Customer. And sell them straight to the customer. A decade after the financial crisis, is the world ready to be taken off of financial and support . This is bloomberg surveillance and im Francine Lacqua in london. We go to a suburban paris, where six people have been hurt after a car rammed into them. Police are still searching for the driver and the car. This is according to police reports. Place aftere sentinel operation since n was declared to remain until it is no longer useful. This occurred in the northwestern suburb of levall ois. We will keep an eye on that. On to geopolitics and the impact on the market. We see a very clear movement into havens. This is what we are seeing the goldyen gaining on the tensions in north korea. European stocks, slumping following declines across most of asia. The vix is up. Does get straight to the bloomberg first word news. Reporter the South African rand has led declines among major currencies after president jacob zuma survived another bid to oust him, crushing the prospect of reviving the countrys economy. He has been mired in weighed on investor minds. A commanding lead in the countrys president ial elections. According to independent electoral data, he leads the former Prime Minister by 55 to 44 with more than 80 of the votes counted. He failed on three previous attempts to win the presidency. Chinas Producer Price gains held steady. The Producer Price index rose 5. 5 in july, just shy of the economist estimates. Demand remained resilient. At the same time, the Consumer Price index increased 1. 4 , way below the government feeling of 3 . Oil has extended declines for a third day in speculation that the protected game in u. S. Ops profitsl offset u. S. Will offset. The meeting in abu dhabi came after several nations faltered in their pledges to reduce output. Disney has outlined plans to sell some of the premier content directly to consumers online, starting next year. The Anderton Company will offer animated films, including with to pay providers, like comcast. Keylix is moving a supplier. My guess is the distributors will look at this more as a threat than anything else. Its not intended to be that. We are reacting to marketplace conditions and taking advantage of the quality of our brand, the passion of the project we create and the technology that enables us to reach consumers directly. Reporter global news 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries around the world. Im taylor riggs. This is bloomberg. Francine thank you, taylor. North korea is examining a plan to fire missiles at a u. S. Military base on the Pacific Island of guam. That is according to state media. Apologies, its obvious. It is august. Trump ratcheted up his threat s to an on president ial level. North korea best not make any more threats to the United States. They will be met with fire and fury like the world has never seen. Francine will those comments cause volatility to spike . The korean yuan we can buy the most since march and asian equities slid. Peter. Et the latest from ,lso joining us this hour Geraldine Sundstrom. What do you know about what north korea will do next . They telegraphed that they will do something, but we dont know what that might be. They talked about launching a missile that would head toward guam, where the u. S. Military base is, and whereb1 strategic bombers flew out of ended a fly south korea. Beyond that, not very specific, very similar to Donald Trumps comments of fire and fury. We do not know what he means by that, nor does north korea. North korea has responded with a very unspecified threat of a very similar line that if there is any kind of preventative attack by the u. S. , in their words, they will be merciless annihilation of the u. S. Francine peter, who is the right person to deescalate . Thes these tensions . Is it china, another country . China has most of the economic leverage, most of the trade with north korea is with china. They might have the most control over the situation. As to how they will respond is not clear. Thats the reason why trump is probably pushing or prodding china more than any other country at the moment. Francine it is having quite a lot of impact, first of all, on the currency. Were looking at a chart looking at the credit default swaps and the price of koreans bond protection has risen. It is not the huge rise that you might have expected. What is the modod like out there . Were sose the comments unclear, they rattled the market, but not to the extent that other news events here have had. Tehe kind of provocation, the rhetoric we hear, both on Donald Trumps side and north korea, is similar to what south korea has heard over the many years. The allusion to fire. Sea of fire is the common term north korea uses when it talks about making threats against the u. S. And south korea. Very few people here are rattled. The markets were somewhat because they could not figure out what the heck donald trump was talking about when he said there would be fire and fury. Francine it does seem like it is a little bit business as usual. Little bit of a risk off mood, but nothing huge. How much is it that the market does not know how to rand, and how much is it that they dont find it concerning . North korea has been playing these games for a number of years. The nature of the fed has changed in the last couple of months. Trump also, in his reaction function, is something new for all of us. In the past, the strategy was deny and neglect. We always did pretty well with that. Now, given the nature of the stress, and now also that the players are new, it makes the situation a little bit unusual. Minor events like this, it is very hard to trade, very hard to have a position for this. We need to look at how much korean risk