Turmoil in Hong Kong Hits the swiss watchmakers first half sales. Chipmakers gain ground as Dialog Semiconductor raises its guidance and asml forecasts solid growth for the rest of the year good morning top of the hour on street signs. Lets go over some price action weve had over the last 24 hours ending with the wall street moves yesterday. What we saw on wall street is u. S. Equities slipped for the first session in four days the dow ending about 23 points lower. A tenth of a percentage point. A fraction weaker as we get into the heart of the earnings season the drops were bigger for the s p and nasdaq, but still about a third and a fourth of a percentage point the focus has been on earnings season with some of the key banks reporting yesterday. Goldman sachs, jpmorgan, wells fargo looking head we also get bank of america one of the ones you want to watch out for. As we were talking about, the focus is back on trade more commentary out of the u. S. President suggesting that they could look to impose more tariffs on china thats weighed on asian equities overnight. In europe the picture is in the red. Ftse 100 trading down by a quarter percentage point yesterday the ftse was the outperformer. Yesterday the theme in the uk was about that move in the pound. The pound briefly dipped below 1. 24, inverse correlation to the ftse 100 that helped give the ftse 100 momentum yesterday today the inverse is happening ftse 100 is trading weaker in a half hours time we get inflation data watch out for that after strong wage data. Xetra dax below the flat line. Cac 40 also weaker ftse mib just above. We are also getting into the heart of earnings season here in europe today is a heavy day, but in terms of the break down, oil and gas is trading right at the bottom down 1. 2 . We are continuing to see drops on the spot price. Tell l telecoms, were focussed on ericsson this morning. Thats a name dragging down that sector banks down 0. 41 one in particular is swedbank, not able to put Money Laundering concerns behind them at the top, technology with some key names were looking at i want to give you a closer look at a couple semiconductor names. Starting with Dialog Semiconductor. They raised their guidance they said Second Quarter operating profit will be higher than expected thanks to stronger revenue and gains from its asset transfer deal with apple dialog shares trading 3. 3 higher asml reported an 18 fall in quarterly net profit and forecasts lower than expected sales for q3 amid turbulence in the Semiconductor Market the dutch chipmaker maintained its fullyear guidance and says it still expects 2019 will be a growth year. Asml shares trading higher to the tune of 3. 3 markets taking confidence in the fact they reiterated that guidance shifting gears to the watchmaking space. Profit at swatch fell 11 in the first half as political turbulence in Hong Kong Hit sales. The swiss watchmaker says they expect strong growth in the second half due to demand in its key markets. Swatch is trading at the top of the stoxx 600 this morning very positive reaction to those results. We had a chance to speak he to the ceo earlier on on squawk box. He weighed in on the situation in hong kong, the biggest export market for swiss watches we sell double digit liess. You have less people coming to hong kong, less Chinese People coming to hong kong, so consumption is lower tats n our brands are well dropped and represented in mainland china. So we compensate this through sales in mainland china. The only little problem is that in hong kong you have better margins. You make more profits. There are no taxes so thats the little thing that makes it a little bit more sour. Otherwise, okay, a little bit of impact, but this will not make any big, big noise for the second half of the year for us Bruno Lemaire called on g7 countries to find an International Solution to taxation he made the comments in paris as he welcomed finance minute centers and central bankers from g7 countries washington and paris are engaged in a spat over tax after french senators approved a bill that will see a 3 tax levied on large tex firms that do business in france. Steve joins us live from france, on the outskirts of paris. I had a look at the g7 program it looks like this year the theme is all about Inclusive Capitalism where does digital taxation fall into that. It is the truth of the matter is, were here about 30 odd minutes north of paris its a stunning location this fairer capitalism tag line is very important to face populism down with something new, an alternative and bring people in. Thats not the key issue here. Theres a couple of major issues one is the rise of global protectionism. And the creaking architecture, which is governed europe and the world for the last 75 years. It was 75 years ago as of the 22nd of this month that the Bretton Woods agreement was announced that has been the role model for global governance. What is replacing it and do we have Something Else which is more inclusive, especially of those emerging nations such as china and india who are not even part of the g7 lemaire addressed this last night. Today Bretton Woods is contested by the two major world powers, by the u. S. And by china on a different matter, but this comes from the two major world powers isnt that interesting . From within the u. S. And from without china, g7 is under a lot of pressure. You have to say is this the right body to make those global decisions . Should