Announcement. Oil bidding analyst estimates. Feeding off it until we got last night, beating saying a bit of a troughing. Asml equipment which makes the chips for intel. Alibaba. Lory from up managing to wrap advertising. Working and ibm together to create apps. These are companies that have been feuding for a good three decades. Bowl adveas the super rt. Liked it. Rs byebye library. All that and more. We are talking about china. They have released the latest check on the economy with Economic Growth accelerating. Better than estimates. Is this an economy that is restructuring to you . I think we have to dig deeper. The headlines figure 7. 5 . How they got there is another matter. You look at the dear the year to date. Pricing that the country would be expanding. The median estimate was 7. 4 . The expansion quickened the first time in three quarters. Two opposingg at forces. We have this pulled down by this big and sharp drop. On the other hand you have what economists have targeted called targeted easing. Banks to lend a little bit more money. From economists we spoke to, property. That will weigh on growth. It is a very huge component. You consider that if you take all related sectors. Steel, construction, chemicals. More than a quarter of final demand so it is ok for now. This is one to keep at the back of your head. We go to retail sales and factory output. How do these speed to gdp figures . For factorye beat output. 17. 2 . That is infrastructure spending. Factory output 9. 2 . Single digit growth higherthanexpected stations. Fromonsumption spending cars and cosmetics, furniture, food at 12. 4 . Atit short of estimates 12. 5 . Fore was a median estimate retail sales. Back to you. What amazes me when you get these chinese numbers, when theyre bad they must be very bad. This cycle will say us that cannot be good. Clicks or less stimulus going forward. When you talk about the exhilaration, the first time the economy has said accelerated in three quarters. Happens is the economy salaries for quarter in the slips back. We should not make much of this is a trend. We will be talking about that in a minutes time. Janet yellen appeared before the Senate Banking committee on her first date. She does said despite the jobless figures the labor market is a major concern. Labor force participation appears weaker than one would expect based on the aging of the population and the level of unemployment. These and other indications that significance like remains in labor markets are corroborated by the continued slow pace of growth and most measures of hourly compensation. In this testimony will be incredibly detailed and nuanced. I think what you get from janet yellen, if you get to read big profile paper, this is a lady that is not just concerned about unemployment as a data point. She is concerned about the unemployed. She still sees too many people unemployed and she sees it as harold to do some thing about it. Isn they have sort of said [inaudible] on the fiscal side the government is not doing too much at all. She is talking about the Participation Rate not being high enough. Reconcile those two things. More people are employed and yet what is the issue . The issue is wages. She does not see enough money in peoples pockets. She does not see enough wage growth and for her that means a slack in the economy. There are people of working age that are unemployed for six months. It was amazing. She did seem to say if the bettersuddenly did get faster than expected maybe Interest Rates would have to go up that she said the market is nowhere near. Lower it was a lot more nuanced. The big take away for me did not come from the semiannual testimony or from the q a. It came from the feds Monetary Policy report where the Federal Reserve say equity valuations of smaller firms is one of appeared to be stretched. There was the selloff earlier this year. I had a chat with someone about this lately. My question is what can she do about this . The fed cannot said policy. Or twitter. Ook there was a bit of a reaction. A bit of a selloff in the small caps. Is such as that state of affairs to tell you that for the fed to tell you that valuations are overstretched. The housing bubbles are making them but this is a fascinating move. Put money . Vestors we are seeing treasury yields remaining low. Spoke for how long yesterday . In our and 50 minutes. And 50 minutes. She will speak again today. What more could she add . A lot of people will bush are on the stuff we did not get a response to. I do not think we got enough on her view on inflation. Take stocks, people want more color. It remains to be seen. We have earnings coming through. Breaking. Got asml they beat in terms of their gross margins. Quarter. Is the third is deteriorating and sales will selloff. Sml makes the equipment that make chips. It looks as though they might slow little bit. Ofse chipmakers, the likes intel and samsung are delaying their orders. They are saying we do not know when we will need to upgrade. We do not know what we will have to make these powerful, more smaller chips which asml has the equipment to make. The orders are not coming as the or fast as thick or fast. The big pop in the share price for intel. Betterrd quarter will be in terms of sales than anybody anticipated, they say. They are a big customer of asml. Presumably that would be good news. This is the likes of pcs. Troughing. Ights a buying computers but wheres the mobile growth. Theyre saying deterioration and they are nowhere. Checkig morning for today. Apple and ibm have set aside a three decade old rivalry in favor of a partnership. We will see the Companies Develop software for iphone and ipad users. Thisthe thinking . Gives apple an opportunity to ofsue corporate users iphones and ipads. Everyone uses it for its own personal needs and businesses use them but it is limited in how must able use their iphones and ipads. People check your email and calendars. They obviously surf the web to do they do a lot more, can you get approval for an expense through your phone, can you run project . That is one of the things that ibm does very well. They do it on the