you have in your portfolio. Safe havens are always good to have in your portfolio. Francine are you concerned that short positions in the vix futures are at a record . What does this tell us about the rhetoric . On the one side we look at Economic Data globally and we have very good growth, the best we have had in a number of years. Bullisha relatively central bank and there does not seem to be a recession around the corner. At this point in the cycle, typically volatility is very low. On the other hand, you have the Political Risk and the fact that asset valuations are stressed. We are between a rock and a hard place. We have erratic moves. Volatility eventually has only one way to go, up. The problem is the timing. Volatility has been a costly position in the last few years. Francine peter, we put out a story today saying that the finance Ministry Official told reporters by phone that the south korean government is watching the markets closely. Is this suggesting that they could intervene . Definitely, think that is the suggestion, that they would do something to step in. This is a common comment that is made every time north korea makes a provocative mood. This time it was Donald Trumps comments. That was very unusual. Thats the reason why they had that kind of response. But so far, the markets have indicated there was no need for any type of intervention or some type of action from the government. Francine peter, thank you very much and Geraldine Sundstrom stays with us. Stay with bloomberg surveillance. Plenty coming up, including jacobs them a narrowly including jacob zuma narrowly surviving a ano contest vote. And disney cuts out the with then as it changes t digital world. Francine this is bloomberg surveillance. Lets get straight to the Bloomberg Business flash. Reporter eon has underlined the profit outlook and the plans to boost investment. Germanys Largest Renewable Energy generator says the standard Debt Reduction will allow more spending. The share prices rose more than 30 this year, making it the fourth best performer in the dax. We speak to the companys cfo in half an hour. It gained from the disposal of the Private Banking assets. Net income rose to 960 million euros, beating estimates. The bank booked a euro gain after completing the sales of its asian and middle east wealth operations. Secondquarter earnings beat analyst estimates as sales improved with inflation returning to the u. S. The Company Reported an increase of 34 and underlying operating euros,to 626 million beating estimates. That is your Bloomberg Business flash. Francine . Francine the South African president , jacob zuma, has narrowly survived a no contest motion in parliament. Party members cheered as the motion was defeated, 198 votes to 177. The South African rand strengthened against the dollar against the vote, but lost ground after the victory of the 75yearold president. We are now joined from johannesburg. What does the closeness of the vote actually tell us about the fragility of the zuma presidency . Well, it is certainly waning. Ever since 2015, we have seen numerous motions of no confidence. As a whole, we have seen eight against the president , all unsuccessful, but this is the closest we have seen between the motion for and against. As you said, 198 to 177. The Ruling African National congress has 249 members in parliament and only 198 voted in favor of keeping the president in power, clearly with an his own ranks there is a lot of weakness. The confidence in his presidency is not the level it should be. The Approval Ratings are certainly much lower than they should be. Francine could we see another attempt to oust the president , or is that it . Know, you certainly could. Remember what they say about cats, they do have nine lives. Of course, we dont know that for sure. But opposition members of parliament have said they will continue to go to the court to lay out impeachment proceedings. They do believe the corruption charges against the president , the fact that he frivolously spent millions on his homestead south of the country means that he certainly is not respecting the country. He has not allowed the country to grow at the levels it should. We are in a recession and have been downgraded to noninvestment grade as well. Francine thank you. Still with us, Geraldine Sundstrom, Portfolio Manager at pimco europe. When you look at south africa, does it mean investors will be more cautious, or is it a done deal . President zuma stays until he retires in 2019 . Might be another chance for him going away earlier in december. Then again, the situation is, who will succeed him . This is the question everybody wishes they had the answer to. There are two obvious candidates to the succession. One is the Deputy President , who would be market friendly, who has been pretty vocal and would lead to a rally of South African assets. The other candidate is his exwife, which would mean the influence of zuma would continue, even though he is not the president anymore. I suppose the question of the succession is really what we would want to know because south africa is, after all, a country that has significant structural issues on the fiscal side. A lot needs to be done for this country to perform. And the right politics is necessary. Francine what does this mean for investors . Do you have any portfolios in there . Im looking at this is the real deal for the 10 year. You could also look at volatility, charting the rand. How do you play it . At the moment, not much of a view when it comes to south africa. When it comes to pimco,a neutral view. Rate cuts are already priced in. Francine Geraldine Sundstrom stays with us. Up next, mickey is on the move. Bob iger tells us why he is ready to pull disney from netflix. Francine