EU Races to Secure US Trade Deal; Japanese PM Suffers Election Setback | Bloomberg Brief 7/21/2025

EU Races to Secure US Trade Deal; Japanese PM Suffers Election Setback | Bloomberg Brief 7/21/2025

♪ DANI:
GOOD MORNING, HERE IS WHAT YOU NEED TO KNOW ON THIS MONDAY.
EUROPE PREPARES FOR A FIGHT. LESS THAN TWO WEEKS UNTIL THE
U.S. TRADE DEADLINE, THE E.U. GETS READY TO PUSH BACK.
JAPAN’S PRIME MINISTER VOWS TO STAY ON TO NEGOTIATE TARIFFS
DESPITE HIS PARTY’S HISTORIC DAY ELECTION LAWS.
AND STELLANTIS BOOKS A MASSIVE LOSS FOR THE U.S.
IT IS BIG TECH EARNINGS ON DECK. THE SECOND BUSIEST WEEK BY
MARKET CAP FOR U.S. EARNINGS. GET ALPHABET THIS WEEK
ALONGSIDE TESLA ON WEDNESDAY. WE ARE UP BY ABOUT A QUARTER
PERCENT. LITTLE CHANGED ON FRIDAY, SO
SHOULD BE OPEN HERE, WE WILL BE AT OTHER ALL-TIME HIGHS.
WHAT A VOLATILE AND CRAZY WEEK. SOME QUESTIONS THAT FED
INDEPENDENCE. TRYING TO SEE WHERE TARIFF
INFLATION HIT, WE ARE MET WITH A RALLY THIS MORNING AFTER
POSITIVE LAST WEEK ALONGSIDE CHRIS WALLER CALLING FOR LOW
RATES. 10 YEAR YIELDS LOWER BY MORE
THAN THREE BASIS POINTS. LET’S GET YOU NOW SOME STOCKS
THAT ARE MOVING IN THE PREMARKET. WITH THAT IS VALERIE.
VALERIE: LET’S START WITH A CHECK ON
STELLANTIS. DOWN 1.4%, THIS COMES AFTER
THEY’RE RELEASED SIMPLE AND AIRY FIGURES FOR THE FIRST HALF
POINTING TO A LOSS OF 2.3 BILLION EUROS. THERE WASN’T COLOR OF AN
IMPAIRMENT CHARGE AROUND 3.3 BILLION EUROS THAT THEY GAVE
DETAIL. STELLANTIS DOES REPORT FULL
RESULTS NEXT TUESDAY SO WE WILL AWAIT THOSE AS WELL.
MOVING ONTO STOCKS INCLUDED IN THE S&P 500, ONE OF THOSE BEING
ADDED IS BLOCKED. SHARES ARE UP 9% SO FAR IN
PREMARKET TRADE. IT’S GOING TO REPLACING HEST IN
THE ASIAN BE 500. HEST WAS ACQUIRED BY CHEVRON ON
FRIDAY SO THAT STOCK IS NOW DELISTED. SHARES TRADING JUST SLIGHTLY
LOWER, UNCHANGED ON THE MOMENT. THIS IS THE SECOND ID ADDED FOR
ALASKA AIRLINES THAT HAS GROUNDED ITS FLEET THIS YEAR. DANI:
THANK YOU SO MUCH FOR THAT. THAT KETTNER OF HSBC WILL GIVE
HIS CURRENT READ TO US ON MARKET SIGNALS LATER THIS HOUR.
ANOTHER BIG WEEK OF EARNINGS. FUTURES ARE RISING AND THE BUSY
EARNINGS WEEK. THERE ARE SOME WARNING SIGNS
EMERGING, SPECIFICALLY OUR SHORT-TERM SENTIMENT AND
POSITIONING SIGNALS ARE NOW SENDING A SELL SIGNAL AND FACT,
THE BIGGEST ONE SINCE MID-2023. I’M PLEASED TO SAY THAT MAX
JOINS US NOW. REALLY WONDERFUL TO SPEAK WITH
YOU THIS MORNING. IT WASN’T THAT LONG AGO, IN
FACT THE START OF THIS MONTH THAT YOU DOUBLED DOWN ON YOUR
OVERWEIGHT U.S. EQUITY CALLS. I BALANCE THAT WITH THE
CONCERNS YOU ARE SEEING ON A MORE TECHNICAL LEVEL NOW0. >> FROM A FUNDAMENTAL
PERSPECTIVE I THINK THIS RALLY CONSOLE GO ON A LITTLE BIT
FURTHER. I THINK EQUITIES IN THE U.S.
STILL HAVE A LITTLE BIT OF ROOM TO RUN FURTHER PARTICULARLY
WITH THAT REPORTING SEASON. LET’S REMEMBER THAT WE ARE
GOING INTO THIS REPORTING SEASON WITH VERY LOW
EXPECTATIONS. WE STARTED SAYING THAT EARNINGS
ARE GOING TO DROP SEQUENTIALLY, THAT THEY ARE GOING TO SEE A
QUARTER ON QUARTER DECLINE. EVEN IN TECH THAT IS FATHERED
BY THE WEAKER DOLLAR BUT ALSO BY CONTINUED SPENDING ON THE AI
SIDE. SO THEREFORE I DO THINK THE
NEXT COUPLE OF WEEKS I STILL WELL SUPPORTED.
I THINK HEADING TOWARD SEPTEMBER, IS PROBABLY A BIT
MORE QUESTIONS LIKE YOU SAID AROUND THE TECHNICAL SIDE AND
AROUND THE SENTIMENT AND POSITIONING SIDE. I THINK A LOT OF THAT HAS
MISSED THE RALLY. STILL MORE SUBDUED SENTIMENT,
STILL UNDERWEIGHT ON THE HIGH YIELDS ON AGGREGATE, BUT AT
LEAST THE SHORTER-TERM SIGNALS FROM US A REALLY NOW STARTING
TO FLASH. THIS DOESN’T MEAN THAT WE NEED
TO IMMEDIATELY GET OUT, AND I DO THINK IN THE NEXT COUPLE OF
WEEKS COME UP WITH A COUPLE OF HEDGES ON SOME OF THE CYCLICAL
PART OF THE MARKET. IN YEAR, THINGS LIKE THE AUTO
SECTOR. THAT ALMOST 10% SQUEEZE THAT WE
HAD EARLIER THIS MONTH, USE THOSE KINDS OF SQUEEZES TO PUT
A COUPLE OF HEDGES ON UNLOCKING SOME OF THOSE GAINS. JONATHAN:
IT IS A BIT DIFFERENT FROM WHAT ETHAN SAME WHEN YOU BEEN WITH
THE BULLISH AND WHAT YOU BEEN WITH THE COMMUNICATING WELL IS
THAT THIS MARKET HAS BEEN MISSING A LOT OF THINGS THAT
CAN GO RIGHT. BUT THE TITLE OF THE NOTE THAT
YOU PUT OUT THIS MORNING IS WHAT COULD GO WRONG IN THE
SECOND HALF. IS THAT ALSO AN ACKNOWLEDGMENT
THAT THERE ARE GREATER RISKS TO THE DOWNSIDE RIGHT NOW THAN TO
THE UPSIDE? >> IT HAS TO BE IF YOU ARE AS
BULLISH AS US. WE CAN FAIRLY THE ANYMORE
BULLISH. FROM THAT STARTING POINT, EVEN
UPSIDE RISK I THINK WOULD BE PROBABLY NOT THE MOST PRUDENT
THING TO DO. BY DEFINITION REALLY THE ONLY
DOWNSIDE RISKS. THERE ARE SOME OF THEM THAT I
AM GENUINELY CONCERNED ABOUT. THINGS LIKE YIELDS GOING UP
AGAIN BECAUSE GROWTH IS TOO GOOD, OR MAYBE GOODS INFLATION
GOES UP. BUT ULTIMATELY, THOSE ARE THE
KINDS OF BUYING SIGNALS. THE SAME THING IS ON THE
TECHNICAL SIDE, AT SENTIMENT AND POSITIONING, PUT A COUPLE
OF HEDGES ON. TRUMP SAYING SOMETHING,
SOMETHING HAPPENING ON THE FED SIDE OF THINGS.
