Transcripts For CNBC Worldwide Exchange 20240622

Vote on its third Bailout Program with a number of members expected to reject the package. This as Alexis Tsipras concedes European Partners got the better of him. Sales in hong kong slump but the Fashion Group says its still pursuing growth opportunities. Coming up on todays show mickey goes to shanghai. The exclusive from the companys ceo. Twitter spares spike on a fake report of a takeover bid but has this happened one time too many . And donald comes up trump. The extravagant real estate mogul leading the gop field despite weeks of controversy. All the details later in todays show. Lets kick off with china. Retail sales, industrial output and fixed Asset Investment all beating forecast. Data came in at 7 . Thats higher than analysts were expecting. The worlds second largest economy is now on track to hit the 2015 growth target. Fancy that. Interestingly they were quick to jump to the defense of the data saying the figures were not inflated and the improvement was hard one. Its real interesting that they make that statement. They see the need to clarify that their data is accurate but the better than expected data comes after a major stock market sell off which prompted heavy Central Bank Intervention. Theyre failing to reflect the positive numbers, major indices ending the session. The shanghai comp losing 3 and the hang seng is still down by. 33 . Many people say this underlines the disconnect between them and the broader economy. Joining us is richard, the chief economist for asia. Good morning to you. Already a bit of scorn on whether this number is accurate or not. What do you make of whether the data is trustworthy and is that the best indicator of the fundamental level of activity in the chinese economy . Well theres a number of questions to address. Has the chinese economy improved close to the first quarter. The answer is certainly yes. This is an economy with considerable data and a very sizable stock market bubble which had some impact on the economy. The economy improved relative to the first quarter. Whats the best gauge of that . I argued for a long time that the nominal gdp numbers are much more reliable. If you look at them in nominal terms they were a 5. 8 year on year in the first quarter. Thats improved to just over 7 . So just above those official real numbers in the Second Quarter. So thats my main focus and its better to look at those numbers. They are a bit more reliable and do present a picture of an economy picking up some momentum before the melt down in the a share market. Well come back to the stock Market Performance shortly but the fundamental question for me on china is can there be a slow landing. From 7 to 6. 8 to 6. 5 or is there a moment where all of a sudden growth collapses by a significant factor . Yeah. A lot of analysts looked for sometime for that sharp break or moment. Ive come to the view that thats pretty unlikely. Im concerned about the prospects. Im concerned that debt is still rising faster than the nominal gdp. It tilted heavily toward investment but that having been said the authorities have got a lot of ammunition left to fire. I still think theres considerable space, particularly in terms of Monetary Policy to continue to kick the can down the road. Richard, the big problem is that Monetary Policy they have been using that over the last couple of months. Four big rate cuts but that didnt really help the economy did it . We take a look at the first half numbers. Industrial production the slowest pace on record 6. 3 . Fixed Asset Investment 11. 4 and the last one ill give you is retail sales. Exports down 2. 5 for the Second Quarter. If we get more cuts what difference is that really going to make . Well i think you make a very good point. The transmission mechanism, the monetary transmission mechanism isnt that efficient and if anything that argues for doing even more which is why were arguing strongly and consistently to our clients. You have to stay positioned for lower Interest Rates in china. Those have been very profitable over the last 18 months and that will remain the case. Clearly looking at the monthly numbers some improvements in the shortterm momentum on the industrial side since april. I suspect well get further confirmation of that in next weeks flash pmi survey which is going to be the next important number on the horizon. The Monetary Policy can get some structure and thats an argument for the authorities having to do more. Losing steam here. Shanghai composite closing down by around 4 . Do you see further pressure on stock prices Going Forward despite further Central Bank Intervention . Well i think i do. Today is an exemplary. They attempt to stabilize the markets that were a work in process and secondly how stock market developments remain. Key for me is really what drove the bubble was an unprecedented build up in margin debt by retail investors. This was really the key dynamic driving stocks higher to ultimately unsustainable levels and we were clear in warning about this during the run up. The bulk of the selling pressure really flows from deleveraging. If you look at the official data on margin positions, they seem to maybe be 2thirds through the process of unwinding those margin positions so i think the authorities can limit the down side but ultimately that pressure will have to continue to come through. Richard, stay with us. Well come back to you and talk more about emerging markets in a few minutes. But first lets turn our attention to whats happening in greece. We have a very important vote happening today and ahead of that the Greek Parliament speaker speaking as a lawmaker says that Parliament Must not conclude the blackmail from creditors. That is a very very strong statement. No going back. The Greek Parliament votes today on the bailout deal amid opposition from mps as the Prime Minister says he has reservations about the package in brussels. I take my responsibilities and its my responsibility. However i wont escape from my duties or responsibility. I have to guarentee the country or social groups would not face destruction. I shall be responsible for the noncollapse of the Banking System. I will not escape from my obligations. I will try to implemented my plan in a four year time frame. We have a certain europe on our lands. I believe we have our crops out in the field and we shall see the results of this crop. If substantial debt relief is not sought but interesting comments coming here from the Greek Parliament speaker. Its really on Alexis Tsipras to show he can pass these reforms in parliament. Its going to be interesting because its going to see him have to get support from his opposition and new support within his party. That latest flash, because he does have the about to delay the vote. Its a big q and a, the speaker is not obliged to schedule it will vote. This could delay the whole timetable. We wouldnt know when the vote would be but she could delay her votes in the Greek Parliament for up to 3 days. Interesting to hear that given that she does have the ability to delay timetables and that would not please the germans. The average mitt cal analyst says that 2 3 of parliament is expected to vote in major of reforms. Its definitely interesting. It really highlights the challenge for the greek government and i found it Just Brilliant what he says overnight. He said i dont believe in the deal. If he doesnt believe in the deal how can he make the country or people agree to a deal. He said im going to implemented it but he has no credibility when he says that seriously. No but thats indicative two factors, a taste of what grexit could be like and also even if he doesnt really believe in it in the shortterm theres nothing to gain. In the medium term this is just pointing to the fact that they probably will pass it and it will resurface in a week or a month or a year but i dont see that theres anything for them to gain given that tsipras has been the most antagonistic. Even he can get more of a deal. We should point out what the imf is saying. Thats absolutely crucial. Not only in greece are we seeing