this is bloomberg surveillance. Disney is cutting out the middleman, outlining plans to offer films and tv shows directly to viewers online, sidestepping partners such as netflix and comcast. Bob iger explained his plans to bloomberg. My guess is distributors will look at this as a threat. It is not intended to be that. We are reacting to marketplace conditions and we are taking advantage of the quality of our brand, the passion in the product we create and the technology that enables us to reach consumers directly. If you look at disney businesses , by the way, except for the themepark business, virtually all of our products touch the consumers through thirdparty distributors, everything from bigbox retailers to the Motion Picture theaters and i could go on and on. This is an opportunity for us to reach the consumer directly, an important step for the company in terms of growth. Reporter help me make sure i understand this correctly. If i sign up for this app the moment it is available, it is available early 2018 . Yes. Its the espn app. Reporter but i will not get all of the programming unless i order through my Cable Provider . That is correct. There is one app that exists today. You can watch the linear channels on that app. This gives you the opportunity to buy access to the other 10,000 live events with this so scratch and, with subscription, which should be very userfriendly, as far as i can tell. I guess you will predict you can watch the linear channels in a similar fashion, but we dont have plans to do that right now. We will watch the marketplace and see how it revolves. Reporter is this the beginning of the end for the bundle . I think that is a little bit too strong. I dont think it is the beginning of the end. We have seen erosion of the bundle. But no, first of all, it is still highly profitable. Secondly, it is still a good consumer proposition. There have been incursions on the bundle, whether it is new providers, youtube, hulu, a couple of them. We are an owner of hulu, so we know about that. There is more competition to reach viewers with multichannel services. I think it represents a continued shift in Consumer Behavior and the opportunity that Technology Provides us. Francine up next, the inflation situation. Will the numbers out of the u. S. Ease the fed . Will the fed breakeven . This is bloomberg. Who knew that phones would start doing everything . Entertaining us, getting us back on track and finding us dates. Phones really have changed. So why hasnt the way we pay for them . Introducing xfinity mobile. You only pay for data and can easily switch between pay per gig and unlimited. No one else lets you do that. See how much you can save when you choose by the gig or unlimited. Call or go to xfinitymobile. Com. Xfinity mobile. Its a new kind of network, designed to save you money. Francine this is bloomberg surveillance. Lets get straight to the bloomberg first word news. Heres taylor riggs. Taylor north korea is examining a plan to fire a missile toward the u. S. Military base on guam according to state media. President trump ratcheted up his rhetoric to an unprecedented level, warning the regime will face a devastating military strike if it continues threatening america. North korea best not make any more threats to the United States. They will be met with fire and fury, like the world has never seen. He has been very threatening, beyond a normal statement. Taylor in france, the mayor of the paris suburb says an incident in which a car rammed into an antiterrorism officer was deliberate. Police say they are still searching for the driver and car. Earlier, a Police Spokesman said six people were injured. The South African rand has led declines among major currencies after president jacob zuma survived another bid to oust him, reviving the countrys economy. Zumas will has been mired in corruption and mismanagement that has weighed on investor sent the economy into recession. Disney has outlined plans to sell some of its content directly to consumers online. The Worlds LargestEntertainment Company sent the y into recession. Disney has will offer animated films, sidestepping partners from netflix to comcast and directv. Disney shares fell in extended trading, as did netflix. My guess is the distributors will look at this more as a threat than anything else. It is not intended to be that. We are reacting to marketplace conditions. Taylor global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. Im taylor riggs. This is bloomberg. Francine thank you so much. Investors are looking to fridays u. S. Inflation numbers with bated breath. So our officials at the federal reserve, where the plan for three rate hikes in 2017 looks dead as the bank struggles with persistently low inflation. The market sees a 42 chance of another hike before the year is out. Still with us, Geraldine Sundstrom at kimco. If you get inflation right, i guess you get all your trades right. Asset managers are betting this way. Which way are you betting . Geraldine for this friday number, we think the consensus is probably close to the right point. This inflation has been absent. We have been waiting for it for a number of months. At the moment, the market is telling the fed, you are a liar. There is no inflation. The fed is still consistent in thinking they might hike rates. So depending on the inflation number, a lot is at stake. Either the fed is right for the market is right, but not both of them at the same time. Francine treasuries will move on the back of it either way. Im looking at inflation through the breakevens. You have the 10year rate in white, the 30year rate in blue. What do you see . Geraldine the market doesnt believe the fed is going to achieve the mandate. I would say theres a technic