Transcripts For BLOOMBERG Bloomberg 20240703

Good morning and welcome back to bloomberg daybreak europe. I am kriti gupta in london. Tension simmer in the israelhamas war as President Bidens visit fails to win over arab leaders. The area signaling full backing when it comes to israel. The u. K. Prime minister begins his middle east war today as well. A selloff is underway in asian equities. Turmoil in the middle east combined with hawkish comments from the new york fed chief pressuring sentiment across the board. We will dive into the details. Earnings season is underway. Tesla reporting on earnings miss as elon musk dials back growth expectations. On the other hand, netflix soaring after hours in the u. S. Session following a pretty big boost to. Subscriber numbers we will hit the major european numbers as well throughout the hour. Theres a lot of crosscurrents to really kind of work our way throughout. I want to start with the broader picture and talk about futures trading. Risk sentiment is sour over in asia. Its not exactly green on the screen in the u. S. And europe. Euro stoxx 50 futures following that asian lead, down about 0. 6 . Ftse 100 futures right on its heels, down 0. 3 . Even that defensive, you think the entire world is selling off, their might be that defensive bit to u. S. Assets. You are not seeing it here. S p futures down 0. 2 . We are getting to the end of the week, no real clarity on the situation in israel versus hamas. The idea being that may be middle eastern tensions, that diplomacy is not necessarily working. To what extent is this an ongoing issue . Not to mention the hawkish fed speak we are getting overnight, all of that creating a damper into sentiment. A lot of it is coming out of asia because thats where you see a lot of selling concentrated. If you look at the nikkei, the hang seng, you see a microcosm of the red on the screen that you see across the continent. Even the kospi in south korea not doing that well. Some of it is going to be the earnings story, some of that is going to be the broader sentiment that is magnified in emerging markets. Nikkei down, the currency something we are watching closely. Dollaryen on the cusp of that crucial 1. 50 level and dollaryuan, continuing to see weakness at 7. 32. I mentioned the hawkish fed speak. The two year yield, 5. 24. 10 year yield right on the cusp of 5 . Hawkish back into the rhetoric. Do you hike rates in the face of geopolitical risk . That will be a topic. Aussie dollar will be your biggest contributor to the bloomberg dollar index. It is not necessarily related to brent crude, which is trading at a 91 handle. Again, lets get to our top story, whats going on in the middle east. U. K. Prime minister rishi sunak is the latest world leader to go to israel. Is about to make a visit as part of a global effort to prevent the israel hamas war spilling into the wider region. The visit comes after the u. S. President biden signaled for backing for israel. Pres. Biden we are going to make sure we have what you need to protect your people, to defend your nation. For decades, we have ensured israels qualitative military edge. Later this week, i am going to ask the United States congress for an unprecedented support package for israels defense. Kriti the president tried to delay concerns about the deepening humanitarian crisis in gaza as israel gears up for a ground invasion. Biden says egypt has agreed to send as many as 20 truckloads into the gaza strip. Oliver click standing by in tel aviv. 7. 5 hours in tel aviv, what did he get out of it what did President Biden get out of it . Oliver this was a visit with huge symbolic importance and there was also some palpable outcomes. The most significant newsline to emerge was because he arrived just hours after that explosion at the hospital in northern gaza where there was a lot of fingerpointing going on, biden very early on said that from the evidence he sees, he did not think it came from the israeli side. That was a sort of very initial an important newsline. The other message he came to the region with is the unflinching support for israel, which is what we have heard from every u. S. Official. This message of deterrence. The u. S. Has had a one would policy on this, dont. That is a dont aimed at hezbollah, aimed at iran. He said he will continue to replenish the iron dont Defense Systems in Israel Iron Dome systems in israel, but also making reference to the carrier groups the u. S. Has sent to the Eastern Mediterranean and 2000 troops on high alert. There is a question of aid. Theres been a lot of positive noises, biden saying that there is a sort of agreement in principle from israel to create the conditions for allowing aid to go in further rafah crossing and southern border of gaza with egypt. We are entering the 13th day of this conflict with dire situations on the ground in gaza and that aid has still not moved. Kriti at the same time we are still trying to figure out whether this diplomatic push is actually working. Oli, what else does biden have to do . What else comes with this u. S. Diplomatic effort to really ease the tensions . Oliver well, i think that is really the disappointing thing about the biden visit, it lacked this diplomatic component. It was supposed to be a twopart trip. He was supposed to meet with the president of egypt and