OBVIOUSLY THERE IS A BIT OF A HIGHER HEIGHT TO FOREFRONT, BUT
THAT DOESN’T MEAN THE END OF THE RALLY. I THINK THERE’S MORE
FUNDAMENTAL THINGS THAT I’M CONCERNED ABOUT.
BUT FOR THE WRONG REASONS, FOR THE REASONS OF INTEGRATION
FLOWS GOING INTO PERHAPS EVEN NEGATIVE.
THAT REALLY WOULD BE SOMETHING THAT FUNDAMENTALLY WOULD MAKE
ME CONCERNED. EVERYTHING ELSE IS TACTICALLY
AND TECHNICALLY DRIVEN. DANI:
IS IT A MARKET MORE SENSITIVE NOW? IT REALLY HAS BEEN ABLE TO BRUSH OFF, BE EXTREMELY
RESILIENT. IS IT YOUR CONCERN THAT THAT
TYPE OF LACK OF SENSITIVITY ENDS AS WELL? >> TALK AGAIN AFTER THE SUMMER
HOLIDAYS. I THINK THEN MAYBE I WILL ASK A
BIT DIFFERENTLY OR I WILL ANSWER A BIT DIFFERENTLY BUT
FOR NOW, I THINK IT IS THE SET UP OF THOSE REALLY LOWER
EARNINGS EXPECTATIONS THAT WE HAD A HEAD OF THE Q2 REPORTING
SEASON THAT CAN REALLY GET PARTICULARLY THE MEGA CAPS AND
THE LARGE CAPS OF THE S&P 500 REALLY GOING IN THE NEXT COUPLE
OF WEEKS. THAT REALLY OVERSHADOWS
, THAT IS REALLY THE MUCH MORE IMPORTANT THING.
I WOULD BE MUCH MORE CONVINCED THAT MUCH LESS CONVINCED IF WE
WENT INTO THIS WITH THE TEXTBOOK PAGES OF LIKE 10% PLUS
FOR THE TECH SECTOR. I THINK IT IS A DIFFERENT THING
BECAUSE THEN THERE MIGHT BE SOME MORE PLANS COMING ON THE
FUNDAMENTAL BASIS. NOT NECESSARILY TARIFFS FOR THE
FED, BUT MUCH MORE FROM A GROWTH EXPECTION. >> IT HAS BEEN INTERESTING TO
LOOK AT A BOND MARKET HAS BEEN SENSITIVE TO INFLATIONARY
CONCERNS COMING OUT. I KNOW THERE’S A LOT IN THIS
BOND MARKET RIGHT NOW BUT WE SAW 30 YEAR YIELDS GO BACK
ABOUT 57, 10 YEAR YIELD HOVER AROUND 4.5%.
IF IT IS AN EQUITY MARKET IGNORING INFLATION AT THE
MOMENT, AT WHAT POINT DO HIGHER BOND YIELDS NEED TO REAWAKEN
THE CONCERN THAT OTHER RISK AS A BABY SHOULD BE MOVING IN
LOCKSTEP WITH THE BOND MARKET? >> THE ANSWER IS 4.7% ON OUR
ESTIMATES. 4.50 PERCENT, A THING NORTH OF
THAT ON THE 10 YEAR. ONE THING THAT WE’VE ALWAYS GOT
TO REMEMBER THE BOND MARKET WITH RISK ASSETS OVERALL, THE
RELATIONSHIP IS HIGHLY NONLINEAR.
IT DOESN’T MATTER, HIGHER YIELDS DON’T MATTER UNTIL THEY
ARE THE ONLY THING THAT MATTERS. WHICH SOUNDS VERY STUPID BUT
BASICALLY IT IS NOT A RELATIONSHIP WHERE YOU SAY BOND
YIELDS ARE UP FIVE BASIS POINTS, THEREFORE EQUITIES NEED
TO SUFFER. IT REALLY DEPENDS ON NUMBER
ONE, WHAT KIND OF LEVEL THERE IS WHERE IT REALLY STARTS
STOKING FEARS IN RISK ASSETS OVERALL AND DEPENDS ON THE
VELOCITY NOT ONLY ON ONE DAY, BUT OVER A MONTH. UNTIL THEN, WE CAN THOROUGHLY
IGNORE IT. >> I REALLY WANT TO SQUEEZE
THIS IN, YOU ALSO WROTE THAT IRONICALLY, TARIFFS TO BE THE
NEXT BULLISH CATALYST. WHAT DO YOU MEAN BY THAT? >> MY DESPERATE GERMAN ATTEMPT
AT BEING FUNNY, IT’S NOT THAT. IT’S SLIGHTLY MORE
SOPHISTICATED. AROUND TARIFFS, AROUND THE
NIGHT OF JULY THERE’S BEEN A LOT OF HEDGES, A LOT OF CONCERN
AROUND THAT. WE SUDDENLY HAD A NEW DEADLINE
REINSTATED. LET’S NOT FORGET THAT THIS
WHOLE TARIFF ISSUE, PARTICULARLY THE DEADLINES,
THEY ARE NOT SET IN STONE. THEY ARE NOT MANDATED BY LAW,
ABSOLUTELY NOT. THERE’S NOTHING IN THE WAY THAT
IN THE NEXT WEEK OR TWO WE COULD SEE THE ADMINISTRATION
SAY WE ARE HAVING REALLY GREAT NEGOTIATIONS WITH CHINA, THE
EUROPEAN UNION, WE JUST NEEDED MORE TIME. LET’S MAKE A NEW DEADLINE, OR
MAYBE WE WON’T HAVE ANY DEADLINES. I’M TELLING MARKET PARTICIPANTS
NOT TO WORRY TOO MUCH ABOUT THE U.S.-CHINA THING. IT’S ACTUALLY NOT AS MUCH OF A
DEADLINE PER SE. PEOPLE PERHAPS ARE TAKING THE
TWO LITERAL, ALMOST ECONOMICALLY INEVITABLE.
REALLY IT IS A SELF-IMPOSED THING THAT COULD ACTUALLY JUST
BE EXTENDED AND WE COULD AS A RESULT SEE
THAT MOVE HIGHER. DANI: A BELATED CONGRATULATIONS, I
SAW YOU ARE VOTED NUMBER ONE IS A MULTI-ASSET ANALYST.
WELL-DESERVE. LOOKING FORWARD TO CHATTING
AGAIN SOON. SOME OTHER TOP STORIES TRENDING
THIS MORNING, STELLANTIS REPORTED A NET LOSS OF $2.3
BILLION IN THE FIRST ACT. RESTRUCTURING EXPENSES AND U.S.
