Transcripts For CNBC Worldwide Exchange 20240622 : compareme

The greece story would play out. We did see a significant head line in the index in the month of june coming in at 1. 074. Coming in at 1. 08 against expectation. Were looking at highs of 1. 11 against the u. S. Dollar. Lets get reaction from bill oneal from ubs Wealth Management. From the headline number bill this number looks pretty good . Yeah i think its provide something reassurance that a multidollar recovery is still under way in europe. I think the weakness of the euro posed the greek settlement that played a role here. Clearly that to be reflected in green coming through the market for the midyear as well. But i think its important that the market was to have some nasty surprises after some pmi number, purchase managing numbers, of course that did disappoint. We should point out that the ifo has said their june expectations has been revised up to 0. 121. Its also a twoweek i after the ifo. I guess the question is what does it mean for the exporters out there who have been benefitting from the weaker currency this year . Well i think its clearly important for the market. From the point of view the earnings story. The analysts are looking for evidence of organic growth. But this is important in sense of a balanced recovery against europe. You one that incorporates both the core and the periphery. And thats what weve been seeing. Its not a spectacular recovery in terms of pace but its steady and reassuring. Just when we thought the fundamentals would be driving prices. Once again, china guiding the discussion would you agree . Yes, especially china, having an impact youre seeing the influence of that in world trade as well. What weve been seeing recently is the Services Sector visavis, the manufacturing sector, doing relatively better. Thank you for that. Bill stick with us i want to get your thoughts whats happening in asia. Because heavy losses in chinas air share with the shanghai composite boasting its biggest drop since 2007. Energy stocks among the worst performing with China Oilfield Services off 10 . More live in singapore with the latest. Sharia whats the big catalyst on the downside . Well there seem to be two factor seema. One is theres a sector that seems to be suggesting that beijing is starting to step away from the market in terms of its support. And the backstop that we saw at the height of the volatility, remember in july over the course of july really especially and into june as well. So theres a asense that the government is trying to test the waters here. 4,150 was being touted as an unofficial bailout target. At that point, it seems that the government we crossed it by the way, last week in intergovernment trading. At that time trying to test the markets recovery from the lows are selfsustaining and clearly it was premature to do so. They got a hint that the government was starting to step away and we saw cataclysmic declines. And theres evidence that the economy is falling with the profitability numbers for the month of june. Contraction 0. 3 . So this reverses the expansion that we saw in the prior two months leading up to june so concerns still lingering about the state of the broader economy. Now, we really have to wait and see whether this is a continuation of the volatility. Whether there say second phase of the selling. So the course of this week is really going to be quite important. So that will be testing the markets confidence. Is this going to be the opportunity for some of the more some of the investors with a stronger appetite to get back into the market to buy some of the large caps that have been beaten down . Or is this a case once again catching a falling mark . Very quickly, the index heavyweight stock got beaten up china unicom bank of communications. The worst day for shanghai. Thank you very much. Lets get ba back to bill oneal the ubs wealth investment. How much is china a factor . Well clearly its the market and the economy. Our sense is the connection with the market with the broader limited. Youre talking about participation is 15 of households in the equity market. Its not a big issue in terms funding with corporate. Households have got Something Like 20 trillion in terms of savings. Theyre huge opposites. I think it is important, in tellers, i suppose in the manner of financing and the whole move to reform and china regulation. It really is a pothole in that story. I think, clearly from the point of view the market the concerns would be other markets whether there is liquidity again would be used as hedges if there were to be portions of trading such as in the markets recently. One question from twitter as well as over email does it get worse before it gets better when looking at the Chinese Markets . Thats a really different call. I think the backdrop in terms of the economy, i think were seeing signs of stability, improvement in the story, the infrastructure spending, some signs show its beginning to stabilize but i think you cant say its over yet. Earnings in focus today as well 3shgs Second Quarter net profit at ubs jumping 53 beating analysts expectations this as the swiss banks Wealth Management Division Posted its best q 2 results. Shares are lower amid the equities today. Lets get to carolin roth live in zurich. Hi carolin. Good morning, seema. I just looking at Goldman Sachs, they said this is a mixed result. They point out that the banking business was in line with expectations. Investment banking also in line with very strong equities if you listen to cnbc earlier this morning, he said are we benefitted from trading in china because thats where theyre very strong. So someone is benefitting from all that volatility were seeing in the Chinese Markets these days. And then of course another positive pointed out by Goldman Sachs is the very Strong Capital levels. 14. 