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tv   Street Signs  CNBC  July 19, 2019 4:00am-5:00am EDT

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. good morning welcome to "street signs." i'm joumanna bercetche >> i'm julianna tatelbaum. these are your headlines european stocks track asia higher as dovish commentary from fed officials boost hopes for a rate cut later this month. shares of publicics fall following a weak second quarter. ab inbev shares pop after the drinkmaker agrees to sell
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its australian business to asahi to 10 billion euros. and oil prices climb after the u.s. navy takes down an iranian drone in the strait of hormuz ratcheting up tensions between washington and tehran. good morning, everybody. one of the names we're very much focused on, a big mover is publicics in france, down 7.5% the french advertising group has actually announced that it will be -- we will be getting more information on that. you can see that the stock is down about 7.5%. down about 15% over the last few months they have slashed their 2019 revenue guidance after delivering a worse than expected second quarter the third largest advertising
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group posted organic growth of 0.1%, missing market expectations as it suffered from weak ad spending in the united states publicis put its 2020 targets under review citing the 4$4.4 billion acquisition of epsilon for the move. i'm pleased to say karen is around the desk with us. karen is somewhat of an expert in this field and has been following publicis' transformation is this a case of short-term pain for long-term gain? or are we seeing signals they will be unable to deliver on the transformation >> you go to a couple of canned lines you become an expert in advertising, but i think we all covered some of the structural challenges in this sector. the problem is that invests potentially did not expect this to stretch out for so long the problems are into 2020
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potentially. this company has done more than others in some ways in the sense that it made a major acquisition of a data business recently. the likes of wpp have been selling down some businesses, selling down kantar. the problem is what is flagged up in the numbers. it's around the big advertising clients it has in the united states you think big clients who have been cutting their budgets because of the pressure they faced on flat revenues and activist investors they're not spending the sort of money that they traditionally spent with an advertising company. when they are spending it, they are spending it on digital, which is much cheaper than a big blockbuster ad for a super bowl. you have budget cuts, fee reductio reductions, and a profound transformation is what they described it as, the epsilon purchase how they execute on this could
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stretch out to next year they have also flagged up some of these trends with clients spending less could stretch out to 2020. >> what does this mean for the sector as a whole? this is a theme you discussed many, many times it's not just publicis there are many other traditional agencies coming under pressure, they are making this big push into digital because the mod hall been disrupted by the likes of facebook, google. what is the unique selling point of these traditional advertising agencies if you're a company, surely it's easier for you to get rid of the middle man and go straight to the digital platforms. >> here's the answer i don't know that's a problem, right? you are seeing a reorganization of these businesses, a dramatic reorganization the data side of epsilon that publicis is buying, how transformational will it be? we've been promised swift execution and betting down this
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part of the business in publicis will it make a difference? we don't know. there's flat revenue growth for this company i have the same issues when it comes to wpp they get rid of part of kantar, keep some of it, but the model for most of these agencies is broken i was asking whether the agency model was starting to show signs of recovery, whether there was a comeback plan, the answer was no the jury is still out. and i spoke to the biggest expert in the field. if he could not see a way out for those advertising giants, that's the problem and it is reflected in the share price action today >> all right karen, thank you for joining us. lovely to have karen on "street signs. let's talk about some market action overnight you can see there is a bit of green on the board
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in europe, about 70% of the stocks on the heat map are trading in the green a lot of positivity in the air for the stoxx 600 led by wall street all of the sentiment turned around after comments from fed williams which has cemented the case for an interest rate cut at the end of this month. the question is how much will they go for? 80% probability of a 50 basis point cut is priced in that positive session has fed into asia, now you can see it's in europe as well. up a half percentage point almost all sectors in europe are trading in the green today led by cyclicals, autos and basic resources. i want to break it down by individual markets the picture is one of green across the board ftse mib, the relative underperformer keep an eye on the politics there. things have been heating up
