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tv   Worldwide Exchange  CNBC  July 16, 2015 4:00am-6:01am EDT

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a very good morning to you. this is worldwide exchange. i'm wilfred frost. >> i'm carolyn roth. these are your headlines from around the world. >> flames of fury in athens as the country's lawmakers vote for the bailout. tsipras prepares to adopt austerity. >> janet yellen reiterates the fed is preparing for lift off this year no matter what happens overseas. >> the decision on our part will say no we're close to where we
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want to be. >> auto stocks drive markets to the green after car sales hit a 5.5 year high in june amid strong demand for luxury brands. >> time for a change. swatch has its best day in over two years as investors shrug off a 20% fall in profit focussing on the watch maker's positive outlook. >> greece passed the austerity measures required for a bailout. tsipras urged lawmakers to approve reforms. 229 voted in favor of the bill. chaos was outside parliament. parts of the square were set ablaze as they chanted we have
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been betrayed. >> and anger inside parliament. half of the no votes came from syriza as they condemned a very black day for democracy in europe. he wrote a scathing blog in which he likened the bailout to fiscal water boarding. no surprise that he would vote against that deal. he has been very outspoken. yesterday we saw the deputy finance minister stepping down because he simply couldn't stand behind the deal. >> what's so interesting here is that this vote went through because of support across all parties in general apart from some divided across here. the same sorts of parties that used to be in government that at the time had a deal in place more favorable on greece. they must be sitting there saying admit you got this wrong. played hard ball and ended up with a tougher deal and you're
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only getting the vote passed because of support from us. they must be so frustrated because five months ago they had a primary surplus, growth was coming through and the terms of the deal was less stringent. >> it all went down the drain. in the matter of five or six moss. >> it did. greece set to dominate the ecb meeting today amid concerns over the country's banks which have been closed for 2.5 weeks. julia is live with what to expect. >> thanks so much, wilf. greece is going to be one of the key focuses in the q and a at least as far as mario draghi is concerned. what are they going to do about the emergency liquidity assistance? that vote last night was effectively a green light to allow mario draghi to raise that emergency liquidity assistance. they're finding themselves in a
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difficult position. we have concerns about tim pacts right now and the need for recapitalization and we don't have a third bailout deal yet. we have other votes to happen in other countries so farce the ecb is concerned it's likely that they stand back and watch and see what happens here and that ties to the scramble we've seen to come up with interim financing. particularly to get us over the payment july 20th. we're at least having a conference call later on today and that's something we'll be trying to thrash out then. >> i'm interested in the threat of contagion and how much support they're going to give the banks. i wonder if they'll be pushed on capital controls and the fact that it's already closed. surely it isn't worth the same as in cash despite the fact that we reached a deal.
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what is mr. draghi going to say on that side? and this is incredibly hard for greece to get out of because the capital controls were imposed? >> what are you eluding to? saying the greek euro doesn't value the same as a german euro. >> i'm saying i'd take cash and german bank account. >> this is the key question going forward. obviously in terms of the greek banking sector now there's a situation where if you try to lift the capital controls or open the banks, people are still going to be afraid and when we came out of the meeting at the weekend the risk of a grexit isn't off the table. we can't tell at this stage how long they're going to remain but this is also at the crux of the argument. they need a guarentee.
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they need a third bailout and assurances and guarentees over what the future is and as much as we got the vote signed off last night and we got the other votes in other european parliaments there still needs to be implementations for the greeks. i'm sure he'll be asked and be batting off the questions and reminding everybody that they stand ready in a worst case scenario to do what it takes to stabilize the markets. they said in april they would raise the amount of buying that they can do in a month. we've barely seen them adjust that which is quite interesting. particularly given yields in the rise since the last meeting. but what he'll also draw a distinction between is what was inflationary yields rising and what was perhaps concerns about a greek and potential contagion rising there too. >> overall the ecb should be
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relaxed. if we look at inflation that is back inflationary territory. we have some activity indicators indicators, if we ignore greece they should be pretty content in the european recovery. >> i agree with you. it's as far as everywhere else is concerned. 0.6% growth available for q-2. we did see 0.2 for the last month. a little bit low but we're talking slight. if you tie that to what we've seen as far as a come down in some of the oil prices recently that gives him the opportunity to be a little bit more dovish here just to contain any concerns about contagion from this too. it's a sweet spot. the lending is still a problem. mortgage demand is still
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healthier and corporate lending is still a problem. it's what a numberover analysts were hoping for. there is still elements where further support can be provided. he'll reiterate that qe is here until the third quarter of next year and of course we'll be willing to do more if the inflation stats don't come back in line to what they're hoping near the target. >> julia, thank you so much for that. we'll check back in with you a couple of times during the show. >> a sign of the times, which is your favorite ecb sign? the boring permanent one or the exciting new inflatable cnbc version? we might be bias but do head online and cast your vote. you can vote as many times as you like. it's not like a formal election. do get online and vote. >> do you think it's only cnbc staff voting? we're very biased here. >> probably and i don't think
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we're winning. >> we're not? >> no that's really bad. >> our viewers are letting us down. i can't imagine people randomly outside of staff and viewers are voting. >> anyway moving on shares are trading higher after they beat earnings expectations in the second quarter despite battling head winds in the main markets of sweden and denmark. we're now joined on the phone by the ceo how exactly are you dealing with the negative interest rates. you're not passing those on to your clients. why not? >> it's a very unusual situation and we look at the customer relationship as a full one so to ask our household customers to pay for the deposits we would not really benefit anyone. i think they understand that
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they get a benefit for not paying negative rates right now. they have the market price that's negative in denmark and sweden. >> in the case of sweden do you actually think this move in negative territory was warranted? and you just said this is a measure that might be temporary. who knows how long it's going to be in place for. in denmark for quite a long time. in switzerland for a number of months and i can't see it end there. >> it is not normal. i will say particularly in sweden which runs a growth rate between 2.5 and 3%. it's of course not normal to have negative rates and the only reason is of course that ecb is
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having a very lax policy. there must be an incentive to save and invest and that can only happen with a normal yield curve and positive interest rate. i think normalization is ahead of us starting in the u.s. but it will be ahead of us and then we will go back to normal territory. it can last for the quarter to come of course. >> it's responding to the low interest rates which helped your impressive set of numbers. how worrying is that demand for sweden's housing market which is not underperforming in recent years. >> yeah but it's not very short but of course we need to ensure that we don't create a bubble so both the banks and the inspection but also the politicians are now looking at how to avoid or the customers
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take excessive loans in their houses. we have already introduced requirements and we will have more. it's bound to create some bubbles if we don't take care. >> let's touch on the norwegian economy. nice set of results there for you as well. the results don't include the last two week sell off in oil prices. would you expect the norwegian economy to suffer in the second half of the year? >> not really. it's proven very resilient. i think that first of all they have a good balance sheet and they're doing well and many operators have been well prepared and the rest of the economy is doing quite well right now so i think we will see the resilience we've seen in the
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past 6 to 12 months continue. some what lower growth rates than a year ago but in clearly positive territory. about 1.5%. we're not too worried but of course if it lasts forever then there will be some effects. particularly around the west coast where we have all the oil service companies. >> just very briefly, obviously, greece is really still making the headlines and the euro zone banking sector's direct exposure to it is very limited but do you think investor's markets are underestimating the indirect effect on it in terms of the hint of sentiment? >> now we have a short-term solution coming up with political and it's more the major long-term. you can say for every year the european economy gets more resilient. we're looking into growth rates if europe. end of the year. 2% run rate.
