Japan PM Says US Tariffs ‘Regrettable’, Docs Link China to Russia Drones | Bloomberg The Pulse 07/08

Japan PM Says US Tariffs ‘Regrettable’, Docs Link China to Russia Drones | Bloomberg The Pulse 07/08

FOR THE CONVERSATIONS THAT
MATTER AND THE INSIGHTS YOU NEED, LET’S GET STARTED. ♪ >> NEWSMAKERS AND MARKET
MOVERS, THIS IS “THE PULSE WITH FRANCINE LACQUA.” FRANCINE:
GOOD MORNING AND WELCOME TO “THE PULSE.” BLOOMBERG UNDERSTANDS THE EU IS
SEEKING TO CONCLUDE A PRELIMINARY TRADE DEAL WITH U.S.
THIS WEEK THAT WOULD ALLOW IT TO LOCK IN A 10% TARIFF RATE
BEYOND THE AUGUST 1 DEADLINE. BUT PRESIDENT TRUMP HAS HINTED
THE DEADLINE COULD BE EXTENDED FURTHER. PRES. TRUMP:
I WOULD SAY FIRM BUT NOT 100% FIRM. IF THEY CALL UP AND SAY WE
WOULD LIKE TO DO SOMETHING A DIFFERENT WAY, WE ARE GOING TO
BE OPEN TO THAT. ESSENTIALLY, THAT IS THE WAY IT
IS RIGHT NOW. FRANCINE: FOR MORE ON THIS, WE HAVE TEAM
COVERAGE. LET’S BRING IN RUFARO CHIRISERI, ROS MATHIESON, AND
BRENDAN MURRAY. WE ALSO HAVE SUSAN LYNCH. FIRST OF ALL, BRENDAN, LETTERS
WERE SENT SAYING HE WOULD BE HAPPY WITH KIND OF DEAL HE
IMPOSED BUT AT THE SAME TIME NEGOTIATIONS ARE OPEN.
WHAT DOES THE PRESIDENT WANT? >> 90 DAYS WAS ALWAYS GOING TO
BE AN OPTIMIST SICK TIMETABLE TO PUT — OPTIMISTIC TIMETABLE.
WHAT THE PRESIDENT LAID OUT IN THIS LETTER — THESE LETTERS
YESTERDAY WHICH WERE PRETTY MUCH BOILERPLATE FOR THE
VARIOUS COUNTRIES JUST WITH DIFFERENT TARIFF RATES IN THEM,
HE SAID ESSENTIALLY, LOOK, THERE IS MORE TIME IF YOU WANT
IT BUT IF NOT, AUGUST 1 IS THE NEW DEADLINE.
HE BASICALLY SAID THERE IS MORE FLEXIBILITY THAN I INITIALLY
GAVE THE JULY 9 DEADLINE HAS BEEN THE MARKER THEY HAVE LAID
DOWN FOR THREE MONTHS. SO IT IS BUYING THE
ADMINISTRATION A BIT MORE TIME AND SOME OF THESE COUNTRIES A
BIT MORE TIME TO BRING DEALS THAT HAD GOTTEN BOTTLENECKED AT
THE FINISH LINE ACROSS THE PRESIDENT’S DESK. FRANCINE:
THAT IS PLAYING OUT IN EQUITY MARKETS BUT ALSO IN OVERALL.
THERE’S A LITTLE HOPE NEGOTIATIONS CAN BE ONGOING AND
LEAD TO BETTER OUTCOME. >> I THINK CERTAINLY WHEN WE
THINK OF REACTION WE HAVE SEEN IN THE BOND MARKET SO FAR, IT
IS BEEN I SUPPOSE POSITIONING FOR THAT SLIGHTLY BETTER
OUTCOME, THAT IF YOU WILL BE REACHED.
WE DON’T SEE TALKS OF BREAKING DOWN IN THIS SCENARIO, BUT WE
THINK THERE MIGHT BE CAN — SOME CONCESSIONS THAT MY NEED
TO BE MADE AROUND THE SECTORIAL ASPECTS.
WHILE THERE IS GOOD NEWS, I THINK THERE IS STILL SOME WAY
TO GO. FRANCINE: FROM THE EUROPEAN UNION SIDE,
THEY ARE TRYING TO BASICALLY DEAL WITH THIS POOR LUMINARY
TRADE DEAL. THEY WANT TO CARVE OUT WINE AND
SPIRITS CAN AIRCRAFT AND AIRCRAFT PARTS. >> YEAH, AND I THINK THE KEY
PHRASE IS PRELIMINARY. THIS WOULD BE A VERY BROAD
BRUSH STROKES KIND OF DEAL THAT THE EU IS TRYING TO FINALIZE
BEFORE THE END OF THE WEEK. WITH THAT TO PERCENT RECIPROCAL
RATE AND AS YOU SAY THEY’RE TRYING TO GET SOME CARVE OUT
FOR CERTAIN SECTORS. IN PARALLEL, YOU HAVE THE WHOLE
ISSUE OF SECTORAL TARIFFS. TARIFFS ON STEEL AND ALUMINUM,
AUTO SECTOR, EVEN PHARMA TARIFFS .
THEY HAVE NOT COME FROM THE U.S. YET BUT THE U.S.
IS INVESTIGATING AND COULD IMPOSE PHARMA TARIFFS.
THEY ARE THE BIG HEADACHE FOR THE EU BECAUSE IF THEY WERE TO
GET THIS 10% RATE EVEN WITH SOME CARVE OUT AND GET NOTHING
ON THOSE BIGGER EXPORT PRODUCTS, WELL, THEN THEY HAVE
TO HAVE A PROBLEM. I THINK THE ATMOSPHERE HERE IS
QUITE CAUTIOUS. I DON’T THINK IT IS NECESSARY
SEEN AS A HUGE POSITIVE IT HAS BEEN DELAYED ONCE AGAIN.
GERMANY IN PARTICULAR HAS BEEN SAYING FOR THE LAST FEW WEEKS
STRONGLY IT WANTED THIS WRAPPED UP QUICKLY.
NOW WE HAVE ANOTHER EXTENSION IN THE INTERIM PERIOD TO AUGUST
1. BY NO MEANS WERE CUT AND DRY ON
THIS YET. FRANCINE: WE ALSO SPOKE TO THE EUROPEAN
INVESTMENT BANK PRESIDENT. THIS IS WHAT SHE HAD TO SAY
ABOUT TARIFFS. >> THE CONSTANT CHANGE OF
POSITION AND THE DELAY OF THE DATES AT WHICH THE TARIFFS ARE
SUPPOSED TO KICK IN I THINK JUST CONFIRMS A TARIFF WAR
BENEFITS NO ONE. IT IS A LOSE/LOSE PROPOSITION.
FROM THE EUROPEAN UNION, WE HAVE EVERY INTEREST IN FINDING
A GOOD OUTCOME THAT WILL CONTINUE TO PRESERVE FREE TRADE.
FRANCINE: RIOS, OUR PARTNERS GETTING USED
TO THE FACT THIS MAY BE THE WAY DONALD TRUMP OPERATES?
HE ESCALATES AND HE ESCALATES AND AT THE END OF THE DAY WE
WILL END UP WITH TARIFFS THE ECONOMY CAN SURE? >> WITH DONALD TRUMP IT IS NOT
FINAL UNTIL IT IS CHISELED INTO CONCRETE.
THIS ADMINISTRATION MOVES QUICKLY BUT ALSO CHANGES VERY
QUICKLY. DONALD TRUMP IS VERY OPEN TO
CONTINUING TO TALK. AS WE HAVE BEEN DISCUSSING
HERE, ON THE ONE HAND THAT BUYS COUNTRIES TIME.
ON THE OTHER, IT EXTENDS THE UNCERTAINTY OVER A LONGER
PERIOD OF TIME AS WELL. WE CAN SEE FROM THE INITIAL
FRAMEWORKS THAT HAVE BEEN DONE THEY DON’T FIX EVERYTHING.
YOU HAVE THESE DEALS HE HAS ANNOUNCED WITH VIETNAM ALTHOUGH
VIETNAM HAS NOT CONFIRM THAT, WITH CHINA AND THE U.K..
EVEN FOR THE U.K., IMPLEMENTING WHAT THEY SAY THEY HAVE AGREED
HAS BEEN DIFFICULT. THERE ARE DISPUTES OVER STEEL.
WHAT DEFINES STEEL. THAT IS VERY BOGGED DOWN.
YOU SEE EVEN A VERY BROAD FRAMEWORK THAT U.K.
CAME UP WITH, GETTING ALL OF THAT BEDDED DOWN IS DIFFICULT.
