Interviews coming up over the next couple hours. Have ago. Francine we have a lot of earnings. Descalzi,o, claudio about 10 minutes from now. Accors ceo will talk to us at about 10 30. Stay tuned for all of this. Manus shell is cutting 6. 5 thousand jobs, reducing investment by 7 billion. This comes as the slump in crude oil prices continues to take its toll. Francine the company is planning for a prolonged downturn despite an earnings beat, reporting a secondquarter profit of 3. 8 billion. What the oilws price is going to be. It will depend on how demand will grow for oil, how supply will shrink. Run, weve in the long will see Oil Prices Back into the 70 and 90 range. Manus lets speak to bloombergs chief energy correspondent, javier blas. Protecting the dividend, cuts, what did you make . Have you main take away is a change of language. Three months ago, it was about going back to 90 in three years. Now they say, todays oil price will last for several years. It is a significant change in tone and language. That has been reflected in the actions they are taking. They are firing people. They are reducing investment. The dividend needs to be safe. That is what the ceo is trying to say. Probably we got too excited about the return to higher oil prices. To makeaking measures sure we continue to reward investors. Francine is this a positive or negative for shell . It seems they are aligning them selves to the other majors. Javier i think it is a positive. The reaction of the market has been very good. I think the company needed to react. The investors were unhappy at the strategy the company was taking. The language the company used was misunderstood by the market. The company didnt think carefully what it was about to say. Company is trying to reset the relationship with shareholders and make sure that the language is more in line with what investors want to see. Manus lets talk about eni. Profitability falls, but production rises. We saw total deliver in production yesterday. Eni has always been a very good explorer. Other Companies Prefer to buy production assets and develop. They have a very good exposure to africa, to the noise oil to the new oil provinces. The big problem is the turnaround. They continue to disappoint. The Claudio Descalzi future lies on where he is able to turn that company around. Francine that is a very fair way of looking at it. Back to shell. Tomorrow, we hear from bg group. We heard the ceo defending himself, saying it was perfect timing. Javier you look at the two companies, they tried to put together that bill so many times. Is the price right . If you look at what the probably ity today, looks a little bit on the expensive side. Manus he said the deal was worth doing at any price. Francine he made the deal. Manus i suppose hes got to defend it. Im sure you will be back tomorrow. Javier blas. Francine back later. Manus there you go. Javier blas. Francine that brings us to todays twitter question. Should all ceos prepare for a prolonged downturn . That goes back to a deeper question of, do you need to be in these markets where we are seeing growth around the world just a little more careful, not calling it a done deal just yet . Manus they are cutting costs. That is the first thing the Oil Companies are doing. Lower energy costs have an impact for everybody. Heres a look at what else is on our radar. Deutsche bank says secondquarter profit more than fell. D after its tax bill 796income came in at Million Euros. Cochief executive john cryan who replaced anshu jain is pressing ahead with the banks plan to bolster profitability. Has posted a secondquarter profit. Net income came in at 293 million pounds. The ceo is selling assets and cutting thousands of jobs to return the bank to annual profit. Manus bnp paribas is considering a reorganization of its securities unit. That may bring the deepest cost cuts ands the financial crisis. Frances largest bank has enlisted Olivia Weinman and boston Consulting Group. Lufthansa says firsthalf profits more than doubled. The group benefited from lower fuel cost during the six months. Lufthansa also saw its Passenger Airlines improve since the start of the summer season. Manus facebook has better than expected sales. Revenue rose almost 40 in the last quarter to just over 4 billion. Increased hiring an investment on mobile apps sent costss surging. Francine samsung has signaled that price cuts for its smartphones to combat a market slowdown and surging sales of the iphone. The Company Posted a fifth consecutive quarter of profit declines. Manus the dollar is set for its biggest monthly gain since march after the fed indicated as barriers for Interest Rates rise, they are getting smaller. The u. S. Stocks also extended gains as the fed said the Economic Outlook and the jobs market are both improving. Francine strategists believe there could be a move as soon as september. We are joined by citis head of International Rate strategy. Great to have you on the program. When you look at what janet yellen said, the market interpreted as, we dont really know. It looks like we will have an Interest Rate hike this year. Is it looking like september . There is a chance priced into the markets for a rate hike in september. We assign a high probability to that. The fed has changed its language towards more hawkish stance. Manus the one word everybody seems to be obsessing over is some. They want to see some more improvement in the jobs market. Theres two more jobs reports between now and september. Is that what you are focused on . Alessandro we dont really care about the number of jobs being added. Theres an average of 210,000 this year. What matters is, do we see Wage Inflation rising, yes or no . That is the key point for the fed. Francine when you say higher, you believe it will happen in september. Do you think it is a done deal for september unless we have some downside in terms of wage growth . Alessandro its not only due to domestic factors. This could come from the international front. If we had further decline in Energy Components, in commodity prices, perhaps the fed may change its longheld tradition of seeing Energy Components as being transitory. Someets talk about people are saying, pulling the trigger is a done deal for 2015 whether they go in september or december. What matters the most in 2016 is how weekly how quickly they ratchet up the hikes. If we look at what the fed says, they say 1. 