headquarters. i'm francine lacqua. we do have a packed show it i want to go through some of the main movers. then get to our guest host. this is a picture for emerging markets. a lot of the assets are falling with european equities. and other strengthening as ask petition for u.s. interest rate hike is growing ahead of a speech on friday by the federal reserve chair. oil slumping a touch after data showing a jump in u.s. stockpiles. we'll get back to the markets. we will update you on this up -- on this terrible earthquake. let's get more with church -- with nejra cehic. nejra: channel central bank has injected cash into the system using 14 day researchers agreement for the first time since february. this comes amid speculation -- cool a bond rally using more extensive -- has popped the traders to seek leverage to have the fire returns. at least 21 people have been killed after a 6.2 magnitude earthquake hit the center of italy. that is according to the tv channel. they are also reporting the news agency that at least 100 people are missing in the town. the survey said the quake hit 140 kilometers northeast of rome. showingresumed its drop u.s. stockpiles rose giving inventories at the highest level in 30 years. it followed a jump in prices on speculation iran may support an opec freeze. there are reports that tehran has sent positive signals about supporting joint action. global news, 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries. i am nejra cehic. this is bloomberg. francine. francine: emerging-market assets . expectation for u.s. interest rate hikes growth ahead of the speech from janet yellen. germany's second quarter growth coming in line at 0.4%. also supported euro area growth ahead of the brexit vote. let's welcome my guest host, margareta drzeniek-hanouz. she will be with us throughout the show today. thank you so much for joining us . what a pleasure to speak to you. gives a sense, there's so much focus on the fed. there's so much focus on whether interest rates will move this year, september or december. the general trend is we are ready to normalize? margareta: the trend is that we need to do something about this low term that's long-term low-interest rates. we do realize that there is change. the question is when? whether september or december or later. there is a lot of uncertainty with the u.s. elections, with upcoming elections in france. inre is a lot of uncertainty terms of future development. the u.s. economy seems to be strong [indiscernible] a lot of uncertainty. francine: do we understand the follow-up from possible emerging markets? are a member catching up with you talking about the fact that if we do see a lot of limbo commodity related companies, will interest rates go up? emerging markets could go into default. i cannot figure out if this is a good thing. because we have had such artificial rates, we need a little bit of clearing out. margareta: we do need some clearing out. the question is -- this could be really bad. it could send the emerging markets into a crisis. the pace of it is important. we are talking about a hike very small. a value that is going to have a real effect on the emerging-market. -- its why this is so could really since some of the emerging markets that are not .oing so well into default francine: re: emergent markets better than they were two or three years ago? have putthem structural reforms. are they in better shape now? margareta: yes or no. -- yes and no. it depends on the country. some countries are really good at structural reforms but others they were in a much better situation to implement reforms. i now they are pressed with a .otential crisis coming it is difficult in terms of structural reforms at a time when there is low growth. it is not going to be an easy path for the emerging markets. .hey are in a better situation we have implement it some structural reforms, at the same time, the capitulation this the continuation of reforms is really difficult. francine: are there more risks than it were six months ago? only getting into a better place -- are we getting into a better place? seen riskswe have grow from one year to another. in the assessments, they were moving to the upper right-hand corner and a higher impact of risks. we are moving up on the scale. in terms of the financial risks, it has been very volatile. so we see a lot of volatility. overall, we see more than six months. francine: are people aware of this? is the danger that monetary policy and politicians are not aware of what they are looking at? margareta: in a very short-term way of looking at things. the monetary policy is a shortened measure to establish the economy. we haven't reformed the , evenerm issues up to now in the financial sector. low interest rates also carry a lot of risks by themselves. francine: we have plenty to talk about, talking about risks. short-term is what we are doing right now. we wonder what the long-term will bring. margareta drzeniek-hanouz, the head -- stays with us. stay with the pulse, plenty coming up. buffets have fallen by two thirds -- profits have fallen by two thirds at glencore. morning's 6.2 magnitude earthquake, will get the latest from