FOR OTHER COUNTRY STILL PUSHING THIS DOWN THE ROAD TRYING TO
GET SOMETHING THAT AVOIDS A HIGH LEVEL OF TARIFF WILL STILL
BE FRAUGHT WITH PROBLEMS. FRANCINE:
GERMAN EXPORTS, THIS IS BECAUSE THE VALUE OF SHIPMENTS
BASICALLY TO THE U.S. PLUNGED TO THE LOWEST LEVEL IN
THREE YEARS. WHEN ARE WE GOING TO HAVE MORE
DATA POINTS LIKE THIS THAT POINT TO CHIEF EXECUTIVES NOT
SPENDING, CUTTING DOWN ON SOME OF THE INVESTMENT THEY WOULD
HAVE OTHERWISE TRADE BEING SHIFTED AROUND?
FOLKS LOOKING AT THE GERMAN PICTURE, WE HAD SOME SLIGHTLY
MORE POSITIVE DATA YESTERDAY BUT OF COURSE THE FRONT RUNNING
THAT WE SAW IN Q1 THAT EFFECTIVELY IS BORROWING FROM
FUTURE QUARTERS, WE HAVE A MORE POSITIVE VIEW IN TERMS OF EURO
AREA GROWTH IN GENERAL. WE ARE EXPECTING GROWTH OF 1.3
PERCENT THIS YEAR AND THAT IS FEEDING THROUGH FROM THAT
STRONGER Q1 PERIOD BUT ALSO IT IS THE FISCAL SPENDING WE THEN
CAME TOO EARLY FROM GERMANY. AND ALSO ULTIMATELY IT IS THAT
CONSUMER SPENDING AS WELL WE HAVE HAD HIGH SAVINGS IN THE
EURO AREA. WE EXPECT THAT IF YOU POSITIVELY TO GROWTH AS WELL.
FRANCINE: WHO IS GETTING THE TOUGHER
TARIFFS? IT FEELS IT IS A LITTLE MORE
CALCULATED THAN THE FIRST TIME AROUND. >> IT LOOKS LIKE THEY ARE
COMING IN JUST A BIT UNDER WITH ORIGINAL RECIPROCAL RATES WERE.
IF TIME IS ON THE SIDE OF THE U.S.
IS TRADING PARTNERS, I THINK ONE OF THE THINGS THAT THIS
THREE WEEK CAUSE WILL DO IS WILL CUT STRAIGHT TO THE HEART
OF THIS NEXT EARNINGS SEASON AND THE CLOUD OF UNCERTAINTY
THAT HANGS OVER COMPANIES ARE FACING THESE TARIFFS ARE NOW
GOING TO SAY WE STILL DON’T HAVE ANY VISIBILITY OUT INTO
THE THIRD QUARTER OR THE FOURTH QUARTER INTO THOSE COSTS. WHILE ADVISED TIME FOR TRADING
PARTNERS, THE COMPANIES THAT ARE PAYING THESE TARIFFS ARE
STILL STRUGGLING TO FIGURE OUT HOW THEY’RE GOING TO OPERATE IN
AN ENVIRONMENT WHERE THEY HAVE — THEY DON’T KNOW WHAT THE
FUTURE HOLDS. FRANCINE: WE ALSO HEARD FROM PRESIDENT
LOU LOVE BRAZIL. >> A PRESIDENT OF A COUNTRY THE SIZE OF THE UNITED STATES TO GO
AROUND THREATENING THE WORLD ON THE INTERNET, IT IS NOT RIGHT.
HE NEEDS TO UNDERSTAND THE WORLD HAS CHANGED.
NO, WE DON’T WANT AN EMPEROR. WE ARE SOVEREIGN NATIONS.
IF HE THINKS HE CAN IMPOSE TARIFFS ON COUNTRIES, COUNTRIES
ALSO HAVE THE RIGHT TO DO THE SAME. FRANCINE: YOU HEAR THIS FROM A COUPLE OF
LEADERS, ESPECIALLY FROM THE EMERGING MARKETS OR THE BRICS
COUNTRIES. IS TRADING FRAGMENTED OR IS
THERE A POOL COMING TOGETHER IN SOME PART OF THE WORLD? >> THAT IS ONE OF THE REASONS
DONALD TRUMP DOESN’T LIKE THE BRICS IS BECAUSE THAT GROUP IS
ACCOUNTING FOR A LARGER PROPORTION OF THE GLOBAL
ECONOMY. WHETHER THEY CAN ACT AS A
PROPER GROUP IS — REMAINS TO BE SEEN.
WE SAW THE MEETING WE JUST HAD ON THE WEEKEND SOME LEADER
SPEAKING OUT BUT OTHERS FRANKLY VERY QUIET WHEN DONALD TRUMP
TALKED ABOUT A 10% TARIFF ON BRICS COUNTRIES FOR BEING
ANTI-AMERICAN. THEY DID NOT REALLY WANT TO
ENGAGE ON THAT. THEY SEEMED TO WANT TO LET THAT
FLYBY. COLLECTIVELY AS A GROUP, THEY
ACCOUNT FOR A LOT OF THE ECONOMY AND TRADE AND OUTPUT
READ ARE THEY ABLE TO ACT AS A TRUE COLLECTIVE AGAINST THE
U.S.? UNCLEAR. SOME OF THESE SMALLER ECONOMIES
FRANKLY DON’T HAVE THE ABILITY TO GET A TRADE DEAL WITH THE
U.S. THAT KIND OF HAVE TO SWALLOW
WHAT IS COMING. IF YOU ARE A BIGGER ECONOMY,
CAN NEGOTIATE BETTER. SO THEY ARE LITTLE BIT AT THE
MERCY OF WHAT THE U.S. WANTS HERE.
YOU CAN SEE FROM — BRAZIL IS QUITE VOCAL, SOUTH AFRICA WAS
VOCAL YESTERDAY. BUT AGAIN, THE SMALLER
ECONOMIES, WHEN YOU LOOK AT CAMBODIA, MYANMAR IS ANOTHER
ONE, SMALLER SOUTHEASTERN — SOUTH ASIAN STATES, THEY DON’T
HAVE THE ABILITY TO DO ANYTHING. FRANCINE:
IS THIS PLAYING OUT ON THE FIXED INCOME OR THE CURRENCY
MARKETS FOR SOME OF THESE COUNTRIES? >> I THINK CERTAINLY FROM THE
MARKETS, COVER, LOOKING AT THE U.K.
MARKETS, WE HAVE NOT SEEN TOO MUCH OF A REACTION IN TERMS OF
THAT HAPPENING GIVEN THAT U.K. HAS A TRADE DEAL READY.
WE DID SEAL YIELDS TRACK A BIT HIGHER ACROSS U.K.
AND EUROPEAN MARKETS AS WELL AS THE U.S.
MARKETS THAT WE THINK THAT WAS JUST A REACTION TO THE JOB
STATED THAT CAME OUT ON JULY 4. PREDOMINATELY, SOME OF THE
FISCAL ASSETS, MAYBE THE ASPECT THAT START TO PLAY INTO WHERE
YIELDS GO FROM HERE. FRANCINE: SUZANNE, YOU LOOK AT THE
EUROPEAN COMMISSION, WHICH HANDLES TRADE MATTERS FOR THE
EU, FIRST OF ALL, SEEMS DONALD TRUMP AND HIS TEAM ARE OK TO
NEGOTIATE WITH THEM. WE THOUGHT MAYBE THEY WOULD
COME IN AND TRY TO BREAK THEM APART AND PLAYED THE LEADERS
OFF EACH OTHER. AT THE END OF THE DAY, WOULD
THEY GET ONE OF THE BEST DEALS IF THINGS GO TO PLAN? >> WELL, THAT IS WHAT THEY ARE
HOPING. YOU ARE RIGHT, IT IS EUROPEAN
COMMISSION NEGOTIATING ON BEHALF OF THE YOU, BUT THE EU
MEMBER STATES, PARTICULARLY THE BIG COUNTRIES LIKE GERMANY AND
FRANCE, THEY ALL HAVE TO SIGN OFF ON THIS.
I DON’T THINK YOU’RE GOING TO BE HEARING LANGUAGE LIKE WE
JUST HEARD FROM PRESIDENT LULU BUT THERE IS A CONVERSATION
HAPPENING HERE ABOUT HOW FAR SHOULD THE EU HITS BACK.
THEY DO FEEL THEY HAVE LEVERAGED.
HAVE SANCTIONS READY TO GO IF THEY NEED TO.
THEY HAVE BEEN HOLDING BACK ON THAT AND THEY’RE CONTINUING TO.
THEY DON’T WANT TO ESCALATE THE SITUATION.
I THINK THERE ARE A LOT OF NERVES HERE.
WHAT KIND OF DEAL THIS THIS COULD ULTIMATELY BE FOR THE EU?
AND IF IT IS NOT GOOD ENOUGH, ARE THEY RIGHT TO SIGN UP TO IT?
WE SEE IF THEY SIGN THIS PROVISION AGREEMENT BY THE END
OF THE WEEK, THAT WILL GIVE SOME CALM THE SITUATION ABOUT
MORE TIME BUT DOES BIGGER QUESTIONS REMAIN ABOUT THE
SECTORAL TARIFFS AND OTHER PARTS OF THE TRADE RELATIONSHIP.