6 in 2016. The market is pricing in something a little bit less. The market is more dovish than the fed. Who has to right size themselves . Alessandro i think the market is taking a very cautious view. They are basically saying it is not going to happen like 2004 and 2005. I think the market is also taking the view that the terminal rate, the equilibrium rate at which the fed will settle, is much lower due to the fact that we have much lower real natural rate interest. Francine we had a guest on this week, a quite wellknown strategist, and he was saying theres a big chance that if they raise too soon, they may reverse but that is ok. Dangerthink there is a if the data comes in a little soft, if the situation worsens in china, that if they raise too soon they may have to do a reversal . Alessandro a policy error is always in the cards, but this is why the fed is taking its time. They dont want to overturn it. They dont want to do it too early. They want to see whether there is a risk of external developments affecting their decision. Manus one of our editors said the biggest threat to the fed is that china essentially is doing quantitative easing by supporting the stock market and china could begin to sell dollars. That potentially is one of the biggest unknown threats to fed policy. What do you think of that . Alessandro what else is a reserve currency apart from the dollar . The euro, maybe . It is very unlikely to see a big shift in reserve currency compositions. Youve got to take a view that the dollar will remain a reserve currency for the Central Banks and it wont change that fast. Francine thank you so much. Alessandra 10 tory. Italys Largest Oil Producer eni has followed the trend of other Companies Reporting a drop in secondquarter profits. We can now speak to the companys chief executive, Claudio Descalzi on the phone from rome. Thank you for joining us. You are refining your marketing unit to boost profit on the group level. You say that you are concerned about structural headwinds in the european refining sector. How long will this last . , thank you very much. Pleased with our result. We transformed the company and i think the result we presented this morning with an increase of production at 9 , the highest growth rate since the early 2000s, is a very important achievement. Chemicals are positive for the Second Quarter. [indiscernible] i think that that is very important. That is due to the big transformation and restructuring we have done, especially on the takingide and also the best segment. The results are very important. The more important point, despite the 50 reduction in the oil price, in the first half of this year, we generated the same amount of cash flow in the first half of 2014. That sounded almost all our capex. The level of 60 or less than 60 per barrel is a very important achievement that shows how much eni is resilient. Francine shell this morning saying it is preparing for a prolonged downturn. You seem to have done that six months ago. You were one of the first ones to cut costs at the expense of the dividend. Do you now feel vindicated . Mr. Descalzi i dont look at that. Asust look at our result very impressive and i think that we made the right move in restructuring and cutting our dividends. Now we can confirm without any problems. [indiscernible] i think we are on the right way to reach a good result by the end of the year. Another point that i might stress, in a year where everybody cut cost and we cut cost, we reduce our cost. We were out to increase our production by 10 . That is a historical number for us. We are quite happy about what is happening. Francine despite the very difficult environment, youve managed to kind of look at the pitfalls. When do you expect this concerning environment to get better . Of, youalzi in terms are talking about price and the focus with the price . Economics and our plan of restructuring, considering a low oil price. [indiscernible] [no audio] francine unfortunately, i think we lost mr. Descalzi. We were about to talk about some of the assets that they may have to sell off or at least restructure in other parts of the world. We will try to get back with Claudio Descalzi shortly on the phone. Went he said that they first. Do you feel vindicated . He says, i dont feel vindicated. He said, we went first, it was the right move, and it gives them freedom. Francine up next, how facebooks spending spree overshadowed Strong Revenue growth. Francine welcome back to the pulse. We are live on bloomberg tv and radio. Manus facebook reported their earnings and the social network has continued to grow in users and revenue. Profits took a tumble following a sharp increase in cost. The revenue numbers versus the expenditure. Caroline hyde has the breakdown. Caroline it was a beat looking at most of the metrics. We are seeing stellar growth in terms of sales and the amount of people joining facebook. Sales up 39 . Weve seen quarterly revenue above 4 billion. Active users up 13 . Billionnow close to 1. 