122 under basel3. Seema, on the downside Goldman Sachs points out that the Private Banking margin actually fell. Its now at 82 basis points and we saw a miss in the Corporate Center but as you pointed out, numbers were released one day early. He talks about why it happened. We wanted to bring some transparency and also address some Incorrect Information that was reported yesterday in the swiss media. And since we were prepared to go at it we thought it was within the best interest of all stockholds to get the information out today. Clarify it for us that report cited an insider. Has any member of ubs staff been disciplined, or will they be disciplined as a result of this . And have you managed to confirm that information was actually leaked by an employee . There is no basis for coming to such a quick conclusion that the information there is coming from inside. As i mentioned, the media reports were incorrect, misleading and we thought it was sufficient to trigger release of results a year before. Well see who was responsible, if anybody was responsible at all. Or if even it was just a speculation. But i think we now move forward. Im very pleased with the results and we are keeping our focus on the next steps. So you will be investigate, i daresay, to try and identify any individual if that was indeed how the information came into the newspapers hands. Lets talk about the Second Quarter numbers then. You must be quite pleased with the net figure youve delivered to the market this morning. How representative of trading for the rest of the year will this increase have been . Well i say in the First Quarter we should multiply by four. I think the Second Quarter was more reflective of the seasonality. If you look at the profits in the first pat of the year were up 70 . Im confident we are entering the second part of the year with a good momentum. The seasonality in the Third Quarter is clearly higher. And if you look at the mac control environment and the geopolitical environment, its a challenging one. Unfortunately, weve been quite accurate in our forecast in the last ten quarters or so but im confident that we can deliver to our shareholders and our clients despite that. Sergio emergency roomeio ermotti speaking to us earlier. The ubs trading up 21. 29, up 1. 3 . You would expect with a solid report card like that today, shares are going to be trading higher above, in the maelstrom were seeing in the markets that said it simply cannot avoid that trend. And maybe a little bit of profit taking because yeartodate share, up a nice 25 , seema. Absolutely a bright spot. Carolin, thank you so much. Lets take a look at european equities. How are we faring . Right now, european stocks trading decisively lower. Stoxx down 1. 25 . The ifo economists say temporary relief in midjuly contributed to the brightening of mood. Youll see that were basically lower across the board, the xetra dax down 1 . The ftse off 0. 3 . Were seeing the Commodity Markets swell the selloff in asia that of course denting sentiment here on monday morning. Taking a look at bonds, if investors are selling equities they perhaps are buying bonds be the tenyear at 2. 5 . German tenyear at 0. 69 . The lowest since february. And a quick look at the tenyear at 1. 9. The dollar was mixed in the past week against commodities against currencies such as the aussie dollar and the canadian dollar. You can see the euro though, at a twoweek high against the u. S. Dollar after we got that better than expected ifo data. All right. Lets talk comphod eyemodities because it was a big week. Wti crude oil falling and breaking below 50 a barrel. Gold also in the lime light now down for the fifth straight week losing more than 3 in trading below 1,100 last week which is a key psychological level. And spot gold lets keep an eye on now up 5 bucks on the day. Bill oneil from ubs management still with us bill were looking at the german dax of 15 . French markets up about 18 . The ftse European Market up 0. 2 why is that . It sort of broadened in the uk against the performance, not simply down against the commodity, clearly energy as well. Those do account for 25 of the Earnings Base in the market. And earnings up 8 year to date in trade index. Its clearly less impressive because of the dollar but the euro is having an impact as well. The relevant of it is an outstanding case of valuation, the weakness in earnings has affected the weakness in the market. The npc meeting last week suggests that policymakers are becoming increasingly worried and how that could have a negative impact on gdp. Do you think that will play out this week . Well i think its an influence. Its not the only thing. The feeling at the moment its supporting, its supporting real earnings. And therefore supporting consumption. The other part of the story is is that for now, the banks seem to be more focused on leading indicators of inflation around wages. The wages productivity story is rather more significant rather than impact in terms of inflation. And its on stat for, bill which is what you can use as well are you ready . Three months from the polling date from the july mpc meeting, the effective rate has gone to 4 . Where does it go from here . Well its had pressure typically before the election. I suppose the election resolved in the way the market had had anticipated a great deal. But the big story here is the consistency, the recovery. After having a bit of a wobble this week from the uk likely to see 0. 7 in the quarter. And the question is if the boe raises rates before the fed . Were expecting it to move in september, the mpc to move in november. Two moves this year. Lastly what are you expect for the fed policy . I think this is very interesting, theres no forecast, in terms of theres no press conference. But the language will be looking for any hint theres an imminent rate hike on the way. This is the last big statement before the possibility of a september rate hike. Of course a big week. Were not only watching the volatility in china, but uk numbers. Its a busy week. Add to that earnings which, of course, is keeping things interest for us bill oneal head of ubs office. Asia markets walllow in the red. See what looms for a central bank meeting. Thats after this break. More and more, data is visual. In fact, the number of mris has increased by ten percent a year. And a radiologist might view a thousand images to find one tiny abnormality in shape, contrast or movement. Because its so challenging a Research Project is teaching ibm watson to see. In the future, it could help clinicians spot key patterns quickly and precisely. Ibm watson is working to make healthcare smarter every day. Need to hire fast . Go to ziprecruiter. Com and post your job to over one hundred of the webs leading job boards with a single click. Then simply select the best candidates from one easy to review list. And now you can use zip recruiter for free. Go to ziprecruiter. Com. Welcome back. Lets give you a rundown of what to watch this week. Today, well get durable goods number. And earnings from nor fok southern and twitter and facebook earnings will steal a spotlight later in the week. All eyes on the fed wednesday after it releases a statement after a twoday meeting with investors looking for some clues on the timing of a rate hike. One of them could be more anticipated than that is the release of Second Quarter gdp on thursday. Economists are predicting a 2. 