it be g20 or is g20 too big and unwealdy as well . Theres a lot of question marks about where we go forward. Every time a country tries to do something unilaterally it has a huge Ripple Effect and ramifications. I saw jay powell strolling along towards the castle here. He made the point last night in paris that every time the fed does everything, it has enormous Ripple Effects for the rest of the world. Joumanna you know about that global dollar denominated debt, so the ramifications coming from dollars moved is enormous. Going back to clear and present dangers, a salacious spat going on, everybody likes a spat, mr. Mnuchin and mr. Lemaire are due to meet here this morning to iron out some crinkles and the fact that this tax the french are thinking about bringing in for the global internet, Technology Companies as well, will that disproportion naturalnadisproportionatel affect the u. S. Companies . Well, yes. Lets hear what lemaire said about that the u. S. Are one of our closest allies they will remain one of our closest allies but they are ready to use sanctions against france instead of trying to sort out an issue through discussion and cooperation. Our view is that it would be far more preferable to sort out that kind of difference through discussion and cooperation instead of opening a 301 section and threatening the use of tariffs. That was the host of this meeting, Bruno Lemaire talking about the spat about taxation on Technology Companies and would it be wrong of me to suggest that basically pressure on governments around the world to find revenue raising opportunities has never been more paramount with the huge amount of debts around would they be looking at the Technology Sector as a cash cow as well . Everybody wants a little slice of that pie, dont they . So wherever that money goes home to be churned into buybacks on wall street of whether some of that money stays in paris or goes into the coffers of the united states, thats one of the big battles that people dont quite put it into those terms. Everyone wants a slice of the pie. It will be interesting. We had a guest yesterday on the show who said it will be impossible to get an oecd level solution without the u. S. Coming on board it will be crucial to see what mr. Mnuchin has to say as the g7 meetings go on thanks, steve. Thats steve live in paris ursula von der leyen is set to become the first female president of the European Commission after she received 52 of support from meps the yooutgoing German Defense minister called the job a big responsibility and vowed to work for a united europe. After her win, von der leyen said it was important to preserve the proeuropean Center Ground lets talk about this more i want to bring in the chief economist from barenburg lets start off by talking about her mandate. She secured 383 votes, thats much less than her predecessor, juncker got at the time. Many people are saying she had to rely on some of the nonmainstream parties to get over the line. What sort of implications will they have on her mandated in the future of course it was a secret ballot, so we dont know who voted her into office. She probably received almost all her support from the mainstream factions the reason that the greens mostly did not vote in her favor has little to do with policies but the process and how she was nominated. So i think over time, when the discussion is about issues rather than about the process, how she was nominated, that the greens will come on board so that the four big mainstream groups, center right, center left, liberals and the greens will Work Together so that they will not have to make serious concessions to the populists on the left and the right to pursue policies was interesting in the speech she gave before the vote, they specifically gave ambitious targets on c o 2 reduction plans, all of this targeted at the greens and the more leftist parties and in the end the socialist party did in theory buy into her nomination. At the end of the day, if she cant deliver on those particular items of agenda that she set forward, the populists and the nonmainstream parties will be quick to attack her. The nonmainstream parties will be quick to attack anybody and thats a given we dont have to take much care of that issue. The most interesting thing about her speech yesterday, it came from a conservative german woman. Angela merkel has never espoused these ambitious targets for Climate Change management. She never espoused this european unemployment reinsurance scheme. Of course the president of the European Commission does not have very much power in europe, but the fact that these ideas are now promoted by a conservative german woman with high office could actually help the german conservatives to take the hurdle and start endorsing some of these ideas. In that sense her speech yesterday may make a difference in the european policy discussion and move europe a little bit forward in addition to the agenda item set forth on Climate Change, she said she would interpret fiscal roles with full flexibility. Italy comes to mind rite away. What are the chances that she actually delivers on this pledge to exert a much more flexible approach to fiscal policy . The eu has already been pretty flexible in its dealings with france and italy over the years. I take it as an attempt to diffuse the potential conflict with italy but of course it will only be diffused if italy also plays along. In the past, last december, this june, italy backed down somewhat on its fiscal plans. I think they have said if italy continues to back down occasionally the Eu Commission will also be flexible to avoid a big confrontation, which would cost everybody and especially italy dearly certainly a question that will be weighing on peoples minds in the next few months as we get to the draft budget from italy. Thank you very much for joining us coming up, we get right into the heart of earnings season Norwegian OilServices ProviderAker Solutions beats forecasts in the Second Quarter. We speak to the ceo right after the break. In a storm devastated area. A family pulled up. It was a mom and her kids. Everything they had had been washed away. 