FRANCINE: AND PURE GEOPOLITICS, THERE ARE
SIGNIFICANT THINGS THAT HAPPEN. BENJAMIN NETANYAHU NOMINATED
DONALD TRUMP FOR NOBEL PEACE PRIZE. I DON’T KNOW WHETHER THAT
CHANGES HIS THINKING AND ALSO MAKE SOME COOL UP MAY BE ON
TRADE A LITTLE BIT. THE FACT WE SEEM TO HAVE A
REVERSAL FROM THE TRUMP ADMINISTRATION ON SENDING
WEAPONS TO UKRAINE. >> ALL OF THIS AND DONALD
TRUMP’S WORLD MERGES TOGETHER SO GEOPOLITICS, TRADE, THESE
THINGS ARE BECOME ONE. SO YOUR PERSONAL RELATIONSHIP
WITH THE PRESIDENT MATTERS A LOT.
YOU CAN SEE THAT, JAPAN, FOR EXAMPLE COME THE LATE PRIME
MINISTER SHINZO ABE HAD A GREAT RELATIONSHIP WITH TRUMP AND
THAT DID ARGUABLY DIFFUSE SOME OF THE TENSIONS OVER PAYING FOR
THE U.S. MILITARY IN JAPAN, THE TRADE
RELATIONSHIP. IF YOU HAD THAT REPORT, IT CAN
HELP. BENJAMIN NETANYAHU CLEARLY DOES
STILL HAVE THAT REPORT WILL DONALD TRUMP.
THERE HAVE BEEN A FEW TENSIONS OF LATE OVER THE MIDDLE EAST,
DONALD TRUMP FRUSTRATED HE HAS NOT GOTTEN HIS CEASE-FIRE IN
GAZA. AND WE DID NOT SEE A LOT OF
TANGIBLE PROGRESS IN THE MEETING LAST NIGHT ABOUT THAT.
THERE IS A BIT OF A MOVEMENT TOWARDS A CEASE-FIRE BUT A LOT
OF OBSTACLES REMAIN. HE IS TRIED TO LEVERAGE THE
ECONOMIC RELATIONSHIP IN THE REGION WITH ISRAEL TO GET
BENJAMIN NETANYAHU TO GET TO AGREE TO THE TERMS OF A
CEASE-FIRE. PUSHING ON THE TRADE AND
INVESTMENT FRONT THERE ALSO. FRANCINE:
I WANT TO TALK ABOUT THE U.K. TO SECOND BUT BRENDAN, WHAT ARE
YOU LOOKING OUT FOR THE NEXT COUPLE OF DAYS?
LET US GET PUBLISHED ON SOCIAL MEDIA BUT IS — ARE THEY
TELLING THESE COUNTRIES BEFORE FACE TO FACE? >> I THINK THEIR MAIN THING IS,
WHERE THE DEALS? THE PRESIDENT PREANNOUNCED THE
VIETNAM DEAL LAST WEEK. IT HAS NOT MATERIALIZED.
IF THAT DOES NOT GET OVER THE LINE BY THE DEADLINE TOMORROW,
YOU HAVE TO WONDER WHAT HAPPENED.
ALSO YOU MENTIONED THE BRICS, WHAT ABOUT INDIA?
THEY HAVE BEEN TALKING FOR WEEKS ABOUT HOW AN INDIA DEAL
IS CLOSED. IF THAT IS NOW PUSHED BACK TO
AUGUST 1, WHY CAN THEY GET THAT OVER THE LINE?
THE MAIN QUESTION NOW IS, WHERE THE DEALS? FRANCINE: THE U.K. HAVE A DEAL OR — >> THEY HAVE
A LIMITED FRAMEWORK OF A DEAL THAT STILL HAS A LOT OF DETAILS
TO BE WORKED THROUGH. FRANCINE: THE PROBLEM IS IS U.K.
GROWTH, GIVEN WHAT WE HEARD LAST WEEK WITH THE BENEFITS
WELFARE FIASCO AND WHAT THAT MEANS FOR INFLATION LABOR. >> FROM THE U.K.
PERSPECTIVE, IF WE THINK OF THAT GROWTH PICTURE, SIMILAR
SITUATION AT TO WHAT HAPPENED IN THE EU, Q1 BORROWED FROM
PETER QUARTERS, WE EXPECT GROWTH IN THE FUTURE QUARTERS
TO BE LOWER IN THE U.K. COMING INTO THE INFLATION
PICTURE, WE SEE WAGE GROWTH DYNAMIC CONTINUING TO IMPROVE.
THE LAG DATE IS NOT NECESSARILY WHERE IT NEEDS TO BE.
THAT 3% LEVEL WE HAD BUT ULTIMATELY, THE CFO DATA COMING
FROM THE BANK OF ENGLAND SURVEY POINTS THAT WAGE GROWTH IS
EXPECTED TO TREND TOWARD REPORTING PERCENT TOWARD THE
END OF THE YEAR THAT SHOULD BE POSITIVE FOR INFLATION AND ON
THAT BASIS WE THINK THE BOE COULD EASE THREE MORE TIMES TO
350 AT THE END OF THIS YEAR. OF COURSE THAT INFLATION
DYNAMIC CONTINUES TO BE A RISK. FRANCINE:
WHEN YOU LOOK AT FIXED INCOME, DO THESE TRADE NEGOTIATIONS
MATTER WHEN IT COMES TO CHOOSING GILTS OR GERMAN BUNDS? >> TO INTEGRATE AND I THINK IT
JUST DEPENDS ON THE INVESTOR, WHERE THEY WANT TO BE EXPOSED
IN THEIR CURRENCY, HEDGING COSTS THAT NEED TO BE FACTORED
IN. WE THINK ULTIMATELY, LOOKING AT
THE PICTURE OF FIXED INCOME ACROSS THE BOARD, WE ARE NOT A
FAN OF HOLDING PROLONGED BONDS BUT PURVEYOR — PREFER TO BE
SHORTER OR IN THE METEOR BECAUSE OF THE FISCAL DYNAMIC
PLAYING OUT IN THE LONG WAS FRANCINE:
I LOVE TEAM COVERAGE UNDER DAYS LIKE THIS. RUFARO CHIRISERI, ROS,
BRENDAN, SUZANNE. COMING UP, DEAL MAY ACTIVITY ON
THE UP. — JOE MAKING THAT IS NEXT.
THIS IS “BLOOMBERG.” ♪ FRANCINE:
DEALMAKING HAS HAD A BIT OF A WILD RIDE THIS YEAR, 2025, M&A
BOOM UNDER DONALD TRUMP ONLY FOR THESE ENTHUSIASM TO BE
STAMPED OUT BY TERROR THREATS AND TRADE AND CERTAINTY.
DEALMAKING HAS FOUND ITS FOOTING AGAIN. JOINING ME NOW, DANIEL RUDNICKI
SCHLUMBERGER. THERE’S A LOT TO TALK ABOUT.
HOW DO YOU SEE THE M&A PIPELINE FOR THE SECOND HALF OF THE YEAR?
COOK’S FIRST OF ALL, THANK YOU FOR HAVING ME. INDEED, SUCH A GOOD TIME TO
CATCH UP. SO MUCH HAS BEEN HAPPENING.
DEALMAKING COME M&A RELATED PIPELINE FOR THE SECOND HALF OF
THE YEAR, IS GETTING BETTER. WE ARE SEEING GOOD SIGNS.
STARTING TO SEE SOME LARGE CROSS-BORDER LBO’S COMING BACK. WALGREENS, 24,000,000,004 SOME
SKETCHERS, 10 MILLION. RESCIND THE CONTESTED TAKEOVER
— WE ARE SEEING SOME CONTESTED TAKEOVER.
MORE NEW LEVERAGE FINANCING IN THE PAST QUARTER AND AT ANY
POINT IN TIME SINCE 2021. STILL, VERY LITTLE IN TERMS OF
THE VOLUME HERE TODAY. ONLY ABOUT 20% OF THE VOLUME
WHICH IS VERY LOW NUMBER COMPARED TO LONG-TERM AVERAGES.
FRANCINE: WHY IS THAT? WE HAVE HAD STRONG EQUITY
MARKETS AND I DON’T KNOW WHETHER STRONG EQUITY MARKETS
AND HEIGHTENED VALUATIONS MEAN IT IS A GOOD THING FOR M&A AND
IPO’S, OR WHETHER THEY HINDER IT. >> WELL, IT DEPENDS ON THE
SECTOR. WHAT WE HAVE SEEN IS M&A BEEN
CONCENTRATED IN EASIER SECTORS. YOU HAD TO FUND THIS VERY
VOLATILE ENVIRONMENT. SECTORS THAT ARE NOT TO TARIFF
-EXPOSE, NOT TOO CYCLICAL, SHOW A LITTLE BIT OF GROWTH.
THE FIELD OF THE POSSIBLE HAS BEEN REDUCED. FRANCINE:
GIVEN THE RISK APPETITE AMONGST BANKS AND THINGS LIKE THAT, CAN
PRIVATE EQUITY — PRIVATE CREDIT COMPETE TO FINANCE SOME
OF THE DEALS? >> ABSOLUTELY.