7 rise after a contraction in last quarter. The data will also include annual revisions going back to 2012. A quick look at european. Policymakers saying restructuring debt and also saying prepare for unprecedented financial solidarity towards greece. Theres statements coming in from ecbs benoit courier. Theyre looking at what it will look like this week when it comes out at a that. Do you think that negotiations will go well this week . I think it will be tough, i think it will be tough to meet the deadline which seems to be the key talk at the moment. And to sign off on a medicalmorandum of understanding will be difficult. With the action with the set of reforms particularly with the implementation to be basically demanded of the greek parliament. Three things to remember three parts, the budget targets, the process of the reform commitment and then the debt relief. Those three elements in october are going to be keys. Clearly a huge area for dissension. There are some who say this is not enough. Including Christine Lagarde saying the bailout wont be enough to help greeces economy . Well, we dont because this seems to be again, just a moving target. What we can see theres going to be large sums of money required in terms of the banking organization. It may be that the targets are adjusted. But its really people talk about the direction of travel. Its about things like commitment of the government in athens to implement and to own the program. And were steering considerably away from that. You think its important to see debt relief measures versus maturity sanctions . Well i think its maturity sanctions. A quick word on german stocks right now, the xetra dax down 1 superiors. This after a 4 move to the downjied lastdown downside last week. Would you buy on the dip here . Yeah the favored market is germany. The valuations are appealing. And we think the economy is going strong. And in general, 13 , 14 , 10 extra. But the stronger euro perhaps, makes the german exporters less attractive . Its a stabilizer in germany. The global story, even including the picture on the emerging markets beginning to show little sign of strength as they recover in the second half of the year. And thats important. Its the final demand story in these economies not just the causation. Betting on the second half. I cant tell you how many investors say that. Bill oneal head of ubs at Wealth Management. Moving on to politics, despite a flurry of controversial comments business mogul donald trump continues to sit on top. Meanwhile, Hillary Clinton holds a Comfortable Lead in the mail. Nbcs Kristen Welker has the latest from iowa. Theres a movement going on. And its a very strong movement. Reporter donald trump known for his brash style and controversial comments is surging according to the latest nbc poll. He packs ace 7 lead own jeb bush. In i, was hes just two points behind scott walker but 44 of iowas Republican Voters view him unfavorably. That number jumps to 53 in New Hampshire. I believe in what were doing and what we have to do. Reporter and today, democratic frontrunner Hillary Clinton again tried to turn the page away from her emails and back to policies. We need to have a democratic president in the white house. Reporter but on saturday she was forced to defend the use of a private email account when she was secretary of state. Secretary clinton, doesnt the fact that were having this debate underscore the fundamental problem with using a private email server while you were secretary of state . Not at all. No, no this would be the same debate if it were the vast majority of everything i sent and received was already on the state department system. The Unclassified State Department system. Reporter the new marist poll showing the flap could be taking a poll topping bernie points by 13 in New Hampshire 20 of iowas democrat voters view her unfavorably. And that number gets even higher in New Hampshire, 23 . To what extent do you think that would hurt secretary clinton in the general election . I think republicans, it would hurt her a lot. I dont see it hurting her a lot. Reporter trump set his sights squarely on his republican challengers. Im thinking about a man who is in favor on common core a man who is weak on legislation. Jeb bush. A guy like walker who frankly in state is having tremendous reporter meanwhile, clinton ignored a chance to make a swipe at him. Do you want to comment on donald trump . He will hold talks before addressing the Wealth Management<\/a>. From the headline number bill this number looks pretty good . Yeah i think its provide something reassurance that a multidollar recovery is still under way in europe. I think the weakness of the euro posed the greek settlement that played a role here. Clearly that to be reflected in green coming through the market for the midyear as well. But i think its important that the market was to have some nasty surprises after some pmi number, purchase managing numbers, of course that did disappoint. We should point out that the ifo has said their june expectations has been revised up to 0. 121. Its also a twoweek i after the ifo. I guess the question is what does it mean for the exporters out there who have been benefitting from the weaker currency this year . Well i think its clearly important for the market. From the point of view the earnings story. The analysts are looking for evidence of organic growth. But this is important in sense of a balanced recovery against europe. You one that incorporates both the core and the periphery. And thats what weve been seeing. Its not a spectacular recovery in terms of pace but its steady and reassuring. Just when we thought the fundamentals would be driving prices. Once again, china guiding the discussion would you agree . Yes, especially china, having an impact youre seeing the influence of that in world trade as well. What weve been seeing recently is the Services Sector<\/a> visavis, the manufacturing sector, doing relatively better. Thank you for that. Bill stick with us i want to get your thoughts whats happening in asia. Because heavy losses in chinas air share with the shanghai composite boasting its biggest drop since 2007. Energy stocks among the worst performing with China Oilfield Services<\/a> off 10 . More live in singapore with the latest. Sharia whats the big catalyst on the downside . Well there seem to be two factor seema. One is theres a sector that seems to be suggesting that beijing is starting to step away from the market in terms of its support. And the backstop that we saw at the height of the volatility, remember in july over the course of july really especially and into june as well. So theres a asense that the government is trying to test the waters here. 4,150 was being touted as an unofficial bailout target. At that point, it seems that the government we crossed it by the way, last week in intergovernment trading. At that time trying to test the markets recovery from the lows are selfsustaining and clearly it was premature to do so. They got a hint that the government was starting to step away and we saw cataclysmic declines. And theres evidence that the economy is falling with the profitability numbers for the month of june. Contraction 0. 