troubles of this being past implemented but we have this big dispute between germany and the euro zone and the imf. You need to take a much much bigger hair cut. Germany doesnt want to do that and you have to be part of this bailout. Maybe this is all bog to fall away before every government can vote on this. Which is possible. Im surprised by the extent of the change in tune in the statement this morning. They have never been quite as hard lined as germany on this but they have been part of the other bailouts. All the others have been very very restrictive and lagarde has not been speaking out in a loud way to say this deal has to change more in favor of greece. Its very odd timing now. I dont think this is surprising at all. With the 2010 bailout they made a huge mistake because back then the imf said the greek debt is sustainable and they said they dont need a major hair cut. What happened two years later we needed that hair cut so the imf said sorry we were wrong on that so theyre not going to make that now. Why not . After the deal has been done . Theyre always the ones to state the obvious. Thats what they have always done. When the slow down happened in emerging markets they said be war ri of whats happening in emerging markets. But this is very much an initial agreement at this stage. Far from being a deal ratified and many hurdles to get over. Well continue that discussion. And really interesting angle. Dont miss our interview with the partys economy spokesman coming up at 10 40 cet. Meantime lets have a look at how markets are trading today. How are we looking . At the moment basically flat. People were waking up to the fact that the greek deal hasnt been ratified yet and was still a long way to go but by the end of trade we were just above flat and as we look at things today were just below flat so the official optimism we saw monday from a greek deal being announced has been muted on tuesday and today as well. Lets look at the stoxx 50. Thats lower than the stoxx 600 but as we said 8. 2 for one week. So a lot of positivity surrounding greece already priced into equity markets over the last week. Lets look at bonds. A bit of movement there considering whether youre considered a core country. It did cross 0. 9 earlier in the week but back down again 2. 0 on the ten year in spain. Euro has been confusing as everment thus today is a small positive gain. 11023. We did dip back below 110 earlier in the week. Sterling as well 15650. A strong rally yesterday when mark carney said were moving closer to an Interest Rate rise. Unemployment and wage data. That will be interesting to watch. A quick look at commodities. Yesterday buy the room and sell the facts. Once we got the iran deal we saw oil prices strengthen again and they have been in general over the last 8 or 9 trading days. Brent 58. 2. Coming up on the show keeping up with the jargon. Its all about picks. What does this latest buzz word mean . And does it even matter . Find out after this break. Fed chair janet yellen will deliver part 1 of her testimony on Monetary Policy to congress today. She goes before them at 10 00 a. M. Eastern time. She had testy exchanges with republican congressmen earlier in the year. Fed watchers say its unlikely yellen will drop many policy hints unless she wants to steer markets toward a september rate hike. As investors gear up for a lift off by the fed what will it mean for emerging markets . They identified five fragile economy which is is joined as the picks. Thats peru indonesia, columbia turkey and south africa. Richard, which of these markets do you think is particularly vulnerable to a potential rate hike . Great question. With a was fascinating to me when we had ten key variables it was an economy thats not typically on investors radar, columbia which came out of the most vulnerable. A current account deficit of close to 7 of gdp in the first quarter. Growth already slowed significantly and could have really quiddity issues if we did move into a period of more risk off in markets if we did get an earlier but more aggressive lift off by the federal reserve. Lets talk about a couplel of the other ones. Two less surprising ones turkey and indonesia. The socalled twin deficit countries. Is that the reason why theyre on the list as well . They have this current account deficit as well . Yeah look. Its really external liquidity is the key variable here. Were looking at economies that are very reliant on hot money flow. Thats not covered by Foreign Direct Investments that tend to be more sticky. The more reliant you are on hot money flow the more exposed you are to any shift in the risk environment. It throws up a number of the usual suspects and perhaps a couple is darker horses. Columbia that we already emphasized and also peru. Theres another key dimension here and thats commodity dependence and thats very important because what we observed is that commodities are are very elastic with respect to the u. S. Dollar. The u. S. Dollar appreciates in response to higher u. S. Rates the more aggressive Monetary Policy tightening. Many of those economies will suffer on the back of that. Turkey is the exception here because turkey is a big commodity importer. Not a net commodity exporter. A lot of people we talked to here on the show they tell us what the fed hikes rates at the end of 2015 it wont lead to a sell off in the emerging markets. Now they have it out of the system. Valuations were lower than in 2013. I know you dont necessarily agree with that view. You think the markets are complacent, why . I do. If you look at the implied volatility across the range of markets, particularly u. S. Equities that trustybarometer, its still at low levels. Theres a clear risk moving forward. Even the fed will have to do more on rates than is currently priced in or the fed stays behind the curve and we get more Wage Inflation than many are anticipating and that protuss margin pressure. Either way risk is well get more volatility in equity markets and that has been the best single one stop guide to stress in emerging markets. If we do get the sharp spike higher its inevitable that well see fall out in emerging markets. As is always the case theyre very reliant on shortterm hot money financing are going to be the ones most exposed. Should we talk about the negative surprises, which country surprised you the most on the positive . Who is better prepared for the rate hike . Going in the other direction what stands out is the relative security of asia. Asia typically sees very strong current accounts deficits relatively limited requirements and particularly the region is a net commodity importer so that dynamic of stronger dollar lower Commodity Prices actually works to strengthen external balances for the region. So the economies that stand out as the basis for us in this frame work south korea thats going to have the biggest current accounts deficit this year thailand the philippines and although china has many domestic issues external solvents and liquidity are not issues that it faces. China looks relatively secure from an external perspective as well. Thank you for your time. Emerging markets chief economist. We want to bring you the latest comments from the greek finance minister. He says a number of measures in the european deal will have a recessionary effect and i dont think that would be a surprise to anyone here. Stating the obvious. Totally. But these debates are going to go on all day and clearly the words we heard so far are very negative and not supportive of the deal but the expectation is that the deal get passed. Still coming up on Worldwide Exchange, how long before iran is pumping its big stock pile of crude oil. The latest on the deal dividing opinion in the middle east. The numbers are accurate and stimulus is working. Japan maintains its inflation forecast noting that head wind versus eased. The central bank however, trims its growth outlook. Greek lawmakers begin debating the bailout deal served on athens. This as they warn the program is recession nary while the Parliament Speaker could delay the vote. Falls to the bottom of the u. K. Market as sales in hong kong slump but theyre still pursuing growth opportunities. Lets have a look at sterling. Were awaiting some u. K. Employment and Wage Inflation data. Sterling 156. 