Japan’s Ishiba Vows to Stay on, EU to Prepare US Trade Retaliation Plan | Bloomberg The Pulse 7/21

Japan’s Ishiba Vows to Stay on, EU to Prepare US Trade Retaliation Plan | Bloomberg The Pulse 7/21

♪ ♪ >> NEWSMAKERS AND MARKET MOVERS.
MOVERS. THIS IS THE PULSE WITH FRANCINE LACQUA. IT’S GUY JOHNSON THIS MORNING. WE HAVE A GREAT GUEST LINE-UP LET’S KICK THINGS OFF WITH
TRADE WHICH IS A STORE THAT TRADE WHICH IS A STORE THAT
WILL DEVELOP THIS WEEK. WILL DEVELOP THIS WEEK.
IN TERMS OF THE EUROPEAN IN TERMS OF THE EUROPEAN
RESPONSE. RESPONSE. EUROPEAN ENVOY SAID TO ME TO
EUROPEAN ENVOY SAID TO ME TO FORMULATE A PLAN TO PUT FOUR
FORMULATE A PLAN TO PUT FOUR MEASURES TO RESPOND TO A NO
MEASURES TO RESPOND TO A NO DEAL SCENARIO WITH THE UNITED
DEAL SCENARIO WITH THE UNITED STATES WITH DONALD TRUMP.
STATES WITH DONALD TRUMP. THE U.S. THE U.S.
SEEMS TO WANT AND NEED SEEMS TO WANT AND NEED
UNIVERSAL TARIFF ON EU GOODS UNIVERSAL TARIFF ON EU GOODS
HIGHER THAN 10%. HIGHER THAN 10%.
HOWARD LUTNICK BELIEVES A DEAL HOWARD LUTNICK BELIEVES A DEAL
WITH EUROPE CAN STILL HAPPEN. WITH EUROPE CAN STILL HAPPEN. >> I AM CONFIDENT WE WILL GET A >> I AM CONFIDENT WE WILL GET A
DEAL DONE. DEAL DONE. IT WILL BE GREAT FOR AMERICA
IT WILL BE GREAT FOR AMERICA BECAUSE THE PRESIDENT HAS THE
BECAUSE THE PRESIDENT HAS THE BACK OF AMERICA.
BACK OF AMERICA. I THINK ALL THESE KEY COUNTRIES
I THINK ALL THESE KEY COUNTRIES WILL FIGURE OUT IT IS BETTER TO
WILL FIGURE OUT IT IS BETTER TO UP THE MARKETS THE UNITED
UP THE MARKETS THE UNITED STATES OF AMERICA AND TO PAY A
STATES OF AMERICA AND TO PAY A SIGNIFICANT TARIFF.
SIGNIFICANT TARIFF. GUY: GUY: LET’S TALK TO — THE MARKET HAS
LET’S TALK TO — THE MARKET HAS BECOME COMPLACENT ABOUT THE
BECOME COMPLACENT ABOUT THE RISK COMING THROUGH FROM TRADE.
RISK COMING THROUGH FROM TRADE. THE EU FEELS LIKE IT IS NOW —
THE EU FEELS LIKE IT IS NOW — IT IS WAKING UP TO THE RISK
IT IS WAKING UP TO THE RISK THAT NO DEAL SCENARIO IS NOW
THAT NO DEAL SCENARIO IS NOW POSSIBLE. POSSIBLE.
THE MARKET IS YET TO GET TO THE MARKET IS YET TO GET TO
THERE. THERE. HOW BIG OF A RISK IS THERE?
HOW BIG OF A RISK IS THERE? >> IT IS HEADING IN THE >> IT IS HEADING IN THE
DIRECTION OF RISK YEAR IN TERMS DIRECTION OF RISK YEAR IN TERMS
OF THE ECONOMIC FALLOUT THAT OF THE ECONOMIC FALLOUT THAT
THIS COULD CREATE. THIS COULD CREATE.
THE IMPORTANT THING THAT HOWARD THE IMPORTANT THING THAT HOWARD
LUTNICK SAID WAS IT WILL BE A LUTNICK SAID WAS IT WILL BE A
GREAT FOR AMERICA. GREAT FOR AMERICA.
THE FLIPSIDE IS IT WILL NOT BE THE FLIPSIDE IS IT WILL NOT BE
GREAT FOR THE EUROPEAN UNION. GREAT FOR THE EUROPEAN UNION.
OFFICIALS IN BRUSSELS TRIED TO OFFICIALS IN BRUSSELS TRIED TO
FIGURE OUT HOW MUCH PAIN CAN WE FIGURE OUT HOW MUCH PAIN CAN WE
TAKE? TAKE? WHAT IS THE THRESHOLD OF THAT
WHAT IS THE THRESHOLD OF THAT RECIPROCAL TARIFF?
RECIPROCAL TARIFF? 10%, THEY WOULD TAKE 10%.
10%, THEY WOULD TAKE 10%. IT WOULD ABSORB THAT BUT 30%
IT WOULD ABSORB THAT BUT 30% RIGHT NOW, THAT WILL CUT OFF
RIGHT NOW, THAT WILL CUT OFF TRADE SAVE NEGATIVELY.
TRADE SAVE NEGATIVELY. THE REAL QUESTION NOW IS WE
THE REAL QUESTION NOW IS WE HAVE SEEN A LOT OF DEALS COME
HAVE SEEN A LOT OF DEALS COME ALONG. ALONG. TALKS OF DEALS, FRAMEWORKS AND
TALKS OF DEALS, FRAMEWORKS AND VARIOUS ARRANGEMENTS TOWARDS
VARIOUS ARRANGEMENTS TOWARDS THE DEALS THAT DONALD TRUMP
THE DEALS THAT DONALD TRUMP WANTS TO GET TOGETHER BUT WE
WANTS TO GET TOGETHER BUT WE HAVE NOT SEEN ANY REAL
HAVE NOT SEEN ANY REAL RETALIATION THE EUROPEANS ARE
RETALIATION THE EUROPEANS ARE THREATENING WHAT WOULD BE THE
THREATENING WHAT WOULD BE THE FIRST SIGNIFICANT RETALIATION
FIRST SIGNIFICANT RETALIATION IF IT GETS TO THAT POINT.
IF IT GETS TO THAT POINT. GUY: GUY: WE ARE FOCUSING ON WHAT’S
WE ARE FOCUSING ON WHAT’S HAPPENING ACROSS THE ATLANTIC
HAPPENING ACROSS THE ATLANTIC BUT WE NEED TO FOCUS ON WHAT’S
BUT WE NEED TO FOCUS ON WHAT’S HAPPENING WITH CHINA.
HAPPENING WITH CHINA. WE HAVE THE EU-CHINA SUMMIT.
WE HAVE THE EU-CHINA SUMMIT. IT LOOKS LIKE WE WILL HAVE A
IT LOOKS LIKE WE WILL HAVE A TRUMP-XI SUMMIT ON THE FRINGES
TRUMP-XI SUMMIT ON THE FRINGES OF THE APEC SUMMIT.
OF THE APEC SUMMIT. WHAT WE KNOW ABOUT THIS AND THE
WHAT WE KNOW ABOUT THIS AND THE ETC. ETC. RELATIONSHIP?
RELATIONSHIP? BRENDAN: BRENDAN: IT IS ALSO NOT IN A GREAT PLACE
IT IS ALSO NOT IN A GREAT PLACE NOW. NOW. IT HAD A NUMBER OF BACK AND
IT HAD A NUMBER OF BACK AND FORTH.ON VARIOUS ISSUES THE
FORTH.ON VARIOUS ISSUES THE MEETING THIS WEEK IN BEIJING
MEETING THIS WEEK IN BEIJING WILL BE IN AN ATTEMPT TO PUT
WILL BE IN AN ATTEMPT TO PUT THAT BACK ON TRACK AND TO TRY
THAT BACK ON TRACK AND TO TRY TO SHOW THE TWO SIDES CAN WORK
TO SHOW THE TWO SIDES CAN WORK TOGETHER AS STRATEGIC ALLIES
TOGETHER AS STRATEGIC ALLIES AND COMPETITORS.
AND COMPETITORS. THE THREE ECONOMIES ARE IN A
THE THREE ECONOMIES ARE IN A DIFFICULT POSITION RIGHT NOW
DIFFICULT POSITION RIGHT NOW AND ALL TRYING TO JOCKEYING
AND ALL TRYING TO JOCKEYING AROUND TO FIGURE OUT WHO IS
AROUND TO FIGURE OUT WHO IS REALLY GOING TO BE — AND WHO
REALLY GOING TO BE — AND WHO HAS THE LEVERAGE AND ALL THESE
HAS THE LEVERAGE AND ALL THESE DIFFERENT NEGOTIATIONS.
DIFFERENT NEGOTIATIONS. GUY: GUY: THANK YOU, BRENDAN MURRAY.
THANK YOU, BRENDAN MURRAY. WE WILL BE GATHERING MOMENTUM
WE WILL BE GATHERING MOMENTUM TOWARDS THE BACK END OF THIS
TOWARDS THE BACK END OF THIS WEEK. WEEK.
THAT STORY WILL BE FRONT AND THAT STORY WILL BE FRONT AND
CENTER. CENTER. THE STORY THAT IS FRONT AND
THE STORY THAT IS FRONT AND CENTER THIS MORNING IS WHAT’S
CENTER THIS MORNING IS WHAT’S HAPPENING IN JAPAN.
HAPPENING IN JAPAN. THE PRIME MINISTER INSISTED HE
THE PRIME MINISTER INSISTED HE WILL STAY ON DESPITE THE
WILL STAY ON DESPITE THE COALITION LEWIS MAJORITY IN THE
COALITION LEWIS MAJORITY IN THE UPPER HOUSE. UPPER HOUSE.
THE PRIME MINISTER HAS NOW LOST THE PRIME MINISTER HAS NOW LOST
LOWER HOUSE AND UPPER HOUSE. LOWER HOUSE AND UPPER HOUSE.
NOT SINCE THE MID-50’S. NOT SINCE THE MID-50’S.
THIS WILL COMPLICATE MATTERS THIS WILL COMPLICATE MATTERS
WHEN IT COMES TO TRADE TALKS. WHEN IT COMES TO TRADE TALKS.
ISSUING THAT THERE WILL BE NO ISSUING THAT THERE WILL BE NO
IMPACT ON THAT BUT THAT IS HARD IMPACT ON THAT BUT THAT IS HARD
TO SEEK WITH THIS POLITICAL TO SEEK WITH THIS POLITICAL
INSTABILITY. INSTABILITY. IT IS UNCLEAR WHAT HAPPENS IN
IT IS UNCLEAR WHAT HAPPENS IN TERMS OF MEETING THE U.S.
TERMS OF MEETING THE U.S. PRESIDENT. PRESIDENT.
WE’VE AT THE U.S. WE’VE AT THE U.S.
TREASURY SECRETARY JAPAN AS TREASURY SECRETARY JAPAN AS
WELL. WELL. WHAT HAPPENS NEXT WILL BE KEY.
WHAT HAPPENS NEXT WILL BE KEY. LET’S TAKE A LISTEN TO WHAT HE
LET’S TAKE A LISTEN TO WHAT HE HAD TO SAY. HAD TO SAY. >> WE MUST PROTECT JAPAN’S >> WE MUST PROTECT JAPAN’S
INTERESTS IN TRADE TALKS WITH INTERESTS IN TRADE TALKS WITH
THE U.S.. THE U.S.. KEEPING IN MIND, THE DEADLINE
KEEPING IN MIND, THE DEADLINE OF AUGUST 1. OF AUGUST 1.
I HAVE PASSED THIS YES IT’S — I HAVE PASSED THIS YES IT’S —
THIS MEASURES THE U.S. THIS MEASURES THE U.S.
AND SECRETARY BESSENT. AND SECRETARY BESSENT.
I HOPE TO SHOW TANGIBLE RESULTS I HOPE TO SHOW TANGIBLE RESULTS
IN TRADE TALKS SOON. IN TRADE TALKS SOON. GUY: GUY:
LET’S TALK ABOUT THE LET’S TALK ABOUT THE
IMPLICATIONS OF ALL OF THIS IMPLICATIONS OF ALL OF THIS
WITH ALICE FRENCH FROM TOKYO. WITH ALICE FRENCH FROM TOKYO.
HE IMPLY HE NEEDS TO CONTINUE HE IMPLY HE NEEDS TO CONTINUE
WITH THESE TRADE TALKS. WITH THESE TRADE TALKS.
JAPANESE MARKETS ARE CLOSED JAPANESE MARKETS ARE CLOSED
TODAY. TODAY. DO WE HAVE A SENSE THAT THINGS
DO WE HAVE A SENSE THAT THINGS HAVE GOTTEN MORE COMPLICATED
HAVE GOTTEN MORE COMPLICATED AND WE GET A GREAT — A GREATER
AND WE GET A GREAT — A GREATER SENSE OF THAT TOMORROW WHEN
SENSE OF THAT TOMORROW WHEN MARKETS REOPEN? MARKETS REOPEN? ALICE: ALICE: GOOD MORNING.
GOOD MORNING. LIKE YOU SAY, THINGS ARE
LIKE YOU SAY, THINGS ARE BASICALLY EVEN MORE UNCLEAR NOW
BASICALLY EVEN MORE UNCLEAR NOW THAN THEY WERE BEFORE.
THAN THEY WERE BEFORE. WE SAW THE YEN STRENGTH LETTING
WE SAW THE YEN STRENGTH LETTING SLIGHTLY TODAY. SLIGHTLY TODAY.
PARTLY ON THAT SAFE HAVEN TO PARTLY ON THAT SAFE HAVEN TO
MAN AMONGST ALL THIS MAN AMONGST ALL THIS
UNCERTAINTY. UNCERTAINTY. OF AND IT WEAKENED QUITE A LOT
OF AND IT WEAKENED QUITE A LOT LAST WEEK ON WORRIES AROUND
LAST WEEK ON WORRIES AROUND THIS ELECTION. THIS ELECTION.
TRADE WILL BE A BIG FOCUS. TRADE WILL BE A BIG FOCUS.
ELECTION OR NO ELECTION, THE ELECTION OR NO ELECTION, THE
TALKS HAD NOT YIELDED A GREAT TALKS HAD NOT YIELDED A GREAT
DEAL. DEAL. A LOT OF UNCERTAINTY AND
A LOT OF UNCERTAINTY AND WORRIES AROUND THAT.
WORRIES AROUND THAT. A LOT OF PEOPLE SAY IT LOOKS
A LOT OF PEOPLE SAY IT LOOKS LESS LIKELY THAT JAPAN CAN GET
LESS LIKELY THAT JAPAN CAN GET A POSITIVE DEAL NOW THAT HE HAS
A POSITIVE DEAL NOW THAT HE HAS BEEN WEAKENED DOMESTICALLY.
