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tv   Street Signs  CNBC  July 26, 2019 4:00am-5:00am EDT

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welcome to "street signs." i'm willem marx in london. these are your headlines falling out of fashion kering shares fall after missing second quarter estimates with lower sales in the united states. vodafone stock is planning to spin off its european tire business and services beat forecasts in the first quarter. amazon's second quarter misses on the bottom line as its
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profit streak comes to an end sending shares lower in extended trade. don't miss our interview with renault's ceo as the french carmaker cuts its full-year sales guidance on a degradation in demand. no clear direction so far in european markets after that key announcement from the ecb about forward guidance, the introduction of quantitative easing down the road and what seems to be an almost certain rate cut in september in terms of the individual markets across europe, though, you can see the four major indices in europe are trading slightly higher. the ftse 100 in london about a fifth of a percent higher. similar story in germany we have huge amount of earnings going on at the moment the cac 40 is slightly above the
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flat line. in italy, where we've been hearing from the two deputy prime ministers about the future of the economy, you can see the ftse mib is in negative territory. media performing well as is telecons technology in europe bouncing slightly higher, up 0.4% the retail sector often facing some challenges, that seems to be lower by 1.25%. shares in kering have plummeted after announcing revenue from its biggest brand, gucci, fell short of expectations. sales dropped 2% in the united states due to fewer chinese tourists elsewhere gucci's margins reached a record high. vodafone shares are on course for their best day in a year after announcing better-than-expected organic services revenue and reiterated full-year guidance the company announced the sp
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spinoff of its european tower unit, and that company could become operational in 2020. shares in alphabet surged in after hours trade after beating second quarter revenue and earnings forecast. transaction costs were lower than exz pektepected amazon beat revenue expectations in the second quarter but missed on earnings after the higher costs impacted its bottom line. the online retailer invested heavily to expand its one-day delivery guarantee for prime members in the u.s third quarter guidance was lower than expected. shares in that firm fell in after-hours trade. i'm joined by elizabeth schulze to discuss those numbers which factors may have prompted amazon shares to fall? >> amazon had a series of record profits over the past few quarters it looks like this broke with
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the latest earnings report the eps came in at 5.$5.22. sales growth was strong, 63$63. billion in the second quarter, that was 20% growth year-on-year that tells us amazon is delivering sales despite the added cost to its business one of those big costs is the introduction of one-day shipping in the u.s., that showed up in the cfo saying that coasted more than the 800 million they projected. the other sort of red flag in the report is the slowdown in aws. so this is amazon's cloud business it reported growth above 40% in sales growth every quarter since the company started reporting the metric this quarter we got 37% sales growth perhap assign that some of the competition is keeping up with amazon in the cloud, that
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wouldn't be a great sign for profits going forward. >> we had a pop in alphabet shares after the markets closed yesterd yesterday. what is behind that? >> alphabet had a sales slowdown in the last quarter and it blew past expectations in this quarter on profits and revenues. we also had a massive buyback announcement, $25 billion stock buyback. this is something investors had been calling for for a long time with alphabet. it looks like the company delivered last night they emphasized their growth not just in advertising, but in hardware, cloud, and in other services so generally pretty strong report across the board. i don't think we can underestimate the impact of that buyback announcement yesterday. we are joined by christopher rossbeck of j. stern and company. thank you very much for coming the overall pie, when you look at online advertising continues
