Lenovos smartphone strategy is paying off. They deliver a jump in profit as its new hand set business offsets personal computer sales. Announcer youre watching worldwide exchange, bringing you Business News from around the globe. Good morning, everyone. You are watching worldwide exchange. We are just modestly lower, around 0. 2 . It is gdp day and the data we got out specifically this morning for germany and france, that was definitely disappointing. The recovery is losing steam. Lets have a look at the markets one by one and see how theyre responding to the data. The xetra dax is down by 0. 1 . Rew blaming its Renewable Energy subsidies for that big decline. The cac 40 is off by 0. 5 . The ftse 100 outperforming this morning by roughly six points or 0. 1 . Lets get to some of the top spots were watching for you this morning. Balfour beatty up 1. 9 . Carillion says it is confident on the new approach which would pay shareholders an additional Cash Dividend of 8. 5 pence a share. Rwes first half operating profit plummeted by 40 , hit by lower power prices and competition from Renewable Energy sources, as i just mentioned. Germanys largest power producer blaming weak Economic Growth for depressing demand. Balfour beatty up by 1. 9 and rwe down by 2. 8 . Take a look at the share Price Performance for novozymes, off by 5. 2 . The danish firm now sees Profit Growth of 9 to 11 . Earlier on squawk box, just spoke to the ceo of the company and asked for his views on todays gdp numbers. Well, its all about the innovation that we can supply to our customers. So the underlying gdp growth doesnt have a phenomenal impact in our business. Its our ability to innovate with our customers that drives the business. Lets show you whats happening on the bond markets on the back of the disappointing gdp numbers. 1. 007 is what were seeing here. Incredible number, isnt it . The french yield is at 1. 39 . Analysts see another record low for the tenyear spanish at 2. 43. It has now gone up back above that 2. 5 level. So once again, it is a flight to safety. Growth concerns, but concerns about the disinflationary environment that were in. All right. So time for your take on the markets in asia. Sri jegarajah is in singapore. How are we looking in asia today . Very distinct concerns in this region, as well. Lets start with the japanese data. Once again we saw some pretty disappointing numbers, machinery orders in the Second Quarter, contracted by more than 10 . Although we are looking at a rebound in the region of about 3 in the quarter, in the Third Quarter that we are in right now. The market does seem to be quite sanguine about the prospectors for the japanese economy. Theyre brushing it off and looking forward to that rebound in the Third Quarter. If we dont see that, it will probably build the case of further action by the baj bank of japan. Try the possibility of more Public Pension Fund participation in the market. Shanghai composite is the underperformer today. Growth concerns really squarely hitting that market after we saw disappointing lending data earlier on this week. That raised concerns about the outlook for the worlds second largest economy. Overall, a fairley mixed picture for asian equities. Carolin, youre facing growth concerns in your region. A similar story back to you, as well. And i want to bring you the latest flash. Singapore has sent a nigerian woman to a hospital Isolation Unit on suspicion of ebola. This is after korean air says its sending flights to kenya over ebola worries. Once again, this is also a big concern in the asian sphere. Lets get back to our top story. European market trading slightly lower this morning after weak gdp numbers out of france and germany as demonstrated by our wall, which you can see. There you go. France surprisingly came out on top in the Second Quarter, was completely flat growing. Germany is second. Berlin blaming a drop in Foreign Trade and investment for 0. 2 contraction. This puts it on par with italy which saw negative growth in the quarter as was highlighted last week. Meanwhile, italian Prime Minister renzi has stepped up to holding a secret meeting with mario draghi. The gettogether was thought to have taken place earlier this week where draghi has a holiday home. Good for him. The ecb declined to comment on the meeting, but it comes just days after draghi said the pace of reform in italy is slow. With us in and out, nicholas spiro. Anatoli, let me kick things off with you. This is the wake up call to germany, isnt it . I think its a wakeup call not only for germany, but all of europes government will need to look at this data carefully. I think in the data we had a very strong q1 which was dist t distorted by good weather. Q2 numbers, it was an unusually high number for the holiday. I think we should look at the first half as a whole to think about this. There, germany is still growing. Spain is the surprise, a surprise market on the upside. France and italy, way too low and a big concern going forward. Nicholas, what is wrong with the eurozone . We were sitting here saying we had finally come out of the recession, and now it looks like italy is back into recession and maybe dips in some of the other countries. Whats wrong . Well, the news is extremely dire. We have a situation where twothirds of eurozone gdp is either in recession, flirting with it, or has contracted in the Second Quarter. The ecb has allowed the eurozone to sleep walk into this situation. I would share your other guest views about spain in the sense that mr. Draghi clearly has a point that those economies that are undertaken meaningful Structural Reforms clearly are in a better position. But i am extremely worried. Sorry to interrupt here, but you say the ecb has allowed a couple of companies in