5. That follows a strong rally yesterday after mark barney was speaking where he said an Interest Rate hike was moving closer which did surprise some investors and lead to just and a percent gain yesterday. Up 10 to 15 basis points. Last time we did see positive Earnings Growth of 3 last month. So again in positive territory. Yesterday we had cpi data at 0. 0 . We have inflation data moving quicker than core inflation. Were waiting unemployment and Earnings Data at the moment. U. K. Jobless rate rising for the first time in more than two years. There you go. Yeah and quite a dip in sterling against the green back after that data came out. We have the june adjusted jobless claim at 7,000 at 2. 3 of the work force. We have the Unemployment Rate up 5. 6 . You said the forecast was . 2. 7. So average earnings 3 last month. Unemployment rate thats probably whats moving for the slight gain in trades now to a slight loss in trades. Has been steady at 5. 5 now and its just ticked up to 5. 6 . Dont forget that rally in sterling we had yesterday thus the slight decline coming down 10 to 12 basis points at the moment. Lets move on. Were seeing a softer picture of the board. Its roughly 12 points in the cac 40 up by 0. 2 but its bucking the trend higher by 0. 4 . A lot of focus on the greek vote coming up later today. Top stocks as well in europe. Trading higher after the company says its on track for record 2015 sales. They reported q2 net sales, marginally higher than 2014. Were up 2 on asml. Up fractionally a quarter of a percent and ryan air also fractionally down 1 because eu antitrust approval for its 1. 3 billion wrur row bid is being decided. The Eu Commission says the British Airways owner agreed to make concession to ease competition worries. Burberry down lower after further deceleration in hong dong. Theyre not planning to change the strategy for region. Nuclear deal being announced yesterday, oil carrying different markets as it suggests an agreement. The prospect of irans stock pile flooding on to the market depressed prices initially. The deal lead to celebrations on the streets of teheran but does not mean the immediate listing of sanctions on iranian crude exports. Now iran will be able to raise krut exports by only 60 within a year. More on that story, live in teheran with the latest. Seema, thats right. Sanctions will not be lifted immediately. Theyll be implemented once theyve resolved all outstanding issues on Irans Nuclear program but thats crossing the ts and dotting the is at this stage. It is a done deal. They were euphoric about this deal last month. Once news spread and night fell it felt more like the rio carnival here but it showed how much people were happy about this deal and how long they have been anticipating and waiting for it and this really could spell a new error for iran. I dont want to overstate things. Theres a lot of difficulties. Not the easiest place to work in the world. Okay. Unfortunately we lost that line. Not the most stable of lines but thank you for that. Joining us now is the global commodity analyst at bank of america. Interesting. Yesterday initially a big sell off but recovery into the end of the close. Do you think that market has fully priced in the return of iran tps ian oil . Well go higher from here . Or do you think theres still down side . I think the market is still digesting the news. We also need to see how quickly some of the, you know very old fields can come up. It will continue to yield down side pressure and then further down set pressure as we are actually seeing the volumes him the market which is not going to happen before december or january. Theres a lot of debate out there as to how much is in the floating storage and to what levels iran can get back to in 2016. What are your numbers . About 40 Million Barrels of floating storage. Half of that is crude oil. What really matters is the crude oil numbers. That will be a shock to the market. Production and exports will slowly ramp up toward the end of the year. Production is currently at 2. 8 and we think well see an additional 650,000 barrels a day by the middle of next year. We have seen quite a lot of oil price weakness. Particularly sharp sell off loss monday. That has that been ahead of this deal expected to be announce or other factors . Many factors. We have been ourselves warning investors and our clients of a double dip in oil prices in the third quarter. We have greece and now we have a bailout, its massive implementation risks we still need an extra program. Thats hitting all commodities badly and the Commodity Markets are starting to position for a big depreciation. Certainly the iran deal has already, as weve had indications that this may be in the pipeline and then theres other microfactors we shouldnt overlook. Gasoline has been a massive driver in the Second Quarter. It provided a huge amount of support. The gasoline demand and driving season in the u. S. Was very strong. But now were pass the seasonal peak in demand. Its very easy to produce unlike summer gasoline and finally, you know, refiners have had phenomenal margins. They have been running their plans as hard as they could but now eventually theyll have to go down for maintenance and we expect a steep maintenance season. Lets touch on china as well. They have gone back on to the path pretty strongly as well. How strong is the correlation between china easing and oil prices recovering . Its of course over the relationship of what china does on the monetary side and physical front. The pboc was very successful at simulating the economy following the financial crisis. That was a huge boost to demands. We saw global demands in oil increase and partly because of pboc lending. In 2012 they did the same. I think now, you know clearly what 2012 generated was a housing bubble and now an equity bubble which is deflating. So the returns to this sort of policy are a lot lower than in the past and maybe less effective. What were seeing is the commodity intensive industries are slowing down drastically. Its a busy time for you as someone that tracks the price of oil but Going Forward whats the factor that analysts should keep an eye on . The stronger dollar or Iran Nuclear Deal or weaker than expected data out of china . Its a tough question. Its a little bit of everything. Euro dollar has been a phenomenal driver and you shouldnt underestimate how the strength in the dollar has also been an additional applied additional Downside Pressure to oil during the collapse. Likewise, were getting iranian barrels into the market. Saudi is pumping at record highs. Iraq is pumping at record highs but were about to lose a lot of shale oil in the u. S. Demand has been conflicted. Very strong in some areas and not so strong in others. We have to take all of this into account. In our view. At least the first part of 2016 will be still quite weak for oil prices. Its like a jigsaw puzzle. A pressure to have you on the show. Now the potential lifting of economic sanctions on iran lead to a number of western firms seeking to reestablish ties with the country. The deal allows for a significant advance in our on going discussions with teheran. Lets get out to stefen live in paris with more on the story. French car makers believe there are huge perspectives before the sanctions. They used to have a 40 market share in the kuhn. Iran was the second largest market after france. In 2010 it sold the 450,000 vehicles in the country. And iran also was a significant market. It accounted for 100,000 vehicles per year. Negotiating for awhile to organize its potential come back in the country. It was in negotiations with its former iranian partner to create a joint venture. It could produce the 400,000 vehicle a year in the midterm in iran. Globally speaking more could capitalize on the iranian deal starting with total, the French Oil Major never really kept the relationship with iran and in the southern part of the country and it believed