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to grow. i want to ask you, google as a company, are they just seeing their market share keep up with that growing pie is it something they've done in the way they approach the advertising, the way they transmit it, the way they present it and target customers that is making it more profitable for them? >> i think we're seeing in general e-commerce is continuing to grow as a share of overall retail it's a tremendous source of growth for all the digital platforms we have, whether that's google with the advertising they do, whether it's facebook, which also had extraordinary strong results i think you're seeing google and facebook and similar platforms, because of the information that they have, because of their ability to target what people are looking for, they can direct the advertising they got, and it adds value it adds value to advertisers but also to consumers, because they're getting the information about the projects they're
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looking to have. >> alphabet doesn't just do advertising. which of their businesses are performing well and why do you think they're performing well? >> one important thing -- that's one thing we welcomed with results, they pushed with the disclosure they have a number of businesses they're reinvesting in, and that's why costs are going up and they provide disclosure, but selectively as those businesses grow and get to a point where they want to talk about them the cored advertising business s important and specifically youtube. we would like to see more nfx about t information about the growth rates and about the impacted on the bottom line. as you look at all of these companies getting back to 20%
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growth, i think explains in part the share price performance and how people should look at them, they have tremendous opportunities going forward. >> 20% growth at these massive companies already being criticized for their size and market values. we heard a bit of dismissing in the regulatory concerns by amazon and alphabet saying we already are working with regulators, we know there's a formal doj review announced this week of the big tech companies, that would most certainly include alphabet and amazon. i'm wondering from an investor perspective how seriously do you take the regulatory threat >> i think they're of extreme importance we looked to invest in companies that are sustainable over time and operate in a sustainable
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way, and that's a part of it you have the question of data and privacy and the way it's used, what we've seen in terms of the response with facebook with the agreement they've made on that, i think it's very much a step in the right direction. there should be greater accountability, there should be greater transparency and information for users to know the data they provide, how that data is used, stored and protected. the fact that the government has to step in is of great importance for the robustness of those businesses they're growing, both the companies and regulators are figuring out how to regulate those ideas, but the step that is the regulation of data and privacy which is what we've seen in the eu with gdpr, which is what the u.s. is applying through principle and with specific remedies is the way to go the antitrust discussions around the potential breakup of these
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companies is not i don't see what that would achieve. >> coming back to amazon specifically, and drill down a bit more on their business strategy, historically it's been a firm that has prioritized growth over short-term profit. i'm wondering do you, from where you sit, do you think that's still the strategy >> yes, absolutely i think one thing behind amazon is the fact that in jeff bezos they have a visionary leader who pry your t prioritized growth over short-term profits they have to have a project that has a potential for llgt vong-tm value creation one thing he said when people congratulate amazon on numbers, he's saying it's not the numbers of this current quarter he's working on, he's working on the quarter three to five years from now. i think it's embedded in the
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ethose of t ethos of the company they have those issues they're working on you see it on aws, whether it's 40% or 37% growth, it's still tremendous both the increase of the mote around amazon with the one-day delivery they're working on and other ways of fulfilling is an extraordinary investment in the business that i think will pay dividends. on the cloud computing, you can see between amazon, azure, which had good numbers, the google business which is also now at an 8 billion run rate, we're at the very beginning of moving data to the cloud and having the benefits of that as we move away from servers there's a lot of growth that amazon is investing in and will create value from. >> christopher, thank you very much for your views this morning. my thanks also to elizabeth schulze. if you have views on big tech, get in touch on twitte twitter, @streetsignscnbc and you can also tweet me directly
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coming up, we will hear from renault's ceo after the break.
