Transcripts For BLOOMBERG Bloomberg 20240703

Bond traders price of fed rate cut one month earlier in november ahead of todays key u. S. Jobs report. Apple jumps after hours as it forecasts a return to sales growth. The iphone maker announcing a 110 billion Share Buyback, the biggest in u. S. History. In europe, the focus switches to banks with french lenders in the spotlight. Socgen reporting a profit beat as equity traders help lift results. A beat across the french lender. First quarter net income coming in at 1. 9 billion euros. Profits comfortably above the estimates of 1. 5 billion euros. Full year underlying net income at 6 billion euros. Rev knows for the First Quarter, 6. 8 one billion euros. Above the estimates for Credit Agricole in terms of some of the other details around this earnings picture. The Investment Banking side of the business also coming in with a beat. Upbeat in revenues, profits, in terms of the Investment Banking side of the business for Credit Agricole. The stock is up 13 year to date. The deputy ceo of Credit Agricole will be joining markets in the next hour. His thoughts on the beat that came through. Soft and also coming through with a beat in the headlines. The profit beat coming through. It was the Equities Team doing the heavy lifting with revenue there within that unit coming in and again of 3 . Not in line with its wall street rivals but better than expected. Socgen First Quarter net income 680 Million Euros versus the estimates of 556 Million Euros. Faced income sales a little bit softer than expected. Is the equities component of this business in the First Quarter that did the heavy lifting. Revenue coming in at 870 Million Euros above the estimate. Decent beat. We will get the details on the reaction for that with a check on the pricing at 8 00 u. K. Time. The lift coming through from apple. Better than expected particularly in this quarter. The outlook, consequential. That record buyback, historic for the u. S. 110 billion u. S. Dollars. The tech optimism is back for equity markets as we look ahead to the key jobs data with a lens on the wage growth within that mix. European futures pointed at too tense of 1 . Looking to add 12 points. The s p building on the gains of yesterday, looking to add two tense of 1 . Nasdaq futures in positive territory. Looking to gain five tense of 1 . Cross asset. Japan is close. You did see a decent run down and yields. Yields dropping around nine basis points across the 10 year yield yesterday. The twoyear getting some action and focus. The best two day for shorts and treasuries since january. Five basis point move on the 10 year and nine basis point move. The bloomberg dollar index is softer. That is helping in terms of the pressure. The japanese yen, the best gains that weve seen in terms of three weak eyes against the u. S. Dollar. Intervention is the expectation. Brent up two tense of 1 . A little bit of again. Lets crossover to april hong in singapore. Avril asian stocks headed for gains today. A week where the Federal Reserve was not as hawkish as fear. Apples outlook lifting the mood. We are seeing some gains though not by much on the south korean and taiwanese gauges. Leading the pack is a hung saying. Underpinned by the chinese tech names. Alibaba, tencent, may 2 on. The hung saying is on its longest winning streak since 2018. I will get to whether this has legs in just a bit. Nikkei futures in singapore pointing to declines at the start of trade. Markets returned from the long weekend. I think it has something to do with what we are seeing on dollaryen. We started the week no thanks to a dovish boj. Thats quite a recovery this week, helped along by those intervention expectations and speculation that we saw this week along with how the dollar slump. The recovery we are seeing on the yens its best week against not just the dollar but the pound, the euro since december 2022. In the past 24 hours, the moves have been fairly steady. It doesnt smell like intervention. More likely, this is the trimming of positions. We came into this week with massive shorts. That was the mood on the markets. Lets take a look at what we are seeing on the hong kong stock gauges. This chart will show you, they are well into overboard territory. I know it looks like a tiedye shirt. The point is, it makes you wonder how much of this is the fear of missing out. Worth considering, when you take a look at the chinese tech valuations, still well below historical averages and that of their global peers. Lets take a look at the apple suppliers. A couple that i wanted to highlight including lg. That stock up about 5 today. This is the ninth day of gains. The best winning streak since it was listed. Takes about 80 of its revenue from apple. Not a bad way to end the week. Tom a check on the asian markets. Focus on apple. We continue the details around that story. Apple shares jumping in late trading in the u. S. After strongerthanexpected sales last quarter