After the Islamic Republic seizes a tanker in the strait of hormuz. Healthy growth phillips beats Sales Estimates for the Second Quarter as the ceo gives bloomberg his take on the trade war. These trade wars that are , as ave in the world strong believer in what globalization has brought to the world, i hope that we can see coming closer to each other. That will be good for the world economy. We had some outflows. If i had that back, we are actually within the target range. If i look at margins and revenues compared to the second half last year, they have substantially recovered. A very more welcome to the European Market open, everybody. European markets opening what . 28 minutes time . There or thereabouts. Futures suggesting we will be a little bit weaker at the start of the trading day. European markets expected to be a little bit weaker, apart from the 3100. I should point out, seen as a bit of an outlier, and that could very much the case in oil markets. Futures dewpoint slightly higher. A little bit of a weaker start to the european trading day. Lets talk about what is going on on the gm and. European equity markets set for a mixed to flat to negative open perhaps at the level. Markets increasingly adjusting, an assumption that 25 basis points might be as generous as the fed gets this month. We have the asian equity markets losing ground this morning, down around 1 . The Hong Kong Market weaker. We will focus on the tensions there on the streets once again a little while. We also have the japanese yen losing ground. Think we are having a little problem with our graphics this morning. Apologies for that. We are get it all sorted. Not seeing money piling into the japanese currency. Quick word on oil, oil prices up , 1. 6 higher on brent and around. 9 on tensions in the persian gulf. But thats not the only part of the story. Lets get to the markets now. A busy week ahead. Our managing editor joins us now in singapore. Very good to speak to you once more. You have been pretty bearish on equities recently. I know you have been assessing your bearishness, putting it through a bull market lens and asking yourself if you could be wrong here. What did you work out in the bowl versus their case for u. S. Equities . I was tryinghing to work out is what would drive equities higher in the short term. One of the longerterm readings that i am bearish is i have a negative perspective on the u. S. China trade war and i do accept the point that if we have a grand bargain, the outlook will be pretty positive, but thats unlikely to happen in the next couple of weeks, so on friday, everything i could see a ahead of me was a negative catalyst. Increasing our intentions, and that was even before the strait of hormuz seizure. Season started off overly positive. Much of the guidance has been lower and we are seeing estimates trend lower, so i have been trying to work out with my colleagues what it is i am missing. What would be the catalyst to buy stocks in the next to the weeks . Surprisethe fed will well, they will only surprise 50 basis points if there is a black swan negative tale event that would already be negative for equities. The ecb will cut rates but that will not do much to help the s p, so i do not think that is much of a boost. Overall, going through the popular scenarios to boost the positive is fully priced and yet, the risks are continuously underpriced. Think the pressure for stocks the next two weeks is still lower, very much so. You mentioned what the fed could do. You mentioned also with the ecb could do. For some, that could be another area of surprise this week. Draghinot think that will want to go out with a kind urrah this summary echo this a chance they might want to surprise the market, but they also might want to keep some ammunition for the september meeting. I think that is a chance they do 10 basis points this week, but that will not massively boost sentiment this week. 10 basis points on deeply negative real yields already. We have a curve which is deeply negative. This will not be a game changer. It is not like shock and ought here. Its confirmation theyre going to deliver the easing that we know is coming. I think that will provide a very shortterm boost. Will it provide much of a boost to u. S. Stocks, maybe 12 hours, 24 hours, but not anything exciting. It does not override the mounting negatives and the risks. Let me ask you our question of the day then. In europe, big events including the conservative leadership, we ministerthe new prime tomorrow in and that actually happens on wednesday, so will u. K. Assets give the new leader a honeymoon period, or will the challenges of brexit way too heavily on sentiment . We are kind of thinking we might see a relief rally tomorrow. Not necessarily for any fundamental reason we can see obvious to boost u. K. Assets, but they have been trading deeply negative for some time, and whoever the new Prime Minister is, it looks like that negative path will continue. It looks like brexit path will stay there and the fundamental negatives will not stay there. The deeply negative real yields, the leverage economy, the slow growth. Its not like there should be any particular positives this week, but this asset has been trading very negatively for some time, so there is a chance that tomorrow, investors find some reason for a bit of a relief rally that might cause a bounce for a day or two, but i think overall we will see u. K. Assets on a negative slant for the next couple of months. Thanks very much. Life managing editor joining us from singapore. You can join the debate on todays question of the day. Will we see a relief bounce as mark suggests, or will the challenges of brexit way too heavily on sentiment . Lets get the bloomberg first word news update now. U. K. Chancellor philip ifmond says he will resign Boris Johnson becomes the next Prime Minister. He says he cannot