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the more resilient it gets the less of a systemic problem that greece poses so it's very good that we see the short-term solution and it just might be so that all the measures being put in in greece now will actually put greece in the right direction. i certainly hope that and then we will start to forget about it in the markets. >> thank you so much for joining us today. much appreciated it. now let's focus on european markets. they have strengthened through the last hour in particular having opened only slightly positively. over 1% of gains in the main continental european forces. germany, france italy, all up over 1%. the ftse 100 up .5%. this follows the fact that the vote did get through the greek parliament yesterday. positive toward the start of the
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week and end of the week now that it's past the greek vote. auto stocks are the best performing sector here in europe today. significant gains across the board. 3% up the best part of 2.5%. it comes after sales in june hit a 5.5 year high. as i said fear leading the back with 17.7% jump in sales. demand for luxury cars helped drive the numbers with porche among the stand out performers. now that we have a greek deal, focus has gone back on the fundamental difference in monetary policy out look for europe and the u.s. that saw another rally in the u.s. dollar yesterday and again continued today. we're at 10906. nearly below 109. on monday we crossed above 111 briefly so a particularly soft week for the euro this week. 10907 as we look at things now.
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what's coming up? >> a lot of cool stuff coming up on the show. hailing uber and hating on uber. why it's dividing opinion in washington. plus as donald trump claims his $10 billion fortune makes him too hard to regulate we're asking can you ever be too rich? and we reveal who is tweeting for billionaire carl icahn. don't miss it. we'll be back in two. are you moving forward fast enough? everywhere you look, it strategy is now business strategy. and a partnership with hp can help you accelerate down a path created by people, technology and ideas. to move your company from what it is now... to what it needs to become.
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the u.s. may be at full employment before then. williams a voter on the fomc this year is seen as a centerist whose views are in line with janet yellen. >> janet yellen goes back to capitol hill today for the second part of her testimony on monetary policy. she testifies at 2:30 p.m. eastern. she told house panel the fed is likely to raise rates later this year and turmoil overseas probably won't effect the u.s. economy. >> a decision on our part to raise rates will say no the
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economy doesn't stink. we're close to where we want to be and we now think the economy needs higher rates. there have been head winds and we've tried to overcome them. >> yellen might want to raise rates this year but she can't. that's the verdict of the bond king that told cnbc at the delivering alpha conference that the central bank overestimated u.s. economy growth. >> i think it's difficult for the fed to raise rates without nominal gdp increasing and they have a problem with the pce deflator which is not trending higher like some of the other inflation measures most notably the employment cost index which looks like a rising trend and with it being the favorite indicator of inflation i don't see how they can tighten with that indicator trending lower and certainly nowhere near the 2% level. >> i actually think he may have
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a point there because there's still the big disconnect between the market and janet yellen. take a look at fed futures now, they barely price in 125 basis point hike by the end of the year but she said two times in one week now that that's a done deal. she still needs to do some work as to convincing the market. she is a little bit more hawkish than the rest. >> that's what she was doing yesterday. will she maintain her flexibility and try to telegraph it's coming in september or later this year. she went for the latter. she's trying to tell the market that's coming. it is appropriate to raise the target. interesting what you say, yesterday by the end of the day we saw yields come down but that's because of general risk off sentiment but the two year start of the curve did n fact spike as she started talking
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before that happened. i would say she's trying to telegraph that this is coming and september seems more likely than not but your point at the difference in the market is definitely indicative. >> definitely but the dollar did react quite well. >> exactly. >> or i mean it was higher by quite a lot against the euro and the markets were focussing on the yield differentials so that tells you a lot about what the market is expecting. >> but the dollar move is important because bonds were reacted to general risk off sentiment where as the dollar was rallying throughout. it's also partly a safe haven. that shows she was being pretty hawkish. interesting as well just quickly because of commodity prices she mentioned them and used that as a positive. she was saying oil prices will help the consumer. clearly on the flip side canada doesn't think that. >> moving on chinese stocks pairing session losses with the tech heavy index up 1% and shanghai comp up a third of 1%.
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meanwhile the asian development bank cutting it's full year growth for 2015 and 2016 citing slower than expected growth for other countries else is the domestic economy. sri is in singapore, sri. >> firmer in a word. so a bit more appetite for risk because the greek vote passed through parliament. we know. you have been talking about that. that was good news and a step in the right direction. we're watching the dollar against a lot of asian currencies. we did see dollar yen stronger. three week closing high for the nikkei 225. we continue to see deleveraging in the china market although we were firmer at the close by about 18.5 points. so we can say at this point in time at this stage in the narrative of the deleveraging that the authorities in beijing seem to have put a flaw in the market. the big question is for how long
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given the fact that there's still some 1 trillion of margin debt still in the market. a lot of that in the grey market as well. so bear that in mind. broadly positive on the back of the external leads that we got. mainly from your neck of the woods in europe with the greek parliament passing that vote approving the bailout measures and the austerity measures as well though i think you'd agree with me we're not out of the woods in terms of the greece risk by any stretch of the imagination. back to you. >> thank you for that. cnbc played host to the delivering alpha investor conference yesterday with greece, oil and politics dominating those conversations. however it was the volatile tiny stock market that appeared to be the biggest concern for a number of participants. take a listen. >> i think china is a bigger
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global threat by far. >> must understand what's happening in china if you are going to be a global investor today. it is irresponsible not to understand what's happening given the impacts on global gdp. >> the china situation is up and down. you can't trust the chinese numbers. that's a good sense of how much the economy has slowed down but that's a much greater impact on the region than us. >> you look at the chinese financial system and shadow banking and the amount of leverage and how desperately they worked to get their stock market up. it looks worse to me. >> right. >> than 2007 in the united states. much worse. >> those participants, they're all right in pointing out china's big risk to global gdp growth but they failed to point out that foreign ownership of chinese stocks is only 2%. >> of the a-share market. >> of the a-share market so contagion should be limited and because of that slump in the asian markets over the last
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couple of weeks gdp won't be hit by that much. we won't know that until the end of the month or later this year obviously but expectations are for only a very small dip in gdp. >> no, that's a fair point. as we said for sometime the a share market and how it's performing is separate to the economy. personally i do agree with the sentiment bill ackman was putting across that the economy itself is also a massive concern. when we think of the fundamental arguments everyone has a view on china. it's just which side you put the weight on. i think the fact that we have seen more of these extraordinary measures. focus toward the stock market and economy and then lacking to have the traction they used to have that starts to be okay are we now going to get that punch? they have papered over the cracks and managed it and all the china bears out there have foreseen a crack and it hasn't come yet and the fact that they're easing so strongly.
