Indonesias political race. But some say its too early to call. 7 billion in the works for citigroup. Investigator look at paying out for mixed mortgages. Coming up on todays show, croatia plays the game of tourism and looks to cash in on the huge success of the series game of thrones. And brazils football coach luis ferarri describes it as the worst day of his life after the National Team suffers an embarrassing 70 defeat. We bring you all the action from brazil. And the u. S. Retailer the Container Store misses that america is now in the midst of a retail funk. Find out what he has to say about shoppers habits later. Sharp losses for the markets in europe, yesterdays trading saw the index in particular down at a sevenmonth low. Were currently switching between making gains and loogz them. The stoxx 600 down 0. 1 right now. Weve now taken out all the years gains, so relatively in change for that. The german dax relatively unchanged today. A bit of movement going on in the italian market, up 0. 5 . Yesterday there were losses across the board. The dow down 0. 7. . The worst two days that weve seen was back on april 11th. Similar to the russell 2,000. We got a similar idea back in april when we saw this pullback. Momentum leaning under pressure yesterday. Some significant falls across the board. It can be down 7 . Pandora, similar story the. Linked into all the stocks that gained most over the last couple of months pulling back. I guess if we do see a pullback, we can expect to see that to some degree. In the Asian Session, sri, taking the queue from what we saw in the u. S. Session, tencent one of the real underperformers, sri. Absolutely. It was down by 276 . The markets really couldnt ignore that steep sell off on the nasdaq that we saw overnight. Stateside, deepest drop in almost two months. Big drag on the broader hsi as were the banking names for the Greater China market. But many are characterized in this pullback that were seeing on h shares, the hang seng and the shanghai comp over on the mainland as a correction to the oversketched rally that we have se seen. We have realism coming back into revelations right now. Were not seeing any quotes for the benchmark composite because today, in fact, is a public holiday. Polling has now finished in the country and the counts are starting to come in. Even at this early stage, i believe more than the vote countered, jokobi is declaring victory albeit by a narrow margin. The fact that this is not a resounding victory may create some consternation in the market when they return for trade tomorrow. Watch the reaction in the jakarta confidence. There could be some legal challenges from the main opposition contender. That is the former general. Thats something to watch out for. Elsewhere, the Australian Market was another underperformer today, 5,45. Again, we are off from multi month highs in the market. It was the big blue chips that were reacting to the weakness on wall street overnight. Let me he come back to china. Its going to be the data that is going to be front and center, julia. We got the numbers on the cpi front. Once again, when you look at ppi, that is telling us there is a lot of slack and overcapacity in the system. We get trade numbers tomorrow. The big story there is whether we are going to see further evidence of stabilization in the worlds second largest economy. Were going to be talking about indonesia, but sri, well catch up with you a little later on. Matthew, good morning. I was jus just saying what were seeing is the nasdaq and the dow. Weve seen it before. Same again here or something a bit more sustained, do you think . Mixed messages. Which right now make it challenging to call the direction of markets into the shape of markets. Whatever the sector, i mean, youve got technology there. I think if you go beyond technology, some peripheral european stocks, media stocks bank across the world. Including smaller midcap stocks. He said yesterday he would much rather be in markets, rather be in europe than the u. S. Markets are fined somewhat harder. And i think the emerging markets on this who mortgageness block of websites. Indeed, how some of the Regional Forces are behaving. Its increasingly relevant. The market shares are doing very well. I know Morgan Stanley now has an 80 probability that we see further sympathy ewe husband in october, i believe. Do you expect that and do you think that could then see markets rally again further in q4 . Is good data bad news or is bad data good news . Weve been expecting further stimulus already. The answer is really quite well. Demand inflation, all indicates we know the boj are looking at. If anything, there is a concern that that incremental wont come about. Which i think will be seen as a negative. Its pretty bold when youre saying an 80 probability. Prime minister abe as well as the bank of japan governor are very strong. They are going to do whatever they think they need to do to ensure inflation in japan. The data so far has suggested improvements. I think well see further stimulus. Lets bring everyone up to speed with more top stories for today. Alcoa is seen Second Quarter profits beating forecasts as cost cutting feed through to the bottom line. Revenues are flat but beat estimates. The aluminum giant selling products on business which includes truck wheels and parts. The activity is strong and it comes from all across the country. It has been like this since the crisis which leads us to ensure the Balance Sheets are strong. Our net debt has come down. This is a very positive thing. This allows us to invest. Alcoa shares rose more than 2 in after hours trade. Alcoa was kicked out of the dow last year. Had it still been in the dow, it would have been the top performer up 39 . The next one is caterpillar, i believe, up 221 . Similar story with bank of america. That would be the top financial institution. Well move on. The Container Store is cutting its full year outlook amid a retail funk. Even as the Company Reported a First