accept that members of his government except a no deal brexit. Very important the Prime Minister had those closely aligned with him in policy and i to theresa mayn before she tenders her own resignation. The results of the contest are due to be announced tomorrow. Protests continue in hong kong as a peaceful mass rally turned violent late sunday. Police fired tear gas as demonstrators targeted chinas main headquarters for the city. Earlier, hundreds of thousands biggestas hong kongs political crisis in a generation shows no signs of abating. Japanese shinzo abe has claimed victory in yesterdays upper his bloc ison, but short of the super majority needed. He is on track to be japans longest serving Prime Minister. British airways suspended flights to kylie from to cairo for seven days. The carrier says it is constantly reviewing security arrangements and will never operate a flight unless it is safe. Cairo is playing down any threats, saying there is no reason to halt flights. Global news 24 hours a day on twitter,t tictoc on powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Anna thanks very much. Oil extends gains for a second day as tensions rise in the gulf. The u. K. Demanding iran freeze free a tanker seized in the strait of hormuz. They will have coverage on Bloomberg Radio as well. This is bloomberg. Anna welcome back to the European Market open. 10 42 in london, 842 and paris or berlin. Lets not read too much into european suggestion of a sluggish start to the day. Chinas new stock venue designed for Technology Startups got off to a positive start today is all 25 stocks rose on their debut. Theled after the nasdaq in u. S. , the socalled star market is chinas latest attempt to avoid moving the latest Alibaba International exchanges. In the opening of the stan honda the Shanghai Stock Exchange live up to expectations . I was at the Stock Exchange earlier today and there was a whole frenzy of excitement, s from all 25e companies were there to ring the bell. Investors did push up the stocks of all 25 companies higher, but that was really knows the prize given the limited supply and the massive demand. A a lot of investors are choosing to spit it out this time. They are concerned about the locking valuations and that after this initial excitement there will be a big fall when somethings start to pare down, but there is little room for error here given that xi jinping had announced this initiative less than a year ago, and it has been touted by the top levels of the Chinese Government. Theres a lot of impetus for this to succeed, especially in a trade war when china is being threatened from being cut off to the Global Supply chain. What are the hoops that Chinese Companies need to jump through . This is arguably the boldest Capital Markets reform in china yet. It takes a more nasdaq style way of listing and there are the top three changes that are being limited. Number one, it is taking a registration listing profits, which gets rid of a lot of the opaque regulations from before. It was a very cumbersome process to list on the other exchanges. Second, it allows Unprofitable Companies to list. This is a big deal in that a lot of these innovations are. Nprofitable companies this is a bid to get the next alibaba or tencent to list at home, not to go to new york or hong kong. It also gives the mystic investors a chance to experience the success of their Homegrown Technology giants. The issue has not been a lack of Technology Companies in china to list. What has been missing before is to have a market with the regulatory structure that it will allow companies with a financiald different profile to list. Thanks very much for the update. Selina wang joining us there. Lets get a Bloomberg Business flash. A Bridgewater Associates flagship has lost 4. 9 in the first half of the year according to the financial times. It is one of the funds worst performances in two decades. Global stocks and bonds markets rebounded on hopes of looser monetary policy. Shares of asahi falling the most in more than a year after the an 11maker unveiled billion dollar deal to buy a be and in that australian inbevions ab and australian operations. Signaledlators have they are on the verge of approving the merger of sprint foxtmobile according to business. It says there could be a settlement announcement as soon as wednesday that will give us more details on the consensus agreed as part of the deal. His include asset sales to create a new wireless network. Avengers end game has toppled avatar as the highest grossing film of all time. Mojo, it to box office only ranks 16th if we factor in inflation. The top spot in that ranking is still held by 1939s gone with the wind. Anna thank you very much. Extended gains as tensions in the persian gulf remain elevated. The u. K. Has demanded the Immediate Release of the tanker which was seized by iran in the strait of hormuz friday. Later, british Prime Minister theresa may is leading a meeting to discuss shipping in the gulf. Am joined by our reporter for middle east energy markets. Great to have you on. What is the latest on the situation in the gulf now and how is that supporting prices. Thise prices elevated 1. 