jordan, the king of jordan, as well as the men who presides over the west bank, the palestinian authority. That was canceled in the wake of that explosion in the hospital. The damage was already done, regardless of where that bomb really originally came from. We also wanted to hear from biden was his discussion with the israelis and netanyahu about the ground incursion and what was he advising their . We had a flavor of that from the speech, because he mentioned 9 11, he said the u. S. Sought justice after 9 11 but made mistakes. He said israel needs to keep clear objectives when it is trying to go after hamas and dismantle hamas and needs to be very honest with itself about whether or not the path it is on will actually yield those objectives. Biden is expected to speak again tonight from. Our reporting, we understand he wants to put a funding bill to congress for 100 billion that would go in part to israel, but also to ukraine, some funding to the indo pacific. And taiwan as well as u. S. Border control. That will be the next focal point in terms of support monetarily that will come from the u. S. Kriti thats just one piece of the equation. The europeans are starting to weigh in. Rishi sunak making a trip i believe its on the heels of olaf scholz, and some whispers that even a Emmanuel Macron may make it to the region. Oliver crook live in tel aviv, thank you for your reporting. Thats the wests approach to the region. What about the actual middle east . What are the players sing at a time when egypt is really coming into focus in terms of how much humanitarian aid they are going to give, and really how much they expect in return really for helping out . Lets get the latest from a bloombergs daybreak middle east and africa anchor, yousef gamal eldin joins us. From the very beginning, there was pressure on egypt to take in those refugees. We know the president has pushed back quite a bit. Where do we go from here . Yousef yes it was kind of a nonstarter for the egyptians. They made that very clear in the runup to the press conference that we saw late yesterday afternoon. This was with the german chancellor, olaf scholz. And you know, he spoke for a few minutes, the egyptian president , and he basically indicated that this would not be a plan that egyptians are going to sign up on. He said the israelis have plenty of space in their country to temporarily take on Palestinian Refugees. And once the gaza strip is ready for a rehabitation, than they can bring them back. There are historical ties for the palestinians to that land, so its not just an issue of logistics and expense, its also an issue of principle for the egyptians and many other arab leaders. Take a listen to what he had to say during the press conference. I offer my sincere condolences to the victims of the bombing of the National Hospital in gaza. And i affirm egypts condemnation of all military actions that target civilians in violation and clear violation of all international laws. I stress the rejection of all deliberate practices against civilians and i, on the International Community to intervene immediately to stop them. Yousef that was a little bit of a snippet but it does not quite capture how strong the message was from the egyptian president. He also added that if need be, he could show that millions of egyptian protesters could take to the streets to support the message that the egyptian president is sharing with the rest of the world, that he has public backing for the points hes making today. Kriti thats always i think been kind of the issue in egypt, that on the surface, that they are actually extremely friendly with israel, via the United States, but then that public support was lacking. Its interesting to see that uturn, at a time, the president had said if there was a plan for displacement, there is the desert of negative in israel. If egypt is not the answer, what is . Is jordan, for example, another potential solution . Yousef no, the jordanian king also maker that palestinian also made clear that Palestinian Refugees would no longer be taken up in jordan. This has been something that has been drawn out over decades. They also feel the same kind of frustration and disappointment with the lack of progress on a two state solution. I want to point to a major conference that took place, the organization of islamic operation, which islamic cooperation, which saudi arabia called up, dozens of foreign ministers, everybody from iran to morocco, all the way out to indonesia, gave a series of speeches very critical of whats happening in the gaza strip and of the israeli reaction, the dis disproportionate reaction in their view to whats happened on october 7, october 8 and onwards and the need to get behind the two state solution. It shows you from the organization of islamic cooperation side of things, they are willing to see alternatives to the un, other International Bodies that can help bring an end to all this. Kriti is a lot to digest. As we start to see a lead cross currents move and i think President Biden on his way back away from the region as well. What else is the deterrent . Do we see that ground offensive we were expecting this past weekend . Yousef gamal eldin ringing us the crucial update for the region. Stay with us. We will be having updates throughout the hour but we will be speaking with