States. Germanys Second Largest Bank plummets. Be the Second Quarter as good as it gets for the majors this year . And hope. Ow favoring an immediate stimulus to the uk following bmi weeks dire readings. Welcome to countdown everybody. Breaking e bit of for you fond people. Well ahead of the market estimate of 326. They raised a full year guidance. Sales numbers come in, just a little bit lower. If you want to understand what they think about polymers, this is the foams or car parts, the polycarbonate that goes into the top of your laptop cases. Course, it was divested, sold off as part of the buyer family. 64 stake have a in this company. And that could be useful do deals. To Second Quarter group level 7. 7 . Olumes up they say that the loans to repaid in be full. So top line is they are year the full guidance. Its by freedom. Freedom to make decisions in closing it systems, plants in brazil, and, of course, they are on target for cost cuts. A conversation a little later on in programming during on the move. Ill have a conversation with Patrick Thomas at 8 10 a. M. This morning. Got something coming in from south korea. Manufacturer hyundai. They made a profit, looking of the estimates in. Terms of the net income number also ahead of the estimates. Second quarter operating profit ahead of estimates. Q2 sales also just a little bit ahead of an estimate. O those numbers coming through from the south korean automaker. Lets talk about where these kets are and have they are rather unsure at the moment. Risk look at the rating. Weve got equities, just undecided. See what ing to happens. 1. 5 , yenthe topix has gotten stronger waiting to see what japan does. Week, all of that leading to a little bit haven. Mand for safe we see the yen stronger against the dollar. That yeng strength story downward g any pressure you might see on the japanese currency if ere going to see any big stimulus. Strong yen not good for exporters. Interesting story around the pound this morning. Will be on the front of daybreak. On. L feature this later ostensibly an hawk for his tenure at the bank of apparently he said ive seen enough. He favors immediate stimulus. This is a story in the ft. He literally has been hawkish for midwest of his time. 131. 18, as much well play into what happens with the ed in their statement tomorrow night. Those pmi numbers on friday, i think, have sort of pushed perspective on whats happening in the uk. It only a survey. Of making that point, course, but one they are seriously. Lets get the bloomberg now tom thanks, sanders told the democratic onvention that Hillary Clinton must become the next u. S. President. It came after his he plead avoid porters to protests on the floor and it was ignored by some. Michelle obama also offered endorsement of clinton. What i admire most about is that she never pressure. Nder she never takes the easy way out. Hillary clinton has in r quit on anything her life. Any objective observer on conclude that based her ideas and her eadership, Hillary Clinton must become the next president of the United States. [applause] man armed with a knife has killed at least 19 eople and injured several others at a facility for disabled peek near tokyo kyoto. Ing to broadcaster said a 26yearold man is under arrest after turning himself in. Motive hasnt been established but the man used to work for the facility. Federal reserve policymakers begin their twoday meeting. Officials are projected to line on Interest Rates as they assess the impact of britains decision to leave the e. U. But funds the chances te of a rate hike this december are almost back at the level day of the the referendum vote. Britain needs a new to punishwatchdog wrongdoing in order to win public confidence. Thats according to the Uks Parliament treasury committee. A new body should operate separately from the Regulation Authority and the Financial Conduct Authority to help prevent a repeat of the to the te response near collapse of british lender in 2008. Impulse 2 has become the first aircraft to fly around the world powered nly by the sun the plane touched down in abudhabi this morning ending 35,000 kilometer journey without burning a fuel. E drop of fossil it made 16 stops in its navigation of the glob. Stories ond more the Bloomberg App top go. This is bloomberg. Tom, thank you. Lets check into the markets. David, a little bit of a little bit of nervousness ahead of this bank of japan meeting on friday. And right. I think a lot of what people are talking about here now just really lack of clarity and how big that stimulus will be. Here are several reports, some have rate chetted up the size of the spending package. Yes, there said, is some caution. Have a look. Apan pulling its way, 1. 5 down. You look across asia and just look at this map, its not a very interesting sense there e is noun one clear direction. Are also at an even split between gainers and lose issues. Pulling back is not huge with the exception of the yen. There is also the element of Commodity Prices on the way down. Oil at threemonth lows. Nickel, down 1 each. If you do consider these where you have ae decent waiting when it comes weremodity producers seeing a pullback. Down. 25 . We talked about the yen. Chart, biggest drop, in fact in dollaryen since the brexit vote. Time yesterday we were close to 1. 06. Above 1. 