TARIFFS AT THE AUTOMAKER. NORTH AMERICAN SHIPMENTS FELL
25% IN THE SECOND QUARTER. THE NEW CEO ATTEMPTING TO CLEAN
HOUSE. ELSEWHERE, RYANAIR SAID IT WILL
REQUIRE — RECOVER MOST OF THE FARE DROP IT’S ALL LAST YEAR.
IT DID CAUTION THAT SECOND-QUARTER INCREASES WILL
BE LOWER THAN THE FIRST. TRAVEL DEMAND IS STRONG, BUT BY
CAPACITY CONSTRAINTS AND OTHER CARRIERS.
MICROSOFT SERVER SOFTWARE WAS EXPLOITED BY UNIDENTIFIED
HACKERS. CYBERSECURITY AND INFRASTRUCTURE SECURITY AGENCY
SAID HACKERS ACCESSED FILESYSTEMS AND INTERNAL
CONFIGURATIONS. MICROSOFT SAID IT RELEASED A
NEW SECURITY CASH TO MITIGATE ACTIVE ATTACKS.
COMING UP, THE E.U. PREPARES FOR NO DEAL WITH THE
U.S. THE WAS COMPETENT THEY CAN GET
ONE DONE. — THE U.S. IS STILL CONFIDENT THAT IT CAN
GET ONE DONE. THAT IS COMING UP NEXT ON YOUR
“BLOOMBERG BRIEF.” ♪ ♪ >> I’M CONFIDENT WE WILL GET A
DEAL DONE AND IT WILL BE GREAT FOR AMERICA BECAUSE THE
PRESIDENT HAS THE BACK OF AMERICA.
SO I THINK ALL THESE KEY COUNTRIES WILL FIGURE OUT IT IS
BETTER TO OPEN THE MARKETS TO THE UNITED STATES OF AMERICA
THAN TO PAY A SIGNIFICANT TARIFF. DANI:
11 DAYS AWAY FROM PRESIDENT TRUMP’S AUGUST 1 TARIFF
DEADLINE. BLOOMBERG REPORTING THAT THE
EUROPEAN UNION IS PREPARING FOR A NO DEAL SCENARIO WITH THE U.S.
FOR MORE, WE’RE JOINED BY OLIVER CROOK.
THIS ALSO FOLLOWS OFF THE BACK OF FT REPORTING THAT THE TRUMP
ADMINISTRATION WOULD BE LOOKING AT A TEAM PERCENT-20% BASELINE
TARIFF FOR THE E.U. WHAT IS THE E.U.
PLANNING RETURN? >> WE DON’T KNOW AT WHAT LEVEL
OF ASYMMETRY THE EUROPEANS ARE GOING TO RETALIATE ON THE TRUMP
ADMINISTRATION. THAT IS GOING TO BE THE MAJOR
CONVERSATION HAPPENING NOW BETWEEN ALL OF THE CAPITALS,
THE MINISTERS AND LEADERS OF THESE COUNTRIES WHICH IS WHAT
SORT OF BASELINE TARIFF RATE IS EUROPE A SICKLY HAVE TO RESPOND?
ANOTHER WINDOW FOR TARIFFS IS GOING TO BE BETWEEN 10% AND 30%
IN THE EVENT OF A NO DEAL BY AUGUST. THERE ARE SOME
REPORTING THAT THAT NARROWS DOWN TO ABOUT 50%-20%.
WILL THEY RETALIATE? WE KNOW FROM THE PRESIDENT ANY
KIND OF RETALIATION OF 5% TARIFFS IT’S STACKED UP ON TOP
OF WHATEVER THE U.S. HAS BEEN FORWARD, HOW HARDBALL
THE PLAY, HOW MUCH STEAK DO YOU BRING TO THE CARROT? I SPOKE EARLIER WITH THAT, HAVE
A LISTEN TO WHAT THEY ARE SAYING ABOUT HAVE A TRADE WAR
IS EVOLVING AND THEIR. VIEWOF IT >> WE HAVE TO STOP
THIS UNCERTAINTY. ONCE THERE IS A DEAL, THE DEAL
SHOULD BE THE DEAL. THEN WE CAN DEPLOY CAPITAL
AGAIN BASED ON FACTS. MOST OF THE COMPANIES ARE NOT
TRENDING AWAY FROM GLOBALIZATION.
THEY ARE SIMPLY SAYING HOW CAN WE DIVERSIFY AND MAKE SURE WE
ARE NOT TO DEPENDENT FROM ONE OR THE OTHER. >> TWO PERSPECTIVES, BASICALLY
SAYING THAT A CERTAIN POINT, THE UNCERTAINTY BECOMES WORSE
THAN A BAD DEAL BUT THE UNITED STATES, AND ON THE OTHER SIDE,
HE IS SEEING A LOT MORE INTEREST FROM CLIENTS WHO ARE
LOOKING FOR EUROPEAN ALTERNATIVES TO U.S. BANKS.
THAT THIS IS ONE OF THE BENEFITS, ONE OF THE
SILVERLINING FOR SOME OF THE INSTABILITY WE’VE SEEN IN THE
UNITED STATES. DANI: I RECOMMEND EVERYONE GOING ONTO
THE TERMINAL TO LOOK AT THEM ON GERMANY’S INVESTMENT PUSH.
THANK YOU SO MUCH, THIS IS OLIVER CROOK.
COMING UP, THE JAPANESE PRIME MINISTER TRIES TO BUY TIME
AFTER YET ANOTHER ELECTION SETBACK.
WE ARE GOING TO DISCUSS THAT COMING UP NEXT AND THE RALLY
FOLLOWING THAT ELECTION. THIS IS BLOOMBERG. ♪ ♪ DANI: YOU’RE WATCHING
“BLOOMBERG BRIEF” I’M DANI BURGER IN NEW YORK.
LET’S TAKE A LOOK AT THE FRONT PAGES THIS MORNING.
FIRST UP, MEMBERS OF CONGRESS FROM BOTH PARTIES SAY THEY WANT
TO SEE MORE FILES RELEASED ON THE EPSTEIN CASE.
DAYS AFTER THE JUSTICE DEPARTMENT ASKED A FEDERAL
JUDGE TO UNSEAL GRAND JURY TESTIMONY, BOTH DEMOCRATS AND
REPUBLICANS SUGGESTED THE MOVE WAS INSUFFICIENT. NEXT UP ON THE WALL STREET
JOURNAL, REPORTING THE TREASURY SECRETARY SCOTT BESSENT
PRIVATELY LAID OUT HIS CASE TO PRESIDENT TRUMP FOR WHY HE
SHOULDN’T FIRE FED CHAIR POWELL. HE SAID FIRING POWELL WAS
UNNECESSARY BECAUSE THE ECONOMY IS DOING WELL.
TRUMP PUSHING BACK ON TRUTH SOCIAL SAYING HE KNOWS WHAT IS
BEST AND THAT IS WHY STOCKMARKETS MARKETS ARE AT
ALL-TIME HIGHS. ON THE FINANCIAL TIMES,
JAPANESE PRIME MINISTER SHEBA SO THAT HE WILL CONTINUE TO
LEAD JAPAN. THE LIBERAL DEMOCRATIC PARTY
LOST ITS MAJORITY IN BOTH HOUSES OF PARLIAMENT.
HE SPOKE AT A PRESS CONFERENCE AFTER THE ELECTION RESULTS. >> WE COME THE LIBERAL
DEMOCRATIC PARTY RECEIVED A VERY SEVERE JUDGMENT BY THE
PEOPLE IN YESTERDAY’S UPPER HOUSE ELECTION.