italy. today's fourth industrial revolution -- the world has been waiting for or just another fall down. we'll talk technology with our guest host. this is bloomberg. ♪ francine: this is "the pulse." i am francine lacqua. let's get to the bloomberg business flash with nejra cehic. nejra: 21 people have been reportedly and killed after an earthquake hit the center of italy. that is according to the sky tg24 tv channel. they are also reporting that at least 100 people are missing in the town. the u.s. geological survey said the quake hit wanted hundred 24 kilometers northeast of rome. wpp benefited from the u.k. vote to leave the eu in the first half of the year. the world's largest advertising company saw earnings jump 15% in the six months to the end of june. upset brexit drag on the eu -- on the u.k. economy. the airline said underlying pretax profit jumped 57% to 1.5 3 billion off -- 1.50 3 billion australian dollars. >> i am very excited there is a future for this group because there's so much opportunities. to delivery of the 787's change our route network nationally. the growth in japan, plans and vietnam and here in australia. [indiscernible] i have always said if i am enjoying it, i continued in this role and nothing is changed. nejra: that is the bloomberg business flash. francine: uncorked court shares in europe are down after it reported a 66% dropped -- glencore shares in europe are down after it reported a 66% drop. glen thomas and margareta drzeniek-hanouz. usnk you for both being with . overall, they beat estimates. it was better than people had expected. cooks i think overall the picture has been pretty positive . they have made a ton of progress in cutting the debt and selling assets. if you look at where we were a year ago, there is a tremendous turnaround. last year there were huge questions about candies companies survive. how are we going to survive the commodities turnaround. there taken a lot of steps. step.a positive francine: think of glencore now. it's debt control. they have cut the debt where they said they would. -- : it showedfrancine: the world that glencore meant business, right? they cut production and the price has rallied. lynn: if you look at the other producers, people are not willing to cut production at this point. you have not seen prices react in the same way that zinc has. the zinc a story is quite an amazing one. you have morgan stanley come out and say glencore has been vindicated by what they did. yet --e: is a difficult difficult? you look athow do companies like this desk glencore is half of a trading company -- glencore is half a trading company. do you worry about the systemic risks? margareta: there are companies that make up high share in the economy. there depending on the commodities. -- systemic risks because commodity prices, right? you can see the systemic risks. the companies are not that -- have more of a global outreach been a national one. they have a global footprint rather than a national one. francine: one of these big companies that gives us a little bit of a go -- greta stays with us. --n thomasson is here from two months after the referendum and brexit is turning out to be a blessing in disguise. take a look at our charts of the hour. expectations have risen that the ecb will add a stimulus to shield the region from economic fallout, bonds from the areas -- you can see total returns from spanish government debt. that is an orange. italy in white. margareta, we picked this chart because basically it shows we are mispricing risks because central-bank action is there, right? we had brexit, political fallout, but it is fine because mario draghi is there. how risky is that? afloatta: we cannot keep with these kind of measures. at the same time, their risks with high liquidity that is being pumped into the european economy. bubbles -- asset bubbles popping up in different areas. .t is a realistic risk francine: should be worry about inflation? i spend a lot of my time saying up? is inflation which we do about it? companies are struggling in terms of revenue but they do not have to pay their workers more to feel richer. should we not complain that we are not seeing that much inflation? margareta: it will be a signal that demand is picking up more. you get a inflation, signal as well as that demand is driving the economy. francine: how d.c. brexit? margareta: -- how do you see brexit? it is almost back to normal as if nothing happened. i would've expected much more and certainty, much more global effects. the u.k. economy is just a small share of the global economy. francine: what does that tell us? how we price risks? is it that this economy is stronger than we thought? margareta: i think in many ways the u.k. economy is much stronger than we thought. we are concerned about the financial sector but we also know that we improved on the invasion indicators. -- it isstion mark now a good link -- think tanks in the usa and the private sector. this is a link for innovation going forward. there is the real strength of the u.k. economy, and it was on the right path to strengthening the economy. in terms of the long-term fundamentals. there is a lot of strength in .he