cloud so this is a way for them to team up and it gives apple a massive salesforce in the United States of people to go out and pushes products. For ibm it gives them im an opportunity to get into the space which they have not been. They have been tied to the pc space. In terms of these corporate users it could be massive. They have 30,000 iphone users. Deutsche bank has 20,000. There is an opportunity here and that is the reason we saw both share prices is going up. Apple climbing nearly two. Blackberry. S more evidence that blackberry is losing its place in the business base. Teaming up to make software. Nike dropped the fitness band. It seems that apple have got a broader strategy. The great up with brands that are out there. The likes of nike have decided we are going to go with software. Nike wants to be good at what he gets into. It does not want to spread itself too thinly. It can win parts of hearts and minds and provide more apps on your phone. They do not need to rival samsung. Like that to the guys apple. We will do the software for you and build that brand. This is the theme of moving to mobile. Intel has not got the chips for mobile as quickly. They do not dominate that space. This is a move of everyone wanting to get onto your tablet sent smartphones. News thisof tech morning. Chinese growth accelerates for the first time in three quarters. Our next guest warns beijing is putting off its problems. That is coming up in two minutes. Welcome back. 6 15 a. M. In london. Chinas economy grew more than expected in the last quarter. Gdp and the engine was 7. 5 . The first time in three months or three quarters growth has accelerated. Industrial production last month rose 9. 2 on the year also ahead of estimates. For more on the state of asias largest economy, our guest. Welcome to the show. 7. 5 at least to me does not feel like this economy is restructuring. Am i right, am i wrong . Entirely right. You have taken the words out of my mouth. You have seen the quarterly numbers. Ahead of expectations. What is coming through clearly when you look at the break down s, the fiscaltor stimulus package is coming through. Growth has accelerated. The question is about growth going forward. Many have called for the government to do more and hope that stimulus could come further. Pressure offe the the government . The measures are working and they are preventing a socalled hard landing. Restructuring as quickly as you would want to see. They will let the market change and let the Property Market cool off. That was our view that it would be we were saying there would not be any big stimulus. Ackage theyre aware of the debt overhang problem and they are tackling it in their own way and any stimulus would be fine tuning which changes our view. The loan growth in the new credit numbers that came out earlier. Unbelievable. The new do numbers were up 90 on last year. If you look at it historically the last time the june numbers exceeded this level was 2009. Panic mode andin maxistimulus mode. What is coming through clearly as the started off minimum stimulus has become the maximum stimulus. You are pretty worried about china. We were just saying that this is the first time we have seen an acceleration in growth in three quarters. You think itle do is and how big of an issue, how worried should we be about the Property Market in china . Good question. Pumphave the ability to prime. The question is about the quality of growth. And theres a couple of things. What you see clearly is diminishing returns. Is giving yout less and less in terms of raven ever turn an investment. You see this in the corporate sectors. Growth apparatus and the overhang continues to build and with it capacity. What youre seeing is visibility of growth. What level of growth that we saying . The economy in china is growing at five percent to six percent. Questions. Ways the official numbers that the economy is growing by five or six percent, we expect it to slow to three percent or five percent. Fix some people will point to the collapse and some people will look at you till of the usage. What do you look at . We look at the number proxy variables with some of our favorites. , the one that is a good indicator is industrial production. That economy has become so synchronized with the chinese economy. We look at the trade data from the point of view of evil people [inaudible] and funding data. Insights. Us her coming up, betting on games. The italian Lottery Company agrees to buy the worlds guest slot machine maker. Is it a gamble . We will have more up next. Lets have a look at one of the key corporate stories in europe. To buyas agreed International Game technology. Bringing together the largest provider of lottery systems with the biggest slot machine maker. Ais is a much larger layer in 317 billion billion euro gambling business. Grapplingry is with sewer growth. Some International Games are will of fortune. One of the most successful of all time. They have been pretty in a day innovative. They have video poker. Interesting that they are flushing the cache. This industry was hit by the financial crisis. These are physical slot machines. This is about physical slot machines. There were some rules that meant that each book he could only have some ornate shop at so what they did was open more. You can have more slot machines. The government looked at this and thought we need to do something about this. They have whacked a massive tax on the profits of those machines and those companies will get hit and you wonder how it filters through. I went to a huge event, and it was amazing. Some of the machines they had on sale. It was the great and the good from all the casinos taking out these slot machines. They are quite funky things. I a we will be talking israel. Rocketestinian bombardment left a it fiction truce proposal in tatters. More from tel aviv. Rex welcome back. Your time to head out for fed check. The market seems to be focused and the dollar is moving higher. The market seems to be more focused on the language she used but rings got better. That is the backdrop and that is what the dollar is doing. And