Easily top forecasts. Chinese factories continue to fall back shedding jobs at the fastest pace in more than four years. Hsbc leads to more calls for fresh stimulus support. And hedge fund under fire. Reports say u. S. Prosecutors are set to file criminal charges against sac capital over alleged Insider Trading as soon as this week. Good morning, thank you for joining us. We have some information just crossing the latest picture on the eurozone. Lets just dive into the eurozone composite pmi, growth for the First Time Since january 2012. In terms of some of the numbers that have just hit, the composite pmi showing us there is expansion in business activity. The flash pmi estimate was at 50. 4. The read for the markets was expected to be in the order of about 49. 3. These are the estimates on the flash number for july. This compares to what we had in june when the number came in at 48. 7. We got to 50 on this key number, which is interesting. We havent seen that for quite a while yet. Lets get instant reaction. Joining us is chris williamson. Lets dive into some of the numbers. Good to have you on board with us this morning. What do you make of the numbers that have just been crossing the pmi flash estimate forecast of 49. 3 and the number coming in above this. Yeah, this is very strong number. It was surprisingly strong across the board really, leading growth is germany why were seeing really decent growth in manufacturing and services. In france, which has been a weak spot in the surveys, even the manufacturing there returned to growth, and a rate of contraction and services called. And when you strip out those big two, there is even a brighter picture in there, the periphery. If you look at that lumped together, it was the shallowest rate of contraction for two years. It looks like theyre dragging out of their downturns. It is a broadbased picture. Led by manufacturing, manufacturing that was the best reading for two years, just above the 50 line. Interesting that would be every single forecast from the reuters poll economy. So a really strong number, a big surprise. Yeah, getting through the 50 mark is something we havent really seen here in europe. China has been giving up on numbers above the expansion contraction level. The numbers suggest were not in a bad spot after all. Were getting there. Thats the thing. So the ecb and many others are looking for the region to pull out of the recession in the second half of this year. There is a chance we display seen a stabilization of gdp in the Second Quarter. The consensus is for. 1 growth in the Third Quarter. I think this number will lead to revisions to those. This is a good start. If you see further increase, well be seeing. 2,. 3 . Much depends on the Global Environment and, of course, the political situation. But what this does, it does certainly take some pressure off the leaders for those political pressures to maybe start easing. There is signs of light at the end of the tunnel in terms of the recession going on for a year and a half now. I want to dive into that, the hsbc data out this morning confirms the worlds second largest economy continues to slow. Fresh pmi fell to 11month low of 47. 7, thats weaker than the 48. 2 we saw last month. And the employment subindex hit the lowest mark since march 2 09. Analysts says the data further cements views that beijing needs to run more supportive policies to stabilize growth. Chris what is your read on china. The numbers keep on going south. Yeah, we were expecting this one to have stabilized, maybe a tad lower, so the drop is bigger than we thought when we crunch the numbers. And saw that weakness. The one perhaps hopeful spot is the rate of decline exports did ease somewhat. Maybe the external environment that china is operating isnt as bad as we thought previously. Seems it is domestic and perhaps sucking the life out of manufacturing at the moment, does call into question whether youll see any acceleration of growth from the 7. 5. It is very much looking like growth will weaken further. Diving into your comments about domestic demand removing some of the life out of the chinese economy, we have an economy looking to rebalance toward domestic consultion. Is the execution around rebalancing not being perfectly executed right now . I think theyre playing a longer game. They have clamped down hard on expenditure, on lavish luxuries among the elite. And thats not just the actual political leaders. It is the main Corporate Leaders as well who are reining in their belts. They dont want to be seem to lovish in their expenditure. That seems to be hitting the economy hard this year. Were seeing that come through, while the rebalancing toward general consumption will take a lot longer. Are you worried about the sub index when you look at employment rate . We need to see stability in the employment side. Is there anything in the numbers that would cause you to worry about dissent and unrest across the employment population in china . Yeah, the Employment Index is signaling the steepest rate of job losses in early 2009. Going back to the crisis. In one respect, thats bad news. In another respect it may prompt the authorities to do a bit of shortterm to get some growth stimulus in place to make sure it doesnt accelerate even further. There is good and bad. Thank you for joining us with instant analysis. Chris williamson, global economist at market. Lets check on the reaction across asia to those numbers from hsbc. Li sixuan joins us from singapore. It is a mixed day of trading in asia as the weak china pmi data dampened the mood. The shanghai composite lost a modest half a percent and the hang seng in hong kong, in fact, trimmed losses in late trade, ending higher by about a quarter of a percent. Meantime, china related shares also weighed on the taiwan and japanese market, both ending just a tad weaker. But south korea and australia managed to stay in positive territory. In china, the manufacturing and industrial related sectors were under pressure, so we saw weakness coming from automakers, Steel Companies and cementmakers. Meantime, Property Developers and banking shares on the bottom row here also pulled back after yesterdays rally. Standard poors released a report highlighting the Financial Risks in Chinese Developers while seeing smaller players may be facing higher liquidity pressure. As for the bright spots in the region, apple suppliers showed pockets of strength after iphone sales came in better than expected. Taiwans hanhui added 1. 