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between dimaio and mr. salvini and mr. dimaio calling for a meeting and a peace offering elsewhere the ftse 100 is up 0.6% the theme there is one of the markets coming to terms with the possibility of a no-deal brexit come october 31st, and how parliament would move in order to stop that from happening. xetra dax and cac 40, the focus today is very much so on earnings all right. joumanna bercetche mentioned the fed commentary as one of the key drivers of market moves yesterday and spilling into today. let me give you more detail on what we heard. the new york federal reserve walked back comments by john williams that stoked expectations of aggressive rate cuts in a speech williams said central bankers need to act quickly when rates are low and economic growth is slowing saying it's better to take preventive measures than to wait for disaster to unfold market expectations for a 50
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basis point rate cut jumped to about 59% following the remarks. they fell back down after the new york fed clarified the comments a spokesman told cnbc the speech drew from research and was not about potential policy actions at the upcoming fomc meeting separate separately, richard clarida made comments that added fuel to the fire he argued the case for cutting rates quickly saying you don't have to wait until things get so bad to have a dramatic series of rate cuts. let me show you some of the price action on the dollar yesterday. we saw the dollar fall back on the back of these comments now right there on your screen you're seeing sterling rallying versus the -- excuse me, sterling falling back against the dollar sterling, as joumanna mentioned, a lot happening on the uk side of that currency pair. i want to bring in colin asher
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now from mizzou bank the markets took this to heart and are pricing in a more aggressive rate cut at the end of july. did this change your view of what we might see in a couple weeks time >> rates are going down, it's a question of how far and how fast the fact they tried to walk it back suggests that they are not -- were not particularly pleased with the market reaction they felt they had to do something to roll it back. so i still think that the 25 basis point cut is likely. certainly the notion of moving aggressively -- if you think about it, it's really a message for the other central banks. the fed actually has some space to cut rates williams was talking about where policy space it limited. you don't need to keep your powder dry probably talking about the ecb, bank of england, boj
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>> it's one thing to have more room to cut rates relative to other central banks, it's at to use that ammunition at this point when you have stock markets at all-time highs, the labor market remaining strong. do they need to be using this dry powder now >> there is one word in your introduction, when you said williams said we don't need to wait for disaster. it's not a disaster at the moment in the u.s. growth is reasonable the labor market is strong unemployment is below the fed's mid point of the long-term estimate there's not a sense of imminent disaster, and there's not a great deal of urgency to cut rates. prevention is better than cure, and it looks like they're heading down that track. my sense is they'll start slowly, probably continue -- i
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think maybe one cut now, probably another one the back end of the year or early next year, which is less than the market is pricing in i think it's a question of how far and how fast the direction is -- the direction is the same for everyone lower is definitely the next step for almost everybody. >> there's been a lot of talk about fx intervention the last couple of weeks. particularly in light of where the u.s. dollar is headed. we have this anticipated fed cut that is about to happen, whether it's 25 basis points, 50 basis points how do you think about what the fed does in the context of the u.s. desire to have a weaker currency >> i think the fed is trying hard to manage its primary responsibilities, which is dual mandate. it's not particularly focused on the foreign exchange markets as with all central banks, the level of foreign exchange is an important input. it's not trying to drive the
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dollar i think one of the reasons the dollar is strong is because u.s. rates are so much higher than everywhere else. the yield pick up in the u.s. is higher than most other markets clearly that's a function and donald trump is strongly against that the question for me, would the u.s. like to intervene for maybe a couple of decades since the clinton administration, central banks intervening or governments intervening to weaken currencies has been less, it hasn't happened particularly often. generally to prevent when markets are disorderly, but is it likely to come back on the table? i think it is more likely to come back on the table given what the u.s. is doing with trade, the dollar remains highly valued the imf released its annual currency report the other day. this all plays into the notion that we have seen donald trump once a week talk about this. i think he'll work on the trade