economy that is shown francine: do you worry about the banks? you mentioned banks a couple of times. the you worry about u.k. banks? do you think there is something that we have taken a lot of risk out because of capital -- recapitalization, but we have not gone far enough? margareta: there is a lot that needs to be done in terms of the banks. recapitalization and lending. the big concern is why doesn't macroeconomic policy to go down into the business to create growth? the stands in contrast to tighter regulations. getting the balance right is a concern, because either we get low growth or risk associated. now banks are worry right did we see what is happening in italy. that's right now. we see what is happening in italy because of the banking sector -- right now. we see what is happening in italy. francine: margareta drzeniek-hanouz, we think you right now. she stays with us. a 6.2 magnitude earthquake hits italy. we get the latest from rome. this is bloomberg. ♪ francine: this is "the pulse." china's central bank has injected cash into the country's financial system using the 14 date repurchase agreement. the first time that the pboc has -- china is trying to cool a bond rally. let's get the thoughts of margareta drzeniek-hanouz from the world economic forum. how much do we understand about what china is trying to do to cool off the economy? this latest measure in a series of measures. do they have a firm hand on keeping the economy steady? margareta: i can give you a site of the a company -- of the country and become testes -- and the complex these of the issues. you see china's track record in the past has been quite good in a number of ways. in a very good way over the past -- betterhave managed than expected. this makes me think they have a better grip than they are making it seem from the outside. francine: we know about that. -- we know about debt. is it a 50% chance it goes wrong? because they have an ok track think it will be volatile but they will be owed to manage the transition? morereta: i am on the mystics side. -- more on the optimistic side. very competent people. -- they have very competent people. francine: margareta drzeniek-hanouz stays with us. we are getting news that the italian premier is canceling his trip to paris where he was scheduled to meet francois hollande. buildings had collapsed in three regions. town -- ande small the small town about 100 20 can't -- 120 kilometers from rome. half the town was destroyed. were joined on the phone by alessandra migliaccio he -- alessandra migliaccio. it is hit a lot of the small remote town spirit how many buildings can you see left .tanding -- towns how many buildings can you see left standing? -- there is nothing, just rubble. we spoke to a woman a couple of minutes ago, asking her what happened. she said everything crumbled around me. it was just a dark. that is the impression you get what you walk through the center. the further in, it is even worse and we are seeing constant and let's going up and down, back-and-forth just constant ambulance going up and down, back-and-forth. people still coming out, wearing blankets. francine: we understand that some of the towns have been cut off. what is the search and rescue operation like? are there many people? are they trying to people from neighboring regions to come and help? alessandra: fortunately the counter small. because of they are in the mountains and it happened around 3:30 in the morning, so it first the new mayor was quite desperate. he was begging for help on the news. the journalists got here first. now we see helicopters, firemen, civil protection and of course ambulances. the towns are being reached. there is no town that is completely isolated. some towns can only be reached on foot. migliacciosandra there on the -- francine: alessandra migliaccio there on the ground. ♪ "rancine: welcome to "the pulse live from london. i'm francine lacqua. here's nejra cehic. nejra: at least 21 people have reportedly been killed after a 6.2 magnitude earthquake hit the center of italy. that is according to the sky tv channel. sky is also reporting that at least 100 people are missing. prime minister matteo renzi has canceled a planned meeting with french president francois hollande in paris. china's central bank has injected cash into the financial system using repurchase agreements for the first time since february. this comes amid speculation policymakers are looking to cool a bond rally. a record rally in chinese sovereign debt has prompted traders to increase leverage to amplify returns. oil has resumed its drop after industry data showed u.s. stockpiles rose, keeping inventories at the highest seasonal levels in years. this followed a jump in prices on speculation iran may support an opec freeze of output. there are reports that tehran has sent positive signals about supporting joint action. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. francine: we stand on the brink of a technological revolution that will alter the way we live. those are the opening words of a report by the world economic forum. will technology finally provide the boost to productivity that the global economy has been desperate for? with me this morning, margareta drzeniek-hanouz, global head of competitiveness and risk at the global economics forum. let's also welcome mark gilbert, who has done extensive work on this industrial revolution. margareta, when you look at all the work you've done, how quickly will this fourth revolution come into play? you can argue that at his been there for at least four or five years. willy accelerate -- will it accelerate exponentially? margareta: it will. it will have a very strong disruptive effect. when we look at how it changes existing industries, what is interesting that experts agree that it is going to take much longer than we think. it requires a lot of changes in the business models. those changes are going to take a number of years. we're looking at a time horizon of five to 10 years in terms of changes to the business model, especially on the digital sign. there's also artificial intelligence. there is biotechnology. there are many technologies we look at. francine: mark, we've been talking about the fact that these changes that have already come into effect should maybe change the way we look and measure at gdp. maybe we are measuring things wrong. mark: the productivity puzzle is still driving economists batty. i bought a robot. francine: did you? what does it do? mark: little robbie, he's cleaning my floor. he's got -- francine: really cleans your floor or just pretends? mark: it has water inside it and it cleans the floor. incredible job. i love him to death. francine: so what does that mean? mark: i don't have to mop the floor. i can do other things. i would never have believed it. i bought it very skeptically. i thought, all right, it will run around the floor and push things. it works. francine: what is the impact of robbie the robot on productivity? does it make mark a lot more productive here at work or does it make us less productive because if mark had a cleaner, that cleaner wouldn't come anymore. margareta: it has both effects. if mark had a cleaner, it would displace a job. it increases our leisure time for sure. we will have more time for leisure. it doesn't necessarily make us more productive at work. it doesn't make us think harder during the day. francine: we just had some breaking news. giant, china's biggest oil and gas producer. i'm going to update our viewers on it. net loss, 7.7 million yuan. there's a linkage between this and the canadian oil assets. a year ago, their profit became a loss. a lot of these oil majors in china are interdependent or have huge stakes in some of the more mature, or the most technologically advanced oil producers in the u.s.. petro china also coming up with first half net income 531 million yuan. we will look at the share price when the open tomorrow. margareta, when you look at productivity, you have the robots, then you have this booming economy which is china that keeps making things. what is the interplay? margareta: the trend towards more robust and more 3-d printing is mainly reassuring some of the production. if we figure out how to make apparel and clothes by robots automatically, it will displace a lot of labor in emerging markets. this could have a strong effect if china does not keep up in terms of investment. we have bid on digital technology. china has been improving a lot. areas inhe remote china are still not connected. it may increase inequalities within china. it may make us question the whole development model of china , which was export oriented. which china has been moving away from, but the transition is going to be much more important. mark: 3-d printing, the computer revolution, i learned to type code in binary and hexadecimal and stuff. francine: 20 years ago? mark: more. from that generation, all of today's programs, intel, microsoft, all came from that home revolution in computing. you've got to affect 3-d printing brings a similar revolution in manufacturing. there's a guy called fitzpatrick who does the most amazing stuff with cats and dogs. the other night, he showed how he built a new elbow for a dog, 3-d printer, out of metal. it would have taken years to fabricate with a chisel and a bit of metal. that has got amazing potential. francine: but our companies giving up? we talk about innovation. it is a word being branded a lot about without sometimes meaning anything. are there companies taking this seriously that can be at the forefront while saving jobs? think it depends on a lot more than just the companies. it is really the small, disruptive companies. still,ger players, it is there's still a lot of unknowns. the technology is not yet their across all the different uses we can imagine. i think there's still some way to go. the developments have come very far in terms of 3-d printing. we've talked about printing food even. francine: how do you retrain a population? if you don't want people to be unemployed, you have to retrain them. education is more and more expensive. mark: do you remember when typing was a special skill? the computer revolution changed that. i think populations catch up to technology quicker than we expect they will. it is your own self-interest to get your head around the technology. if