BEEN WEAKENED DOMESTICALLY. EQUITIES TRADING IS CLOSED
EQUITIES TRADING IS CLOSED TODAY BUT TOMORROW, THE TRADE
TODAY BUT TOMORROW, THE TRADE SENSITIVE TEXTURES, AUTOMAKERS
SENSITIVE TEXTURES, AUTOMAKERS WILL BE A BIG IN FOCUS IN TERMS
WILL BE A BIG IN FOCUS IN TERMS OF WHERE INVESTORS WILL BE
OF WHERE INVESTORS WILL BE LOOKING TO PUT THE MONEY.
LOOKING TO PUT THE MONEY. MAYBE THE WANT TO LOSE OUT ON
MAYBE THE WANT TO LOSE OUT ON THIS. THIS. GUY: GUY:
WHAT IS THE FEAR HERE? WHAT IS THE FEAR HERE? IS IT THAT WE SEE MORE
IS IT THAT WE SEE MORE UNCERTAINTY, MAYBE WE DON’T
UNCERTAINTY, MAYBE WE DON’T SEEM RATE HIKES COMING THROUGH
SEEM RATE HIKES COMING THROUGH FROM THE BOJ IN THE WAY WE
FROM THE BOJ IN THE WAY WE ANTICIPATED? ANTICIPATED?
WHAT IS A THREAT THAT EMANATES WHAT IS A THREAT THAT EMANATES
FROM THIS ELECTION? FROM THIS ELECTION?
THE FACT FOR THE FIRST TIME THE FACT FOR THE FIRST TIME
SINCE THE 50’S THAT NO LONGER SINCE THE 50’S THAT NO LONGER
CONTROLS BOTH HOUSES? CONTROLS BOTH HOUSES? ALICE:
ALICE: LIKE YOU SAY, BASICALLY THIS
LIKE YOU SAY, BASICALLY THIS GENERAL UNCERTAINTY OF WHERE WE
GENERAL UNCERTAINTY OF WHERE WE GO FROM HERE IN TERMS OF
GO FROM HERE IN TERMS OF POLICY, FISCAL POLICY.
POLICY, FISCAL POLICY. WE KNOW JAPAN HAS A HUGE
WE KNOW JAPAN HAS A HUGE GOVERNMENT DEBT BURDEN, MORE
GOVERNMENT DEBT BURDEN, MORE THAN 200% GDP. THAN 200% GDP.
IT HAS BEEN WORSE ABOUT IT HAS BEEN WORSE ABOUT
GOVERNMENT SPENDING AND WHAT IT GOVERNMENT SPENDING AND WHAT IT
SHOULD BILL CAN DO ABOUT THAT. SHOULD BILL CAN DO ABOUT THAT.
WE KNOW THE OPPOSITION PARTIES WE KNOW THE OPPOSITION PARTIES
AS BOLSTER THE INFLUENCE OF THE AS BOLSTER THE INFLUENCE OF THE
UPPER HOUSE, SEVERAL ASKING FOR UPPER HOUSE, SEVERAL ASKING FOR
TAX CUTS. TAX CUTS. HOW WILL THAT BE FUNDED, HOW
HOW WILL THAT BE FUNDED, HOW WILL HE PUSH FORWARD WITH THE
WILL HE PUSH FORWARD WITH THE PLANS FOR INCREASING DEFENSE
PLANS FOR INCREASING DEFENSE SPENDING IF GOVERNMENT SPENDING
SPENDING IF GOVERNMENT SPENDING PLANS ARE CHANGED.
PLANS ARE CHANGED. OBVIOUSLY, TRADE.
OBVIOUSLY, TRADE. LOOMING OVER THIS.
LOOMING OVER THIS. WE KNOW IF THAT WILL BE LEFT TO
WE KNOW IF THAT WILL BE LEFT TO RUN POLICY, THEY MAY BE MORE
RUN POLICY, THEY MAY BE MORE CAUTIOUS WITH THE FUTURE RATE
CAUTIOUS WITH THE FUTURE RATE HIKES. HIKES.
IN GENERAL, THE CONSENSUS IS IN GENERAL, THE CONSENSUS IS
THAT THE TABLE AT THE PUSH THAT THE TABLE AT THE PUSH
FORWARD AT SOME POINT BUT THE FORWARD AT SOME POINT BUT THE
ELECTION OUTCOME MAY SLOW DOWN ELECTION OUTCOME MAY SLOW DOWN
THE PACE OF THAT AND THAT MAY THE PACE OF THAT AND THAT MAY
BE BAD NEWS. BE BAD NEWS. GUY: GUY:
WE WILL WATCH TOMORROW WITH A WE WILL WATCH TOMORROW WITH A
GREAT DEAL OF INTEREST TO SEE GREAT DEAL OF INTEREST TO SEE
HOW THIS FITS TOGETHER ONCE THE HOW THIS FITS TOGETHER ONCE THE
MARKETS OPEN. MARKETS OPEN. ALICE FRENCH, JOINING US.
ALICE FRENCH, JOINING US. THINKING ABOUT ALL THIS.
THINKING ABOUT ALL THIS. GOOD MORNING. GOOD MORNING.
MORE UNCERTAINTY. MORE UNCERTAINTY.
JAPAN IS CREATING MORE IN JAPAN IS CREATING MORE IN
CERTAIN TP DO YOU HAVE THE CERTAIN TP DO YOU HAVE THE
TRADE STORY LOOMING. TRADE STORY LOOMING.
WE DON’T KNOW WHAT WILL HAPPEN. WE DON’T KNOW WHAT WILL HAPPEN.
IT FEELS LIKE A BIGGER THREAT IT FEELS LIKE A BIGGER THREAT
THAN THE MARKET IS LOOKING FOR THAN THE MARKET IS LOOKING FOR
AT THE MOMENT. AT THE MOMENT. YET, ASSET PRICES LOOK GOOD.
YET, ASSET PRICES LOOK GOOD. MARKETS HAVE RALLIED.
MARKETS HAVE RALLIED. THE MARKET SEEMS VERY CALM.
THE MARKET SEEMS VERY CALM. IS AT THE RIGHT PRICE TO BE
IS AT THE RIGHT PRICE TO BE RIGHT NOW? RIGHT NOW?
IS THIS A GLASS HALF-FULL IS THIS A GLASS HALF-FULL
ENVIRONMENT? ENVIRONMENT? . . >> WE HAVE SEEN THIS INTERPLAY >> WE HAVE SEEN THIS INTERPLAY
BETWEEN MARKETS AND INVESTORS BETWEEN MARKETS AND INVESTORS BEING WORRIED ABOUT TOP-DOWN
BEING WORRIED ABOUT TOP-DOWN FACTORS. FACTORS.
THOSE THAT YOU MENTIONED, THOSE THAT YOU MENTIONED,
TARIFFS, TRADE COME INFLATION. TARIFFS, TRADE COME INFLATION.
, BUT ON THE OTHER HAND MARKETS , BUT ON THE OTHER HAND MARKETS
HAVE BEEN INFLATION BY HAVE BEEN INFLATION BY
BOTTOM-UP FACTORS. BOTTOM-UP FACTORS.
THE FACT THAT CONSUMERS SEEM THE FACT THAT CONSUMERS SEEM
HEALTHY. HEALTHY. THE FACT THAT BUSINESS
THE FACT THAT BUSINESS SENTIMENT HAS IMPROVED AND
SENTIMENT HAS IMPROVED AND BUSINESS ACTIVITY HAS
BUSINESS ACTIVITY HAS INCREASED. INCREASED.
IF YOU LOOK AT WHAT’S GOING ON IF YOU LOOK AT WHAT’S GOING ON
WITH THE EARNINGS IN THE U.S. WITH THE EARNINGS IN THE U.S.
WHAT I SUSPECT WILL HAPPEN IS WHAT I SUSPECT WILL HAPPEN IS
ONCE WE GET MORE CLARITY ON THE ONCE WE GET MORE CLARITY ON THE
TOP-DOWN FACTORS, MARKETS WILL TOP-DOWN FACTORS, MARKETS WILL
CONTINUE TO BE DRIVEN BY THE CONTINUE TO BE DRIVEN BY THE
BOTTOM-UP FACTORS. BOTTOM-UP FACTORS.
I THINK WHERE WE ARE WITH I THINK WHERE WE ARE WITH
EQUITY MARKETS IN THE U.S. EQUITY MARKETS IN THE U.S.
IS WE ARE APPROACHING THE FINAL IS WE ARE APPROACHING THE FINAL
STAGES OF AN EQUITY BULL MARKET STAGES OF AN EQUITY BULL MARKET
THAT HAS BEEN SOMEWHAT EXTENDED THAT HAS BEEN SOMEWHAT EXTENDED
BY TRUMP TO TURN ON TARIFFS, BY TRUMP TO TURN ON TARIFFS,
THE ONE BILL AS WELL. THE ONE BILL AS WELL.
BECAUSE WE FEEL THERE IS THE BECAUSE WE FEEL THERE IS THE
FINAL PHASE, WE ARE FINAL PHASE, WE ARE
DIVERSIFYING THE EXPOSURE AWAY DIVERSIFYING THE EXPOSURE AWAY
FROM THE U.S. FROM THE U.S. IN TWO OF THE MARKETS INCLUDING
IN TWO OF THE MARKETS INCLUDING INDIA, JAPAN AND EUROPE.
INDIA, JAPAN AND EUROPE. GUY: GUY: THE FINAL PHASE OF A BULL
THE FINAL PHASE OF A BULL MARKET. MARKET.
WHAT IS THAT COME TO AN END? WHAT IS THAT COME TO AN END?
ANEKA: ANEKA: IT COULD BE AN INCENTIVE FOR
IT COULD BE AN INCENTIVE FOR QUITE SOME TIME.
QUITE SOME TIME. GUY: GUY: THE FINAL PHASE COULD BE — THE
THE FINAL PHASE COULD BE — THE END OF IT COULD BE A WAY AWAY.
END OF IT COULD BE A WAY AWAY. ANEKA: ANEKA:
IT COULD BE A WAY AWAY. IT COULD BE A WAY AWAY.
WE HAVE BEEN SEEING THAT U.S. WE HAVE BEEN SEEING THAT U.S.
SECULAR OUTPERFORMANCE HAS BEEN SECULAR OUTPERFORMANCE HAS BEEN
DRIVEN BY, OF COURSE, THE MAG DRIVEN BY, OF COURSE, THE MAG
SEVEN, AI THEME WHICH COULD GO SEVEN, AI THEME WHICH COULD GO
ON FOR SOME TIME. ON FOR SOME TIME.
NOW, WE SEE THESE RESULTS NOW, WE SEE THESE RESULTS
COMING OUT, SOME OF THEM THIS COMING OUT, SOME OF THEM THIS
WEEK. WEEK. NOW, WHAT WE SEE GOING FORWARD
NOW, WHAT WE SEE GOING FORWARD IS WE WILL START NEEDING TO SEE
IS WE WILL START NEEDING TO SEE THESE COMPANIES MONETIZE ALL OF
THESE COMPANIES MONETIZE ALL OF THE CAPEX SPENDING THEY’VE BEEN
THE CAPEX SPENDING THEY’VE BEEN DOING. DOING. WE ESTIMATE BY 2027, IF WE
WE ESTIMATE BY 2027, IF WE DON’T SEE THAT, WE COULD GET
DON’T SEE THAT, WE COULD GET THAT DE-THRATING.
THAT DE-THRATING. GUY: GUY: WE’RE STARTING TO SEE IT.
WE’RE STARTING TO SEE IT. THE TARIFFS STORY.
THE TARIFFS STORY. IS THIS THE LAST SET OF’S
IS THIS THE LAST SET OF’S EARNINGS THAT WILL BE LARGELY
EARNINGS THAT WILL BE LARGELY UNAFFECTED BY TARIFFS?
UNAFFECTED BY TARIFFS? WHEN WE GET TO THE THIRD
WHEN WE GET TO THE THIRD QUARTER THAT THESE NUMBERS ARE
QUARTER THAT THESE NUMBERS ARE LOOKING A LITTLE BIT MORE
LOOKING A LITTLE BIT MORE BLEAK? BLEAK?
ARE CORPORATE ORDERINGS GOING ARE CORPORATE ORDERINGS GOING
TO CONTINUE IN THE VEIN THEY TO CONTINUE IN THE VEIN THEY
ARE? ARE? THIS EARNINGS SEASON SO FAR
THIS EARNINGS SEASON SO FAR LOOKS PRETTY GOOD.
LOOKS PRETTY GOOD. ANEKA: ANEKA: SO FAR, SO GOOD.
SO FAR, SO GOOD. LET’S UNPACK WHAT’S BEEN
LET’S UNPACK WHAT’S BEEN HAPPENING SO FAR WITH THE U.S.
HAPPENING SO FAR WITH THE U.S. EARNINGS. EARNINGS.
SO FAR, SO GOOD. SO FAR, SO GOOD.
WE WENT INTO THIS EARNINGS WE WENT INTO THIS EARNINGS
SEASON WITH QUITE LOW SEASON WITH QUITE LOW
EXPECTATIONS. EXPECTATIONS. EPS GROWTH EXPECTED TO BE
EPS GROWTH EXPECTED TO BE AROUND 5%. AROUND 5%.
WE ARE LOOKING AT EARLY BEATS WE ARE LOOKING AT EARLY BEATS
ALREADY. ALREADY. THE U.S. THE U.S.
BANKS HAVE CALLED OUT THAT THE BANKS HAVE CALLED OUT THAT THE
CONSUMER IS HEALTHY. CONSUMER IS HEALTHY.
THEY ARE NOT STRESSED BY ANY THEY ARE NOT STRESSED BY ANY
SORT OF CREDIT FACTORS. SORT OF CREDIT FACTORS.
BUSINESS ACTIVITY IS DOING BUSINESS ACTIVITY IS DOING
WELL, ESPECIALLY INVESTMENT WELL, ESPECIALLY INVESTMENT
BANKING. BANKING. CEOS ARE LOOKING THROUGH ANY
CEOS ARE LOOKING THROUGH ANY UNCERTAINTY TO GET DEALS DONE.
UNCERTAINTY TO GET DEALS DONE. RETAIL SALES, RETAIL WITH WAGE
RETAIL SALES, RETAIL WITH WAGE GROWTH ALSO. GROWTH ALSO.
ON THE TERROR FRONT, WE HAVE ON THE TERROR FRONT, WE HAVE
NOT SEEN — TARIFF FRONT, WE NOT SEEN — TARIFF FRONT, WE
HAVE NOT SEEN THAT COME THROUGH HAVE NOT SEEN THAT COME THROUGH
AS YOU MENTIONED BUT WE ARE NOT AS YOU MENTIONED BUT WE ARE NOT
QUITE OUT OF THE WOODS. QUITE OUT OF THE WOODS. THE U.S.
THE U.S. HAS ONLY SIGNED DEALS WITH THE
HAS ONLY SIGNED DEALS WITH THE FEW COUNTRIES. FEW COUNTRIES. A LOT OF THAT TARIFF EXPOSURE,
A LOT OF THAT TARIFF EXPOSURE, AND ONLY 30% TO 40% OF THAT HAS
AND ONLY 30% TO 40% OF THAT HAS BEEN PASSED ON TO THE END
BEEN PASSED ON TO THE END CONSUMER. CONSUMER.
