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Foundations for the merger losing its find. Pandora blames a challenging u. S. Retail environment for its Second Quarter profit miss shares off by 9 and trade data from china disappoints but the country maintains a healthy surplus with the u. S. Good morning, everyone, it is tuesday and taking a look at the map this morning, the stoxx 600 isnt going anywhere were just holding ton the flat line the stoxx just out of the gates up by 0. 2 now, an hour into the trading session we are flat as a pancake. Again, thats a pretty quiet day when it comes to Economic Data the only piece of data we got out is german trade numbers, german exports with its fastest fall in two years we got the china to focus on and that did lead to the basic metals stocks lower. Lets show you the European Market its one by one ftse 100 up by a few points and the xetra dax coming by the sectors, one of the worst sectors with the downside of 0. 4 and travel and leisure also down 0. 7 lets give you more info on that trade data from china while it came in below expectations for the month of july, exports rose 7 , and imports down 11 that left the country with a trade surplus with nearly 7 billion for the month. Lets dig into those numbers with miranda carr. Miranda was his an aberration or a slowdown when can comes to fundamental factors . I think with the economy and western markets, we had a very surprisingly strong june numbers and surprisingly weak july numbers those two factors even out. And the last two months were see improving economies in the western economies both in the u. S. And eu demands picking up almost in double digits. So thats pretty positive. And also domestics when you think of excavators, machine tools, consumers to commodities, theyre not great but coming along pretty well. But what chinas throwing out is the huge anomalies in the markets. You got two factors messing up the figures and messing up basically the demand picture but i do need to pick up on two points the fact exports to the eu has been the u. S. biggest trading partner with the drop in double digits do you think this is a sign of slowdown in the u. S. And eu . Well, the u. S. Numbers were particularly strong in june, but the Previous Year down 10 a lot of it is unfavorable comparisons. But you look, go back to end of last year, exports to the u. S. Were only rising by 2 whereas now theyre rising 14 so thats a big shift. Thats a trend thats not just sort of monkey work so the pickup from the u. S. And europe people markets seems from a very weak base i mean, were not talking about a fantastic year last year, european exports 2 last year. So youre talking from a very weak base things are looking better again, dont get too excited but i dont see this as a major thing. One thing thats probably going to add more fuel to the fire, the chinese u. S. Trade spot that is the trade with the u. S. For the first five months, thats the increase, 5. 9 . By dont know what the trade is going to be coming from u. S. Towards china. To what extent does that slow down the trade between the two countries . You get strange arguments on both side. Steel exports have been falling. So, a keep point of the Trump Campaign was steel thats now falling and trying to say, weve addressed your concerns, thats fine you know, the currency is going up, appreciated by 3 . Thats automatll tactical movements . Its very tricky with the two things that negotiators are coming at you with is, these are no longer issues we still have obviously exports. You know, the textiles will replace goods coming into the u. S. Market that they could then take action on but then china argues, well, wed like to import more of europe, but we want highend, advanced machinery, advanced energy in particular, which the u. S. Doesnt want to export. I think the negotiations are going to be quite tricky because chinas answered a lot of the problems that the u. S. Has had thats exactly my question, when do you see that trade action being taken how severe, how aggressive, do you think the retaliation will be on the part of china . Can they afford to be that aggressive because they dont want to slow down trade with their biggest trade partner . Well, some of the measures that china takes is more internally focused you can see the big if you remember is to try to open up chinas Financial Services markets. Some of the internet markets, but basically if it doesnt get action on trade it did limit the markets with the likes of facebook, google or any of the any of the Financial Services companies, they want to get into china and china can just keep that keep those barriers up if theyre not if theyve got trade sanctions imposed by the u. S. Its been roughly two years, exactly two years, in fact, august 2015, that was the month where we worried so much about the unpredictability of chinas currency and the action of the pec. Weve seen a stable economy, by and large, weve seen a pretty Stable Currency which has been rising a little bit. But you said in a recent note that this masks some of the underlying problems. Were now in a slightly weird point in the marketplace kind of a weird place, ahead of the congress the pboc, we did a recent survey recently in the bond investors, no one expects the leverage to continue it might be up to the Mighty Congress but basically in the next few months were not going to see any shift in the policy things are going to be kept stable and its only the external risks that china has to worry about. Everything has been going back to the safe, going back to the banks, keeping the market steady everything is being held very, very stable, up until the congress up until that congress which i guess happens in november right . Yeah. Whats the obvious trade for china at this point . Is there one or isnt there one because everything is to be kept stable . I think the market just in general, the markets, in terms of Monetary Policy were seeing a slight shift yields are gradually moderating we think theyre going to peek at 2. 