Futures Rise After US-Japan Trade Deal; Tesla & IBM to Report Results | Bloomberg Brief 7/23/2025

Futures Rise After US-Japan Trade Deal; Tesla & IBM to Report Results | Bloomberg Brief 7/23/2025

>> IT’S 5:00 A.M.
IN NEW YORK CITY, GOOD MORNING, I’M DANI BURGER WITH YOUR BLOOMBERG
BRIEF. HERE’S WHAT YOU NEED TO KNOW ON
THIS WEDNESDAY. TOKYO AND WASHINGTON STRIKE A
TRADE AGREEMENT FOR A 15% LEVY ON JAPANESE IMPORTS.
POWERING AHEAD AFTER ANOTHER RECORD IN U.S.
STOCKS GLOBAL RISK RALLIES OFF THE BACK ABOUT TRADE DEAL. ALL OF THAT AHEAD OF BIG TECH
EARNINGS THAT KICKS OFF WITH GOOGLE AND IBM, TESLA ON DECK.
A RECORD YESTERDAY JUST BARELY EKING THAT OUT AND ANOTHER LEG
TO THE RALLY THIS MORNING SUPPORTED BY THAT DEAL WITH
JAPAN. DOES THAT MEAN MORE DEALS ARE
TO COME WITH THAT DEADLINE. THE RALLY IS PROBABLY MORE
PRONOUNCED INTERNATIONALLY ESPECIALLY THINGS LIKE JAPANESE
AUTOMAKERS. WE ARE HIGHER BY 4/10 OF 1% FOR
THE S&P, RUSSELL 2000 FUTURES REALLY OUTPERFORMING OFF THE
BACK OF A DEAL OF 1% SO A LOT OF NEWS OUT OF JAPAN.
THE BIGGEST IS THE TRADE DEAL BUT THERE WAS ALSO A BOND
AUCTION THAT WENT REALLY POORLY AND OFF THE BACK OF THAT YOU
CAN SEE BOND YIELDS ARE PUSHING HIGHER ACROSS THE GLOBE BUT
HERE IN THE U.S. TO BE LED BY THE LONG END OF
THE CURVE 30 YEAR YIELDS UP, YOUR 10 YEAR YIELD STANDS AT
437. JAPAN — THE HIGHEST YIELD SINCE 2008 FOR THE JAPANESE 10
YEAR. SOME STOCKS MOVING WITH THAT IS
VALERIE TYTEL. >> STARTING OUT EAST WITH
TOYOTA, IT’S BEST SESSION SINCE OCTOBER 2008 PUTTING IT IN A
BIT OF PERSPECTIVE FOR YOU JUST HOW MUCH WE HAD NOT PRICED IN
THE FACT THESE CAR TARIFFS COULD BE KNOCKED DOWN DOWN TO
15. IT’S ALSO GIVING A BOOST TO EUROPEAN AUTO NAMES AND WE WILL
CHECK THOSE U.S. AUTO NAMES AS WELL.
LET’S MOVE ON TO MEME STOCK MANIA.
THIS TIME IT’S KRISPY KREME. A LOT OF CHAT ABOUT THIS STOCK
ABOUT OF THE SHORT INTEREST IS PERCENT OF FREE FLOW IS AROUND
30% THE STOCK JUMPED 37% YESTERDAY ON NO NEW COMPANY
NEWS SPREAD IT’S RISING IN THE PREMARKET UP AROUND 18%.
SO WATCH OUT FOR MEME STOCK MAINLY — MANIA. TEXAS INSTRUMENTS DOWN 12%,
THEY GAVE QUITE A GUARDED FORECAST FOR THE YEAR AHEAD AND
THE MARKET REALLY DID NOT LIKE THAT THE CFO COULD NOT QUANTIFY
WHAT PERCENTAGE OF THEIR SALES SURGE IN THE SECOND QUARTER WAS
DUE TO CUSTOMERS FRONT RUNNING TARIFFS. >> THANK YOU FOR THAT,
BLOOMBERG’S VALERIE TYTEL. IN JUST MOMENTS WE WILL SPEAK
WITH SEEMA SHAH A PRINCIPAL ASSET MANAGEMENT.
LATER THIS HOUR WE PUSH AHEAD TO TECH EARNINGS WITH ALAN BOND
OF JENSEN INVESTMENT MANAGEMENT. THE U.S.
