. We have had breaking news out of persia this morning that need succumb from volkswagen carolina still be drawled these. Caroline it looks as though it Second Quarter has beaten in terms of sales. 56 billion euros, the estimate marja 54 billion euros. A clear beat. We are coming just shy, again just slightly ahead of analysts estimates. Results were 6 or 7 . Passenger cars, were seeing revenue breaks of up to 4 . They will remain flat for 2015. It is still managing to remain more profitable than expected, and sales are going high. Overall, delivery remains flat for the year. Anna caroline, thank you very much. Another company reporting results is the Worlds Largest paper packaging group. The report secondquarter numbers in line with estimates. With us exclusively is smurfit ceo. Gary, thank you for joining us in the studio. What do they tell us about the state of the European Business . Demand is remaining robust considering all that we saw around the greece crisis. Gary weve seen evidence of recovery for several quarters now. It is a broadbased recovery and the greek problem has continued. It was not particularly evident in business that is interfered in any significant way. We are beginning to get some pricing activity which is important in the context of our recovery. Our business is up, our margins are up we can go the second half. Anna this is been a real turnaround story has in it . Some of the decisions you made around the debt. How far in that story hardly are we . Gary the important thing is to learn from the past. We have achieved that, and we are in Capital Allocation mode now. Dividend accretion, an increase of dividends is important. Anna lets talk about mergers. Do you see yourself more as a buyer or a target . Gary we are definitely a buyer. We could spend an acquisitions without testing of a leverage levels. In the last 14 months, we spent 315 million euros, all of them integrating into our business with good growth prospects. Anna is that where your appetite and . Gary not necessarily. Now we have to know where we are currently operating. We are not adverse to doing substantial transformation if they are available. So far, we havent seen any. Has International Paper been bidding for your business . Gary there was speculation some months ago. If there had been any basis, we wouldve had to make a statement. Anna do you think your business makes an attractive target right now . Gary the important thing is that they believe businesses can run them better than the company is currently running them. I dont think they can run the better than we are running them. Anna what about with the change of management that is coming . Is that a bittersweet moment . Gary there is a time in everybodys life to move on. I think, as an investor, it is seamless, we have tony smurfit taking over. With a wide range of very professional operators that a been through the wars and back. I have great confidence in them. Anna i was the change in all the years youve been the ceo . Things now that our highpriority, in those days, things mustve changed considerably. I heard you making reference to the circular economy. All of these things, im guessing a very different complications than the ones you used to have. Gary the important thing is that people are progressing and recognizing that packaging is a huge part in marketing and consumption. People are busy, and spend less time at the supermarket shelves. Packaging, and the eye impact and someone, we are than a huge amount of work in that area. We believe the point of purchase , no one is more experience than we are. We are focused right now on the consumer. Then, in the sustainability area, we are trying to understand the economy basically means no waste at the end of the day. The lowest possible waste, we have been producing paper for packaging and holland that has almost zero waste. Anna how much do customers at the pay for that . Gary they will pay for it in terms of what it does for them. Anna it is good to have you on the program. We wish you luck with the next stage of your career. It has been a day for vw just posted earnings beating estimates. Earlier, we had some pleasure and a big day for automakers in berlin. Hans, lets start with you. With the top lines in the caroline, start with the details. Hans give a clear beat from volkswagen. Yes it was 3. 4 8 billion, were just getting through some of the actual brands. Volkswagen really wants to see that profitability margin, they are in the 2 range are lower last quarter. Their goal is 6 . Audi came in at 9. 8 profitability. Another stronge quarter from porsche. We will be looking to see what their overall sales are in china, and brazil. The forecasts will remain on target. These numbers are still scrolling through. We will just and little bit. Anna i give a much, lets get the caroline conan. She has been pouring over the details. What have we heard . Caroline it is a pretty good sense of earnings the secondlargest carmaker. Win 1. 4 2 billion euros operating income. The estimate is 29 billion euros it is come a very long way since 2013 when they were on the verge of bankruptcy. Their been slashing cuts, theyve also been increasing employee pays. Even the showroom the headquarters they will move away from these headquarters in 2017 to move to the suburbs of paris. That is the strategy. He has been slashing cuts, and signing partnerships in china. It is also benefiting from the good economy environment, especially in a recovering europe. Registrations go up, just behind the performance of volkswagen. Of course the Iranian Market, notably of the stigmatic agreement will be seeking to come back. Now they are targeting as much as 400,000 vehicles in iran by 2025. Anna talking this morning about the challenges that face the Chinese Market. Just to go back to the vw story, they lower the delivery target to flat sales from a moderate again. This seems to be something of backtracking against the previous target. They had previously forecast that a moderate increase in 2015, now theyre talking about that number being flat. We get back to hans with further analysis. Thank you both very much for the latest on the auto industry. Stay with bloomberg and stay with the theme of cars, because the president of suture when citroen will be joining us. That is a little later on. Stay with the french reporting season, the posted a betterthanexpected profit after production and refining surged almost making up for a crude price slump. Javier, good to see you. What are the Key Takeaways . Javier the incease in production, and very good result and refining almost make up for a 50 drop in prices. The same profitability it was delivering a year ago. The management of the company is really working very hard. The couple of highlights refining processes up almost 20 a year. That is thanks to the big refinery complexes in saudi arabia. Then again, going back to the