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welcome back renault cut its full-year outlook and blamed a degradation in demand in the first half. they said revenues fell 6.4% over the period. here is the company's ceo talking to joumanna bercetche. >> macro economic conditions are different than expectations in 2019 we expected something flat/minus worldwide, and that's not what happened it's minus 7% as far as we can see, and our prospect for 2019 is more or less minus 3% so the market is really not where we expected. in different conditions between china, which is something like minus 12%, and brazil which is positive
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so, you know, different situations depending on markets. overall it's a degradation >> joumanna bercetche joins me from the studio. what else did he have to say >> i think a couple of things stood out here that line degradation of demand, which featured in the earnings, is one key thing that the investors were jumping on here that particularly also is pertaining to their outlook when it comes to sales for the rest of the year. here i want to draw to european markets, they expect the outlook to the stable including -- sorry, excluding the possibility of a hard brexit they see the russian market to be down 2% to 3% it was up 3% previously. the brazilian market they see a downgrade of growth, but still growing from plus 10% to plus 8% so the outlook is weaker when it comes to the growth and demand he says it is a function of the market conditions. but one segment and one location that i thought was interesting
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they're still relatively positive on is china >> we are not suffering from that because we are too small. that's why china is such an opportunity for us because we are coming pretty late compared to other players, we are focussing as much as possible on the sub segments of the market which are growing and perfectly in line with our strategy, like ev, electric vehicles, plus 80% in china and not the minus 12 you can see in other places that's why we're focusing there and launching our new vehicle at summertime, and many more cars will come in a short future to fuel that move on the chinese market >> isn't that interesting? almost every other automaker we
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heard from in the last couple of weeks talked about the weakness of demand in china everyone has been talking about the slowdown in vehicle sales in china, renault seems to have a positive outlook i asked him why, we heard it there, he said we're starting from a small base. we're only selling 200,000 odd cars, but they'll meet their targets of 500,000 by the end of 2020 so he sees positive potential there. he said our ev share in china has grown by 80% in the last year so that's very interesting and a positive one but look, so that's when it comes to the growth dynamics they have talked about the degradation of demand. let's not forget that there are so many other stories swirling around renault, whether it's to do with the future of the relines with nissan. nissan recorded their own operating profits, a decline of 95% two days ago that stock has
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with been under pressure the last couple of days, and they had conversation with fiat chrysler, and the analysts think that would have created a lot of synergies for the two, but the talks did not yield anything tangible so i asked mr. bollore about those talks with the fca the fca said they faced political hurdles within france. >> the first element that is key to notice, when we received this offer from fca, it showed that the alliance, renault and the applian alliance were extremely attractive the attractiveness of the alliance is massive. we like it i think this project was extremely interesting because of the incredible new synergies that we could have created there. at the moment, the talks are over we don't talk to fca any longer. >> two things, the talks are
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over, that's it. they're done they're not keeping the door open there i thought that was interesting and then the second thing is he said it showed people still have interests in this alliance they still have the alliance, it's an ongoing alliance between renault, nissan, mitsubishi, and the fact you have a company like fca circling around renault says this is a reflection that there's still value in it. >> interesting comments there from him during that interview, and the idea that you have consolidation as a possibility is a representation or reflection of the firm's success and the fact that the tie-ups they had previously seemed to have worked in their favor thank you very much for that interview. we're joined by juergen p
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pieper right now on the phone. what do you think of the results? >> i think renault looks a bit unspectacular and the reaction of the share price is the same top line is rather weak, but we all kind of knew that. profitability is okay. it's more likely down year over year this is not as good as peugeot or volkswagen, but better -- much better than what time ler had t daimler had to say >> do you think the results is a reflection of the management >> i think mr. ghosn who had to leave, he was a powerful manager, there for more than ten years, he had so much control on the company, that naturally there's a vacuum after ghosn has
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gone, so to say. and i think this creates probably some uncertainties at all levels of renault. this is what i could imagine what i've heard from mr. bollore a couple minutes ago, what i could read today, this sounds quite okay i think renault is not in great shape. the markets don't help at the moment there's no real product story except one or two electric cars. but other than that, i think it's not -- as i said, it's not as bad as one could fear >> sir, i'm actually the lady who spoke to mr. bollore earlier, i thought it was interesting how positive he was on the outlook on china, particularly because they're starting from a small base and they are rolling out so many electric cars there. do you share that optimism that