AS THE HEAD OF THE LIBERAL DEMOCRATIC PARTY, I APOLOGIZE
DEEPLY FOR THE UPPER HOUSE ELECTION RESULT. DANI:
THE YEN STRENGTHENING AGAINST THE DOLLAR THIS MORNING,
STRONGER BY ABOUT 6/10 OF 1%. JOINING US FOR MORE ON THE
STORY OUT OF TOKYO IS BLOOMBERG’S ALICE FRENCH.
ALICE, JUST HOW HISTORIC WAS THIS LOSS FOR THE PARTY? >> SO LOOK, AS YOU MENTIONED
THIS IS NOT A GOOD OUTCOME. PARTLY EXPECTED I THINK AFTER
THEY LOST THE MAJORITY IN THE LOWER HOUSE IN OCTOBER.
HIS RULING COALITION FAILING TO GET THOSE 50 SEATS THAT THEY
NEED TO MAINTAIN A MAJORITY IN THE UPPER HOUSE.
THAT MEANS IS GOING TO HAVE TO MOVE FORWARD AND RULED THE
COUNTRY WITHOUT A MAJORITY IN EITHER HOUSE FOR THE FIRST TIME
SINCE MID-50’S. THIS IS A PRETTY HISTORIC
DEFEAT. THIS COMES AMID A LOT OF DISCONTENT AMONGST VOTERS
AROUND THE RISING COST OF LIVING, INFLATION, ETC.
WE DID SEE THE YEN SLIGHTLY GAINING TODAY, MORE ON A KIND
OF RISK OFF SAFE HAVEN MOVE AND SOME BUYING BACK AFTER THE
WEAKENING THAT WE SAW LAST YEAR AHEAD OF THE SELECTION ON
CAUTION, BUT WE WILL REALLY SEE TOMORROW HOW MARKETS RESPOND TO
THIS BECAUSE IT HAS BEEN A PUBLIC HOLIDAY HERE TODAY. DANI:
MAYBE WOULD MORE LIQUIDITY COMES BACK YOU SEE A DIFFERENT
REACTION BUT THE FACT IS THAT THERE IS NOW LESS THAN TWO
WEEKS FOR A DEADLINE FOR THE U.S.
ON JAPAN AND THE OTHER NATIONS. WHAT IMPACT HAS THE ELECTION
HAD AS THIS TRADE TALKS CONTINUE ON? >> THE TIMING IS THE TRICKY.
AN ISSUE WITH POSITION IS NOT GOING TO SET HIM UP WELL FOR
PUSHING FORWARD WITH THOSE TRADE TALKS.
WE KNOW THAT JAPAN’S CHIEF TRADE NEGOTIATOR HAS BEEN BACK
AND FORTH TO WASHINGTON MULTIPLE TIMES.
WE HAVEN’T REALLY SEEN ANY CONCRETE OUTCOMES OF THOSE
TRADE TALKS SO FAR. I’VE BEEN SPEAKING TO PEOPLE
HERE TODAY. THERE’S A LOT OF WORRY THAT
THIS MAY WEAKEN JAPAN’S HAND EVEN FURTHER.
WE KNOW JAPAN OBVIOUSLY IS VERY RELIANT ON EXPORTS PARTICULARLY
IN THE AUTO SECTOR SO THERE IS A LOT OF WORRY AMONGST
INVESTORS OF HOW THAT MIGHT IMPACT STOCKS, WHAT IT MIGHT
MEAN FOR THE YEN. THIS IS ONLY GOING TO MAKE
THINGS MORE DIFFICULT. DANI: IT PROBABLY MAKES THINGS MORE
DIFFICULT FOR THE BOJ. HOW DO THEY HANDLE POLITICAL
UNCERTAINTY RIGHT NOW? >> THE GENERAL CONSENSUS IS
THAT BOJ WILL PROBABLY HAVE TO PUSH FORWARD BECAUSE INTEREST
RATE HIKES AT SOME POINT, BUT OBVIOUSLY THIS POLICY
UNCERTAINTY PARTICULARLY AROUND GOVERNMENT DEBT IS LIKELY TO
PERHAPS SLOW DOWN THE PACE OF THOSE HIKES.
I WAS SPEAKING TO SOME PEOPLE TODAY SAYING THEY WERE LOOKING
FOR AT LEAST ONE HEIGHT BY THE END OF THE YEAR AND NOW THE
POSSIBILITY OF NO HIKES FOR THE REST OF 2025 HAS GOT HIGHER.
GOVERNMENT SPENDING WAS A REALLY BIG FOCUS OF THE
SELECTION. THE OPPOSITION PARTIES THAT
HAVE GAINED TRACTION IN THIS VOTE, SEVERAL OF THEM PUSHING
FOR TAX CUTS TO THE CONSUMPTION TAX, CONCERNS OVER HOW THE
GOVERNMENT WILL FUND THAT, CALLED FOR MORE DEFENSE
SPENDING. IT’S REALLY CASTING A LOT OF
DOUBT OVER THE OUTLOOK FOR THE BOJ AND FOR FISCAL POLICY IN
GENERAL. DANI: THANK YOU FOR THAT EXCELLENT
UPDATE. AS WE’VE BEEN TALKING ABOUT,
THE STRENGTHENING THIS MORNING, JUST UNDER 1.50.
COMING UP, LACK OF CONVICTION LINGERS IN MARKETS.
WE CATCH UP WITH AMY WAS SILVERMAN WHO OUTLINES WHERE
THE HEDGES ARE AND ARE NOT. SHE JOINS COMING UP NEXT. ♪ ♪ DANI: GOOD MORNING, I’M DANI
BURGER WITH YOUR BLOOMBERG BRIEF.
HERE’S WHAT YOU NEED TO KNOW ON THIS MONDAY MORNING.
EUROPE PARIS FOR A FIGHT. LESS THAN TWO WEEKS INTO THE
U.S. TRADE DEADLINE. THE E.U. GETS READY TO PUSH BACK.
JAPAN’S PRIME MINISTER VOWS TO STAY ON TO NEGOTIATE TARIFFS
DESPITE HIS PARTY’S HISTORIC ELECTION DAY LOSS.
AND YEAR OF KICKS OFF A BUSY EARNINGS WEEK.
STELLANTIS TAKES A MAJOR HIT. THEY TECH IS ON DECK IN THE U.S.
AND INTO THAT TECH EARNINGS SEASON, BOTH ALPHABET AND TESLA
REPORT ON WEDNESDAY. OVERALL, 20% THE MARKET BY
MARKET CAP. THEY BARELY MOVED ON FRIDAY,
BUT HERE WE GO AGAIN, IF WE HOLD ONTO THESE LEVELS, WE WILL
HIT ANOTHER ALL-TIME RECORD TODAY. FOR THIS TREASURY MARKET,
PROBABLY PART OF THE REASON YOU’RE SEEING SMALL CAPS RALLY
IS BECAUSE IT IS A TREASURY RALLY. OFF THE BACK OF SOME SIZABLE
MOODS YESTERDAY, RATHER, LAST WEEK, THAT INDEPENDENCE,
HAWKISH DETAILS COMING FROM THE LATEST CPI.
ALL OF THOSE HELPING TO PUSH DEALS AROUND 5%.
SOME OF THE CURVE STEEPENING EASES OFF TODAY.