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that has to be worrying in terms of the timing. >> i totally agree with you. anyways, still to come on the show, the toshiba accounting scandal continues to snowball. we cross live to tokyo for the latest after this short break.
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>> flames of fury in athens as the country's lawmakers volt for the bailout but a grexit may be better while mario draghi prepares for questions on how the ecb will support the nation's banks. >> janet yellen reiterates that the fed is preparing for lift off this year. no matter what happens overseas. >> decision on our part to raise rates will say no the economy doesn't stink. we're close to where we want to be. >> car sales hit a 5.5 year high in june amid strong demand for luxury brands. >> swatch has its best day in over two years after focussing on the luxury watch maker's positive out look.
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>> we had a big development yesterday which was that the bailout terms were passed in greek parliament that allowed european stocks to embrace positivity today. germany, france italy up over 1%. ftse 100 up 0.5%. >> quick look at the bond markets. after greece passed the bailout measures we saw them dropping some what. we don't have them on the charge here but what we will show you is the ten year bund yield at 77.3 basis points. ten year note 2.37%. we saw that dip yesterday on safe haven buying. >> let's have a look at forex because the focus has been on core monetary policy differentials between the u.s. and europe and thus we have seen the euro sell off quite marketedly. just above 111 on monday.
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it's flirting with falling back to the 108 handle today. it's at 1.0912. >> it seems germany is still in favor of a temporary grexit. a hair cut is not possible within the rules of the euro zone. i guess the germans, specifically, on behalf of the euro zone and the imf still over the debt cut. >> they are. the imf made it very clear but i keep going back to this point, the imf was at the table and the creditors knew what the imf felt about the contents of that deal so anything signed and will be signed as far as this bailout deal, everybody knows the implications. it's a case of when we get around to negotiating over that debt but i think a lot of the press was suggesting the imf might be about to derail the plan. everybody knew what the imf
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thought but let's get more thoughts on the greek situation. i'm joined by the chief foreign ratings officer. great to have you this morning. we got a number of votes. looks like we'll get the third bailout deal. does that move the dial as far as you're concerned on the situation here? >> the vote was a good first step. if you look at the euro group and from the counsel many sort of uncertainty still around. many of the conditionality needs to be around. what happens if it smalls short. none of this is being held by the nagging suspicion that the greek government isn't behind it and the commitment is an important part to rebuild the trust. some of the rhetoric coming out of the government while it may be tactical it's still sort of raising the alarms of those that
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are skeptical that the greek government will follow through so we're not really there yet. this is the first step of a drawn out process. >> that also ties to mario draghi and the ecb today. they need guarentee that there will be fulfillment. at the moment there's a suggestion that half that money, 25 billion euros will be offset to recapitalize the banks. anyone that knows anything about privatizations in greece know they haven't happened. it's tough to see when the banks can even open. >> yeah, i think the situation in the banks remains very tense. the ecb is deliberating today what to do. my expectation would be that they do nothing on ela currently until they actually see come monday whether they get paid and then maybe it's a new game overall. would you not expect that greek
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depositors would try to with draw as much as possible. so the liquidity is exacerbated and until the confidence that greece can turn the corner is more deep routed. the capital controls will have to remain in place and that means many more months probably. >> the ecb is also part of that overriding confidence as well in the greek banking sector. so it's a difficult line that they find themselves -- a path they find themselves treading too. >> i want to ask you about that july 20th bond payment. we keep asking you these points but similar to the imf as far as the ratings agencies are concerned you don't consider a missed payment on monday a default. but obviously there's ramifications and spill over effects. >> yeah we would not declare a default in greece doesn't pay on monday. it seems to be falling into place but if it weren't to be paid or the august bond weren't to be paid there would not be
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default because these bonds are held exclusively by the ecb. they're not commercially traded held securities and our ratings really speak to commercial debt held by investors. the ecb is not an investor in that sense. but if it were i think things would look really dire indeed because if on monday the ecb doesn't get paid it's very hard to see how they could extend ela even at the current level. they'd have to close down emergency liquidity provision and that means that the banks are insolvent and have to be shutdown and you have a financial melt down in greece. >> it's interesting that they also said today that without recapitalizations the banks are going to collapse. it ties back to this financing but also the board of recapitalizations. the u.k. is interesting. they said we don't want to be part of the financing. we know there's work to try to guarentee them over this period until the third bailout deal is
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signed and the cash comes in. difficult for david cameron as he faces this referendum coming at some point in the future and the position they have with europe over potential financing. >> indeed. westminster believes they're beaten back any attempts in 2010 that the u.k. could become part of the bailout mechanism and architecture in the euro zone. they'll come in through the eu 28 fund to paper over the greeks until the esm program is in place and hopefully three months time. that's the current estimation. but of course what it does is give additional arguments. it's sort of marginalized so these funds are being appropriated with different users.
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i'm not saying this is all truement it's not largely but it's very clearly a difficult argument for cameron or anyone that will campaign for britain to remain in the eu. so this is not inconsequential from that perspective. >> i want one line from you about the take out of the german people from the deal that was agreed at the weekend. is there an acceptance that angela merkel was tough enough in her negotiating tactics? >> my impression is that the balance was right but it's much more visible that there's different views than there were before. many skeptics say this is pushing it too hard. but believe me the vote will be there to support opening negotiations with greece. there will be plenty of votes for that. >> thank you so much. chief foreign ratings officer at s&p. back to you. >> julia, thank you very much for that. now do stay tuned throughout the day on cnbc because we'll have
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full coverage of the ecb's rate decision later on decision time. we'll bring you the announcement live at 13k:45 cet. >> let's get back to corporates. a slow down in the second quarter in sales growth. europe's second largest retailer citing a disappointing performance in it's french home market and china. but stefan brazil seems to be doing better. >> absolutely. they managed to offset the weak performance in france and sharp declining in china. 12% contraction for the second quarter and in france it was able to report 0.5% growth. that's to compare with more than 2% this year. excluding currency effect and fewer saves. revenue grew by 2.6% in the second quarter. still it's a bit weaker than the 2.6% reported for the first
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quarter. all in all the revenue was a bit stronger than expected. the average was stronger than the average forecast at 21.4 billion euros not in terms of outlook. the ceo says that the market concerns operating profit between 2.51 and 2.53 billion euros this year was reasonable and also indicated that it was rated although it doesn't need this to finance it's operations in brazil so they'll wait a bit more. quite positive as i was mentioning the revenue although it's a bit weaker was stronger than the average forecast. that's the reason why the stock is up 1 and 100%. back to you. >> thank you. >> let's have a look at other big movers today. up 1.5%.
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of the company doing well after earnings. let's move on to alfa laval. beat expectations but warned of slowing demand in the quarters ahead but up the best part of 10%. now anglo american down 0.4% after announcing more write downs. it expects to take a hit of between 3 and $4 billion in first half results because of the slide in iron ore and coal prices. now swatch is having the time of its life. up 4.9%. this is the best day in 2.5 years after delivering an upbeat full year outlook so the results being taken well but carolyn what are the other reasons the stock is up so much? >> analysts say that the top line and the bottom line they're better than expected.