AND JAPAN STRYKER TRADE DEAL. >> SIGNED THE LARGEST TRADE
DEAL IN HISTORY I THINK MAYBE THE LARGEST IN HISTORY, JAPAN
WE WORKED ON IT LONG AND HARD AND IT’S A GREAT DEAL FOR
EVERYBODY. IT’S A GREAT DEAL. A LOT DIFFERENT FROM THE DEALS
IN THE PAST I CAN TELL YOU THAT. DANI: JOINING US IS BLOOMBERG’S
BRENDAN MURRAY WHO LEADS OUR GLOBAL TRADE COVERAGE.
WHAT DOES THE STEEL LOOK LIKE? BRENDAN:
WE KNOW THE HEADLINE FIGURES IN THE DEAL THE 15% TARIFF ON
JAPANESE IMPORTS AND THE 15% ON TERROR — ON CARS ARE A BIT OF
A RELIEF TO OFFICIALS IN TOKYO, THEY HAD EXPECTED SOME OF THOSE
FIGURES WOULD BE AS HIGH AS 25% SO 15 SOUNDS A LOT BETTER AND
THE MAIN TAKEAWAY IS THESE DEALS AS THEY START TO TRICKLE
IN ARE COMING IN AT THE LOW END OF THE RANGE OF THE TARIFF
LEVELS THAT PRESIDENT TRUMP HAS THREATENED SOMETIMES 25,
SOMETIMES 35 OR 45%. SO THE HANDFUL WE HAVE SEEN SO
FAR HAVE COME IN WELL BELOW THOSE THREATENED RATES.
SO WE CAN LOOK FORWARD TO THE NEGOTIATIONS WITH INDIA AND
TAIWAN, WITH THE EUROPEAN UNION AND SWITZERLAND AND SOME OTHER
COUNTRIES AND I THINK THE MARKET IS TAKING SOME COMFORT
IN THE FACTORS IS TARIFFS ARE COMING IN LOWER THAN EXPECTED.
DANI: MAYBE THE MARKET WAS RIGHT TO
LOOK THROUGH SOME OF THE TARIFFS CARE AND AUGUST 1.
SCOTT BESSENT SPOKE ON FOX ABOUT AN EXTENSION TO THE U.S.
TARIFF TRUCE WITH CHINA. >> CHINA, THAT DEAL EXPIRES ON
AUGUST 12 AND I’M GOING TO BE IN STOCKHOLM ON MONDAY AND
TUESDAY WITH MY CHINESE COUNTERPARTS AND WE WILL BE
WORKING OUT WHAT IS LIKELY AN EXTENSION THEN. DANI:
CHINA’S MINISTRY OF COMMERCE AFFIRMING THAT THIS MORNING
SAYING CHINA AND THE U.S. WILL HOLD TRADE TALKS FROM JULY
27 TO THE 30TH. DOES THIS MEAN CHINA GETS
ANOTHER EXTENSION OR ARE WE LIKELY TO SEE SOME SORT OF DEAL
GET INKED? BRENDAN: IT SOUNDS LIKE THEY ARE GOING
TO GET ANOTHER EXTENSION. SECRETARY BESSENT ALSO SAID HE
WANTS TO BROADEN THOSE TALKS TO INCLUDE THINGS LIKE SANCTIONED
OIL CHINA IS BUYING FROM IRAN AND RUSSIA AND SO IT WILL BE
INTERESTING TO SEE WE DON’T KNOW WHAT IS ON THE AGENDA YET. WE DON’T KNOW YET WHAT THE
CONTENT OF THE NEGOTIATIONS ARE BUT THE GOALS WILL BE OR THE
DELIVERABLES TO BE EXPECTED, BUT IT SOUNDS TO ME LIKE THE
U.S. WANTS TO BROADEN TALKS OUT BEYOND JUST THE TARIFF LEVELS
AND THE RARE EARTH AND THE EXPORT CONTROLS FOR THE PAST
COUPLE OF MONTHS. DANI: WE HAVE A LOT MORE TO DISCUSS
ON THAT. TUNE INTO BLOOMBERG SURVEILLANCE THEY WILL BE
SPEAKING TO U.S. TREASURY SECRETARY SCOTT
BESSENT , THE COMMERCE SECRETARY HOWARD LUTNICK AND
LATER SENATOR BILL HAGGERTY. CONVERSATIONS DO NOT WANT TO
MISS THIS MORNING. GLOBAL STOCKS ARE RALLYING ON
TRADE OPTIMISM. SEEMA SHAH WAYS IN SAYING EVEN
AN OPTIMISTIC UPSIDE SCENARIO, THE AVERAGE EFFECTIVE TARIFF
RATE IS STILL EXPECTED TO TRIPLE COMPARED TO ITS LEVEL TO
START OF THE YEAR. BEYOND THE SHORT-TERM INVESTORS
SHOULD EXPECT CONTINUED GAINS IN THE S&P 500.