4 . South korea, lg display and chipmaker sk highnex had gains. Despite the weak china data, they extended a strong rally helped by commodity prices. Fortescue metals gained over 4 in todays trade. Back to you, karen. Sixuan, thank you for the update. Across the european markets, you can see how much green there is on the charts. Some is down to the earnings hitting the tape today. The overall stock share of 600, the benchmark is tracking higher by almost half of 1 . We have seen an acceleration through the morning session. The core in particular, the ftse ahead. 6 . Were opened up. 4 firmer. The xetra dax, half of 1 in germany. Ibex 35, the strongest performer this morning, up. 9 , accelerated through 1 , but has come back a little bit now. Firm is the tone indeed. And the cac in france put on. 7 . Lets move on to what is happening on Foreign Exchange markets. A little selling in sterling dollar. A little above the 153. The Australian Dollar has succumbed to more selling pressure. Had a firmer day yesterday. Back to the 92 level today. Selling off more than 1 , hitting a bit of Dollar Strength really when you look at the charts with the yen as well, just crossing 100 again. 6 on that trade. Euro dollar, somewhat supported this morning versus the others, 1. 3232 on the charts. The earnings today, am numbers getting to more traction across here today in germany on the markets. 2. 9 . Apple, rather, relieved investors with the beat on forecasts in the companys latest earnings report. The company swatted away fears it is losing market dominance as it benefitted from strong sales of its iphone. If you look at how puma shares are doing, down. 8 . It reported Second Quarter earnings below expectations. The general sports wear clothesmaker blamed the poor numbers on falling sales in china and Southern Europe as you would expect. Easy jet soared to the top of the stock share of 600. The company has increased capacity, but also helped the Budget Airline raise its revenues as well based on that. The uk airline is forecasting a pretax profit for the year of up to 480 Million Pounds. Elsewhere, we had numbers out too from arm, the british chip designer. It has beaten Market Expectations with a 30 rise in pretax profit, the rise in part is due to the Strong Demand for its latest processes used by mobile phones and tablet computers. Earlier on the channel, the new man at the helm told us hes focusing less on the stock price and more on the groups pipeline. Back to your question about stock price, not too concerned about that in the medium term. What were focusing on is that r d, the opportunities we see in front of us as the market expands and delivering into it. Chinas probe in the Pharma Industry is front and center today. Glaxosmithkline ceo is expected to address the issue and reporting earnings at 1 00 p. M. Cet. They say gsk is looking at cutting drug prices in china. Astrazeneca, two more of its employees were questioned by Shanghai Police and officials are detaining another u. S. Citizen in shanghai in connection to the probe. A uk business heeditor helia jos us on the set. Tell us your perspective. I think what you mentioned about Price Reductions is key here. Alongside results obviously china has taken the headlines. Were expecting to see a bit more detail on what the drugmaker will offer up to chinese authorities to appease them. And thats expected to be reductions in price across maybe one, maybe two, maybe all of their drugs that theyre selling in china. Thats pretty big deal. We got a couple of guests coming up this morning who have been looking that the from the stock perspective and their feeling is it could be a shortterm issue. If you talk about Price Reductions, this changes the earnings profile for the company in china, and there too i would imagine for other Drug Companies trying to source profits from china. I think youre right. This is almost one of those stories that has hit the headlines, the scandal has been unfolding and we have all been caught up in it. When ive spoken to shareholders, they dont care that much. Thats because what theyre more focused on is the drugs that have been approved, had three drugs this year. Remember, last year, gsk wasnt doing that great. Same time last year they had to give up their guidance, they missed that completely, and numbers werent great. In the last couple of months, things have picked up and analysts are saying this is a turning point. In terms of china, remember, this is just 3 of their turnover. It is a very fast growing market. But it is a very small proportion. It is about 759 Million Pounds, when the company throws off about 4 billion pounds in Free Cash Flow every year. I think the price reduction point you mentioned absolutely key in the sense, how will that affect the profitability . But were not quite clear. Sometimes you give up prices in terms of you want to grow volumes. Normally done out of a position of strength, not normally done out of a position of weakness which could hurt them. I wonder what the broader ramifications are for china here. We know in the past there has been a few scapegoats used in different