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front f thereand if there are or fronts he can open, i think he would like to. it's where i think the trade secretary is against it, larry kudlow is against it, and would it be effective? it's mostly effective when all central banks are intervening in the same direction they'll be going it alone. no one else will be intervening to strengthen their own currency while the u.s. is trying to weaken theirs. i think the question of effectiveness will be something to look at >> we've gone from trade war to tech war, potentially a currency war. we'll pick up the conversation in the next segment. oil prices are higher after the u.s. said it took down an iranian drone in the strait of hormuz president trump said the vessel took defensive action against
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the aircraft following multiple calls to stand down. he called the iranian maneuver provocative and hostile. tehran's foreign minister said he had no information about losing a drone the latest escalation in the region comes as iran offered more inspections of its nuclear program in exchange for the lifting of u.s. sanctions. the foreign minister said tehran would be open to ratifying a document granting u.n. inspectors greater tools to verify the country's nuclear projects the u.s. said any serious gesture must include the end of uranium enrichment. coming up, shinzo abe's ruling coalition faces voters in the upper house elections this weekend. we're live from tokyo next
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steve mnuchin says trade talks between washington and beijing are ongoing. both sides spoke over the phone
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on thursday, but mnuchin said he expected in-person fatalks to follow soon. mnuchin said there is a willingness to rekindle negotiations >> i think you know we were very far along on the deal. we were disappointed that we went backwards on certain issues i think we got direction from president xi to president trump to try to get back to the table and move forward and that's what ambassador litehauser and i are working on. that's our objective we want to get a good deal we will only enter into a deal if it's a good deal. in japan the ruling coalition maintains its lead ahead of elections on sunday at stake are several planks of shinzo abe's legacy, including a twice delayed sales tax increase martin tsong joins us live from
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tokyo with more. the key question, i supposed, is will shinzo abe be able to maintain his super majority? if he doesn't, why shouldn't the market care? what are the key implications of him losing this majority >> good morning. you're spot on there it's about not so much whether shinzo abe and their coalition partners can win, but whether or not they can win big, not just maintain a simple majority but maintain two-thirds of the upper house. the polling suggests they'll get sort of half of it done. they will get the simple majority but may be challenged trying to super majority as you all know, what markets really want to see out of the politics in any country is a couple of things they want to see certainty they want to see reliability
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they want continuity of policy will they get that that's a question that's becoming an increasingly big one if it's true he will lose that two-thirds super majority. one, it means in terms of constitutional reform that it will be harder for him to get through. more importantly, it's going to mean overall that the ldp coalition will have a weaker hand we'll see that play out likely shortly after the elections. could be as soon as august when abe is likely to reshuffle his cabinet. key men, who will they be? will some retain their posts or will some of them be switched out and booted also in terms of the factional politics, the horse trading. what is abe, the ldp coalition, what will they have to horse trade to keep other people happy? it may not necessarily be as
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stable as the market would prefer that's something to watch out for. simple numbers upper house, 245 seats, only half of them up for grabs. call it 124. to maintain the simple majority they need 53 seats to hit the super majority, they need 38 seats more on temperature of that. the key issues, the controversial second leg up in sales tax, up to 10% even. how folks here handle that, that's an open question. how voters feel about that as well we've talked about this big hole in the pension system in japan whether or not old folks here will have enough money, not just from the pension, but whatever else they need to supplement income on top of that from the point they retire and pass on. that's an open question. some stats have come out in the last one or two weeks suggesting that pension hold, that shortfall could be big the upside for markets, it could force a lot of them -- this is
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what we've been seeing, a lot more people have been opening up retail brokerage accounts, many of them online to try to supplement income and take more risk guys, back to you. >> interesting comment there especially when nee yeels are ys are negative we have some data out of japan overnight, inflation hit a two-year low, raising expectations for more easing from the boj core cpi rose 0.6% in june in line with expectations, but it's the weakest reading since july 2017 a new reuters poll showed 88% believe there was no need for more stimulus this year. 88% of people don't see more stimulus all right. let's challenge that colin asher from mizuho joins us again. that's a surprising number that