GOING INTO THE SECOND HALF OF GOING INTO THE SECOND HALF OF
THE YEAR, BUSINESSE MAY BES. THE YEAR, BUSINESSE MAY BES.
WE MAY SEE A SLOWDOWN IN Q3. WE MAY SEE A SLOWDOWN IN Q3.
HIGHER TARIFFS, HIGHER HIGHER TARIFFS, HIGHER
INFLATION. INFLATION. THIS IS WHY THE FED IS
THIS IS WHY THE FED IS JUSTIFIED IN HOLDING RATES
JUSTIFIED IN HOLDING RATES WHERE THEY ARE FOR THEY NOW.
WHERE THEY ARE FOR THEY NOW. GUY: GUY:
YOU SAID YOU WANT TO DIVERSIFY YOU SAID YOU WANT TO DIVERSIFY
AWAY FROM THE UNITED STATES. AWAY FROM THE UNITED STATES. WHY DO I WANT TO DIVERSIFY AWAY
WHY DO I WANT TO DIVERSIFY AWAY FROM A MARKET THAT IS
FROM A MARKET THAT IS OUTPERFORMING? OUTPERFORMING?
YEAH, THE FINAL PHASE COULD YEAH, THE FINAL PHASE COULD
LAST A LONG TIME. LAST A LONG TIME.
FROM MY EXPERIENCE IS THE LAST FROM MY EXPERIENCE IS THE LAST
PHASE GENERALLY IS WHERE YOU PHASE GENERALLY IS WHERE YOU
GENERATE QUITE A LOT OF THE GENERATE QUITE A LOT OF THE
UPSIDE. UPSIDE. IT IS NORMALLY THE LAST PHASE
IT IS NORMALLY THE LAST PHASE WHERE YOU SEE THE FINAL
WHERE YOU SEE THE FINAL EXHILARATION. EXHILARATION.
ANEKA: ANEKA: THAT’S RIGHT. THAT’S RIGHT. A BIT OF A NUANCE.
A BIT OF A NUANCE. WE ARE STILL VERY MUCH FOCUSED
WE ARE STILL VERY MUCH FOCUSED ON U.S. ON U.S.
COMPANIES THAT WE DEEM COMPANIES THAT WE DEEM
EXCEPTIONAL. EXCEPTIONAL. CERTAINLY, THOSE OF THE
CERTAINLY, THOSE OF THE COMPANIES MOST CLOSELY RELATED
COMPANIES MOST CLOSELY RELATED TO THE AI THEME.
TO THE AI THEME. WE WANT TO HAVE THOSE.
WE WANT TO HAVE THOSE. ELSEWHERE, WHERE WE CAN FIND
ELSEWHERE, WHERE WE CAN FIND SIMILAR COMPANIES WE ARE
SIMILAR COMPANIES WE ARE DIVERSIFYING TO EUROPE, INDIA,
DIVERSIFYING TO EUROPE, INDIA, CHINA. CHINA.
BECAUSE VALUATIONS ARE BETTER. BECAUSE VALUATIONS ARE BETTER.
EVEN THOUGH THE U.S. EVEN THOUGH THE U.S.
HAS DONE BETTER THE LAST COUPLE HAS DONE BETTER THE LAST COUPLE
OF MONTHS, THERE’S A HUGE OF MONTHS, THERE’S A HUGE
DISPERSION IN TERMS OF DISPERSION IN TERMS OF
PERFORMANCE BETWEEN EUROPE AND PERFORMANCE BETWEEN EUROPE AND
THE U.S. THE U.S. IN EUROPE, THE BUSINESSES ARE
IN EUROPE, THE BUSINESSES ARE COMMITTING TO INVESTMENT.
COMMITTING TO INVESTMENT. WE ARE SEEING TALKS ABOUT THE
WE ARE SEEING TALKS ABOUT THE REGULATION. REGULATION. ALL OF THIS IS BUSINESS TO
ALL OF THIS IS BUSINESS TO CONDUCIVE. CONDUCIVE.
WITH THINK ALL THE WITH THINK ALL THE
INFRASTRUCTURE SPENDING IS INFRASTRUCTURE SPENDING IS
GOING TO CREATE DOMESTIC DEMAND GOING TO CREATE DOMESTIC DEMAND
AS WELL. AS WELL. IT IS FERTILE GROUND FOR
IT IS FERTILE GROUND FOR INVESTMENT IN EUROPEAN STOCKS.
INVESTMENT IN EUROPEAN STOCKS. GUY: GUY: RE: RE:
CONFIDENT THAT THE U.S. CONFIDENT THAT THE U.S.
MARKETS — IF THE U.S. MARKETS — IF THE U.S.
MARKET RULES OVER, HOW MARKET RULES OVER, HOW
DIVERSIFIED WILL THESE OTHER DIVERSIFIED WILL THESE OTHER
MARKETS BE AND WHAT WILL THE MARKETS BE AND WHAT WILL THE
CORRELATIONS LOOK LIKE? CORRELATIONS LOOK LIKE?
IT WILL BREAK DOWN AT THE IT WILL BREAK DOWN AT THE
MOMENT BUT WILL THEY TIGHTEN UP MOMENT BUT WILL THEY TIGHTEN UP
AS WE START TO SEE — IF WE DO AS WE START TO SEE — IF WE DO
SEE THE U.S. SEE THE U.S. ROLLING OVER? ROLLING OVER?
ANEKA: ANEKA: IT COULD BE. IT COULD BE.
THAT IS WHERE YOU WANT TO HAVE THAT IS WHERE YOU WANT TO HAVE
GEOGRAPHIC DIVERSIFICATION GEOGRAPHIC DIVERSIFICATION
BEYOND THEIR REPEATED MARKETS BEYOND THEIR REPEATED MARKETS
WE ARE LOOKING AT INCLUDE WE ARE LOOKING AT INCLUDE
EUROPE, CHINA. EUROPE, CHINA. INDIA IS A FANTASTIC GROWTH
INDIA IS A FANTASTIC GROWTH STORY. STORY.
IT HAVE THE DEMOGRAPHIC GROWTH IT HAVE THE DEMOGRAPHIC GROWTH
STORY WHERE THE MIDDLE CLASS IS STORY WHERE THE MIDDLE CLASS IS
EXPECTED TO CONTINUE TO GROW EXPECTED TO CONTINUE TO GROW
AND FUND DOMESTIC DEMAND, AND FUND DOMESTIC DEMAND,
EQUITY, EXPOSURE AS WELL. EQUITY, EXPOSURE AS WELL.
THAT IS QUITE LOW. THAT IS QUITE LOW.
YOU HAVE A PROGROWTH GOVERNMENT YOU HAVE A PROGROWTH GOVERNMENT
AS WELL. AS WELL. THEY ARE CUTTING TAXES,
THEY ARE CUTTING TAXES, INCREASING SPENDING.
INCREASING SPENDING. THE INDIAN MARKET IS QUITE
THE INDIAN MARKET IS QUITE DOMESTICALLY FOCUSED.
DOMESTICALLY FOCUSED. IT IS NOT AS EXPOSED TO FACT IS
IT IS NOT AS EXPOSED TO FACT IS LIKE THE U.S., LIKE A REP FOR A
LIKE THE U.S., LIKE A REP FOR A GLOBAL GROWTH SLOWED DOWN THAT
GLOBAL GROWTH SLOWED DOWN THAT IS WHERE YOU WANT TO GET THAT
IS WHERE YOU WANT TO GET THAT KIND OF DIVERSIFICATION TO
KIND OF DIVERSIFICATION TO REDUCE THOSE CORRELATIONS.
REDUCE THOSE CORRELATIONS. GUY: GUY: GREAT TO SEE YOU.
GREAT TO SEE YOU. THE BEFORE TO YOUR MANAGER
THE BEFORE TO YOUR MANAGER JOINING US. JOINING US.
WE WILL LOOK AT THE OUTLOOK FOR WE WILL LOOK AT THE OUTLOOK FOR
EMERGING MARKETS. EMERGING MARKETS.
A TAKE ON WHAT’S HAPPENING WITH A TAKE ON WHAT’S HAPPENING WITH
THE END. THE END. A BUSY WEEK COMING UP.
A BUSY WEEK COMING UP. THIS IS BLOOMBERG.
THIS IS BLOOMBERG. ♪ ♪ GUY: GUY: WELCOME BACK.
WELCOME BACK. LET’S TALK ABOUT WHAT’S
LET’S TALK ABOUT WHAT’S HAPPENING IN THE CURRENCY
HAPPENING IN THE CURRENCY MARKETS AROUND THE WORLD.
MARKETS AROUND THE WORLD. THE YEN FROM LAST WEEK AS JAPAN
THE YEN FROM LAST WEEK AS JAPAN PROMISED TO STAY IN POWER GIVEN
PROMISED TO STAY IN POWER GIVEN THAT HE SUFFERED A HUGE DEFEAT
THAT HE SUFFERED A HUGE DEFEAT IN THIS WEEKEND’S UPPER HOUSE
IN THIS WEEKEND’S UPPER HOUSE ELECTION. ELECTION.
NO LONGER CONTROL IN THE UPPER NO LONGER CONTROL IN THE UPPER
OR LOWER HOUSE IN JAPAN. OR LOWER HOUSE IN JAPAN.
WE HAVE SEEN THAT SINCE THE WE HAVE SEEN THAT SINCE THE
BACK THE 1950’S. BACK THE 1950’S.
PHOENIX KALEN JOINING ME AROUND PHOENIX KALEN JOINING ME AROUND
THE TABLE. THE TABLE. NOT REALLY YOUR BAG BUT — IS
NOT REALLY YOUR BAG BUT — IS THE YEN TRADE A SAFE HAVEN
THE YEN TRADE A SAFE HAVEN TRADED? TRADED?
IS IT A RISK TRADE? IS IT A RISK TRADE?
HOW DO YOU SEE IT? HOW DO YOU SEE IT?
MORE UNCERTAINTY IN JAPAN MORE UNCERTAINTY IN JAPAN
BECAUSE THE YEN SOLD OFF OR DO BECAUSE THE YEN SOLD OFF OR DO
I BY THE YEN BECAUSE WHERE I BY THE YEN BECAUSE WHERE
THINGS GET TOUGH, YOU USED TO THINGS GET TOUGH, YOU USED TO
GO TO THE DOLLAR BUT GO TO THE DOLLAR BUT
INCREASINGLY, NOW YOU GO TO THE INCREASINGLY, NOW YOU GO TO THE
YEN. YEN. PHOENIX: PHOENIX: I THINK IT IS BROADLY
I THINK IT IS BROADLY CLASSIFIED IN THE EURO.
CLASSIFIED IN THE EURO. SAFE HAVEN BENEFITING FROM
SAFE HAVEN BENEFITING FROM FLOWS AWAY FROM THE U.S.
FLOWS AWAY FROM THE U.S. WE HAD BETTER THAN EXPECTED
WE HAD BETTER THAN EXPECTED OUTCOMES FROM THE ELECTIONS.
OUTCOMES FROM THE ELECTIONS. THAT HAS PROVIDED A BIT OF A
THAT HAS PROVIDED A BIT OF A BID FROM THE YEN.
BID FROM THE YEN. GUY: GUY: I’VE BEEN ON VACATION, DURING
I’VE BEEN ON VACATION, DURING THAT TIME, THE DOLLAR HAS AT A
THAT TIME, THE DOLLAR HAS AT A COMEBACK. COMEBACK. PHOENIX:
PHOENIX: 2%. 2%. GUY: GUY: IS IT SOLID? IS IT SOLID?
IS THIS SOMETHING THAT IS THIS SOMETHING THAT
CONTINUES OR SOMETHING YOU CAN CONTINUES OR SOMETHING YOU CAN
STOCK UP TO MIDDLE OF THE STOCK UP TO MIDDLE OF THE
SUMMER AND NOTHING GOING ON? SUMMER AND NOTHING GOING ON?
PHOENIX: PHOENIX: WE HAVE AUGUST 1 COMING UP.
WE HAVE AUGUST 1 COMING UP. THAT IS THE DEADLINE FOR THE A
THAT IS THE DEADLINE FOR THE A LOT OF THESE NEGOTIATIONS.
LOT OF THESE NEGOTIATIONS. THERE WILL BE NERVOUSNESS,
THERE WILL BE NERVOUSNESS, VOLATILITY IS ESPECIALLY SINCE
VOLATILITY IS ESPECIALLY SINCE WE’RE IN THE SUMMER ILLIQUID.
WE’RE IN THE SUMMER ILLIQUID. OF THE MARKETS. OF THE MARKETS.
IT CAN BE A LITTLE CHOPPY AND IT CAN BE A LITTLE CHOPPY AND
WE CAN SEE FURTHER GIVEBACK IN WE CAN SEE FURTHER GIVEBACK IN
TERMS OF EM CURRENCY IN FIXED TERMS OF EM CURRENCY IN FIXED
INCOME PERFORMANCE AND THE LEAD INCOME PERFORMANCE AND THE LEAD
UP TO AUGUST 1. UP TO AUGUST 1. AFTER THAT, THE QUESTION IS
AFTER THAT, THE QUESTION IS AROUND HOW MUCH REPRICING
AROUND HOW MUCH REPRICING FURTHER DO WE SEE OUT OF THE
FURTHER DO WE SEE OUT OF THE FED IN TERMS OF THE RATE CUTS
FED IN TERMS OF THE RATE CUTS THAT ARE PRICED IN.
THAT ARE PRICED IN. GUY: GUY: YOU SEE QUITE A BIT.
YOU SEE QUITE A BIT. ONLY ONE? ONLY ONE? PHOENIX: PHOENIX:
ONLY ONE CUT COMING FROM UP ONLY ONE CUT COMING FROM UP
FROM THE FED IN DECEMBER AND FROM THE FED IN DECEMBER AND
THAT MEANS THERE IS STILL ABOUT THAT MEANS THERE IS STILL ABOUT
20 BASIS POINTS WORTH OF 20 BASIS POINTS WORTH OF
REPRICING THAT NEEDS TO COME REPRICING THAT NEEDS TO COME
OUT. OUT. THAT CAN PROVIDE MORE JUICE TO
THAT CAN PROVIDE MORE JUICE TO THIS DOLLAR TRADE.
THIS DOLLAR TRADE. THE POSITIONING SHIED IS STILL
THE POSITIONING SHIED IS STILL QUITE UNFAVORABLE.
QUITE UNFAVORABLE. PEOPLE HAVE GOTTEN SO BULLISH
PEOPLE HAVE GOTTEN SO BULLISH ON EM VERSUS ON THE DOLLAR.
ON EM VERSUS ON THE DOLLAR. AROUND DOLLAR HAS BEEN MUCH
AROUND DOLLAR HAS BEEN MUCH MORE BEARISH THE LAST COUPLE OF
MORE BEARISH THE LAST COUPLE OF MONTHS. MONTHS.
I THINK THAT SENTIMENT AND I THINK THAT SENTIMENT AND
POSITIONING HAS BEEN POSITIONING HAS BEEN
UNFAVORABLE FOR THIS GUY: UNFAVORABLE FOR THIS GUY:
ILLIQUID MARKET CONDITION. ILLIQUID MARKET CONDITION.
