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tv   Street Signs  CNBC  August 6, 2019 4:00am-5:00am EDT

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good morning welcome to "street signs." i'm joumanna bercetche >> i'm willem marx here are some headlines. >> european stocks steady after their biggest two-day drop since the brexit referendum. the dow plunging more than 760 points. the shanghai composite finishes at its lowest level since february and the nikkei closes in the red despite a late recovery >> the u.s. labels china a currency manipulator sending the
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yuan to an all-time low even as beijing sets its mid point fix at a stronger than expected level. and european yields extent their slide as growing trade tensions spur a growing flight to safety with the dutch and the irish ten-year the latest bonds to fall below zero all right. so let's talk about some price action overnight we had chinese and japanese equities closing in the red. this after the u.s. treasury department formally designated china as a currency manipulator for the first time in more than two decades. this after chinese authorities allowed the yuan to weaken beyond the psychologically significant 7 per dollar level on monday.
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the pboc rejected washington's designation and insisted it does not use the yuan to cope with trade tensions china's bank set the mid point stronger than 7, but it hit a low before news of a bond sale helped it to recover >> china confirmed it will suspend purchases of u.s. agricultural products in response to president trump's new tariffs a spokesperson for the chinese ministry of commerce called president trump's latest tariff announcement a serious violation of the meeting between the heads of state of china and the united states. so those are the developments overnight. we saw a bit of a stabilization in asian equities. we still had a session in asia where most equities ended up in
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the red. shanghai down 1% the picture for europe today, you can see somewhat of a stabilization. but still many indices are turning south in the last half hour or so we have ftse 100 the underperformer down 0.6%. yesterday the ftse was down 2 1/2 percentage points. keep an eye on the uk. we've been dropping despite weakness in the pound that we've seen in the first couple weeks of the month cac 40, the french index, moderate recovery, up 0.22%. xetra dax flattish, pretty much bang-on the flat line. we're seeing deutsche posting, that stock was up 3% we had better-than-expected factory orders come out. that is giving somewhat of a boost. a bit of a relief to the european equities after the bloodshed we had in european equities and across all stock markets yesterday. let's keep an eye on this.
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it's still early hours of the trading session. i want to take you to safe havens we saw a lot of activity going into the safe haven currencies. here i'm talking about yen and the swiss franc. with the stabilization of the equities overnight and this morning in europe we're seeing that safe haven bid coming off dollar/yen trading at 106.33. we are coming off a bit, but the mood is still one of extreme cautiousness, especially after what happened in u.s. markets yesterday. >> this was a selloff. let's figure out how big and how significant it was in terms of the context. all three indices saw their worst perform man of the year. for the s&p, this is down almost 3%
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that was the seventh worst point drop ever coming off '87 the worst since april of last year the sixth negative session in a row. an indication of how much this volatility stems from the trade war. 6 out of 10 of those top point drops on the sp &p 500 have been since february 2018. the dow had its worst day since christmas eve last year. the fifth negative session in a row. the nasdaq, it fell 270 points, 3.5% essentially that was the worst daily performance since april of last year the sixth negative session in a row. one major reason for the nasdaq falling so much was apple in particular we saw the stock down, having the most negative impact, the apple stock on the nasdaq comp yesterday. the tech sector as a whole down around 5%. you can see some of these majors
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down twitter down 5.8%. apple down 5.2%. let's check in on how asian markets have been faring today with matt taylor matt, can you run us through some details >> hi, willem. it was an interesting day because at the start of trade we did see significant falls right across these asian markets we had declines for the big ones, between 2% and 3%. as the day wound on and as we saw the chinese yuan strengthen a bit, tracking back towards the 7.06 level we saw confidence coming into the markets. by the close that was the picture on the asian markets i want to show you what happened in japan we saw a 2% swing for the
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japanese market off its lows of the session. down by several hundred points by the low of the day. this is the closing picture on the nikkei 225 off 0.6% this was off the big rally we saw coming in the japanese yen we did see that rally. it weakened asian side we had this 1% weakening for the japanese yen back into 106 territory so there's move out of the japanese yen supporting the export sector in japan and dragging that market off of the lows of the session. you can see on dollar/yen, it has strengthened in the last little while, 106.34. we're watching central banks in asia as well in particular australia out with