7, 2. 8. That stocks moderating, coming back to it again, things are loosening up again we do see risks in the private sector local government financing platforms. Theres more risk there. Basically moderating after the june squeeze yield moderating markets are stable. And its really only as i say external risks miranda, thank you so much for that insight in other earnings news this morning, pandora shares we heard on the headlines falling after the Second Quarter profit. No expectations. Dane ish protested a profit revenue grew at 12 year on year helping pandora to reaffirm their fullyear guidance and Deutsche Post driven by strength in its express Delivery Business it rose 12 . Helping the german mailing Logistics Company to reaffirm its targets and says no Material Impact from the cyber attack in ukraine in the end of june and its seen higher volumes, shares up nicely 1. 16 on the German Market and unip raises profits. Now seeing earnings before interest in tax of 1. 2 billion pounds up from previous forecasts. And shares of junglinerich raises outlook as the german forklift manufacturer poses a Second Quarter even and the fund manager alex, always a pleasure to talk to you about some of your stock picks on the shelf why do you like it each . Obviously, you didnt know what the numbers were going to bring today. Yeah, no, weve been invested in them for a long period of time basically the second largest forklift truck business in europe Third Largest globally and the reason we like the stock, it boasts the theme of Online Retail, bringing more transaction online only about 10 of all retail globally is done online at the moment and when that happens you need to warehouse it. And things need to be brought out, packed and transported. Its not just a forklift truck, but logistics system as well we see this business as a play on growth and Online Retail which is a key and future trend that will only develop and very important. And that story certainly makes sense, alex. But at the same time, given that this is a German Company that probably exports quite a bit isnt going to be hit by the 1. 18 Exchange Rate for the dollar thats certainly important for the business 8 of the companys revenue actually has come from europe. The exposure is quite well mitigated to that effect lets talk about some of the countries you like one of them being asal in the Semi Conductor space. The only issue with stock it has business with 30 in the last year is it now time to take profit . Youre right, the stock has had a really good performance when you compare it to businesses like advance materials or land research, the company has actually seen relative underperformance. Certainly, the second point id state to valuation, if you look at this business, relative to its tenyear average, one year out, trading at 24 times earning. Over the last ten years, it averaged 27 times. But i think the important thing, its not just the multiple but the actual earning that goes low. This is a business that set out a very clear target in 2016 in capital markets. They said by 2020 we could do at least nine euros of bps. The next iteration of machines that theyre rolling out at the moment that management has said theyre at an inflexion point now, theyve got 5 billion plus euro i think that mindset is very, very achievable, you could be looking at 10, 11, 12, Something Like that. Which i think allows asml to grow very comfortably. My question to you is to what extent asml is at risk from the likes of apple and samsung which are now trying to streamline the production of ships inhouse they want to build this vertical integration. They want to simply not use the likes of asml. And i think there was a big story of one of its partners is it asml with apple and smith not meeting them intel is actually 108 investor in asml so the interests to the businesses are very close aligned. I think whats fascinating if you ache asmls biggest customer, intel, todays take, samsung, every one of those businesses, totally in line, and its supporting the technology that as said ml ml you appreciate the importance of the law, things have to fit. And if you believe in all of these trends, better memory, better devices, you cant fill it out without asml, simple as that iand now the cost of gene secrets falling and demand would rise, obviously this is a player that would do very well. Given that costs are falling, wouldnt more competitors come into the space and try to eat some of the cake thats certainly an argument thats been leveled for this company. If you look at the market share, somewhere still along 70 or 80 . Generally, we intend to only invest in businesses with high market share you need to get the regulators on board so it proves it this business, illumina theyre still investing 50 on research and development. Theres a close link to the Academic Community and the big businesses that are actually buying the machines and actually dislodging that business is proving i think a lot harder than the skeptics of the stock mentioned. And they wanted to buy that business a couple years ago, illumina didnt