Meeting. New gdt shows the u. S. Economy slowed on an annual basis in the Second Quarter. Okay. Welcome to the program. Plenty to get through today. Plenty to talk about. Coming up on todays program, indias biggest private bank reports. Find out if the financial giant is weathering economic head winds in its home market. Well be in mumbai. With the countdown to the feds decision under way, well hear from one gold bull who says ongoing qe could support the precious metal. J. J. Burn will join us from the states. And gdp growth, fred hawkman will be with us 11 40 cet. French carmaker peugeot, well have expert analysis from paris at 9 45. All of that coming up. Well start off with earnings. Bnp paribas slipped by 4. 7 from a year ago. The drop smaller than expected. Stock is flat in paris. Lets get more on that. Stephane is with us, hes been speaking to the ceo. Stephane. Good signal for the earnings season in france. Bnp, the first bank to report for the quarter. Expectations 1. 8 billion euros for the net profit on the quarter. Stronger than expected driven by the Retail Banking activity of 1 . Investment solution also was dynamic, up 3. 4 . And the corporating Investment Banking, almost flat on the quarter, with 0. 4 . Bnf confirms its final strength, one of the highest solvency ratio in europe. 10. 4 at the end of the quarter. For the first time, the bank disclosed its leverage ratio. It is 3. 4 and thats already above the regulatory level of 3 which will come into force only in five years. I caught up with the ceo of the bank for an exclusive interview. He told me hes not worried about the new round of stress tests in europe, from the European Central bank and also about the banking unit. It is a complex move. It is essential. It is going to change the Banking Industry in europe and has to be done progressively, like youre doing in integration between two companies when you are merging bnp paribas with others, you need when youre merging 17 different regulatos,s it is not that big, that strong. Totally normal to have those steps to understand everything step by step, and were quite confident this is going to give additional strengths to the union, to the Banking Industry in europe. So were very much in favor of that move. Talking about regulation, do you think that regulators are putting more pressure to raise Additional Capital . It is difficult to say. We do not have any request in that respect, very high level ratios in terms of leverage ratio, for basel 3, ratio we do not feel any, i would say, complex or difficulty. We do not need to raise capital. Interesting announcement also from bnp paribas. After three years of deleveraging when the bank reduced the size of its balance sheet, it is time to grow again. Bnp paribas will expand business in germany, planning to raise its targeting revenue 1. 5 billion euros out of the country. It is going to hire 500 people in germany. And it is also going to expand its Asset Management business by 10 over the next three years. So were talking expansion again, ross. Thats a good signal. Yeah, interesting. The carmakers as well, stephane, with peugeot, this morning. We know, look, we know european car sales have been really tough. Better news this morning. How are analysts seeing it . Yeah, well, peugeot was still unprofitable on first half of the year. 426 Million Euros of net loss. But it is a sharp improvement compared to last year. On the First Quarter last year, the net loss was above 800 Million Euros. So its been divided by two. In a statement, peugeot says the Restructuring Plan is going quicker than expected, and that there were some early signs of recovery for the company in the first half of this year. Peugeot also is planning to reduce its negative cash flow by more than 50 this year, which is a bit more optimistic than the target to bring the negative cash flow to 1. 5 billion euro this year from 3 billion euro last year. So thats good news. For the next year, the company is expecting very significant cash reduction and also there was a positive announcement yesterday evening, the European Commission approved the support from the french states. It gave its dreamline for the french state to provide a financial guarantee for the financial need of peugeot. So all and all, better target for the negative cash flow and Financial Support from the state, thats the reason why the stock is where it is today. Well be talking more about peugeot during the course of the program. Lets talk about diageo, stock down a percent, but new strength in u. S. Allowing the spread group to allow 5 in net sales for the fiscal full yoear and increase dividend. Double digit growth in the emerging market may be hard to maintain. The emerging markets are going to be a rocky road. Just in the results we have declared, brazil has been tough, nigeria is tough, china and india slowed down. However, we have still been able to grow at 11 . Okay, that was diageo. The worlds biggest beer brewer ab in bev, the sock up 6. 8 . The maker of budweiser. Eads up 1. 7 . Theyre actually now renaming the group, air bus group, a major reorganization of the business. They reported a better than expected underlying profit for first half and raised its 2013 aircraft order target by 25 . Well be getting rid of that name. And bayer today, it has admitted it is increasingly ambitious. The German Company says fouryear targets are more challenging because of conditions in plastics and chemicals markets. The Second Quarter adjusted came in just shy of forecasts. Well speak to the ceo of bayer at 11 00 cet. Thats the earnings. How does that play into the general equity session . Were cautious. Around about 6 to 4. Sorry. 