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analysts say that this might be the low point for swatch. we've had so much in bad news for this company over the last couple of months or so and other analyst sas the current valuation is very attractive. currently trading on 13 times 2016 earnings and that is an all tile low versus the sector and the european markets. many analysts say this could be a buying opportunity but worth noting we're just getting comments from the ceo on dow jones and swatch will launch the smartwatch in china, u.s. and switzerland and that will be launched in the summer and swatch has already made 20,000 watches. now that's a really interesting take here from the ceo because swatch has always been very timid when it comes to the smart watch because they said look we're not in the business of smart watches. if you really want a smart watch you have to buy the apple watch. not ours. but they still have laumplgnched a watch and a watch with nfc
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capabilities for contact less payments. and i wonder whether the strategy is going to pay off because it's not a full -- >> i definitely agree with you on that side of the bargain. if you are going to buy a smart watch don't you want to go for the full one. but compared to other traditional watch makers they're not going to cannibalize their brand in the same way a luxury watch maker world. they're saying we want to stay clear of that because we damage our core high end brand so yes they have high end watches but they're a practical watch maker more than anything. particularly the thin ones we saw, they're for ease of use of efficiency and stuff like that. so i think they can move into that area without cannibalizing their brand in a way that a rolex might. >> it remains to be seen. analysts say that the brand most at risk of cannibalization is that brand but it's too early to
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say but also maybe the smart watch, the apple watch isn't doing so well because remember didn't we recently talk about the reports that it hasn't done that well? that the sales have been slowing. so maybe the strategy not to go full in is maybe the better strategy because no one knows how successful it will all be. >> and it proves that a halfway house is doing incredibly well. >> so swatch up having it's best day for 2.5 years today. now an accounting scandal continues to rattle toshiba. the company is expecting a major personnel shake up. let's get out to the nikkei for the story live from tokyo. >> thank you wilfred. more than half of toshiba's directors are expected to re-sign in september. this news comes as latest fall out over the discovery made in may that toshiba was manipulating it's earnings for years. he even called the scandal the biggest crisis the 140-year-old
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company ever faced but third party investigators discovered that he himself as well as his predecessor were among the top officials who instructed subsidiaries to delay booking losses. suspicions over his involvement have been growing and earlier this week he told close associates of his intentions to re-sign effective in september. his official announcement will be made next week when investigators release the report and in addition the auditing company which had signed off on years of inappropriately calculated earnings may also face penalties or suspension over it's involvement. now his last duties as president are are expected to be performed at a special shareholders meeting scheduled for september where he will prevent future counting irregularities and the companies new management team will also be announced at the september meeting. back to you. >> thank you very much for that. now, still to come here on the show, we were talking about u.s.
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elections. donald trump and uber. what have they got impacting the u.s. election debate at the moment? we're back in two.
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the eu commission says it will open two separate
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investigations into u.s. supply of qualcomm. the company offered financial incentives. and the other will look into whether the company engaged in predatory pricing to undersell competitors and drive them out of the market. they say the concerns are without merritt but it will cooperate with the investigation. >> his tweets netted investors millions of dollars but carl icahn is not responsible for writing those characters. it is in fact his daughter who, quote, does my twitter thing. he has over $200,000 on the social network or his daughter has that many followers. a tweet about the value of apple stock in may added over $8 billion to the tech giant's market value. who does your twitter thing? >> i wish there was any reason for anyone else to do it but i find this really amusing because we always tried to get my father to get on to twitter put he didn't understand tech at all so
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somebody would have had to do it for him if he was to do it. i like this. clearly his daughter doesn't come up with all of the tweets. i hope he verifies them but that's fair enough. >> why not. it's more efficient. 140 characters you can easily write that within 20 seconds. >> so you know. >> but lots of people that have official accounts have someone to do it for them. >> david cameron doesn't tweet his own tweets does he? he has a staff? >> he has two separate twitter accounts. there's david cameron and the pm. i don't know if he does his own ones. it's an interesting point. let's stick with mr. icahn. is there a role for activists in the modern world? here's what's some of the players told cnbc at the delivering alpha conference yesterday. >> there's a role for activism. a big role. we have to own companies that are poorly run and companies that are well run. >> we are, as you know readily,
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willing and able to get involved in every company we invest. that's not our first choice. our first choice is to work with the company. >> we want management and the board to do a good job. we'd rather be rich than right. >> unlike active investors, our investors can't sell those stocks if they hate the company. we have to own the stock whether we like it or not so we have a much greater responsibility in working with companies to build the proper returns that we expect from them. >> it's a very general world. what is innovation. there's a lot of ceos that don't have the capability of innovating correctly. if you go tell that guy what are you doing on your research? your spending $20 billion, they'll listen to you. they ain't going to listen to me. maybe a little to me. >> uber is being fined
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$7.3 million for refusing to give information about it's business practices to california regulators. this includes details on driver's safety accidents and whether it's vehicles are accessible to disabled passengers. they have allowed uber and lift to operate in the state as long as they report on aspects of their activities. uber says it's provide efficient information and will appeal the fine. >> disruptive companies may be shaping presidential election issues. jeb bush will visit a san francisco start up by hailing an uber. he's going to talk about the importance of fostering disruptive technology to create high paying jobs. but hillary clinton hinted that apps such as uber and airbnb were responsible for stagnation. >> it's a moment of truth for
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donald trump. the forms weren't designed for someone of his massive wealth. katie has the details. >> unlike most presidential hopefuls donald trump doesn't shy away from his wealth. he flaunts it. >> $8,737,547,000. >> that was in june. trump says it's in excess of ten billion dollars. >> what he's trying to say is if you vote for me you're voting for someone that's the american dream. >> many analysts thought trump would never do it. filing his personal financial disclosure with the federal election commission. they have 30 days to release it to the public but the campaign offered some of its highlights there weren't million. income last year 362 million. stock gains more than 27 million. salary from 14 seasons of the
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apprentice on nbc 213.6 million but the campaign released few specifics on trump's assets. >> what stood out to me was the $10 billion in all caps but not being able to see the information to support it. >> next to nothing on his real estate holdings. it's branding deals or his debt. what's more numbers on paper may be smaller than they appear. >> with trump we think there's a bit more art to science than he is letting on and we tend to think that he is worth closer to 4 billion than the 10 billion he asserts. >> regardless trump is flying high. a usa today poll shows him leading the gop field at 17%. >> i think trump is really resinating because he's very plain spoken and he's saying what he means and he means what he says. >> still the same poll showing when it comes to hillary clinton trump would lose by a wide margin. nbc news new york.
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>> so with donald trump saying the financial watchdogs don't know how to deal with someone as rich as him we're asking you what would you do in his shoes? what would you do with $10 billion? join the conversation here on worldwide exchange. get in touch with us. carolyn, what would you do with 10 billion? >> obviously probably give it to greece because they need 7 billion by monday and then another three -- to be fair don't they need $70 billion. >> you wouldn't give it to wolf wolfgang? >> why does he need that? >> that's boring. you don't want to dpifgive it to greece. 10 billion is too much. 9.8 billion. >> let's see if you have something more exciting. >> i would buy arsenal football club. only a market cap of under 1 billion so then you could invest a lot in players. >> who would you buy? >> defensive midfielder.