IT IS VOLATILITY PICKUP? IT IS VOLATILITY PICKUP?
PHOENIX: PHOENIX: VOLATILITY HAS STRUGGLED TO
VOLATILITY HAS STRUGGLED TO PICK UP. PICK UP. WE HAVE TRIED TO LOOK AT — TO
WE HAVE TRIED TO LOOK AT — TO TRY TO GO ALONG EM INVOLVED IN
TRY TO GO ALONG EM INVOLVED IN CERTAIN TRADES BUT IT HAS NOT
CERTAIN TRADES BUT IT HAS NOT WORKED OUT. WORKED OUT.
EVEN WHEN YOU HAD THE EVEN WHEN YOU HAD THE
VOLATILITY PICKUP WITH THE VOLATILITY PICKUP WITH THE
REALLY IMPACTED MARKETS LIKE REALLY IMPACTED MARKETS LIKE
BRAZIL AND COLUMBIA. BRAZIL AND COLUMBIA.
IT STRUGGLED TO HOLD. IT STRUGGLED TO HOLD. FUNDAMENTALLY, INVESTORS ARE
FUNDAMENTALLY, INVESTORS ARE VERY BULLISH, THE KIND OF
VERY BULLISH, THE KIND OF OUTSIDE STORY. OUTSIDE STORY.
EVEN THOUGH THE FLOWS HAVE BEEN EVEN THOUGH THE FLOWS HAVE BEEN
STRUCTURALLY QUITE SLOW TO STRUCTURALLY QUITE SLOW TO
MATERIALIZE, THEY ARE MATERIALIZE, THEY ARE HAPPENING.
HAPPENING. WE ARE SEEING MORE INTERESTED
WE ARE SEEING MORE INTERESTED IN ASIAN INVESTORS INVESTING IN
IN ASIAN INVESTORS INVESTING IN EUROPE, LOTS OF FLOWS INTO
EUROPE, LOTS OF FLOWS INTO LATM. LATM.
WE HAVE SEEN A QUADRUPLING OF WE HAVE SEEN A QUADRUPLING OF
FLOWS INTO EMERGING MARKETS FLOWS INTO EMERGING MARKETS
PORTFOLIO DEBT IN JUNE. PORTFOLIO DEBT IN JUNE.
QUADRUPLE FROM THE APRIL AND QUADRUPLE FROM THE APRIL AND
MAY FIGURES AFTER THE MAY FIGURES AFTER THE
LIBERATION DAY CHAOS. LIBERATION DAY CHAOS. GUY: GUY:
WE HAD THE CHAOS BUT NOW WE ARE WE HAD THE CHAOS BUT NOW WE ARE
IN THIS — DOES THAT CRACK? IN THIS — DOES THAT CRACK?
AUGUST 1 CRACK THAT? AUGUST 1 CRACK THAT?
DO WE SEE CREDIT NUANCE BEING DO WE SEE CREDIT NUANCE BEING
IMPLIED IT TO DIFFERENT IMPLIED IT TO DIFFERENT MARKETS?
MARKETS? DOES ENTER A.M. DOES ENTER A.M.
PICK UP MORE IN TERMS OF — I PICK UP MORE IN TERMS OF — I
FEEL LIKE WE ARE IN THIS FEEL LIKE WE ARE IN THIS
INCREDIBLE ENVIRONMENT WHERE INCREDIBLE ENVIRONMENT WHERE
EVERYBODY IS SUPER CALM ON THE EVERYBODY IS SUPER CALM ON THE
SURFACE. SURFACE. I CANNOT BELIEVE THAT WILL NOT
I CANNOT BELIEVE THAT WILL NOT CHANGE. CHANGE. PHOENIX:
PHOENIX: IN TERMS OF THE MARKETS
IN TERMS OF THE MARKETS DISBELIEF IN THE AUGUST 1
DISBELIEF IN THE AUGUST 1 DEADLINE, SOME ELEMENT OF THAT
DEADLINE, SOME ELEMENT OF THAT IS QUITE CREDIBLE BECAUSE YOU
IS QUITE CREDIBLE BECAUSE YOU HAVE LOTS OF LEGAL ISSUES
HAVE LOTS OF LEGAL ISSUES AROUND THE TARIFFS AS WELL.
AROUND THE TARIFFS AS WELL. THEY ARE FACING LOTS OF LEGAL
THEY ARE FACING LOTS OF LEGAL CHALLENGES. CHALLENGES.
THE MORE FEDERAL ONES ARE THE THE MORE FEDERAL ONES ARE THE
SECTORAL ONES AND I THINK THE SECTORAL ONES AND I THINK THE
MARKET LANDS MORE CREDENCE TO MARKET LANDS MORE CREDENCE TO
THAT AND DOES WEIGH ON THOSE THAT AND DOES WEIGH ON THOSE
ECONOMIES MORE IN TERMS OF THE ECONOMIES MORE IN TERMS OF THE
PLACES WHERE AUTOS ARE BEING PLACES WHERE AUTOS ARE BEING
TARGETED OR COPPER IS BEING TARGETED OR COPPER IS BEING
TARGETED. TARGETED. YOU SEE A MORE SUSTAINED
YOU SEE A MORE SUSTAINED IMPACT. IMPACT.
THERE IS A DIFFERENTIATION. THERE IS A DIFFERENTIATION. GUY:
GUY: YOU THINK A MORE NUANCED YOU THINK A MORE NUANCED
PICTURE EMERGES. PICTURE EMERGES. PHOENIX:
PHOENIX: YES. YES. IT IS 10 DAYS AWAY.
IT IS 10 DAYS AWAY. WE WILL NOT GET THAT MANY DAYS
WE WILL NOT GET THAT MANY DAYS AWAY. AWAY.
JUST VERY HIGH-LEVEL PACKS. JUST VERY HIGH-LEVEL PACKS.
THE DETAILS WILL NOT BE WORKED THE DETAILS WILL NOT BE WORKED
OUT FOR MONTHS IF NOT YEARS. OUT FOR MONTHS IF NOT YEARS. FUNDAMENTALLY, THINK OUTLOOK IS
FUNDAMENTALLY, THINK OUTLOOK IS VERY FAVORABLE FOR EMERGING
VERY FAVORABLE FOR EMERGING MARKETS IF YOU LOOK AT THE
MARKETS IF YOU LOOK AT THE GROWTH AND INFLATION BACKDROP.
GROWTH AND INFLATION BACKDROP. GLOBAL GROWTH DECELERATING A
GLOBAL GROWTH DECELERATING A BIT CREATIVE CHINA DATA GETTING
BIT CREATIVE CHINA DATA GETTING WEAKER. WEAKER.
THEY ARE IN NEED OF MUCH MORE THEY ARE IN NEED OF MUCH MORE
STIMULUS IN THE SECOND HALF OF STIMULUS IN THE SECOND HALF OF
THE YEAR. THE YEAR. INFLATION SIDE, WE ARE SEEING A
INFLATION SIDE, WE ARE SEEING A PICKUP IN THE U.S.
PICKUP IN THE U.S. BUT NOT SEEING A PICKUP
BUT NOT SEEING A PICKUP ELSEWHERE. ELSEWHERE. GUY: GUY: IS THE INFLATION IN THE STATES
IS THE INFLATION IN THE STATES DEFLATIONARY ELSEWHERE?
DEFLATIONARY ELSEWHERE? THAT A REASONABLE WAY OF
THAT A REASONABLE WAY OF PAINTING THIS? PAINTING THIS?
PHOENIX: PHOENIX: WE ARE ACTUALLY SEEING SOME
WE ARE ACTUALLY SEEING SOME DEFLATION CREEP BACK INTO THE
DEFLATION CREEP BACK INTO THE CHINA DATA AS WELL.
CHINA DATA AS WELL. NEXT THAT SUPPLY IS A BIG
NEXT THAT SUPPLY IS A BIG PROBLEM FOR THE REST OF THE
PROBLEM FOR THE REST OF THE WORLD VERSUS THE U.S.
WORLD VERSUS THE U.S. THERE IS THAT COMPONENT OF
THERE IS THAT COMPONENT OF DEFLATION CREEPING THROUGH OR
DEFLATION CREEPING THROUGH OR DISINFLATION CREEPING THROUGH
DISINFLATION CREEPING THROUGH TO THE REST OF THE WORLD.
TO THE REST OF THE WORLD. IN TERMS OF WHAT EM REALLY
IN TERMS OF WHAT EM REALLY WORRIES ABOUT IS A REAL RATE
WORRIES ABOUT IS A REAL RATE SHOCK OUT OF THE U.S.
SHOCK OUT OF THE U.S. AND DESPITE THE MOVE WE’VE HAD,
AND DESPITE THE MOVE WE’VE HAD, THE 25 BASIS POINT MOVE ACROSS
THE 25 BASIS POINT MOVE ACROSS THE CURVE OF THE PAST TWO
THE CURVE OF THE PAST TWO WEEKS, THAT’S NOT NOT A REAL
WEEKS, THAT’S NOT NOT A REAL RATE SHOCK. RATE SHOCK.
THAT HAS BEEN DRIVEN MOSTLY BY THAT HAS BEEN DRIVEN MOSTLY BY
RISING INFLATION EXPECTATIONS. RISING INFLATION EXPECTATIONS.
FIVE YEAR BREAKEVENS HAVE GONE FIVE YEAR BREAKEVENS HAVE GONE
UP 25 BRIGHTENS POINTS. UP 25 BRIGHTENS POINTS.
PRETTY MUCH MATCHING THE PRETTY MUCH MATCHING THE
NOMINAL RISE. NOMINAL RISE. THAT IS REALLY THE STORY BEHIND
THAT IS REALLY THE STORY BEHIND THAT MOVE. THAT MOVE.
INVESTORS ON THE EM SIDE SHOULD INVESTORS ON THE EM SIDE SHOULD
NOT BE CONCERNED ABOUT THAT PIG NOT BE CONCERNED ABOUT THAT PIG
IS THAT’S NOT THE REAL RATE IS THAT’S NOT THE REAL RATE
SHOCK. SHOCK. WE HAVE THE RIGHT FAVORABLE
WE HAVE THE RIGHT FAVORABLE REAL COMPONENT ON EM ON THE
REAL COMPONENT ON EM ON THE GROWTH INFLATION FUN.
GROWTH INFLATION FUN. GUY: GUY: WHICH CURRENCIES IN MY LOOKING
WHICH CURRENCIES IN MY LOOKING AT? AT? PHOENIX: PHOENIX:
WE LOVE LATIN CURRENCIES. WE LOVE LATIN CURRENCIES.
WE HAVE A BASKET TRADE WHICH IS WE HAVE A BASKET TRADE WHICH IS
A GOOD WAY TO DIVERSIFY WHAT A GOOD WAY TO DIVERSIFY WHAT
YOU’VE GOT. YOU’VE GOT. LOTS OF RISKS THAT OF THE TRUMP
LOTS OF RISKS THAT OF THE TRUMP ADMINISTRATIONS ABOUT HOW THEY
ADMINISTRATIONS ABOUT HOW THEY MAY TARGET INDIVIDUAL
MAY TARGET INDIVIDUAL ECONOMIES. ECONOMIES. IT IS LONG NICO WAITED BRAZIL
IT IS LONG NICO WAITED BRAZIL MAX, COLOMBIA AND CHIAL AGAINST
MAX, COLOMBIA AND CHIAL AGAINST THEE DOLLAR. THEE DOLLAR.
THAT HAS BEEN ABLE TO WITHSTAND THAT HAS BEEN ABLE TO WITHSTAND
THIS MARKET VOLATILITY. THIS MARKET VOLATILITY.
THAT IS ONE GOOD WAY TO THINK THAT IS ONE GOOD WAY TO THINK
ABOUT THE MEDIC THEMES THAT ARE ABOUT THE MEDIC THEMES THAT ARE
MAY BE LESS FAVORABLE FOR THE MAY BE LESS FAVORABLE FOR THE
U.S. U.S. AND MORE FAVORABLE FOR THE REST
AND MORE FAVORABLE FOR THE REST OF THE WORLD BUT DO IT IN A
OF THE WORLD BUT DO IT IN A BASKET EXPRESSION.
BASKET EXPRESSION. WE HAVE BEEN LOOKING AT LONG
WE HAVE BEEN LOOKING AT LONG VOL. VOL.
THAT IS NOT REALLY WORKED OUT THAT IS NOT REALLY WORKED OUT
WELL YET. WELL YET. WE STILL LIKE OTHER SHORETEL
WE STILL LIKE OTHER SHORETEL THEIR POSITIONS LIKE SHORT
THEIR POSITIONS LIKE SHORT DOLLAR VERSUS CE.
DOLLAR VERSUS CE. AFTER THIS MARKET WOBBLE IN
AFTER THIS MARKET WOBBLE IN THIS SUMMER, WE LOOK INTO
THIS SUMMER, WE LOOK INTO RECEIVER POSITIONS IN PLACES
RECEIVER POSITIONS IN PLACES LIKE BRAZIL AND SOUTH AFRICA.
LIKE BRAZIL AND SOUTH AFRICA. GUY: GUY:
LOOKING FORWARD TO SEEING THOSE LOOKING FORWARD TO SEEING THOSE
TRADES WORKING OUT. TRADES WORKING OUT.
ALWAYS GREAT TO SEE YOU, ALWAYS GREAT TO SEE YOU,
PHOENIX. PHOENIX. COMING UP, WE WILL TURN OUR
COMING UP, WE WILL TURN OUR ATTENTION TO WHAT’S HAPPENING
ATTENTION TO WHAT’S HAPPENING IN GERMANY. IN GERMANY.
GERMAN’S BIGGEST COMPANIES GERMAN’S BIGGEST COMPANIES
PLEDGING HUNDREDS OF BILLIONS PLEDGING HUNDREDS OF BILLIONS
OF DOLLARS IN INVESTMENT. OF DOLLARS IN INVESTMENT.
WE WILL TALK ABOUT THAT NEXT. WE WILL TALK ABOUT THAT NEXT.
THIS IS BLOOMBERG. THIS IS BLOOMBERG. ♪ ♪ GUY: GUY: WELCOME TO THE PULSE.
WELCOME TO THE PULSE. LET’S TALK ABOUT YOUR TOP
LET’S TALK ABOUT YOUR TOP STORIES. STORIES.
THE JAPANESE PRIME MINISTER THE JAPANESE PRIME MINISTER
VALID TO STAY ON DESPITE THE VALID TO STAY ON DESPITE THE
HISTORIC SETBACK THAT SAW HIS HISTORIC SETBACK THAT SAW HIS
COALITION LOSES MAJORITY. COALITION LOSES MAJORITY.
FIRST TIME THAT HAS HAPPENED FIRST TIME THAT HAS HAPPENED
SINCE THE MID-1950’’S. SINCE THE MID-1950’’S.
A POSSUM OR NO DEAL CENTER WITH A POSSUM OR NO DEAL CENTER WITH
THE U.S. THE U.S. ON TRADE. ON TRADE.
