Alphabet and amazon report. Nejra welcome to daybreak europe. It has just gone 6 00 in london. Earnings onslaught is a great way to describe it. Roche numbers are coming through. At 30. 4lf sales come in 7 billion. The estimate was 30. 53. First half core operating profit. The red headline, let me get to that. View toits sales growth mid to high single digits. Thats very interesting. Raising its sales growth view to mid to high single digit. Thats the red headline on roche. At 11. 1. Comes in the estimate was 10. 65. Thats a beat on first half core eps. Core operating profit for the first half comes in at 12. 36. The estimate was 12. 16. Theres a beat on some of the numbers. The headline you want to focus on is the fact that its raising its sales growth view to mid to high single digits. There were some pressures whether it wouldve raised guidance a second time this year. To the ceowe speak of roast. Dont miss that interview at 7 30 a. M. London time. Dani burger is standing by with the nokia earnings. Beat are looking at a across most of these numbers for nokia. They had a big miss last quarter. There adjusted eps coming in at three euro cents. Three. Imate was secondquarter net sales at 5. 69 billion euros. That beats the estimate. They are maintaining their guidance for the full year for 2019. This is something analysts have been pouring over. The fears that their five g network wouldnt be up to speed. They have maintained their outlook and operating margin. Everything looks good for 2020 as well. How much market share are they able to get from huawei . Coming up, we will be speaking to the nokia president and ceo. Dont miss that interview at 8 30 a. M. London time. Nejra lets get to a be in beth. Revenueuarter organic rises 6. 2 . The estimate was 5. 1 . Thats a beat. The secondquarter adjusted rises 9. 4 . Thats a beat. Underlying eps. Thats one dollar 16. We are beating on a few of these numbers here. , theecondquarter adjusted key 1, 5. 8 6 billion dollars. In terms of some of the commentary, still seeing strong growth in the fouryear revenue. If we look at firsthalf net debt, thats 104. 2 billion. This is one of the key things. It does have that big debt pile. The context here being that it agreed to set an australian unit. This after it pulled ashares stale a share sale. That will be something to watch for, whether that ipo might be back on the cards. Still got more numbers to get through. Moving now to be asx. The ceo saying, currently low visibility and poor predictability. It has been a challenging time. Bloomberg intelligence says it hopes for a second half rebound. Is to gaugelenges the depth and timing of a drop in earnings. On data on cross controls is the we could be looking for when we dig into the details. It is confirming its outlook as reside rhythm revised on july 8. Estimate ofn the 966. 3 million. SecondQuarter Sales come in at a beat. 15. 1 6 billion euros. Sayingrg intelligence akita modeling the bottom will be the secondquarter discussion of the factors that drove a recent guidance cut. Lots of earnings. Lets get to the full market. We saw the s p 500 and nasdaq hit records. Nasdaq futures taking more of a head. You have Facebook Gaming in afterhours. Tesla plunging. We saw drops in european yields as well. Some of the pmis coming through in germany. Lets take a look at the euro. Thats trading near an eight week low in terms of eurodollar volatility. Index, treading water for the past couple days. Crude up 3 10 of 1 . Much get a check on the markets in asia with Juliette Saly and ignore in singapore. Good to see you. We do havelthough most of the key indices tracking higher, the msci asian index up for a Third Session of gangs. Gains. The nikkei up by one third of 1 . Positive news in terms of the trade talks between the u. S. And china. The cost be is underperforming. Secondquarter gdp was a beat. Corn is are selling futures. People arent willing to buy on the dip on the cost be. 4 10 of 1 . Y weird from the rba governor saying, if theres back to back rate cut in australia, they are willing to act again. Fa aussie has fall and llen. I want to focus on the tech sector. We have been looking closely at high decks in seoul. It came through with numbers that were amiss. Its going to rein in its chip output amid the trade concerns. That seems to have impressed investors. Shares tracking higher in seoul. We heard from apple supplier saying they see demand for new iphones starting to stabilize. You have one of the biggest apple suppliers in taipei off by 3 . Samsung coming through, saying that it is ready to launch its foldable phone by september. That was put on hold a few months ago after early reviewers saw a defect. Samsung shares up by over 1. 5 in the afternoon session. Nejra thank you. Underway. Eason well weve seen secondquarter numbers coming in better than expected. The s p 500 and nasdaq closing at record highs yesterday. Estimates for the third and Fourth Quarters are moving the wrong way, worsening over the last two weeks. Companies beating estimates now are refusing to raise guidance, effectively lowering the outlook for the second half. Oining us now is the cio at busy earnings time in europe in the u. S. Lets start with the positive side. If you take a look at the chart thanake it back further this earnings season, and we go back a decade, Earnings Growth largely explains the s p 500s gains during the past decade. While we start to question why we are at record highs again, does this chart say theres no bubble here . Its a question of how you define a bubble. What we are looking at today is a position where the valuation on the u. S. Market isnt actually at stratospheric levels. Its nowhere near where it was and 87. The idea of us being in a bubble situation is really not the case. If we move into the third and Fourth Quarter and there is the potential for earnings disappointment, with should we should be more cautious. If Companies Start missing