3 . So this reverses the expansion that we saw in the prior two months leading up to june so concerns still lingering about the state of the broader economy. Now, we really have to wait and see whether this is a continuation of the volatility. Whether there say second phase of the selling. So the course of this week is really going to be quite important. So that will be testing the markets confidence. Is this going to be the opportunity for some of the more some of the investors with a stronger appetite to get back into the market to buy some of the large caps that have been beaten down . Or is this a case once again catching a falling mark . Very quickly, the index heavyweight stock got beaten up china unicom bank of communications. The worst day for shanghai. Thank you very much. Lets get ba back to bill oneal the ubs wealth investment. How much is china a factor . Well clearly its the market and the economy. Our sense is the connection with the market with the broader limited. Youre talking about participation is 15 of households in the equity market. Its not a big issue in terms funding with corporate. Households have got Something Like<\/a> 20 trillion in terms of savings. Theyre huge opposites. I think it is important, in tellers, i suppose in the manner of financing and the whole move to reform and china regulation. It really is a pothole in that story. I think, clearly from the point of view the market the concerns would be other markets whether there is liquidity again would be used as hedges if there were to be portions of trading such as in the markets recently. One question from twitter as well as over email does it get worse before it gets better when looking at the Chinese Markets<\/a> . Thats a really different call. I think the backdrop in terms of the economy, i think were seeing signs of stability, improvement in the story, the infrastructure spending, some signs show its beginning to stabilize but i think you cant say its over yet. Earnings in focus today as well 3shgs Second Quarter<\/a> net profit at ubs jumping 53 beating analysts expectations this as the swiss banks Wealth Management<\/a> Division Posted<\/a> its best q 2 results. Shares are lower amid the equities today. Lets get to carolin roth live in zurich. Hi carolin. Good morning, seema. I just looking at Goldman Sachs<\/a>, they said this is a mixed result. They point out that the banking business was in line with expectations. Investment banking also in line with very strong equities if you listen to cnbc earlier this morning, he said are we benefitted from trading in china because thats where theyre very strong. So someone is benefitting from all that volatility were seeing in the Chinese Markets<\/a> these days. And then of course another positive pointed out by Goldman Sachs<\/a> is the very Strong Capital<\/a> levels. 14. 122 under basel3. Seema, on the downside Goldman Sachs<\/a> points out that the Private Banking<\/a> margin actually fell. Its now at 82 basis points and we saw a miss in the Corporate Center<\/a> but as you pointed out, numbers were released one day early. He talks about why it happened. We wanted to bring some transparency and also address some Incorrect Information<\/a> that was reported yesterday in the swiss media. And since we were prepared to go at it we thought it was within the best interest of all stockholds to get the information out today. Clarify it for us that report cited an insider. Has any member of ubs staff been disciplined, or will they be disciplined as a result of this . And have you managed to confirm that information was actually leaked by an employee . There is no basis for coming to such a quick conclusion that the information there is coming from inside. As i mentioned, the media reports were incorrect, misleading and we thought it was sufficient to trigger release of results a year before. Well see who was responsible, if anybody was responsible at all. Or if even it was just a speculation. But i think we now move forward. Im very pleased with the results and we are keeping our focus on the next steps. So you will be investigate, i daresay, to try and identify any individual if that was indeed how the information came into the newspapers hands. Lets talk about the Second Quarter<\/a> numbers then. You must be quite pleased with the net figure youve delivered to the market this morning. How representative of trading for the rest of the year will this increase have been . Well i say in the First Quarter<\/a> we should multiply by four. I think the Second Quarter<\/a> was more reflective of the seasonality. If you look at the profits in the first pat of the year were up 70 . Im confident we are entering the second part of the year with a good momentum. The seasonality in the Third Quarter<\/a> is clearly higher. And if you look at the mac control environment and the geopolitical environment, its a challenging one. Unfortunately, weve been quite accurate in our forecast in the last ten quarters or so but im confident that we can deliver to our shareholders and our clients despite that. Sergio emergency roomeio ermotti speaking to us earlier. The ubs trading up 21. 29, up 1. 3 . You would expect with a solid report card like that today, shares are going to be trading higher above, in the maelstrom were seeing in the markets that said it simply cannot avoid that trend. And maybe a little bit of profit taking because yeartodate share, up a nice 25 , seema. Absolutely a bright spot. Carolin, thank you so much. Lets take a look at european equities. How are we faring . Right now, european stocks trading decisively lower. Stoxx down 1. 25 . The ifo economists say temporary relief in midjuly contributed to the brightening of mood. Youll see that were basically lower across the board, the xetra dax down 1 . The ftse off 0. 3 . Were seeing the Commodity Markets<\/a> swell the selloff in asia that of course denting sentiment here on monday morning. Taking a look at bonds, if investors are selling equities they perhaps are buying bonds be the tenyear at 2. 5 . German tenyear at 0. 69 . The lowest since february. And a quick look at the tenyear at 1. 9. The dollar was mixed in the past week against commodities against currencies such as the aussie dollar and the canadian dollar. You can see the euro though, at a twoweek high against the u. S. Dollar after we got that better than expected ifo data. All right. Lets talk comphod eyemodities because it was a big week. Wti crude oil falling and breaking below 50 a barrel. Gold also in the lime light now down for the fifth straight week losing more than 3 in trading below 1,100 last week which is a key psychological level. And spot gold lets keep an eye on now up 5 bucks on the day. Bill oneil from ubs management still with us bill were looking at the german dax of 15 . French markets up about 18 . The ftse European Market<\/a> up 0. 