WITH LOOK AT SOME OF THE STOCKS MOVING IN THE PREMARKET.
WITH THAT IS VALERIE. >> LET’S START WITH A CHECK ON
STELLANTIS THAT YOU DID MENTION. SHARES ARE DOWN NEARLY 2%.
THEY CAME OUT SIMPLE LUMINARY RESULT FOR THE FIRST HALF
DETAILING A LOSS FOR THE FIRST HALF OF THE YEAR.
$2.3 BILLION LOSS. THERE WAS SOME COLOR ABOUT AN
IMPAIRMENT CHARGE. THEY ALSO HAD SOME COLOR ABOUT
THEIR SHIPMENTS TO NORTH AMERICA.
SECOND QUARTER SHIPMENTS OF DROP BY 25% AS THIS COMPANY
CONTINUES TO DEAL WITH TRUMP’S AUTO TARIFFS.
LET’S MOVE ONTO OTHER COMPANIES THAT ARE GOING TO BE INCLUDED
IN THE S&P 500. THIS IS A BIG WIN FOR THE
PAYMENTS COMPANY THAT OWNS CASH APP AND SQUARE.
UP NEARLY 10% ON THE NEWS THAT IT WILL BE REPLACING HESS IN
THE S&P 500. THIS COMES AFTER CHEVRON
ACQUIRED HESS ON FRIDAY. THAT SUCCESSFUL ACQUISITION LED
TO THEM BEING DELISTED AND BLOCKED WILL BE ADDED TO THE
S&P 500 EFFECTIVE ON WEDNESDAY. SOME STOCKS TO KEEP AN EYE ON
THIS MORNING, ONE OF THEM IS VERIZON. SHARES ARE TRADING IN THE GREEN
AND ONE TO LEAVE YOU HUNGRY, DOMINO’S PIZZA ALSO REPORTING
BEFORE THE BELL. DANI: NEVER TOO EARLY FOR A SLICE OF
PIZZA. THANK YOU VERY MUCH. AMY SILVERMAN OF CAPITAL
MARKETS DOES SEE MORE ROOM FOR THEM TO GRIND HIGHER WRITING
SENTIMENT AND POSITIONING SUGGESTS A DRAMATIC LACK OF
CONVICTION REMAINS BUT THAT ALSO MEANS IF THINGS COME IN
BETTER THAN ANTICIPATED, THERE IS MORE ROOM FOR INVESTORS TO
GO JUMPING INTO THE POOL. APT METAPHOR FOR A HOT SUMMER
DAY. I THINK A LOT OF PEOPLE WISH
THAT THEY WERE AT A POOL INSTEAD OF AT THE DESK TRADING
THESE MARKETS. EARLIER IN THE PROGRAM WE WERE
TALKING TO MAX KETTNER WHO SAID THINGS ARE STARTING TO LOOK
STRETCHED AND IT IS CONCERNING HIM.
WHERE ARE YOU SEEING THAT LACK OF CONVICTION AND MAYBE MORE
UPSIDE TO COME? >> IT’S ACTUALLY EXACTLY THAT
COMMENT. I WOULD CALL THIS A VERY
RELUCTANT RALLY. FOLKS KNOW THAT VALUATION IS
STRETCHED. GIVEN EVERYTHING THAT IS
OVERHANGING, AND BECAUSE OF THAT, WE SEEM KIND OF THIS
DICHOTOMY PERHAPS BETWEEN THE RETAIL INVESTOR BASE.
THERE’S BEEN MORE DRAGGED TO THAT INSTITUTIONAL INVESTOR
BASE BUT YOU HAVE TWO BIG EARNINGS THIS WEEK IN THE MAG 7.
JUMPING INTO THE POOL IF YOU WILL BECAUSE WE STILL HAVE THIS
PROBLEM AT HIGH BENCHMARK CONCENTRATIONS. U.S.
AND INVESTOR MUST PARTICIPATE AS WELL. DANI:
THIS IS INTERESTING, THIS IDEA THAT IT IS UNCERTAINTY.
A LOT OF THE CONVERSATION HAS BEEN THAT IT IS COMPLACENCY, A
MARKET THAT SADLY DOESN’T CARE. ARE YOU SAYING THAT IS THE
WRONG NARRATIVE, INITIATIVE MARKET WHERE THINGS ARE VERY
UNCERTAIN SO IT IS KIND OF NERVOUS TO RELATE THAT ONE WAY
OR THE OTHER? >> I THINK IT IS FAIR FOR
PEOPLE TO CHARACTERIZE COMPLACENCY WHEN YOU HAVE THE
VICKS SUB 17 HANDLES. THE ISSUE HAS BEEN THAT WHEN
YOU HAVE BEEN DOING THESE CONSISTENT SYSTEMATIC HEDGES IN
THE MARKET CONTINUES TO GRIND UP, IT IS VERY HARD TO CONTINUE
TO HOLD THEM. THAT’S NOT COMPLACENCY, THAT’S
JUST THE DIFFICULTY IN BEING TACTICAL ABOUT THE HEDGING.
I THINK ONE REASON THAT WE SEE TERM STRUCTURE OPTIONS
HEIGHTENED IS BECAUSE NEAR TERM WE ARE UNCERTAIN, BUT WE
HAVEN’T BEEN PLACING THOSE HEDGES WELL.
LONGER TERM WE ARE STILL QUITE WORRIED.
THE SECOND PART OF THAT AS WE ARE GOING TO AUGUST, COULD
SUDDENLY SPIKED TO 65. I WOULD BE WARY OF THAT GOING
FORWARD. >> I WOULD SAY THE FIRST IS
BECAUSE HAVE THE MEAT IS MADE MATTERS BECAUSE THE
CONCENTRATION RISK IS SO HIGH IN THESE STOCKS. TO GIVE YOU AN EXAMPLE, WE HAVE
BOTH GOOGLE AND TESLA REPORTING. OBVIOUSLY LARGE FACTORS IN THE
WEIGHT OF THE S&P. THEY ALSO MAKE A LARGE
COMPONENT OF THE COMMUNICATIONS ETF AND IF YOU LOOK AT
VOLATILITY SPREAD, THAT IS ACTUALLY AT A FIVE-YEAR HIGH.
WHEN YOU THINK ABOUT THE DISPERSION OF THE MARKET, THAT
DIFFERENTIAL BETWEEN THE INDEX LEVEL OPTION PRICES AND THE
SINGLE STOCK, YOU CAN OFTEN USE THE ETF AS A PROXY WHEN YOU
THINK ABOUT THESE MAJOR WEEKS WHEN A LOT OF THE WEIGHT OF A
CERTAIN ETF WILL REPORT AS WELL. DANI:
I THOUGHT YOU FLAG IT REALLY INTERESTING ONE, THE REGIONAL
BANKS SAYING YOU’RE SEEING PEOPLE MAKE DECISIONS BUT IT IS
NOT LIKE A WILD ANIMAL SPIRITS RISK ON ENVIRONMENT.
WHAT HAS BEEN YOUR READ OF EARNING SO FAR, BOTH IN WHAT WE
FIRST FROM COMPANIES AND THE MARKET REACTION TO THAT? >> THEY WERE ACTUALLY HAVING
THIS CONVERSATION ABOUT NETFLIX GOING INTO EARNINGS.