it could come back quite easily on the iranian market. That being said French Companies are going to face a sea of competition in the country and also some of them are concerned that it could pay the price for the french hard line on iran when it kale to sanctions and the regime will make it more difficult for them to come back but among the company that could benefit, lvmh in the luxury sector. Over to you. Thank you for that. Lets have a quick look at a live shot of the Greek Parliament where on going debate is happening ahead of a vote scheduled for later on today and that latest agreement between creditors and greece. Lets bring you the latest flashes coming from the Eu Commission. Greek Banking System collapse could spill over into other countries. An interesting point of view and other factors coming out as well on the amount of financing needed. Yeah. They also say that the high debt to gdp ratio means they raise serious concerns on the greek debt sustainability. They also say that the financing gap is to be covered by external means. So financing needs was 78 billion but that number could obviously rise. When you take a look at personal debt yields it seems like investors arent pricing in that risk and that could change. I want to point out that banks will not reopen until july 16th. They have been closed over 10 days. That in itself crippling greeces economy and could result in further debt relief needed down the road. We dont know when the banks will reopen again. Whether all of them will be open. Some say it will be two banks left. Lets move on. Much has been made of the similarity between the parties. Both have campaigned tirelessly against austerity. But as athens capitulates to top demands it thought to distance itself from the greek ally. Joining us is the economy spokesman. Thank you for joining us. Why are you distances yourself . Because i thought you were allies . Good morning. Thank you very much for the invitation. The first thing is we see the greek agreement is that we understand and we perfectly understand that this agreement basically has the Current Situation and that means that it will continue to be on the economic Current Situation of greece for the next year. It entails Enormous Growth but also economic growth. At the end of the day its sustainable and thats where we think that disagreement was not designed to solve the economic problems problems. Theyre already talking about the need of debt restructuring but it was basically designed with political object eyes. That means under normal financial pressure to break the greek government and thats why we understand that this agreement does not like to the government and thats why we considered that its not a good agreement. Does this agreement that the greeks have secured in the last couple of days does it highlight that their ideals and intentions are too optimistic . These are ideals and intentions that you also share with them but theyre not practical . Theyre hard to carrie out . Well i think the demand was not too optimistic or especially radical or difficult to achieve. Plenty of economies need to consider debt restructuring for the case of greece and there is no way that greece can get out and can come out of the depression without a debt restructure restructuring. So assault the debt problem will entail 5 to 7 of gdp for the next decade. Thats something impossible to achieve. Have you changed your Economic Policy or the way you structured your goals now that youve seen the tough road they have taken . Well we happen to defend a sil thing from the beginning but according to the point that the spannic economy and Greek Economy are very different and are in a situation very different we have to say when we talk about debt restructuring were not talking about debt restructuring. The proposals are very different from the proposals that is proposed for the Greek Economy. Its not public debt but private debt and one of the first measures we need to take is restructuring of the it shall that means a reduction of the value of many mortgages and when the spanish households give back their house to the bank their debts will be cancelled and that doesnt mean that we dont need public debt restructuring. We dont need the type of public debt restructuring that a Greek Economy need but we need to restructure the debt link to the bailout. In terms that banks should contribute to the bailout. Youve got that big election coming up at the end of the year. Now youre polling at around 21. 5 . Not too far away. If you dont get that outright majority which a lot of people arent expecting you to do are you going to build a coalition with the Peoples Party . We have already done that and were open to dialogue and talking with the political parties. Especially with the socialist party. Thank you for your time. Appreciate it. Still to come on the show making a twist of investors. We discuss the dramatic rise and fall of twitters stock price after yesterdays hopes. That story coming up. Bank of japan governor said china maintained stable growth overall but adds he will continue to closely monitor the chinese economy and stock market. This as the japanese economy continues to recover moderately amid sluggish export numbers. Lets get out to live from tokyo. Thank you wilfred. Now this first outlook report since april and the bank revised downward the growth rate figures from physical 2014 and alt the conference the governor made it clear that the downward revision is not due to domestic weakness. He explained there was a decline caused by slowing growth in the global economy. Now the median gdp growth rate for physical 2016 and 17 remained unchanged and the fwroeth rates are well above the potential rates. They were all adjusted to 0. 1 lower and are now at 0. 7 1. 9 and 1. 8 respectively how ever the bank is maintaining the view that its inflation target will be reached around 2016 and earlier they said inflation will accelerate from this autumn but he did add that some of the Board Members are cautious of the target. The bank decided to maintain the status quo by an 81 view. The question is when the next further easing will be implemented and some suggest october. Its speculated that the april to june gdp figures were not be as strong and secondly unpopular and government agenda items are approach approaching selfdefense forces. They my want to launch further stimulus in the coming months. Back to you. Moveing on and were not seeing much today. The euro dollar is here. 11026 and the dollar yen pair 12356. Lets get out to the Vice President and strategist at barclays. What do you expect to see today . She is expecting a rate hike at the end of this year. Is she really going to move the needle today . There was a lot of information in that speech on friday. We were confused in terms of where they sat with this on going volatility and Financial Markets whether it be greece or china. If she continues that tone of friday which she did mention that she would like to move rates higher by the end of the year. Well see the dollar being supportive. If we take a look at euro dollar and i want to focus on the euro here over the last week, its down 1. 