2 why is that . It sort of broadened in the uk against the performance, not simply down against the commodity, clearly energy as well. Those do account for 25 of the Earnings Base<\/a> in the market. And earnings up 8 year to date in trade index. Its clearly less impressive because of the dollar but the euro is having an impact as well. The relevant of it is an outstanding case of valuation, the weakness in earnings has affected the weakness in the market. The npc meeting last week suggests that policymakers are becoming increasingly worried and how that could have a negative impact on gdp. Do you think that will play out this week . Well i think its an influence. Its not the only thing. The feeling at the moment its supporting, its supporting real earnings. And therefore supporting consumption. The other part of the story is is that for now, the banks seem to be more focused on leading indicators of inflation around wages. The wages productivity story is rather more significant rather than impact in terms of inflation. And its on stat for, bill which is what you can use as well are you ready . Three months from the polling date from the july mpc meeting, the effective rate has gone to 4 . Where does it go from here . Well its had pressure typically before the election. I suppose the election resolved in the way the market had had anticipated a great deal. But the big story here is the consistency, the recovery. After having a bit of a wobble this week from the uk likely to see 0. 7 in the quarter. And the question is if the boe raises rates before the fed . Were expecting it to move in september, the mpc to move in november. Two moves this year. Lastly what are you expect for the fed policy . I think this is very interesting, theres no forecast, in terms of theres no press conference. But the language will be looking for any hint theres an imminent rate hike on the way. This is the last big statement before the possibility of a september rate hike. Of course a big week. Were not only watching the volatility in china, but uk numbers. Its a busy week. Add to that earnings which, of course, is keeping things interest for us bill oneal head of ubs office. Asia markets walllow in the red. See what looms for a central bank meeting. Thats after this break. More and more, data is visual. In fact, the number of mris has increased by ten percent a year. And a radiologist might view a thousand images to find one tiny abnormality in shape, contrast or movement. Because its so challenging a Research Project<\/a> is teaching ibm watson to see. In the future, it could help clinicians spot key patterns quickly and precisely. Ibm watson is working to make healthcare smarter every day. Need to hire fast . Go to ziprecruiter. Com and post your job to over one hundred of the webs leading job boards with a single click. Then simply select the best candidates from one easy to review list. And now you can use zip recruiter for free. Go to ziprecruiter. Com. Welcome back. Lets give you a rundown of what to watch this week. Today, well get durable goods number. And earnings from nor fok southern and twitter and facebook earnings will steal a spotlight later in the week. All eyes on the fed wednesday after it releases a statement after a twoday meeting with investors looking for some clues on the timing of a rate hike. One of them could be more anticipated than that is the release of Second Quarter<\/a> gdp on thursday. Economists are predicting a 2. 7 rise after a contraction in last quarter. The data will also include annual revisions going back to 2012. A quick look at european. Policymakers saying restructuring debt and also saying prepare for unprecedented financial solidarity towards greece. Theres statements coming in from ecbs benoit courier. Theyre looking at what it will look like this week when it comes out at a that. Do you think that negotiations will go well this week . I think it will be tough, i think it will be tough to meet the deadline which seems to be the key talk at the moment. And to sign off on a medicalmorandum of understanding will be difficult. With the action with the set of reforms particularly with the implementation to be basically demanded of the greek parliament. Three things to remember three parts, the budget targets, the process of the reform commitment and then the debt relief. Those three elements in october are going to be keys. Clearly a huge area for dissension. There are some who say this is not enough. Including Christine Lagarde<\/a> saying the bailout wont be enough to help greeces economy . Well, we dont because this seems to be again, just a moving target. What we can see theres going to be large sums of money required in terms of the banking organization. It may be that the targets are adjusted. But its really people talk about the direction of travel. Its about things like commitment of the government in athens to implement and to own the program. And were steering considerably away from that. You think its important to see debt relief measures versus maturity sanctions . Well i think its maturity sanctions. A quick word on german stocks right now, the xetra dax down 1 superiors. This after a 4 move to the downjied lastdown downside last week. Would you buy on the dip here . Yeah the favored market is germany. The valuations are appealing. And we think the economy is going strong. And in general, 13 , 14 , 10 extra. But the stronger euro perhaps, makes the german exporters less attractive . Its a stabilizer in germany. The global story, even including the picture on the emerging markets beginning to show little sign of strength as they recover in the second half of the year. And thats important. Its the final demand story in these economies not just the causation. Betting on the second half. I cant tell you how many investors say that. Bill oneal head of ubs at Wealth Management<\/a>. Moving on to politics, despite a flurry of controversial comments business mogul donald trump continues to sit on top. Meanwhile, Hillary Clinton<\/a> holds a Comfortable Lead<\/a> in the mail. Nbcs Kristen Welker<\/a> has the latest from iowa. Theres a movement going on. And its a very strong movement. Reporter donald trump known for his brash style and controversial comments is surging according to the latest nbc poll. He packs ace 7 lead own jeb bush. In i, was hes just two points behind scott walker but 44 of iowas Republican Voters<\/a> view him unfavorably. That number jumps to 53 in New Hampshire<\/a>. I believe in what were doing and what we have to do. Reporter and today, democratic frontrunner Hillary Clinton<\/a> again tried to turn the page away from her emails and back to policies. We need to have a democratic president in the white house. Reporter but on saturday she was forced to defend the use of a private email account when she was secretary of state. Secretary clinton, doesnt the fact that were having this debate underscore the fundamental problem with using a private email server while you were secretary of state . Not at all. No, no this would be the same debate if it were the vast majority of everything i sent and received was already on the state department system. The Unclassified State Department<\/a> system. Reporter the new marist poll showing the flap could be taking a poll topping bernie points by 13 in New Hampshire<\/a> 20 of iowas democrat voters view her unfavorably. And that number gets even higher in New Hampshire<\/a>, 23 . To what extent do you think that would hurt secretary clinton in the general election . I think republicans, it would hurt her a lot. I dont see it hurting her a lot. Reporter trump set his sights squarely on his republican challengers. Im thinking about a man who is in favor on common core a man who is weak on legislation. Jeb bush. A guy like walker who frankly in state is having tremendous reporter meanwhile, clinton ignored a chance to make a swipe at him. Do you want to comment on donald trump . He will hold talks before addressing the African Union<\/a> tuesday. He told the president he needed to address his countrys human rights record. In a Point Press Conference<\/a> the u. S. President said kenya could succeed that warn bad things happen that treats states differently when theyre not doing harm. Ive been consistent all across africa on this. I believe in the principle of treating people equally under the law. And that theyre deserving of equal protection under the law. And that the state should not discriminate against people based on their sexual orientation. And i say that recognizing that there maybe people who have different religious or cultural beliefs. But the issue is how does the state operate relative to people . Still to come on Worldwide Exchange<\/a> ryanairs ceo say airlines should display each others prices. So is this the beginning to the end for comparison websites . Well discuss right after this break. Youre watching Worldwide Exchange<\/a>. Chinese stocks plummet in the biggest oneday drop in eight years. Investors left scratching their heads with more weak data. The euro hits a twoweek high on an upbeat ifo survey. But china looks for a boost to exports. Ubs gets caught up in the market despite a surprisingly huge beat in the Second Quarter<\/a> profit, the swiss bank is investigating a newspaper report that prompted to release earnings early. Fiat shares moving down in italy after u. S. Regulators slap a 105 million fine on the automaker overlapses in safety in relation to recall. Chinese stockings getting obliterated again. Shanghai composite seeing its worst day since 2007. Some were thinking, you know what, maybe the volatility is over. Over the last two weeks we have of course, seen some stability in asian markets. Shanghai deposit losing 8. 5 in todays trade. The similar story for the shanghai composite. And hang seng triple digits down by 1 . We will get that better than expected ifo number. Traders perhaps getting their cues from asia. The xetra dax down 0. 9 . French markets down 50 points. And the ftse 100 flat on the day down two points. Stocks specific news. Fiat chrysler is being fined a record 105 million by u. S. Regulators over safety lapses. Lets get out to claudia out to the line. This is the largest fine since honda motor was fined in january of this year 70 million. Now, this fine that is as you said, 105 million, is made up of 70 million in pure fine. Another 20 but they need to invest to improve how they are addressing these issues of these recalls. The recalls that are being watched here are 23 recalls that regard 11 million jeep cherokees and liberties and models ranging from 1993 to 2007. Another 15 million would be charged if they were in violation of the consent order. So they really need to move forward on the timing and how theyre handling these recalls. These recalls regarded fuel tank issues loss of steering controls. Sudden shutdowns. This, of course comes amidst a crackdown on safety. And automakers will have seen lots of recalls coming through. The slow response, the insufficient response has led to the national Highway Traffic Safety Administration<\/a> is cracking down on it and that has prompted this fine. Just to note also that friday fca also announce theyre recalling another 1. 4 million vehicles, this due to the possibility of hackers being able to take control of the vehicle. This would be the first in its kind where issues of hacking the systems within these vehicles is coming under scrutiny. So, certainly affecting the stock here this morning. We are seeing down by over 2 points. The worst here on the italian market. Were watching what kind of effect that will have long term also in regards to costs. Another stock were watching israeli pharmaceuticals, teva. Acquiring allergen for 40. 5 billion. Theyre seeing savings and teva also says upon closing the deal it will receive 33. 75 billion cash shares in teva. They hope this deal will be significantly credited to nongap earnings including doubledigit accretion in 2016. You there go confirmation there it that teva is acquiring allergan for a multibillion deal in the health care space. Shares of ryanair trading lower after with the guidance after the Irish Airline<\/a> projected 2015 profits in the upper end of the range and increasing traffic by 3 million. Joining me on the phone from dublin is stephen furlong at db stockbrokers. Stephen, this seems to be a good report but the stock is down 3 . Why do you think that is . Hi. Its early in their Financial Year<\/a> so typically, they dont tend to change or materially change their guidance at this time of year. So i think well have to wait a little longer and see how the bookings and yields are particularly in the peak summer and later on in the year. Using some of profits to improve fares could this negative affect profits Going Forward<\/a> . I think the peak summer is very important for ryanair, as you say, it looks its like going to be very good. So i think thats going to be very good for fullyear profits in that terms of winter theyre certainly going to add a lot of capacity. And grow traffic 15 . They built that growth rate from 10 to 15 . I would say thats going to put a lot of pressure on the overall fares. Shares are going down over the winter. The fares are going to be down from minus 4 to minus 9. Up 80 over the past four month, what are the catalysts here . For example theres an agm in september. And the cash generation of the company is fantastic. But in addition to that theyre going to get probably another 400 million from the airling sale. And the peak number reporting season will be in november. So thats usually a strong period for the stock. Hist to beically the stock has done very well in the back end of the year. Oil prices is supposed to be good for airlines all the airlines. The question has the recent price in energy actually going to benefit ryanair as bottom line Going Forward<\/a> . This year theyre 90 hedge at 910 which would be above the market per metric ton which is 95 a barrel. Next year they Just Announced<\/a> that theyre 70 hedged at 657. Meaning theres a 250 savings next year. They have a huge benefit in them as they go into the following year with lower oil prices. And this will be likely ahead of the market. So ryanairs Competitive Position<\/a> is going to be extremely strong as you look into next year. Whats your top pick in the airline index, stephen . For me its ryanair and longhold aeg. There you go. And trading at the top of the stocks index. The Dutch Electronics<\/a> company says the increase was driven by sales growth in its Health Care Unit<\/a> and margeal improvements in consumer and lighting business. Shares of valeo, despite a record intake of 10. 