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Welcome back ericsson has reported Second Quarter operating profit in line with estimates and said it is on track to meet its 2020 targets, disappointing some analysts who expected the company to raise its guidance ericssons Networks Business saw an 11 rise in sales year over year due to strength in the 5g unit the ceo underlined the importance of the technology we see very Strong Demand for 5g its the mobile technology has been the fastest gaining technology ever. 5g is the fastest scaling mobile technology its happening we see great demand in north america as well as northeast asia thats really where the First Networks were rolled out we see very good momentum in that business. Its helping our growth quite clearly. Thats a key driver for our growth we also see good demand in australia. Were starting to see europe emerging good demand in the middle east as well for 5g 5g is not the buzzword anymore fshg it but its happening in reality. Swedbank set stricter financial targets amid ongoing fallout from a Money Laundering scandal. The swedish lender lowered its dividend policy from 75 to 50 of annual profit in a bid to strengthen its capital position. The Bank ReportedSecond Quarter net profit above forecast but warped multiple u. S. Authorities are still conducting investigations that could take years to conclude. And Aker Solutions has reported a better than expected rise in Second Quarter net profit and revenue as the oil Services Provider said they continue to see high tendering activity in key markets. They also backed its fullyear earnings outlook adding that the oil Services Market remains competitive. I want to bring in luis araujo, the ceo of Aker Solutions. Your Second Quarter seems to be stronger than the expectation was anticipating i want to drill into the details. From what i can see, while your revenues are higher, your order intake is actually lower than where it was a year ago. On a forward looking basis that isnt very prom missinising. Good morning. Thanks for having me again this morning. Yes. We had a very strong execution in the quarter solid financial performance. We have a high tendering activity so i think the order intake could have been better, but it was stronger than expected for this time of year. And considering the orders we have are usually a bit lower we have 55 billion in order intakes, order tendering now so we expect that to be awarded in the second half, which will support our 2020 execution now, can we talk about margins here i see at a headline level margins are up significantly from a year ago. When you exclude the new ifrs adjustments, margins were below where they were a year ago give us a bit of color around what youre seeing on an underlying basis for margins and what youre expecting for the second half of the year. Okay. Iit is actually remarkable that we have stable margins, that was a reflection of our strong focus on cost and execution. I think margins are stable thats very good considering the competitiveness of the oil and gas markets. We have quite a lot of Spare Capacity through the downturn. We have won contracts which were challenging in terms of price because of the market. We are delivering well on those contracts. I think were proud what my team and our execution are doing during the time. I want to talk about something very, very recent. Last week you announced you made an Oil Discovery off norway. Can you talk to us about the potential there and how much you could be looking to extract . Okay. I think the company who found that is aker dp, but not Aker Solutions. Thats the operator, were the contractor understood. I do want to talk about another company you do have, thats an exploration startup in ghana about six months ago you had submitted plans to ipo that unit where do we stand on that now . Again, the company youre referring to is aker energy, thats partially owned by the same Aker Solutions, but, y they had an interesting finding in ghana. They are progressing to file the pdo, the development plan. So we are working, of course, very close with that client. Perhaps we can talk about the outlook for oil services you have seen some pressure on prices how do you see that pressure developing over the rest of the year i think that in oil and gas, activity has increased so some capacity has been taken. In some areas, and i actually emphasized the poorer markets, theres some variables so theres strong competition there. But we expect prices to go up. Thats normal in any market. We expect prices to recover. Again, in our case, we are not waiting for that we will continue focussing our cost base, and we have announced we will reduce our cost base by 5 per year. We achieved 20 in les