SEEMA SHAH JOINS US NOW. HOW DO YOU WAY UP THESE TWO
THINGS, WHEN WE GET THESE DEALS COMING IN IT JUST POWERS AHEAD
A RALLY BY EARNINGS BUT STILL THE RISK REMAINING IN TARIFFS
WHICH ARE ULTIMATELY SETTLING HIGHER THAN THEY HAVE BEEN IN
SOME TIME? >> I THINK IS WE ARE GOING
THROUGH THE COMING WEEKS THERE WILL BE A LOT TO LOOK AT.
AUGUST 1 WHATEVER COMES FROM THAT ISN’T NECESSARILY THE END
OF THE TARIFF DISCUSSION WE CAN SEE THE WAY THE U.S.
IS LIKELY TO NEGOTIATE WITH CHINA BUT TARIFFS WILL BE USED
AS A NEGOTIATING TACTIC GOING FORWARD.
IT’S IMPORTANT INVESTORS TRY TO LOOK THROUGH PRINT WHAT WE’VE
SEEN IN THE LAST COUPLE OF MONTHS IS THE ECONOMY IS
CONTINUING TO POWER AHEAD. THE KEY THING GOING FORWARD IS
HOW EARNINGS PERFORMING, WHAT IS THEIR FORWARD GUIDANCE WITH
REGARDS TO HOW THEY ARE NAVIGATING ALL OF THIS NOISE.
GENERALLY SPEAKING IT’S A FAIRLY CONSTRUCTIVE FROM. DANI:
SOME OF THESE HAVE BEEN REALLY FASCINATING. JUST LOOK AT GM YESTERDAY OR
RTX, TWO COMPANIES THAT ON THE HEADLINE LEVEL BEAT EARNINGS
BUT NOTED SOME BIG HIT TO TERRACE.
IT SEEMS THERE ARE A LOT OF COMPANIES THAT ARE THE ONES
PAYING THE COST OF TARIFFS. IS IT YOUR ASSUMPTION
ESPECIALLY WITH THESE MORE CYCLICAL TYPE COMPANIES THAT WE
ARE GOING TO BE UNDERGOING A PERIOD OF MARGIN COMPRESSION?
SEEMA: I THINK IT IS LIKELY. THE THINK IT’S UNCLEAR FOR
INVESTORS EXACTLY HOW MUCH THOSE TARIFFS COMPANIES WILL
EAT AND HOW MUCH WILL BE PASSED ON TO CONSUMERS.
THAT’S WHAT WE ARE TRYING TO BE ABOUT THIS EARNINGS SEASON IS
UNDERSTANDING WHAT ARE COMPANIES DOING.
WE DESPITE A LITTLE BIT OF MARGIN COMPRESSION, OTHERWISE
CERTAINLY I THINK COMPANIES WOULD BE DOING EXTRAORDINARILY
WELL. STILL CONSTRUCTIVE AND ARE FINDING WAYS AROUND IT BUT WE
ARE ANTICIPATING SOME PRESSURES WHICH TO US IS THE KEY
IMPLICATION IS WE ARE EXPECTING POSITIVE GAINS BUT NOT AS
STRONG AS WE HAVE SEEN IN THE LAST COUPLE OF YEARS.
IT IS CONSTRUCTIVE BUT NOT DOUBLE-DIGIT RETURNS FOR THE
S&P 500. DANI: GEORGE SAID LOOKING AT DEUTSCHE
BANK ASKING THE QUESTION WHO IS PAYING TARIFFS AND THE
RESOUNDING ANSWER IS NOT EXPORTERS.
THAT THEY HAVE NOT SLASHED COST AS SOME WOULD HOPE TO MITIGATE
PROBLEMS GOING FORWARD. THAT IT IS THE WORLD.