Quarter loss. The company, which went public last november, saw samestore sales for nearly 1 . In a statement, the ceo says we thought our sluggish sales were because of calendar and weather shifts, but consistent with so many of our fellow retailers, we are experiencing a retail funk. Shares dropped 13 after hours. Just down 14 at this point. Matthew is still with us. Earnings season crucial to seeing a share rally in particular here in the u. S. . Really important. Really important in the u. S. After the difficulties of q1. We know they were weather related. Suggestions of q2 have been better. Perhaps not as good as we were expecting to offset. The trajectory today is lower than where we thought we would be at the beginning of the year. Q2 is crucial in the u. S. And its going to be fine, isnt it . Because if we look at the amount of the revisions lower as far as estimates are concerned, 97 revisions and 133 preannouncements have been negative. We have to beat as best we can. Yeah. We had a series of preannouncements in q1. This is the challenge, people are looking at good data. Apparently good data, but its not enough to move markets. To move markets higher, we need to see earnings upgrades. Markets are at multiples, not yet expensive, but certainly nowhere near cheap. Therefore, the markets go higher, its that valuation not to be stretched too much further. They need to see earnings upgrades across multiple sectors with markets moving significantly higher from here. Define significantly. Were not getting that and yet the markets are inching their ways higher. Were talking about new highs as far as last weeks trading sessions are concerns. Stocks are more expensive. Earnings are going down incrementally. The markets are higher. Now, it is very hard to know just how far it can be stretched. It can be stretched much further to historical highs of 2000 or 2008. Right now, the markets go high with confidence in the profit driven cycle. Where is the best place to look at this stage . Regionally. In our Global Equity funds, we find ourselves with decent applications towards japan. Bottom up specific things going on. Interesting, too, in europe compared to the u. S. Where in europe . I think the stocks are interesting. Leverage. Operationally where . Give me a country. In this, for example, we own banks of uni credit, we own a greek bank, kbc, the belgium bank. So there are lots of banks exposed to this economic recovery where we dont think it adequately affects prices. Matthew, thank you. Germany utterly humiliated brazil in the world cup semifinals in what was the host nations most dramatic defeat in their history. Thomas muller opened the scoring in the 11th minute. They beat the world cup scoring record just 12 minutes later. There you go. Tony cruz stunned the whole scoring within just three minutes. They made it 50 with just half appear hour played in the first half. The second half, then, was played almost at walking pace, but germany remained ruthless with Andre Schuler tacking in a sixth and smashing in the seventh across the crossbar ten minutes later. The lastminute fight for brazil, no constellation on the record, winning 71. Phillipe scelari called this the worst day of his life forway called a catastrophic defeat. Fans clearly shared his sentiment. German fans were understandably overjoyed from the results. Germanys thousands of supporters watched the game from outside the brandenburg gates. Germany will go into the final as many peoples favorite. Tonight, big game as netherlands takes on argentina. The match will see messi and lionel go head to head. Up next, we continue our European Tour live in croatia. Well tell you whats coming up. This is a country with approximately 16 unemployment. One of two youths are unemployed, as well. After the break, ill be speaking to the president of the croatian employers association, to stay with us. We needed 30 new hires for our call center. Im spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast . Go to ziprecruiter. Com and post your job to over 30 of the webs leading job boards with a single click; then simply select the best candidates from one easy to review list. You put up one post and the next day you have all these candidates. Makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter. Com offer2. President obama has been quoted in the german press saying skraellys and palestinians must be prepared to take risks for peace. Its removing the gloves against hamas in retaliation for rocket fire. Palestinian Officials Say at least 23 people, including civilians, have been killed across the region. War planes hit 50 targets. At least 130 rockets have been fired into israel since monday. Nbcs eamon is in tel aviv. The sirens in tel aviv have gone aif indicating rocket fire is reaching deeper inside israel. It has become a major cause of concern for israeli officials. They have opened bomb shelters across the country and canceled Summer School and day care programs and raised the levels at hospitals all across the country, an indication that they are expecting this to worsen in the coming days. Inside gaza, the situation is catastrophic according to Health Officials who say they simply cannot deal with the casualties a large conversation praise could bring. Already on the first day, they could bring fatalities. The Israeli Military says it is targeting hamas factories what produce rockets as well as the homes of suspected militants and other rocket capabilities, rocket firing capabilities from gaza. But at the same time, there is growing concern about some of the rockets that are coming out of gaza. At least a hundred have been fired into skrael on tisrael on day of operations alone. Meanwhile, negotiations between iran and six major powers have hit a further road block after the countrys leaders said iran needs enrichment capacity. This while negotiators struggled to reach a new final agreement by july 20th. Demand for a further Enrichment Program would be a deal breaker in the