Most in three years. We used to focus on cost, now we need to focus more on revenues. David we hear from Deutsche Bank ceo and ceos of other European Banks reporting this week. Major data out of japan and the u. S. We size up the state of the , global economy. I think the economy is now picking up, but if you look around the globe it is happening elsewhere, so i do not think the bank of japan can take credit for that. It paints a picture of an economy overall which is effectively treading water. David it is all straight ahead on bloomberg best. David hello and welcome, im david gura. This is bloomberg best, your weekly review of the weeks most important Business News analysis , and interviews from Bloomberg Television around the world. Lets start with a day by day look at the top headlines. The week began in st. Petersburg, russia where opec members and other Oil Producers emphasize their commitment to continue cutting imports in order to best exports in order to put a stop to the Global Supply glut. Were pretty sure that the rebalancing process may be going on at a slower pace than we earlier projected. But it is on course. It is on course, and it is bound to accelerate in the second half because of these numbers. August is going to demonstrate further leadership by the kingdom of saudi arabia. We have already informed our customers of a deep cut in our august allocation, again exceeding 600,000 barrels per day. Also, august is going to experience the maximum demand within the kingdom of saudi arabia. More of the same, it is going going to get better. But the saudi put seems to be ramped up just a bit. Yes. It is also the overall projection of strength that the Saudi Energy Minister put on today in the past few hours. I mean they are still camped out , behind me here in the hotel pointing out that, we are going to stick with our lead by example model. When i asked him, are you going to continue over complying, and he said yes, we will continue to do that. That is how we do business, from the very beginning. Also, those who are not pulling their weight in terms of compliance, which was key going into this meeting he said we will go heavier in on them. It will no longer be tolerated as much as it was in the past. Then you have the destocking that the nigerian minister is talking about. They think the second half will pick up and they do not need to refine anything about the agreement. Having said that, they are exploring all tools and options for future adjustments. Fascinating to say the least. Jared kushner i did not collude with russia, nor do i know anyone else in the campaign who did so. I had no improper contacts, and i have not relied on russian funds for my businesses. And i have been fully transparent in providing all requested information. A number of senators, particularly democrats have said that they do want to see him in public. They said the statement that he made raises more questions than answers. So i think clearly democrats , will not be satisfied until he appears in public. I think at some point, he is probably going to have to, given the number of questions still swirling around about it. Was there anything in the statement specifically that stood out that in your sense, politicians thought seemed vulnerable, that they wanted to understand more about . I mean one good example would , be the statement about how he did not rely on russian money. We are not quite sure what rely on means. Is that something that is being couched carefully, or was it just a word he chose, right . So that is an example of , something that democrats said they would like to ask him more about and find out. The senate being equally divided, the Vice President votes in the affirmative and the motion is agreed to. The gavel has been struck. The Vice President breaking the tie, and the senate has now approved has voted yes to go ahead with motion to proceed. They can now begin debate on the health care bill. Pres. Trump i am very happy with the result. I believe that now we will, over the next week or two, come up with a plan that is going to be really, really wonderful for the American People. I know the president is going to be doing a victory lap on this. It might be a little too soon to celebrate though. It is still a long bumpy road ahead. Anna the senate vote on the amendment to the health care bill, on the skinny repeal. It seemed that the senate lacked the votes on the gop skinny repeal bill. This being brought by the senate gop leader mitch mcconnell. Sen. Mcconnell this is a disappointment. A disappointment, indeed. Our friends over in the house, we think them as well. I regret that our efforts were simply not enough this time. Tom what will be the response of the white house . Kevin the president tweeting, tom, just after the vote failed in the senate, saying three republicans and 48 democrats let the American People down. As i said from the beginning, let obamacare implode and then deal. Watch. Of course, he was talking about senators lisa murkowski, and john mccain the latter of whom was a big surprise and the literally audible gasps on the senate floor as senator mccain having returned to the senate and voting against the health care bill. Michael no change in policy, concern about inflation and that hint about the Balance Sheet that jeff was looking for. The committee expects to begin implementing its Balance SheetNormalization Program relatively soon. The fed is keeping to this narrative of transitory factors holding down inflation so that they can get on with the Balance Sheet normalization. Then the focus shifts to december, as to whether or not inflation has proceeded well long the path to give us another hike. I think the fed therefore will stop raising shortterm Interest Rates, maybe 25 basis points, maybe not, and start disinvesting in 10 year treasuries that they mentioned in the statement, by reducing the Balance Sheet over time. That means, to me, slightly higher 10 year rates. Perhaps to 2. 