6 yes, 6 to 4. 3 to 2. European equities flat to negative this morning as we opened up for trade. Not quite at the session low. About an hour and eight minutes into the session. Xetra dax is down about a third of a percent. Disappointing retail Sales Numbers out today. German retail sales down in june, the biggest drop this year. Ibex is down. 4. Cac quarante down about a third. Now, inventis and Schneider Electric agreed to merge in a 5. 2 billion deal. Schneider says the takeover should allow cost energies valued at 200 million, the stock up 1. 8 , schneider up 3 . I think investors feel they were lucky they didnt get involved in a bigger bid battle. And well have an exclusive interview with the schneider chairman and ceo. Bond markets, were in a wait and see. We have the announcement of the feds meeting today. Plus, u. S. Gdp, Second Quarter gdp figures and adp as well. Portuguese yields just below 6. 5 . Treasury yields, 2. 6 . Tenyear gilt yields, 2. 3 . Currency market, euro dollar around 1. 3280. Dollar yen, below the 98 mark. Aussie dollar, back down to the 24month lows at. 9041. Thats the european session. Lets recap the asian trading day. Li sixuan with us from singapore. Trade in asia with mixed markets reflecting caution over what the fed might say about the tapering timeline. Nikkei was the worst performer in the region, down 1. 5 today, with a stronger yen weighing on exporter stocks. China markets trimmed some early gains, but still ended in the green. Overnight, beijing promised to keep growth steady and fine tune the economy in the second half. The shanghai composite g gained. 2 today and wrapped up the month 1 higher. The Hong Kong Market taiex and south korea under pressure today. In japan, hitachi shares got a boost, closing higher by nearly 3 in todays session after raising its first half profit outlook. Batterymaker gs yuasa soared over 7 thanks to better than expected quarterly results. But taiwans htc took a beating, down almost 7 . The smartphonemaker had little sign of a turn around anytime soon. In china, Property Developers were the top gainers today as the companys politburo sounded a positive tone yesterday about promoting Healthy Development of the property market. China merchant jumped more than 4 today and the other two smaller players, they surged up by 10 . Back to you, ross. All right, sixuan, catch you later. The fed is wrapping up its twoday meeting with a decision expected at 2 00 p. M. Eastern. Fed watchers will be looking for any clues on when central bank may start its tapering bond purchases, but they will stress any action, still conditional on the economy improving. A first glance at Second Quarter u. S. Gdp today. Growth is forecast to rise. 9 , down from 1. 8 in First Quarter. That weakness is expected to be temporary as growth we think was held back by the sequester budget cuts that kicked in on march 1st and carryover from the payroll tax hike in january. We spoke about diageo, the new boss optimistic on growth in the United States. I love our north american business. It is very well positioned for the demographics in that marketplace. Spirits are growing. And premiumizing and today generates over 40 of our profits. This is a real engine for growth for us. All right, joining us with his thoughts for next half hour, paul cavanaugh, Senior Market strategist at killen and coe. What do you make of diageo right now . It is interesting. Only six months ago we were all excited about Companies Like diageo for their emerging markets growth. But thats certainly not the news of today. The news today is the growth has largely come from their north american department. They made a big point about the fact theyre spending an additional 5 on marketing this year xeered ed compared to las. They have seen a 10 growth in the u. S. And cutting back in europe and the emerging markets. So quite a big transition. Sort of reflects where the growth the fresh growth, the marginal change in growth has come from is north america. Well in fact, you can take the story wider and say this is how corporates are managing the global problems at the moment. They got that ability to be able to sort of transition themselves around the world, and focus on those areas of growth and just rein back the spending where obviously things are flat lining. Overall, good set of numbers. I think what was more cheering is not necessarily the line, but the ability to grow the operating profit through pricing pricing positive pricing and better mix. It is i sort of think of the likes of diageo and unilever, consume er focus, glol markets, are these they generate a lot of cash, sustainable dividends, one supposes. These sort of nice, solid they are. What we have to recognize is that all of those companies you mentioned, because of their stability, predictability, their price earnings ratios now are up towards the top end of the range. The reason for that is that people are looking not necessarily at dividend yields, but the earnings yields of these predictable earnings streams. And where theyre coming to a little bit of buffering recently, particularly unilever, has been the fact that the u. S. Tenyear yield has pushed up from u to 2. 