and a forecast for a return to growth in the current time. But iphone maker announcing the largest Share Buyback in u. S. History. Lets get the details from bloomberg intelligence. What surprises are there in these earnings . The Biggest Surprise was the relative strength in china. Theyve been well flight for several months now. Particularly on the iphone. So sales were down about 8 . Tim cook was very clear on the call that the iphone was better than people expected. Took the number one and number two piece in terms of market shares in urban china last quarter. From its recent visit to china, things are going well. Time after time, analysts asking the question, is china doing that well . It doesnt reconcile with what weve been doing seeing on our channel checks. We are still confident about it. Tom wouldnt break the iphone numbers. In terms of what investors are looking for from apple in the quarters ahead then. Big picture, they are looking for the next big thing. They want this to be a topline growth stock. It clearly isnt right now. One or 2 , not much. Two things coming up, one is ipad refresh next week. May 7 announcement. Bigger than that in june, the Worldwide Development conference where they will reveal more about ai plans. Lots of questions on the call yesterday about those plans. A couple of keys or clues and what tim cook said at the beginning of his prepared remarks. He said they bring a unique combination of hardware and software and services to the table. I think it will be quite interesting. That might be something in terms of the Service Proposition but also may the iphone refresh later this year. Something more exciting. Maybe its going to get more people upgrading iphones. The replacement cycle on smartphones has been stretching. They need to shrink again to get more sales momentum. Tom really interesting. As you say, really consequential. Analyst investors singing, we want this to be a growth stock again. Buybacks and dividends from apple. Thank you very much. To the macro now. Bond traders moving forward expectations for the Federal Reserves first full Interest Rate cut by a month from december to november next on the radar. Key u. S. Jobs data out later today. Kriti gupta is here with a preview. What you what will you be scrutinizing . The headline numbers will be important. Wage Growth Numbers are extra important. One of the key pieces of the inflationary story has been services inflation. The housing numbers and Wage Inflation numbers. I will get really nerdy here. Things like ambulance drivers and how much they get paid. I dove in deep. Things like that. They are getting paid extra, more money than they traditionally have. Its those pieces of the labor market that are starting to see these bumps that are driving Services Data and the broader inflationary story. Thats important when we put that into the context of housing numbers as well. Housing has a wealth effect when it comes to everyday consumers and how much they own in addition to the stock market as well. Services at the core of all of that. Whats also important is that the whole purpose of tackling inflation in the first place is to tackle the affordability question as well. That americans and their counterparts in other parts of the world need to be able to afford groceries. If real wages are catching up or outpacing the inflationary measure, is that an issue . Thats what a lot of people are talking about in terms of resilience. Thats where the headline number matters more. The average number precovid was 200,000. Thats a very normal number. The whisper number is 247. So still its coming in quite hot. Its a mark to drop from the numbers we got last month for the previous month but is still a higher estimate that we saw in the entire back half of last year. If we are looking at the theme of the market being hot and inflation taking higher, the answer for a lot of people is yes based off of these estimates. Tom i wonder what you make of the Market Reaction and repricing around the fed. There has been so much choppiness there. Now you see that moving lower in terms of yield. The market pricing, the november cut. What do you make of the ways a market is adjusting . It could be a nothing burger. Heres why i say that. You are not supposed to say that is a journalist. Weve gotten so much of it earlier this week from the Federal Reserve, from the treasury funding announcements. Pay attention to the yield curve. The take away from chair powell was the quantitative tightening piece. Youre keeping yields high but you are pulling back a little bit on the long end. That manipulates the curve. That isnt happening until the start of june so we are still a month away. You will see a lot of traders front run that. What does that mean for the labor market if it comes in hotter than the average of last year when inflation was coming down . That could be a concern. You are not going to see them in the long run. You are going to see that on the frontend where to year yields stay up of 5 . Does the start stock market react more harshly . Does oil move with it . Does the dollar have the Ripple Effect . The fed swaps themselves may not move that much. Theyve moved a cup to november. There is still election risk and a lot of data between now and then. Tom setting us up really nicely with a preview of the nonfarm payrolls made up. Scrutinizing the earnings component. 