WASHINGTON HARDENING ITS STANCE WASHINGTON HARDENING ITS STANCE
AND RYANAIR ROCKETING. AND RYANAIR ROCKETING.
STELLANTIS STARLING. STELLANTIS STARLING.
WE WILL GIVE YOU A KEY ROUNDUP WE WILL GIVE YOU A KEY ROUNDUP
OF THE STORIES YOU NEED TO BE OF THE STORIES YOU NEED TO BE
WANTING ON THE CORPORATE FRONT. WANTING ON THE CORPORATE FRONT.
LET’S TURN OUR ATTENTION TO LET’S TURN OUR ATTENTION TO
WHAT’S HAPPENING IN GERMANY WHAT’S HAPPENING IN GERMANY
THIS MORNING. THIS MORNING. IT DOESN’T OF COMPANIES HAVE
IT DOESN’T OF COMPANIES HAVE JOINED THE GOVERNMENT TO LAUNCH
JOINED THE GOVERNMENT TO LAUNCH A NEW INVESTMENT DRIVE WORTH AT
A NEW INVESTMENT DRIVE WORTH AT LEAST 100 BILLION EUROS.
LEAST 100 BILLION EUROS. MONTHS THE COMPANY LEADING THIS
MONTHS THE COMPANY LEADING THIS INVESTMENT ALLIANCE.
INVESTMENT ALLIANCE. THE OBJECTIVE IS SIMPLE —
THE OBJECTIVE IS SIMPLE — REVIVE EUROPE’S BIGGEST
REVIVE EUROPE’S BIGGEST ECONOMY. ECONOMY. >> IT IS QUITE IMPRESSIVE AFTER >> IT IS QUITE IMPRESSIVE AFTER
A COUPLE OF MONTHS. A COUPLE OF MONTHS.
61 COMPANIES. 61 COMPANIES. MORE TO COME OVER THE NEXT
MORE TO COME OVER THE NEXT MONTHS. MONTHS.
THAT EUROS WITH THE SENTIMENT THAT EUROS WITH THE SENTIMENT
IS AND WE HAVE A CHANCE. IS AND WE HAVE A CHANCE. GUY: GUY: THE CEO SPEAKING TO
THE CEO SPEAKING TO BLOOMBERG’S ALL EARLIER.
BLOOMBERG’S ALL EARLIER. HE JOINS US NOW OUT OF BERLIN.
HE JOINS US NOW OUT OF BERLIN. TALK TO US ABOUT WHAT’S
TALK TO US ABOUT WHAT’S HAPPENING. HAPPENING.
THIS IS THE CORPORATE STORE IN THIS IS THE CORPORATE STORE IN
GERMANY COMING FORWARD AND GERMANY COMING FORWARD AND
SAYING WE WANT TO INVEST, WE SAYING WE WANT TO INVEST, WE
WANT — WE WILL TAKE YOUR WANT — WE WILL TAKE YOUR
LEADERSHIP AND FOLLOW IT UP. LEADERSHIP AND FOLLOW IT UP.
TALK TO US ABOUT THE SCALE AND TALK TO US ABOUT THE SCALE AND
THE INTENT AND HOW FAR THIS THE INTENT AND HOW FAR THIS
COULD GO. COULD GO. OLIVER: OLIVER:
THIS IS AN INITIATIVE THAT WAS THIS IS AN INITIATIVE THAT WAS
SPEARHEADED BY BOTH THE CEO OF SPEARHEADED BY BOTH THE CEO OF
SIEMENS AND CHRISTIAN SEWING, SIEMENS AND CHRISTIAN SEWING,
THE CEO OF DEUTSCHE BANK. THE CEO OF DEUTSCHE BANK.
THE INITIATIVE TO GET THESE THE INITIATIVE TO GET THESE
COMPANIES TO PLEDGE MONEY TO COMPANIES TO PLEDGE MONEY TO
INVEST IN EUROPE TO INVEST IN INVEST IN EUROPE TO INVEST IN
GERMANY. GERMANY. THERE IS THE AMENDMENT TO THE
THERE IS THE AMENDMENT TO THE DEBT BREAK THEM ALL THE
DEBT BREAK THEM ALL THE SPENDING THAT WILL HAPPEN FROM
SPENDING THAT WILL HAPPEN FROM THE GOVERNMENT LEVEL ON DEFENSE
THE GOVERNMENT LEVEL ON DEFENSE AND INFRASTRUCTURE.
AND INFRASTRUCTURE. THAT CAN BE MORE THAN ONE
THAT CAN BE MORE THAN ONE TRILLION EUROS BUT THAT IS ONLY
TRILLION EUROS BUT THAT IS ONLY WORTH SO MUCH. WORTH SO MUCH.
WHAT YOU NEED IS THE PRIVATE WHAT YOU NEED IS THE PRIVATE
INVESTMENT. INVESTMENT. THIS IS MORE THAN HALF A
THIS IS MORE THAN HALF A TRILLION EUROS IN INVESTMENT
TRILLION EUROS IN INVESTMENT BID UP THEY ARE SAYING THIS IS
BID UP THEY ARE SAYING THIS IS NOT REALLY TRUMP LEVEL
NOT REALLY TRUMP LEVEL ACCOUNTING. ACCOUNTING.
TRUMP SAYS THERE HAS BEEN $14 TRUMP SAYS THERE HAS BEEN $14
TRILLION WORTH OF COMMITMENTS TRILLION WORTH OF COMMITMENTS
OF THE U.S. OF THE U.S. THERE IS SOME QUESTION TO THE
THERE IS SOME QUESTION TO THE VERACITY OF THE CLAIMS BUT THIS
VERACITY OF THE CLAIMS BUT THIS IS THE MOMENT OF THE
IS THE MOMENT OF THE OPPORTUNITY FOR GERMANY.
OPPORTUNITY FOR GERMANY. THERE’S IS A RISKS NAMELY COME
THERE’S IS A RISKS NAMELY COME THE TRADE WAR AND THAT CAN BLOW
THE TRADE WAR AND THAT CAN BLOW THINGS OFF COURSE FOR TO HAVE A
THINGS OFF COURSE FOR TO HAVE A LISTEN TO WHAT THE CEO OF
LISTEN TO WHAT THE CEO OF SIEMENS AT THE SAME.
SIEMENS AT THE SAME. >> THERE IS ONE POINT, WE HAVE >> THERE IS ONE POINT, WE HAVE
TO STOP THIS UNCERTAINTY. TO STOP THIS UNCERTAINTY.
ONCE THERE’S A DEAL, THE DEAL ONCE THERE’S A DEAL, THE DEAL
SHOULD BE THE DEAL. SHOULD BE THE DEAL.
AND THEN WE CAN DEPLOY CAPITAL AND THEN WE CAN DEPLOY CAPITAL
AGAIN BASED ON FACTS. AGAIN BASED ON FACTS. OLIVER:
OLIVER: WE WERE SPEAKING BEFORE THE
WE WERE SPEAKING BEFORE THE INTERVIEW. INTERVIEW.
HE SAID AN OK DEAL ON TRADE THE HE SAID AN OK DEAL ON TRADE THE
NEXT COUPLE OF WEEKS, EVEN IF NEXT COUPLE OF WEEKS, EVEN IF
IT IS NOT THE BEST DEAL, IT IT IS NOT THE BEST DEAL, IT
WILL BE BETTER THAN ANOTHER 12 WILL BE BETTER THAN ANOTHER 12
MONTHS OF NEGOTIATIONS. MONTHS OF NEGOTIATIONS.
COMPANIES CAN BEGIN TO MAKE COMPANIES CAN BEGIN TO MAKE
DECISIONS. DECISIONS. IT IS SOMETHING WE HEAR FROM
IT IS SOMETHING WE HEAR FROM HIM. HIM.
IT IS NOT JUST THE RISK IT IS NOT JUST THE RISK
ASSOCIATED WITH THE U.S., IT IS ASSOCIATED WITH THE U.S., IT IS
ALSO AN OPPORTUNITY. ALSO AN OPPORTUNITY.
IT IS AN UPRISING OF THIS TO IT IS AN UPRISING OF THIS TO
SELL AMERICA AND BY EUROPE SELL AMERICA AND BY EUROPE
TRADE. TRADE. >> THERE WAS ONE TREND WHICH >> THERE WAS ONE TREND WHICH
WAS THE SAME ACROSS THE WORLD, WAS THE SAME ACROSS THE WORLD,
THAT THE CLIENTS WANT TO HAVE THAT THE CLIENTS WANT TO HAVE
THE EUROPEAN TO THE BANKS. THE EUROPEAN TO THE BANKS.
VERY CAPABLE U.S. VERY CAPABLE U.S.
BANKS BUT IN THIS WORLD OF BANKS BUT IN THIS WORLD OF
GEOPOLITICAL UNCERTAINTY, THEY GEOPOLITICAL UNCERTAINTY, THEY
WANT TO HAVE A CAPABLE GLOBAL WANT TO HAVE A CAPABLE GLOBAL
EUROPEAN PLAYER. EUROPEAN PLAYER. OLIVER: OLIVER:
IN THIS VAST BALANCE OF RISK IN THIS VAST BALANCE OF RISK
AND OPPORTUNITIES FACING THE AND OPPORTUNITIES FACING THE
GERMAN ECONOMY, THIS INITIATIVE GERMAN ECONOMY, THIS INITIATIVE
IS SOMETHING THAT IS BEING IS SOMETHING THAT IS BEING
DRIVEN BY THE GERMAN PRIVATE DRIVEN BY THE GERMAN PRIVATE
SECTOR AND TRY TO CAPITALIZE TO SECTOR AND TRY TO CAPITALIZE TO
SOME OF THE MOMENTUM WE ARE SOME OF THE MOMENTUM WE ARE
GETTING FROM THE GERMAN SIDE. GETTING FROM THE GERMAN SIDE.
THE PRIVATE BUSINESS COMMUNITY THE PRIVATE BUSINESS COMMUNITY
VERY HAPPY WITH WHAT THEY ARE VERY HAPPY WITH WHAT THEY ARE
SEEING FROM THE GOVERNMENT. SEEING FROM THE GOVERNMENT.
REALLY TRYING TO INSULATE THE REALLY TRYING TO INSULATE THE
GERMAN ECONOMY AND REIMAGINED GERMAN ECONOMY AND REIMAGINED
IT FROM WHAT IT LOOKS LIKE THE IT FROM WHAT IT LOOKS LIKE THE
NEXT 20 YEARS. NEXT 20 YEARS. IT WILL BE VERY DIFFERENT FROM
IT WILL BE VERY DIFFERENT FROM THE LAST FEW DECADES AND WHAT
THE LAST FEW DECADES AND WHAT DROVE WEALTH IN GERMANY.
DROVE WEALTH IN GERMANY. GUY: GUY: GREAT STUFF. GREAT STUFF.
REALLY ENJOYED THE INTERVIEW REALLY ENJOYED THE INTERVIEW
PETER THANK YOU FOR THE PETER THANK YOU FOR THE
UPDATING US ON THE TAKEAWAYS. UPDATING US ON THE TAKEAWAYS.
LET’S CARRY ON THE LET’S CARRY ON THE
INFRASTRUCTURE STORY. INFRASTRUCTURE STORY.
THE GLOBAL COHEAD OF GLOBAL THE GLOBAL COHEAD OF GLOBAL
INDUSTRIALS GROUP AND A LOT OF INDUSTRIALS GROUP AND A LOT OF
INFRASTRUCTURE AT UBS JOINS US. INFRASTRUCTURE AT UBS JOINS US.
PERFECT PERSON TO PICK UP. PERFECT PERSON TO PICK UP.
GOOD MORNING. GOOD MORNING. IS THIS A GERMAN OR EUROPEAN
IS THIS A GERMAN OR EUROPEAN STORY? STORY?
I HEAR A LOT ABOUT GERMANY AT I HEAR A LOT ABOUT GERMANY AT
THE MOMENT. THE MOMENT. I HEAR ABOUT THE INVESTMENT
I HEAR ABOUT THE INVESTMENT THAT U.S. THAT U.S.
CORPORATE WANT TO MAKE. CORPORATE WANT TO MAKE.
IF I GOING TO FRANCE, IT LOOKS IF I GOING TO FRANCE, IT LOOKS
LIKE A DIFFERENT NARRATIVE. LIKE A DIFFERENT NARRATIVE.
WE CONFUSING A BIG GERMAN WE CONFUSING A BIG GERMAN
INVESTMENT DRIVE WITH A INVESTMENT DRIVE WITH A
EUROPEAN STORY THAT LOOKS MORE EUROPEAN STORY THAT LOOKS MORE
POSITIVE — HAVE NUANCED WE POSITIVE — HAVE NUANCED WE
NEED TO BE? NEED TO BE? >> THE REALITY IS ON THE BACK >> THE REALITY IS ON THE BACK
OF THE EUROPEAN UNION, WHEN YOU OF THE EUROPEAN UNION, WHEN YOU
LOOK AT IT, GERMANY HAS BEEN LOOK AT IT, GERMANY HAS BEEN
ONE OF THE OF THE KEY FACTORS. ONE OF THE OF THE KEY FACTORS.
IT IS DIFFICULT TO COMPLETELY IT IS DIFFICULT TO COMPLETELY
SEPARATE GERMANY FROM THE REST SEPARATE GERMANY FROM THE REST
OF EUROPE BUT I THINK GERMANY OF EUROPE BUT I THINK GERMANY
WILL BE THE DRIVER OF THIS WILL BE THE DRIVER OF THIS
CHANGE. CHANGE. IT WILL AFFECT OVERALL MOMENTUM
IT WILL AFFECT OVERALL MOMENTUM ACROSS EUROPE. ACROSS EUROPE. GUY: GUY:
THIS IS A CONVERSATIONAL WE THIS IS A CONVERSATIONAL WE
HAVE ACROSS THE GERMAN HAVE ACROSS THE GERMAN
GOVERNMENT. GOVERNMENT. THERE’S ALSO THIS BROADER POOL
THERE’S ALSO THIS BROADER POOL BY EUROPEAN CORPORATE’S.
BY EUROPEAN CORPORATE’S. THE MESSAGE THEY ARE SENDING IS
THE MESSAGE THEY ARE SENDING IS COME ON, GET ON WITH THIS.
COME ON, GET ON WITH THIS. WE HAVE ALL THIS STUFF GOING
WE HAVE ALL THIS STUFF GOING ON. ON.
IF YOU NEED TO ACT AND WE NEED IF YOU NEED TO ACT AND WE NEED
TO ACT BOLDLY. TO ACT BOLDLY. IS WHAT WE HAVE SEEN SO FAR IS
IS WHAT WE HAVE SEEN SO FAR IS YOUR ACTING BOLDLY?
YOUR ACTING BOLDLY? PHILIPPE: PHILIPPE:
INTERESTINGLY, I THINK EUROPE INTERESTINGLY, I THINK EUROPE
HAS ALWAYS MANAGED TO THRIVE IN HAS ALWAYS MANAGED TO THRIVE IN
TIMES OF CRISIS. TIMES OF CRISIS. IN A BENIGN ENVIRONMENT, NOT
IN A BENIGN ENVIRONMENT, NOT MAKING BIG DECISIONS.