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people don't see more need for stimulus japanese inflation is at the slowest in two years time at 0.6% i believe the bank of japan have a target of 2. >> yes i think this has come back to williams point, using your powder early the bank doesn't have much power. rates are negative yesterday there were comments out from the head of the japan banking association urging the boj to carefully weigh the costs and benefits of policy saying any further lowering of rates will hurt banks mediation and reduce credit to the economy so the debate for japan is they are fairly near the reversal rate can rates go lower possibly, but they can't go much lower. the bank of japan can buy more assets the yield curve controls the quantity target. they could widen the yield curve
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band possible minus 30 basis points the flatter yield curve, that will mean they wouldn't help banks either so the bank of japan has limited options. that's why the luring of the inflation is unlikely to engender policy reaction at the meeting at the end of july >> what might enjegender policy reaction is the fed cutting. that puts the bank of japan in a tricky spot. >> but it doesn't have a lot of options. that's the problem for the bank of japan it could increase its buying of etfs it could step outside government bonds and start buying municipal bonds. buy equities buy bank loans these are radical things for which the ground work has not been relayed i think the most likely thing is even if the fed cuts, the bank of japan won't respond the other interesting thing about the poll, it's 88% for no
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change the risks are on the down side 12% are looking for policy to be easier nobody is looking for policy to be tighter >> let's talk about trade when it comes to japan. we're all in a bit of wait and see mode when it comes to the u.s. and japan and what kind of trade agreement we could see them make what do you think? will we see them come to a sweeping big agreement around trade? is it likely to be narrower and in particular because we're heading into the u.s. elections, could be a quick win for president trump. >> probably a quick win for president abe. the narrower it is the better it is for the japanese. he may have to give up some agricultural protection. the u.s. may throw japan a bone and they may get a relief on japanese auto exports to the united states. the japanese surplus with the u.s. grew about 5% or 6% in the first half of the year it's predominantly in autos. it's an area that donald trump
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is already very heavily focused on he wouldn't be keen to give too much away. in fact, the main thing for japan is to escape the trade talks without further taxes on the auto trade it looks as if there's a reasonably good chance that would happen >> i want to go back to the yen as a currency. we have a chart up of the equity market but the currency is very important in terms of where that equity market goes in recent days, you know, we have been seeing more and more flight to quality bid for the yen. do you think that will persist in this environment of increasing downside risk to financial assets the stock markets are at a high, but we're seeing a huge bid for gold because of the language coming out of the fed and potential rate cuts. do you see the trajectory of the yen heading higher >> i would expect the dollar/yen to continue to decline and the yen to strengthen. the risks on the trade are on
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the downside, not just japan against the u.s. but china u.s. as well. in terms of outflows, i think, you know, japanese outflows on the equity side have been lackluster again, i think that's a function of overseas markets being fairly highly valued. a little bit of volatility compared to last year, outflows on the equity side are low i was surprised to see the data earlier this week that m&a transactions remained particularly high. again, that would be suggesting japanese companies buying overseas assets. >> just today as well. >> yes that has continued at a fairly elevated pace. i think you have to be a bit careful because not all of this is funded out of yen cash, some of these companies don't need to buy them they can buy them with yen, use their overseas cash to buy them. it's not a straight one to one read into the fx market force
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all of these transactions. >> colin, we'll leave it there thank you very much for your thoughts today now, shares in software ag are sliding after cutting full-year guidance for its integration software units the division underperformed in the second quarter on the back of a staff shakeup in north america. second quarter profit fell 9% which the firm said was in line with expectations. british broadcaster itv says it has reached an agreement with the bbc to launch a new joint streaming service in the uk called britbox the company announced they will control the venture adding that original program will be commissioned to go along with a state of archive content from both itv and the bbc we have to take a quick break. coming up, microsoft sales grow 12% in the latest quarter driven by its cloud services. we delve into the numbers next
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welcome back to "street