IF YOU JUST RECALL, THIS WAS ONE THAT ON THE HEADLINES
EVERYTHING LOOKED GREAT AND IT WAS A VERY MUTED, VERY
UNDERWHELMING STOCK REACTION. AND WHEN YOU HAD PRICING COMING
INTO IT, IT WAS BASICALLY PRICING ABOUT TWO THIRDS OF THE
MEDIAN MOVE. SO ONE THING I WOULD SAY IS I
THINK WHAT IS HAPPENING IS YOU HAVE ALL THESE HISTORICAL MOVES
THAT WERE TO SOME DEGREE PANDEMIC-BAKED IN, SO THIS
MAGNITUDE LOOK VERY HIGH. NETFLIX REMOVED THEIR
SUBSCRIBER NUMBERS, SO THAT WAS UNIQUE TO IT. IT IS STILL WAIT AND SEE, IT IS
STILL A LITTLE BIT EARLY IN TERMS OF TARIFFS.
EVEN THE MANAGEMENT TEAMS THEMSELVES ARE STILL WAITING TO
HEAR WITH THE FINAL NEGOTIATIONS ARE SO IT KIND OF
DOESN’T SURPRISE ME THAT YOU’RE GETTING THESE UNDERWHELMING
NUMBERS GOING INTO THESE EARNINGS EVENTS WHEN THERE IS
SO MUCH WE DON’T KNOW. DANI:DANI:
SO MANY PEOPLE HAVE SAID THE BAR IS REALLY LOW, ALL THESE
COMPANIES ARE GOING TO BE ABLE TO SURPRISE TO THE UPSIDE.
WHY HASN’T THAT PLAYED OUT, BECAUSE THE BAR HAD BEEN LOW OR
WAS IT NOT LOW ENOUGH? WHAT DO YOU MAKE OF THAT
SENTIMENT GOING INTO THE SEASON? >> I WOULD SAY IT IS STILL
EARLY. FINANCIALS OBVIOUSLY KICKS OFF
THE BEGINNINGS OF EARNINGS, BUT WE HAVEN’T REALLY HAD THE MEAT
IN TERMS OF THE CONCENTRATION. I DO THINK IT IS INTERESTING
WHEN YOU LOOK AT THE WEEK AHEAD, THE PRICING YOU SEEN IN
TERMS OF SENTIMENT OPTIONS HAS BEEN RELATIVELY BEARISH. AT LEAST IN THE PAST, IT’S BEEN
INCREDIBLY BULLISH. GRANTED, NVIDIA REPORTS LATE,
BUT YOU’RE NOT SEEING THAT AT ALL. YOU’RE SEEING VERY BEARISH
SENTIMENT. I THINK IT SPEAKS TO THIS
RELUCTANT RALLY ASPECT AND THEN THE SECONDARY ASPECT OF THE
WAIT AND SEE. I THINK WE WOULD HAVE SEEN THAT
EXUBERANCE ALREADY AND WE HAVEN’T SEEN THAT. DANI:
THERE WAS SOME HOPE THAT YOU WOULD GET A REAL ROTATION WHERE
YOU SAW MOMENTS TO REALLY SELLOFF IN FAVOR OF VALUE. IS IT YOUR EXPECTATION THAT
THAT DISCONTINUES IN TERMS OF MOMENTUM, AI, TECH, THE KIND OF
MARKET LEADERS CONTINUING TO LEAD FOR THE NEXT SEVERAL
MONTHS? >> I JOKE THAT IS THE LORI
CALLISON INDICATOR. SHE IS THE PRO ON SMALL CAPS. IF SHE HASN’T TURNED ON THE
LIST, I DON’T KNOW WHY I WOULD, EITHER.
A LOT OF WHAT I’VE LEARNED FROM WORKING WITH HER IS THE HIGH
SENSITIVITY TO RATES, AND SINCE WHEN YOU LOOK AT THE PRICING IT
KIND OF LOOKS LIKE A LOT OF THE CUTS THAT WE POTENTIALLY WOULD
HAVE HAVE BEEN DELAYED, THAT’S JUST NOT GOOD FOR THE STORY.
YOU DID SEE THIS HUGE MAGNITUDE SHIFT BETWEEN MOMENTUM AND
VALUE, BUT JUST AS QUICKLY, THAT SNAPPED BACK.
IF WE CAN’T GET THE RATE STORY STRAIGHT, WE CAN’T NECESSARILY
GET THE SMALL CAPS THREE STRAIGHT.
THAT IS WHAT IS BEING PRICED INTO THE FACTOR ROTATION. DANI:
WONDERFUL TO KICK OFF THE WEEK WITH YOU.
LET’S NOW GET YOU SOME OTHER TOP STORIES THAT ARE TRENDING
ON THE TERMINAL THIS MORNING. ISRAEL WARNS THAT IT WOULD MOVE
THE FIRST TIME INTO A TOWN IN THE HEART OF GAZA AND ACCUSES
HAMAS OF STALLING CEASE-FIRE TALKS.
THE PREVIOUS TRUCE ENDED IN MAY. A HUGE INVESTMENT PUSH FROM
GERMANY’S PRIVATE SECTOR, THE COUNTRY’S TOP FIRMS UNVEILED AT
LEAST $116 BILLION WORTH OF NEW PROJECTS TO UPLIFT THE COUNTRY
OUT OF STAGNATION. DEUTSCHE BANK’S CEO SPOKE ON
THIS MOVE ON BLOOMBERG. >> I THINK IT’S QUITE
IMPRESSIVE WHAT WE’VE COLLECTED OVER A COUPLE OF MONTHS OF
INVESTMENTS. 61 COMPANIES, AND TO BE HONEST
I THINK MORE TO COME. BUT IT SHOWS WHAT THE SENTIMENT
IS AND THAT WE HAVE A CHANCE. DANI:
MICROSOFT SERVER SOFTWARE WAS EXPLOITED BY UNIDENTIFIED
HACKERS. THE U.S. CYBERSECURITY AND
INFRASTRUCTURE SECURITY AGENCY SAID HACKERS ACCESSED
FILESYSTEMS AND INTERNAL CONFIGURATIONS.
MICROSOFT SAID IT HAS RELEASED A NEW SECURITY BADGE TO
MITIGATE ACTIVE ATTACKS. AND COMING UP, DEAL OR NO DEAL? TRADE UNCERTAINTY RISES AS THE
U.S. READIES FOR A NO DEAL SCENARIO
WITH WASHINGTON. WE WILL HAVE THE LATEST, NEXT. ♪ DANI: YOU’RE WATCHING “BLOOMBERG
BRIEF” AND LOOKING LIVE AT THE PRINCIPAL ROOM.
COMING UP LATER TODAY, AN INTERVIEW WITH THE VERIZON CEO
AT 10:00 A.M. NEW YORK TIME, 3:00 P.M.
IN LONDON. >> I’M CONFIDENT WE WILL GET A
DEAL DONE. IT WILL BE GREAT FOR AMERICA
BECAUSE THE PRESIDENT HAS THE BACK OF AMERICA.
SO I THINK ALL THESE KEY COUNTRIES WILL FIGURE OUT IT IS
BETTER TO OPEN THEIR MARKETS TO THE UNITED STATES OF AMERICA
THAN TO PAY A SIGNIFICANT TARIFF. DANI:
LESS THAN TWO WEEKS UNTIL A TARIFF DEADLINE SET BY THE
WHITE HOUSE. AT THE SAME TIME THE EUROPEAN
UNION ISN’T AS CONFIDENT IN THE TERMS OF A POTENTIAL NEW DEAL.