6 . And as all of these Asset Classes are relatively priced, that has created a little bit of a head wind towards the higher price earnings ratio. So where macro meets corporate, today could be very interesting. You mentioned the macros. Clearly waiting for the fed today. Gdp numbers, marketplace worried if there is a pushup in treasury yields. I think overall today is going to be less interesting than probably the previous two and indeed how september pans out. These gdp numbers today are not going to be, i suspect, that inspiring. But as you pointed out earlier on, there has been some head winds to the economy this year that should begin to unwind and growth is forecast to accelerate Going Forward. What would be of more interest, i suspect, is how they calculate gdp. There are changes taking place and we may hear a little more about that today in terms of new presentation. And also in terms of qe programs, while i think the real focus is on september, there are some outliar bets out there as to whether well be discussing a tapering program at some point, even today or over the course of the next few weeks. Paul, thank you very much for that. Stick around. More to come from you. Official, Schneider Electric and invensys are parg iring up. Well get more on that merger today. [ male announcer ] its time. Time to have new experiences with a familiar keyboard. To update our status without opening an app. To have all our messages in one place. To browse. And share. Faster than ever. Its time to do everything better than before. The new blackberry q10. Its time. Where will it send me. One call to hoveround and youll be singing too pick up the phone and call hoveround, the premier power chair. Hoveround makes it easier than any other power chair. Hoveround is more maneuverable to get you through the tightest doors and hallways. More reliable. 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Have they snared their target . 3. 4 billion pounds, thats the price schneider will take for the british company, the french group is offering 5. 2 pence per share in cash and shares. Thats a 14 premium on the Closing Price of july 11 that was just before the story became public. Invensys shareholders will receive 372 pence in cash, plus 0. 0529 new shares of schneider for each of their existing shares. In a statement this morning, schneider said that the deal will increase its services to customer. It is going to expand its business, its exposure to north america, and will give the group the opportunity to sell more low voltage devices, thats the statement. Schneider is targeting 160 Million Euros in operational annually by 216 and significant tax savings, 400 Million Euros for first five years of the acquisition. The integration will have an impact on the earning per share. Schneider is expecting a low to midsingle digit cash eps, earning per share, in 2014. Market reaction very positive. Ross, well have an exclusive interview with the head of schneider, jeanpascual tricoire. See it tonight in closing bell. Catch you later. What do you think of the significance of this deal . I think invensys was always a sitting target. They resolved their pension issues, they saw some of the noncore businesses, they ended up with a focused and valuable asset. Im surprised others havent thrown the hat in the ring on this, names like anderson have been very active in this market in the past, on the m a side. It is not too late. They have tabled their bid at the moment and for holders of invensys, it is pretty relaxed now to hold the stock in the event that as we see from the screen there, schneider shares are up 3. 7 today, there is a shared element to it, which will take the stock a little higher than that headline 502 figure. And as i say, i suspect that over the next week or two there may be rumblings of somebody else. Thats what we presumed when it was announced. Havent heard anything yet. No. For anybody who is interested, im sure they want to see somebody make the first move. So as i say, i think that while i dont think the chances are sort of short, i think there is still a chance somebody else entering the fray. There is there seems to be more big deal m a going on. You think that will continue . I think the environment is conducive for a little bit more m a. As we go through the q2 season, what we have seen is that there are more head winds towards the revenue side of the profit and loss account. Certainly earnings Going Forward, coming in slightly better than expected, better cost control, which is continuing to extract out better profits. Stock prices are also better valued now. We had a stock market that is up 20 or so year to date, or over the course of the one year. As more confidence enterz the stock market, it means management has to look. If you look at the invensys still, they were highlighting 400 Million Pounds worth of revenue synergies to bring to bear on that. As it goes to the revenue side, youll look at bolts on acquisitions and possibly mergers that could be defensive moves to try to protect the pnl. All right. Stick there. Well come back. Little bit more to talk about, including earnings. Taylor wimpey, the Company Posted a 42 rise for first half of the year. The stock in the company up nearly 2 . Quick word about this, paul, they said benefiting from the governments housing scheme, are we going to have too much of a good thing . I think housing transactions still remain pretty low. The thing about these House Builders is they are taking increasing market share. As house prices are falling across the country, it is much more difficult for the secondary market, people selling homes, to adjust to that environment. They probably still have two inflated expectations of what the house is worth. A new House Builder can adjust the build to accommodate lower prices. They are taking market share at the moment.