06. Our now were making way back to 104. Organ stanley, mitsubishi of Morgan Stanley securities putting this wave of dollar selling, if you will, down plain and simple risk. Most equities pulled back in japan. Back get some buying nto the japanese yen and across other currencicies in asia. Very much. U david in hong kong for us. Earnings season for the oil majors. Later. We have a closer look at these numbers. Great to have you on the program. Verse, ryan, lets talk bout what were expecting from the Second Quarter report. By all measures it should be a relative zinger. You look at oil prices, rose nearly 25 , best quarter in for the oil price, up 25 . You think about it. E were sub 28 in the spring. The average oil price in the Second Quarter was 47 a barrel. Look at stocks, msci orld Energy Stocks, up 25 over the last six months versus about 9 for healthcare. Stocks globally, and the same in general for stocks. You look just at the Second Quarter, and again, you have energy really outperforming all the other industry groups, up about 9 . Double what you saw Health Stocks do in the Second Quarter, and globally you know, the msci about. 3 . Dex up oil stocks was a good place to make money in the Second Quarter. There is no doubt about it, thats what were expecting to see reflected in bps numbers. He estimate out there is about 800 million for adjusted profit. Thats not a lot. Not trump change. Est quarter in three if it works out that way. In another lump of money towards their loss. So youve got that. Of rally if the price oil but gasoline inventories actually rising so there are any factors that play in, in terms of taking the story forward, what is the next as . Ter shaping up it may not be as pretty as the Second Quarter just indicating. While crude Oil Inventories in the United States, the biggest consumer of oil have een falling weve seen a huge glut of gasoline. So if you look at total inventories, stripping out reserve, i. E. , crude plus refined product, weve just reached a record states. United were just beneath 1. 4 billion barrels, equivalent barrels of oil. Thats about 14 days worth of global demand. A lot. There is so much gasoline in particular, that just in the weve been counting tankers, at least five tankers, bound for new the wanted to go into port to deliver their gasoline, were turned away one needs it. You can watch those ships. Weigh in on the sector as a whole, on the face of these majors, as we scituating to hear from the first of them. This will be the first. From others later this week. Exactly. Well find this has been the best that were going to see for a while, im not so optimistic about the outlook from here. Speaking more cautious on the price of oil, expecting more declines than increases. Look at the inflation adjustment of oil price its 30 to 40. Round the china boom period clearly long gone. Towards a ack range that we think is historically more relevant. Number two, were still is king that the fed going to race it at some point. Weaker r slightly oil prices. More weakness rather than strength that will feed sector. The energy thats good news for the world growth story. 140 or oill at at 25 didnt do much to boost the growth story. Im just putting it into context, as long as it stays good s bandwidth its news. Absolutely. The key difference is that we said the same thing. Before was falling but it turned out not to be the case because it was such a dramatic decline. We want the nice combination of low oil prices and some stability. Efore when you add the big decline it was such a big shock you didnt get to feed through the demand. Well be more likely to see it than before. The supply disruptions oil s agented on the price to support it, were not in denial about how Weak Oil Prices should be, are we . No, were not expecting another big decline there. Will always be the potential for disruptions, be it or venezuela but in a long term perspective, balance is supply and demand. Excess supply versus demand, again, more moderate weakness which at this point of a goldilockgoldilocks scenario. They struggle with a price below 30, which you suggested we could see. Is your Investment Strategy, if you can, avoid Energy Stocks altogether . I think at this point it doesnt seem to be the best alternative. If you look at the other sectors that performed well o far this year besides energy, weve had the yield plays, utilities, tell coand so on with the in yields. From our perspective from here, rising new Interest Rates, we think well see a of those ut sectors in energy on a relative basis, probably not so attractive so were back and consumer because we think that will give you the best appreciation or potential for the rest of year. Maybe you might want to planes instead. Take a trip. Where are we . Companies move to protect dividends. Holy grail. Real focus last year on dividends. Where does it stack up in the dividend story for you. People are paying a whole lot for income wherever they can find it, market, rging stocks, that wont change. Given what we expect to get now from the bank of england, more stimulus rather than less. So that story wont change. People will pay for growth if they can find it or pay for income but it looking at valuations relative to the income that you receive where you get a little bit ore uncertain about your potential total return. Weve seen this period of a oil prices, having refinery business in your stable seems to be something that helped some of the oil that be a story this time around as well, do you think . Probably not so sure about the mix. People want to think about whether they will see a significant enough increase in consumer demand high level of inventories, people driving more hopefully, i think that will underfin sector as much as anything else, if we see people, consumers feeling more confident. More ies feeling confident about the outlook demand easing the that will bring down inventories. If we look at the whole of u. S. N terms oil, european oil, where do to be in that respect . Right now youve got to look at the potential, with the u. S. Energy sector as a whole, u. S. Economy as a whole, as the to adjust to the changes and circumstances, so if it means reallocating or labor, fundamentally i think the u. S. Economy, u. S. Corporations, tend to