play along at that point, they said this is nice to have, not a musthave. A couple years later one of the big players came out and said this is a musthave company and we need to go in and buy it . I think thats a plausible scenario, indeed for the future trends that we look at, whether its molecular diagnostics, and all of that sequencing very few people are in the market, so theres certainly a scarcity value attached. Alex, thank you for your time fund manager at heptagon capital. Still coming up on the show we check in on some of the larger Hotel Players ahead, after the break do stick around. Ihd share ihg shares are trr with a drop in the Second Quarter. And weighing on the numbers, the revenue also declined from the First Quarter. And Marriott International has a lower outlook for its enorth american market. The Worlds Largest hotel chain reported income up 68 but shares fell on the plymouth forecast seema mody has more. Marriott, the Worlds Largest hotel chain reporting better earnings, much higher than what the team was expecting revenue also a beat at 5. 8 billion but i also want to draw your attention to net income Second Quarter net income totals 414 million a 68 increase over the prior year period. Management says a lot of this has to do with Strong Performance in asiapacific and europe the company pointing out some strong markets like shanghai, barcelona and london asia has been the big focus for marriott today the big news that the company is signing up with this joint venture with alibaba the stock is up higher, already 45 year to date, making the best performing hotel stocks this year. Back to you. Ey says, quote, unprecedented market disruption is pushing companies to divest over half of the firms surveyed by ey said global and political insecurity drove sales diversity leader at ey joins us to discuss the support of the rest of the industry and divestments for 2017 what are those unprecedented market sources exactly carolin, great question weve got mac book volume difficult. Geopolitical uncertainty in so many markets we have great disruption right now because of technological change its everywhere and its disrupting so many Business Models and we have shareholder activists all over the place driving activity i just want to pick up on that point weve seen a lot of Shareholder Activism in the u. S. But only recently its reached europe with some of the big ones like nestles being targeted. Do you think that increasing will be driving divestments . At this point, we know nestle was going to sell off some of its confectionary business anyway do you think this is an organic decision or one driven by Shareholder Activism i think there are two pieces. I think theres the Portfolio Management to your point, carolin. Thats looking at things that are noncore. And things that are underperforming perhaps in somebody elses hands. Thats one piece of it and but then you also have the Shareholder Activism piece all of the conversations with clients in asia pacific and europe, thats going to grow in asiapacific at what point do Companies Invest a whole too much . Weve seen that from factor like oil price and profits plummeting at what point do we see the profitdrivers being cut off to the extent that we simply cant invest in these companies anymore . Yeah, i think right now, disruption is going to continue to drive these divestments, carolin, theres no question about that what were seeing companies are using the proceeds right now from investments to come back and invest in Digital Technology whether automation robotics, software, internet and because of that disruption and what technology is doing to everybodys business model, we believe that will continue one of the pieces of information in your report, i found it really interesting, it was fascinating, you say that in europe theres more pressure to sell at a certain speed. Rather than at the right price why is there so much pressure on speed in europe and are we seeing fire sale prices in europe you know, thats a great question, actually because its a bit of a dichotomy between americas and europe. In europe, youre seeing a couple things, number one, youve got the postjune 2016 hangover from brexit there was a bit of stagnation in the market for a period of time. And i think youre seeing that market get caught up i think because of that stagnation, that drove a lot of companies to perhaps make decisions that were hasty to drive further activity do glconglomerates still work i knee theyre completely out of fashion. They want to drive the noncore that begs the question are they value or is it about valuation i think some parts can offer value. Its how they unicommunicate tht core to their stakeholders down to the street. Thats what it comes down. Thank you so much in other news, citigroup will pay 130 million to settle a libelrigging lawsuit in the u. S. British lender barclays reached a similar agreement in 2015 for 120 million and on a programming note make sure you tune to cnbc today at 17 30 cst with an interview with jamie dimon we have more street signs in a few minutes. Dont go away. Your brain is an amazing thing. But as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. 