the eurozone to sleep walk. The ecb has done everything it potentially can, right . We share the view that the ecb has done more. The ecb is trying to patch things up, buying time for more reforms and the whole adjustment process from the deepest crisis weve been through. Certainly we think the ecb will do more. What exactly should they be doing after that . Thats a very good point. Certainly they wont be doing anything until the review is announced. That compliments matters. I personally believe that outright qe is a political starter in the eurozone. The fundamental problem, which your guest has also hit the nail on the head on is that the ecb, its become clear now that the ecb is not able to fix the underlying problems of the eurozone. In terms of the governors. The economic and the political governance of the eurozone is a shambles and mr. Draghi himself is a leader to this. Its not a coincidence that mr. Draghi has been stepping up his calls for closer political, economic and integration. Lets get back to the markets quickly. The tenyear german bund yield falling below 1 for the first time ever. Once again, it shows us concerns about disinflation, shows you the safe haven flight. Interesting stop between france and germany because the dundes bank chief said yesterday urging france to start setting an example on budget matters while today it seems as though france is slashing the deficit targets, is slashing the growth targets. Theres no reason for france to be smug about the numbers today, even if it beat germany in the Second Quarter, right . Yes, indeed. We are going to get weaker fiscal positions, thats clear. I still the think there is a call for germany to do more. In terms of wages, for example. In terms of wages. And in germany, its lower, around 1. 5 . When we talk about structural e reform. Theres more to be done. We can look further ahead with demographic challenges that are even more relevant. Investors are wading a speech by Vladimir Putin in crimea in parliament. He is on a twoday tour in the annexed region joined by various Prime Ministers. Putin is expected to visit the navy base. Meanwhile, uncertainty remains about the fate of the russian convoy. The red cross says it n information about the shipment and doesnt know despite moscow claiming it is coordinating with the organization. Meanwhile, the Prime Minister of ukraine accused russia of cynicism for sending medical and Food Supplies after allegedly arming rebels in the east. Nichol nicholas, what exactly do you expect mr. Putin to say today . I think its clear that he is going to say russia is not returning. It shows the extent to which the ukrainian crisis has escalated over the past several months, that russia and the rest are at a draw virtually over the provision of humanitarian aid. Its very clear that certainly russia is not returning. And that mr. Putin believes that he can still pull this off. Its become a very debilitating crisis. And its no longer just about ukraine. This is about two fundamentally different divisions. But history and inter nationnat relations. And thats whats very worrying. And to what extent is russia and the ukraine crisis to blame for that slowdown in Second Quarter gdp . Germany, yes, we saw that big drop in the zew. That was no surprise given that the dax had dropped almost 1,000 points in the month of july. But do you think that is here to stay or is it really just tempora temporary . I think its been underlying weakness in the export data towards central and Eastern Europe and we have to remember, if you take germany, for instance, you have an exposure to central and Eastern Europe which is quite big. So i think as long as the crisis doesnt escalate further, this should be fairley reasonable to contain. What do you think of the mixed messages that ukraine has been sending with allowing that convoy into the country . Theres a lot of confusion in terms of what were seeing in terms of western media. Can you clarify this . There is. Russia is toying with the rest. This is a huge pr stunt. Russias aim from the joit set has been to undermine, to destabilize, to discredit the ukrainian government. If russias aim is, in fact, to undermine the ukrainian governments ability to properly function and to even carry out the imf, that its supposed to be carrying out all right. Nicholas, thank you so much for that. I also want to thank anatolli, from societe generale. The twitter account for Prime Minister medvedev was hacked over a 40minute period which suggested the pm was resigning after he was, quote, ashamed at the actions of the government. Another tweet suggested he was hoping to pursue a new career as a photographer. Rossneglect has asked the government for 40 billion in order to endure sanctions from the west. A report citing government sources says the plan currently has 12 billion of Debt Repayment due at the end of this year. Russia has meat 1 . The french Government Bond yields have fallen to a record low of 11. 