7 billion youre flows the first half of 2014. Lets get the full story with stephon in paris. Good morning, seema. The numbers are quite strong actually, 54 rise in profits in asia and the united states. Sales were boosted by huge savings in driving assistance technologies. And after they decided to raise the guidance for the vehicles and the improvement in the margins for the second half of this year better than 2. 4 reported for the first time. Thats a slight increase over the 2 margin for the last year. The forecast is based on a 2 to 3 in the global volatility of the automobile market this year. Thats based on a 4 to 5 expansion this year in europe and this year in china. Even the ceo said it was concerned about the slowdown in china. What were seeing in the market is increasing in europe. Is stable in north america. And were always concerned about china which is slowing down. Its clear that the First Quarter<\/a> was 1 up. The Second Quarter<\/a> was 3 up. And the growth number is very stable. And the performance in china, as the Company Makes<\/a> 25 of its revenue out of the Chinese Market<\/a>. A significant slowdown in this country could delay the outlook for valeo. Thats the reason why the stock is the biggest performer in the cac despite the numbers we have for the first half. Off by more than 2 . It was down more than 4 after the start of trading this morning. Society situation is improving a little bit. Stephon, thank you so much. All right. Moving on two turkish soldiers were killed and a four injured in a roadside bombing sunday in southeast turkey. This after turkish fighters bombed camps. The strikes with the peace efforts put into place with the Kurdish Party<\/a> in 2012. The white house says it welcomes turkeys efforts to fight Islamic State<\/a> with the ppk. And clashes erupted after a suicide bombing in a city that killed over 30 people and wounded 100. Police used Water Cannons<\/a> and tear gas to break up crowds. Officials believe Islamic State<\/a> was responsible. Moving on, the turkish lira faces problems. The turkish lira is one of the number of prominent currencies to significantly weaken within the last week. Lets get the forecast with the managing director of credit research. Where do you see the market here, given the instability that were seeing over the weekend . I think its on the downside definitely for the turkish lira. One managing to get the Coalition Government<\/a> the 23rd of august. After that it will be clear, i think whats going to be important, the fed hiking rates. Although i think a lot is in the price, the turkish lira is definitely one of the smaller ones in terms of volatilities. Like fed policy . Absolutely. But also in terms of the current deficit and the instability. Whats the focus of china . Shanghai deposit closing by 8. 5 . How does this volatility in the Chinese Markets<\/a> how does that impact the market if at all . Well it doesnt impact it in terms of volatility. Having said that i think its mostly relevant for commodities. I think on the whole, whats been happening in china, first of all, all the chinese want too fast too much. Right now, were in a period of investors are seeing stocks with the effects of the stocks filtering and we havent seen that yet. The aussie dollar a proxy in chinese growth. Where do you see the aussie dollar going from here . Its very difficult. Right at the moment id like to stay on the sidelines as far as dmod this commodities go. One thing, a lot is in the price both in terms of the chinese, as well as Commodity Prices<\/a> going down. At the same time its hard to get excited about commodity currency. Would you buy the chinese currency purely on the bet that the pboc will continue to buy policies stimulating chinas economy . No i think in the more striking scenario were going to see marginal increase in volatility over the next few months. I think it will be a nod to the imf that the pboc is moving towards a more flexible change. And thats important for the inclusion. What kind of reaction are you expecting from emerging market currencies once we hear from janet yellen this week . Well its a very interesting question. I think yellen has said a lot over the past couple of weeks. So i dont really anticipate that its going to provide us with fresh news over what we already know. So what we know so far is that the fed rate hike is getting close. I dont think its going to be so much of a matter of whether its going to september or december. Right now, we have to in fact have a price in for this year. So, on the back of it i just doubt that were going to see significant moves following the fmc statement on wednesday. Id also acknowledge that a lot of these currencies are no longer moving on policy but domestic news . Thats a global story. Up until the end, as we call it of the superstrong dollar rally which ended somewhere around march and april of this year. Since then specifics have moved currency. The japanese are seen as a defensive play in the currency market but today, its been moving lower. Data on Producer Prices<\/a> in japan seem to be pushing the yen even lower. What are your thoughts on the japanese yen Going Forward<\/a> . Its a very difficult one, because the yen is one of these currencies where it may do nothing for a certain period of time and then move on upwardly. As far as japan is concerned, because i think by far now, this is the most important factor for the yen Going Forward<\/a>. Im still not convinced that it will manage to hit the targets that it had set by 2016. So i still think the race for the yen to be on the upside. Thank you so much. Moving on shares in berlin entertainment suffer their biggest ever daily fall after a profit warning. This following a roller coaster crash at its uk theme park alton towers at the begins of union. Merlin is warning the costs will have an adverse effect. Down 3. 