on their earnings, people will get worried. Nejra a growing number of companies are not raising their for your guidance. Thats looking at 2019. The market also is not pricing any kind of worsening in earnings beyond 2019 into 2020. Thats right. You have to look from the big picture and individual companies. Picture,ok at the big an environment where companies are on balance to disappoint rather than outperform, the market is going to take that pretty poorly. Waysgoing to look at other of creating opportunity rather than actually pushing the equity market ahead further from here. This is a pivotal moment. Thats what is being reflected in some of the federal reserves, thinking about cutting rates to support the economy as we go through the second half of the year. Early we are still quite in earnings season. Even though it feels like an onslaught. You are getting a bit of a mix. Some of the names that point to the industrial side, the bellwether to the economy, not doing as well as some other companies. Semiconductor stocks have been doing well. Looking through their earnings, you could look at u. S. And europe, is it telling you anything about the economic backdrop right now . It is quite difficult to actually extrapolate out from individual companies. What we are seeing, we saw it through the pmi data better yesterday, that the pmi data is not strong at this point. That will be signaled by more companies as we go through the rest of the earnings season. There are some concerns ahead of us rather than the continued growth we saw through the second half of last year. Nejra now, on dividends, i asked this question a couple days ago. I think it is still relevant. The fact that dividend policy has been maintained. Dividends have been increasing in the u. S. Does that tell you that ceos and cfos are quite positive about the future . Even if they have not been raising those fouryear outlooks. Theres a lot of conflicting messages here. I admire your optimism. Nejra [laughter] companies that its trying to bolster their share price. Aey increase dividends lot of these dividends are not being paid out of cash flow. They are being paid out of borrowing. The same with company buybacks. Thats a way of share prices being supported and bolstered rather than actually driving further growth. Nejra thats a really good point. I will bring some cynicism in now. Lowball stocks have been outperforming as well. If you take a look at the hedge of choice, open interest has been climbing in august. Is this a warning signal that volatility could start to pick up . How will that translate to the outperformance of lowball . Fall of these low vol stocks are set up for disappointment Going Forward. I have been really surprised at how little volatility weve had through 2019. Considering the geopolitical turmoil, considering the ongoing trade talks weve talked about many times on the show. Actually, it has been the fact that companies have generally performed really well. If we go into an environment where companies are not performing so well, the geopolitics of volatility may actually start causing problems Going Forward. Nejra great to have you with us. Our guest is with us for the hour. We have a lot to get into. Let me recap some numbers from roche. We had a few more lines coming through, details on some of the specific products. It is seeing its core eps inline with sales. Second Quarter Sales coming in at 1. 6 billion swiss francs. A bit of a mess. 1. 86 billionarter, swiss francs. Upbeat on the estimate. Second quarter tech centric was 374. 3. Mate that is a strong beat. The key line with roche was the fact that it raised its fouryear sales growth few to mid to high single digits. As get the bloomberg first word news with debra mao in hong kong. Prime minister Boris Johnson has cleared out more than half of theresa mays top team. Hes installing a string of brexit enthusiasts to his first cabinet. The new chancellor of the executor, home secretary. Former special Counsel Robert Mueller largely disappointed democrats with his testimony on capitol hill. Some wanted him to read aloud potentially damming parts of his report. He declined. Oners helped refresh details possible obstruction of justice by president trump. Mueller didnt offer any clues. Turkeys bank looks set to cut rates. President erdogan has been a believer that higher rates cause inflation. Ready toal bank looks put that unconventional theory into practice. This month, the president ousted the former governor, installing his deputy. Board is a thing of the s p 500 past. The last company in the index without a field director has now appointed diane moorefield. Gender balance has been slow. In 2000, 80 6 of s p 500 companies had one fema board member. The last 14 have taken almost 20 years to close the gap. Global news 24 hours a day on air and i tictoc on twitter, hour by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Nejra thank you. Coming up, volkswagen report earnings shortly. We will speak to the cfo. Catch that interview at 7 00 london time. This is bloomberg. Nejra this is bloomberg daybreak europe. Just got some breaking lines coming through here from gazprom. Worth about 2. 3 billion on the market today. That is something to keep an eye on. Shares will be sold in a single lot. It is selling 694 million shares, worth 2. 3 billion at current market prices. We are talking about europes biggest natural gas supplier. Lets check in on the markets now. A third day of gains on the msci asiapacific index. We hit records on the s p 500 and nasdaq yesterday. Nasdaq futures looking soft right now. The euro near an eight week low. It was driven lower along with a lot of fields in europe including the 10year bund yield which got to 38. Concerns around pmi numbers in germany has been rising. 