240,000 is the forecast. 7 40 five u. K. Time, french Industrial Production data will be coming out. More color in terms of the health of the french economy. 9 00 u. K. Time, the Bank Decision as well. None 00 u. K. Time. Today, hsbc with a focus on what they will do and the decision around so bonus cap. With a aligned with u. K. Government policy . Goldman sachs has gone in that direction. Coming up, oil set for the biggest weekly drop since february. Signs of easing geopolitical risks in the middle east. All the details across the oil space, next. This is bloomberg. Tom welcome back to bloomberg daybreak europe. Happy friday. Earnings have missed estimates as a plunge in profits dragged on performance. Unit had become a major profit engine in recent years for the australian firm. The contribution fell 47 on the prior year as Energy Shocks from wars in ukraine and the middle east subsided. Gazprom group has posted its first annual loss since 1999, driven by falling shipments to europe and lower gas prices. The russian statecontrolled gas giant reported a loss of 6. 8 billion u. S. Dollars. Gas flows to europe have been restricted among the retaliation for western support of ukraine after russias invasion in 2022. Lets check in on the oil markets as well. A lot of factors to think about in the oil markets in the last few days in terms of inventories, stockpiles, a potential ceasefire in the middle east. Brent is down in the last 30 days. As you can see in the session, up over 3 10 of 1 . Wti below 80 per barrel. Lets unpack some of this and bring in our seen or Energy Reporter joining us out of singapore. Walk us through what weve been seeing in the oil markets and how markets investors have started to recalibrate their views on oil. Yeah. A few weeks ago, we hit a peak for oil after iran attacked israel directly and then israel had the counteroffensive there. You saw prices jump up above 90 for brent. Since then, theres been a steady decline, down roughly 10 . Thats largely driven by that war risk receding. The u. S. Has stood pretty firm saying, asking israel and urging them not to further retaliate against iran which would potentially risk that spiraling into a proxy war. In a worstcase scenario, Oil Production in the region as well as flows through the strait of hormuz which makes up 30 of oil trade goes through that key conduit. Because the risk has receded, youve seen prices really deflate. So thats the one thing. The other thing as well is the fundamentals. Weve had bearish data out of the United States. Larger than normal gains in oil product inventories. At the same time, theres indications that gasoline demand and demand for products arent terribly strong right now in the United States leading up to the peak driving season. When summer starts, everyone goes on a trip. Theres fears that there wont be a lot of demand in the United States. As well, chinese demand hasnt been as resilient. It hasnt been as resilient as some had been expecting. Thats a more complicated picture because theres factory data that has recently been released. That has shown a positive economic increase two months in a row of positive factory data out of china. That being said, the picture is showing that maybe we arent in a march to 100 brent. We will be playing in the 80 range for a while. Tom rather than 100 that some analysts had forecast. What other catalysts are you looking for . Where does opec stand at this point . Certainly theres a big question as to where u. S. Gasoline demand is going to be. I dont have the crystal ball. Its hard to say how that will pan out. I think once the data starts to come in, use could see prices rise or fall. When you talk about opecplus, thats the next big question. Theyve held production cuts steady for the second quarter. What are they going to do for the Third Quarter . If oil prices are sliding, if we arent so worried about an oil deficit in the market, maybe opecplus keeps these cuts going into the Third Quarter. Theres also a matter of compliance. Is a rack going to hit their production cuts . Theyve struggled to do so in the fast but they have committed to reducing their production. Russian oil output has been a bit more resilient than some of the market was expecting. Is that going to be reduced because of the war in ukraine . There have been drawn attacks on refining facilities as well. Will they reduced to hit opecplus targets . Its a question, will these cuts continue through the Third Quarter . If it does, you could see prices remain higher in