WE HAVE SEEN THAT IN MARCH AND APRIL.
APRIL WAS INTERESTING CASE STUDY FOR US OF WHAT HAPPENS
WHEN THERE IS A MARKET WOBBLE. DURING THE MONTH OF APRIL, WE
SAW COST OF LEVERAGED DEBT INCREASE BY AROUND 150 — WHAT
WE HAVE SEEN ALMOST IMMEDIATELY IS PRIVATE EQUITY FIRMS
PIVOTING FROM BROADLY SYNDICATED REMEMBER THESE TWO
DIRECT LOANS. WE HAVE TAKEN THAT INTO ACCOUNT.
OUR CLIENTS COME TO US FOR DEBT. THEY WANT GET CHEAP AS POSSIBLE.
THAT IS WHAT WE HAVE DECIDED A JP MORGAN TWO DIRECT LENDING
WITHIN LEVERAGE — WE CAN OFFER A OR B OR C OR WHATEVER THE
RIGHT SOLUTION IS DEPENDING ON THE MARKET.
I WOULD ARGUE THAT HAVING PRIVATE CREDIT NOW ALMOST MAKES
OUR MARKET SAFER TO BE ABLE TO CONTINUE TO DO DEALS AND
DISTRICT — DISTRIBUTE CAPITAL. FRANCINE:
YOU MENTIONED THE SYCAMORE PARTNERS BY OUT OF U.K. FIRM.
I THINK YOU’RE SENDING OUT INVESTORS FOR MID JULY LAUNCH
FOR THIS 4.2 BILLION DOLLARS DEBT PACKAGE.
IS THERE INVESTOR APPETITE? DOES IT FEEL GOOD OR DOES THE
TARIFF THREAT DISTRACT INVESTORS? >> GENERALLY, THERE IS VERY
GOOD INVESTOR APPETITE AND LENDER APPETITE FOR DEBT, IN
PARTICULAR IN DEFENSE OF SECTORS. AS FAR AS TARIFFS ARE
CONCERNED, THEY WILL LOOK AT IT NAME BY NAME. IN A WAY WE ARE LOOKING —
LUCKY BECAUSE WE CAN OPEN ON WHAT IS HAPPENING IN COMPANIES.
AND TO FIGURE OUT WHAT IS THE REAL IMPACT. REALLY GOOD CASE STUDIES POST
SKETCHERS, WE DID THE ANALYSIS AND REALIZED UNDER CERTAIN
SCENARIOS ON TARIFFS, THE IMPACT ON THE PAIR OF SNEAKERS WOULD BE JUST — IT IS VERY
DIFFICULT FROM THE OUTSIDE IN WITHOUT DOING THE REAL — TO
FILL — FRANCINE: OF SPEAKING TO THE OWNER OF THE
BIG DRINKS COMPANY AND TEMPERS THAT WE CAN ABSORB, 20% WILL BE
MORE COMPLICATED. — 10% WILL YOU CAN ABSORB, 20%
WILL BE MORE COMPLICATED. DO YOU SEE A SHYNESS FOR THE
FUTURE BECAUSE OF THE UNCERTAINTY AND HOW DOES THAT
TRANSLATE INTO M&A? >> OF COURSE WE ARE TAKING IT
INTO ACCOUNT. AND OF COURSE THE VOLATILITY
WAYS ON US. SECTORS THAT ARE MORE EXPOSED TO VOLATILITY WILL BE — MORE
DIFFICULT TO GET TRANSACTIONS DONE IN.
SO WE ARE SEEING THAT WEIGH, YES.
WE ARE LESS EXPOSED THAN THE EQUITY MARKETS OVERALL. THAT SAID, THE NEXT COUPLE OF
MONTHS REMAIN — THE VISIBILITY REMAINS LIMITED BECAUSE THERE
ARE SO MANY FACTORS OF UNCERTAINTY.
THAT IS PROBABLY WHY WE ARE AT SUCH A HUGE REFINANCING WAVE IN
THE PAST COUPLE OF MONTHS. IT IS LITERALLY CRAZY.
WE HAVE ISSUED 220 BILLION OF LEVERAGE ON HIGH-YIELD IN THE
FIRST SIX MONTHS OF THE YEAR. THAT IS A QUARTER OF EUROPEAN
MARKET REFINANCED. FRANCINE: DO SEE A LOT MORE OPPORTUNITIES
IN EUROPE THAN ELSEWHERE? >> I THINK PROBABLY RENEWED
INTEREST IN PRIVATE EQUITY FIRMS FOR EUROPE, YES.
SOME FIRMS HAVE PURPOSEFULLY DECIDED TO FOCUS ON EUROPE NOW
AND THEN THERE ARE SUBSECTORS THAT OFFER REALLY INTERESTING
— THINK ABOUT DEFENSE FOR EXAMPLE. FRANCINE:’S
DEFENSE SOMETHING WHERE YOU ARE EXPECTING THE POSSIBILITY OF
M&A? ARE THERE CERTAIN SECTORS IN
TERMS OF LEVERAGED FINANCE WHERE YOU’RE GENERALLY MUCH
MORE OPTIMISTIC THAN OTHERS FOR THE NEXT SIX MONTHS? >> DEFENSE, TO CONTINUE ON THAT
THEME, IS A HUGE AREA OF FOCUS FOR US.
WE HAVE JUST DONE A 2 BILLION BOND ISSUANCE IN EUROS AND
DOLLARS FOR CSG WHICH IS THE LARGEST MANUFACTURER OF SMALL
AMMUNITION. IT IS IDEAL THAT WOULD NOT HAVE
BEEN POSSIBLE TO YEARS AGO. THE NEEDS IN DEFENSE ARE JUST
HUGE. AND MANY MANY SME IN EUROPE IN
PARTICULAR ARE FINDING IT REALLY HARD TO FIND — FINANCE
THEMSELVES. DIRECT LENDING — WE’RE DOING A
LOT IN DIRECT LENDING WITH THESE COMPANIES BUT IT IS AT A
SCALE THAT IS HARD TO IMAGINE. A CEO WAS TELLING ME, LIKE, I
HAVE TWO FACTORIES AND I NEED TO BUILD TWO MORE.
FOR DEFENSE IN EUROPE, IT IS REALLY — FRANCINE:
THANK YOU SO MUCH, DANIEL RUDNICKI SCHLUMBERGER.
COMING UP, HAVING REVOLUTIONIZED SHARE OWNERSHIP
RETAIL INVESTORS, TRADING UP ROBINHOOD IS ROLLING OUT
BLOCKCHAIN. IT IS NOT WITHOUT CONTROVERSY.
WE WILL BE SPEAKING TO THE ROBINHOOD CHIEF EXECUTIVE
COMING UP NEXT. CONVERSATION WITH VLAD TENEV.
THIS IS “BLOOMBERG.” ♪ FRANCINE:
GOOD MORNING AND WELCOME TO “THE PULSE.”
THESE ARE YOUR TOP STORIES. PRESIDENT TRUMP FIRES OFF A NEW
WAVE OF TARIFF THREATS BUT PUTS THEM UP UNTIL AT LEAST AUGUST
FIRST. NEGOTIATIONS CONTINUE. THE EU RUSHES TO SEAL IT TRADE
DEAL WITH THE U.S. TO LOCK IN A 10% TARIFF RATE.
IN A POLICY U-TURN, TRUMP PROMISES MORE ROBBINS FOR
UKRAINE — PROMISES MORE WEAPONS FOR UKRAINE.
ROBINHOOD IS CREDITED WITH CHANGING THE GAME FOR U.S.
RETAIL INVEST MEANT AND HELPING MAKE IT ACCEPTABLE TO EVERYONE.
— ACCESSIBLE TO EVERYONE. TO TALK MORE ABOUT THAT, I’M
JOINED BY VLAD TENEV. THANK YOU FOR GIVING BLOOMBERG
A LITTLE BIT OF YOUR TIME. FIRST OF ALL, HAVE YOU HAD ANY
INQUIRIES FROM YOUR LOCAL REGULATOR IN LITHUANIA
REGARDING THIS OFFERING? >> WHAT WE ANNOUNCED LAST
MONDAY IN THE SOUTH OF FRANCE ARE SEVERAL PRODUCTS FOR THE EU
STOCK TOKENS, WHICH GIVE EXPOSURE TO PUBLIC LISTED
EQUITIES. WE HAVE OVER 200. THOSE ARE AVAILABLE/245.
GIVING OUR EUROPEAN CUSTOMERS’S POSTER EUROPEAN STOCKS.
THEN WE DID A GIVEAWAY OF WHAT WE CALL PRIVATE STOCK TOKENS OF
OPENAI AND SPACEX. THOSE AREN’T TRADABLE YET BUT
IT IS SORT OF TESTING THE WATERS, IF YOU WILL, FOR WHAT
WE BELIEVE IS A HUGE OPPORTUNITY TO RESOLVE ONE OF
THE BIGGEST INEQUITIES IN CAPITAL MARKETS.