5 . Still to come on Worldwide Exchange<\/a> take your pick, greece, china, the dollar the fed. 2015 has been full of obstacles to trip up hedge funds but whats the road like ahead . Were going to discuss that. Dont go away. Value leo. Some neighbors are Energy Saving<\/a> superstars. How do you become a superstar . With pg es free Online Home Energy<\/a> checkup. In just under 5 minutes you can see how you use energy and get quick and easy tips on how to keep your monthly bill down and your Energy Saving<\/a>s up. Dont let your neighbor enjoy all the savings. Take the Free Home Energy<\/a> checkup. Honey, we need a new refrigerator. Visit pge. Com checkup and get started today. Welcome back. Teva has reported to acquire allergan for 40 billion. Its withdrawn its proposal to buy marlin. Shares in teva opening up to 6 in trade. Brent saunders will join squawk box, 6 30 a. M. Eastern. You wont want to miss it. In the meantime weve actually been receiving earnings from Teva Pharmaceutical<\/a> the numbers, the Second Quarter<\/a> revenue at 4. 97 billion. Adjusted Second Quarter<\/a> earnings of 1. 43. And of course the big news though, theyre buying allergan for that mega amount. Over 40 billion. Well see how the stock performs up 6 in premarket trade. Around deutsch b o. Rse to buy for ex for 725 million. In other news mcgraw hill financial is in talks with virginiabased Intelligence Services<\/a> snl financial. This according to reports. The deal which sources say could be announced as early as monday values the target at more than 2 billion. Snl financial is currently 60 owned by a private equity firm new mountain capital. An update on greece. Grease to be capital on the Stock Exchange<\/a> yep, as early as morning. Saying that boerse was waiting for signoff on counsel from the european bank. Capital controls are likely to be in place, as they wait for a cash injection from europe. Expect some updates this week. Meantime greeces near exit from the eurozone caused alarm from hedge funds which had exposure to the countrys debt. Our next guest says however there are few positive takeaways. Lets get it from anthony lower. Good morning, i think the big issue is the unguarantee around greece is what was holding it back. Betting high on greece wasnt a lot of highquality bet. So there wasnt a lot of exposure betting one way or other. But people are holding back their explosionosure. We need to come to a greek compromise in roughly the next four weeks. What were seeing is hedge funds taking their european exposure back up. Youve seen including last weeks selloff, the european equities still positive. So yes, theres opportunity, looking at growth in europe as opposed to the specific greek situation. So the fact that uncertainty has receded is what brings opportunity. Its receded but is greece seen as one of the top risk markets . As a headline risk definitely. But really what people are looking for is a lower uncertainty. And i think that people believe now that greece will stay part of the euro. And so theyre more comfortable putting exposures back on. When you look at the data in europe german unemployment levels Spain Unemployment<\/a> trend, Consumer Credit<\/a> those are all positive right now. So the fundamental story in europe is positive. People want to put money to work. So, this decrease in the focus on greece say good thing. Is that primarily because there is a thinking that the ecb will absorb any economic shock associated with a greek exit . Theres no clarity on that yet. Thats all to be negotiated in the coming weeks. The belief though is that europe will find a solution and muddlethrough solution, if you like extending maturities allows greece to hold off on Interest Rate<\/a> payments et cetera. Lets pivot the discussion to asia. Once again chinese stocks selling off. How much are hedge funds suffering from this recent volatility in china . So extreme volatility really. Including today, a big selloff today. Most hedge funds have lower exposure to china. Those who have been hurt the same for greece are those there are the a shares in china or the Greek Exchange<\/a> both of which closed for a period of time. In china, we actually see great opportunities especially in trading in hong kong, and Hong Kongrelated<\/a> china related names. Pes about six times in an economy thats going at 7 . Even at a lower growth the 7 00 , those are very attractive. We think if you can hold through the volatility especially if youre buying in hong kong we see Good Opportunity<\/a> as well. We wouldnt disagree with the statement from bridgewater that asia that the Chinese Market<\/a> is almost untradeable at this point so that you have to have patience of capital to live through that volatility or trade in hong kong. Its interesting you bring up valuations most say incredibly lofty valuations especially when you look at the tech sector trading at 50 times the average pe. I guess youre saying you need to look at specific sectors within china to figure out whether to get in . Absolutely. I think that global applies particularly to today. I think its being more difficult to be long in the market. Chinese equities those have all moved. European and chinese equities up 15 year to date. Dollar about 7 stronger. Year to date. To now say those are good quality is much more difficult. I think you have to pick your name so were much more in favor of relative value rather than sector picking. Anthony, pleasure to have you on. Get the hedge funds view on markets. Anthony lawler Portfolio Manager<\/a> at gam. Lets take a look at u. S. Futures this monday morning, after that negative session in asia, premarket suggesting theyre brushing off the concerns, perhaps focus more on fundamentals. Economic data as well as earnings. Were looking at dow suggesting a high of 70 points. The s p 500 up about 5. Nasdaq slightly higher on the day in premarket. European markets although we are lower across the board, despite that better than expected ifo data, a blip of green in the ftse 100. The xetra dax, keep an eye on the German Market<\/a> down about 90 point as we see the euro strengthen. Coming up on Worldwide Exchange<\/a>, the downward move on the china market tumble. After this break. Done go away. Welcome to the second hour of Worldwide Exchange<\/a>, everybody. Im seema mody. Here are your headlines. U. S. Stock set to downstairs back after the dow posted its worse week since january. But the biggest oneday drop in eight years. The deal is done teva buys allergans business for 40 billion. And fiat shares moving down in italy, after u. S. Regulators slap a record 105 million fine on the automaker over","publisher":{"@type":"Organization","name":"archive.org","logo":{"@type":"ImageObject","width":"800","height":"600","url":"\/\/ia801301.us.archive.org\/29\/items\/CNBC_20150727_080000_Worldwide_Exchange\/CNBC_20150727_080000_Worldwide_Exchange.thumbs\/CNBC_20150727_080000_Worldwide_Exchange_000001.jpg"}},"autauthor":{"@type":"Organization"},"author":{"sameAs":"archive.org","name":"archive.org"}}],"coverageEndTime":"20240629T12:35:10+00:00"}