hafsa halawa from the middle east institute about egypt and its role in the israelhamas war. We will get a little bit more detail at about 6 30 a. M. London time. Later, we are joined by former u. S. Secretary of defense mark esper. That coming up on bloomberg surveillance. You can get everything you need to know on our top stories in a roundup of the other stories you need to get your day going in today edition of daybreaks. All you have to do is type in da why bigo on your bloomberg terminal. Theres a lot to digest, including the earnings story. We are already getting some of these european stories that are breaking. I want to start off with nokia specifically. They have, and said they are cutting up to 14,000 jobs to reduce some of their costs. They said its a program to reset its cost base, saying this will help with longerterm growth, enable the market to navigate the current market uncertainty. When they are talking about costs, lets talk about how much. They say it will help them by somewhere between 800 to 1. 2 billion euros by the end of 2026. That is subject to variability. Adjusted operating margin coming in a bit shyer than expected at about 8. 5 relative to 9. 4 . Renault as well is reporting as well. They are coming out and sing that they have seen sales climbing in a really big way. 10. 5 billion was their number, the estimate about 10. 7 billion, saw a slight mess but the sales really matter. The full year operating profit as well starting to see margin slip a little bit, 7 to 8 was their range, estimate was right in the middle. We are going to do a speed round of roche, thirdquarter sales coming in about 14. 3 billion, we will call the estimate about 14. 4 billion. Seeing that one right on part. Margins across the board are under pressure, whether its nokia, whether it is renault, or whether its in roche, you see that same theme across the board. We will dive into that in the hours to come. Theres one more thing to put on your radar. Speaking of earnings, tsmc will be reporting in our our. I think what you need to know is just how much pressure tsmc has been on. Net income is actually forecasted to fall about 31 . We got a taste of this yesterday with asml earnings, where they said tsmc was pressuring those numbers. We are going to hear from tcm see itself, the profit pressure being shown on your screen. We will dive into all of. For now, coming up after the brick, we will go into the u. S. Side of things. Elon musk darling back expectations for the carmaker has higher rates continue to bite. We will break down the results, next. Stick with us. This is bloomberg. Kriti welcome back to bloomberg daybreak europe. We are getting more breaking headlines on the earnings front when it comes to nestle. They are coming out with 9 million sales, amounting to about 68. 8 billion swiss francs. That estimate was about 69. 6 billion. You are seeing it kind of fall in line. You see that theme of marginal pressure. Full year the organic revenue coming in 7 to 8 . They are slightly guiding of a bit lower. Ninemonth real internal growth down about 0. 6 . Seeing a little bit of pain in nestle. I imagine it will not be met with a ton of excitement. The focus being on volume now and how much that is expected to increase into the holiday season. We will keep you apprised as we get earnings headlines from the conference call. Lets go back to the u. S. , because we are getting major tech earnings. Tesla disappointed with a miss on profit and sales. Thirdquarter eps coming in at about . 66 below street estimates. Elon musk dialing back expectations. Years of rapid expansion colliding with rising interest rates. Elon i apologize if i am perhaps more paranoid than i should be, because that might also be the case because i am, i have ptsd from 2009 bigtime. Kriti for more, lets bring in alex webb. Ptsd on the rates front, how does that factor into tesla . Alex of course, cars are expensive and there are quite a lot of people buying and do so using financing. If financing becomes more expensive, it becomes more expensive to buy cars. Tesla has been trying to expand down the price chain. It came in very much as a premium offering, competing with the likes of mercedesbenz, bmw, now it is trying to extend to the more affordable price range, a price range that needs financing. As it is just spent a huge amount of money expanding Production Capacity in shanghai, berlin and texas, it is now facing a problem of how it ensures that it uses it sells enough vehicles to give it the capacity to have profitability. Kriti the fact that they are actually talking about pulling this back at a time when commodity pressures are inching back higher up again, thats just one piece of the equation. Its a bit of a bummer for the broader index. The Positive Side is what you hear from netflix, they see upside with price hikes, the strategy is actually working . Alex netflix has a very tricky tight rope to walk. On the one hand, it basically has two levers through which it could improve earnings. Of course, it could add more subscribers, and it can increase its pricing. It has managed to increase its subscribers, which presumably suggests managers think they have the header to increase pricing as well headroom to increase pricing as well. There is talk they will be increasing prices by about two dollars, about 