this 80 range. If they dont, we could see prices fall and the market be flooded with more oil. Tom the granular detail on these oil markets. Thank you very much indeed. Coming up, how polysilicon supply chains are causing a trade war. Our weekly deep dive into the Green Energy Transition is next. This is bloomberg. Tom welcome back. Time now for our weekly deep dive into the Green Energy Transition. This week, we look at polysilicon. Used in most solar modules. Why u. S. China trade tensions have made it a hot commodity. Why are governments supporting policy production outside of china then . Mostly its the u. S. That is supporting this policy of production outside of china. Last month, the u. S. Awarded 256 million tax credit to accompany to build the first greenfield polysilicon out of china for years. The reason that the u. S. Is doing this is that china makes about 95 of the worlds polysilicon. Mostly in a province where there are Human Rights Concerns and therefore restrictions on exporting it to the u. S. Clearly this is something of a dependence worldwide. China makes 95 of the stuff. Tom offering a Technology Edge over the heavyweights in the industry. Talk to us about the positioning amongst these different players then. Ok. Polysilicon has two major production methods. One process which is about 85 of the market and a reactor which is quite similar actually. Highland materials which is a company that ive never heard of. I was a bit surprised to see that on the list. Highland materials says it doesnt do either. What it sounds like is that its probably doing a technology called upgraded metal logical silicon. Its interesting because that has never been successful. This is a longshot. It is supposed to be a lowenergy, low capex alternative but i would stress that this has never really worked before. It has been quite extensively invested in. So who knows whats going on there. Tom ok. There are other dynamics than supporting production outside of china at this point. There are. In 2022, the u. S. Brought in something called the forced labor prevention act which means that polysilicon used in modules like go to the u. S. Needs to have paperwork proving that its entire supply chain is not in that region. The results of this is that polysilicon from outside of china currently trades at a premium of about three times, eight dollars per kilogram from china and about 22 a kilogram from elsewhere. So theres an incentive to manufacture outside of china but it probably isnt sufficient to set up entire capex intensive hemi chemicals plans. This is the first announcement in years. Tom ok. Thank you very much indeed. A focus on the changes around polysilicon production and the consequences for the broader solar industry. Thank you. Coming up, the spanish food dynasty is launching what is said to be the biggest european listing this year. We will have the details, next. Stay with us. This is bloomberg. When i was your age, we never had anything like this. What . Wifi . Wifi that works all over the house, even the basement. The basement. So i can finally throw that party. And invite shannon barnes. Dream do come true. Xfinity gives you reliable wifi with walltowall coverage on all your devices, even when everyone is online. Maybe well even get married one day. I wonder what i will be doing . Probably still living here with mom and dad. Fast reliable speeds right where you need them. Thats walltowall its an amazing thing when you show generosity of spirit to someone. And you want people to be saved and to have a better life, then you dont stop. We have been able to reach over 100 Million People impacted and affected, and at risk of hiv. The rocket fund takes all of the work that were doing, all over the world, and looks at the most effective ways, to get resources to them, to get services to them. The idea that we have saved five Million Peoples lives, its overwhelming. Its everything. Good morning, i am tom mckenzie. A rally in hong kong leads markets higher. Traders price a fed rate cut earlier. The iphone maker announcing a Share Buyback, the biggest in history. In europe, saw jen reports a profit as equity traders record a beats european futures adding points. S p futures adding 2 10 of 1 they record buyback. Lets look cross asset, not getting a print on treasuries, playing into japan with the yen a three week high. Long gone are the days of 160. Intervention speculation continues. Currency is up. Brent is below 84. Up 3 10 of 1 and gold is popping on the yellow metal. Spotlight on european and french banks, profits ahead of estimates as traders lift results. Credit agricole reporting upbeat. Were joined by charlie wells. How does soft jen pull this off . It is up 7 broadly on the stock 600. They got a boost from equities, an increase of 3 . There is softness, we are seeing some hedges weighing on Net Interest Income and this ties into the push to streamline. They announced 900 job cuts and the beat will