5 and i wonder why that is. Because were focussing on Monetary Policy divergence or a lot of question marks over the greek deal or is there a third reason i dont know about . Its the former. Although its only a conditional agreement between greece and its creditors i think what it has allowed the market to do is concentrate back on those fundamentals. Monetary policy divergence. In europe theres a huge amount of economic slack still in the economy and were seeing that being taken away at quite a fast rate. We think thats going to happen in an environment where the ecb remains very much committed in its entirety. That should drive euro dollar lower we think. How has the behavior of Equity Investors impacted the euro. A lot are going long european equities and short the euro. Is that providing down side pressure to the price of the euro . Its a great point you make and something we acknowledge ourselves. The environment is a good one and we do like to be long european equities but what we look at is that were probably likely to see in the fixed income space continued outlows as the rates move higher in the u. S. And also as we move into other parts, fixed Asset Investment. The u. S. Will look like a better place if youre thinking about that fixed asset. Youll get better returns here than in europe. Mark carney saying were moving closer to a rate rise in the u. K. Is it plausible he could move before the fed . Its plausible but we were surprised how much the market focused on that comment. It would be like describing to a toddler that youre moving closer to going to university. Theres a lot of things that have to happen in between for that to be the case. More broadly when you look at what he was saying in that system, he was essentially really being quite consistent with how they have done this year. Cautious amid very low inflation. We saw the u. K. Generating no inflation on an annual basis. We have growth in wages but we need to see that continue for them to be close to moving. Thank you for joining us. Much appreciated. Coming up mickey mouse going to shanghai. Well get you that story coming up after this. Welcome to a second hour of Worldwide Exchange everyone. Here are your headlines from around the world. Its not the economy stupid. Chinese stocks stumble despite a slew of better data. Beijing says its stimulus is working. The nuclear deal between iran and six world powers and traders evaluate how much of the stock pile will be able to come on to the market. They begin debating the bailout served on athens after the Parliament Speaker could delay the vote. Celegene makes a move on receptos as they buy a blockbuster drug in late stage development. A price at over 9 billion. Coming up on the show mickey goes to hang shy. The Company Plans its newest theme park. Twitter shares spike on a fake report of a 31 billion takeover bid but that has had happened one time too many. Donald comes up trump. The real estate mogul leading the gop field despite weeks of controversy. All the details later in the show. Now a slew of data out of shy in a today. Retail sails, industrial output and fixed Asset Investment all beat forecast but the key data point also coming in slightly higher than analysts were expecting at 7 . The worlds second largest economy is on track to hit beijings 2015 official growth target of 7 . Interestingly they were quick to jump to the defense of the data saying the figures were not inflated and the improvement was hard won. Now the better than expected data comes after a major stock market sell off which prompted heavy handed Central Bank Intervention. Failing to reflect the positive numbers. As you can see major indexes ending in the red. This underlines the disconnect. Thats been a debate as to what is really driving the markets Going Forward despite the big moves taken by the central bank. Very interesting that we had the bureau come out and say the 7 was accurate and of course yes this data is in line with forecasts but overall its still pointing to a bit of a slow down and of course the market disappointing the performance in the stock market today and of course carolyn weve seen huge volatility in the stock market in china in recent weeks. Absolutely but i want to come back to the statement that the government made saying our books are accurate. If theyre that accurate dont just put out a statement. Show us those books. I want to show you what u. S. Futures are looking like early on this morning. Four consecutive days of gains and theyre looking brighter. S p 500 seen up by 2 points and the nasdaq expected to open higher by around 11 points. European markets are taking a little bit of a breather today. This is after five days of gains for european markets and lets look how theyre shaping up today. The ftse 100 is moving into the green dax is higher by 0. 1 . Two key events to focus on today. Thats of course yellens testimony and the greek vote. Lets just have a look at bonds because of course they have been moving in line with headlines out of greece. Also as were looking at things today 0. 82 on the safe haven german bond. That u. S. Bond will ignore greek headlines today. A look at the u. K. 2. 11. Lets also have a look at forex rates because the euro is offsetting a bit of weakness in European Equity markets. 10 basis point move today. It was above that level earlier in the week. Quick look at sterling as well. Sterling was just flat today having rallied quite strongly yesterday on the comments that were moving closer to a rate hike. Quick look at oil prices. Soft today. Down half a percent. 52. 8 for wti. Back to our top story, the Greek Parliament votes today on the bailout deal amid opposition from some mps. This as a Prime Minister has reservations about the package agreed in brussels. Lets bring in michelle who is live in athens. Greece of course has six sweeping laws to pass today by parliament. Do we know if they have the political capability to get these through parliament . Yes they will pass today. No doubt about that. Its just how. Ahead of this key vote last night Alexis Tsipras went on National Television to do an interview with local journalists. Wide ranging we are sags and border line confrontational. He brought home a deal worse than the one they rejected. Local political analysts described it as a superb performance. He explained, look we went to use american vernacular we went to the mattresses on this one and it was as good as it was going to get. This is what were going to have to do or else it would leave the euro. He played on a particular part of greek psychology when he said to them listen our creditors want nothing more than for us to fail. They would like me to lose my job and for us to leave let us prove them wrong. We always knew the opposition would go wrong. Parliament began the whole procedure. We believe the official debate begins 10 00 local time tonight and then the vote will happen sometime after midnight. We focused on custom pensions and raising salaries but theyve all been about reforms. About opening closed professions and liberalizing the economy. Who is going to protest today . The pharmacists. All the pharmacies are closed today. Theres no walgreens or cvss. To own a pharmacy you must be a pharmacist. Youre only allowed to own one. The government will tell you where to locate it and you have a monopoly on things like tylenol and advil. All of that will go away if they pass everything in the bailout agreement. Thats one sector of the economy. We wait to see what happens with brussels. These guys need shortterm financing to baby monday. That brings me to my next question. Whats the response like from people on the ground and the Business Community in athens as of course mounting pressure on tsipras to pass these reforms . They think they dodged a bullet when he announced a very tough deal but a deal. Many in the Business Community thought that actually all along he had planned for a grexit. In fact he has so far proven thats not the case. So any deal to the Business Community hooks good. What they would really like is for the ability to get money to move across boarders so they could import products again. This is is a country that relies on imports. That is going to be weeks if not months away. A final deal must be done and must get through the German Parliament before theyll be able to recapitalize the banks and put them at a position where full functionality for the Banking System will come back on. Michelle, thank you so much. Oh to be a fly on the wall. The u. S. Treasury department confirmed that treasury secretary jack lew will meet with mario draghi later. Its part of a twoday tour for lew that will drop in to discuss the situation in greece. Stay tuned to cnbc tomorrow because julia will be live at the central bank headquaters from all the news from lews meeting with draghi. Coming up, some of the worlds best investing minds are gathering at the conference in new york city. Well be speaking with them throughout the trading day. Stay tuned for that. Welcome back. Yellen takes the stand. Monetary policy at 10 00 a. M. Eastern time. Data is accurate but chinese stocks still take a tumble as the heat is on Greeces Parliament. Debate the bailout deal ahead of a crucial vote. Walt disney is breaking ground on the new theme park in shanghai. Theyre hoping to see growth when it opens to the public next spring. Will there be demand for it . Lest get out to eunice that joins us live in shanghai. Well, the ceo of disney had come to shanghai to lift the curtain on the new theme park here. This 5. 