MAKING BIG DECISIONS. I WOULD LIKE TO THINK THIS IS
I WOULD LIKE TO THINK THIS IS THE BEGINNING OF A BIGGER SHIFT
THE BEGINNING OF A BIGGER SHIFT IN THE GERMAN HEADLINES WILL BE
IN THE GERMAN HEADLINES WILL BE CRITICAL IN PUSHING AND PUSHING
CRITICAL IN PUSHING AND PUSHING THE EUROPEAN SHIFT.
THE EUROPEAN SHIFT. WHAT’S INTERESTING ABOUT THE
WHAT’S INTERESTING ABOUT THE EUROPEAN HEADLINES IS IT IS
EUROPEAN HEADLINES IS IT IS FOCUSING ON AEROSPACE AND
FOCUSING ON AEROSPACE AND DEFENSE AND THE INFRASTRUCTURE
DEFENSE AND THE INFRASTRUCTURE SPACE AS WELL. SPACE AS WELL.
IT IS NOT UNCOMMON FOR IT IS NOT UNCOMMON FOR
GOVERNMENTS TO USE GOVERNMENTS TO USE
INFRASTRUCTURE AS A WAY OF INFRASTRUCTURE AS A WAY OF
RESETTING, PROPELLING THE RESETTING, PROPELLING THE
ECONOMY. ECONOMY. IF INFRASTRUCTURE HAS A
IF INFRASTRUCTURE HAS A MULTIPLIER EFFECT, WHETHER IT
MULTIPLIER EFFECT, WHETHER IT IS CALLED LABOR, SUPPLIES,
IS CALLED LABOR, SUPPLIES, IMPROVING EFFICIENCIES.
IMPROVING EFFICIENCIES. GERMAN GOVERNMENT IS FOCUSING
GERMAN GOVERNMENT IS FOCUSING ON THAT. ON THAT.
I THINK EUROPE HAS MADE SOME I THINK EUROPE HAS MADE SOME
OTHER HEADLINES, MUCH SMALLER. OTHER HEADLINES, MUCH SMALLER.
I THINK THE DIFFERENCE WITH I THINK THE DIFFERENCE WITH
GERMANY IS THE SCALE THAT WOULD GERMANY IS THE SCALE THAT WOULD
IT IS HAPPENING. IT IS HAPPENING.
IT IS QUITTING A SHIFT IN TERMS IT IS QUITTING A SHIFT IN TERMS
INVESTORS IN THE PRIVATE INVESTORS IN THE PRIVATE
MARKETS ARE GOING TO LOOK AT MARKETS ARE GOING TO LOOK AT
THIS OPPORTUNITY. THIS OPPORTUNITY. GUY: GUY:
WHERE ARE THE OPPORTUNITIES? WHERE ARE THE OPPORTUNITIES?
I HEAR FROM CORPORATE’S IN I HEAR FROM CORPORATE’S IN
EUROPE, STILL TOO MUCH EUROPE, STILL TOO MUCH
BUREAUCRACY. BUREAUCRACY. THAT IS A PROBLEM.
THAT IS A PROBLEM. THE OTHER THING I HEAR ABOUT
THE OTHER THING I HEAR ABOUT HIS PROBLEM — ENERGY.
HIS PROBLEM — ENERGY. WHERE DO YOU THINK OUTSIDE OF
WHERE DO YOU THINK OUTSIDE OF DEFENSE THAT THE OPPORTUNITIES
DEFENSE THAT THE OPPORTUNITIES LIES? LIES?
WHERE’S THE BIG OPPORTUNITY WHERE’S THE BIG OPPORTUNITY
THAT EXISTS THAT GETS EUROPE THAT EXISTS THAT GETS EUROPE
INTO A POSITION THAT IT CAN INTO A POSITION THAT IT CAN
THRIVE IN A MUCH MORE THRIVE IN A MUCH MORE
SELF-SUSTAINING, POSITIVE WAY? SELF-SUSTAINING, POSITIVE WAY? PHILIPPE: PHILIPPE:
THE HEADLINE IS INFRASTRUCTURE. THE HEADLINE IS INFRASTRUCTURE.
IT IS NOT JUST ABOUT BRIDGES, IT IS NOT JUST ABOUT BRIDGES,
ROADS AND RAIL. ROADS AND RAIL. IT INCLUDES AI AND RECRUITING
IT INCLUDES AI AND RECRUITING THE RIGHT INFRASTRUCTURE WITH
THE RIGHT INFRASTRUCTURE WITH DATA CENTERS. DATA CENTERS.
IT MEANS ELECTRIFICATION. IT MEANS ELECTRIFICATION.
EV CHARGING. EV CHARGING. THE NEED FOR POWERING THE DATA
THE NEED FOR POWERING THE DATA CENTERS. CENTERS.
ENERGY INDEPENDENCE. ENERGY INDEPENDENCE.
THESE ARE REAL MEGATRENDS THAT THESE ARE REAL MEGATRENDS THAT
ARE CUTTING ACROSS EUROPE AND ARE CUTTING ACROSS EUROPE AND
ACROSS THE GLOBE TODAY. ACROSS THE GLOBE TODAY.
THE NEEDS ARE SIGNIFICANT. THE NEEDS ARE SIGNIFICANT.
YOU SEE CAPITAL COMING IN TO. YOU SEE CAPITAL COMING IN TO.
FILL THESE NEEDS THE FILL THESE NEEDS THE
INFRASTRUCTURE’S ARE SO MUCH OF INFRASTRUCTURE’S ARE SO MUCH OF
THE LARGEST PLAYERS IN PRIVATE THE LARGEST PLAYERS IN PRIVATE
CAPITAL MARKETS. CAPITAL MARKETS. GUY: GUY:
HOW MUCH FURTHER DO WE HAVE TO HOW MUCH FURTHER DO WE HAVE TO
GO? GO? HOW MUCH MORE CAPITAL IS HOW MUCH MORE CAPITAL IS
REQUIRED? REQUIRED? WHERE ARE THE BOTTLENECKS?
WHERE ARE THE BOTTLENECKS? YOU CAN PUSH CAPITAL INTO A
YOU CAN PUSH CAPITAL INTO A MARKET WITH SOME TIME TO GET
MARKET WITH SOME TIME TO GET STUCK AND YOU WENT UP WITH IT
STUCK AND YOU WENT UP WITH IT BEING APPLIED IN THE WRONG
BEING APPLIED IN THE WRONG PLACES. PLACES.
WHERE’S THE CHALLENGE RIGHT WHERE’S THE CHALLENGE RIGHT NOW.
NOW. WHAT IT DOES NOT FEEL LIKE IS
WHAT IT DOES NOT FEEL LIKE IS THE PROBLEM IS, THE
THE PROBLEM IS, THE AVAILABILITY OF CAPITAL PAID UP
AVAILABILITY OF CAPITAL PAID UP AND FEELS LIKE IT IS EXECUTING
AND FEELS LIKE IT IS EXECUTING THAT CAPITAL INTO THE RIGHT
THAT CAPITAL INTO THE RIGHT PLACES. PLACES. PHILIPPE:
PHILIPPE: THAT IS ABSOLUTELY RIGHT.
THAT IS ABSOLUTELY RIGHT. NOONDAY PULL AND PUSH.
NOONDAY PULL AND PUSH. WHAT NOW, YOU ARE SEEING THEY
WHAT NOW, YOU ARE SEEING THEY ARE TRYING TO CREATE THE PULL
ARE TRYING TO CREATE THE PULL — THESE HEADLINES ARE TRYING
— THESE HEADLINES ARE TRYING TO INCENTIVIZE PRIVATE CAPITAL
TO INCENTIVIZE PRIVATE CAPITAL ALONG THE GOVERNMENT TO FUND
ALONG THE GOVERNMENT TO FUND INVESTMENTS BOTH IN DEFENSE OF
INVESTMENTS BOTH IN DEFENSE OF BUT ALSO IN THE BROADER
BUT ALSO IN THE BROADER INFRASTRUCTURE SPACE.
INFRASTRUCTURE SPACE. THE PUTSCH NEEDS TO HAVE THE
THE PUTSCH NEEDS TO HAVE THE RIGHT INCENTIVES AND THE RIGHT
RIGHT INCENTIVES AND THE RIGHT PLATFORM TO DO THAT AND THERE
PLATFORM TO DO THAT AND THERE IS WORK REQUIRED TO MAKE THE
IS WORK REQUIRED TO MAKE THE INVESTMENT EASIER OR MAKE THE
INVESTMENT EASIER OR MAKE THE BARRIERS LESS DIFFICULT BUT, I
BARRIERS LESS DIFFICULT BUT, I THINK GERMANY IS MAKING MORE
THINK GERMANY IS MAKING MORE INTEREST BIG NUMBER.
INTEREST BIG NUMBER. THEY SEEM TO BE CREATING AN
THEY SEEM TO BE CREATING AN INVESTMENT THROUGH A SET UP
INVESTMENT THROUGH A SET UP THAT WILL ALLOW PRIVATE
THAT WILL ALLOW PRIVATE INVESTMENT TO COME ALONGSIDE
INVESTMENT TO COME ALONGSIDE IT. IT.
WHETHER IT IS QUITE INVESTMENT WHETHER IT IS QUITE INVESTMENT
WHERE THE GOVERNMENT GUARANTEES WHERE THE GOVERNMENT GUARANTEES
WHICH WILL INCENTIVIZE THE WHICH WILL INCENTIVIZE THE
PRIVATE INVESTMENT. PRIVATE INVESTMENT.
I THINK THEY ARE CREATING THE I THINK THEY ARE CREATING THE
RIGHT BACKDROP. RIGHT BACKDROP. HOW IS THAT GOING TO TRANSLATE
HOW IS THAT GOING TO TRANSLATE INTO M&A? INTO M&A? I HAVE NO DOUBT IT WILL
I HAVE NO DOUBT IT WILL TRANSLATE INTO AN INCREASE M&A
TRANSLATE INTO AN INCREASE M&A ACTIVITY AROUND THE
ACTIVITY AROUND THE INFRASTRUCTURE SPACE MORE
INFRASTRUCTURE SPACE MORE BROADLY IN GERMANY.
BROADLY IN GERMANY. GUY: GUY: DO WE GET A BIGGER STOCK OF
DO WE GET A BIGGER STOCK OF COMPANIES? COMPANIES? PHILIPPE:
PHILIPPE: A BETTER INFRASTRUCTURE BEXTRA
A BETTER INFRASTRUCTURE BEXTRA OR OVER THE NEXT DECADE OR
OR OVER THE NEXT DECADE OR MORE. MORE. OF THAT IS A NECESSITY.
OF THAT IS A NECESSITY. WE CANNOT REMAIN THE WAY WE
WE CANNOT REMAIN THE WAY WE ARE. ARE. DATA CENTERS, THERE’S OVER $1
DATA CENTERS, THERE’S OVER $1 TRILLION WORTH OF INVESTMENT
TRILLION WORTH OF INVESTMENT OVER THE NEXT FIVE YEARS.
OVER THE NEXT FIVE YEARS. THAT IS MASSIVE.
THAT IS MASSIVE. THE CAPITAL AROUND ELECTRICITY,
THE CAPITAL AROUND ELECTRICITY, THE SAME THING. THE SAME THING.
A POWER HAS BEEN FLAT FOR THE A POWER HAS BEEN FLAT FOR THE
LAST DECADE. LAST DECADE. IT IS INCREASING NOW AND WILL
IT IS INCREASING NOW AND WILL INCREASE EVEN MORE IN THE
INCREASE EVEN MORE IN THE FUTURE. FUTURE.
ALL OF THINGS WILL HAPPEN ONLY ALL OF THINGS WILL HAPPEN ONLY
IF YOU PUT N. IF YOU PUT N. INFRASTRUCTURE FRONT OF CAPITAL
INFRASTRUCTURE FRONT OF CAPITAL TO INVEST IN. TO INVEST IN. GUY:
GUY: I STILL HEAR ABOUT THE I STILL HEAR ABOUT THE
BUREAUCRACY. BUREAUCRACY. IT IS A CHALLENGE TO GET IT
IT IS A CHALLENGE TO GET IT DONE. DONE. YES, THE MONEY IS COMING IN BUT
YES, THE MONEY IS COMING IN BUT EXECUTING ON THE PLATFORM AND
EXECUTING ON THE PLATFORM AND THE PROJECT IS STILL DIFFICULT.
THE PROJECT IS STILL DIFFICULT. TRY TO GET STUFF DONE IS STILL
TRY TO GET STUFF DONE IS STILL DIFFICULT. DIFFICULT. ARE WE MOVING FAST ENOUGH
ARE WE MOVING FAST ENOUGH CUTTING BARRIERS, THE RED TAPE
CUTTING BARRIERS, THE RED TAPE TO GETTING SOME OF THESE DEALS
TO GETTING SOME OF THESE DEALS DONE AT A TIME WHEN YOUR HAS
DONE AT A TIME WHEN YOUR HAS THIS DETERMINATION TO DO MORE
THIS DETERMINATION TO DO MORE BUT SEEMS TO BE TRIPPING OVER
BUT SEEMS TO BE TRIPPING OVER ITSELF IN TERMS OF EXECUTING ON
ITSELF IN TERMS OF EXECUTING ON THAT? THAT? PHILIPPE: PHILIPPE:
WE NEVER MOVE FAST ENOUGH. WE NEVER MOVE FAST ENOUGH.
ACROSS A BROADER INFRASTRUCTURE ACROSS A BROADER INFRASTRUCTURE
SPACE AND ACROSS REMOVING THE SPACE AND ACROSS REMOVING THE
RED TAPE. RED TAPE. THE SHORT ANSWER IS WE COULD DO
THE SHORT ANSWER IS WE COULD DO AND SHOULD BE DOING A LOT MORE
AND SHOULD BE DOING A LOT MORE TO IMPROVE AND FACILITATE THE
TO IMPROVE AND FACILITATE THE CAPITAL DEPLOYMENT.
CAPITAL DEPLOYMENT. THESE HEADLINES — I WOULD LIKE
THESE HEADLINES — I WOULD LIKE TO THINK WOULD HELP EUROPE MOVE
TO THINK WOULD HELP EUROPE MOVE IN A DIRECTION OF REMOVING THAT
IN A DIRECTION OF REMOVING THAT RED TAPE TO ALLOW FOR
RED TAPE TO ALLOW FOR INFRASTRUCTURE FUNDS TO THE
INFRASTRUCTURE FUNDS TO THE CAPITAL IN THIS SPACE.
CAPITAL IN THIS SPACE. GUY: GUY: HOW LONG WILL THIS LAST?
HOW LONG WILL THIS LAST? EUROPE HISTORICALLY HAS THIS
EUROPE HISTORICALLY HAS THIS KIND OF, EUROPE GETS ON THE
KIND OF, EUROPE GETS ON THE FRONT FOOTBRIDGE IS LAST LONG.