alleviate some. Tom bit of relief. The lion seemed to be positive for Credit Agricole. Give us the details. Charlie Large Customer unit houses their bank and give them a boost. Revenue hit a record so that will be positive. When you look back weve got the Second Largest Bank in the Third Largest bank that got a beat. Very good morning because bmp had a beat. This tells a positive story. Tom we will see how much of a lift comes through. Weve had european banks coming through, what is your topline view . Positive across the continent when you look at that stock as i mentioned up 16 , doing well. Hsbc is a story that investors like. Tom charlie wells, thank you indeed. The ceo of Credit Agricole will be joining the markets today team, an exclusive interview, tune in. Londons top bankers may have a paycheck that looks like packages of new york counterparts with Goldman Sachs paving the way. They are set to vote, decisions, after a on bonuses was scrapped to make london appealing. Wall street paydays may be coming to london. Six months since the u. K. Lifted a cap on bonuses that limited them, a legacy of the financial crisis and far cry from the millions that traders in new york make. Its up to shareholders and banks putting the matter to vote. If proposals pass, the process could begin in time for bonus season which wall street has counted on to pay for private schools, luxury homes and expensive cars. U. K. Officials are battling to maintain londons position as a Global Financial center. Overhauling pay could have consequences. U. K. Bankers salaries increased and they could face reductions. European rivals could find themselves at a disadvantage. It is a concern when regulations, when we are active, start to move in a way that places competitors at a disadvantage. Advisers recommend Shareholders Approve the measures. A sign they are likely to pass. No longer will rainmakers in london feel like poor cousins. Deutsche bank is planning to double assets for rich families in asia and the middle east. The lender says hide that worth individuals are keen to invest in Southeast Asia in hong kong. They manage 650 billion for rich clients. s vanish dynasty the pooch family is launching europes biggest listing. After raising 2. 6 billion euros, lets bring in bloombergs menu well. What are you expecting from the launch . Manwell . Major events taking place today with the largest ipo in europe trading. It is phenomenal. Weve been covering the company very thoroughly in the past few months, they have an ipo, big news because the market is hungry for successful ipos and investors need good news. To bring back confidence and there has been a huge amount for this ipo, priced at the top and, it is a formidable and Solid Company with lots of growth, very profitable with huge brands behind it, so a company that should do well, we will see how it performs, but a lot of expectations in the listing today. You answered an important question. Is this signaling a rebound in listings . I know you scrutinize the story. Yes, it is a big question on the horizon, its looking better and in europe we have seen some signs of improvement in the market this year, today will be a test in the u. S. , weve seen sizable ipos taking place recently. Here in asia, sentiment remains challenged, muted in venues such as hong kong where it is still a far cry from the boom years, still a lot of challenging unforeseen challenges, but definitely europe and the u. S. Is looking better and the ipo today will be a good sign, of the three, asia is more challenging. Tom really interesting on the details for europe. That is the story earlier about demand. Thank you indeed. Sony and apollo made a bid for paramount global. They offer is a nonbinding offer and paramount weighed a proposal from the hell of sky dance. Hong kong watchdogs launched proceedings against edge fund capital. The ssc alleges dealing before a block trade. The company deny the allegations. Coming up, results from last nights u. K. Elections. What is the take away for the Prime Ministers conservative party . That conversation is next, this is bloomberg. Welcome back to daybreak europe. U. K. Election results are streaming in with the opposition making gains. Winning a by election in a below for richey sumac. Some wanted a shellacking for the tories, how bad was it . Reporter results will trickle in until sunday. A key result, the most important result today is blackpool south. Scott benton stood down following the lobbying scandal in the swing to labor is 26 percent, thirdlargest election swing sense the second world war. Conservatives have to contend with a rightwing group that has risen up. Best performance ever, so they have to look over both shoulders. Tom reform getting 17 . That result was a by election. What signals do we get about the fortunes of the labour party and how this sets up the labour party . Lizzie the more conservatives lose, the more it reinforces that they are on the