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you probably don't know who he is. >> no chew what you're talking about. >> and then a striker and leave it to the english boys. maybe a wage increase. plenty to kick around. but do get in touch with us. what would you spend $10 billion on or is that too much? do you juan less? no one wants less. you want it all so you can decide what to do with it. get in touch with us nbcwex is our twitter handle. the fifa story reports that the swiss federal office of justice says the first of 7 fifa officials held in switzerland has been extradited just recently. of course that might -- of those he's the only one that ageereed to his extradition. >> they don't need any extra.
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>> now the best golfers in the world are at the old course austin andrews for the open championship. all eyes will be on jordan spieth going for his third consecutive major win. he'll be the first to play with pga championship with the chance to come meet the grand slam. many out at this point already. spieth is on the course about 15 minutes and tiger woods is just getting underway now. good luck to mr. spieth. >> we break down janet yellen's testimony and how the markets reacted. that's coming up in 2.
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welcome to worldwide exchange. i'm carolyn roth. >> i'm wilfred frost. here's your headlines from around the world. >> the dollar powers higher after the fed is preparing for liftd off this year. no matter what happens overseas. >> the decision to raise rates will say no the economy done stink. we're close to where we want to be. >> flames of fury in athens as the country's lawmakers vote for the bailout but the german finance minister says a grexit still may be better as they
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prepare for how the ecb will support the nation's banks. >> a number of banks raise their price targets after it exceeds expectations on new subscribers in the second quarter but income falls on expansion costs. >> how rich can he get? donald trump's fortune climbed to $10 billion. they can't deal with a man of that welthd. >> straight today at a and what we've got for you is the june euro zone inflation data. it was confirmed at 0.2% on the year. that was in line with
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expectations. the euro zone for now moved out to inflationary territory. that's still a dip from the month prior but should be welcomed by the ecb? >> well it gives them a little bit more room doesn't it for flexibility? we obviously still have the negotiations over greece and also on china and we hear that as well. global issues for these central bankers to have an eye on. it's something that allows them just a little bit more room as far as mario draghi is concerned to contain the risk. the message for him to be stamped out in policy. pmis coming out strong. it just filters into the data here and in the q and a afterwards it will all be about greece. what can we hear about emergency liquidity assistance? there's a lot of speculation that the vote will be a green
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light as far as emergency liquidity assistance. need to be more skeptical here. they have to see greater guarentees that we'll get to a third bailout deal. other countries have to vote on this and then the germans on friday and then further terms to accept at a bailout deal to nevermind implementation. so i think the scramble we have seen to come up with interim financing in order to make that ecb bond payment on monday is effectively what's going on to shield the ecb from making difficult decisions as far as the banks are concerned. also the recapitalization of the banks will be a big question for mario draghi. we're still going to be asking. >> stick around for a moment. i want to bring in phillip shaw. do you think that the ecb will raise the cap for the ela? for the greek paingbanks today? >> it's likely.
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so yes there will be a little bit of a carrot there ahead of the big ecb bond repayment on monday and we can start to help the banks more actively. >> politically some kind of consensus has been reached. he's not making the political decision and that's really what investors need from this whole situation. they need to know that the ecb stands to back up greece in all scenarios. >> i'm not sure that it does. if you were talking three years ago about the future of the euro there was a serious chance that the euro could fragment and with it take the world economy down and that really was a need for a whatever it takes statement for mario dag mario draghi. now it's partly up to greece and
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not just up to the europeans and the ecb. >> but the greek banks cannot reopen until you get some kind of statement like that because otherwise the value of a euro in a greek bank is not the same as a german bank. investors or savers in greece need to know their money is worth exactly the same or else they with draw all of their cash. >> arguably you have already had a statement which equivalent of saying that which is that you have them agreeing and we do accept it in not just greek banks but emergency liquidity but possibly advice on restructuring as well and consolidation. >> at the risk of sounding much too negative on this isn't this whole project doomed from the start? now we have the big spat between the imf and euro zone over whether there's debt relief. the past two bailouts haven't
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been implemented. why would the third one be implemented? >> that's a very very good question. agreeing on a bailout is one thing and then agreeing on the details is more difficult and more difficult still is actually perhaps implementing those measures. we would expect them to release it more slowly and actually implementing those prior actions which the greek government will have signed up to but yes that is a risk to things going wrong over the next i don't know 12 months to two years and we could be in a similar position to now in a year's time. >> we got a question from julia in frankfurt. jules. >> i wanted to ask you whether we'll see mario draghi draw a distinction. the message from him in june was there's going to be volatility get used to it.
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arguing that the back up we had seen was about the reinflationary trade in the economy and the euro zone. if we look at the situation now some of the pull back we've seen in rekrencent weeks was about that risk now. do you think he'll make the distinction? >> it's not so long ago, perhaps a year agatha central bankers and other global policy makers were expressing some concern about the lack of volatility in global markets. and perhaps that's a case of be careful what you wish for. it might come true. what has occurred over the last 2.5 months has been noticeable but is relatively contained in the sense that we vn seen euro zone sovereign yield rise up to the levels we saw a couple of
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years ago for example. if we had been in a grexit type situation and the markets in portugal and spain and italy were looking very very weak that could have been the signal to step up the pace. it's volatile but as i say it's arguably relatively contained. >> thank you very much. now for. we'll talk fed with phillip in a few minutes. jules thank you from brussels. we'll be back later in the show with julia. >> let's see how u.s. futures are shaping up this morning. the s&p 500 taken fair value into account and the nasdaq opening higher. this is after u.s. markets were fractionally lower but really just fractionally and they did fall for the first time in five sessions. couldn't quite hold on to their morning gains but yellen did
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make a big splash in the markets yesterday. at least not in the equity markets. moving on to the european picture, european markets trading at six weeks high and that's because greece voted off on the bailout measures. it's lagging a little bit but still higher. we had a couple of very positive corporate updates from swatch. >> interesting to see the size of these gains. opened up only about 0.3% and been a steady climb throughout the day. expecting support from mario draghi when he speaks later. let's look at the bond market. although we have seen positivity over the last 24 hours or so we did have a little bit of risk off sentiment late yesterday which meant despite the comments from janet yellen will be hawkish the u.s. ten year didn't see yields tick up. it saw yields decline a little bit.
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2.375 is where we're at at the moment but as you can see red across the board here because of the positivity in equity markets we're seeing bond selling, yields ticking up. 0.78 in germany. 2.12 on the u.k. let's also look at forex rates. the euro sold off significantly this week because focus after greek agreement was reached has been back on monetary policy between europe and the u.s. >> janet yellen goes back to capitol hill today. she testifies before the senate banking committee at 2:30 p.m. eastern. she told house panel on wednesday the fed is likely to raise rates later this year and turmoil overseas probably won't effect the u.s. economy. >> to raise rates will say no the economy doesn't stink.