FRONT FOOTBRIDGE IS LAST LONG. THIS IS A TREND THAT IS
THIS IS A TREND THAT IS SUSTAINABLE> PHILIPPE:
SUSTAINABLE> PHILIPPE: ABSOLUTELY. ABSOLUTELY. YOU THINK ABOUT THE UNDERLYING
YOU THINK ABOUT THE UNDERLYING MEGATRENDS, THESE ARE THINGS
MEGATRENDS, THESE ARE THINGS THAT ARE IMPERATIVE TO HAPPEN.
THAT ARE IMPERATIVE TO HAPPEN. IT IS NOT GOOD TO HAVE, IT IS A
IT IS NOT GOOD TO HAVE, IT IS A MUST-HAVE. MUST-HAVE.
IT YOU THINK ABOUT THE FUTURE, IT YOU THINK ABOUT THE FUTURE,
IT WILL UNDOUBTABLY HAPPEN. IT WILL UNDOUBTABLY HAPPEN.
AND IT WILL HAVE TO HAPPEN IN A AND IT WILL HAVE TO HAPPEN IN A
VERY SHORT TERM. VERY SHORT TERM. AS I SAID, AI, ELECTRIFICATION
AS I SAID, AI, ELECTRIFICATION AND EVEN THE OWN AIRPORTS IN
AND EVEN THE OWN AIRPORTS IN LONDON, SAME THING.
LONDON, SAME THING. IT IS A NEED GUY:
IT IS A NEED GUY: FOR CAPITAL. FOR CAPITAL. GREAT TO SEE YOU.
GREAT TO SEE YOU. PERFECT TIMING. PERFECT TIMING. JOINING US, THE GLOBAL HEAD OF
JOINING US, THE GLOBAL HEAD OF THE GLOBAL INDUSTRIAL GROUP AND
THE GLOBAL INDUSTRIAL GROUP AND AHEAD OF INFRASTRUCTURE AT UBS.
AHEAD OF INFRASTRUCTURE AT UBS. LET’S TALK ABOUT THE OTHER
LET’S TALK ABOUT THE OTHER STORIES WE ARE WATCHING.
STORIES WE ARE WATCHING. ISRAEL WARNED IT WILL MOVE FOR
ISRAEL WARNED IT WILL MOVE FOR THE FIRST TIME INTO A TOWN INTO
THE FIRST TIME INTO A TOWN INTO THE HEART OF GAZA STRIP THAT IT
THE HEART OF GAZA STRIP THAT IT EARLIER FOR FEAR REFORMING
EARLIER FOR FEAR REFORMING HOSTAGES. HOSTAGES.
TELLING PELLA SETTINGS TO TELLING PELLA SETTINGS TO
EVACUATE SOUTHWARDS AWAY. EVACUATE SOUTHWARDS AWAY.
OFFICIALS IN GAZA SAY A TOTAL OFFICIALS IN GAZA SAY A TOTAL
OF 1000 PALESTINIANS HAVE BEEN OF 1000 PALESTINIANS HAVE BEEN
KILLED AWAITING AID INCLUDING KILLED AWAITING AID INCLUDING
67 ON SUNDAY. 67 ON SUNDAY. WITNESSES SAID AWAITING THE
WITNESSES SAID AWAITING THE ENTRY OF FOOD TRUCKS IN
ENTRY OF FOOD TRUCKS IN NORTHERN GAZA, INTENSE CLASHES
NORTHERN GAZA, INTENSE CLASHES WITH HAMAS HOLDERS.
WITH HAMAS HOLDERS. THE WASHINGTON POST IS
THE WASHINGTON POST IS REPORTING A CHINESE-AMERICAN
REPORTING A CHINESE-AMERICAN EMPLOYEE OF THE U.S.
EMPLOYEE OF THE U.S. COMMERCE DEPARTMENT HAS BEEN
COMMERCE DEPARTMENT HAS BEEN BARRED FROM LEAVING CHINA SINCE
BARRED FROM LEAVING CHINA SINCE APRIL. APRIL.
HE TRAVELED THERE SIN TO VISIT HE TRAVELED THERE SIN TO VISIT
FAMILY AND WAS DETAINED WHEN HE FAMILY AND WAS DETAINED WHEN HE
ARRIVED. ARRIVED. THE LESSON OPPOSED TO CITE
THE LESSON OPPOSED TO CITE SOURCES SAYING THE MEN IS BEING
SOURCES SAYING THE MEN IS BEING HELD BIGGEST HIS CASE IS LINKED
HELD BIGGEST HIS CASE IS LINKED TO ACTIONS BEIJING CONSIDERS
TO ACTIONS BEIJING CONSIDERS HARMFUL TO NATIONAL SECURITY.
HARMFUL TO NATIONAL SECURITY. HACKERS ARE REPORTEDLY SAID TO
HACKERS ARE REPORTEDLY SAID TO HAVE EXPLOITED THE MAJOR
HAVE EXPLOITED THE MAJOR SECURITY FLAW IN A WIDELY USED
SECURITY FLAW IN A WIDELY USED MICROSOFT SERVER SOFTWARE
MICROSOFT SERVER SOFTWARE PLATFORM TO LAUNCH A GLOBAL
PLATFORM TO LAUNCH A GLOBAL ATTACK ON GOVERNMENT AGENCIES
ATTACK ON GOVERNMENT AGENCIES AND BUSINESSES IN THE LAST FEW
AND BUSINESSES IN THE LAST FEW DAYS. DAYS. THE U.S. THE U.S.
HAS LAUNCHED COUNTRIES HAS LAUNCHED COUNTRIES
INVESTIGATING THE COMPROMISE OF INVESTIGATING THE COMPROMISE OF
THE SHAREPOINT SERVICE, THE SHAREPOINT SERVICE,
PROVIDING A PLATFORM FROM PROVIDING A PLATFORM FROM
SHARING AND MANAGING DOCUMENTS. SHARING AND MANAGING DOCUMENTS.
COMING UP, WE WILL TALK ABOUT COMING UP, WE WILL TALK ABOUT
WHAT’S HAPPENING IN THE WHAT’S HAPPENING IN THE
AVIATION SECTOR. AVIATION SECTOR.
PROPHETS OF RYANAIR HAS MORE PROPHETS OF RYANAIR HAS MORE
THAN DOUBLED AFTER RECOVERING THAN DOUBLED AFTER RECOVERING
AFTER LAST YEAR. AFTER LAST YEAR.
MORE COMING ON THAT SHORTLY. MORE COMING ON THAT SHORTLY.
THIS IS BLOOMBERG. THIS IS BLOOMBERG. ♪ ♪ >> DIFFERENT ROUTES ACROSS >> DIFFERENT ROUTES ACROSS
INCLUDING 160 NEW ROUTES THIS INCLUDING 160 NEW ROUTES THIS
SUMMER. SUMMER. ALL OF THOSE ARE VERY STRONG
ALL OF THOSE ARE VERY STRONG FITTED FARE ARE RECOVERING
FITTED FARE ARE RECOVERING NICELY. NICELY.
WE EXPECT TO RECOVER ALMOST 7% WE EXPECT TO RECOVER ALMOST 7%
IN THE SECOND QUARTER LAST IN THE SECOND QUARTER LAST YEAR.
YEAR. WE ARE SEEING NO SOFTNESS TO
WE ARE SEEING NO SOFTNESS TO TRAVEL. TRAVEL.
WE HAVE LIMITED GROWTH THIS WE HAVE LIMITED GROWTH THIS
YEAR. YEAR. WE ARE GROWING BY 3%.
WE ARE GROWING BY 3%. 206 MILLION PASSENGERS BUT
206 MILLION PASSENGERS BUT DEMAND IS EXCEPTIONALLY HIGH.
DEMAND IS EXCEPTIONALLY HIGH. WE HAVE NO QUALMS ABOUT HITTING
WE HAVE NO QUALMS ABOUT HITTING THAT TARGET THIS YEAR.
THAT TARGET THIS YEAR. GUY: GUY: THE CFO OF RYANAIR SPEAKING
THE CFO OF RYANAIR SPEAKING EARLIER TO BLOOMBERG.
EARLIER TO BLOOMBERG. EUROPE’S BIGGEST BUDGET
EUROPE’S BIGGEST BUDGET REPORTER DOUBLING AND INCOME OF
REPORTER DOUBLING AND INCOME OF THE FIRST QUARTER.
THE FIRST QUARTER. THE SHARE PRICE REACTION HAS
THE SHARE PRICE REACTION HAS BEEN STRONGER AS WELL.
BEEN STRONGER AS WELL. LET’S BRING IN BENEDIKT KAMMEL.
LET’S BRING IN BENEDIKT KAMMEL. LET’S TALK ABOUT RYANAIR AND
LET’S TALK ABOUT RYANAIR AND WHAT WE ARE GETTING THIS
WHAT WE ARE GETTING THIS MORNING. MORNING.
THE MARKET IS PLEASED WITH WHAT THE MARKET IS PLEASED WITH WHAT
WE ARE HEARING. WE ARE HEARING. IF THIS IS SOME WAYS THEY
IF THIS IS SOME WAYS THEY CONSTRAINED AIRLINE.
CONSTRAINED AIRLINE. IS THAT WHY MAY BE A WE ARE
IS THAT WHY MAY BE A WE ARE SEEING A BOUNCE BACK IN THE
SEEING A BOUNCE BACK IN THE NUMBERS WE ARE GETTING RIGHT
NUMBERS WE ARE GETTING RIGHT NOW? NOW? BENEDICT: BENEDICT:
YES, THIS IS A GOOD MARKET FOR YES, THIS IS A GOOD MARKET FOR
FRUGAL TRAVELERS. FRUGAL TRAVELERS.
PEOPLE WANT TO GET OUT AND PEOPLE WANT TO GET OUT AND
PEOPLE ARE CAPACITY PEOPLE ARE CAPACITY CONSTRAINED.
CONSTRAINED. AMONG THE RIVALS, EASYJET IS
AMONG THE RIVALS, EASYJET IS HAVING ISSUES. HAVING ISSUES.
THAT IS HELPING RYANAIR. THAT IS HELPING RYANAIR.
THAT HAD A TOUGH SPOT OVER THE THAT HAD A TOUGH SPOT OVER THE
LAST YEAR WITH THE INTAKE OF LAST YEAR WITH THE INTAKE OF
THE BOEING AIRCRAFT THAT SEEMS THE BOEING AIRCRAFT THAT SEEMS
TO BE BEHIND THEM. TO BE BEHIND THEM.
WE HEARD FROM THE CFO, HE’S WE HEARD FROM THE CFO, HE’S
HAPPY WITH HOW THINGS ARE HAPPY WITH HOW THINGS ARE
PROGRESSING AT BOEING. PROGRESSING AT BOEING.
LATER ONE YEAR INTO THE NEW CEO LATER ONE YEAR INTO THE NEW CEO
TENURE. TENURE. IT FEELS LIKE HE’S MANAGED
IT FEELS LIKE HE’S MANAGED THINGS AROUND. THINGS AROUND.
A BETTER CADENCE AND TEMPO IN A BETTER CADENCE AND TEMPO IN
TERMS OF THE AIRCRAFT. TERMS OF THE AIRCRAFT.
THAT INCLUDES RYANAIR WHICH IS THAT INCLUDES RYANAIR WHICH IS
THE BIGGEST CUSTOMER IN EUROPE. THE BIGGEST CUSTOMER IN EUROPE.
THEY SAY WE STILL HAVE AIRCRAFT THEY SAY WE STILL HAVE AIRCRAFT
COMING NEXT YEAR BUT WE DON’T COMING NEXT YEAR BUT WE DON’T
HAVE TO TAKE NECESSARILY A GOOD HAVE TO TAKE NECESSARILY A GOOD
PLACE NOW. PLACE NOW. ALL OF IS HELPING THE AIRLINE
ALL OF IS HELPING THE AIRLINE NOW. NOW. GUY: GUY:
YOU DO WONDER — THE SHARE YOU DO WONDER — THE SHARE
PRICE REFLECTS THAT. PRICE REFLECTS THAT.
THE LACK OF CAPACITY — THE THE LACK OF CAPACITY — THE
LACK OF AIRCRAFT COMING OUT OF LACK OF AIRCRAFT COMING OUT OF
SEATTLE HAS HELPED IN TERMS OF SEATTLE HAS HELPED IN TERMS OF
THEIR ABILITY TO BOUNCE BACK THEIR ABILITY TO BOUNCE BACK
FROM THE DIP. FROM THE DIP. THE MARKET WAS SHOCKED.
THE MARKET WAS SHOCKED. SIX MONTHS, NINE MONTHS, A YEAR
SIX MONTHS, NINE MONTHS, A YEAR AGO WHEN RYANAIR SAID WE ARE
AGO WHEN RYANAIR SAID WE ARE SEEING SOFTNESS.
SEEING SOFTNESS. THAT SEEMS TO BE IN THE
THAT SEEMS TO BE IN THE REARVIEW MIRROR.
REARVIEW MIRROR. BENEDICT: BENEDICT: YOU ARE RIGHT.
YOU ARE RIGHT. THE SITUATION COMING OUT OF
THE SITUATION COMING OUT OF BOEING IS LOOKING MUCH BETTER.
BOEING IS LOOKING MUCH BETTER. THE SITUATION IS LOOKING GOOD
THE SITUATION IS LOOKING GOOD FOR RYANAIR. FOR RYANAIR.
THE FARES ARE CREEPING UP THE FARES ARE CREEPING UP AGAIN.
AGAIN. CAPACITY REMAINS UNDER CONTROL
CAPACITY REMAINS UNDER CONTROL TO A POINT WHERE THEY CAN
TO A POINT WHERE THEY CAN REALLY MANAGE THAT.
REALLY MANAGE THAT. THAT EVENT INTO SOUTHERN EUROPE
THAT EVENT INTO SOUTHERN EUROPE REMAIN STRONG. REMAIN STRONG. THEY HAVE PUSHED EXTRA CAPACITY
THEY HAVE PUSHED EXTRA CAPACITY INTO SCANDINAVIA THAT IS GOING
INTO SCANDINAVIA THAT IS GOING AFTER SOME OF THE AREAS THAT
AFTER SOME OF THE AREAS THAT THEY FEEL ARE CONDUCIVE TO
THEY FEEL ARE CONDUCIVE TO THEIR BUSINESS MODEL.
THEIR BUSINESS MODEL. LOW COST, LOW TAXES.
LOW COST, LOW TAXES. GERMANY IS NOT ONE OF THOSE
GERMANY IS NOT ONE OF THOSE PLACES BIT OF IT IS ONE OF THE
PLACES BIT OF IT IS ONE OF THE MARKET’S NOT DOING WELL FOR
MARKET’S NOT DOING WELL FOR RYANAIR BUT THEY HAVE OPTIONS
RYANAIR BUT THEY HAVE OPTIONS TO GO ELSEWHERE.
TO GO ELSEWHERE. GUY: GUY: THE FIRST HEADLINE I READ THIS
THE FIRST HEADLINE I READ THIS MORNING WAS THE FACT THAT
MORNING WAS THE FACT THAT ALASKA IN THE U.S., ALASKA
ALASKA IN THE U.S., ALASKA AIRLINES HAD A GROUND STOP THIS
AIRLINES HAD A GROUND STOP THIS MORNING. MORNING.