10 in the u. S. , and similar increases in the u. K. And france. They think there is enough resilience in the market to support that. Kriti i love that you talk about resilience in the market. When we look at subscriber growth numbers, you are not seeing them all come from the u. S. The global push is so much more important when you talk about the pricing, Currency Exposure becomes far more relevant to netflix when, for example, hypothetically, most of your growth is coming out of india, china, or south korea, then suddenly, the Pricing Matters and the pricing outside of dollars matters. Thank you so much for joining the program. I want to go from u. S. Tech earnings to u. S. Bank earnings. Morgan stanley numbers, shares plunging the most since june of 2020 after steelmakers posted the biggest drop in fees on wall street. Its Wealth Management unit had the lowest inflows in more than three years. Sonali basak has more. Morgan stanley on wednesday rounded out the big six banks reporting results for the Third Quarter of this year, with Morgan Stanley saying Wealth Management revenue fell short of expectations. Morgan stanley has the biggest wealth and Asset Management business out of his three biggest Investment Banking rivals, and it has also fell short of Net Interest Income for the quarter. It also said Investment Banking revenue had fallen more than Goldman Sachs and jp morgans further thirdquarter. Morgan stanley Ceo James Gorman and his rival, david solomon, have the signs that dealmaking could come back. There are green sheets for dealmaking in the future and these investment banks will be poised to capitalize should the market start to stabilize. I am sonali basak for Bloomberg News in new york. Kriti coming up on the program, jim jordan lost ground in his effort to become house speaker. We will bring you the details, next, and all the latest in u. S. Politics. Stick with us. This is bloomberg. Kriti lets get to some top stories from around the world. The founder of Country Garden has met with the head of China National Agricultural Development group. The developers said it is looking to deepen cooperations with the state owned firm. On wednesday, Country Garden signaled it is sent to default on a dollar bond after warning it would not be able to meet all of its offshore payments on time. Over in the u. S. , several republicans are preparing to enter the race for u. S. House speaker, as trump loyalist jim jordans bid unravels. Jordan, who was endorsed by former president donald trump, has remained in the race despite losing support with 22 republicans voting against him, two more than on tuesday. He insisted still that he is not dropping out of the race. Meanwhile, several republicans, including house budget chairman Jodey Arrington are seen as possible candidates. Sequoia is being targeted by a u. S. Congressional committee that started investigations into several other Venture Capital firms for their investment in Chinese Technology companies. It is seeking information about sequoias investments into ai, chips, and quantum computing and the asian country, as well as its recently announced split into three firms. In the split. , sequoia china was rebounded rebranded. Openai is in talks to sell existing Employee Shares at an 86 billion dollar valuation. Bloomberg has learned the startup behind chatgpt is negotiating the transaction with potential investors. If successful, it would leapfrog the likes of stripe and a chinese online retailer to become one of the world mosts valuable closely held companies. The creators of south park are in discussions with Carlyle Group for a private loan totaling around 800 million. Sources telling bloomberg best the money will be used to refinance an existing Credit Facility and fund a cash payout. The loan would be backed by various assets, including intellectual property from the hit tv show. A lot to digest, a lot going on in the private market specifically. You can see again in the face of some of the risk sentiment really souring in the pub markets, it makes sense that these loans and arrangements are held in the private space. Lets talk about those public markets. Oil is going to be a big part of the trade and has a real ripple effects across the bond market, equity market as well. You see brent crude at about a 91 handle. Nymex crude on its heels, trading with an 88 handle. On the surface, it does not look like there is much going on but let me walk you through it. On friday when we saw the initial geopolitical risk start to fall out, use our call option volume on commodities really grow quite substantially. A lot of people diving into the oil market as a geopolitical risk hedge. To see these marginal moves on the lower end really does not speak to the fundamentals, it speaks a lot to positioning. Thats been the take from a lot of strategists across wall street. The readthrough into oil from the geopolitical risk is not as clear, simply because we are waiting to see what happens to iran. Do you start to see more american sanctions on iran . Does oil output really drop when you look into that context . That is going to be the gauge that has report effect into Monetary Policy and the equity market as well when you talk about inflation into the broader story. I am going to talk about the main story that we have work been meant. Covering