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renault can become a serious player in china on the electric vehicle front? >> i think in the short and medium term, yes my impression is that renault reacted quickly to the changes in the chinese market that people go quickly to electric cars, small electric cars. and renault seems to have reacted there quite well also i think the chinese market just for statistical reasons in the second half is probably not looking as bad as in the first half because the market turned down quite strongly in mid 2008. so the comparisons are becoming much easier. also after having listened to volkswagen yesterday, their comments on china weren't that bad either they say in china it's possible to hold the earnings on a fairly high level demand is not bad for everybody. especially bad for the chinese players. so it's -- everyone is not as
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bad, if we talk about china as it has looked for the last six months >> all right positive signals there i want to turn to the alliance itself between renault and nissan investors a s ars are paying a valuation discount to renault's 43% stake in nissan. how can you create value for shareholders from this alliance? is it a question of strengthening it further and moving further with merger plans or is it about ending it completely >> we have this phenomenon for a long period of time that renault and nissan have always been strongly undervalued, if you take the individual companies, if you take the value of the individual companies, companies put that together. i think one plus one has never been two it's always been something like 1.3 or so. also in addition to that, i think people are not willing
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really to put money into these corporations, into these possible mergers like you saw the announcement between volkswagen, ford and normally took care on that. renault/nissan is an old corporation, it's an old story it's difficult to see that there's something new coming up quickly. i think the whole sentiment on the sector has improved. i expect that for 2020 but this takes some time then we talk about all these nice things which people really ignore at the moment >> you mentioned there volkswagen and the potential partnership with ford. i wonder what's the magic formula for volkswagen why are they doing so much better than their german competitors at the moment? >> that's a good question. i think we have some answers what is really surprising, one of the biggest drivers of volkswagen is pricing. i would say 8 out of 10 at the
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moment suffer under some kind of price pressure more declining prices than increasing prices. volkswagen not for the first time but the second or third time that prices are increasing. they are successful in putting in price increases the second one is product mix that came late the suv story, but doing it in a way where you see all the 12 brands almost, you see now new suvs every couple months this has a strong effect they said it's around 1 billion euros on the positive side finally efficiency measures, after diesel gate, they had to do certain things, and they did these things and i think this is in the end then the final reason, question of the management. it looks to me like the management at volkswagen has become quite tough, but i would
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say they underwrite this toughness. >> thank you for joining us. my thanks also to joumanna for that interview with thierry bollore. the slump has hit michelin's first half results, but the french firm reiterated guidance for the full-year despite a weaker outlook for the sector. shares are trading lower down just over 2.6%. coming up, the ecb's latest plans to stimulate the eurozone economy prompts the criticism of banking chiefs in germany. we'll discut that with geoff cutmore who will be live in salzburg next.
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welcome back to "street signs. i'm willem marx in london. these are your headlines falling out of fashion kering shares fall after missing second quarter estimates with
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lower sales in the united states. vodafone stock is on course for the best performance in a year after planning to spin off its european tower business and services bea forecasts in the first quarter. and the ecb tees up a cut in september. and renault cuts its full-year sales guidance as revenue slides 6% in the first half the ceo tells cnbc the auto slowdown has taken its toll on the company. >> it's just market conditions which are very different from our initial expectations for 2019 you know, we expected something flat minus worldwide it's not at all what has happene happened >> if you're invested in italian equities, i may have bad news. the ftse mib is the only major index in europe trading lower.
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it's down a third of a percent we had another political development there in terms of the future of giovanni tria, the economy minister, with one deputy prime minister, mr. salvini, saying it will be either him or me unless mr. tria is preparing to allow tax cuts mr. dimaio saying he has full confidence in mr. tria in the ftse 100, we have a new prime minister this week the ftse 100 trading 0.5% higher the xetra dax is also up in paris, we have some gains in terms of the currencies, interesting day yesterday when you look at euro/dollar, as of right now that euro/dollar trad weaker it might be a story of dollar strength in the market today the pound not the best performer
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over the last couple of years. that's trading weaker again. 1.24 is the number there the dow jones being called higher, 25 points. nasdaq also looking to open higher after some of those after-hours trades in firms like alphabet no doubt helping to raise investor confidence. the s&p 500 also called higher by around 7 points you can see that ecb stays in focus over the course of this week in eurozone inflation expectations have continued to fall the report forecasts longer-term inflation at 1.7%. that is below previous projections. that's after the ecb signaled it comove could move to cut rates and launch fresh stimulus. the central bank kept rates on hold, but president mario draghi stressed we don't like what we see opted inflation front.