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its interest rate decision, keeping rates unchanged at 1%. it was particularly dovish when it was suggesting its forward guidance saying that further easing would be needed -- or if further easing is needed to support the australian economy t would not hesitate aussie dollar moving higher on that usually pummelled when we see equity markets sell down so much, but the aussie dollar at 0.6787 so that's two of the big features we're watching in the asian markets. yes a down day, but markets coming off the lows of the session. >> we're seeing some stabilization in european markets as well. thank you for the breakdown there on what to watch overnight. i want to bring in the global macro managing director from ts lombard and daniel bomorris fro
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bnp paribas to help us make sense. i guess the two significant developments between china and u.s., is china allowed their currency to deprecate through the psychological level of 7 and overnight the u.s. labeled china a currency manipulator what do you make of those developments >> i guess the key message is that the persistent trade war and related uncertainty that we've seen so far is likely to drag on for longer the chinese move on the currency front means it escalated to an fx war so china is no longer hesitant to use the currency as a weapon. it's not really that surprising. the chinese policymakers use either property prices, stimulating property prices, fiscal policy or credit stimulus as measures to stimulate the
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economy. they also have this long-term or medium term plan to de-leverage. so they stayed away from credit and property market so what they're left with now is the currenc currency >> let's take this back to the market and the implication this means for the markets. we had a huge day of volatility yesterday in equities and currencies it looks like we're entering into a new paradigm now. the authorities only have the currency left to use as a buffer against the tariffs. what does that mean for financial market volatility going forward? does this have implications on the trajectory of how investors should think about trading currency, particularly those exposed to china >> it's going to increase pressure on a lot of other asian currencies we're expecting a lot of central banks now, if they were not planning to ease, they have to
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now because they need to defend their own currencies so, yes, it will increase volatility a bit really the key source of the volatility will remain trump, which is unpredictable, as we know as we think in general, for us fundamentally the question is has our outlook for markets and u.s. growth, european growth under. i will changed because of the announcement of tariffs, and it hasn't >> on this decision on currencies in china, does this to you seem like -- should this to investors seem like ultimately an economic decision? is this really a political decision as to what mr. trump announced? >> it's a combination of both. so, you know, trade war has moved away from economic considerations it's no longer about u.s. not
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wanting a massive trade deficit with china it's no longer as much about the chinese policymakers managing the currency it's moved on to the political horizons it's also more about tech wars as well. and the bar on either side to pull back is significantly higher chinese policymakers have this commitment to double their gdp growth between 2010 and 2020 and they have been falling behind that. so, you know, you would not be surprised to see premiere blaming this on trump and letting the currency slump because of that. >> the last time it was accompanied by a huge wave of capital outflows out of china. why is this time different >> one of the big reasons is that the capital controls are a lot stricter this time than in
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2015 because 2015 was the first time policymakers experimented with devaluation. this time around, you know, they're better prepared. this has been going on for so long, investors, chinese residents are sort of used to these capital outflows, these policy moves that's one of the reasons. the other one being china's gradually opening up its capital market so there's some sort of inflows into chinese bond market as well so these are some reasons why it's a bit well balanced this time >> do you think the yuan will continue to move in the weeks and months to come >> if anything, we think it will move back down below 7 we think it's fair valued currently. we don't think it's the intent of the pboc to use it as a weapon and allow it to deprecate. we think it could strengthen from here. >> interesting >> please stay with us coming up, despite a slight pick up in industrial data, german's
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economy ministry says the country has yet to turn a corner we'll leave you with some details of the asian markets as we take a break. all four major indices well into the red today. your brain is an amazing thing. but as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. healthier brain. better life. (danny) after a long day of hard work... have to do more work? (vo) automatically sort your expenses and save over 40 hours a month. (danny) every day you're nearly fried to a crisp, professionally! (vo) you earned it, we're here to make sure you get it. quickbooks. backing you.