5 billion facility is going to be authentically disney and distinctly chinese. Its going to have a lot of firsts. Its one out of the six themed lands is going to be pirate themed. And also the castle is going to be the largest out of any disney park. The company also said that this is going to be the first time where you wont see main street. A lot of the americana is going to be stripped out of this theme park and a lot of chinese elements will be added in like the 12 animals of the chinese zodiac. Its going to be crucial for disneys future. This is one of the most important projects were involved with as a company. China he presents a great opportunity for the walt disney company. Growing in china is a huge priority for us and our primary approach in terms of growth is this park so obviously its extremely important and very exciting. Despite the slow down in the economy he is very upbeat about the chinese consumer. Disney land was built 60 years ago and has been through the ups and downs of the u. S. Economy for six decades. So were not concerned with the economy and ber bullish about the long material prospects of it. It is finally going to have its grand opening next spring. Are you going to go and try it out once it opens . I think so. Theres actually going to be a couple of geek star wars themes and all of the scifi stuff i like. You would fit in with that crowd. Ive never been to the florida one. Been to the paris ones a coup of times. But i was younger. But theres a desire to get back out there. Thank you for joining us today. Have you been to disney . Of course but also universal to blow our own horn. Fantastic. Amazing. Leaps ahead of anything else. No matter what age we are we all have a kid in us. Which is lovely. We should be able to enjoy these theme parks no matter what. Only problem. Buy the fast pass. That will be exciting as and when it opens. Yum brands with its 4th straight quarter of falling sales. Profit dropped 30 although excluding items earnings did beat forecast. Same store sales in china fell 10 . Worse than expected however that was an improvement from the 1st and 4th quarter. Wrum shares fell 1 in after hours trade. Down. 5 today. Csxs Second Quarter profit rose more than 4 beating forecasts thanks to lower fuel prices. It fell 5 missing estimates. However results beat the companys own expectations. Csx rose 3 in after hours trade. Lets take a look at how its trading in frankfurt. Clelgene striking a deal for 7 billion. It will pay a 12 premium from the price on wednesday. They trade higher. Receptos up by almost 12 . Wow. The ceo will be on squawk box for a first on cnbc interview. Continue to see a massive move in bio tech. M a a driving force when looking at the bio tech story. Push to retail bigger than black friday. Thats the promise from amazon as it celebrates its 20th birthday with a sell at midnight tonight. It sold 5. 5 million items on black friday and its hoping to surpass that which would make it the biggest sale in the companys history. Walmart and target are attempting to rival prime day with their own promotions with many shoppers expecting a pricing war. Shares as you can see its mixed. Target up about 11 . Amazon the big winner up nearly about 50 . We should point out amazon last year in 2014 was one of the biggest underperformers in the tech sector. Theres been a massive change in sentiment. A lot of that having to do with breaking out their cloud revenue. 5 million in cloud last year. The ceo said in ten years you could be referring to amazon as a Cloud Company versus a retail company. The stock hit a record high on monday. The mark cap now gained 4. 7 billion ahead of todays massive sale. Investors see opportunity in this. Absolutely. Its transitioning to other areas but on the pure retail side of things its the big on going debate between profit and margin. Everyone fights back like they did in china i wonder if investors fear this kills their earnings again. Now as a consumer, do i spend a lot on black friday or julys july 15th sales or back to school sales. I dont know. I believe consumers are bog to prioritize. So i dont think its going to add up. Look at the retail Sales Numbers yesterday. Disappointing. Town 0. 3 . Were not spending massively are we. Despite gas prices still relatively lower than the historic average. Still to come, a new survey shows the u. S. Economy is recovering nicely but that may notbe the best thing for u. S. Business. Well discuss after this break. Dont go away. Now the latest development on greece. Eu sources are telling cnbc that a uk safe guard is being worked on that could evolve using markets from the program if the esm deal fails. Now fed chair janet yellen will deliver part one of her semiannual testimony on Monetary Policy to congress today. She goes before the House Financial Services committee at 10 00 a. M. Eastern time. This time after trading testy exchanges earlier this year. The hearing also comes two weeks before the fomc meeting so unlikely yellen will drop policy hints unless she wants to see a september rate hike. American manufacturing firms are bullish for the next 12 months according to a survey that suggests that 91 of executives think their business is either Holding Steady or thriving. It warns that american manufacturers need to be more innovative to keep up with their nonu. S. Counter parts who are more likely to invest in cloud and social media. Lets talk more about the of Manufacturing Sector with the leader of the Industrial Products. When you say innovation what do you mean by that . A couple of things. You mentioned the survey. Most predict their businesses will increase in Revenue Growth by about 12 and increase employment by 8 but one of the things that is really important is that for manufacturers to stay ahead and stay competitive, they need to continue to invest in their businesses and particularly in innovation. Innovation in their processes and equipment and also in the products and services they deliver to their customers. The Economic Data over the past ten days has been disappointing. Business inventory. The jobs data for the month of june. How do they hinder the Manufacturing Sectors progress . Well you know whenever retail sales is down and Consumer Confidence is down theres an impact on the sector and one of the things that helped is the lower energy prizing since the Manufacturing Industry uses a lot of industry. That has been well for the manufacturers manufacturers. This was the first year we included nonu. S. U. S. Manufacturers in the survey and now theyre tending to invest more in their businesses in terms of technology and machinery and equipment and their plant facilities and not only are these nonu. S. Manufacturers investing more in technology they seem to have more success in implementation of cloud and social media and regular erp systems. So one of the things is comparing u. S. Manufacturers to nonu. S. Manufacturers and we found that it seems that nonu. S. Manufacturers are good at dealing with u. S. Commerce. They have higher goals to sell outside their country and higher goals to target the u. S. In terms of investment and to export into the u. S. So its been some really Interesting Data and you know one of the messages for u. S. Manufacturers is even though theyre focused more in serving customers in the u. S. Market i think that other nonu. S. Manufacturers are targeting the u. S. And have their eyes on this market. They need to make sure that they stay aware and are aware of who their competition is. A pleasure to have you on this early morning. Leader for the Industrial Products industry. Still to come on the show drilling into the detail. How the iran deal will effect Global Oil Supply is coming up next. Well leave you with a look at how futures are trading on this wednesday morning. Earnings also to react to. Dow about 11. Nasdaq up about 12. WorldWide Exchange dont go away. Well be back very soon. Kids are expensive. So im always looking to get more for my money. Thats why i switched from uverse to xfinity. They have the most free on demand tv shows and movies on all my devices. Its perfect for me because my kids are costing me a fortune. Im going to cabo [ music plays ] dont settle for uverse. Xfinity is perfect for people who want more entertainment for their money. 