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he indicated a here e tiered rae system might help some european banks, he flagged multiple economic headwinds >> this outlook is getting worse and worse. it's getting worse and worse in manufacturing especially, and it's getting worse and worse in those countries where manufacturing is important because of value chains this propagates all over the eurozone so the -- this must be taken into account the reasons were basically found to be in the general uncertainty that is now with us for several months, actually more than a year which relates to trade wars, political tensions, and the possibility of a hard brexit
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certainly is another factor to take into account. and the slow rotation of chinese economy, all these factors, and probably others r aft, are affe the present outlook. >> the heavy burden on banks, financial stability, savers and companies was focused on and ifo sentiment continues to deteriorate. the group said troubles among auto manufacturers mean the good times enjoyed by the german export industry are over for now. geoff joins me from salzburg where policymakers and bankers are gathering for the first ever salzburg summit. geoff? >> yes, very good morning to you. with austria just across the border from germany, they're all too aware of the consequences of any slowdown in the heartland of
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europe austria, of course, in its own right is a significant exporter of manufactured goods. some high-profile companies like steel, of course, and ktm. so they will be watching closely these developments that mario draghi is discussing some of the bankers here will be sulking a little about the prospect of even easier interest rates set to be announced at the september meeting. let's circle back to that whole issue of growth in europe's largest economy. a little earlier on we had the opportunity to talk to the former german defense minister and i asked about germany's current economic malaise and what can be done let's have a listen to what he to say >> we are dancing on thin ice economically in germany as well.
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a lot of reforms have not been imposed and should be imposed. we've been working for reforms from the schroeder era from 14 years ago. something new has to happen. that's up to whoever is in power in germany >> so i think it was interesting, willem, just watching mario draghi first send the markets hearts off in a dovish flutter, then we got that rally. then the boomerang where ultimately in the press conference he sounded less dovish now looking to the federal reserve and wondering if we'll get the same outlook from the federal reserve. while it's not necessarily going to solve some of the economic issues that we do have here structurally in europe, the prospects of easier rates will be broadly welcomed by a lot to of people in the economy back to you. >> geoff, thank you very much. geoff will be speaking on a
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panel later today. something to watch out for with some of the high profile members of various companies you can see there we'll have those conversations at 13:15 cet. our next guest joins us now. did you get the sense today from the ecb and mr. draghi in particular that their tools are not proving as effective as they might have 40hoped in >> unquestionably that's the case if you look at what they've done, they introduced negative deposit rates. when you look at all they got was a reasonable correction in the euro a bit of depreciation. pass-through inflation from the weaker currency. that's it. >> there was a question noted during the press conference where he was asked, you spent all this money on qe, has it
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done the trick he pushed back he was combative yesterday trying to defend his record. >> he was. in fairness, you know, his tenure wasn't just dealing with the monetary side of things. he was trying to keep greased within the eurozone. i think his job is 50% economics, 50% politics, which by in large he's done quite well the difference as well is he prevented a wider banking crisis in the eurozone through the qe methods. in general you would have to say his tenure was successful. but on the inflation side, they undershot their targets. >> how significant was the reiteration that the ecb was going to focus on the symmetry of inflation targets >> it's rather academic at this stage. >> is it not a signal? is it not an important signal to the market >> the answer is no. if you look at what's priced in further down the curve, we don't anticipate the deposit rate
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getting to zero until 2027 or 2028 on that basis they won't have a material impact on things as they are at the moment >> my colleague, jeff kgeoff cu suggesting there may be some banking chiefs sulky about what happened yesterday from the perspective of european bankers and from the perspective of economists looking at the real-world impacts, what are the pros and cons of a tiered rate >> a couple things to say. the academic literature deposit rates is small it's a resent policy innovation. five years ago, there was sort of ph.d.s in labs working with things five years later, the effects are mixed. you have a decline in banking system profitability that's clear the ecb says it had a much stronger effect in the eurozone because it's more of a bank-based economy it wouldn't necessarily work in