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welcome back we talked about some price action in european equities, a bit of astabilization, but i want to take you to the price action in fixed income we have the two-year note rallying 14 basis points during yesterday's session. so just to give you an idea of what's happened in the front end, the day after the fed meeting last week the market was pricing in 34 basis points worth of extra cuts for the rest of the year we're pricing in 67 basis points worth. so more than an extra cut priced in after the developments on the trade front. you can see the ten-year note also showing in price terms
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here, but we rallied about 12 basis points today we're coming off a bit that's the picture for u.s. bonds. we continue to see a flight to quality bid going into those instruments. let's talk about eurozone bonds. we are seeing a mixed bag. more strength in the ten-year bunds, minus 52.3 is the level now. we were talking about this yesterday. every single german bond is trading in negative space. the netherlands is joining the negative party ten-year gui yooe-year gilt tr 2 52 hewe talked about stabilization. on the back of the stabilization of equities, we're seeing the bid for safe havens being
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unwound. yen coming off a fraction, 0.4% weaker ten-year note, swiss franc coming off a fraction. gold coming off six-year highs still we've seen a lot of money flow into gold over the last couple of sessions let's keep an eye on how fundamentally executives evolve in the next 24 hours that should give you a better picture of what's going on in the safe haven space >> amid the market movement let's talk about corporates. deutsche post raised its 2019 earnings forecast. they said restructuring measures and a rise in postage prices should help earnings the company said it's operating on a challenging macro economic environment. the cfo told cnbc the company is back on a path to growth >> these are year over year declines for several quarters now, since the fourth quarter of 2017 q2 2019 marks a turning point. we're in growth territory year over year for our post and
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parcel business. the post business declines, they will continue to decline but at a steady pace. we are growing past the business and here we saw another strong quarter, 6% volume growth. the growth continues out in the german market. >> let's stick with germany. industrial orders there ticked up slightly in june. this helps to calm concerns about the impact of the latest trade escalation between the u.s. and china big ticket items and demand for non-eu countries fell 1% raising fears that europe's largest economy may contract on a yearly basis, industrial orders dropped by 3.6% let's bring back in our guests
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let me ask you about this. how much worse could it get for europe if we see continuing trade deterioration? >> quite a lot worse from here this is actually a massive deterioration from where it is in 2017. now expectations for eurozone growth are north of 1% similar levels in 2020 as well this is way below europe's modest potential growth rate so trade war uncertainty persists, and it seems like it will, we could see further downgrades from here it's manufacturing oriented, and we will see these repercussions bleed into the economy what's worrying, so far the services sector held on well, wages are growing at a rapid
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place, inflation is modest, employment is gaining at a rapid pace, but the drag on manufacturing is spreading into the services sector. s as are l expectation expectations >> with this somewhat gloomy set up for the second half of the year in the eurozone, how do you play it? we rallied so much in fixed income space already do we have more to trade if you want to trade something in the eurozone >> you have to look as a relative opportunity as opposed to absolute. even if fixed income stays where it is, you may not be earning a lot on the bond that you buy,
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and equities, the potential for us is not yououtstanding, but i should be higher so we prefer equities still, but at the same time we have modest expectations where those returns might be >> what about the different countries in the eurozone? i want to understand the distinction between what's going on in germany, in italy, in spain, in france >> it's sort of a tale of two halves germany and italy are some of the worst performing eurozone economies. and on the other hand we have france and spain doing quite well the reasoning being germany as we spoke about earlier is one of the most export oriented economies. at the same time on italy, it's also quite export oriented what is worse for italy, you know, we are aware of this, the
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productivity challenge and the political challenge, the fiscal challenge as well. it's also -- it competes a lot with china terms of exports baskets. surprisingly italy hurts more than many other economies, it's not an asian economy, but its export basket is almost the same as china's various factors including the corporate tax cuts, the fiscal stimulus is one of the largest among the eurozone countries, and also it's got a relatively more competitive starting point, so exports are doing relatively better than the rest of the eurozone the same holds for spain and it's exports basket successfully managed to carve out an increase in exports share