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signs. i'm julianna tatelbaum >> i'm joumanna bercetche. these are your headlines >> european stocks track asia higher as dovish commentary from fed officials boost hopes for a rate cut later this month. shares of publics fall following a weak second quarter. ab inbev shares pop after the drinkmaker agrees to sell its australian business to asahi for 10 billion euros, just one week after abandoning the ipo of its asian unit and microsoft's frankfurt-listed shares near record highs after growth in cloud computing helps the tech giant blow past expectations in the fourth quarter we will show you some live images of german chancellor angela merkel who is holding her annual summer press conference
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she is just beginning that now we'll keep an eye on any breaking news or significant headlines that come out of that annual address we are still very much focused on earnings season over here in europe so one name in particular that we've been looking at today is ab inbev which has agreed to sell its australian business carlton and united brewers to japan's asahi for 10 billion euros. the move follows reports that the brewer was exploring asset sales after it pulled the ipo of its asian unit last week, something that we discussed on the show earlier this week ab inbev said all proceeds from the sale would be used to pay down debt. i want to bring in ewan mcleish. this seems to be a company undergoing a lot to of change. they had plans to do this ipo listing. they shelved those plans now they're going ahead with the
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sale of their business what does that tell you about what the company are trying to achieve here and ultd matly whether there's a hole in their finances that they're trying to plug given that they're selling these businesses >> i think there are two main focuses or ab inbev. the largest one is a lot of debt on the balance sheet i think they're looking at didn't ways of bringing that number down rapidly. the second one is driving m&a in the apec region and some of the brewers like san miguel in the philippines and others to the table. >> in terms of the ipo that they ended up pulling, it seems clear that the reason they pulled it, they were asking a price range that the market said was too high do you think the pricing that
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they set out was too aggressive for this business? >> based on our valuation we came to a fair value of 60 billion u.s. dollars for the business but what is interesting, what looked like a bundled ipo process now looks like a master negotiation tool they have been speaking to asahi in the background and other buyers about asset sales i can only imagine that last thursday evening when the ipo was pricing, asahi were finalizing their offer and putting their best foot forward. it seemed they used the ipo process to get the best money they can for the business. i wouldn't be surprised if they came back to the market with the
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ipo down the road. >> that's fascinating, that you think this was a bit of a negotiating tactic, the motion to list that business. so down the line we could see them return and try to ipo that business do you think there's any other deals brewing in the background that we could see come to fruition in the next 12 to 18 months >> we've seen talk in the press about selling the korean businesses as well i think that's quite a potential outcome. one of the challenges that investors have found about apex is it's often 50/50 profit slit between developed countries like korea and australia and china on the other side that's why we and many invest felt the valuation range was
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very rich. if they were to sell australia here, and south korea, you have very much a developing market business that you could bring back from ipo. the multiples in china are considerably higher. we valued the china business at 22 to 23 times forward ebita i think that's the sort of larger volume towards china. >> the three markets you mentioned are part of the mature markets in their portfolio, yet they're looking to shelve some businesses in those areas. do you read this as part of a bigger strategy on their part to exit from the mature markets which are commanding those rich premium and focus more on
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developing markets, places like thailand and vietnam for example? >> the biggest opportunity in apec to me is really about being able to do business in the philippines and vietnam. san miguel is one of the most attractive beer assets in the world not owned by a major global brewer. i think if you were to acquire assets and ipo this business and offer shares to the owners of san miguel and sabico, that could be attractive. inkrooesicreasing exposure to t markets could impact the organic
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growth both in vietnam and the philippines you have the emerging growth stories, you have a large, young, rural population who are getting richer and consuming more and more consumer goods and more and more beer. so that to me would be either one or both of the gold medal for abi in this process. by selling the ab business, they can push that ipo back by 12 months, but it could be attractive >> we'll leave it there. thank you very much. julianna will give us some more color on what's happening in europe >> european markets are tracking asian and u.s. stocks higher this morning some pretty decent sized gains