ENVOYS SET TO MEET EARLIER THIS WEEK TO DISCUSS HOW TO DEAL
WITH THE U.S. IF A DEAL CANNOT BE REACHED.
FOR MORE, WE’RE JOINED BY BRENDAN MURRAY LEADS ARE GLOBAL
TRADE COVERAGE. WHERE EXACTLY DO NEGOTIATIONS
STAND BETWEEN THE E.U. AND U.S. AT THIS MOMENT? >> THE EUROPEAN UNION TRADE
NEGOTIATING TEAM DELIVERED A PRETTY STARK MESSAGE TO
OFFICIALS IN BRUSSELS ON FRIDAY. THAT WAS THAT THEY SAW THAT THE
U.S.’S NEGOTIATING POSITION WITH HARDENING UP.
THERE WASN’T MUCH FLEXIBILITY IN THE TARIFF RATE, THE
RECIPROCAL TARIFF RATE THAT CURRENTLY STANDS AT A THREAT OF
30%, THE EUROPEAN UNION WANTS THAT TO BE 10%, BASICALLY RIGHT
AT THE BASELINE, AND THERE WAS SOME OTHER TARIFF RELIEF THAT
THE EUROPEANS ARE LOOKING TO GET ASSURANCES ON, AND THOSE
ARE FORTHCOMING AS WELL. WE HEARD THE COMMERCE SECRETARY
SAY HE’S CONFIDENT IN THE FACT THAT THEY WILL GET A DEAL, BUT
HE DIDN’T SAY THE DEAL WAS GOING TO BE GREAT FOR EUROPE,
HE SAID THAT DEAL WAS GOING TO BE GREAT FOR AMERICA.
THE EUROPEANS ARE INCREASINGLY LOOKING AT THIS LIKE A SCENARIO
THAT’S GOING TO BE OUT OF BALANCE, NOT IN THEIR FAVOR,
AND THEY ARE LOOKING TO TAKE WHAT NEXT STEPS THEY MIGHT GO
DOWN IN TERMS OF RETALIATION AGAINST AMERICAN EXPORTS. DANI:
WHAT MIGHT THOSE RETALIATIONS LOOK LIKE? >> THEY HAVE ABOUT 100 BILLION
DOLLARS WORTH OF U.S. PRODUCTS TARGETED FROM BOEING AIRPLANES TO BOURBON AND
SOYBEANS, KIND OF ALL-AMERICAN TYPE PRODUCTS THAT THEY COULD
INITIALLY START OFF WITH. THEY ALSO HAVE SOMETHING CALLED
AN ANTI-COERCION INSTRUMENT, WHICH IS SORT OF A NUCLEAR
OPTION. THEY COULD START GOING AFTER
U.S. TECH COMPANIES. THERE’S NOT AN AGREEMENT ON
WHETHER THAT SHOULD BE USED AT THIS STAGE, BUT THE CALLS FOR
THAT INSTRUMENT TO BE USED ARE GROWING, AND THAT IS IN THE
ALL-OUT TRANSATLANTIC TRADE WAR SCENARIO.
WE’RE DEFINITELY NOT THERE YET, BUT WE ONLY HAVE TWO WEEKS LEFT
TO PUT THIS DEAL TOGETHER BEFORE THOSE TARIFFS TAKEN ON
AUGUST 1. DANI: TWO SHORT WEEKS. SIDE THE E.U., WHO ELSE ARE
LOOKING OUT FOR FOR SOME POTENTIAL MOVEMENT AHEAD OF
THAT? >> WE HAVE REPORTED THAT THE
SOUTH KOREANS ARE IN WASHINGTON THIS WEEK.
JAPAN STILL THINKS JUST OFF OF THE UPPER HOUSE ELECTIONS IS
STILL THINKING HE CAN TRY TO GET A DEAL.
TAIWAN IS ALSO IN THE NEXT. INDIA IS STILL IN PLAY.
ALL OF THESE, ESPECIALLY THE ASIAN COUNTRIES ARE LOOKING TO
GET THE RECIPROCAL TARIFF RATE SOMEWHERE AROUND 20%.
INDONESIA’S GOT 19%. IF ALL OF INDONESIA CAN GET
THEIRS TO BE AROUND 20, THAT SEEMS LIKE A NUMBER THAT THEY
COULD ALL LIVE WITH THAT WOULDN’T BE TOO MUCH DISPARITY
REGIONALLY. BETWEEN THE EUROPEANS, THE
SWISS ALSO HAVE A DEAL ON TRUMP’S DESK THAT HASN’T BEEN
APPROVED YET, SO THERE ARE A NUMBER OF THESE IN THE WORKS
THAT COULD COME TOGETHER BETWEEN NOW AND THE END OF THE
MONTH. DANI: THANK YOU VERY MUCH FOR THAT
UPDATE. ANOTHER SECTOR WE ARE KEEPING
AN EYE ON THIS MORNING, AIRLINES FROM EARNINGS TO OTHER
ISSUES. ALASKA AIR HAS RESUMED FLIGHTS
AFTER TEMPORARILY GROUNDING ITS FLEET LATE SUNDAY FOLLOWING AN
I.T. OUTAGE. WE ALSO LEARNED THAT DELTA HAD
RECENTLY MOVED AGGRESSIVELY TO AVOID COLLIDING WITH A B-52 JET.
FOR MORE, WE’RE JOINED BY BLOOMBERG’S MANAGING EDITOR FOR
AVIATION IN SPACE. GOOD MORNING TO YOU.
A LOT OF THINGS GOING ON HERE. IS THERE A COMMONALITY OF
THINGS UNDERPINNING THESE POTENTIAL MISTAKES THAT OF
COURSE WERE AVOIDED, IS THERE AN ISSUE OF A LACK OF
INVESTMENT, OR IS SOMETHING ELSE GOING ON HERE? >> THAT’S USUALLY THE QUESTION
THAT DOES COME UP. THE SOFTWARE THAT IS BEING
USED, WHAT IF THE STATE OF THE PERSONNEL?
REFERRED QUITE A LOT ABOUT THIS SINCE THE MIDAIR COLLISION IN
JANUARY, AS THE U.S. TRAFFIC CONTROL PROPERLY
STAFFED, IS THERE TOO MUCH HUMAN ERROR, IS THERE AN ISSUE
WITH SOFTWARE? THIS IS SOMETHING THAT ALASKA
WILL HAVE TO TAKE A VERY HARD LOOK AT.
THESE OUTAGES DON’T HAPPEN VERY OFTEN, BUT WHEN THEY DO THEY
SERVE CHIP AWAY AT THE PUBLIC SENSE OF SAFETY AND THAT IS
OBVIOUSLY AN IMPORTANT PART OF AVIATION.
PEOPLE WANT TO FEEL GOOD ABOUT GETTING ON A PLANE, THEY WANT
TO FEEL SAFE, THE TECHNOLOGY NOT JUST OF THE AIRCRAFT BUT
ALSO EVERYTHING THAT SURROUNDS IT IS UP TO SNUFF AND OBVIOUSLY
EVENTS LIKE THIS WITH ALASKA, YES IT WAS SHORT-LIVED BUT THAT
DOESN’’T HELP. THE DELTA ISSUE, MIDAIR
COLLISIONS OR WRONG WAY COLLISIONS, EXTREMELY RARE BUT
WHEN THEY DO HAPPEN THEY CAN BE ABSOLUTELY NEEDLE SO THIS WILL
BE INVESTIGATED QUITE AGGRESSIVELY.