5 over the balance of the year, but not much. Mark one brave analyst having he says one of the best earnings days, that he is experienced in over 20 years. James edward jones, arriving at rbc europe today in london. At the same time, the worlds biggest brewer ab inbev reported results. 15 minutes later, came nestles buy dan and ated 6 30, then diageo, British American tobacco, all before the morning team meeting at save session 7 15 a. M. James edward jones is still with us. He is on the phone. Crazy day. Not even done, are you . We have loreal in roughly 26 minutes. There hasnt been a day like it. 706 Million Euros of market cap reporting today. Enjoy two or 3 reporting on the same day. You just have to focus on what is important. The problem today, is that it is impossible in ways to work out what is important. Something i missed, for example, was the sales in the u. S. , and i had to go back and revisit it at 11 00 this morning. So, it has been hectic. We are watching all of the economic numbers that have come out. Inflation not really budging, still essentially flat there in japan. But we did see retail sales miss on the other end. Household spending, a nice tidy beat there. So, kind of a mixed picture that we have been seeing with economic numbers out of japan. Suzanne at least these numbers do not really change our view that despite the labor market tightening, and upward wage pressures, i think the pickup in inflation is going to be very muted in the near term. I think the economy is now picking up, but if you look at around the globe, this is happening elsewhere. I do not think the bank of japan can take too much credit for that. Inflation is still very weak. In fact, if you look at the service inflation, which is probably the best gauge of domestic prices in japan, it actually turned negative last month for the First Time Since the bank of japan launched quantitative and qualitative easing. So, that is a clear sign that the policy is not gaining much traction. Jonathan the gdp number is a mess. A marginal it comes in at 2. 6 . One, the estimate was 2. 7 . This is Second Quarter annualized gdp in the United States coming in at 2. 6 . The estimate was 2. 7 . Michael the pce headline number comes in at just 1 , down from prior quarters. Inflation is just nowhere to be seen. Basically it is a soft , inflation picture. It paints a picture of an economy overall which is , effectively treading water. Maybe a reflationary dividend will be paid courtesy of capitol hill later on in the year which will upset the apple cart. But also, you have to go back to the fomc decision this week and the markets reaction to it. You know, we saw the downgrading of the inflation outlook and the an ahhaok that as moment for the third rate hike this year. Dollar was gained, treasuries arose. David tech earnings on tap. Coming up we digest the results , of alphabet, facebook, samsung and amazon. And Deutsche Bank bets the wrong way on u. S. Inflation, sending secondquarter revenues south. We hear from the leader of germanys largest Investment Bank. We have said in some areas the revenues do not meet our expectations. That is good and bad. The Macro Economic environment in europe is very positive. David this is bloomberg. David this is bloomberg best, i am david gura. Lets continue our global tour of the weeks top stories. With the dive into this weeks tech earnings, starting with alphabet. Alphabet shares dipping in afterhours trading. Googles Parent Company releasing secondquarter earnings which initially sent shares soaring, then turned south. Revenue for the search giant came in at 26 billion, up 21 . Yearoveryear, but aggregate costs dropped 23 from a year ago. These numbers include the effect of that 2. 7 billion fine from the European Competition commission. I spoke to the cfo about the fine and she told me, it is so early for our analysis of the decision, this is an ongoing legal matter and they have not decided if they will appeal. I want to show you on the bloomberg, shares were up and then down cory. , why did that happen . This is more about traffic acquisition cost. Cory i think it is. They have warned a big change in their business. They will be more mobile and more programmatic, it is going to cost more. And this time we saw it. Emily we talked about the adpocalypse this year when they were really criticized for their extremist content shown next a next to some prominent advertising. A lot of advertisers pulled their campaigns. It seems those advertisers have returned. I did ask about this and she reiterated that revenue across the sites was strong. That benefited in particular for an mobile search and youtube. We continue to take very seriously the issue and we are doing all that we can to protect the ecosystem. We have written a lot about that. Cory a lot of them have made a lot of noise about this, but they also like the traffic, that google is giving them in terms of clicks from their ads. I mean, the google ad is like nothing else in the history of advertising in that you can actually see the results of an ad as it runs. And advertisers like that. Because it is where they are shifting their ad dollars to. Emily facebook turned out faster than expected, Quarterly Sales growth fueled by continued strength in mobile video advertising. The social network now has over 2 billion active monthly users and is steadily driving revenue at a faster pace than other text tech giants. Facebook has also been heavily investing in original content and the first shows are expected to come online in august. I just got off the phone with facebook coo Sheryl Sandberg who explained the strategy. Sheryl so we are seeing a lot of content viewing