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we're close to where we want to be and we now think the economy cannot only tolerate but needs higher rates. so there have been head winds and we have tried to use monetary policy to overcome them. >> now yellen might want to raise rates this year but she can't. that's the verdict of bond king who told cnbc at the delivering alpha conference that the central bank overestimated u.s. economic growth. >> i think that it's difficult for the fed to raise rates without nominal gdp increasing and they have a problem with the pce deflator which is not trending higher like the other inflation measures most notably the employment cost index which does look like it's in a rising trend and with that being the fed's favorite indicator of inflation i don't see how they can tighten with that indicator trending lower and nowhere near the 2% level. >> now phillip shore is still with us. chief economist at investec.
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people interpreted yesterday as hawkish. or do you agree that the data will prevent janet yellen from raising rates then. >> we do think that rates will probably rise in september but it's going to be dependent between now and then although she was careful not to express a specific month nor talk about how many increases there were likely to be this year but reading between the lines and looking at other fed policy makers as well and there's been a trend toward more hawkish comment from some of the centrists providing that we don't see surprises over the next coup of months we would say september is probably the first month we see a rise. >> they point out there's a risk
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of huge market overaction. that is if the fed starts to raise rates in december because it puts a focus on year end balance sheets. does that put december in favor over december. >> the primary driver will be the data but central banks have become more cognizent about the markets. but no i think if we see employment growth continuing at 200 k plus every month. unemployment ticking down. some signs that the momentum in consumer spending hasn't been lost despite disappointing retail sales numbers earlier this week then two rate rises are entirely possible and it's our baseline view. >> just a very quick comment to round things off on the u.k. because we had interesting comments suggesting we're coming
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toward a rate hike and data that might suggest that's unlikely. >> well mixed messages as ever from the data and i think what's really happened over the past couple of months is that we've seen now firm evidence that pay growth is rising up toward more normal levels and that's a big factor for the mpc. are we seeing a slow down in employment growth and declines in unemployment? probably. it's probably overstated but there's no signs that it's being as often as yesterday's numbers. we'll see a hike in february next year but there's a chance it will be brought forward to november. >> thank you for joining us. the chief economist at investech. >> donald trump claims his 10 beside billion fortune makes him too hard to regulate we're asking can you ever be too rich? more on that coming up.
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the dollar powers higher and u.s. futures indicate a higher open after janet yellen sticks with a rate hike this year. and fire bombs are thrown in the streets of athens. banks tune in to netflix raising
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their price target on the streaming service after it reports strong subscriber numbers. >> hawkish tones added to a perfect storm for commodity currencies overnight. the qe fell to a six year low on lower dairy prices and a weaker inflation print in new zealand. it lead to a softening of the aussie dollar. the canadian dollar suffered on the back of an unexpected rate cut. >> the qe central bank will be next to cut rates as early as next week. keep an eye on that. chinese stocks pairing session losses with the tech heavy index closing up just over 1% and the shanghai comp up a third of 1%. meanwhile the asian development bank cut it's full year growth forecast for 2015 and 2016 citing slower than expected growth in developed countries as well as in the domestic my.
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let's check in on how markets in asia finished the trading session. sri, pretty quite session. they passed the bailout measures which means more austerity which means that the crisis perhaps is nearing an end game. that's what the markets respond to. there's an element of caution because we're not looking at a full resolution of the greek crisis so you're seeing a degree of caution. some risk taking but the gains capped at around 1% if you look at most of the markets. in terms of the shanghai composite they sealed to have put a flaw in the market we have
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seen some deleveraging of the debt. it's 1 trillion euro so that still represents a risk and some are saying that the risks are still tilting to the down side. that's where we stand. back to you. >> moving on form you are. s. president bush is in stable condition after falling at his summer home in maine on wednesday breaking a bone in his neck. the 41st president turned 91 last month. he suffers from a form of parkinson's disease that requires him to use a motorized scooter or wheelchair to get around. >> donald trump claims he's worth more than $10 billion more than he previously said. his campaign releasing a statement on wednesday in typical trump fashion using lot of capital letters saying he filed his financial papers with the federal election commission
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but he didn't release the document or give many he details on his wealth. he made $213 million from the apprentice. he is mostly self-financing his campaign. $1.8 million in the second quarter. so this has us talking here on cnbc. what would you do here if you had $10 billion? several of you tweeted in already. he will set up a global fund to combat poverty and illness working along side the gates foundation and richard bransen. a highly commendable thing to do. what would you do with $10 billion? e-mail us or get in touch on twitter @cnbcwex. what would you do? >> still probably help greece. on monday they need 7 billion euros. right now we're working on financing so give some of that to greece and the rest i don't know, do something nice. >> although it would be nice because then we can move on as a
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discussion topic if you're doing something that the philanthropic there's better things to do as greece. >> like buying arsenal for example. >> but arsenal's market cap is just below $1 billion. so i could buy them and invest in the club another half a billion or so and you'd have plenty left over for other stuff. >> get in touch with us us @cnbcwex. >> still to come on the show are you ready for the latest online shopping binge? we'll tell you about amazon's prime at a after this short break. ♪ i built my business with passion. but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one. i earn unlimited 2% cash back on everything i buy for my studio. ♪ and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... that's huge for my bottom line.
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what's in your wallet?
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welcome back. black friday cyber monday singles day and now prime day. another 24 hour shopping binge. courtney reagan has the full sales report. >> leave it to amazon to create a shopping holiday and stir up the retail community. they're celebrating it's 20th birthday with a prime day. a shopping event for prime members to get more deals than on black friday. walmart responded offering awe tonic sales for 90 days or while supplies last. but amazon and walmart weren't first to drum up black friday in
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july type events. target has been doing it for the past six years. best buy also holds online sales in july. even though some shoppers expressed frustration with the type and availability of items on sale the marketing is working. >> save big on thousands of amazing items. >> by 2:00 p.m. amazon said peak order rates surpassed 2014 black friday though it declined to give actual numbers. >> they think this was a winning day for amazon. they're going to add lots and lots of members and make a new group of people familiar with with their offerings. maybe they'll clear out merchandise they want to clear out. certainly they got vendor participation to help with some of their best price offerings and it's going to be a good day for them. >> it's a good day for amazon because it never cared about making a profit. so a sale that compresses profitability isn't a big deal but for other retailers the constant one upping each other with deeper and deeper
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diskounlts maydiskounltcounts may increase revenue bit it's a change to the bottom. >> from the price transparency to the expectation of low cost and fast shipping as retailers pull out all the stops to compete, many fear it's a dangerous pattern as retailers train consumers to only buy when merchandise is heavily discounted. when it generates the lowest profit margins. who wins? that depends how winning is defined. it's ultimately a good day fromor consumers. >> and netflix beating on the bottom line but can netflix stay on top when it comes to the streaming market? we'll discuss that in two minutes. don't go away.
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welcome to worldwide exchange. >> here are your headlines from around the world. >> the dollar powers higher after janet yellen reit tates that the fed is preparing to lift off later this year. >> the decision on our part to raise rates will say no the economy doesn't stink. we're close to where we want to be.