high Profile Industries to try to prove a point. This in some ways would seem to be the latest. This also comes at a time in the Chinese Market is slowing. So is china as attracted to companies these days when theyre throwing up enormous risks to earnings . I think china has always been a difficult market for multinationals, but lets not forget, even though it is just 3 of gsks turnover, it is growing at 17 a year. Thats a very healthy growth rate. So in terms of how important the market is, it is key. It is not gsk is not number one, not number two, not number three in china, but an incredibly important market. How it manages to make sure it falls in line, yeah, absolutely, i think it is going to want to do everything it can to move on with chinese authorities and we have got a bit more of that detail, as you said, later today. That does put into perspective, doesnt it . Thank you very much for joining us, helia brahimi. U. S. Prosecutors were reportedly set to file criminal charges against hedge fund sac capital as early as this week. The move follows a multiyear probe into alleged Insider Trading at the firm. Reports say no charges are expected against founder steven cohen. And coming up in the next half an hour, we speak to an International Lawyer who describes the civil charges against steven cohen and what he faces as obscure. Stay tuned as we discuss the case at 10 40 cet. On todays show, the motor city has its day in court. The judge set to rule on whether detroit can file for the biggest municipal bankruptcy in u. S. History. And boeing is set to answer investor concerns over the dreamliners latest woes when it reports earnings later today. Cnbcs phil lebeau joins us from the Aerospace Giants hometown of chicago. Thats at 11 45 cet. And as the slew of tick earnings continues across the globe, we cross to seoul for Lg Electronics results in a few minute. Apples Solid Earnings boost suppliers across asia. Well have expert analysis live from hong kong after the break. The once lost lotus submideastern car from the James Bond Film is set to go up for auction. Robert frank has all the details. It is one of the most famous 007 cars ever, the lotus esprit that became a submarine. After the movie, the car mysteriously vanished and then in 1989, a long island man who rented tools for a living, bought a storage container, sight unseen like the storage war shows. He paid 100 for what appeared at first to be just a large lump covered in blankets. When he unwrapped it, he still didnt know what it was because he had never seen a bond movie, only after he loaded on his truck and strangers stopped him and told him he had the famous bond car. Years later, doug ridinios told the owner what it could be worth. The car nicknamed wet nelly is expected to sell for more than 1 million. Thats likely to change the life of the humble owner. First of all, youre going to go down in history as the guy who found the james bond car. But then if it sells for what were hoping it will sell for, that money will give you an opportunity to live very comfortably for the rest of your life. The car will be sold by rm auctions in london on september 9th. The owner will also be there. Back to you. We want to know what your favorite bond car is. Get in touch with us by email at worldwide cnbc. Com. By twitter cnbcwex or direct to me cnbckaren. Ill look at one of my favorite cars later in the show. Stick around. Well discuss it a bit more. Lg electronics Second Quarter profit fell 9 . But still managed to beat expectations. Record smartphone sales helped the south korean firm overcome a weaker Television Business report. Lets get out to seoul for more. Give us the latest. Yeah, karen, i think lgs numbers really reflect what is going on in the global tv industry and the smartphone segment. Lg electronics saw revenue jump 10 on year by the Second Quarter net profit. 8 in operating profit, fell on 9 year on year. The big takeaway here is that lgs mobile unit which has been lagging behind the likes of apple and samsung for quite a number of years and the smartphone space managed its best Quarterly Sales this time around of 12. 1 million hand sets. Its optima series did the trick and pushed sales across most regions. That wasnt quite enough for lg to create a substantial profit, because consumers snapped up cheaper smartphones, the l and s series with lower margins. There was a lot spent on that. As for tv division, sales of lcd tvs rose but more competition pushes prices lower and Going Forward we know the Third Quarter isnt going to be so easy either and in order to improve the bottom line, lg is rolling out high end models for core tv and hand set businesses as well and will introduce all new optima gt series and current quarter, well have to wait and see how lg does later on. Back to you. Thank you very much for that. We just spoke earlier in the program, apples asian suppliers traded mostly higher today after the tech giant beat forecasts, despite the lower earnings. Now, lg display, which supplies lcd panels to a s tto apple ros than 2 . And hon hai was up more than 1 in taiwan. Lets going to steven pelea for asia pacific at hsbc. Give us a read on what the apple results mean for the suppliers across asia as you see it. Great, thanks for having me on. The apple news here, iphones were better than expected here slightly. It was the ipad disappointment that was a little concerning to me. Ipads were down 14 year on year. And even if you exclude excess inventory impacts from last year, still down 3 year on year. So losing some market share in the tablet wars. Well have to read across a bit negative for the ipad related names. Companies that supply the casings and the back lights, these are Companies Like catcher and radiant of taiwan and maybe pan asia here in hong kong. Some of the good n