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a place like the united states on balance, it's a minor capital outflow when they were initially implemented. that helped to weaken the currency that's a one-off effect. on balance, at this stage, it's doing more harm than good. >> given your title, i want to ask you more about currencies. do you agree with the argument that going forward the most widely traded currency pair in the world, euro/dollar will be much more heavily driven by interest rate differentials than in the most haven't paven recent >> no. euro/dollar has not traded in line for a long time correlations with rate spreads are basically nonexistent. i think where euro/dollar will be determined is by what the fed is doing whether the ecb cuts by 10 or 20 points is immaterial if the fed go from 2.5 to 2 or 1.5 over the coming year or two,
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that's greater magnitude that will weaken the dollar the currency market reaction yesterday told you everything you needed to know euro/dollar traded higher after the ecb said they would cut the rates, potentially restart qe. they're running out of road. >> they have a few more weeks until september. i wonder how you would suggest people position ahead of that next announcement. >> i think we'll have to see what the fed are doing next week my view would be buy dips in the euro/dollar. so there's good reasons to consider a rate cut by the fed, at least by 25 bips. if you see 50, it won't go much further. bank sabadell swung to a profit in the second quarter but
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still missed estimates the spanish bank was boosted by lower loan alsolosspairments bu they had continued pressure on guidance because of those loan rates. caixabank reported higher income thanks to lower funding costs, but the bank also said it was under pressure from the same low rate environment pearson said they are transitioning away from traditional textbooks and that is paying off. they have a 2% rise for underlying growth for the first half of the year the ceo said the company was on track to meet long-term targets. >> we're showing more momentum and prognosis greress on our fi plans. that 30% rise has come through on the drop through on the sales growth and the benefits of the restructuring program we've been undertaking for the last couple
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of years so on track to deliver guidance, stabilize revenues this year, and deliver underlying profit growth. nestle posted its fastest sales growth in three years during the second quarter thanks to strong demand in the u.s. and br brazil but net profit fell 15% compared to the same period last year when it benefited from a one-off gain of the sale of the u.s. n confectionary business. vif vevendi reported a 28% in the first quarter at its universal unit they have investment banks working on a sale on the minority stake of its music unit. and eds posted net profits to 2.5 billion euros from 1.7 billion in the prior year. if you have any views on these
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things, get in touch with us on twitter, @streetsignscnbc. coming up on the show, can italy's divided cabinet heal its wounds we'll bring you fresh comments from two key players next.
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welcome back to "street signs. i'm willem marx in london. shares in intel rose in after hours trade after the chipmaker raised its full-year guidance. separately apple has agreed to buy the majority of intel's smartphone modem chip business in a deal worth $1 billion john fort filed this report. >> reporter: intel out with a report for the second quarter that beat on the top and the bottom line. sales stronger than expected that led to an improved outlook for the full year. intel's ceo, bob swan, saying it was really the growth in data, just data applications, the demand for data, that powered the pc business as well as the
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cloud business which uses intel server chips, that led to the out performance in expectations. at the same time as intel announced earnings, they also announced they were selling their smartphone modem business to apple for $1 billion that includes 2200 employees as well as facilities and patents, that's a big deal. that was expected. and the heir apparent to angela merkel planned to boost military spending in germany as she begins her new role as defense minister after seeing her popularity decline, they are hoping she can demonstrate what it takes to be in a ministerial position. and pedro sanchez has failed to gain the backing of the national parliament to form a
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government for the second time in three days. mr. sanchez was left short of the support he needed after the left wing party abstained on an investure vote the deadline to form a new government is september 23rd to do that. italy's cabinet will meet today to thrash out differences. divisions around spending, taxation levels and regional autonomy destabilized rome's fragile government after reporting to give the coalition his backing this week, mr. salvini said if mr. tria does not agree to tax cuts, it is either him or me.