IF IT’S ONLY A LITTLE BIT OF MARGIN COMPRESSION YOU ARE
NOTING DOES THAT MEAN IT IS GETTING PASSED ON TO THE
CONSUMER AND DOES THAT TRANSLATE INTO CONSUMER
WEAKNESS AND ECONOMIC CONCERN? SEEMA:
THE NEWS IS TRICKLING OUT FROM A COUPLE OF COMPANIES THAT THE
PASSING ON AT LEAST A PERCENTAGE OF THOSE PRICE
INCREASES TO CONSUMERS. ONE OF THE THINGS WE’VE BEEN
SAYING IS CONSUMERS HAVE STAYED RESILIENT BECAUSE REAL INCOME
GROWTH CONTINUES TO BE POSITIVE AND VERY MUCH DRIVEN BY WHAT IS
GOING ON WITH THOSE PRICE INCREASES AND LABOR MARKETS.
SO THOSE ARE THE TWO FACTORS WHICH EVERYONE’S WATCHING, BUT
THAT’S GOOD TO BE THE ONE THAT REALLY DICTATES HOW STRONG DOES
THE U.S. ECONOMY REMAIN OR WILL WE BE
LOOKING AT FURTHER WEAKNESS DOWN THE LINE WHICH WOULD THEN
HAVE SOME CONSIDERATIONS FOR EARNINGS. DANI: THE BENEFITS GET REALLY FRONT
LOADED AND 2026 OF THE ONE BIG BEAUTIFUL BUILT-IN IS THE
GROWTH FROM THAT STIMULUS ENOUGH TO SUPPLANT WEAKENING
GROWTH WE MIGHT GET FROM TARIFFS? SEEMA: I THINK IT DOES SOME JOB IF YOU
LOOK AT WHAT’S GOING ON FROM THE SIDE, WE DO THINK A LOT OF
THAT WILL BE OFFSET BY THE TARIFF INCREASES AND THE
SPENDING CUTS. SO OVERALL WHEN WE ARE LOOKING
AT THIS, NOT SURE THERE IS ENOUGH OF AN OFFSET PROVIDED BY
TAX CUTS, BUT TO THE POINT I THINK WE WERE REALLY
UNDERSTANDING IN THE LAST COUPLE OF MONTHS IS THE
ROBUSTNESS OF THE U.S. ECONOMY HAS BEEN SURPRISING TO
EVERYONE. AT THE BEGINNING OF THE YEAR
THERE WAS AN EXPECTATION THERE WOULD BE SOME SLOWDOWN, SOME
WEAK POINTS IN THE U.S. ECONOMY AND IF ANYTHING THE
CONTINUED STRENGTH HAS BEEN SURPRISING AND YOU SEE THESE
UPGRADES TO SOME OF THE GROWTH FORECASTS AND EXPECTATIONS WE
HEAR FROM AROUND THE MARKET THAT EQUITIES CAN CONTINUE TO
PERFORM WELL EVEN AS YOU CONTINUE TO HAVE THIS TARIFF
NOISE AND SOME OF THE TARIFF NEWS IS A LITTLE BIT WORSE THAN
WHAT A LOT OF PEOPLE WERE EXPECTING. >> WE KEEP UNDERESTIMATE THE
RESILIENCE AND STRENGTH OF THE U.S. ECONOMY.
AT THE SAME TIME YOU ARE SEEING A BOND MARKET THAT’S BEEN
HAVING SOME REACTIONS, DURATION KEEPS GETTING HIT.
MAYBE THIS TIME IT’S COMING FROM JAPAN WITH A WEAK AUCTION
FOR A 40 YEAR YIELD. THIS GLOBAL CONCERN OF FISCAL
SUSTAINABILITY HOW MUCH OF IT IS THAT A GLOBAL STORY VERSUS
COMING BACK AROUND AND MAKING IT DIFFICULT TO REALLY BUY
DURATION FOR THE U.S. BECAUSE OF THE DEFICIT SPENDING
WE ARE ABOUT TO UNDERGO? SEEMA: FROM A FIXED INCOME PERSPECTIVE
THE THING WE’VE BEEN TRYING TO FOCUS ON HIS SHORT DURATION
SIMPLY BECAUSE THE FISCAL CONCERNS AROUND THE GLOBE HAVE
ALL COMBINED BY ASSOCIATION AROUND THE FISCAL CONCERNS AND
THAT MEANS TO US SOME OF THE LONG-DURATION AREA I GUESS WE
ARE MORE WILLING TO AVOID CERTAINLY FROM A LONG END OF
THE U.S. TREASURY CURVE WE ARE EXPECTED
CONTINUE UP OR PRESSURE BECAUSE OF FISCAL CONCERNS AND I DON’T
THINK THAT WILL BE RESOLVED ANYTIME SOON.