WHICH IS THE FACT YOU HAVE THESE MASSIVE COMPANIES THAT
ARE STAYING PRIVATE LONGER. IN MANY CASES, THEY ARE
FRONTIER INDUSTRIES LIKE AI WHERE WE BELIEVE THAT COULD
CHANGE EVERYTHING. BUT RETAIL INVESTORS CAN’T GET
EXPOSURE. WE WERE WORKING TO SOLVE THIS.
FRANCINE: THE REGULATOR IN LITHUANIA, HE
LOOKS AT THE OFFERING AND HE CALLS YOU AND ASKS YOU WHAT? >> I THINK THEY HAVE SOME
QUESTIONS. THEY WANT TO MAKE SURE
EVERYTHING IS PROPER BECAUSE IT IS A NEW INNOVATIVE OFFERING.
WE ARE CONFIDENT. WE THEY THESE ARE NOT ONLY
IMPORTANT BUT WITHSTAND THE HIGHEST FORM OF SCRUTINY.
WHEN ROBINHOOD DOES ANYTHING, PARTICULARLY IF IT IS NEW, I
THINK WE EXPECT THAT IT IS GOING TO BE LOOKED OVER.
WE DO BELIEVE IT IS IMPORTANT AND WE WILL ULTIMATELY
WITHSTAND THE SCRUTINY. SO WE WELCOME THE DISCUSSIONS
WITH THE REGULATORS. FRANCINE: WERE THEY WORRIED ABOUT RISK OR
THE WAY IT WAS PACKAGED AND HAVE YOU BEEN ABLE TO TEST WHAT
DO YOU EXPECT TO LAUNCH THESE TOKENS? >> EFFORTS THERE WERE IN THE
FORM OF A GIVEAWAY. SO WE GAVE AWAY AROUND $1
MILLION WORTH OF OPENAI TOKENS, 500,000 WORTH OF SPACEX.
THE IDEA WOULD BE TO EVENTUALLY ALLOW FOR THEM TO BE TRADED BY
CUSTOMERS AND ALSO TO GREATLY EXPAND THE REALM OF TOKENS THAT
WE OFFER. WE WOULD LIKE TO HAVE THOUSANDS
OF PRIVATE COMPANIES ON THE PLATFORM ACCESSIBLE TO RETAIL.
SINCE OUR ANNOUNCEMENT, I’VE HAD A DELUGE OF INQUIRIES,
PRIVATE COMPANIES THAT ACTUALLY WANT TO ACCESS RETAIL, TO HAVE
THEIR SHARES TOKENIZED TO BE PART OF THIS REVOLUTION.
I THINK IT IS GOING TO BE A THING. OF COURSE, IT IS ALWAYS DIFFICULT TO BE FIRST. BUT I
THINK THIS IS SO IMPORTANT THAT WE ARE VERY MOTIVATED TO FIND A
GREAT WAY THAT SATISFIES EVERYONE. FRANCINE:
DID YOU SPEAK TO ANY OF THE REGULATORS PRIOR TO DEVELOPING
THESE OR LAUNCHING THE STOCK TOKENS FOR PRIVATE COMPANIES? >> THEY ARE LIVE IN THE
EUROPEAN UNION. NOT LIVE IN THE U.K. OR U.S.
YET. ALTHOUGH WE ARE VERY KEEN TO
FIND A WAY TO GIVE RETAIL EXPOSURE TO PRIVATE COMPANIES
HERE. AND OF COURSE WE HAVE ONGOING
DISCUSSIONS WITH ALL OF OUR REGULATORS AS PART OF THE
COURSE OF RUNNING A REGULATED BUSINESS. FRANCINE:
AND CONFIDENT THEY WILL BE HAPPY?
IT WOULD BE WILDLY EXCITING IF IT WERE, FOR EXAMPLE, LAUNCHED
IN THE U.K.. WHAT KIND OF THINGS ARE THEY
ASKING YOU TO DO TO MAKE SURE IT IS FINE TO DO? >> I’M NOT SURE THE FULL EXTENT
OF THEIR QUESTIONS. THEY’RE PROBABLY JUST WANT TO
MAKE SURE EVERYTHING IS CLEAR TO CUSTOMERS.
I THINK THESE ARE NEW PRODUCTS. NEW PRODUCTS AND MY ASSUMPTION
IS THEY WANT TO MAKE SURE THAT THEY ARE AVAILABLE TO CUSTOMERS
AND IT IS CLEAR WHAT CUSTOMERS ARE GETTING.
IN THAT WAY, I THINK WE ARE VERY ALLIED BECAUSE WE WANT
THOSE SAME THINGS. WE DO THINK THAT THE PRODUCT IS
CLEAR AND IS USEFUL. FRANCINE: HOW EXACTLY ARE THESE TOKENS —
THE TOKENS ARE STRUCTURE COMPARED TO THE UNDERLYING
ASSET? >> THE WAY IT WORKS IS WE HOLD
THE UNDERLYING OR IT IS HELD BY A U.S.
BROKER OR OTHER TRADITIONAL FINANCIAL BUSINESS, AND THEN WE
HAVE A TOKENIZATION ENGINE WHICH BASICALLY MINTS NEW
TOKENS WHEN CUSTOMERS REQUIRE THEM.
IF CUSTOMERS WANT TO SELL THEM, WE BURN THE TOKENS — THE
MECHANISM SLIGHTLY DIFFERS DEPENDING ON THE ASSET WHETHER
IT IS A PUBLIC STOCK OR A PRIVATE COMPANY.
BUT THE INTENT IS FOR THE TOKENS TO BE BACKED BY EXPOSURE
TO THE UNDERLYING ASSET IN PRETTY MUCH ALL CASES. FRANCINE:
IF IT IS A PRIVATE COMPANY, HOW ARE YOU VALUING IT? >> THAT IS A GOOD QUESTION.
WITHOUT GETTING INTO THE DETAILS OF THE PRIVATE COMPANY
VALUATIONS, THERE IS A SECONDARY MARKET FOR PRIVATE
ASSETS. ADD TYPICALLY THAT MARKET IS
INSTITUTIONAL OR HIGH NET WORTH IN NATURE. SO INSTITUTIONAL, INVESTORS,
EXCHANGING PRIVATE SHARES OR PRIVATE EXPOSURE TO COMPANIES
WITH ONE ANOTHER ON A NEGOTIATED BASIS.
AND SO WHAT THIS WOULD DO IS IT WOULD UNLOCK THAT SO IT IS NOT
JUST A HIGH NET WORTH INSTITUTIONAL MARKET BUT
UNLOCKS IT TO RETAIL EXPOSURE AS WELL. THE INNOVATION — THE DIFFICULTY HAS NOT JUST BEEN A
SORT OF ACCREDITATION REQUIREMENTS IN THE U.S., BUT
IT HAS BEEN HOW TO GET THE LIQUIDITY. I THINK THAT IS WHERE
TOKENIZATION COMES IN BECAUSE IT SOLVES THE LIQUIDITY PROBLEM
BY TAPPING INTO A GLOBAL NETWORK OF HUNDREDS OF MILLIONS
OF CRYPTO MARKET PARTICIPANTS. FRANCINE: ON A BASIC LEVEL, YOU
CATEGORIZE THESE TOKENS AS TOKENIZED EQUITIES OR
DERIVATIVES? >> THESE ARE DERIVATIVES,
TECHNICALLY SPEAKING, UNDER EU REGULATION.
WHAT MAKES THIS POSSIBLE NOW IS CLEAR REGULATIONS IN THE
EUROPEAN UNION FOR CRYPTO ASSETS. SO IT IS A BIT OF A NEW THING.
IT IS CRYPTO ASSETS BUT ALSO A DERIVATIVE AND THOSE TWO THINGS
ARE BEING PUT TOGETHER. FRANCINE:
IN THE CASE OF DISPUTE , INEVITABLY, THERE WILL PROBABLY
BE SOME DISPUTE THAT COMES UP, WILL YOU INTERMEDIATE IN SOME
CAPACITY ON THESE TOKENS OR IS THAT ONE OF THE THINGS YOU ARE
STILL TRYING TO FIGURE OUT? >> I GUESS IT DEPENDS ON WHAT
TYPE OF DISPUTE. I THINK ONE OF THE BIG
QUESTIONS ABOUT THINGS THAT HAVE BEEN TRIED BEFORE IN THIS
SPACE IS DIVIDEND RIGHTS FOR EXAMPLE. AND IF YOU HAVE THESE
INSTRUMENTS, CUSTOMERS IN THE PAST HAVE BEEN DENIED THE
DIVIDENDS. WE HAVE ACTUALLY MANAGED TO
FIGURE OUT HOW TO GIVE CUSTOMERS EXPOSURE TO THAT.