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the global head of forex strategy is still with us. if you're an investor looking at italy today, one deputy prime minister saying i think this guy needs to go, he's not going to do what i want, you have another deputy prime minister saying, no, we're behind him, would you go anywhere near that place? >> you would buy the bonds on the premise that the ecb will buy the bonds. that's it. essentially that's the backstop for investors in italian debt. if you look at it on balance, you're seeing this three-pronged issue in italy one, spending cuts they want to increase or decrease taxes deficit widens, then you have the eu or the european commission saying, no, you need a tighter deficit. because of brexit, the european commission has been slow to really come down on italy. if you see a hard brexit, after
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that passes, will you have a german in charge of the european commission i think she'll take a harsher stance. would think there woulda deterioration there for sure with that dete >> with that deterioration, the risk rises and it's more expensive to borrow. do you have concerns that the italian government and the things it needs to do with education and rebuilding won't be possible because of the bond market >> i don't think so. provided the italians continue to run a primary surplus, they should be able to maintain low rates of refinancing i don't see a horror show scenario emerging soon but definitely deterioration of relations between brussels and rome is doable if qe does come back, as we have
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been told it will, how does the european bank go about helping the situation in italy how do they target -- is the mix of that buying program likely to change, do you think? >> a strong argument says it should if they continue with the current capital key arrangement they'll buy more germany than italy. that's when germany tens are at minus 40 bips, in that context if they were to change the composition of what they're buying that would make sense whether that's doable or acceptable to german taxpayers, i'm not sure >> i mentioned two sizable spanish banks were complaining about the low interest rate environment earlier. clearly the ecb is aware of this we heard from mr. draghi that he was conscious this was a challenge for the banking sector from an investor perspective, will this argument hold water? >> i think what it says is you're not going to make as much
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money from net interest income anymore. the idea would be banks could be more profitable if they moved to a fee-based model. in various european banking systems, they're overbanked. there's a strong argument for more consolidation that's difficult given labor rules in various european countries. it just makes it difficult for these guys to perform well or certainly to perform any time soon can we come back to the currency again? all of these challenges that you have been talking about there on the peripheral of europe, italy and spain in particular, do they matter for the euro? is it all about the ecb? >> it's pretty much all about the ecb. i think that certainly on the political side we've seen all manner of manifestations of political risk in the last ten years, peripherals with spain, greece, et cetera. any impact in euro has been negligible in a broad sense. we have not seen long-lasting effects on europe. what you're seeing at the
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moment, nobody is talking about italy leaving the eu or anything like that or spain all those questions are gone it's tapering around the edges really >> one final question for you. we're about 42 hours into a boris johnson premiership. pound has not done much since then as he talks about this can-do optimism, can he do anything -- is there anything he can dcan da will change the calculation when it korms to steri s tcomes to s? >> yeah, he can soften his language somewhat and take a more constructive negotiation stance sure there are things he can do whether he's willing and able to come back from the situation he got himself into, he's given himself little room for maneuver >> my european holidays, will they get cheeper they time soon? >> i think not >> that's very sad thank you for joining us
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let's look at u.s. futures before we go it looks like all three of the major indices will open higher the the dow jones in particular being called up 31 points. the nasdaq after those strong earnings numbers from alphabet in particular and the after-hours trade there, they're looking to open 63 points higher the s&p 500, not such a positive week for the index so far, but it's looking to open slightly higher, up 8 points. that is it for "street signs. i'm willem marx here in london my colleagues at "worldwide exchange" in the united states will be on your screen in just a few moments time do stay with us. some big news from mr. clean. stop struggling to clean tough messes with sprays. try new clean freak! it has three times the cleaning power of the leading spray to dissolve kitchen grease on contact. and it's great for bathrooms!
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it is 5:00 a.m. at cnbc global headquarters. wall street weighing, the fed or earnings markets hover just below highs. growth at all costs, not enough to satisfy investors this morning. shares of amazon set to open lower. alphabet poised to make a huge move higher, among the headlines there a massive $25 billion stock buyback. we'll dig into that story. and a major trade warning from one billionaire hedge fund manager who says a deal with china is

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