WE THINK THIS WILL BE AN ISSUE OVER THE COMING YEARS AND YOU
COULD SEE THAT AS THE YIELD CURVE JUST CONTINUING. >> BECAUSE WE ARE ABOUT TO GET
SOME OF THE MAG 7 REPORTING TODAY.
WE GET TESLA AND ALPHABET. FOR YOU ARE THESE BIGGEST —
BIGGER MARKET DRIVERS VERSUS SOME OF THE DEALS WE WILL GET
TRICKLING IN FROM THE WHITE HOUSE.
WHAT’S THE BIGGER FACTOR THAT DICTATES WHERE WE GO FROM HERE?
SEEMA: WHAT WE ARE SEEING IS THE MARKET IS LOOKING THROUGH SOME
TARIFF NEWS. WE KNOW THERE’LL BE A LOT OF TO
AND FRO SO WE ARE LOOKING FORWARD TO THE NEXT YEAR AND A
HALF FOCUSING ON RESILIENCE OF THE U.S. ECONOMY.
PART OF THAT IS ABOUT THE MAG 7 AND THAT CONTINUES TO BE THE
KEY DRIVER OF U.S. EQUITIES AND AS LONG AS THEY
CONTINUE TO DELIVER , AS LONG AS AI CONTINUES TO BE A KEY
THING FOR INVESTORS THAT WILL BE ONE OF THE KEY SUPPORTS FOR
U.S. EQUITIES. FOCUSING ON EARNINGS FROM A
BROADSIDE BUT ALSO FOCUSING ON THE MAG 7 WILL BE KEY TO
FORECASTING HOW THE U.S. EQUITY MARKET WILL PERFORM.
DANI: WONDERFUL TO GET YOUR THOUGHTS
THIS MORNING, THANK YOU FOR JOINING, THAT IS SEEMA SHAH.
LET’S GET YOU SOME OF THE TOP STORIES ON THE TERMINAL.
THE U.K. SUPREME COURT JUST REVERSED THE
CONVICTIONS OF TOM HAYES AND CARLO PALOMBO WHO WERE FOUND
GUILTY IN THE LIBOR SCANDAL. THEY SAY THE JURIES HAVE BEEN
MISDIRECTED, HAYES WAS SENT TO JAIL A DECADE AGO WHILE PALOMBO
WAS JAILED IN 2019. JAPAN’S PRIME MINISTER SAYS
THERE IS NO TRUTH IN MEDIA REPORTS THAT HE WILL RESIGN.
IT COMES AFTER REPORTS OF A STORK ELECTION SETBACK ON
SUNDAY. HE AND THE RULING COALITION
LOSING A MAJORITY IN THE UPPER HOUSE OF THE JAPANESE
PARLIAMENT. MORGAN STANLEY BEING PROBED BY
THE FINANCIAL INDUSTRY REGULATORY AUTHORITY OVER
VETTING OF CLIENTS FOR THE RISK OF MONEY LAUNDERING.
THE JOURNAL REPORTING THE FOCUS ON THE U.S.
BANKS CLIENTS RISK RANKING AND OTHER PRACTICES FROM OCTOBER
2021 THROUGH SEPTEMBER 24. WE TURN TO THOSE EARNINGS,
TESLA SETS A REPORT AFTER THE MARKET YOUR DETAILS NEXT ON
YOUR BRIEF. ♪ DANI: THIS IS BLOOMBERG BRIEF. SOME BIG NAMES ON DECK FOR
EARNINGS, ONE OF THEM TESLA SET TO REPORT AFTER THE MARKET
LET’S GET MORE FROM DANNY LEE. WHAT ARE WE EXPECTING? >> TESLA IS ENTERING HISTORICAL
WEAKNESS DRIVEN BY THE FALLING SALES QUARTER ON QUARTER SO WE
HAVE SEEN MOST RECENT QUARTER WHERE THE REPORT SALES ARE DOWN
14% AND SO THAT MAY VERY WELL BE BAKED INTO EARNINGS.
WE ARE INSPECTING REVENUE FOR THE SECOND QUARTER OF AROUND 23
BILLION U.S. DOLLARS EARNINGS-PER-SHARE
AROUND $.44. THIS OFF THE BACK OF THE FIRST
QUARTER IT’S A FASCINATING TRANSITION, WE HEARD THE LIKES
OF DONALD TRUMP ENCOURAGING PEOPLE TO BUY TESLA EV’S THEN
INTO THE SECOND QUARTER WHERE WE SAW THIS DRAMATIC SPLIT
BETWEEN ELON MUSK WHO RUNS TESLA AND HIM EXITING THE U.S.