WHAT WE KNOW ABOUT THAT? WHAT WE KNOW ABOUT THAT?
BENEDIKT: BENEDIKT: THAT SEEMS TO BE THE I.T.
THAT SEEMS TO BE THE I.T. ISSUE IS BEHIND THEM.
ISSUE IS BEHIND THEM. THE BIGGER PICTURE IS HOW
THE BIGGER PICTURE IS HOW CREAKY IS THE SOFTWARE IN THE
CREAKY IS THE SOFTWARE IN THE U.S. U.S.
AVIATION MARKET IN PARTICULAR? AVIATION MARKET IN PARTICULAR?
SOMETHING WE’VE SEEN ROUTINELY SOMETHING WE’VE SEEN ROUTINELY
OVER THE YEARS, THIS ROLLING OVER THE YEARS, THIS ROLLING
ISSUE. ISSUE. USUALLY, THEY GET OVER IT
USUALLY, THEY GET OVER IT FAIRLY QUICKLY BUT ALASKA AIR
FAIRLY QUICKLY BUT ALASKA AIR HAS BEEN HIT BY THIS FOR
HAS BEEN HIT BY THIS FOR SEVERAL TIMES. SEVERAL TIMES.
THERE HAS BEEN I.T. THERE HAS BEEN I.T. HACKS.
HACKS. ALL OF THAT RAISES THE ALL OF THAT RAISES THE
QUESTION, WHAT KIND OF UPGRADE QUESTION, WHAT KIND OF UPGRADE
DOES THE SYSTEM NEED BOTH OF DOES THE SYSTEM NEED BOTH OF
THE AIRLINES PROPER BUT ALSO THE AIRLINES PROPER BUT ALSO
THE UTC SIDE? THE UTC SIDE? WE KNOW THE U.S.
WE KNOW THE U.S. GOVERNMENT IS TRYING TO DO
GOVERNMENT IS TRYING TO DO SOMETHING ABOUT IT.
SOMETHING ABOUT IT. THE NEW BILL ALLOCATES A LOT OF
THE NEW BILL ALLOCATES A LOT OF MONEY TOWARDS UPGRADING THE
MONEY TOWARDS UPGRADING THE SYSTEM BUT THESE THINGS TAKE
SYSTEM BUT THESE THINGS TAKE TIME. TIME.
WHAT YOU SEE IS WHAT WE HAD AT WHAT YOU SEE IS WHAT WE HAD AT
ALASKA. ALASKA. THANKFULLY, FAIRLY SHORT-LIVED
THANKFULLY, FAIRLY SHORT-LIVED BUT IT IS A REMINDER THAT THIS
BUT IT IS A REMINDER THAT THIS IS A SCHISM THAT HAS BEEN
IS A SCHISM THAT HAS BEEN PATCHED AGAIN OVER THE YEARS
PATCHED AGAIN OVER THE YEARS AND IT COSTS A LOT OF MONEY AND
AND IT COSTS A LOT OF MONEY AND COULD COST TIME.
COULD COST TIME. GUY: GUY: THANK YOU VERY MUCH INDEED.
THANK YOU VERY MUCH INDEED. BENEDIKT KAMMEL HERE AT
BENEDIKT KAMMEL HERE AT BLOOMBERGTECHTV RI STELLANTIS
BLOOMBERGTECHTV RI STELLANTIS — STELLANTIS STRUCTURING AND
— STELLANTIS STRUCTURING AND HITTING THE STRUGGLING
HITTING THE STRUGGLING AUTOMAKER. AUTOMAKER.
CRAIG TRUDELL IS HERE TO TALK CRAIG TRUDELL IS HERE TO TALK
ABOUT THAT. ABOUT THAT. THE NEW CEO. THE NEW CEO.
YOU LOOK THROUGH AND THINK THIS YOU LOOK THROUGH AND THINK THIS
FEELS LIKE A CEO THAT IS FEELS LIKE A CEO THAT IS
LOOKING AT THE NUMBERS AND SAID LOOKING AT THE NUMBERS AND SAID
LET’S CLEAR THE DECKS AND LET’S CLEAR THE DECKS AND
FIGURE OUT WHERE WE GO FROM FIGURE OUT WHERE WE GO FROM
HERE. HERE. CRAIG: CRAIG: MORE THAN A FEW ANALYSTS WERE
MORE THAN A FEW ANALYSTS WERE FOR THIS AS A KANSAN SINKING IN
FOR THIS AS A KANSAN SINKING IN TERMS OF ANTONIO.
TERMS OF ANTONIO. HE HAS A LOT OF ISSUES THAT HE
HE HAS A LOT OF ISSUES THAT HE WORKED THROUGH THAT HE
WORKED THROUGH THAT HE INHERITED FROM CARLOS TAVAREZ.
INHERITED FROM CARLOS TAVAREZ. THE BOARD MOVED OUT OF HIS ROLE
THE BOARD MOVED OUT OF HIS ROLE LATE LAST YEAR. LATE LAST YEAR.
THIS IS A REFLECTION OF A THIS IS A REFLECTION OF A
COMPANY THAT WAS WITHOUT A CEO COMPANY THAT WAS WITHOUT A CEO
FOR MUCH OF THE FIRST HALF. FOR MUCH OF THE FIRST HALF.
IT IS LOST FROM MY PERSPECTIVE IT IS LOST FROM MY PERSPECTIVE
OF WHERE THEY ARE FROM THE OF WHERE THEY ARE FROM THE
LINEUP. LINEUP. THEY WERE TRYING TO MAKE THIS
THEY WERE TRYING TO MAKE THIS PIVOT AND THIS CHANGE TO
PIVOT AND THIS CHANGE TO ELECTRIC VEHICLES WITH A LOT OF
ELECTRIC VEHICLES WITH A LOT OF BRANDS THAT DOES NOT JIVE VERY
BRANDS THAT DOES NOT JIVE VERY WELL OR EASILY WITH IN TERMS OF
WELL OR EASILY WITH IN TERMS OF RAM TRUCKS AND JEEP SUVS.
RAM TRUCKS AND JEEP SUVS. SOME OF THE 3.3 BILLION EURO
SOME OF THE 3.3 BILLION EURO CHARGE WE SAW THE COMPANY
CHARGE WE SAW THE COMPANY REPORT THIS MORNING HAS TO DO
REPORT THIS MORNING HAS TO DO WITH CANCELING PROGRAMS. I
WITH CANCELING PROGRAMS. I THINK WHAT WE MAY SEE GIVEN
THINK WHAT WE MAY SEE GIVEN WHERE FUEL ECONOMY STANDARDS
WHERE FUEL ECONOMY STANDARDS ARE GOING IN THE U.S.
ARE GOING IN THE U.S. IS BRINGING BACK ENGINES,
IS BRINGING BACK ENGINES, BRINGING BACK THE GAS GUZZLERS
BRINGING BACK THE GAS GUZZLERS THAT CAN GET AWAY WITH BRINGING
THAT CAN GET AWAY WITH BRINGING BACK INTO THE FOLD AND PUT OFF
BACK INTO THE FOLD AND PUT OFF HAVING TO MAKE THAT ELECTRIC
HAVING TO MAKE THAT ELECTRIC TRANSITION. TRANSITION. GUY:
GUY: LET’S TALK ABOUT ELECTRIC LET’S TALK ABOUT ELECTRIC
TRANSITIONS AND TESLA. TRANSITIONS AND TESLA.
WHAT IS THE BIGGER PICTURE THAT WHAT IS THE BIGGER PICTURE THAT
IS EMERGING FROM THE AUTO IS EMERGING FROM THE AUTO STORY?
STORY? WHAT’S THE BIGGER PICTURE WE
WHAT’S THE BIGGER PICTURE WE ARE LOOKING AT? ARE LOOKING AT?
CRAIG: CRAIG: THE IMPLICATIONS OF THIS
FEDERAL PULLBACK IN THE U.S. AND IS REALLY GOING TO BE
FAR-REACHING WHERE YOU WOULD THINK ON THE SURFACE IT WOULD
HELP A COMPANY LIKE STELLANTIS. YET, THEY ARE SPENDING THIS
MONEY TO BRING LECTURE VEHICLES TO MARKET, INVESTING IN
BATTERIES. WITH TESLA, YOU HAVE A
DIFFERENT STORY WHERE THEY ARE ABLE TO ENTER FROM FROM THE
FACT THESE RULES ARE GETTING TOUGHER, ESTABLISHED
MANUFACTURERS ARE GETTING TROUBLE MAKING THIS CHANGE.
THE PRESSURE IS OFF THESE COMPANIES.
THE REGULATORY CREDITS, THEY NO LONGER MAY NEED TO BUY ANY OR
AS MUCH. JUST HOW MUCH THAT IS A REAL
ISSUE FOR TESLA GOING FORWARD GIVEN THE FACT OVER THE YEARS
THEY HAVE EARNED SOMETHING LIKE $12 BILLION IN REVENUE THAT HAS
BEEN OUT OF THE POCKETS OF THEIR COMPETITORS. GUY:
YOU SEE THAT FIGURE, HOW IN EARTH IS THIS POSSIBLE?
ARE YOU MAKING CARS OR CREDITS? THANK YOU VERY MUCH.
CRAIG TRUDELL. LET’S TALK ABOUT THE OTHER
SECTORS WE ARE TALKING ABOUT AND THAT WILL BE THE EUROPEAN
BANKING SECTOR. WE HAVE A SERIES OF NUMBERS
COMING UP OVER THE NEXT FEW DAYS. CHLOE NELLY JOINS US. LET’S TALK ABOUT DEUTSCHE BANK.
WHAT ARE WE EXPECTING? >> A FEW THINGS FROM THE CEO
WHEN TO KEEP IN MIND. HE SAID TODAY THAT COMPANIES
AND INDIVIDUALS AMID THIS TARIFF AND SOON TO YOU, TRYING
TO SEEK AN ALTERNATIVE TO U.S. BANKS AND YOU — AND REFOCUS ON
EUROPEAN BANKING. WE’LL SEE HOW THAT IS REFLECTED
IN EARNINGS. HE ALSO SAID THERE HAS BEEN A
ROCKY START IN THE TRADING BUSINESS IN THE START OF THE
SECOND QUARTER. AND WEAKER THAN EXPECTED
PERFORMANCE IN THE ADVISORY BUSINESS.
BASED ON ALL THAT, THERE MIGHT BE SOME DISAPPOINTMENT WITH
NUMBERS BUT SOME BRIGHT SPOTS, PARTICULARLY THE CORPORATE
BANKING. GUY: WHAT ARE THE BANKS WE ARE
WATCHING? CHLOE: BNP PARIBAS LATER THIS WEEK.
WE ALSO HAVE OTHERS NEXT WEEK COMING THROUGH.
THE MAIN THING TO LOOK OUT FOR FOR THIS SEASON IS QUITE A
RESILIENT FIRST QUARTER, WE EXPECT THE SECOND QUARTER WILL
BE TOUGH FOR A. OF WE HAVE THE TRADE WAR,
RECESSION FEARS, INTEREST RATE CUTS. THAT IS FEEDING THROUGH.
WE HAVE SEEN THAT WITH NORDIC BANKS.
THE HIGHER COST OF RISK IS IMPACTING DEALMAKING.
ALL OF THAT WE ARE KEEPING AN EYE ON.
THE READER CROSS SHOWS THAT MAY BE THERE MIGHT BE A BRIGHT SPOT
WITH BANKS IN EUROPE THAT HAS A STRONG INVESTMENT BANKING
DIVISION LIKE BNP. U.K. BANKS, THEY MIGHT BE DOING A
LITTLE BIT BETTER THAN THE PIERS’S BECAUSE THEY HAVE
STRUCTURAL HEDGES THAT PROTECT THEM FROM THE IMPACT OF RATE
CUTS. THEY ARE SHIELDED A LITTLE BIT
BETTER. GUY: GREAT STUFF. WHAT TO DO LOOK FORWARD TO AS
WE WATCH A LITTLE BIT TO HAPPEN THE BANKING REPORTING SEASON.
THAT IS OVER THE NEXT 10 DAYS OR SO. U.S.
FUTURES RIGHT NOW, THIS IS THE PICTURE.
A LITTLE BIT POSITIVE BUT NOT BY MUCH THIS MORNING.
IF YOU LIKE WE ARE SEARCHING FOR CATALYST FIRST THING THIS
MORNING. WE REALLY DID NOT GET ONE OUT
OF JAPAN. WE GOT A LOT COMING UP.
THE ECB THIS WEEK AND COUNTING DOWN TOWARDS THE TARIFF
DEADLINE. PLENTY STILL TO WORK OUR WAY
THROUGH. U.S. FUTURES BROADLY POSITIVE AFTER
A VERY FLAT UNTIL LAST WEEK IN TERMS OF THE FRIDAY SESSION.
UP NEXT, DANI BURGER AND THE BRIEF. THIS IS BLOOMBERG.

Japanese Prime Minister Shigeru Ishiba said he intended to stay on even as his ruling coalition suffered a historic setback in an upper house election on Sunday, an outcome that may further unsettle markets. The ruling Liberal Democratic Party along with longtime partner Komeito lost its majority in the chamber, public broadcaster NHK reported, saying the bloc failed to win the 50 seats it needed to maintain control. That marks the first time since 1955 that a leader from the storied Japanese party will govern the country without a majority in at least one of the legislative bodies. In trade news, European Union envoys are set to meet as early as this week to formulate a plan for measures to respond to a possible no-deal scenario with US President Donald Trump, whose tariff negotiating position is seen to have stiffened ahead of an Aug. 1 deadline.
The overwhelming preference is to keep negotiations with Washington on track in a bid for an outcome to the impasse ahead of next month’s deadline. Still, efforts have yet to yield sustained progress following talks in Washington last week, according to people familiar with the matter. Negotiations will continue over the next two weeks.

Today’s guests: Aneka Beneby, Julius Baer Portfolio Manager, Phoenix Kalen, Société Générale Corporate & Investment Banking Head of Emerging Markets Research, Philippe Chryssicopoulos, UBS Global Co-Head of the Global Industrials Group & Global Head of Infrastructure and Power

——–

“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
00:02:09 – US Seeks Near-Universal EU Goods Tariff Higher Than 10%
00:03:52 – Japan PM Ishiba Vows to Stay on Despite Election Setback
00:11:12 – Aneka Beneby, Julius Baer Portfolio Manager
00:17:18 – Phoenix Kalen, Société Générale Corporate & Investment Banking Head of Emerging Markets Research
00:25:57 – Germany Net Borrowing: €500B to 2029
00:30:17 – Philippe Chryssicopoulos, UBS Global Co-Head of the Global Industrials Group & Global Head of Infrastructure and Power
00:35:55 – Israel Prepares Attack on Deir Al-Balah
00:40:39 – Budget Airline Sees Strong Summer Travel Flow
00:44:35 – Tesla Reports Earnings Wednesday
——–
More on Bloomberg Television and Markets

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