5 morning. Good morning. Is still ongoing. It has not been resolved yet. The tanker was taken on thursday on friday, excuse me, so we had already some impact on prices for or the close friday, but throughout the weekend here hashe gulf, the situation extracted. The two sides have traded arms. We saw some footage of the vessel in port the iranian flag flying. Ando not have a resolution that is contrary to into the tensions. U. K. Officials did come out saying they hope to deescalate this. We are waiting to see what the next step is going to be. Is this going to be a continued situation whereby iranians hold that it is tanker and whereby the british hold an iranian tanker in gibraltar, custody of that tanker by authorities suspended for another roughly 30 days last week . That potentially could continue for a little bit longer. The tanker that was seized off gibraltar, you know, thought to be taking iranian oil to syria. He iranians deny that, of course. Try to iran doing to find markets for its oil . In the midst of sanctions from the u. S. And others, this is proving very difficult for them. Yeah, i mean were watching the tankers move largely to the east. Obviously, we have the one that went to gibraltar, going to syria, but we are seeing tankers enter in port in china. From our story colleagues in china that there is bonded storage. That means tanks that have not entered yet into the chinese system where iran is storing its crude oil that could be positioned to sell to other customers in asia should to be interruptions or should there be a move in the sanctions regime, or that could be sold into china. We are seeing these tankers going into china and, again, that is under the risk of u. S. Chinese buyersld take that oil and should they have assets the u. S. Could attempt to seize or take through sanctions, again, show those chinese take that iranian oil, but the iranians are not sitting still. They are shipping that oil and trying to get into markets. Anna thank you very much. Bloombergs middle east reporter. We are minutes away from the market opening in europe. Up next, we will look at the stocks to watch at the open as china helps drive demand for scanners and other hospital equivalent. We will talk blooming asian markets. Will have the start of the European Equity trading day, and of course, the market opened in eight minutes and 45 seconds time. This is bloomberg. Anna welcome back. Six minutes to go until the start of equity trading. Lets get around to the newsroom and get to our stocks to watch team. Phillipsering siemens, and julius baer. Patrick, lets come to you first. Sort of an inflow story or the pace of inflows that seems to be dominating, sinking here. What is the latest . Good morning, yes. Julius baer reporting firsthalf earnings today at a think it will be difficult even for the most optimistic of observers optimistic in of observers to say that they have been fantastic results. Relationship managers are the bankers responsible for bringing in even more new money. And to his tenure judge and a priority will be reigniting some of that growth for the next person in charge. Anna we have numbers out of phillips. Talk of business in china. They reported orderly sales on a comparable basis. Of around 6. 1 compared with an average estimate of around 4. 5 percent. Those regions are key regions between china and europe. It comes as the Company Recently launched a wide range of new Consumer Health products and also upgraded its Hospital Business anna ok, we will watch that one. Siemens . The ceo taking aim at president trump, saying the man who owns the most Important Office in the world he says is turning into the face of racism and exclusion. We have yet to see what trump has to say. That is it. We will have these stocks opening up at the end of the other side of the break. This is bloomberg. Anna a minute to go until the start of cash equity trading for this first day of the week. Good morning, everybody. This is the European Market open. We have been down essentially. 5 . New stocks doing well in the star market it seems in china, at overall nervousness around host of factors and a sort of dawning realization that maybe the fed is only going to give 25 basis points. The pound certainly range found this morning, but definitely worth keeping an eye on. We are asking if the new Prime Minister is going to get any kind of honeymoon swoon for u. K. Assets. This is the yield on the u. S. 10year. Pointingres tentatively higher, but really theres not much in it. Fairly flat for u. S. Futures and european futures also pretty flat at the start of trade. Perhaps we will see some divergence, between what is going on in london and what happens elsewhere on the continent. European equity markets getting started, getting under way for their first trading day of the week. Were expecting to see that divergence between the u. K. And the other big markets. Part of that has to do with oil prices. Oil prices on the rise up by more than 1 . Theuse of tensions in strait of hormuz, because of the tensions between iran and the u. K. That pushes up some of the oil majors and that might be what we see this morning. The opening fairly flat. The French Market not far behind, for the same reason, fairly flat. Maybe the german markets might be where we see plans for oil. Interesting to see the japanese currency on a sled today, down by. 2 . The negativity in asia not spilling into comedy markets it would seem. Things from a sector perspective and what kind of clues do we get . We are really very mixed. Financials broadly read but then red. H care also broadly energy being a real standout mover to the upside. Mover to a standout the upside, partly why we were expected to see the london market outperform, but it does not really. Lets have a look at what is going on on the individual movers and we can see one of the biggest movers to the upside is phillips. Leading mover, in fact, up by 2. 2 . We heard earlier from the ceo giving thoughts on global trade and our headlines and indeed the story out of china with demand for health equipment. Phillips littering numbers that overall were better than estimated. Update by one of the brokers. Julius baer also on the rise. Better than estimated numbers in terms of profit. Net inflows, a topic of concern, topic of conversation. We will get more on that. Lets move to the downside. Not a great deal of news flow surrounding some of these companies, just looking through the list. Thats what weve got. The European Equity markets. Down, 333,of stocks so fairly evenly split gainers and losers. I