WE WANT TO GIVE ALL THE BENEFITS OF THE CRYPTO
TECHNOLOGY AND OF HOLDING THE UNDERLYING ASSETS WITH AS FEW
COMPROMISES AS POSSIBLE. AND I THINK ROBINHOOD IS RARELY SORT OF LIKE THE FIRST MOVER IN
VARIOUS SPACES. WE TEND TO HAVE AN APPROACH
WHERE WE LIKE TO ASSURE OTHERS SORT OF DO IT FIRST. I THINK IN
THIS PARTICULAR CASE, WE THINK IT IS SO IMPORTANT RETAIL HAS
EXPOSURE TO THESE COMPANIES AND THESE ASSETS THAT WE SAW AN
OPPORTUNITY TO GIVE A ROBUST OFFERING.
YOU MENTION LAUNCHING THIS IN THE U.S. AS WELL.
IS THERE SPECIFIC REGULAR — REGULATORY CHANGE YOU NEED IN
ORDER TO GET THIS DONE? >> FOR TOKENIZATION IN THE
U.S., WE DO BELIEVE THE SEC HAS THE AUTHORITY TO MAKE IT HAPPEN
WITHOUT LEGISLATION, WHICH IS INTERESTING.
AND YOU PROBABLY SAW LAST WEEK CHAIRMAN ATKINS OF THE SEC GIVE
AN INTERVIEW ABOUT TOKENIZATION. HE CALLED IT GREAT INNOVATION.
WE AGREE WITH THAT. WE THINK TOKENIZATION IS
PERHAPS THE BIGGEST INNOVATION TO COME INTO CAPITAL MARKETS IN
THE PAST DECADE. I THINK THE U.S.
SHOULD NOT BE FAR BEHIND. I THINK THE OPPORTUNITY IS TOO
LARGE TO IGNORE, NOT JUST FOR RETAIL BUT ALSO INSTITUTIONAL. AND I THINK — THEY ARE HAVING
TOKENIZATION ROUNDTABLES AT THE SEC WHICH WE HAVE BEEN PART OF.
FRANCINE: SO HOW QUICKLY CAN WE EXPECT IT?
>> HARD TO PREDICT. I THINK THE CHALLENGE WITH THE
U.S. IS WE ALREADY HAVE SOMETHING
THAT WORKS. WE HAVE THE TRADITIONAL
FINANCIAL SYSTEM. IT IS MAYBE NOT 24/7 WHICH
TOKENIZATION WOULD ALLOW, BUT IT IS 24/5.
THERE ARE A LOT OF STAKEHOLDERS WE HAVE TO MAKE SURE FEEL GOLD
ABOUT THE CHANGE. JUST FEEL GOOD ABOUT THE CHANGE.
WE HAVE NOT FULLY MOVED OFF THE MAINFRAME AND THE U.S.
SO WE COULD TAKE TIME. BUT I WOULD LIKE TO SEE THE
DOOR OPENING FOR TOKENIZATION RATHER QUICKLY.
I ACTUALLY THINK OUR EVENT SHOULD HELP ACCELERATE THAT.
NOW THAT YOU SEE REAL PRODUCTS THAT ARE USEFUL TO CUSTOMERS
WITH FUNDAMENTAL TECHNOLOGY, I THINK THERE’S GOING TO BE MORE
AND MORE PRESSURE FOR INDUSTRY PARTNERS AROUND THE WORLD TO
ADOPT THE TECHNOLOGY. FRANCINE: ALWAYS A PLEASURE TO SPEAK TO
YOU, VLAD TENEV, ROBINHOOD CHIEF EXECUTIVE OFFICER.
JANE STREET HAS TOLD EMPLOYEES THAT INDIA SECURITIES REGULATOR
MADE MANY ERRONEOUS OR UNSUPPORTED ASSERTIONS ABOUT
THE COMPANIES TRADING ACTIVITY IN THE COUNTRY.
IN AN EMAIL TO STAFF, THE TRADING FIRM AND MARKET MAKER
SAID IT STRONGLY REJECTS THE INDIAN REGULATORS ACCUSATION OF
INDEX MANIPULATION. BLOOMBERG HAS APPROACHED THE
REGULATOR FOR COMMENT. THE FRENCH PRESIDENT MACRON IS
DUE TO ARRIVE IN THE U.K. LATER THIS MORNING FOR THE
FIRST STATE VISIT BY A FRENCH LEADER SINCE 2008.
THERE WILL BE A LOT OF POMP AND CEREMONY BUT ALSO PLENTY OF
SERIOUS TALKS ON THE AGENDA. LET’S GET MORE. >> GOOD MORNING.
IT IS A PACKED THREE DAYS, A BLEND OF SOFT POWER, POLITICAL
ISSUES. LET’S START WITH THE ISSUES
THAT WILL BE THE SHADOWS CAST OVER ALL OF THE PUMP CEREMONY
IN THE SCENES WE WILL SEE. TOP OF THE AGENDA, MIGRATION.
A HUGE ISSUE MOST OF DOMESTICALLY FOR THE U.K.
GOVERNMENT, THAT THE RIGHT WING REFORM PARTY WITH NIGEL FARAJ
AT THE HELM CHOMPING AT THE BIT TO GET GOING ON THIS ISSUE.
SMALL BOAT CROSSINGS HAVE REACHED A RECORD HIGH IN THE
FIRST SIX MONTHS OF THIS YEAR. KEIR STARMER LOOKING THROUGH A
RELATIONSHIP WITH FRANCE TO TRY AND AMEND THE RETURN
ARRANGEMENTS TO TACKLE SOME OF THOSE CROSSINGS AND HOPEFULLY
TURN A BIT OF A PAGE READ WHETHER WE WILL GET AN INKED
DEAL OF MIGRATION IS UNCLEAR. YOU HAVE SECURITY AND DEFENSE.
THE TWO LEADERS WILL BE SHARING A CALL FROM A COALITION OF
NATIONS HASTILY ASSEMBLED WHEN IT LOOKED LIKE THE WAR IN
UKRAINE COULD COME TO A PAUSE OR STOP, REQUIRING THE U.K.,
FRANCE, GERMANY TO STEP IN AND SUPPORT THE PIECE.
IN THE TALK OF GROWTH AND INVESTMENT.
THERE BRITISH SUMMIT WILL ALSO BE A PART OF THE LEADERS
MEETING. GROWTH AND INVESTMENT IS GOING
TO BE SOMETHING TALKED ABOUT. I THINK THE MOOD MUSIC IF WE
LOOK TO THE AGENDA, YOU CAN GET A SENSE OF THE POMP AND
CEREMONY WITH KING CHARLES LEADING THE WAY, WELCOME AT
WINDSOR CASTLE NOT BUCKINGHAM PALACE BECAUSE RENOVATIONS ARE
TAKING PLACE IN LONDON. THE KING HIMSELF ARE FLUID
FRENCH SPEAKER. YOU CAN IMAGINE HE WILL BE
TURNING ON THE CHARM. I THINK THE EMPHASIS YOU WILL
GET FROM BOTH MACRON AND KEIR STARMER WILL BE THE SENSE OF WE
HAVE TURNED THE PAGE FROM BREXIT. THIS IS A NEW ENGLISH — NEW
U.K.-FRENCH RELATIONSHIP. WHILE THERE ARE THESE BIG
ISSUES, IMAGINE THE TWO LEADERS IN THEIR JOINT PRESS CONFERENCE
WHICH WILL ROUND OFF THE THREE DAYS WILL BE LOOKING TO THOSE
POSITIVE TIES. YOU CAN SEE IT IS OUR FIRST
VISIT FROM A FRENCH LEADER FOR STATE VISIT SINCE 2008.
MY WORD, HAS A REAL CHANGE — HAS THE WORLD CHANGED. FRANCINE:
ALEX, GREAT REPORTING ON MACRON’S STATE VISIT.
PRESIDENT TRUMP SAYS HE WILL SHIP OR WEAPONS TO UKRAINE TO
HELP THE COUNTRY DEFEND ITSELF. IT COMES AFTER THE PENTAGON.
LET’S BRING IN A RUSH ECONOMIC EDITOR GREG SULLIVAN.
WHY DID U.S. HALT SUPPLIES TO UKRAINE? >> THE U.S.
EARLIER HAD HALTED THEIR SUPPLIES OF AIR DEFENSE
MISSILES AND ARTILLERY SHELLS TO UKRAINE.
THE PENTAGON SAID IT NEEDS TO REVIEW HIS STOCKPILES.
THERE WAS CONCERN OVER WHETHER SUPPLIES TO KYIV GIBBY
DIMINISHING GREATLY NEEDED ARMAMENTS.
THE PRINTED — THE PENTAGON IS SAYING WHAT UKRAINE NEEDS MOST
IS URGENTLY NEEDED ELSEWHERE. PRESIDENT TRUMP SAID HE WILL
PROVIDE WEAPONS TO UKRAINE. HE WAS START SPECIFIC ABOUT
WHAT KIND OF WEAPONS WOULD BE PROVIDED THAT WE DID SAY THEY
WOULD BE DEFENSIVE IN NATURE. IT IS IMPORTANT TO NOTE THIS
COMES AGAINST THE BACKDROP OF TRUMP RECENTLY TALKING TO
PUTIN, CAWLEY SAID HE WAS UNHAPPY ABOUT. RUSSIA LAUNCHING RECORD AIR
BARRAGES AGAINSTKYIV AND OTHER UKRAINIAN CITIES.