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in global exports. >> still some divergence within eurozone, but the ecb is the central bank for all of the eurozone so they have to think about all of these things and the potential for the growth situation to get worse what do you think the ecb do in september? can they stop things from getting worse? >> the question is to the degree they're able to do anything, if they try to get interest rates lower, we're already quite low there's a question of how much difference it will make in terms of the economy as pointed out, it's much more around the domestic environment in each of the countries, is there potential reform, how dynamic the countries are. we're focused on that angle as opposed to what the ecb can achieve with interest rates. >> i've been watching the currency closely as the president of the united states the euro currency is stronger than where we were going into
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the ecb meeting. draghi sat down saying we'll do whatever it is to stimulate the economy, and two weeks later the euro currency is sitting stronger that puts them in a difficult situation. where do you see the currency going from here? >> one thing they need is to have a weaker currency if it's a battle between the central banks as to who can get the currency to fall the most t will likely come out in favor of the u.s. that's the challenge that draghi faces and whlagarde will face after him. if they lower the deposit rate, what will that do to the banking sector >> and where do you see the currency going we have about 30 seconds do you have the same view? >> the bar for europe to move lower is very high in spite of qe2. 30 seconds >> you nailed it we both agree then, the bar for
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the currency to move lower is quite high daniel, we'll leave it there thank you very much for joining us and you'll stay with us to continue the chat after the break as well. coming up on the show, luxury stocks in europe stabilize after a rough few days for the sector we'll give you the full analysis next and just before we head out, i want to show you a screen of the off-shore yuan we are actually trading through that 7 psychological level we broke through thaeaiet rlr today. more developments after the break.
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welcome back to "street signs. i'm willem marx. i'm joumanna bercetche these are your headlines >> european stocks steady after their biggest two-day drop since the brexit referendum. wall street logs its worst session of 2019 with the dow plunging more than 760 points. the shanghai composite finishes at its lowest level since february and the nikkei closes in the red despite a late recovery >> the u.s. labels china a
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currency manipulator sending the yuan to an all-time low even as beijing sets its mid point fix at a stronger than expected level. and europe pe the european s extend their slide as growing trad tensions spur a growing flight to safety with the dutch and the irish ten-year the latest bonds to fall below zero all right. finally some groeen on the board european equities trading with more positive tone this morning after some steep declines in yesterday's session. the stoxx 600 as a broad composite index was down 2.4% yesterday in trading today we are seeing some green we have not pared the losses
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that we saw yesterday. the one spot of red, ftse 100, slightly below the flat line this index has come under pressure for the month down about 5% for the ftse 100 overall things are trading with a slightly better tone i want to point out in germany we had slightly better manufacturing data the manufacturing factory orders came in better than expectation. that has given a lift to that index. we had better earnings out of deutsche post. much more green on the board today. let's take you to the price action overnight in asia all of the focus has been on the reaction in chinese equities after the u.s. has formally labeled china a currency manipulator. we saw a weaker yuan overnight the consequence of that, we've seen some more red on the board. shanghai composite down 1.5% weakest levels since february. there is still some market
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damage going on here shenzhen, the tech heavy and more volatile index, down 1.8% i was talking about the renminbi we have the offshore yuan trading at 0.73. let's talk more broadly fx moves. yesterday we had the dollar deline about a half percentage point. you would think that would be a positive thing for emerging market equities, not so much the case we saw a flight to quality safe haven bid for some safer currencies, there i'm talking about the yen and the swiss franc. this morning the yen is coming off. dollar/yen at 106.50. and we have cable seeing consolidation, 1.2140 was the mark we've been the last couple of sessions.