you watch a five-year-old with an ipad, they are quicker than we are. they work out how to use something almost instantly. they are so used to it now. it is like opening a newspaper was for us. margareta: we don't really know what the skills are going to be that we will need. what are we going to teach them? francine: coding? margareta: some basis probably that will still remain relevant going forward, but very hard to say how the job space is going to evolve and what skills we need now. what we know for sure, creativity, critical thinking, those skills are going to be more and more important. they will enable people to come up with new business models. francine: and the problem is that it will -- my it's a much harder time. >> and i think we are questioning a lot of the underlying things that will be faced. a measure in productivity im improvements. so there's a lot -- a host of issues to lookt. francine: also if you type news trends and then your words, so we looked at how many times fiscal stimulus has been used in stories and brought it back to the first of january, 2009. tabbeds spike is amazing. >> so you know what that tells me? the risk of disappointment is huge. whenever you get a risk like that, the risk of disappointment is huge. theu. k. we are expecting this could be a problem. francine: do you agree with that? we had basic thirty chief of staff, george osbourne on and we were talking about the fact that they look like fiscal stimulus but that there are very few projects that work. >> and we know the fiscal stimulus is a we know that fiscs is a shorter measure and if you want to make it work, you need to work on the long-term issues. if you have a short-term fiscal stimulus measure, it is very difficult to identify the problem correctly and very difficult to ensure they have a lot of impact. it makes sense if there is a structural change and balancing at the same time. monetary policy seems to be hitting a level -- it is not working anymore. what are the other measures you have in the arsenal asked and mark -- arsenal? francine: also to your point, there is a physical problem, what do we have left? would this be a disappointing of the economy or the markets? you also said something that stuck with me. is brexit a problem or brexit uncertainty? it is market expectations that is creating the problem. puzzle,e productivity the fact that the fed is divided on what should happen next, the fact that said forward guidance is failing, only a 28% chance of a rate increase but a lot of said officials that want you to believe that meaning is still in play, monetary policy having diminishing returns, inflation is still a risk, it is a combustible mix. francine: how combustible? mark: recession. francine: in the next two years? mark: there's a non-negligible risk that could happen. it is a massive risk to european growth. the continuing failure of the japanese authorities to stimulate their economy, and china, this huge new player on the global stage in the past five years became significant and already it is in a bit of trouble. this is not a good environment. it is not where you want to be almost 10 years after a financial crisis. francine: margareta, final thoughts, do we need some kind of a court? if we are going to face all this, do all the major superpowers have to come together? something bigger, also involving china? margareta: definitely coordination with fiscal policies would be a fantastic thing to do. the global economy is so interconnected right now. we see this already with the discussion around japan, monetary policy discussions in japan, interdependency that we need to take into account. francine: thank you so much for joining us, margareta drzeniek-hanouz and bloomberg view columnist mark gilbert. up next, tesla's twitter bump. messagek's social media . this is bloomberg. ♪ francine: tesla got a bounce yesterday after elon musk tweeted about a new product, but then lost those gains. what happened, chris? >> musk gets a lot of mileage out of his tweets. seems like there was some expectation of a bigger product announcement in reality, it was about a souped-up version of the model s and model x. it has a bigger battery pack and faster acceleration. the model s version of that car can go in ludicrous mode to get zero to 60 in 2.5 seconds, which is very much rarefied error for acceleration. francine: thanks for the update. there's a lot of appetite for elon musk and his tweets. we will keep a close eye on this conversation. breaking news from iceland. cutting its deposit rate. there's been about 15 central banks in the last three months that have cut interest rates. that is on bloomberg surveillance. tom keene will be joining me from new york. we will be looking at interest rate cuts, currencies, and kicking off the conversation with richard from citigroup. we will be talking japan. this is bloomberg. ♪ francine: half the defeat. double the price. a drop in profits and shares trade at twice in 2015 as debt reduction pays off and speculation that policymakers are trying to cool a bond rally. earthquake nitude efforts y and relief are underway. we do

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