COUNTING THE CITIES WITH MISSILES AND DRONES AND
INCREASING CIVILIAN CASUALTIES. SOME OF THAT MAY HAVE PLAYED
INTO TRUMP’S CALCULUS AND MAKING A REVERSAL OF THIS
DECISION HERE. FRANCINE: BLOOMBERG REPORTING RUSSIA HAS
COLLABORATED WITH CHINESE FIRMS TO MAKE DRONES.
WHAT CAN YOU TELL US? >> THAT’S RIGHT.
DRONES HAVE REALLY BECOME PRETTY CENTRAL TO THIS CONFLICT
ON BOTH SIDES. RUSSIA HAS LONG SOUGHT TO HAVE
THE ABILITY AND KNOW-HOW TO REALLY SCALE UP ITS DOMESTIC
DRONE PRODUCTION AS DRONES BECOME SO MUCH MORE IMPORTANT
IN THE WAR. WITH THE DOCUMENTS OUTLINE IS
HOW THIS COLLABORATION TO PLACE, HOW SOME OF THESE
SENSITIVE TECHNOLOGIES CAN FIND THEIR WAY FROM CHINA INTO
RUSSIA. AND DETAIL FROM START TO FINISH
HOW THESE DRONES CAN BE MADE AND HOW SOME COMPANIES ARE
TRYING TO SCALE UP PRODUCTION POSTER PARTICULAR, ONE COMPANY
THAT DOCUMENTS SHOWED HOW THEY USED INTERMEDIARIES TO SOURCE
SOME OF THESE TECHNOLOGIES FROM CHINA AS WELL AS DELIVER TUNNEL
PRODUCTS ONTO THE BATTLEFIELD AS WELL AS SOME OF THE
COLLABORATION. ANOTHER INTERESTING FACET FROM
THESE DOCUMENTS THAT BLOOMBERG REVIEWED WAS RUSSIAN DELEGATION
TRAVELED IN 2023 AND MET WITH COMPANIES LINKED TO HARBIN
INSTITUTE OF TECHNOLOGY — WHICH BY THE WAY ,PUTIN VISITED
IN 2024. INTERESTING START TO FINISH
PORTRAIT OF HOW RUSSIA IS TRYING TO GET THESE DRONES IT
IS NOW USING TO BASICALLY LAUNCH BARRAGES ON UKRAINIAN
CITIES TO TRY TO WEAR OUT UKRAINE AND GET KYIV TO
CAPITULATE TO ITS WAR DEMANDS. FRANCINE:
GREG SULLIVAN, THANK YOU SO MUCH.
COMING UP, WE WILL DISCUSS THE OUTLOOK FOR LEISURE TOURISM.
THAT IS NEXT. THIS IS “BLOOMBERG.” ♪ FRANCINE: WELCOME BACK.
GLOBAL SPENDING AND THE LEISURE TRAVEL MARKET IS EXPECTED TO
TRIPLE OVER THE NEXT 15 YEARS ACCORDING TO A NEW REPORT.
A REVIEW BY BOSTON CONSULTING GROUP ESTIMATES THE INDUSTRY
WILL BE WORTH $15 TRILLION BY 2040.
THAT GROWTH IS BEING DRIVEN BY EMERGING MARKETS.
FOR SOME INSIGHT, WE ARE JOINED BY IRAN OF ONE OF THE WORLD’S
LARGEST THEME PARK AND ATTRACTION COMPANIES RELENT
ENTERTAINMENTS. SOME OF ITS MOST ICONIC
ATTRACTIONS INCLUDE MADAME TUSSAUDS, THE LONDON EYE.
LEGOLAND. THANK YOU SO MUCH FOR JOINING
US. YOU’RE JUST IN SHANGHAI FOR THE
OPENING SO IT IS A GREAT TIME TO SPEAK TO YOU.
CHINA IS GOING THROUGH A BIT OF A ROUGH SPOT BECAUSE OF
CONSUMPTION, THE DECLINE IN — WHY DO YOU THINK IT IS A GOOD
TIME TO BE INVESTED IN CHINA? >> I HAVE JUST COME BACK AS YOU
SAY. WE LAUNCHED OUR FABLESS NEW PARK OVER THE WEEKEND.
IT IS FAIR TO SAY CHINA HAS BEEN CHALLENGED IN TERMS OF THE
ECONOMY THE LAST FEW YEARS. HAVE OPERATED IN CHINA FOR JUST
SHY OF 20 YEARS, SO WE ARE AT AN ADVANTAGE.
WE KNOW THE MARKET. WE HAVE CATERED TO MILLIONS OF
GUESTS. IN TERMS OF THE MARKET, THERE
ARE GOOD SIGNS IN THE LAST FEW MONTHS.
IF YOU TAKE RETAIL SPENDING AS A GOOD GAUGE OF CONSUMER
SENTIMENT, THAT HAS BEEN UP IN THE LAST FEW MONTHS 6.5%.
ANALYSTS THOUGHT IT WOULD BE ABOUT 5%.
WE HAD A SOLD-OUT WEEKEND IN OUR HOTEL AND OUR TICKETS READ
WE ARE FEELING POSITIVE. FRANCINE:
D WHERE HE GOT PRICING? WHAT IS THE SECRET SAUCE TO
MAKING IT SUCCESSFUL IN CHINA WERE YOU ALSO HAVE QUITE A LOT
OF COMPETITION? >> IT IS A VERY COMPETITIVE
MARKET BUT ALSO A SIGNIFICANTLY HUGE MARKET.
IF YOU CONSIDER LEGOLAND SHANGHAI, IT HAS 55 MILLION
PEOPLE LIVING WITHIN THE DRIVETIME FOR THE THEMEPARK.
IF YOU CONSIDER WE ALSO BUILT A THEMED HOTEL, THAT HAS 250
MILLION PEOPLE LIVING BY BECAUSE OF THE HIGH SPEED TRAIN
LINKS BUILT TO CATER THE PARK. IT IS POSITIVE.
IN TERMS OF POSITIVE, AS WE OPERATED IN HR, THIS IS OUR THIRD LEGOLAND PARK IN AIPAC,
WHAT WE HAVE LEARNED FROM OUR MILLIONS OF GUESTS THAT HAVE
VISITED THE LAST 20 YEARS, WE PRICE ACCORDINGLY.
AT THE SAME TIME, WE ALSO MAKE SURE THERE IS A BROAD RANGE OF
ACCESS IN OUR PRICING. ANNUAL PASSES FOR EXAMPLE IS
JUST THE PRICE OF 2.5 DAY TICKET.
THEY CAN VISIT ALL YEAR ROUND. WE ARE SEEING GOOD SIGNS IN
TERMS OF SALES AT THAT AS WELL. FRANCINE:
WHAT IS DOING REALLY WELL ACROSS THE WORLD?
THERE ARE SOME PLACES WHERE TOURISM IS REALLY HOT AND
OTHERS LESS SO WE HAD OUR PEOPLE WORRIED ABOUT TARIFFS
AND CONSUMER SPENDING IN GENERAL OR ARE THEY HAPPY TO
TRAVEL LESS BUT GO TO THEME PARKS? >> IT IS A MIXED PICTURE.
WE ARE IN 20 COUNTRIES AROUND THE WORLD.
IT IS ALWAYS VERY DIFFERENT. WHAT IS DIFFERENT ABOUT MARLON
OVER THE YEARS WE HAVE BEEN TRADING IS BECAUSE WE ARE
PERFECTLY HEDGED IN TERMS OF DIFFERENT ECONOMIES AND
DIFFERENT TYPES OF INCIDENTS. WE ARE PRETTY RESILIENT.
WHAT WE ARE SICK IS U.K., EUROPE, AND AIPAC ARE STRONG
BUT SUNSET — SOME SIGNS OF SLOWDOWN IN THE U.S.
WE ARE POSITIVE ABOUT THE REST OF THE WORLD AND WE PRICE AND
MARKET ACCORDINGLY. FRANCINE: IS OR ANYTHING THAT SURPRISED
YOU? DO PEOPLE LOOK TICKETS A LITTLE
BIT LATER THAN THEY USED TO? WE ALL CHANGE OUR HABITS AND
TRAVEL DIFFERENTLY TO WHAT WE DID PRE-COVID. >> WE ARE SEEING DIFFERENCES
POST-COVID. PEOPLE ARE BOOKING MUCH LATER.
IN SOME MARKETS, EVEN HOTELS ON THE DAY BEING BOOKED.