5 users on facebook. More than half of those connected to the internet are using a facebook app of some sort. Some of these facts are pretty stunning. On average, a person is using facebook for three quarters of an hour per day. That is pretty phenomenal in my mind. In the u. S. , if you are a mobile user, one out of every five minutes on your mobile, you are using a facebook app. This is when you see the scale, the presence of facebook. They are also hiking up research and development and spending. We were warned about this by Mark Zuckerberg. He said 12 months ago, we will be ramping up hours ending. This is where the money is going. That spending is double the sales growth. The forecast is slightly down on thats ending. On that spending. Still, it is a hiccup. I think the reason is because of the rampant growth in the share price over the last ask months, 12 months. Weve seen shares up about 60 . This is the Fastest Company in the u. S. To reach a market valuation of a quarter trillion dollars. This is a company on the rise. But what about the future . Patience is what Mark Zuckerberg is asking for. I think investors are going to listen. He asked for patience before. Everyone wanted more advertising on the facebook page. They wanted banners. They wanted you to be getting the Companies Hitting the marketing. He felt you needed it to come more naturally. You needed businesses to set up a facebook profile and allow people to start liking them. Instagram,whatsapp, he wants to do it correctly. Give him time, he says. Hes going to focus first on expanding the business. 800 million already on whatsapp. 300 million on instagram. Twitter has 300 million for its entire platform. We are going to have to say, look, dont just focus on the u. S. And europe anymore. Most of your users are internationally speaking. Manus well done, caroline. Francine lets talk again to the eni chief executive, Claudio Descalzi. We had a technical problem. We talked a little bit about your earnings. You were telling us you started the process of becoming leaner six months ago. Maybe that is something a lot of Oil Companies need to go through. I want to ask you about one of the biggest concerns. Saipan. How do you plan to turn that around . Mr. Descalzi i think the new management at saipan is doing very well. They started with the right steps, with a very strong cost efficiency. Impressive very presentation. Then we wait on september when they are asked to present the business plan. I think they started in the right way. To be leaner is to be more focused on the best segment to past up completely the standing. I believe that saipan is one of coveringger ones, onshore construction. They show strong competence. Saipem is athat concern for us. Saipem is an opportunity. Im happy about what they are doing now. Francine you also have a right off on the libyan assets. Do you think that is something you will have to do in the future . Aipem, fromi for s our point of view, the Main Objective for us is to consolidate the debt. Be our future. I cannot make any additional comment on that. Debt is our target. Francine talk to me a little about iran. You seem to be one of the companies most interested in getting into the country. Have you had any discussions . Mr. Descalzi we start our discussion with iran, but we are really more discussing about the that we have issue to look over from the past project. That has been mainly the discussion we have with iran. It is a big country. Very interesting. But we need to wait for two main points. One is to understand effectively when the country will be listed. The second, what about the country . [indiscernible] if there is the ability to have a different contract, closer to what we have in other countries, we will be ready to think about new initiatives. Francine great to have you on the program. Thank you so much for joining us, Claudio Descalzi. Manus great discussion, francine. It all comes down to your contract. Great interview. Up next, gains for spain. Highesttry grows at the phase in eight years. Francine just a reminder, you can follow us on twitter. One of the main things that we will be talking about today is the fed. The dollar set for the biggest monthly gain. Is the currency right . The only way to get better is to challenge yourself, and thats what were doing at xfinity. We are challenging ourselves to improve every aspect of your experience. And this includes our commitment to being on time. Every time. Thats why if were ever late for an appointment, well credit your account 20. Its our promise to you. Were doing everything we can to give you the best experience possible. Because we should fit into your life. Not the other way around. Welcome back to the pulse in london. Manus heres our top headlines. Shell plans to cut 6. 5 thousand jobs this year and reduce Capital Investment by 7 billion. Secondquarter adjusted profit dropped to 3. 8 billion from more than 6 billion a year earlier. The jump in the drop in oil prices has cost shall to reduce spending. Francine bnp paribas is considering a reorganization. That may bring the deepest cost cuts and the financial crisis. They have enlisted a Consulting Group to work on the revamp. Manus Deutsche Banks secondquarter profit more than tripled. Net income was 796 Million Euros, up from 237 Million Euros a year earlier. Cochief executive john cryan, who replaced anshu jain, is pressing ahead for the thanks turnaround plan. Hans nichols in berlin, what did we learn from these numbers . Hans Deutsche Bank has a little more breathing room. They did well on trading of debt and fixed income. Equities income was up almost 40 . Income did come in three times bigger than it was last year year on year, but that is a little off. You look at their overall litigation expenses this quarter, those came in at 1. 2 billion euros. Took all this together and said, we have a lot more work to do. Heres what he said when he was speaking. Our challenges are also evident in the unacceptable high level of our cost, our continuing burden of heavy litigation charges, a Balance Sheet that must be more efficient, and core overall returns to our shareholders. If im an employee at Deutsche Bank, my job is p