taking it to new zealand where we have a significant move. The biggest drop in the new zealand dollar. Prices are falling more quickly than the market anticipated. Against alls dying 16 major currencies. That is the biggest losing streak since december 27 and the korean one also on the move. The finance minister says we have to be prepared for this economy and also the view is that you will see a pretty significant move. The biggest twoday loss in almost six months. Stay tuned. You Janet Yellens testimony is the big one for the market. Leaders of the five brick [inaudible] new Development Bank will finance Infrastructure Projects throughout the founding members countries. Janet yellen has appeared on her policyay of the testimony. Despite signs of growth it still needs stimulus. The economy continues to improve come of the recovery is not yet complete. Monetarydegree of policy accommodation remains appropriate. Theirael have renewed rates on the gaza strip after a rocket attack left and egyptian truce proposal and tatters. The israelis had accepted the proposal but hamas said it was hoursnsulted. Within six 50 rockets had been fired from gaza into israel. That attack left one israeli dead, the first in eight days of fighting. Onfor more on the latest israel, we are joined by elliott gotkine. Does this mean were closer to a Ground Invasion . Theres still no decision. Thee are tank brigades on border. A Ground Invasion is within the capacity of israel. Hartman and stirred netanyahu speaking in a press conference was saying we will not stop until we have read israel of the threat. Israel wants the rocket fire to cease. A number of air raid sirens this morning. Israel is carrying out attacks on the gaza strip. The death toll is rising still. We are above the 200 mark according to Health Ministry officials. Israelihad our First Casualty. A voluntary a volunteer taking food parcels to troops. Critically injured in a mortar explosion. To save. Stay safe. Volkswagen is ramping up capacity in north america while promising to cut costs. A year. N euros hans nichols joins us in berlin. What is behind the plan . Theyre setting the benchmark pretty high. High labor costs, no one disputes that volkswagen does a and job at reducing cars producing cars that people like but they have a hard time with their profit margins. Take a look at what the ceo said. We must take action that is clear, effective, and painful. We have a lot of catching up to do with our competitors in terms of productivity. It was even lower last quarter in 2013. He compared toyota at eight. 8 and hyundai at 8. 8 . Almost 600,000 across the world. When you look at the labor costs in the u. S. , germany, and japan you see the difference. Mrs. Auto sector wide but this gives you a sense of how expensive it is to produce german cars in germany. 40 point eight euros her hour. Japan although we down to 29 point 96. In the u. S. Where they have had massive restructuring it is 25. 6 euros. Inkswagen is adding jobs chattanooga and tennessee. 2000 and jobs and new jobs. They talked about the need to trim down factories, especially where they are not producing cars profitable enough. It looks like in east germany there may be some hits. Is phenomenal it is half the price in the u. S. At the moment. They are tackling the costs, where is the target . Advantageit of an area they want to get to profitability to eight percent. They own body and portion audi and porsche. Just a fraction,. 02 . The account for one fourth of profitability. Vw will be profitable but for the brand there will be job cuts in germany. Thank you. On the car sector. Nes. Ve more tech sector news. Beating analyst estimates. Intel did that last night and today we get the asian competitors coming out with a net income Second Quarter. Beatingn at analyst estimates and margin improving. This is a company that is benefiting from new apple and iphones. We are getting more chip demand from them and potentially for more 4g processes. The chipmaker is managing to win out and it seems to be on the mobile side of things. Far more tc heavy overall. Yahoo yesterday and alibaba. We have sales in the Second Quarter dan 3 . Net income down. Theyre saying were not satisfied. Trying to change things up erie it she has been buying tumblr. Eyes on there yahoo screen. When not doing it. Advertisers are not being lured over. The idea that they will hold onto maybe more of their ali baba stakes. Is that heartening investors . There was a little bit of a selloff. Investors are looking up beat on the alibaba side of things. Theyre saying we will not sell as much as we were estimating. Huge growth, this is said to be the biggest ever ipo in the United States. Share sales could he up to 160 billion. When you get a 22 stake that is an isoearner. They have said we will sell one third less because they have future growth but half of that will go to investors. Getting a bit of a cash windfall here. Aboutryone was talking yahoo . They were talking about her because there was a meeting with that sheas turned up to a number of hours late and reportedly it was because she overslept. The criticism and pressure on her is absolutely huge. She did apologize and said she was very sorry. Howge a goes to show much she is under pressure. She is trying to show she can have it all. She once claimed she gets forgets to go home and go to bed. She has been at the company for two years. She promised, came from google and promised she would turn around advertising. Getting moretill advertising. A 13. 8 million deal made in heaven. Announcing a 13. 8 billion deal neos. 50 of airbuss new yahoo is scaling back the number of shares or can sell in the ali baba ipo ensuring it continues to benefit. Ali baba and investors other than yahoo are likely to make up the difference by increasing. He number of shares people familiar with the matter have told us. Yahoo will return at least half the cash it reaps from the ali baba ipo to shareholders. Mulallys appointment to googles board less than two months after the Technology Company unveiled the latest drivinge for itself car. Intel, the worlds Biggest Semiconductor Make