ADMINISTRATION, LEAVING HIS DOGE POSITION.
FOR ELON MUSK HE HAS THE TIME TO REALLY REASSESS WHAT’S GOING
ON IN TESLA AND HIS PLEDGE TO TURN THINGS AROUND GIVEN HIS
HISTORIC WEAKNESS AND FALLING SALES ACROSS THE BOARD FROM THE
LIKES OF EUROPE AND THE PLACES LIKE ASIA AND CHINA AND EVEN
PARTS OF NORTH AMERICA SO THIS IS A VERY KEY TIME INVESTORS
WILL BE LOOKING TO HEAR MORE FROM ELON MUSK ABOUT WHAT HE
WILL DO TO TRY AND TURNAROUND TESLA. DANI: A TWEET FROM ELON MUSK EARLIER
SAYING I’M BACK TO SEVEN DAYS IN THE OFFICE AND SLEEPING IN
THE OFFICE. BUT THEN WE ALSO GOT THIS
DOCUMENT FROM SPACEX OVERNIGHT SAYING THERE IS A RISK ELON
MUSK DOES MORE IN TERMS OF POLITICS AND AS PREVIOUSLY
SERVING AS A SENIOR ADVISOR TO DONALD TRUMP WHAT IS THE
UNDERSTANDING AT THIS MOMENT, WHAT HIS SPLIT IS AND HOW
DEDICATED HE IS TO LOOKING AT TESLA BECAUSE THIS HAS BEEN
SOMETHING ANALYSTS OVER AND OVER AGAIN WERE CONCERNED ABOUT.
>> IT MAY JUST BE A HEADS UP TO INVESTORS GIVEN THE EXTENT TO
WHICH ELON MUSK’S PRESENCE ACROSS THE BOARD, HIS
ACTIVITIES DO INTERSECT WITH POLITICS, WE HAD PREVIOUS
REPORTS ABOUT HOW HE IS LOOKING TO INVEST BACK INDIVIDUAL
POLITICS TO HAVE AT LEAST A RAFT OF ALLIES HE CAN RELY ON
IN THE FUTURE. BUT THEN AGAIN YOU LOOK AT HOW
TESLA IS SET UP FOR THE FUTURE. IT IS STILL GOING TO BE A
CHALLENGE FOR THEM GOING FORWARD. WHEN YOU LOOK AT THE EARNINGS,
I THINK IT’S GOING TO BE CRITICAL INVESTORS WANT TO HEAR
MORE ABOUT THIS TURNAROUND, MORE ABOUT SOME OF THE BUSINESS
ACTIVITIES SUCH AS WITH THE ROBOTAXI WHICH IS BEEN TESTING
IN AUSTIN. MORE ABOUT THIS AUTONOMOUS
FUTURE. THERE’S A LOT ELON MUSK HAS
PLEDGED DESPITE BEING DISTRACTED BY THE POLITICS I
THINK IT WILL BE INCUMBENT ON HIM TO PUT THE ACTION AND WORDS
IN ORDER TO ENSURE THAT HE CAN PUT TESLA BACK ON A BETTER
FOOTING. I THINK IT WILL BE CRITICAL
WITH THE SECOND QUARTER. IT LOOKS LIKE THERE SHOULD BE A
FOR YOUR GUIDANCE THAT MAY WELL DISAPPOINT OR EXCITE INVESTORS. >> THE POLITICS IN SOME WAYS IS
IMPOSSIBLE TO AVOID WHEN YOU HAVE THINGS LIKE THE ONE BIG
BEAUTIFUL BILL ENDING EARLY SOME OF THE TAX CREDITS WHEN IT
COMES TO TECHNOLOGIES LIKE EV’S. IN TERMS OF THE EV SPRAYED WHAT
ARE THE DEMAND STAND RIGHT NOW. IS THERE ROBUST DEMAND OR ARE
WE SEEING THIS PULL FORWARD AFFECT TO TRYING GET AHEAD OF
WHAT IS LIKELY LEGISLATION THAT MIGHT DAMPEN SOME DEMAND. DANI: THERE IS A TICKING CLOCK IN THE
U.S. TOWARDS THE END OF SEPTEMBER SO
THERE MAY VERY WELL BE A PULL FORWARD AFFECT INTO THE THIRD
QUARTER. BUT THEN YOU LOOK AT WHAT TESLA
IS GOING FOR. IT’S LINE UP IT STILL NEEDS AN
AFFORDABLE EV TO PERHAPS ANALYSTS SAY REVIVE ITS
FLAGGING SALES. IT HAS A THIN LINE UP AS WELL.