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[announcer] dont wait, call or go online now for a free sample pair to experience the incredible comfort and invisibility of eargo plus for yourself. Hello and welcome back to street signs. Im carolin roth and these are your headlines outflows at stand lifes fund pull shares near the bottom of the European Equity market alongside partner abidine. The ceo tells cnbc, hes positive ahead of the tieup. The main thing for me, though, is not just the half yearly numbers but the fact that we saw increases diversification of our flows so execution of strategy was in a good place which puts i think, Firm Foundations for the merger trade data from china disappoints with july imports and exports missing expectations but the country maintains a healthy surplus with the u. S a former Google Engineer says he is exploring legal remedies after getting fired for writing a controversial memo on gender inequality. All right. If youre just tuning in, love to see whether today is going to be another recordbreaking day for u. S. Equity markets. Yesterday was one of those the dow extended its winning streak to ten days looks like well see a little profittaking today but only slightly so. The dow jones seen off by less than 0. 5 points and the nasdaq by 0. 72. Were in the midst of office trading, the ftse 100 down by 0. 1 the xetra dax up but that data overall didnt dents the euro too much. We want to show you whats happening with the euro dollar at this point. In fact a touch higher still trading just about the 1. 18 level. I want to draw your attention to whats happening with the aussie dollar, with the proxy from china despite the disappointing numbers from china, that paired with the aussie dollar, the aussie dollar is higher by 2 . Valeant earnings due expected to post 2. 4 billion. Shares have doubled in the past three months held by a positive First Quarter and progress in reducing its debt. But the stock is still 95 off the highs made in august2015 Nolan Langford joins us live given the stocks are 10 weak on the back of numbers. Are we in for a positive surprise were expecting something positive, i think, carolin, i think the 97 cents in earnings that you mentioned i think whats more important in that is the commentary that the company puts forth all right unfortunately, it seems as though werehaving issues with the line can we reestablish the line all right. We will try and reestablish the line in just a second. Obviously want to continue this very exciting conversation given that this fund manager is so positive on valeant bonds. Netflix has bought publisher millarworld as it beefs up its characters in future shows behind titles like wanted, kick ass and kingsmen. The latter two were not part of the deal this is the first time netflix has acquired a history in its 20year history. And cbs is going to expand streaming for its growing audience thanks to higher licensing and subscription fees, louisa we have more. Cbs growing revenues and earnings, 9 to 3. 6 billion surpassing expectations less than 3. 1 billion in revenue six cents better than analysts projections. Cbs says its fees to 25 in the Second Quarter theyre also seeing the benefit of recent skinny bundle deals with youtube tv and hulu. Its being a leading player in the newskinny bundles and with our growing over the top channels were is the up to succeed, no matter how People Choose to consumer their content. Les moonves announced cbs all access and showtime continue to grow beyond expectations and are track to surpass a combined 4 million subscribers by the end of the year. Also expressed that allaccess will expand into canada next year and cbs is working on a new direct to consumer sports service. Later this year, we will roll out a 24 7 Live Streaming channel like cbsn for sports as part of the ongoing ott strategy it does not yet have a name. We think sports fans are looking for Something Like this, and that opportunity is significant. An moonves saying theyre getting credit for viewing for a long period of time, up to a month after the show initially airs cbs now drives less than 40 of its revenue from advertising as it diversifies away from reliance on the volatile ad market back to you. Meanwhile, disney is poised to reveal its earning. Make sure you tune in at 22 0 with an interview with ceo bob iger we want to go back to the conversation about valeant, joining us on the line once again from chicago just a couple minutes ago, you made the point this is all about the outlook today, noland. Why . Yes, as we know, valeant has had challenges over the last couple of years. They brought in a new ceo to sort of stabilize and turn around the business. And the reality is the two core parts of their business are performing pretty well they get the majority of from the bausch lomb business those two make up the revenues and the iba numbers. Those are going to be far more important than what happens in generics theyve been more of a selfhelp story where theyre actually selling off underperforming drugs that pulled on a huge debt load the dead reduction and how the two core areas of business are performing, i think that will be really important for investors let me play devils advocate here because revenues will be declining the next two years as this company will be facing competition from other drugs so, how do you square this up . Youre right. You remember the revenues and iba numbers. And we expect the numbers to actually bottom in 2018 and then actually turn positive from there. Remember, they are launching new drugs. And they have a new gastro drug that they just launched. We expect those numbers to be hitting the books and ramping up slowly we think as 2018 moves closer, we think investors arent just actually focusing on the future. And those numbers look more positive than they have in the last year or so. Noland, obviously, there was one very famous investor who got burned