TWO EVENTS THAT DON’T INSTILL A FAITH OF OPTIMISM IN THE
INDUSTRY. DANI: ONE PLACE IN THE INDUSTRY THAT
DEFINITELY HAS OPTIMISM, YOUTH AND LOOKING AT THEIR EARNINGS
ALL MORNING. RYANAIR SEEING THEIR PROFIT
MORE THAN DOUBLE. WHAT UNDERSCORE THAT STRONG
DEMAND? >> QUITE SIMPLY, PEOPLE LIKE TO
TRAVEL. RYANAIR HAS A HUGE NETWORK
ACROSS EUROPE, EXPANDING INTO FAVORABLE MARKETS LIKE
SCANDINAVIA, SOUTHERN EUROPE AND SPAIN.
BUT THEY ARE ALSO BENEFITING TO SOME DEGREE FROM THE MISSTEPS
AND THE MISFORTUNE OF SOME OF THEIR RIVALS. THE HUNGARIAN LOW-COST RIVAL,
THEY’VE HAD BIG ISSUES WITH AIRCRAFT BECAUSE OF THE ENGINES
THAT THEY HAD TO TAKE OFF AND REPAIR.
EASYJET HAS HAD SOME ISSUES WITH AIR TRAFFIC CONTROL.
THAT IS SOMETHING THAT RYANAIR HAS BEEN ABLE TO SORT OF
SIDESTEP TO A GREATER DEGREE, SO IT’S BOTH THE PRODUCT BUT
ALSO SORT OF >> GOING ON IN THE BROADER INDUSTRY, AND THEY ALSO
HAD THE ADVANTAGE OF BOEING AIRCRAFT COMING BACK INTO THEIR
SYSTEM AT A GREATER CLIP THAT HAD REAL ISSUES ABOUT SIX
MONTHS TO A YEAR AGO. THAT SEEMS TO BE BEHIND THE NOW.
THEY ARE GETTING THE KIT THAT THEY NEED, GETTING THE LIFT.
YOU SEE IT IN THE STOCK PRICE, A LOT OF ANALYSTS ARE UPGRADING
THE FORECAST SAYING THIS IS EARLY IN THE FISCAL YEAR FOR
THEM. THERE’S UPSIDE HERE AND YOU CAN
SEE IT IN THE STOCK, IT WAS UP 10% AT ONE POINT THIS MORNING.
DANI: THANK YOU SO MUCH FOR THAT.
IT MIGHT BE A DIFFERENT STORY FIRST A LANTUS, REPORTING A
BRUTAL FIRST HALF, A NEARLY $3 BILLION NET LOSS.
RESTRUCTURING EXPENSES, U.S. TARIFFS ALL IMPACTING THE
RESULTS. I MEAN, THESE ARE SOME REALLY
UGLY NUMBERS. WHAT WAS DRIVING THEM? >> THIS VARIOUS THINGS AT PLAY
HERE. THERE’S A LOT OF FOCUS ON U.S.
TARIFFS AND CLEARLY PRESIDENT TRUMP’S TARIFFS FOR THE VARIOUS
ANNOUNCEMENTS IN THE FIRST PART OF THE YEAR OF WHAT HE WOULD
AND WOULDN’T DO ON THAT FRONT DIDN’T HELP.
THE COMPANY ANNOUNCED TODAY, AND THIS WAS A PRELIMINARY
ANNOUNCEMENT, A SURPRISE ANNOUNCEMENT, FIRST HALF
EARNINGS ARE DUE ON JULY 29. THE TARIFF IMPACT WAS A NET
IMPACT OF 300 MILLION EUROS, SO ABOUT $350 MILLION.
BUT THERE’S MORE TO THE STORY. THERE’S BEEN A VERY DIFFICULT
2024 FOR THE COMPANY, AND THERE ARE TOUGH DECISIONS BEING MADE.
INVESTMENTS THAT ARE BEING MOVED AROUND, REASSIGNED, AND A
PRETTY BIG MOVE FROM THE FULL-FLEDGED PUSH INTO ELECTRIC
VEHICLES THAT WAS WHAT DEFINED THE ERA OF THE PREVIOUS YEAR
INTO OTHER AREAS, NOTABLY HYBRID VEHICLES, CLOSURE OF
PLANTS, DECISION TO DROP INVESTMENTS IN HYDROGEN. THIS
IS REALLY THE FIRST STEP THE NEW CEO IS TAKING TO RESET
EXPECTATIONS. REALLY RE-SHIFTING THE
PRIORITIES HERE AT THE COMPANY AT A VERY DIFFICULT TIME FOR
THE INDUSTRY. DANI: THAT’S FOR CERTAIN.
THANK YOU SO MUCH. COMING UP, WE ARE GOING TO GET
YOU SET UP FOR THE WEEK AHEAD INCLUDING SOME BIG MAG 7
EARNINGS ON DECK. THAT IS COMING UP NEXT ON YOUR
TRADING DIARY. THIS IS BLOOMBERG. ♪ ♪ DANI: LET’S GET YOU SET UP
FOR YOUR TRADING WEEK. BIG TECH EARNINGS WILL BE
KICKING OFF, TESLA AND ALPHABET WILL BOTH BE REPORTING ON
WEDNESDAY. THEN WE GET INTEL REPORTING ON
THURSDAY. ALSO ON THURSDAY WE WILL GET
JOBLESS CLAIMS DATA. IN THE MEANTIME WITH LOOK AT
SOME OF THE STOCKS IN THE PREMARKET BLOCK, ONE OF THEM A
RALLY UNDERWAY JOINING THE S&P 500, UP 9.6%. IT WILL BE REPLACING HESS AFTER
CHEVRON FINALLY SUCCESSFULLY BOUGHT THE COMPANY.
PRICE TARGET IS THAT $14, TRADING JUST BELOW THAT. IT HAS ALSO REFUSED — REFUTED,
RATHER, AN FDA REQUEST BULLETS GENE THERAPY. TESLA IS LEADING THE MAG 7
STOCKS, UP JUST UNDER 1.5%. IT WILL BE REPORTING EARNINGS
LATER THIS WEEK AS YOU MENTIONED ON WEDNESDAY.
A BIG EARNINGS WEEK, 20% OF THIS MARKET REPORTING ON MARKET
CAP. A RALLY IS UNDERWAY AFTER SOME
DECLINES, SOME STUPID — STEEPENING.
THAT IS IT FOR YOUR BRIEF. SURVEILLANCE TAKES THINGS FROM
HERE.

US equity futures climb ahead of a busy earnings week. The European Union and the US head into another week of intensive talks as they seek to clinch a trade deal. The Japanese yen gains against the dollar as Prime Minister Ishiba vows to lead the nation despite a historic upper house election setback. Max Kettner of HSBC says he sees the current rally going further and Amy Wu Silverman of RBC Capital Markets calls the rally “reluctant.” “Bloomberg Brief” delivers the market news, data and analysis you need to set your agenda.

Chapters:
00:00:00 – Intro
00:01:26 – First Look Movers
00:03:01 – Max Kettner, HSBC Chief Multi-Asset Strategist
00:12:02 – Trending on the Terminal
00:16:39 – Front Page News
00:22:45 – First Look Movers
00:24:10 – Amy Wu Silverman, RBC Capital Markets Head of Derivatives Strategy
00:31:29 – Trending on the Terminal
00:42:17 – What to Watch
——–
More on Bloomberg Television and Markets

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