10 year yield dropped in the u. S. Yesterday. Cable also struggling for direction. We have a new cabinet. Boris johnson has appointed a number of new people. Lets get the Bloomberg Business flash. Heres debra mao in hong kong. Tesla is reporting a worse than expected loss for the quarter despite a Record Number of deliveries. The company lost 1. 12 a share. Another Major Management change has fret cast doubts on their future. The chief Technology Officer is stepping down. Showing its business can weather all kinds of regulatory scrutiny. The company is settling a 5 billion case with the federal trade commission in the doj has announced a looming antitrust probe. Socialavent stopped the networks ability to real in users and advertisers. Of the image sales chopped expectations as creative revamps at Louis Vuitton and Christian Dior helped fuel growth. Sales grew 12 . Fashion and Leather Goods dropping 20 . The Luxury Company is writing out Global Economic uncertainties and slowing growth in china. To Deutsche Bank, saying goodbye to its equities business, it seems parting is such sweet sorrow. The lender now wants to keep some of its stock trading revenue after all. The chief executive says the change of heart isnt a watering down of the banks revamp. That is your Bloomberg Business flash. Nejra thank you so much. Its decision day for the ecb. Policymakers set to signal a rate cut as they step into support the flagging eurozone economy. We will have to wait into september for the real drama. Our guest host is still with us. Market is pricing in a 40 probability of a rate cut today. That did increase after we got those pmis from europe yesterday. What draghi move before the fed . Chris thats the key point. I think draghi would prefer. He is coming up to his last couple of press conferences before he steps down. Therefore hes going to want to go out with a bang. Today, whatates will that allow him to do in september . I think its probably likely that he will differ. He wont make a decision to cut today. Nejra in terms of the bond yield, european sovereign bond yields falling further below the global debt market. We got to 38 on the bund yield yesterday. Yieldly, the 10year bcp closing below 150. Where is the bottom for european yields . Do you see is getting to a bottom anytime soon . Chris its hard to judge. If we had said 10 years ago that yields in any bond market, particularly a huge one like the bund market, were going to get negative, we wouldve laughed. There has to come a point where people are not prepared to receive such negative funding from lending to the German Government. Its difficult to say where it is at this point. What i look at more is when the italian bond yield is trading 50 points inside the u. S. Yield. I think i prefer a u. S. Yield rather than italian bond yields at this point. Nejra looking at the euro as well, weve seen volatility rising. , implied volatility spike into its highest in 13 months ahead of the ecb meeting. Is that the market saying that they are bracing for some sort of surprise, in whatever form that might come . Is thatris i think it the european economy is weak. Action byneeds some the ecb, whether its a signal or action today. The euro is definitely very weak. Been. S. Dollar has relatively strong. One wonders if the was economy starts slowing down, whether we could be getting towards the bottom of the euro at this point. Nejra are we getting to the bottom in terms of ps pmis . The market seemed to be taken by surprise by the weakness of the numbers yesterday. Chris i doubt it. If we see a slowing Global Economy, europe could be harder hit than that because its more exposed to china where growth has been slow. There could be trade tensions between the u. S. And europe as we go into election season in 2020. You could see further weakness in the pmi data in europe. Nejra given all the challenges that european banks are going do you think draghi will be listening to that and trying to put messaging across that might give reassurance to the european Banking Sector . Chris we were just talking about Deutsche Bank in the way they are restructuring their business. What draghi cant afford, what the eu cant afford, is the european Banking System to have any systemic failure. There has to be some support that is provided to it, even if word toy sort of support instead of physical action. Act thatn balancing draghi has to do. Wants to be who seen bailing out the european Banking System. Nejra our guest stays with us. Lots more to discuss. Coming up, we speak to olaf schulz, german pregnant finance minister. Later, the u. S. Secretary of state mike pompeo. Tune in to Bloomberg Radio live on your mobile device or on Digital Radio in the london area. This is bloomberg. Nejra this is bloomberg daybreak europe. Lets get to some more breaking news. Another update on the semiconductor sector. Stmicroelectronics, Second Quarter net revenue comes in at a be. The estimate was 2. 11 billion dollars. The secondquarter growth margin is a slight miss. 38. 2 . Revenue uper net about 15. 3 quarter on quarter. Thirdquarter growth margin at 37. 5 . The key number is the secondquarter net revenue coming in at a beat, 2. 17 billion dollars. We have been seeing Semiconductor Stocks improving a little bit, maybe it means we will get enough left in the second uplift in the second half. That is something we are keeping an ion. Chip stocks in the u. S. Trading at record highs. Lets move onto carmakers. The story for daimler was about costcutting. Now we are looking at vw. Confirming its 2019 operating margin outlook. It still sees 2019 deliveries slightly higher. It is confirming the targets before special items for 2019. A couple of lines coming through their from volkswagen. We will wait for more details and we will be able to get into those details when we speak to the volkswagen cfo, catch that interview at 7 00 a. M. London time. Lets get a check in on the Global Markets. Standing by in london is annmarie hordern. Great to have view. You. How is it feeding through into the broader markets . Another huge earning stop this morning