392 . That is according to trade webb. Coming up on todays show, he started with zilch and ended up with the 10,000 prize. Find out what the winning word was in this Years National scrabble championship a little later on in the show. And we take a look at africas largest bank and its unique relationship with china. And there could be a cleanup on aisle two as walmart sets to disappoint investigators again this quarter. And after this break, Lenovo Smartphone shipments jumped. The cost to hong kong and earnings analysis we will hear when we come back. Having the cloud allows us to rapid prototype a lot of ideas. Being able to pay as we go was crucial for a start up. Having to fork out a lot of money up front was risky. You can launch a feature really quick, and if the feature doesnt work, we havent lost anything and we can have something up and running in days. And this would not be possible without the cloud. We are now supporting over 25 million users each month. Ideas can be tried and tried again on the ibm cloud. The ibm cloud is the cloud for business. Do you need a vacation from your email . Daimler employees do. Select employees for the german carmaker can choose to have all their emails automatically deleted when theyre on vacation so they can return to the office with a clean inbox. Thats everyones dream, isnt it . What we want to know is would you choose to have your emails go on vacation or is the prospect of a Digital Detox scare you . Join the conversation here on worldwide exchange. Worldwide cnbc. Com, cnbcwex. Personally for myself, i think i would be scared to be missing out on any very, very important emails, but you know what . Maybe we should go on holiday without reading any of them. Do send in your comments to twitter and to email. Cisco has announced 6,000 job cuts to add to the 15,000 it has already announced since 2011. The network equipmentmaker has blamed uncertainty over global demand. Josh lipton has more. Cisco stock initially popping in the after hours, the tech bellwether reporting eps of 55 cents on 12. 63 billion. That was better than the street expected on both the bottom and the top. But the clear headline on the Conference Call when cisco said it plans to cut 6,000 job, thats 8 of its workforce. Analysts could jump on that and ask John Chambers about that decision. Here is what he had to tell the street. It is the most difficult decision we make as an operating committee. Were going to leave this market and be decisive in it. These cuts coming as cisco looking for growth. Revenue up 12. 63 billion. But that was basically flat year over year. It was also interesting to see what chambers had to say about geographical around the world with their strength and where theres weakness. He pointed out u. S. Orders were up 5 . But the emerging markets were a different story. China down and down hard. He said bricks, when you look at those emerging markets, they seemed to be turning around in q2 and q3, but then they declined more than anticipated. He did say with the emerging markets, there were what he called some bright spots. Specifically, he said he bet on india in a big quay. As for guidance, looking ahead, chambers telling the street and investors revenue flat to 1 and eps of 51 to 53 cents. The street was looking for 53 cents. Im josh lipton, cnbc, silicone valley. And lets continue with earnings news. Chinas lenovo Beat Estimates with a jump in profits in the fist quarter. This thanks to strong growth and smartphone shipment as the company tries to reduce its stag nabt retail pc business. Lenovo shares atoday are down b 1. 4 . Alex is Vice President of Research Equity at china securities. Thank you so much for joining us. Do these numbers give you enough optimism for the company to be able to manage the two major acquisitions worth more than 5 billion . You would think there is a lot of execution risk out there. Yes, actually, for this corner, the overall market is to estimate. Its driven by the stronger than expected pc and the continued momentum in smartphones and sector globally. Another thing i want to highlight is that lenovo has surpassed samsung to be the number one smartphonemaker in china. This year in china, its all about 4g. So being a looed er boo allow it appears in the second half of the year. What is your jo lieutenant for September Quarter . Can the company continue to gain market share . Yes. Actually, the pc demand is driven by the commercial pc, but due to the global issue, we see some management on the global intel and hp, the management came out in the past quarter revising up their estimate. Lenovo is going to do well in the pc side. We got into the smartphone side which is challenging for lenovo. Which we expect to by the end of the year. So far for the data we have received, we have confident for lenovo to turn around earlier than expected. But again, in the smartphone business, theyre only at break even level. Can they turn this around enough for analysts to be content with the event . Yes. We believe the numbers we see is Global Smartphone shipment has almost doubled on a year on year basis and on a q 1, q2 basis it is doing a very good job. We are confident that on the top line growth, it will maintain a healthy status and on the operating margin wage increase if you look at the Second Quarter numbers. Going forward, we are still very positive on the innovation. The Lenovo Smartphone business is stronger, also with theyre doing that online, a healthy test flow. Thank you so much for that, alex. Appreciate it. Vice president of equity futures for China Technology at china merchant securities. Good news for people who work early hours like us or like nights and struggle to fall and stay aclesleep, the fda has approved mercks insomnia drug. The drug could impair ones ability to drive a car, so the fda cautions people, shouldnt take more than one pill per night. Lets have a look at merck shares. No, still to come on this show, the uk Property Market shows signs of a slowdown. Are soaring home prices no longer a threat to the uk economy . We discuss after this short brock. Welcome to worldwide exchange, bringing you Business News from around the globe. Europes powerhouse runs of you of steam, the German Economy contracts after it fails to expand in the Second Quarter. Pushing tenyear bond yields from both countries to record lows. A speech by russia president putin over whether an aid convoy from moscow will be allowed to enter the ukraine. Cisco is threatening another round of job cuts as it struggles with growth. Lenovo delivers a jump in profit