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>> flames of fury as the country's lawmakers vote for the bailout but the german finance minister says a grexit may be better while mario draghi prepares for how the ecb will support the nation's banks. >> a number of banks raised their price targets on the streaming service after it exceeds expectations on new subscribers in the second quarter but income falls on expansion costs. >> how rich can he get? donald trump claims his fortune has climbed to $10 billion boasting campaign watchdogs can't deal with a man of his wealth. >> hello and good morning. thank you for joining us here on the show. it is 5:30 on the east coast. 10:30 here in london. here's how futures are looking this morning. the s&p 500, dow jones and nasdaq all modestly higher. the dow jones higher by roughly
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85 points. this is after stocks didn't do anything. they were falling for the first time in five sessions and janet yellen didn't move the markets too much. i want to show you what's going on this morning, we're higher across the board. we're seeing very strong gains, in fact the xetra dax higher by 1.4%. also very good numbers from swatch and very encouraging car sales numbers for the euro zone. auto stocks doing well today. also let's show you what's happening with the euro dollar pair. a lot of dollar strength coming through on the back of janet yellen's testimony and that's pushing euro dollar lower to 10902. >> inobstetrical second quarter profit fell 3% and the company
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is projecting better than expected third quarter sales and margins. growth in data centers and it's internet of things business helped offset weak demand for pcs. shares did rise 9% in after hours trade but that's just showing it's flat ahead of the open today. >> want to show you what's going on with netflix. shares up 12% in premarket trade following the second quarter results and we saw after hours it was up by almost 11% so we're getting a price of $109.83 a share. netflix fell 63% on higher cost to buy and create content. the strong dollar lowered the value of revenue generated outside the u.s. however netflix added a record 3.28 million new streaming subscribers in the quarter. more than expected as it aggressively expands internationally. the ceo did say the company may not be able to launch in china
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next year as planned. >> noining us tojoining us to discuss this is kathie wood. there's not many stocks out there where it's more important to call what's going to happen in the earnings release because the share price reaction is always massive after they release earnings but it's not so much earnings that people look at. it's the subscriber numbers, isn't it? >> yes it is. what was very surprising about this quarter was the bigger surprise was in the united states. subscriber growth was 50% above what people expected. so roughly 900,000 versus 600,000 and internationally there was a 25% upside surprise up 2 history to hit 4 million versus 1.9 expected. really strong growth. kind of a tipping point. >> let's talk about the u.s. for example to kick off with rather than new markets.
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what ultimately drives that growth in subscriber numbers? does it all come down to exclusive content or is it other aspects of the netflix service? >> well i do think we are seeing broadcast and cable viewership falling and people really gravitating to the services that netflix offers. original content is about 10% of their offerings. it's a big draw and reed hastings said their goal is to get that to 50% so we're seeing they understand what consumers want to watch. they watch their viewing behavior and understand what works so they are gearing their original anonymous content programming to that. the line-up is enormous. >> kathie let's talk about the international expansion. that's been the big story for netflix over the last year or
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so. europe has done beautifully but now they say that the entry into china may be delayed for a couple of months. do you think we're expecting too much from that much touted international expansion? >> they're in 50 countries now and they expect to be in 200 by the end of 2016. we think that they learned in japan specifically from hulu's mistakes. they're treading carefully and guided expectations to the low end. we think they learned from last year. last year their price was half what it is now. we loaded up on it and we'll maintain our positions because we think international is going to be much stronger than expected. they have kept expectations low. they're being very aggressive. we think that the penetration rates internationally are going
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to be much stronger than people expect. >> but that obviously comes out of a cost profit falling 63% in the second quarter. obvious lay because they need to create and buy content. why are investors so forgiving when it comes to the profit job specifically of netflix? >> well i think investors are looking at netflix the way they're looking at amazon. amazon is investing still against a huge opportunity. it's a huge opportunity and people are seeing it's solely focused on streaming video unlike many other companies and they're going to take a very large share of this market and the market is huge so that's why people are forgiving. >> i just want to finish up with a quick question on google. facebook has been starting to eat into their dominance of the online video market. the free online video market. what are you expecting from google earnings and do you hold
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the stock? >> we do hold the stock. you're right in terms of the competitive landscape. we hold the stock in our industrial innovation fund because we think that there's moves into the autonomous vehicle market are going to be a surprise in terms of the future earnings. it's a huge call option on that. it is a smaller position because of the competitive dynamics that you mentioned. >> thank you for joining us. much appreciated. the ceo and cio. >> for google it will be the first quarter under the new cfo so a lot of people are hoping for better disclosure and maybe a hint at capital return but that would be too much. ebay is close to a deal for
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about $900 million. the wall street journal says the sale could be announced this morning when ebay reports second quarter results. the enterprise business helps retailers boost their online presence and e-commerce abilities but it lost customers as they move operations in house. >> now his tweets netted investors millions of dollars but carl icahn revealed he's not responsible for writing those valuable 140 characters. in the words of the billionaire investor it is in fact his daughter who quote does my twitter thing. he has over 200,000 followers on the social network and a tweet about the value of apple stock in may added $8 billion to the market value. >> the twitter thing. that's really cool. anyway, still to come on the show presidential campaign cash. which candidates are raking in the dough if donors and who is burning through money like it's
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firewood and how much is donald trump actually worth? straight ahead. don't go away. r dentures can move, unlike natural teeth. try fixodent plus true feel. the smooth formula helps keep dentures in place. it's free of flavors and colorants, for a closer feeling to natural teeth. fixodent. and forget it.
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>> focus is going to be on financials. citi and goldman sachs reporting
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before the opening bell. they're expected a single digit decline in earnings. $3.70 a share on revenue but analysts are highlighting the late june uncertainty may have weighed on an otherwise reasonable quarter. thompson routers is forecasting $1.34 on earnings per share. yesterday remember an analyst on the show said he was bullish because citigroup's earnings are expected to be a lot less messy this time around. >> yeah looking forward to today's earnings particularly on the roe front. so lots to focus on on the earnings front. let's switch focus and talk about the candidates that have thrown their hats into the ring for the white house are disclosing some details about the money they raised and spent in the past few months in their quest to be the next occupant of the oval office. for a run down of that let's get
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out to landon live from cnbc hq. >> good morning. donald trump claims he's worth more than $10 billion thanks to the increase of his value and real estate assets. his campaign releasing a statement about filing financial disclosures with the federal election commission. in typical term fashion using lots of capital letters. the fec has 30 days to make it public. trump's campaign claims the form which discloses financial information in broad ranges isn't designed for a man of mr. trump's massive wealth. his wealth does include $213 million from nbc from 14 seasons of the apprentice and also involved with 500 different business with sole ownership of 91% of them. he is self-financing his campaign. and raising another 100,000. he has already spent 1.4 million or 74% of those funds.
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his expenses include transportation consulting, use of trump towers plus food from starbucks and mcdonald's. jeb raised 11.4 million from donors. he got about 375,000 from wall street including employees at goldman sachs and other investment banks. he earned up to $2 million a year. super packs and other outside groups are included. bush has nearly $120 million backing him. hillary clinton raised about 70 million from individual donors and super packs which can spend unlimited sums. 300,000 from wall street with the bulk from morgan stanley and jp morgan. clinton spent nearly 19 million so far on more than 233,000 per day. a burn rate that's seen more cash than other candidates is raised. marco rubio ended june with 9.8 million in the bank.