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today sterling trading a bit firmer versus the dollar to the tune of about 0.30%. yesterday when the dollar was weakening, sterling was weakening against the euro euro/sterling is a currency pair to watch we've been talking about the strength of the euro currency. this is 1.12 versus u.s. dollar. we had extremely heavy selling yesterday in the u.s. markets. we are seeing some stabilization in u.s. futures. all of the three makers seen opening up in the green. in terms of earnings, watch out for some big names like disney coming up later as we head to the end of the u.s. earnings season the treasury department has formally designated china a currency manipulator for the first time in two decades. this followed the chinese decision to allow the yuan to
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weaken below the 7 per dollar level on monday. the peoples daily accused the u.s. of deliberately destroying international order. eunice yoon filed this report about today's reaction >> reporter: beijing appears to be attempting to bring the heat down the chinese central bank said the mid point of how much traders can buy and sell the currency each day slightly stronger than the psych lodgely important 7 mark, though still at the weakest level in seven years. the renminbi is holding steady in line with the central bank's promise to keep the currency level. last night policymakers were committed to keep the exchange rate at a reasonable and balanced level and promised not to use the currency as a tool to deal with trade disputes china does not want to appear as a bad actor or the one to blame for a currency war the u.s. thinks that's what china is the treasury department labeled
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china as a currency manipulator for the first time since the 1990s. steve mnuchin will engage in conversations with part of the monetary fund to eliminate the unfair competitive advantage of chooin china's action but the move is seen as symbolic since any punishments are seen as less damming than president trump's actions. chinese companies are said to have halted on purchasing u.s. agricultural products. the global times explained today that the word suspend means that there's room for the two to reach a solution just another way china wants to present itself as the grown up on the global stage as opposed to the u.s. which the state media here says is destroying international order. luxury stocks have been among the worst performers in
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europe since president trump announced fresh tariffs on china. the companies on the stoxx 600 are vulnerable to a weaker yuan as chinese consumers account for a third of global luxury spending richemont has been hit particularly hard and declines have been exacerbated by the political unrest in hong kong. so let's bring in lucas solca from sanford c. benstein and he joins us from italy. looking at the luxury stocks, kering, burberry, swatch, richemont, all of them got hit in the last 24 hours yesterday some of them were down 5% what's your take on what this escalation between the rhetoric between china and u.s. means for the european luxury sector >> luxury goods, companies
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depend on chinese demand significantly. you said one-third of the market is driven by chinese nationals buying everywhere in the world the weaker yuan is probably going to be a headwind for the industry as chinese consumers face higher prices as the tariffs work against luxury companies. and the international trade confrontation points to potential softness in macro economic growth in china which could indeed again cause more muted chinese demand going forward. that is the reason for the correction hard luxury companies and stocks correct the most because they have the highest exposure to hong kong and during the month of july we have evidence to say trade was more disrupted than in the second quarter in the island
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city that again causes a short-term concern for the likes of richemont and swatch >> what is the likely pricing impact going to be on european companies? we talked a lot about the potential impact on u.s. corporations let's not forget these are tariffs applied between the u.s. and china respectively, not necessarily on european goods. will it have an impact from a pricing perspective on the way these companies price products within china and outside china >> as we look at european luxury goods companies, we don't have much of an impact from tariffs on chinese exports most production is carried out in europe and in areas currently not affected by higher import tariffs imposed by the u.s. administration this is a different kettle of fish, but it is going forward,
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president trump would act on tariffs on european exports and french lines, mentioned previously in one of the recent tweets that could be more of a concern. as far as european luxury goods companies and their manufacturing activity, there's not much of an impact. it's a different story if we look at luxury companies like capri and paper stream in the u.s. which import more important quantities from china directly >> luca, we'll leave it there. thank you very much for joining us on the line from italy. i want to bring back our guest from t.s.lombard i have an idea of chi thenese consumers facing headwinds with the change in the value of the chinese currency, but in terms