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we look at the dax, the foot foot and the cac in particular the dax is up 0.7% now a lot of that has come on the back of that dovish commentary from the fed speakers bolstering expectations for more aggressive rate cuts as we've been discussing all morning at that july meeting. providing additional support for markets. we heard from treasury secretary steve mnuchin saying trade talks remain ongoing with china. in terms of that, a bit of calm on the trade front overall, sectors are trading in the green with a number of corporate earnings for markets to digest in addition to the more macro themes. shifting gears k we lo, can we t global yields? yesterday we saw some big moves on the back of that fed commentary yields falling the dollar dropped a half percentage point now this morning the u.s. treasury ten-year yield trading
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at the 2% mark steady over there. and in the uk, keeping an eye on the pound, which had massive moves yesterday rally being a percentage point the ten-year over in the uk trading at about 0.75% now let's look at u.s. futures it's been a big week for earnings on the banks front, the tech front massive moves lower for nietflix microsoft had a strong record. all three indices in the u.s. ended in positive territory. we are looking there we saw the u.s. futures are indicating a positive start and microsoft moving higher in after-hours trade. joumanna, i think you can give us more detail on what microsoft said >> you think 100% correctly. microsoft reported a 12% rise in q4 sales its ninth straight quarter of double digit revenue growth. the better than expected results were fueled by the cloud business
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shares rose 2% to a record high in after-hours trade i will be knit picking at the numbers here growth in the cloud platform for the last quarter was 64% that's a huge number but it was 75% the previous quarter. we have a slowing growth trajectory >> a little bit of talk about how that azure growth, microsoft's cloud service, was a little bit down. but you have to look at the big picture. 64% growth in the last quarter that intelligent cloud division has been what's been driving microsoft higher it reported $11 billion in revenue last quarter microsoft's ceo wanted to tout how much that has been up in the past few quarters. listen to him on the earnings call last night. our commercial cloud business is the largest in the world, surpassing 38 billion in revenue for the year with growth margin expanding to 63%. i'm proud of what we've accomplished over the last 12
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months, i'm energized by the tremendous opportunity ahead every day we work alongside customers to help them build their own digital capability, creating new businesses with them, innovating with them and earning their trust. >> a bit of a victory lap in this quarter when you look at the global market, cloud infrastructure market, microsoft is number two after amazon azure has about 27% of market share. aws number one at 32%. those two companies are taking the lead in bringing in these enterprise clients, making people make the shift into the cloud and it's paying off at least so far for microsoft >> definitely. all right. elizabeth, stay with us. we have another guest joining us around the desk to talk about the latest trends in big data. that's douglas merritt, the president and ceo of software firm splunk. thank you for joining us today coming off the back of what elizabeth was talking about with
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microsoft results, cloud services and the cloud, a huge part of the tech world moving forward and your business using big data what's your take on how you see the cloud space evolving when it comes to the major players providing cloud services >> this movement, this digital transformation that we've been talking about for 15 years, you can really see it start to accelerate cloud has been a huge lever in that acceleration. it makes it easier for organizations to take processes and put them online. and aws, azure, gcp, a host of local organizations are the big beneficiaries of that. we play across those clouds. and i think one of the more interesting pieces, as companies go online, we hear all about data, big data, how important it is ate mount of data being generated when everything is digitized is explosive more organizations are wrestling with taking advantage of that
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data >> you said the word, data you track things like transaction activity, clicks to provide a summary of activity at a machine learning level now, your business is very reliant on obtaining that data are you finding there are increasing amount of barriers into entry given what the world has discovered about data, data privacy, privacy concerns, the roll out of gdpr are you finding it more and more difficult to get access to the fundamental cogs in the wheel of the business that makes your business turn? >> we're more of the pick and axe provider to the miners we provide the data toolings so that our customers can amass that data, both inside the company and outside the organization to turn data into action it's a difficult task for most folks. within our customer base, there's a growing awareness on data and data privacy. there's two aspects to that.