we will get the latest on the israel Hamas Conflict and the humanitarian crisis. Hafsa halawa from the middle east institute joins us, next. Stick with us. This is bloomberg. Kriti good morning and welcome back to bloomberg daybreak europe. I am kriti gupta in london. Lets get to the top stories that set your agenda. Tensions simmer in the israelhamas war as President Bidens visit fails to win over arab leaders. The u. S. , however, signaling full backing when it comes to israel. The u. K. Prime minister begins his middle east tour today as well. A selloff is underway in asian equities. Turmoil in the middle east combined with hawkish comments from the new york fed chief pressuring sentiment across the board. Plus, earnings season is underway. Tesla reporting an earnings miss as elon musk dials back growth expectations. On the other hand, netflix soaring after hours following a larger than expected boost to subscriber numbers we also get some major european earnings drop hours. Monetary policy on the one hand, geopolitics, and the micro from a lot of these company stories. I think what that equals is a lot a people pulling out of this market. Thats traditional what we see before a weakened. Right now, futures taking a bit of a hit. Euro stoxx 50 futures down, ftse 100 on its heels, down about 0. 3 as well. Look at the u. S. Session, you do not really see the bid, which speaks to the idea that there is that defensive bid in the market, it is just not showing up in the equities space. I would argue it is showing up in the commodities space. In asia, you see some real selling momentum. The nikkei and hang seng, moves of almost 2 lower on the day and that does not begin to dive into what you see in south korea. Dollaryen will be top of mind. We are crucial just shy of that crucial 1. 50 level. Dollaryusn as well dollaryuan as well, we are seeing a lot of weakness across the board. It speaks to risk sentiment, Risk Appetite souring. The cross as a picture is going to be a similar theme. Take a look at the two year yield, yields already higher. Its not like there isnt going to be some sort of hawkish reaper, although we did get those comments hawkish readthrough, although we did get those comments oestreich, is the fact that you dont want to be involved in this market when you dont know what the geopolitical risk is going to result in. The dollar catching a bid, your biggest mover on the bloomberg dollar index will be the aussie dollar, i would argue following a little bit of commodity picture. Brent crude down by about is our. 3 . I want to get back to our top story. Geopolitics are baked into the u. K. s narrative. U. K. Prime minister rishi sunak is the latest world leader to go to israel. He is about to make a visit as part of a global effort to prevent the israel hamas war spiraling into the wider region. Sunaks visit comes after u. S. President biden signaled for backing for israel. Pres. Biden we are going to make sure we have what you need to protect your people, to defend your nation. For decades, we have ensured israels qualitative military edge. And later this week, i am going to ask the United States congress for an unprecedented support package for israels defense. Kriti biden also tried to allay concerns about the deepening humanitarian crisis in gaza as israel gears up for a ground invasion. Biden says egypt has agreed to send as many as 20 truckloads of aid into the gaza strip. Lets get the latest from bloombergs oliver crook standing by in tel aviv. A really short trip for the president , what did he actually get out of it . Oliver it was a really short trip for the president and a really difficult trip for the president , even before there was the explosion of the hospital in northern gaza, which completely rewrote the script for what biden could hope to achieve in the region. This was supposed to be eight twoleggett trip, it was reduced to just one. He came to lend his total support for israel, which she did once again, saying they are never alone while the United States is around. And of course, deterrence. We have two an Aircraft Carrier fleets headed to the Eastern Mediterranean, 2000 american troops on high to deter iran and hezbollah. The question of aid is still at this point unresolved, extensively, one of the very few things we could say came from this trip was biden saying there was progress made on eight on the israeli side and also on the egyptian side. As we entered the 13th day of this conflict with absolutely devastating humanitarian conditions in gaza, that aid is still stuck at the southern border of gaza and egypt at the rough a Border Crossing. Kriti where do we go from here . Feels like we are on this revolving door of World Leaders going to israel. I think when this was first announced, it was thought it would be some kind of deterrent from the rest of the world, if there is a leader from the west, maybe there wont be as much of a risk of this becoming a wider conflict. Is that where we are at . Oliver we were expecting rishi sunak today, we had olaf scholz, biden today. There were no air raid sirens in tel aviv while biden was here, so perhaps a deterrent of some kind. We have a lot of Unanswered Questions from bidens visit. He did not meet with the president of egypt, the king of jordan and the man who presides over the west bank. This