by valeant, bill ackman of Pershing Square he was inquested in the equity zpp that ma does that make you more cautious about investing in the equity . Is there a tale, a lesson, you want to take away from his demands . Well, one of the things i do know as an investor, the pain of buying at 100 and watching something go to 10 is only trumped by the pain of actually selling something at 10 and watching it go to 100. And at this point, you know, i think the horrendous losses are behind the company i think this is a turnaround story. We actually do like what theyre doing on the dak side. Again, its a deleveraging story. They have quite a few stories of bonds especially for your viewers in europe. Your yields are a lot lower than our yields in the u. S. Which are still pretty low but they have a lot of series of bonds you can buy from valeant were getting nice yields in the 8 , 9 range but also capital potential in the bond. Theres a few ways to play the story if viewers are gun shy of buying the equity theres a few ways to buy it on the deck side also i just want to add that valeant is one of your largest positions. Youre snapping up as many of your 2020 and 2014 ones. Noland langford, ceo and portfolio manager. In other news, google has fired the employee whose memo argued there are fewer women in the Tech Industry because of biological differences engineer james demore said hes exploring possible legal remedies in a company know, the ceo sind d Sindar Pichai said shares in tesla have risen sharply this year, driving its market cap above ford and gm staying in the sector, japanese automaker toyota is expanding its hybrid plant in europe joining us with the story, mikiko yes, ahead of it in toyota in europe, aside from one lexus brand cars, the automaker plans to offer two options such as drive power by 2020. The goal is to lift its hybrid sales in europe to half of its total in the region by 2020 up 18 Percentage Points by next year starting next week in germany, toyota will offer a 4,000 discount for drivers switching from a diesel end make tor to oe of the hybrid models and several major europe cities restricting the cars toyota has hybrid car sales in europe which includes russia and turkey climbed over 40 last year sales are continuing to stay strong, rising 44 in the First Six Months the hybrid version of the compact suv accounts for about 80 of the models sales toyota is looking for hybrid to grow further starting in 2040, demand for electric cars are expected to climb sharmly with sales on gasoline and diesel vehicles toyota said the firm will eventually shift to selling electric vehicles building on that technology of working with motors and batteries in hybrid vehicles back to you. Thank you for that. Staying in the region, china is pushing for a diplomatic to the north korean crisis. Speaking in the philippines, the chinas foreign minister said d dialogue is better china will bear the main costs because of their economic ties north korea is vowing, quote, a thousand times retaliation to the United States. Andrea mitchell filed this report on the escalating tensions in the korean peninsula. Reporter north koreans lining up to watch state on tv, 33ing the u. S. For a thousands revenge. Warning its a mistake for americans to think theyre safe. President trump talking for an hour to his secretary of state at a summit today. After delivering say message best signal that north korea could give us that they are prepared to talk would be to stop the missile launches. Reporter in a test ten days a missile able to reach as star as chicago has alarmed the world. That, u. S. Officials call unusual and unprecedented submarine technology which hopes to develop sea missiles as well. Producing a diplomatic win for the white house. A unanimous 1 billion in sanctions against kim jongun. Both china and russia voting yes. With the potential plan for military options theres nothing like the threat of a Ballistic Missile landing on your homeland to clarify your thinking. The United States has to take prudent military planning into account. Reporter while at that asia summit, tillerson also warning russias foreign minister the Election Hacking has seriously damaged relations. This has created serious mistrust between our two conducts reporter Vladimir Putin spear fishing inside of siberia does not appear to be worried. That was nbcs chief Foreign Affairs correspondent Andrea Mitchell reporting there in other news, markets edged higher that south african lawmakers would be allowed to vote in secret on president zuma in all confidence he could step down as party leader by the end of the year. Hes had a rocky term about his management of the economy. And the United States is reportedly preparing sanctions against more venezuelan officials close to president nicholholaolas maduro, however,s not expected to include penalties on the oil sector. Now, would you take money advised from a robot thats after a short break sckrod. Doti aun shares in Standard Life are trading near the bottom of the stoxx 600 due to flows from the fund however, the fund manager offered a 6 increase. Those numbers come as Standard Life nears completing an 11 billion merger earlier, they told cnbc where the company is setting up shop after brexit to asset management, there are two clear homes. One is luxembourg, which is the heart of the ccab administration and the other strong contender has to be ireland. Certainly, were looking at putting our Method Company into ireland. So, i think in asset management, those will be the two strong attracters meantime, uk retail sales both slowed in the month of july but an uptick in food prices upped grocery sales. Growing 2. 