10 30 a. M. Here in london and 5 30 a. M. Here inin new york city. Here are your head hines from around the world. Its not the economy. Chinese stocks fall despite a slew of data. Recent losses between iran and six world powers as traders evaluate how much of the stock pile will be able to come on to the market. Greek lawmakers begin debating the bailout deal served on athens. This as the countrys finance minister warns its recession nary while the speaker could delay the vote. Celgene makes a move. Agreig a price at just over 7 billion. Stocks posting their 4th straight day of of gains. Both of the banks that reported earnings, jp morgan and wells fargo ending the day higher but technology was the big stand out. Some of the biggest names in the space reporting this week like intel and netflix and google. This sector has High International exposure. Making 45 of its revenue outside of the u. S. Keep an eye on currency head winds. Were up about 11 points on the nasdaq. Dow is up about 8 and s p 500 up about one. Well look at european markets. Were waiting to see if Alexis Tsipras can pass the reforms on parliament. The extra dax up about five points. Were looking at the cac 40 up and around 125 points on the upside. The under performer here is at this point, the ftse 100 flat on the day. Quick look at oil prices and were a little bit lower this morning. Brent crude down by 0. 6 . Wti at 5271 but big volatile trade in yesterdays trading session. First down and then up on the day. I want to bring you some comments from the romaniranian president. Iran wont be called a world threat anymore. It is an achievement. Lets get out to ali in teheran. Thats right. He sent word of going through the people and went out on to the streets and as the word of the deal spread and night fell there were euphoric scenes across the city. People were flashing victory signs saying that they loved rohani. Theyre really happy and in these spontaneous celebrations in the streets they were welcoming america. People were shouting we love obama. These scenes are unheard of in iran and the Wider Community in iran is now ready for visitors coming to iran. They want to see american tourist having coming to iran. Iran may not be the easiest place to navigate and work in the world but if the doors are owe youll see a change in this country. Back to you guys. Thank you for that. Now how much crude oil does iran have stored at sea . Windward is a maritime data and Analytics Company which created an indicator of stock piled level. Im delighted to say that joining us is the ceo of winward and joins us now. Good morning. Thank you for joining us. Lets talk about the estimates you have for the floating storage of oil that iran has ready to sell. This morning we have sells from bank of america and lyric lynch so estimated it at 40 million of which only half is crude. What you estimate. We were pretty sure the numbers is around 21 Million Barrels and the impact at the market is significant because its not only the crude itself. Its the expectations of the market and how much crude is going to go out and we have been hearing experts around the world talking about these numbers because with technology developing sbelintelligents and theres about 51 Million Barrels out there right now. When does the tirges in your estimates and consensus estimate arise . Have you always had this difference in opinion over the last couple of years . So i dont want to talk about always right now. We uploaded a website that you can see yourself. Our viewers can see them for thermss therms themselves. Thats more than were allowed to export which is 1 Million Barrels per day and produce which is 3 Million Barrels per day. The question is not only how much do they have now but where is this going to go . If the economists and public is going to take right data or misinformed data. Why do you think wall street underestimated the amount of floating oil stored in the gulf right now . I think technology. Maritime is a complex business and technology is a complex business and this is looking at Iranian Crude Oil in the persian gulf is difficult. We are able to say that surely because the only thing we do is maritime analytics and im not sure that other people around the world are technological and solving it with data sciences. These are manual ways that are not that effective. Just finally, im just curious to see who your clients are. The most interested governments would probably approximate the chinese governments. Is it the Big Oil Companies . Who is it . We have been working in the intelligence space . The middle east central america, and looking at all the investors around the world and pick up vessels involved in illegal activities. Were talking about the one weve been developing based on the same technology and this information you can access by yourself right now and is meant for hedge funds, traders, Commodity Traders around the world to enable them to make better decisions based on accurate and reliable data. Thank you for your time. Lets look at the other top stories at this hour. He has no plans to make a merger offer to gm after his proposal was rejected. Speaking with the uaw the ceo says the company is not actively seeking a merger partner and cant afford to wait but he said he Still Believes that auto makers should join forces to maximize their technology. It cant be done. It failed before. Were desperate. Well make the call in q2 earnings as to whether were really desperate but we keep forgetting the fundamental of the pitch. Theres a better way to run this business that benefits everybody. He spoke after he reassured the uab that Fiat Chrysler wont pursue a merger. Yum brands reported its straight quarter of falling sales. It dropped 30 although excluding items earnings did beat forecast. Same store sales in china fell 10 worse than expected however that was an improvement from the first and third quarters. Currently down by 0. 4. Yes, Second Quarter profit rose more than 4 beating forecasts thanks to lower fuel prices but volumes weighed on revenue which fell 5 missing estimates however results beat the companys own expectations overall. Csx rose in after hours. Still to come, the buying free in the health care and pharma sector isnt bad. Thats coming up. Dont go away. H. Fixodent. And forget it. There were individual stock movers to take account. Specifically go pro. Soaring 5. 5 yesterday after they go from overweight to equal weight. Citing new products and brand strength as key catalysts behind the move. Big mover in yesterdays spradment micron also on the move. Stock jumping 11 on reports that chinese makers would be preparing a bid. It would be the largest chinese take over of a u. S. Firm. Of course m a crucial in many market moves throughout the year. Micron yesterday and lets keep on the m a theme but moving to the health care sector. Already a blowout year. M a activity stopped 250 billion since january and another big purchase has just come down the pipeline from london. Lets get out to landon. She is live with all the details. Thats right. Celgene reached a deal to buy recpetos boosting its line of treatments for immune diseases. Thats a 12 premium to the Closing Price on tuesday. Thats a small amount compared to other recent biotech deals. Up 70 this year on rumors of a take over bid. They have been developing a potential blockbuster drug but relapsing multiple sclerosis is also being tested for using patients with colitis and crohns disease. Generic competition could threaten its top selling drug. The Company Generated nearly a third of its revenue last year from it. They signed more than 30 deals since 2011 and last month it agreed to invest 1 beside in juno theerrapudics. Preannouncing its Second Quarter earnings. Profits beating forecasts as revenue rose 22 and the company is raising its full year guidance. Celegen is up 14 . A program note the chairman and ceo will be on squawk box today and a first on cnbc interview at 7 50 a. M. Eastern time. Back to you. Donald Trumps Campaign will reveal details of his fortune which he estimated at 9 billion last month. If true that would make him the richest person to ever run for president. But skepticism remains. Forbes magazine estimates its worth only 125 million. Voters are responding to trump. He tops a Suffolk University pole with 17 saying hes their first choice for the nomination. 