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one, how do we make sure we protect the rights of citizens and individuals, but corporate data assets are increasingly important as well. across the spectrum this awareness that we are moving into a data driven society, we talk about this being the fourth industrial revolution, i think it's more the first data revolution where we have zeta bites of data available to play with what happens when you deal with a more near real time sense and respond world. the regulatory emphases is it's a good thing for all of us we all will have to continue to work to make sure we treat data with a thoughtfulness and thoroughness that we need to >> you led the company through a series of acquisitions, that's a huge play in the software space and the data space i'm wondering how that outlook is for you and when you see these tech giants like microsoft
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dominating, do you see yourself as a target? these are trillion dollar companies we're talking about. >> the growth of microsoft, amazon, google is astounding they're good innovation engines. for us, acquisitions are a thoughtful decision of where does organic need to meet inorganic. how do we continue to accelerate the pace of capability and the breadth of a product so we can continue to serve customers. we are constantly looking at both our view on splunk is control the things you can control if we serve customers effectively and enhance our official and continue with reasonable growth rates, effective growth rates, that's the piece that we can control that we're most focused on in the face of this m&a activity. >> you work with a lot of private companies. i know the likes of some cruise liners like carnival, starbucks,
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but what about political parties? we've seen increasingly in the uk with the brexit campaign a lot of politicians turning to big data to understand voters better and voter issues. how do you think about that and the ethics behind using data to inform campaign choices and policy choices >> going back to gdpr, it's a theme. data privacy and understanding the value and importance of data i think we're at the beginning of that journey. we have more data available to us than we could conceive of and we're in the first inning. our largest customer is ingesting over 10 pedi bytes of data a day that one organization still has tep ti ten times more data they could be dealing with. being thoughtful on an ethics basis and on a control and
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transparency basis is just like the quality of products in the industrial revolution. you have to serve humanity an serve your customers that will be a topic we'll be living with in iteration after iteration for many decades to come >> we'll leave it there. thank you very much for taking the time to come in. douglas merritt, president and ceo of splunk. elizabeth, thank you for breaking down the microsoft earnings for us. coming up, we are live at the royal portrush for the golf open stay with us flings odors onto your soft surfaces? then they get released back into the air so you smell them later.
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welcome back to "street signs. angela merkel is holding her annual summer press conference we got some lines out of that conference i want to bring you what the chancellor said. she said the weaker economy gives us reason to stimulate the domestic economy she thinks the economy slowdown is largely due to uncertainty in global trade and that we need to bring as
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much reliability as possible into trade relations we need to work on wto reform. we hope that u.s. and china can make progress in trade talks i think in those flashes, the one that is most interesting to me, she says the weaker economy gives us reason to stimulate the domestic economy >> especially in light of an upcoming ecb meeting more and more increasingly people are saying the ecb have exhausted what people can do on the monetary policy front. ultimately we need europe to start spending more. those words stimulate domestic economy is the big challenge well, it was a nightmare day at the open for the big names yesterday. rory mcilroy struggled around the course ending on 8 over par.
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it was a similar story for tiger woods. the two of them ended their first day with 15 over par adam joins us live from royal portrush a bit disappointing for spectators, isn't it >> not really. i can tell you, joumanna, there are 237,000 fans coming through the gates here at royal portrush over the four days of the 148th open yes, they would have come peer hoping to see rory mcilroy and tiger woods doing well, but they're in good spirits today because the leaders are on the course over my shoulder, i can tell you j.b. homes has been joined by terrell hatton at the top of the leaderboard. tommy fleetwood and lee westwood just under way brooks koepka picked up a shot and is at level par. it was all about rory mcilroy and what happened to him yesterday morning. now, he hit the first of his shots on the round about 10:09
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yesterday. by 10:30 he was 4 over par finished his round 8 over par. triple bogey on the last he said how disappointed he was. he was not alone, as you say, with the big names not going well in the first round. tiger woods, he is 7 over par. the masters winner from this year doesn't look like it will be the 16th major for him the scores for his group, juthey will s will tee off in just a little bit. shane lowry is the only leader who is not on the course at the moment he will start this afternoon brooks koepka is ominous on that first page of the leaderboard. he won four out of the last nine major titles he arguably is the man to beat
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jb holmes is leading the way at the moment it will be a hugely exciting day on day two here at the 140th open championship, royal portrush it's an exciting time. the weather is glorious today. none of the inclement rain we had yesterday. the sun is shining the open championship is in full swing. >> adam seems extremely happy. enjoy the rest of your day i'm sure it will be a thrilling couple of days ahead despite the setbacks for the key players there. we'll leave it there i'm joumanna bercetche >> i'm julianna tatelbaum, wxz white sox is up next
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it is 5:00 a.m., here is your five at five. the new york fed clarifying some dovish comments from one of the most important figures at the central bank the bulls continue to charge stocks back in rally mode as invests await one of the busiest weeks of earnings season. boeing help to give a boost to markets, trading higher after it announces a major charge related to its grounded 737 max fleet. general motors is taking the wraps off one of its most anticipated corvette

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