middle east total is singing a concession in abu dobby abu dhabi. In summary, they integrated a big refining unit. It is really helping to wheather thed rop in prices the drop in prices. Anna is that the story of big oil so far . Javier absolutely. Weve seen a drop in refining, we did not get that is good as it was in the case of total. They are also part of big oil again, total had indicated to us that he is planning to exceed the targets. He will remain focused of 2016. Weve seen, as oil prices go back to a sixmonth low, that every oil company is talking about reducing investment. Anna reducing headcounts. Weve had some large numbers. Beer holly air javier also chevron the American Company announcing yesterday that 1500 people will he made redundant in the next year. Anna that was a surprise was that he was talking about the secondary and tertiary effects that the weaker prices will have on some of the economies that are reliant on that. Javier 100,000 people have already lost their employment. Anna we talked about how companies are cutting back on some of the cost, what about dividends . Javier dividends will absolutely stay there. They will do whatever it takes to protect the dividend. If they need to replace every paperclip in the office to save money, they will do that. Babel really they will really, whatever it takes. Anna thank you very much. Bringing us the story of big oil so far. Coming up on countdown, the focus now is on the comments from the banks chairman about the strategy. Who would give you the because after the break. Anna welcome back, you are watching countdown. Here are the stories you need to know. Bickering operating income surged from a restated 380 7 million, europes secondbiggest carmaker sold more cars at higher prices. Buyer Second Quarter earnings beat projections. Bloomberg will bestie speaking with beyers ceo in the next hour. The shanghai composite is now up around 2 . A market support in hong kong has the latest. Another move from positive to negative and all teh way back again. Things looking positive right now. Juliette unfortunately, we are about to close on the shanghai composite. It has been a really wild the day. We are looking at the markets to close high for the first time in four sessions. As you mentioned, there has been a lot of swings. Then the market was a negative territory, after lunch break, it continued to fall, never sick and will close up by about 215 . The public sentiment has flowed through. Up for the first time in six sessions on the back of that positive sentiment out of the u. S. A bit of a rebound in iron ore which rose by three quarters of 1 . A little bit of weakness in japan. Beside really swing between positive and negative territories. Reporting from the report robot maker funuc pretty flat there. Of course, we have been watching this region very closely. The index in hong kong doing quite well adding to yesterdays gains. What we have seen in the last hour or so in china is some volatility but the good gains coming through. That is up by about 4. 5 . It is, as you mentioned, certainly hard to keep up with the composite. It will close higher for the First Time Since thursday. Anna thank you very much. 7 51 here in london. A few minutes and for the European Equity trading day. That continues Jonathan Ferro is here with what to watch in a little bit more. Jonathan so many earnings to date through. The one that stands out for me is them smashing estimates. A net income from of just 2. 1 despite collapsing oil prices, that is impressive. A big performance from them, and the refining side of the business. I will be breaking that will be stuck the fed. It is decision day, perhaps you only decision to have to make is the statement. But they continue with the first rate hike since 2006 . And with a come in september . At 8 40, this is how you talk down your stock. Some Straight Talk from twitter executives. I would not be at all, we will dig through that as well. Anna thank you very much. Back at the top of the hour. John mcfarland has it he was step up the pace of costcutting at the british lender barclays. They had restructuring costs lets get some analysis of where this is going from juliet. Good have you back again. Lets have been done. Juliette overall, like you said, they will run down quickly. What is really interesting is that they are done well there in the investment banking, most of the costcutting. Anna what do we know about this ravaging . There strategy . Under Antony Jenkins, the story was about the retreating from some of the areas of investment banking. Now we have a new voice in charge. Doesnt necessarily mean we will be passing from that does it . Julia it is the macro group that did really well this year because of the volatility around greece and the eurozone. They would be looking to trim down, and focusing more Equity Capital markets. The team that did make them money is a team a lot of banks want to trim. Anna we did get a little bit of that about just how quickly you want to run down these noncore assets. Julia by 2017 he wants have the noncore filtered back into the core. Anna we are waiting for the defined a leader argueta . Arent we . Julia yes, they have struggled a lot. Anna this the first major u. K. Bank to report firstquarter results. A lot of different stories across these u. K. Banks. Julia barclays is one of the one that is left with a strong id. Who will be the left over bank in europe . That is the main question in the europe. Who will be the leading investment bank, and will it be a british bank . Anna we have a lot to digest this morning in terms of the earnings flow. We have earnings from vw, lowering their targets. They beat the estimates and started that was saying. A fascinating story and belgium, we talked about the m a race, that looked like it is going from strength to strength. We leave you with on the move. Jonathan good morning and welcome to on the move. Just moments away from the european trading. What a busy morning with that. Lets get straight to your morning brief. Oil crushes estimates, income slide just 2. 1 from a year earlier despite a crunch and prices. Stepping up the cuts, barclays the 1. 8 5 billion pounds the chairman pledges to excel amid the execution of the strategy. Twitters tock d twitter stock drops how the ceo killed off a rally after some Straight Talk. It is decision day, spinouts Interest Rates decisions. A Economist Says no lift off today, but watch for signals about september. I will be breaking that down over the next 60 minutes. Ahead of the open, futures are higher. Dax futures up also well. The to the early new Caroline Hyde. Caroline it is meant to be another green day at a 1 gain in europe and the united states. We are seeing earnings in the u. S. , that is keeping up the smiles on investors faces. In europe, the m a wave has gotten their attention and driven some optimism. China is still volatile