WE MAY SEE MORE OF A BENEFIT BUT JUST THE WAY IN WHICH THE
FEDERAL BACKING OF EV’S IS NOT SO MUCH WHERE IT WOULD BE FOR
EV’S OR CHARGING WE MAY SEE MORE OF A COOLING DOWN IN THE
KIND OF MONSTER,. DANI: THANK YOU FOR THAT, THAT IS
BLOOMBERG’S DANNY LEE. MICROSOFT WARNS AS HACKERS HIT
A U.S. NUCLEAR AGENCY. MORE ON THAT AND WHAT’S MAKING
HEADLINES IN YOUR FRONT PAGE NEWS COMING UP NEXT ON
BLOOMBERG. ♪ DANI: YOU ARE WATCHING BLOOMBERG
BRIEF. I’M DANI BURGER IN NEW YORK.
FIRST STOP ON THE WALL STREET JOURNAL, THEY LEAD WITH
PRESIDENT TRUMP GOING TO BAT FOR BIG TECH GLOBAL TRADE TALKS.
THE JOURNAL REPORTING THE ADMINISTRATION WILLING TO USE
ITS THREAT OF TARIFF AND OFFERS OF ACCESS TO THE U.S.
CONSUMER TO STOP COUNTRIES FROM IMPOSING NEW TAXES, REGULATIONS
AND TARIFFS ON SILICON VALLEY. THE FINANCIAL TIMES REPORTING
MCKINSEY HAS STOPPED ITS CHINA BUSINESS FROM UNDERTAKING
CONSULTANCY WORK RELATING TO GENERATIVE AI TO GEOPOLITICAL
TENSIONS. THE FIRM REFRAMING TO PROJECT
TO THE WASHINGTON SCRUTINY OF WESTERN COMPANY OPERATIONS AND
SENSITIVE SECTORS. MICROSOFT ACCUSING TO CHINESE
STATE-SPONSORED GROUPS OF EXPLOITING IT SHAREPOINT
SOFTWARE TO TARGET USERS LIKE LARGE CORPORATIONS AND
GOVERNMENT AGENCIES. BLOOMBERG EXCLUSIVELY REPORTING
THE U.S. NATIONAL NUCLEAR SECURITY
ADMINISTRATION WAS AMONG THE TARGETS AS WAS THE DEPARTMENT
FOR EDUCATION. A QUICK LOOK AT THE BOND MARKET
THIS MORNING IT IS SENSITIVITY OF FISCAL CONCERNS AND WHETHER
WE WILL KEEP BUYING DURATION BONDS.
JAPAN HAVING A POOR 40 YEAR AUCTION THIS MORNING ANNOUNCING
10 YEAR YIELDS UP BY SEVEN BASIS POINTS, THE HIGHEST LEVEL
SINCE 2008. OTHER BOND PRICES FALLING AND
SYMPATHY FROM THE U.S. TO THE U.K..
WE WILL SPEAK WITH ALAN OF JENSEN INVESTMENT ON THE
REMAINING MARKET RISKS DESPITE RENEWED TRADE OPTIMISM COMING
UP NEXT ON BLOOMBERG. ♪ DANI: FIVE:
30 AM IN NEW YORK CITY, I’M DANI BURGER WITH YOUR BLOOMBERG
BRIEF. A DONE DEAL, TOKYO AND WASHINGTON STRIKE UP TRADE
AGREEMENT FOR A 15% LEVY ON JAPANESE IMPORTS.
ANOTHER RECORD FOR U.S. STOCKS GLOBAL RISK RALLIES OFF
THE BACK OF A TRADE DEAL. ALL OF THAT AHEAD OF BIG TECH
EARNINGS WHICH KICK OFF WITH ALPHABET AND IBM, TESLA ON DECK.
SOME BIG HEADLINES OUT OF JAPAN A TRADE DEAL BEING THE BIGGEST.
THE HOPE THAT SOME OTHER COUNTRIES MIGHT AVOID HIGHER
TARIFFS ON AUGUST 1. WE ARE HIGHER BY 3/10 OF A
PERCENT FOR THE S&P 500, NASDAQ A LITTLE BIT WORSE.
RUSSELL AND HIGHS ON THE FUTURE SESSION.