path to downing street. Robert haywood predicted losses in local elections. Jeremy heintz prepared everyone, saying he was braced for losses. Another expert in the u. K. , john curtiss has said these results are not like anything put forward the landslide for tony blair where you solve more success locally than today. This is more like last year, not the big bloodbath that some feared, but it will not give comfort to soon act. Tom how results compared to last year leading up to tony blairs victory in 97. Any results you will scrutinize . Lizzie the two key races, actually it is not definite that they are going to lose. Theyre both conservatives and labor is trying to take those seats. They represent the bar of success if conservatives hold on and labor facing areas. The team is projecting confidence and street is more at risk because the Prime Ministers decision to cancel highspeed rail, dramatic decision in the autumn. We will await results. We get street tomorrow. Tom he spoke out against that decision. There had been speculation in westminster that the tories did badly, soon back would be full durable to a run. Its early days and there is a caveat. Do we have a sense as to whether the Prime Minister is safe . Lizzie youre never safe, plotting has been going on for months. The rebels wanted to show that a change of leader could make sure they are not wiped out in the general, but the Prime Minister could claw his way through even if they lose half the seats, if they hold on to the two mayors, he could make it all the way through and conservatives have already had Boris Johnson and liz trust. It would be a difficult thing for the population to digest another tory leader. Tom thank you indeed with the details and in deed results coming in for the Prime Minister. Now to some other stories, Columbia University says 13 of the 45 people who barricaded themselves in the school had no affiliation with the institution. Demands include divestment from israel and an end to ties with the country. Eric adams said outsiders accounted for one third of the people arrested in a crackdown at columbia on tuesday evening. Turkey is halting trade with israel over what it calls the humanitarian tragedy in palestine. Israels imports include machinery, fuel, produce and food. They used a post on x to call this the work of a dictator. Notable achievements on the global stage but on the domestic front, economic stagnation is hurting the ruling partys appeal in south africa as they head to the holes. Bloombergs jennifers office i checked takes a look at the path to power. On the day Nelson Mandela was freed from 27 years of prison, he was the man at his side. The Nobel Peace Prize winners favorite to succeed as president and the ruling party. This was not to be his moment in the spotlight as he was overlooked by the anc. Instead he became a businessman acquiring stakes in every sector of the economy from mining to telecom and fast food. He became one of the wealthiest individuals. 19 years after the anc overlooked him, he returned to politics. Elected president in 2018. He appointed market friendly technocrats. Market was euphoric. The president promised to revitalize the economy but the trade union boss turned millionaire struggled to live up to the hopes and expectations placed on him in his first term. Even as he carved out a role for south africa on the global stage. Unemployment sits at 32 and the rand has been the worst performing currency. The outcome may impact his policies and define his legacy by way of comparison to his mentor. Tom bloombergs jennifer reporting and she will be leading our coverage of south african elections later and in our monthly focus show from across africa. Plenty more coming up, this is bloomberg. Apple reported better than better than anticipated results. What the device growing in mainland china. The device had not been updated since the end of 2022. The companys cfo saw strong sales in the second quarter. Analysts and executives were excited about the prospect of apple moving. I marked carmen. The biggest buyback in u. S. History, 100 10 billion u. S. Dollars from apple in its earnings. 75 billion. The annual returns from the company will average 100 billion. They have a cash Balance Sheet of 173 billion. Apple has returned 840 billion u. S. Dollars to shareholders. As the stock languishes, down 10 , compare that to nvidia, is that enough to put a floor under the stock and is the stock becoming a value stock . We look ahead to details around the ipad and juno for the ai strategy. Plenty more coming up. We speak to the ceo of Credit Agricole. This is bloomberg. And theyre all coming . Those who are still with us, yes. Grandpa whats this . Your wings. Light em up gentlemen, its a beautiful. Day to fly. Good morning from london. European earnings with soft general reporting a profit beat as traders lift results. Will speak to the ceo and deputy ceo this hour. Apple forecasts a return to growt