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rand paul seen as a top tier candidate raised 5.3 million. ted cruz spent more than half of what he raised. bernie sanders raised 15.2 million and still has 12 million left. back to you. >> thank you. now disruptive companies may now be shaping presidential election issues. jeb bush will deliver a san francisco based start up by hailing an uber. he is expected to talk about the importance of fostering technology to create high paying jobs but hillary clinton is taking a dimmer view in the rise of the on demand economy. she hinted that apps such as uber and airbnb were responsible for wage stagnation due to misclassifying workers. >> uber is being fined $7.3 million for refusing to give information about it's business practices to california regulators. this includes details on driver's safety accidents and weather. it's vehicles are accessible to
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disabled passengers. they are allowed to operate in the state as long as they report on aspects of their activities. it has provided sufficient information and will appeal the fine. >> let's remind you of the headlines before we go to break. the dollar powers higher and u.s. futures indicate a stronger open after janet yellen sticks with her outlook for a rate hike this year. greece's lawmakers vote in favor of the bailout deal as fire bombs are thrown in protests in the streets of athens and banks tune in to netflix raising their price target on the streaming service after it reports strong subscriber numbers. worldwide exchange is back in two.
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>> san francisco fed president says a september rate hike is plausible and the fed could lift again before the end of the year. inflation is likely to be back
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at the fed's 2% target or higher by the end of next year and the u.s. may be at full employment until then. williams is seen as a centrist whose views are in line with janet yellen. >> she goes back to capitol hill today for the second part of her semiannual testimony. she testifies before the senate banking committee at 2:30 p.m. eastern. she told a house panel wednesday the fed is likely to raise rates later this year and turmoil overseas probably won't effect the u.s. economy. >> the decision on our part to raise rates will say no the economy doesn't stink. we're close to where we want to be and we now think the economy cannot only tolerate but needs higher rates. there have been head winds and we tried to use monetary policy to overcome them. >> i have to say there is probably nobody in the world that has more attention on what she says. we had minutes last week.
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a speech last week. we had an appearance in the house yesterday. the senate today. it's a little bit absurd. >> someone that rivals her is is obviously mario draghi. that's in about two or three hours time. >> but it is a sign of the times. i'll use this to transition to the fact that we're so focused on it because it means so much for equity markets and we'll probably get a rate hike and it will probably be slowing gradually and small rise but we don't know what that's going to do to equity markets. we've had an extraordinary support and we will get a hike in september. that's what is being hinted yesterday but i wouldn't want to be long u.s. equities ahead of that. >> she didn't make that very clear because they only price in 30 basis points. that means one hike in december. so why -- if you say she was sending the message why is it
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not being received by the markets? there's a sizable disconnect. >> well it's not a sizable one. it's pricing indefinitely one rate hike with a small chance of an extra one. we will get the first one at some point and then be reactive for the next one but interesting to see the bond market moves yesterday because we saw yields coming down but there was general risk off sentiment ahead of that vote and those protests happen happening. dollar moving higher. euro is now flirting with the 108 handle. that's pretty clear that people this week focussing back on monetary policy is seeing that the euro side is continuing to be loosened and getting closer to hike. >> coming back to the treasury markets we definitely saw a jump in the two year. if we bring out the two year again that's at 68 basis points or so. that's quite a jump.
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that's a better reflection but still my point is fed fund futures still not in line with what janet yellen probably wants to say. >> okay let's give you a run down of what to watch this trading day. first time filings for unemployment are forecast to drop by a fair amount from the previous week. at 10:00 a.m. july philly fed survey from the national association of home builders. citigroup, ebay goldman sachs, united health and black stone report earnings. we hear from google. also i want to show you what u.s. futures are doing this morning. they're looking light. it's down about a tad from an hour ago. the s&p 500 seen up by 11.5 points. nasdaq higher by 26 points after stocks didn't do anything yesterday. they were just fractionally lower. >> some juicy positivity in european equity markets today. they opened only slightly
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positive but have risen throughout the trade. in and around. this positivity is really coming following the fact that greece did vote in support of the bailout agreement and ahead of mario draghi's testimony today after the ecb meeting. will he give a further boost to risk on sentiment? we await that later today. now greece of course is set to dominate that ecb meeting amid concerns over the country's bank which is have been closed now for 2.5 weeks. let's get out to julia live with what to expect. julia. >> >> thanks so much. we're expecting a steady hand approach. a bit of softness in that inflation data giving him room to be more dovish to be able to say guys i'm here if you need me. there's risks out there. the greek situation on going and china too. the asian situation a focus for
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the central bankers now not expected to say anything about it but it does mean they'll maintain policy but say look guys i'm ready to support the markets if and when needed. obviously in the q and a we'll be focussing on greece. whether or not they'll look to increase emergency liquidity assistance. we can safely say he needs more guarentees as far as getting a signature on the dotted line on the third bailout deal. we're not there yet. there's all sorts of implications and that ties to the euro group meeting that will take place today. to talk about the short-term financing arrangement. we need to get some cash in place to make that ecb payment on july 20th. that will be the key focus over the coming hours. guys back to you. >> thank you very much for that of course two big central bankers talking today. lots of focus on that but dpichb that we heard from janet yellen yesterday he'll be the key today. he's going to be a little bit
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more supportive of greece than we might expect. >> well he has to because we saw that pretty positive vote in the parliament yesterday even though a lot of members abstained or voted against it but he has to show a sign of faith by lifting the ela cap at what point they're going to reinstate the waiver for greek debt to be accepted as colalteral. maybe that will only happen when the bailout is done. >> absolutely and the crucial development of course is he doesn't want to get involved in mitt cal discussions but now we have that agreement and the greeks voted for it. he'll feel more free to talk. that coming up later today as we leave you today on worldwide exchange european equity market strongs. u.s. futures called to open in positive territory. that's all we have time for today. >> next up, squawk box.
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can a business have a mind? a subconscious. a knack for predicting the future. reflexes faster than the speed of thought. can a business have a spirit? can a business have a soul? can a business be...alive?
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good morning, back from the brink. at least for now. greece votes to approve bailout measures despite a revolt within the ruling party but that's no surprise but the decision was met by violent protests outside of parliament. happening now the ecb is meeting in frankfurt. the decision on rates expected soon and netflix shares up double digits this morning on strong subscriber growth and neil young says no to streaming only this time the fight isn't about royalties. it's thursday july 16th 2015 and squawk box begins right now. ♪
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>> live from new york where business never sleeps this is squawk box. >> good morning and welcome to squawk box on cnbc. i'm becky quick. take a look this is a live picture outside of the greek parliament this morning. it's a very differ scene than we saw last night in athens. things got violent with protestors clashing with riot police. the greek parliament approved an austerity bill. it passed despite a significant level of descent from the governing leftist party. former finance minister was one of several prominent members of tsipras's ruling party that voted against the bill. this crisis is far from over. today the ecb is gathering for a regularly scheduled policy setting meeting. we'll have a live report in just a moment but first let's take a look at the

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