and content engagement shift to mobile and our goal is to be a platform for content providers to find their audience and monetize it. Right now, were doing some early investing in kickstarting the ecosystem to promote more episodic video viewing on facebook. We have a lot of video views on facebook, but not really of that kind and we think that kind is important. So, we are making an investment. Our goal is to become a platform and we hope to have content providers creating the content and finding their audience on facebook. Frankly, for facebook to be producing original content is a major shift for them away from the approach they have always said they wanted to take, which was to be a neutral platform for content created by others. So, typically when they have deviated from that in the past, they have given it up. I will not be surprised if it doesnt work. To be honest. Emily cory, what do you think about facebook as the new netflix . Cory the best thing in america seems to be selling content and making content. Because you have everyone from hulu, hbo, netflix, amazon, all of them buying such content. They want to see how it works and it is a company that has part of its culture, experimentation and trying new ideas. I think this one is just so sexy, they have glommed onto the idea. We will see if they actually try to roll this out in any kind of scale. Samsung at record highs, not surprising given that their profits have beat estimates. We are talking about net income surging 9. 6 billion last quarter. Of course, samsung is such a big part of the south korean economy. It was a Strong Quarter for samsung. Estimates were quite high, about 9. 6 billion. That was about 10 ahead of the average analyst estimates. So, it was a strong performance. Part of it was driven by the smartphone business, the galaxy s 8, a comeback from the note 7 troubles that they had last year. And also the chips business has been very strong for them. So samsung is benefiting from , not just the smartphone business itself, but also making a lot of the components and selling to them to their rivals, including apple and xiaming and other strong competitors in this market. You know what, it was a very, very solid set of earnings. We are used to these crazy beats, right . Is that why you dont sound very impressed . Well, it remains a tough market, if you look at the overall smartphone market, it is still very flat. And it is very difficult to differentiate that smart phone by hardware. So of course, whenever there is , a new Product Launch there is this always creates a revenue search. Cautioused to remain how samsung can differentiate their product beyond just the hardware. Emily amazon dipping in afterhours trading due to disappointment with its financial guidance, especially its projection of a potential loss in the coming quarter. The companys secondquarter earnings per share, . 40, missed the lowest analyst estimates, showing amazon is trying to set up competition with rival walmart and Cloud Computing challengers microsoft and , alphabet. The headline comes in quite short of expectations and this is not unusual for this company. They tend to fluctuate wildly. And investors have been trained to focus on what jeff bezos wants them to look at. Exactly, what weve seen with the stock whenever there is a strange print in the earnings every quarter, at the earnings level the stock pulls back and , investors pile in. And try to look at that as an opportunity. Because again, the longterm bullish story for the amazon play is growth in Online Retail sales and obviously amazon is the dominant play there. Is content different from these other things, in which, maybe there can be multiple players . Amazon is spending 4. 5 billion on content, only bested by netflix at 6. 5. They will increase their budget 2 billion after hearing amazons footprints behind them. We have never seen a company show up with this sort of artillery in any chosen field. Even in an adjacent category. Whole foods, theyre about to become the fastestgrowing offline retailer within potentially the Largest Consumer market in the world. 75 billion market called grocery. Im sure a lot of people here shop at whole foods, and they would shop there more if it was less expensive, guess what, it is about to become a mercedes for the price of toyota, when amazon lays over its operational excellence. It will happen. It looks like Revenue Growth though, has been slowing down. In the First Quarter, revenue rose 42. 6 . That was down from 47 in the preceding quarter. Or 55 in the Third Quarter before that. This is a deceleration of amazons most profitable unit. Yes, this is a business that is a Large Business growing very quickly here at it is a very profitable relative to the core business, but it is a competitive business. Microsoft is in the marketplace, with a very compelling product. Facebook and others google in the business on the Cloud Business. So this is a business that is , competitive, it is subject to severe price cutting across the board. What is happening on the cloud space, a lot of the companies are going for a share right now and weve seen that in the pricing. But i think longterm, it is kind of a real estate game here. They are trying to get as much real estate as they can in the Cloud Business because this, again is another longterm secular story. David youre watching bloomberg best. I am david gura. Just four months into his latest turnaround plans, Deutsche BankCeo John Cryan is already dialing bank ambitions. Dialing back ambitions. What is weighing on germanys largest bank . My colleague matt miller sat down with him in frankfurt. We continue to work on our costs. Yes. You probably saw that the headcount has started net to come down. That is a mixture of the work that we did to restructure in germany, which is now almost co