BUT BECAUSE OF OUR SCALE AND BECAUSE OF OUR MUCH LOVED
BRANDS , WE ARE HIGH DEMAND IN A LOT OF MARKETS. FRANCINE:
WHAT ARE YOU EXCITED ABOUT THE NEXT 12 MONTHS AND WHAT ARE YOU
READ ABOUT IN TERMS OF WHAT YOU HAVE TO DO TO GET YOUR
PRIORITIES RIGHT? >> I’M EXCITED ABOUT LAUNCHING
LEGOLAND SHANGHAI. IT IS OUR BIGGEST LUNCH, OUR
11TH LEGOLAND PARK. YOU WILL SEE MORE OF THAT IN
TERMS OF SCALING. WE HAVE LEGO, WHICH IS THE
BIGGEST TOY BRAND IN THE WORLD. WE DID A DEAL LAST YEAR WITH
MINECRAFT WHICH IS THE BIGGEST GAMING BRAND IN THE WORLD.
WE HAVE SEVERAL COUPLE PARKS AROUND THE WORLD. FRANCINE:
IT IS NOT AN EASY ENVIRONMENT TO DO BUSINESS IN GENERAL
BECAUSE OF THE UNKNOWNS. I IMAGINE INVESTING FOR THE
FUTURE IS A LITTLE HARDER THAN IT WAS EVEN 12 MONTHS AGO. >> TO SOME EXTENT.
ULTIMATELY, ALL OF OUR INVESTMENTS BECAUSE THEY ARE
HIGH ARE MADE OVER THE LONG-TERM.
WE ARE FORTUNATE WITH OUR SHAREHOLDERS ARE IN IT FOR THE
LONG TERM SO WE MAKE LONG-TERM DECISIONS LIKE FOR EXAMPLE
LEGOLAND SHANGHAI. THAT INVESTMENT WAS IN 2017.
MOTHER HAS BEEN ECONOMIC TURBULENCE IN BETWEEN, WE KNOW
THAT IS A BIG BET AND THOSE ARE THE BIG BETS WE MAKE AND ALL OF
OUR BIG MARKETS. WE ALSO HEAVILY INVESTED IN
MAJOR CITIES AROUND THE WORLD SUCH AS LONDON, SINGAPORE,
SYDNEY, ORLANDO. THOSE ARE ALL MARKETS THAT
CATER TO FAMILIES THAT WANT TOGETHERNESS. FRANCINE:
HOW YOU LOOK AT A I? I HAVE HEARD YOU SAY IT WON’T
REPLACE A ROLLER COASTER BECAUSE THE THRILL OF THE
ROLLER COASTER CAN NEVER REALLY BE QUITE MATCHED, BUT DOES IT
CHANGE HOW YOU THINK I’VE RIDES OR DOES THAT HELP WITH CUES? >> AI IS FANTASTIC.
WE ARE BUILDING VARIOUS USE CASES.
WE HAVE ALREADY BEEN MAGIC MAKING TEAM HAVE BEEN USING AR
IN TERMS OF RIDES AND CREATIVITY BUT IT PROBABLY HAS
THE BIGGEST ROLE IN BACK OF HOUSE, HOW WE BECOME BETTER,
FASTER, AND MORE PASTE IN OUR DECISION-MAKING BASED ON AI BUT
ALSO WILL BE USING IT IN PARK IN TERMS OF IMPROVING THE GUEST
EXCRETES AROUND CUEING AND OTHER ELEMENTS AS WELL — GUEST
EXPERIENCE AROUND CUEING AND OTHER ELEMENTS AS WELL.
LOTS OF OPPORTUNITIES. FRANCINE: DOES IT CHANGE FOOD OFFERINGS
AND THINGS LIKE THAT? OR HAVE YOU BEEN DOING IT
IN-HOUSE THROUGH ALGORITHMS AND OTHER WAYS?
HOW LIFE-CHANGING IS A FOR YOU? >> NOT NECESSARILY IN TERMS OF
FOOD AND BEVERAGE BY BACK OF HOUSE.
BETTER PREDICTING CONSUMER TRENDS, BUT UNDERSTANDING OF
CAN — CUSTOMER BASE, MAKING SURE SINGLE CUSTOMER VIEW THAT
WILL ALL BE POWERED BY AI AND LIKE I SAID MAKE FASTER
DECISION-MAKING AND REALLY POWER OUR BUSINESS DECISIONS
GOING FORWARD. FRANCINE: YOUR IDEAL CUSTOMER COME AS A
FAMILIES? IS IT DIFFERENT IN THE U.S.
FROM THE U.K. THAN IT IS IN CHINA? >> IF YOU THINK ABOUT OUR
PARKS, LEGOLAND PARKS, TWO TO 12-YEAR-OLDS, THAT IS ABOUT
FAMILIES. AT THE HEART OF THE LEGO BRAND
IS ABOUT LEARNING THROUGH PLAY, WHICH HAS HUGE IMPORTANCE IN
NEARLY EVERY MARKET. OUR OTHER THEME PARKS AND
ATTRACTIONS SUCH AS MADAME TROUSSEAU, SLIGHTLY AGED UP.
WE REALLY CATER FROM THE TODDLER PEPPA PIG TO YOUNG
ADULTS AND GRANDPARENTS WITH SEE LIFE. FRANCINE:
DO YOU SEE A LOT OF AMERICANS COMING FOR HOLIDAYS? >> PARTICULARLY THE LONDON EYE.
THAT IS AN ICONIC ATTRACTION THAT ALL TOURISTS SEE AS A BIG
PART OF THEIR VISIT TO LONDON AND MET THEM TROUSSEAU AS WELL.
WE SEE U.S. TOURISM IS HUGELY IMPORTANT,
PARTICULARLY FOR THE U.K. MARKET. FRANCINE: THANK FOR JOINING US, IRAN,
MERLIN ENTERTAINMENT. — THEY YOU FOR JOINING US,
FIONA EASTWOOD, MERLIN ENTERTAINMENT.
STOCKS SEEM TO BE HOLDING UP PRETTY MUCH FIRMLY AS DONALD
TRUMP’S ADMINISTRATIONS LATEST TARIFF ANNOUNCEMENTS ALSO SEEM
TO GIVE WAY TO OPTIMISM THERE IS AMPLE ROOM FOR FURTHER
NEGOTIATIONS. A FULL ROUND UP OF THE MARKETS.
ALSO A FOCUS ON EVERYTHING THAT WE ARE SEEING ON SPIRALING
GLOBAL TRADE WAR. THIS IS THE PICTURE WE ARE
LOOKING AT AT THE MOMENT WITH NASDAQ FUTURES GAINING.
UP NEXT, “BLOOMBERG BRIEF.” THIS IS “BLOOMBERG.”

President Donald Trump unveiled a wave of letters again threatening key trading partners with high tariff rates even as he delayed the increased duties until Aug. 1 and suggested that he was still open to negotiations. Trump posted letters to various nations on social media on Monday, starting with his intent to impose 25% levies on goods from Japan and South Korea. A dozen more followed throughout the afternoon, outlining plans to tariff goods from trading partners including South Africa, Indonesia, Thailand and Cambodia.
Later at the White House, Trump signed an executive order that further delayed the so-called “reciprocal” tariffs, effectively buying each affected nation an extra three weeks to cut a deal. Japanese Prime Minister Shigeru Ishiba called the announcement of slightly higher US tariffs “truly regrettable” while he vowed to continue to protect his nation’s interests in the extended trade negotiations. Meanwhile in geopolitics, documents reviewed by Bloomberg offer unprecedented insight into how Moscow capitalized on its friendly ties with Beijing to skirt Western sanctions and acquire the know-how and capability to build drones to attack Ukraine. Soon after President Vladimir Putin launched his full-scale war on Ukraine, a little-known Russian company thousands of miles away hatched a plan to partner with Chinese firms and solve one of the most urgent challenges faced by the invading army — the need for combat drones that were radically reshaping the battlefield. Taken together, the documents show how sensitive technologies can move from China to Russia even if President Xi Jinping’s government says it’s not supplying either side.

Today’s guests: Rufaro Chiriseri, RBC Wealth Management Fixed Income UK Head, Daniel Rudnicki Schlumberger, JPMorgan EMEA Leveraged Finance Head, Vlad Tenev, Robinhood CEO, Fiona Eastwood, Merlin Entertainments CEO

——–

“The Pulse With Francine Lacqua” is all about conversations with high profile guests in the beating heart of global business, economics, finance and politics. Based in London, we go wherever the story is, bringing you exclusive interviews and market-moving scoops.

Chapters:
00:00:00 – The Pulse With Francine Lacqua
00:01:44 – EU Says It’s Making Progress on US Trade Deal
00:06:26 – Rufaro Chiriseri, RBC Wealth Management Fixed Income UK Head
00:07:18 – Trump Unveils New Batch of Tariff Demands
00:08:15 – Brazil President: US Cannot Threaten the World
00:18:26 – Daniel Rudnicki Schlumberger, JPMorgan EMEA Leveraged Finance Head
00:24:49 – Robinhood Tokenizes US Shares for European Traders
00:28:34 – Vlad Tenev, Robinhood CEO
00:36:05 – Macron to Discuss Security & Migration in State Visit to UK
00:43:04 – Fiona Eastwood, Merlin Entertainments CEO
——–
More on Bloomberg Television and Markets

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