do that you have more restraints perhaps on the uropean side so i think if i had to pick one of the two, youll see more of a change in or the environment. Daniel morris. Stays with us this morning program. Lets get you your day ahead. The agenda set. This morning, were going to et the earnings as weve bp. N saying from we also get, in the midafternoon, an update biggest worlds economy with the u. S. Pmi numbers for july. A whole host of corporate results. Earnings from apple, twitter, mcdonalds and all on the horizon. Bloomberg, h lexen bourgeoiss finance minister pierre joins us on pulse, this morning at 9 30 a. M. Up next on the program the on countdown, majority of economists say they see the boj easing this week. We discuss the impact of the yen. To the c. E. O. Of the temporary employment ompany, and a smooth landing, where the Solar Impulse plane has completed its around the globe trip. This is bloomberg. Coming in at 240 million. Interesting comments about shaped up s because, of course, trouble with the Second Quarter across the son board is its almost pre feels very Rearview Mirror so were looking for the some s to give us clues about july. Thats what were getting. Early july volumes indicate growth ond quarter rates have continued. We can ask the management about whether that applies to the uk as well. But as a whole, that might be seen as a reassuring make. Ent to well be talking to a c. E. O. In around 10 minutes time. Is with us. Zie tom . Tom germanys second argest Commerce Bank says key measure of financial strength fell in the Second Quarter. T made accounting adjustments to flexibility operational risks to lenders across the industry. Income in the Second Quarter fell about 32 from earlier. But didnt specify how divisions performed. The federal judge has and cized statements executivesformer bear stearns. Important information was withheld from the public. Es now allowing a lawsuit to move forward. Intend tototoe. Go the gadd let will go for a fraction of the standard issue apple watch. And c. E. O. Reckons 50,000 watches could be sold within a year of its u. S. Debut hoping to bring total revenue to 100 million in 2017. Thats your Bloomberg Business flash. Tom. Much. You very the latest Rate Decision friday. Pan on they see the Central Bank Policy easing. Regardless of whether it analysts t most see things advancing. About says it all. So much expectation is this, yet, this morning, we have a statement, i mean, he says minister says the government will leave actual policy measures to japan. Nk of this pulls away from that hope and ambition that well et this huge fiscal stimulus. Two things are going on. One is the balance between he monetary and physical stimulus. If you get something more tilted towards the physical timulus, like what youre seeing in the yen its likely to lead to more strength. Going back to the central what can they do they have already thrown the kitchen sink at it to try to get the yen weaken. There is some of that doubt ultimatelybility of the bank of japan to get the yen weaker thats now. Ing to strength if we fall too much back on fiscal stimulus, you could strength. We just came out of g20, where there is a lot of not his stairty anymore as a global concept, japan, the ok at safe haven status it takes n a slightly different complexion. Do they have more of an excuse, as a result of the to keep that currency weak senator there are two things you need. Some eside hopefully of the monetary stimulus to help, you still have to come ack to talking about reforms. Japan doesnt need more physical stimulus. They already have too much debt. A y have already spent lot on infrastructure, not for a very positive result end. He if we dont see along with any announcement about a more al stimulus, focus on reforms. Trying to get the economy moving again. Of view point youll see any fiscal timulus that comes in fade of a guard. Where are you in japan . Re they post election victory or strengthening. 8 or lly by, what, 9 . Significant pricing in terms of the equity story. Are you still a borrower of japan . At this point not probably so much. Recovery that youve seen is what youve had generally speaking, after a brexit, youve had recovery. People realize it wont have a big impact. Thats helped japan because one of the more safe haven aspects. Without expectation for significant depreciation of yen its hard to see real rallies in Japanese Equities because there wont underlying it. Are you a buyer of european equities because on e got a great story bloomberg this morning, for the first time in three sound does that like the kind of sentiment you sympathize with or trend you want to go against . I think this time you want to be a bit more contrarian. Certainly from an equity point of view, if its weakening, en its hard to be bullish there. For the u. S. , earning season going badly but what will you get from here Going Forward . Ou go back to europe, one segment is negative, probably an opportunity. The Earnings Growth on. Ential youre betting its just whether or not youre necessarily seeing it. Thats what weve got. This is the stock 600, current season. This is what you say is really the big bet. We look at the Earnings Growth, really its a bet its a bet. E, more of a e medium term story. The other thing that may finally turn this around ill be what happens in the u. S. In terms of fed. If you finally see an hint, week not get it this that Interest Rates are going up in september that will push the balance back in favor of european equities. They step back it will be more underperformance. Great to hear from you morning. Us formorris joining the first halfhour of the program next, well be jacques ivan den broek. All about Second Quarter numbers. This is bloomberg. [hip hop beat] olympics 2016, let me get you on my leve