2 and the report suggests families cut back their spending on clothing and appliances as rising food prices started to bite and British Companies are hiring staff by recruitment agencies at the fastest pace in two years. But theyre worried about fi findifind finding staff in the future. Britains exit from the eu could worsen staff in sectors in both highskilled and entrylevel positions. Well, as you may have noticed all week, were talking about the future of how technological and cultural changes will conform our working lives in the years to come our next guest spends a lot of time thinking about the future and how robots prepare for it. Technology officer at wealth wizards. You guys focus on pensions you put out a recent report asking the question, are brits totally unprepared for retirement are they yeah, we believe they are we did a long study the way people think about retirement and what plans they have in place for it what we found 55 of retirees have said that they will plan for their retirement when they retire when you look at the figures of how much money youre put ago side for it, the average brit is not only going to be woefully unprepared at the time but also, they dont know where they can turn to for advice on that so, what would be the gamechanging technology be then would it be robot advisers as we suggested in the readin . Or how do people get advice when not being prepared i think the first thing, a brit should have access to a financial adviser. There are very few people in the uk comparatively to give this advice maybe only 23,000 or so. Which means advice by somebody who is qualified to give that is out of reach for those people. This is where that Technology Comes up Artificial Intelligence is being used to give people advice about how much money they should be putting aside specifically for their lifestyle. For what type of person they are. How risk adverse they are. How easy it would be for them to have a loss of money based on these things, a robo adviser is able to give that advice. And people in control of their retirement is not delegating this to the government or to their employer, but having the tools and the expert help to be able to do them themselves how would that work in practice, though because if you say there isnt enough resources in britain to have advisers, human advisers talk to many ordinary people who are woefully unprepared for the pensions how would we have enough money to have robots come in and get in contact with the people i think one of the main a tractions of robo advice is youre able to train Artificial Intelligence to give the advice a qualified Financial Planner would give and give it consistently and give it without making mistakes. And to do it cheaper a lot cheaper. What weve been able to do is give this advice away for a tenth of the cost thats available. Or even its available to many people from their employeras a Employee Benefit so, theres several robo advisers outside there, and theyre pretty sophisticated but i see over the next years, they can become more sophisticated and theyre going to tell you who you are as a person and tailor advice on that. Do you think people would want to see that human touch, the handshake or a cup of coffee yeah, i think the Human Element is really important. And robo advisers are going to become more and more engaging to people i think its difficult to replace the human. Whats working well at the moment, this hybrid approach, youre interacting with a human. Youre making eye contact, youre talking in a very informal way about your goals and who you are as a person. But then in the background, their ability is being augmented by an expert whats the risk of using a robot . The risk with humans is they make human errors and they simply give you wrong advice with the robo advisers they would be programmed incorrectly, is that the main risk . That is a ricksk, yes. One of the things we spend a lot of time mitigating against, if you program a robot and it does it wrong 40,000 times, its going to do it 40,000 times. Regulations are really supporting people getting advice so they have recourse if that advice isnt correct stick around for a moment what i want to share with you, all week were talking about how the workplace is changing. That this week, were asking you what Workplace Change do you want most . Less time in meetings, short commute or a new boss. Let us know, peet, whats your call i really like my boss you have to say this. The thing that works well for me, very fulfilling work i think thats the thing that youll find attracts the best talent to the workplace is that they feel that the work is meaningful let me see the emails too many emails, especially when you come back from the holidays and you realize how many emails there are. Thank you so much for that go to cnbc. Com to cast your vote its a pretty tight say. Before we leave the show, trade futures looking mixed. Dow jones two points maybe another record for the dow the nasdaq by 0. 5 points im carolin roth, Worldwide Exchange is up next see you tomorrow byebye. The summer rally the couch notch its and a close straight ahead google fires an employee who wrote a controversial memo of women in tech. Details coming up. Plus, besting on nostalgia, cbs gets an earnings boost an reviving a 90s classic. Its tuesday, august 8th, 2017 and Worldwide Exchange begins right now. Good morning, welcome to

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