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of other sectors in europe, how do they get affected >> the sectors more export oriented europe has escaped the u.s./china trade war the u.s. has not really imposed tariffs on europe. why is europe still suffering? as we pointed out in the beginning, it's export oriented. and there's intricate value chains even if there are no direct tariffs imposed on european companies or products, because there are so many value chains in operation globally, it means when the end demand for chinese exports is heard, that means intermediate goods demand from china is hurt. that's where europe comes into play sectors that are less export oriented will perform better and also sectors that have less exposure directly to china autos are really clearly
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exposed, but those that do not have huge exposure to chinese demand will perform better as we've seen the weakness spread from manufacturing to services, there are not really many options anymore >> we'll leave it there. thank you very much for your time and insight the hong kong protest has seriously hurt foreign investments and are pushing the city into dangerous abyss. that's according to a spokesperson for the hong kong and macau affair services. last night saw further violence in the territory as police fired tear gas and fighting broke out between demonstrators and an armed mob in the eastern part of the city beijing is escalating in its warnings against hong kong protesters and violence in the city the key message from mainland china's hong kong and macau affairs office was today do not
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misinterpret its response so far. >> translator: i want to warn all those criminals don't misjudge the situation or take restraint as a sign of weakness. don't underestimate hong kong society's powerful force for justice. in protection in the rule of law and security and order don't underestimate the firm resolve and power by the central government and the people across china to maintain prosperity and stability in hong kong and safeguard the fundamental interests of china >> reporter: china reiterated the stance against chaos in hong kong in the second press event in over a week this while calling on hong kong s citizens to stand up and protect their homeland one day after the second incident of an armed mob attacking protesters it also added some radical
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protesters are pushing hong kong into a dangerous abyss and that it will not tolerate violence of the law. this comes as we see some alarmist reports about possible military deployment by mainland chinese authorities to maintain the chaos in hong kong when asked about the possibility, beijing says it has full confidence in the hong kong government and police capability of handling the situation. hong kong police are also denying military deployment within its force as well i'm chery kang for cnbc hong kong >> some striking images there from hong kong that's also impacting some performance in asian equity. let's take a quick look at how u.s. futures are shaping up today. we have the three make emajors pointing in the green. that's the picture for u.s. markets. a quick look at asian markets and how we ended overnight
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shanghai composite down 1.5% the weakest level that index has been since february. still a lot of red on the board there. we'll bring you more developments after the break ♪ did you know you can save money by using dish soap to clean grease on more than dishes? using multiple cleaners on grease can be expensive, and sometimes ineffective. for better value, tackle grease with dawn ultra. dawn is for more than just dishes. it provides 3x more grease cleaning power per drop,
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welcome back looking at the developments across all markets in the last 24 hours, first with the look at u.s. futures today we had a heavy session in yesterday's trading with all of the indices seeing the worst day since 2019 the worst day since the february and october selloffs we had last year all the sectors in the s&p were trading in negative territory yesterday. today the three are somewhat stabilizing. dow opening up about 80 points higher a bit more positivity a bit more of a rebound priced in we had steep losses yesterday. those were north of 700 points we have to see how things will develop in the u.s. time
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we are heading into the end of the earnings season. price action for asia. you can see that shanghai composite still in negative territory, ending the session 1.5% weaker. that is the weakest the shanghai composite has been since february, this after further developments overnight the u.s. labeled china a currency ma nnitulamanit -- manr renminbi is weaker overnight even though the official fixing from the pboc did not come in as weak as people an tess pated that provie evided a temporary respite. yesterday was a day where we had energy drop about 3% -- to put it into context, last three
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sessions wti down 8% today we are seeing a bit of a relief rally maybe short covering is going through in line with what we're seeing in european equities. wti trading at about $55 now switching to other commodities, particularly here i want to focus on safe haven. we've seen a lot of in flows into gold the last couple of weeks, not just because of what's been happening in a risk-off environment but also because the fed have turned dovish you have seen some money flow into gold. six-year highs, 14.61 where we're at weaker today, trading on the back foot. generally speaking the momentum is positive. silver as well, we have some flows there. if you look at the relative pricing, silver is catching up with the momentum we're seeing in gold. copper, all eyes on that copper prices have plunged you can imagine the currency is