was supposed to be part of the trip. Theres also the question of the ground offensive. What are the conversations that biden had with israeli officials . Antony blinken saying it is important, despite the fact that there is full support for israel, how they go about dismantling hamas. If you read between the lines of what biden said yesterday, when he talked about 9 11, he said the u. S. Sought justice after 9 11 but made mistakes. He said you need to be very clear eyed on your objectives and honest with yourself about the path you are pursuing, if that is going to achieve those objectives. What we are looking to is bidens remarks tonight. We understand he will speak from the oval office, which usually comes with some degree of gravitas. That can be a request for 100 billion worth of aid to israel but also ukraine, some funding to the indo pacific and taiwan and the u. S. Border. That is what we will be watching for from the president later today. Kriti yousef a lot to digest kriti a lot to digest. Seeing the comments from the president basically admitting the fallout of the 9 11 disaster basically was quite telling about his morning. It held i think for a lot of americans who are watching quite a bit of weight. Bloombergs oliver crook live in tel aviv, thank you for your reporting. Following his trip to israel, biden says egypts president has agreed to allow up to 20 trucks of aid into gaza. Joining us now, hafsa halawa, the nonresident scholar at the middle east institute. A pleasure to have you on the program. A lot of uturns when it comes to how egypt plays a role in this conflict. I think we started out with some real hesitation from president sisi about how involved and how much exposure and how much help here they wanted to give to the crisis. Why do you think this uturn happened . Hafsa well, thank you very much for having me. I think it is important to actually sort of clarify egypts position and also kind of debunk a bit this narrative that egypt has deliberately been obfuscating, its been blocking the border, and it is preventing all kinds of aid or support to get in. Egypt has been very clear from the beginning. In fact, despite claims to the contrary, up until sunday morning when the bombardment began late on saturday night, the seventh, the crossing was open. There are specific protocols, there are regulations, but it has not been permanently closed for some time. Egypt positions was very clear that they wanted to focus on getting humanitarian aid in. They opened up the military airport and northern sinai. And since very early on in this conflict have been receiving significant amounts of aid, not just in support of the gazans from a number of neighboring countries, but also allowing the un to use that airport, which is just a few hours drive from the crossing, to be able to service the Border Crossing in that sense. And i think its very important to highlight egypts main concerns. Egypt has very Real Security concerns. The border was shelled, close to the border was shelled on sunday, the eighth of october. There have been 4 incidents of shelling since then, the last coming just two days ago, which egypt argue have made the crossing border on incredibly insecure, both in terms of roads leading to the crossing, which have been damaged, and the foreign minister was very clear yesterday that they need some kind of security guarantees on the border and they need some kind of commitment or some kind of way to make these roads usable to allow this aid in. Egypt is very committed to having aid in and having aid cross. You need special permission to do so but it will not do so without various guarantees and it will not do so if that entails opening up their borders to allow hundreds of thousands, if not more, palestinians stream into sinai peninsula. Kriti to your point, we know that this is not just a purely humanitarian story, this is an economic story. You are on a financial network. Egypts economy has been struggling with incredibly high inflation. Its mankind of the black sheep of the em debt world, if you will. Bringing on more population will only pressure its economy more. When youre talking about that humanitarian aid on the rafah crossing, i think public sentiment really matters as well. If you look within egypt, there does not seem to be a ton of support for taking this on. Hafsa, do you see that alleviating at any point . Hafsa i think its really important with this particular crisis, unlike the sudan war, where egypt has since absorbed 280,000 sudanese, i dont want to call them refugees certainly, but certainly many have come with income up. That is a different political question to this one with the palestinian question. The bigger issue here is not necessarily the economic burden of absorbing refugees, which very rightly you mention is would be great on egypt and its particular economic crisis at this time. It is much more a political question that they refuse to tyler mass displacement refuse to tolerate mass displacement of the palestinians , which they view would be permanent. As weve seen in previous conflicts of the palestinians in various other moments like this, are moments similar to this. And on top of that, there is not, i would not say just broader, i would say there is almost total support inside egypt to continue to hold this line, in the