70 . I couldnt believe that number. Amazing. Lets turn our attention to sports. Mike trout won his second mvp award. Trout who lead off the game with a home run became the first player to win the all star mvp in back to back seasons. The 23yearold joins willie mayes and kyle ripken junior. Now as we go to break lets remind you of the headlines. Yellen takes the stand. Addresses house lawmakers on monitory policy. Beijing insists its latest batch of data is accurate but chinese stocks still take a tumble and the heat is on Greeces Parliament ahead of a crucial vote later today. Borld Wide Exchange is back in 2. It did participate expectations. Saw a 3 jump in assets under management from the Second Quarter of 2014. Net inflows into products drove robust organic based speed growth for the quarter. Black rock says it sees continued market volatility impacting asset employees in the Second Quarter. Shares down by about. 4 . Lets talk more about the Financial Sector with fred cannon. Global director of research. This might be throwing you a wildcard here but do you track black rock . We do. Those results seem solid at first look. As analysts we like to take a little bit more time. Fair enough. Lets dive into some of the results we saw yesterday and what that might mean for the rest of the Banking System Going Forward. In particular jp morgan. Who does it benefit and who does it hurt . Equities was strong. So you have to look at the mix. On the other hand the thicker issue probably concern about Goldman Sachs and city. That said the read across is difficult because theres a lot of movement within those numbers. Those numbers last time around are pretty extraordinary return on equities. Is is that sustainable . They like to do that. Short answer is no. Goldman sachs has volatile earnings overtime. That said we do believe the volatility will be good at the back half of the year and should set up good numbers as we look that way. You have been pretty bullish on citigroup. You say those numbers are not going to be that messy. How can you be so sure of that . Because bank numbers by definition are always really messy. City is accident prone this Management Team has been focused on getting the management straight controlling the company, running it smoothly. Were starting to see that come through in the company and if we look overall the quarter would have been pretty solid and citigroup will attract more and more investors. Thats why we like it. The management of it and the fact that they can control that Company Better than in the past. How much will trading revenues be helped by greece and china . They have contributed to the rise in volatilities weve seen in markets. We have what we call good volatility and that is that the markets are being made and the volatile is good and should compound and go through the year. Well hear what janet yellen has to say in a little bit, will add to that volatility without a lot of risk in the system. Lets quickly touch on the Retail Banking side. Wells fargo reported a big gain in the volume of mortgages but a fall in applications. What can we draw from that for the u. S. Economy . One quarter doesnt make a mortgage business. Last quarter was pretty well set up for mortgage. You came into the quarter with big volumes because rates were low. Rates went up and the volumes were still there and you got positives on the Mortgage Servicing right values. Thats not sustainable but the health of the u. S. Economy is good now. Unemployment continues to tick down and credit remains pristine which was noted yesterday. Thats a pretty good backdrop for the banks that remain cheap compared to the Smaller Banks in the u. S. Hanukkah for joining us. As we told you black rock just reported earnings. Our colleagues will be speaking to the ceo of black rock in about ten minutes time. And Civil Services packed offices and Municipal Workers held a 24 hour strike and theyre arriving in greece. The numbers are low but theyre expected to pick up in the next couple of hours. Meantime we started in the red but we improved a little bit. The ftse 100 about the flat line. The dax higher as well but very modest losses. Not really doing anything. Retail sales, industrial output and fixed Asset Investment all beating forecast and chinese gdp came in at 7 higher than expected. The worlds second largest economy is on track to hit beijings official target of 7 . Interestingly enough chinas Statistic Bureau was quick to jump to their defense saying the figures were not inflated and you could see an improvement and it was hard won. Absolutely. We have easing in play and better than expected fundamental data so the equity market performed well. Stocks declining in the shanghai. The market thats been holding up better during the recent volatility was down but only slightly. U. S. Futures higher for four consecutive sessions and a fifth day of gains. S p 500 higher by 2 points. The nasdaq seen up by 11. 6 points. Janet yellen will deliver part one to congress today. She goes before the House Financial Services committee at 10 00 a. M. Eastern. The house versus the senate this time after testy exchanges with republican congressman earlier this year. It also comes two weeks before the next fomc meeting. Its unlikely yellen will drop policy hints unless she wants to steer marcus to a september rate hike. We just heard from her on friday. But since then disappointing data and retail sales. Does that change the timetable . They say that yellen be wont be deterred because its still up 3. 3 on an annualized basis. I think hes going to nail it down closer to september. I think she will lean toward making sure that the market is ready. Its all about data dependence. How do you know . How much can change. Especially after the lackluster june jobs report. A lot of people are questions whether it will happen in september. We will see. Coming up today, some of the worlds best investing minds are gathering at the 5th annual delivering alpha conference in new york city. Thats all we have time for. Thank you for watching. Well see you tomorrow. Squawk box is next. Kids are expensive. So im always looking to get more for my money. Thats why i switched from uverse to xfinity. They have the most free on demand tv shows and movies on all my devices. Its perfect for me because my kids are costing me a fortune. Im going to cabo [ music plays ] dont settle for uverse. Xfinity is perfect for people who want more entertainment for their money. Market watchers are of course looking for any hint on when and if ever the central bank might start to raise rates. And dont adjust your calendars, its not black friday. Its not cyber monday but retail giants amazon and walmart are rolling out big online sales and hoping you shop until you drop. It is wednesday, july 15th 2015. Some places try to seek alpha, we deliver alpha. Squawk box begins right now. Good morning and welcome to squawk box on cnbc we are live at the delivering alpha conference today. This is an annual event in new york city it brings together the most important players in asset managerful we are fortunate enough to be joined by one of the most powerful players. Black rocks chairman and ceo. Got the shot right there. I didnt realize you had that