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trading closely to that. that's the picture for commodities. goldman sachs says it expects the fed to cut rates twice more before the end of the year the bank sees a 75% chance of a 25 basis point cut in september, a 50% chance of a second such cut in october the bank previously forecast just two cuts for 2019, now it says the fed has become increasingly responsive to trade war threats, bond market expectations and global growth concerns and tencent is in talk with vivendi to buy a 10% stake in the french company's universal music group. the deal would give the music subsidiary a preliminary valuation of 30 billion euros and the tech firm would have the option to buy a further 10% at the same price and terms a big jump in vivendi stock. analysts expect the success of "avengers: endgame" will help
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disney's third quarter results shareholders will be keeping an eye out for further updates on the streaming service, disney plus guy joins us now with more what could investors hear from disney about the streaming service? and why does it matter >> matters because the television market is transitioning. disney recognized that earlier than any other major studios they're about to embark on a massive reengineering of the entertainment business, going direct to consumer and effectively cutting out the middleman of the relationship they have with them. this is a big deal the quiet before the storm >> so if they try to reengineer that, what does that mean for their revenues if you end up cutting out the middleman, the cable companies, you end up losing those carriage
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fees can a $7 a month subscription make up for that >> you're right. they're about to embark on a huge game of snakes and ladders. i would expect them to going forward to be cannibalizing their own business, dropping down the snake, coming back up the ladder of direct the opportunity for them by going direct, they have a direct relationship with the end consumer that allows them to monetize across the business lines and build that fan base. >> to go back to what willem was saying, there's a shift in terms of how they're sending out the content, they're moving to streaming. that's one shift the other shift is moving to subscription models away from advertisement. how long can that purr subscription model survive >> you're right. we're on the verge of a hybrid model in the streaming space it's been driven by
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subscription netflix, of course, hulu is a hybrid platform. so hulu is one of the planks in the disney bundle. it's not just disney plus. it's hulu and espn plus as well. the advertising part of the pie, absolutely essential better access to data that they'll have when they have the direct relationship, that will allow them to monetize advertising more directly. >> there's so many plans for new streaming companies to come online, whether it's at the end of this year or the beginning of next are there simply too many of them we only got a certain number of hours in the day where you can sit as a consumer and watch. is there a risk of this market becoming oversaturated >> we thought we hit a ceiling earlier this year when we saw the number of services people appeared to level out in the u.s. but i think we're about to break through that ceiling people think nothing of buying a sky subscription with 600
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channels or 500 channels we won't have 500 streaming services, but there's room for 10, 15 or 20 >> we mentioned "avengers: endgame" there how differently does a company like disney or competitors have to think about the content they create, both from a perspective of how it performs at a box office and what's the long-term shelf life on the streaming platforms? will that change the way they go about creating content >> it would change the way they window the cinema, when they window the cinema and put it on their service. what we saw from netflix, the performance of the box office becomes key. that, you have a soft content quarter as netflix did last quarter, and your subscribers can go into declinement when you have that direct relationship, it's important that the flow of quality content continues every single quarter and that will be key for disney
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going forward. >> indeed, that's why netflix have such a big spend on content. guy, we'll leave it there. thank you very much for joining us today we've been talking about markets throughout the show. i want to remind you again about the price action we've seen in asian markets after the u.s. formally labeled china a currency manipulator shanghai down 1.5% the yuan continues its depreciation we're firmly through the 7 psychological level. nikkei off about 0.23% quick look at u.s. futures all three makers seen opening up in the green some stabilization let's see how long it lasts. thank you for watching i'm joumanna bercetche >> i wlema'milm rx "worldwide exchange" is coming up
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monday meltdown could lead to a tuesday turnaround. stocks fighting to bounce back from wall street's worst day of the year the s&p 500 falling 3% this as the trump administration labeling china a currency manipulator. china firing back now saying america is deliberately destroying international order as it looks to stabilize its own currency how is that for a morning? it's tuesday, august 6th "worldwide exchange" begins right now.


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