case of allowing refugees in. That is very much about the support to the palestinian cause. For the first time, president sisi has sanctioned protests in this regard. On friday, there will be large gatherings, there will be a sit in at the crossing to put pressure on the u. S. And israel to allow the age to go in. Kriti your mentioning the United States here specifically. In our short time we have left, i want to talk to you about this idea of the u. S. And other western leaders actually being a deterrent. You worked out beautifully the issues you see in egypt and i think a lot of them apply to jordan as well, which is also dealing with a big chunk of the is really border. Hafsa, the idea of the west been able to deter this from becoming a broader regional conflict, is that a fools dream . What is your thought . Hafsa i think that there was immense expectation on President Biden, particularly after the summit was canceled and we knew he was only going to israel and he would speak to regional leaders on the phone. The broader regional reaction since his visit and the statements hes made has been largely negative. This idea of absolute, if not unconditional, support to israel has been something that has lingered in terms of wider antiu. S. Sentiment in this region for many years, way before 9 11 i would argue, if only compounded by the events of the iraq war and so forth. Its really going to put regional allies in a very difficult position where their people are very clearly taking to the streets, very clearly uniting to say that they want to see a cease fire, they want this to stop, and they want discontinued bombardment and attack on the palestinians to end. And the regional leaders really do not have much leverage in this regard with the u. S. Promising massive packages of military aid. It appears to show that the u. S. Is getting into this fight, if not with boots on the ground, certainly with its equipment, aid increasing, already large amounts of aid to israel. That does not give them any confidence that the west will be led by the u. S. A great deterrent in combing tensions right now. Kriti essentially, the fallout of the summit that President Biden was there for 7. 5 hours i nothing more is quite telling. Hafsa halawa, we have to leave it there but we thank you so much for joining the program. She is the nonresident scholar at the middle east institute. Much more still ahead. Stick with us. This is bloomberg. Kriti i want to bring you some breaking headlines. We got tsmc numbers 10 minutes ago. Net income beating estimates, profits beating estimates. And a lot of it coming from that ai shipped demand. The profit numbers are pretty substantial. They are saying it was a better than feared 11 slide in revenue, that was previously reported, but they came up pretty strong. 6. 5 billion versus profit, that was about 211 billion in the new taiwan dollar as well. Great numbers out of to cmc off the heels of out of tsmc often shows him asml yesterday, which said tsmc was a problem child. This go to bloombergs avril hong with all the details. What stands out to you in these earning results . Avril just looking at these numbers, yes, we have that margin and that profit beat for to cmc but i think one of the key considerations tsmc, but i think one of the considerations is how this was affected because of the weakness in the taiwan dollar at that time. That might have affected the numbers we are seeing based on Gross Margins at the moment. There was a lot of pessimism going into this results. We had those concerns as you flag from asml about how those orders for the Third Quarter had punched. Asml has tsmc as its biggest client so there was a big hurdle to overcome in terms of Investor Confidence and perhaps the outlook on what they were expecting of tsmc. There was also the continued concerns about whether whatever ai boom we will be getting will be enough to offset the slogan the Semi Conductor sector overall no slowing in the Semi Conductor sector overall. On the back of this, we are seeing it is probably going to be needing its guidance for the year but it is still slower paced than usual. Typically, investors think it is great, you know, when we have a company cutting costs. For tsmc, the concern here is really that this signals what it actually expects, in terms of protracted recovery and sluggish chip demand potentially. Kriti lets talk about you trade the stock. If you look at Bear Sentiment around it, theres a lot of that. Walk us through that dynamic. Avril yeah, i think we have seen, you know, that bearishness coming through in terms of the price of the stock. It is down some 9 since the highs we saw around june, tens of billions in market cap wiped out. It is a trailing the taiex. We are seeing put to call ratio near the highest level we have seen this year. Overall, there is a lot of and negative sentiment on the stock. There might be some recalibration when markets are returned to trade tomorrow, given the beat we see on the earnings front but lets not forget that two of its biggest clients, apple this week flagging a how we are seeing those week, a slow start to iphone sales in china and nvidia flagging productions now with u. S. Stepping up efforts to curb the china side of things. Definitely these are continued concerns for tsmc. Kriti a lot of geopolitics in the