negotiations. The world bank has blamed weak leadership for koreas sixyear recession and says structural problems will prevent the country from growing. The countrys minister is positive that they will turn to growth in 2016. Its not so easy. Parts of yugoslavia and then we had a war. After that, we changed the logic of the economy from the regional to the european opportunities. Thats why it takes so long. But i hope that the numbers say that. This year, its a zero point growth and for the next year, we will have the growth in gdp. Louisa is in the area. Louisa, this government has three years to try and address some of these structural issues and they failed. Can we believe the promises . Well, thats a good point, but i think you have to see it from another perspective and say, well, theyre the newest member of the eu. Theyve only been a member for just over a year now. The 1st of july, 2013, was when they joined. The good part that could come out of that is they now have to report back to the eu and show them numbers every six months. So there is some thinking it might help push along some reforms and help push across to get out of this sixyear recession. I have with me the president of the korea asian employers association. Welcome and thank you for being with us. We were just talking via the studio about weather enough is being done and also indirectly what the role of the government is. Well, i would say from the Business Association point of view, of course, we are never happy with the amount of reforms, with the type of strategic changes that are change place. On the flip side, we understand there are basically three reasons why we currently are not seeing a great economic boom that we would have maybe expected immediately following the session. First of all, we are in the midst of a recession. So ourselves and the eu is depending on which numbers youre looking at is also not doing great. The second reason is that we lost the Central European free trade agreement, as well. So we joined as a single country, not as a group. Which means when we joined, we lost some of the privileges we had as a region and the countries of the region are still outside in the eu. So those two reasons coupled with the lack of reforms that didnt take place over the last 10, 15 years which should have been done and that would have actually brought us into a great position to capitalize on this session. Because of these three reasons, we are still in a recession. However, we do expect in the coming years a great deal of change. We do expect a boom. Because we believe that the location that we have, the resources, the human capital, the people, the innovative skills that these people have are all the reasons why we should see a boom. We also have tourism. We have many small and medium sized enterprises, also large companies, as well, that are competing on a global scale and doing this exceptionally well. So with some reforms, we believe we will make a great move forward. With a jobless figure of around 16 and a youth unemployment level of closer to 50 , how long will it take before those numbers come down . Well, those numbers are directly coupled with the lack of reforms. Theyre directly coupled with the inability of somebody to come in here and create value very quickly. In order to create value, you need to lower taxes. You need to put in place reforms, reforms like the public administration, the number of municipalities and the number of regional governments that you have, which are too many in this case. The reform of, for example, education and health care shipments judiciary. If you start moving in these areas, you can very quickly create a condition in which it pays to invest because you have so many other things so well positioned, you know, croatia has a lot of things going for it. Coming back to the point that its just been a year since joining the eu yet weve seen a drop off in foreign direct investment, how long will it take to get Foreign Investment back into croatia because people, they should know then that with reforms coming, now would be the time to invest if you want to benefit from the up point. Foreign direct investment is kind of a barometer. It tells you how well you are doing. So if youre lacking reforms, if youre not actually if you dont have a set of conditions in which it pays to invest and bring back the return on investment, then you actually dont have the idi. As soon as you make some changes, as soon as the government makes certain commitments, as soon as they change a couple of key things, i believe youll see the return to croatia. There are many reasons for this, as i said. If you take tourism alone, if you consider that you have a Hotel Infrastructure thats only being used onethird of the year with supplement some services, perhaps medical tourism, you know, hiking, bicycling, whatever the case may be, you could immediately use the same infrastructure and increase the total revenues from tourism. Sure. For good measure, i need to mention youre speaking with a number of hats on because you were the former ceo of Deutsche Telekom now youre with croatia telecom. We thank you for speaking with us. Its a pleasure. I should not neglect to say croatia has great infrastructure. We have not only roads, well positioned harbors, but the Telecom Infrastructure is world class, as well. Gotta go. Thank you very much. Well enjoy your connections. And more to come in around an hour. Sometimes you can places where you can never get a connection, so its nice to be here. Thank you, louisa. Well catch up with you later on in the show. On cnbc. Com, we put all the details of that story and more on over emerging week. How competent are young people when it comes to Money Matters . The oecb has been trying to find out by testing 15yearolds across 18 different countries. Who is the winner . The youth of shanghai, excepts such as Bank Accounts and savings rates, they should be the custodians of Global Financial system in the future. But how do you fare .