woodwork. Tsmc and asml dealing with that. Avril hong in singapore with the crucial update. I am going to pull one more on your radar, pernod per card sales coming up, sales dropping by 8 Pernod Ricard sales coming up, sales dropping by 8 . The regional storys importance, maker of absinthe vodka, jamison whiskey. They are saying we can still make the guidance but at the end of the day, those organic sales dropping pretty substantially. Coming up, we discuss a Sustainable Future economy within the norway based Growth Equity fund. Stick with us. This is bloomberg. Id like to thank stitch fix for always making me look great. For taking care of the shopping. So i can take care of this. Id like to thank my stylist, now getting dressed is so easy. Thanks for getting my fit just right. For finding me looks that work for me and my budget. For finding me my favorite pair of jeans. Id like to thank stitch fix because, i look good. Thanks stitch fix, you just get me. They get me. You just get me. And theyll get you, too. Take your style quiz today. Kriti virgin Capital Advisors has raised 1. 2 billion for its latest fund. Investors in the norway based Growth Equity fund include private and public pension funds, university endowments, and family offices. Verdane only backs businesses that passes 2040 test. A high bar for the company. Joining me now, bjarne kveim lie , cofounder and managing partner there joins me right here on set. Some High Expectations when it comes to sustainability. How realistic is that goal . Bjarne i think what you refer to now is our 2040 test. That basically says that businesses can survive and do well and actually benefit from externalities being pressed, carbon at 200 tons, regulations change around waste, for example, Consumer Preferences change, we think thats good business, because it future proofs are companies. Kriti does that create an economic incentive to not invest in what the infrastructure that currently exists . What i am thinking of, for example, is a lot of these fiscal initiatives in the u. S. And europe as well that take a really long time. Does that leave you exposed from an investment standpoint . Bjarne the filter around 2040 test, i dont think that does it. Its certain things we dont, other people do them and they need to be done. For example, we chose a long time ago to step away from fast fashion, because we think that model is not sustainable. That leaves an ample universe still. I think that is sort of the structural growth wave of digitization and decarbonization, theres ample opportunity to grow. Kriti from a sectoral perspective, where do you end up seeing your fund attracted the most . The tech space, are you actively leaning away from Oil Companies . How does that work . Bjarne we divested from our last oil and Gas Technology investment. We said this is not the structural Growth Market anymore. Weve been in this industry for a long time, there will be ups and downs, but structural growth, new markets typically enable technology, we seek those elsewhere. We seek that, digitization and decarbonization, consumer services, the entire sort of efficiency transition, massive landscape we think. Kriti it feels like you are leaning more technology focused, that feels like the easy way out when it comes to the sustainable investing. Talk to us about it from a regional perspective. Europe is not known for their edge in tech, relative to china and the u. S. From a regional perspective, which countries in the lead . Bjarne i think what we call joking beer drinking europe. We have offices across the nordics and germany and here and we think they are regionally in the lead in europe. I think europe is global in the lead when it comes to some of these areas. What we are talking about when we talk about tech, tech enabled markets more than deep tech. This is not about heavy investments in ai, the latest chip technology. Its a combination of technology, that means regulation, consumer preference. In that area, northern europe, the Nordic Region is globally leading. Kriti the fact you are divesting away from fast fashion because thats not a trend you think will cross 2040 is i think fascinating. We will bring you back on the program to talk about your latest investments shortly. Bjarne kveim lie, the cofounder and managing partner there. We thank you so much for your time. We have a slew of earnings interviews coming up today, including allison kirk b and roche ceo Thomas Schneider i think is how you say it. Make sure you turn into those, both great interviews. The european markets open coming up shortly. Right now, markets today begins. This is bloomberg. When people come, they say theyve tried lots of diets, nothings worked or theyve lost the same 10, 20, 50 pounds over and over again. They need a real solution. Ive always fought with 510 pounds all the time. Eating all these Different Things and nothings ever working. Ive done the diets, all the diets. Before golo, i was barely eating but the weight wasnt going anywhere. The secret to losing weight and keeping it off is managing insulin and glucose. Golo takes a systematic approach to eating that focuses on optimizing insulin levels. We tackle the cause of weight gain, not just the symptom. When you have good metabolic health, weight loss is easy. 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