FOR THE BOND MARKET PERHAPS A DIFFERENT JAPANESE STORY A WEEK
BOND AUCTION. YOU CAN SEE THE BOTTOM OF YOUR
SCREEN TENURE YIELDS IN JAPAN AT THE HIGHEST SINCE 2008.
WE BREAK FIVE CONSECUTIVE DAYS OF DECLINING YIELDS TO MOVE
HIGHER YOUR 10 YEAR YIELD UP BY THREE BASIS POINTS.
LET’S LOOK AT SOME OF THE STOCKS MOVING IN THE PREMARKET
AND ONE IN JAPAN WITH THAT IS VALERIE TYTEL. VALERIE:
LET’S START OUT EAST BECAUSE THIS WAS A BIG ONE, TOYOTA
SURGED OVER 14% IN TRADE OUT IN TOKYO.
ITS BIGGEST MOVE SINCE OCTOBER 2008 GOES TO SHOW HOW MUCH WE
HAD NO PRICED IN SOME RERATE WHEN IT CAME TO THE SECTOR
TARIFFS. LEADING SHARES IN EUROPE TO
RISE AS WELL, MERCEDES WITH ONE OF ITS BIGGEST JUMPSUIT A FEW
YEARS. I WANT TO MOVE ON BECAUSE I’M
AFRAID THERE IS ANOTHER MEME STOCK, GOPRO JUMPING IN
PREMARKET TRADE, THE MOST TRADED STOCK BY VOLUME SO FAR
IN THE PREMARKET. THIS ONE GOING VIRAL ON THE
INTERNET. I LOOKED AT THE SHORT INTEREST
ON THE STOCK IT’S JUST AROUND 10% SO WHAT THE FRENZY IS ABOUT
THIS STOCK I WILL HAVE TO SCOUR THE INTERNET TO FIND OUT BUT
THE SECOND HEAVIEST VOLUME TRADED STOCK ON THE PREMARKET
IS KRISPY KREME, ANOTHER MEME STOCK TO KEEP AN EYE ON.
THIS AFTERWARD ROSE 37% UNKNOWN NEW CORPORATE NEWS.
ANOTHER TO ADD TO THE RADAR THERE’S A FAIR FEW OF THEM IS
ONE 800 FLOWERS UP 8% ON DECENT VOLUMES AS WELL. DANI:
WHO SAYS THE CONSUMER IS STILL IN TROUBLE IF WE HAVE ENOUGH
MONEY TO THROW AT MEME STOCKS. A LOT OF STOCKS TO KEEP AN EYE
ON BREAD ANOTHER TRADE DEAL IN THE BOOKS FOR PRESIDENT TRUMP. >> THE LARGEST TRADE DEAL IN
HISTORY I THINK MAYBE THE LARGEST. WE WORKED ON IT LONG
AND HARD AND IT’S A GREAT DEAL FOR EVERYBODY, I WOULD SAY IT
HAS TO BE GREAT FOR EVERYBODY IT’S A GREAT DEAL, A LOT
DIFFERENT FROM THE DEALS IN THE PAST I CAN TELL YOU THAT. >> JOINING US IS BRENDAN MURRAY
WHO LEADS OUR TRADE COVERAGE. INCREDIBLE TO BELIEVE SINCE IT
FEELS LIKE IT’S BEEN GOING ON FOREVER BUT WE ARE STILL IN THE
EARLY INNINGS OF GETTING TRADE AGREEMENTS DONE.
WHAT DID WE HEAR FROM JAPAN? BRENDAN:
THE DEAL WAS ALWAYS ABOUT CARS IN THE TARIFF LEVEL THE TRUMP
ADMINISTRATION WAS GOING TO PUT ON JAPANESE EXPORTS TO THE U.S.
AND COMING AWAY WITH A TARIFF LEVEL OF NOT ONLY THE
RECIPROCAL LEVEL OF 15% BUT A 15% RATE ON CARS IS A RELIEF TO
THE JAPANESE AUTOMAKERS AND WILL ANNOY THEM BUT WON’T CRUSH
THEM IN TERMS OF HOW THEIR SALES WILL GO IN THE U.S.. THERE WERE ALSO NO LIMITS OR
QUOTAS PUT ON THE AMOUNT OF JAPANESE EXPORTS TO THE U.S.
SO THAT WAS LOOKED AT AS A RELIEF AS WELL.
WE DON’T KNOW MUCH OF THE TIMING OF THE INVESTMENT FUND
JAPAN IS BARELY SETTING UP TO SPEND IN THE U.S.
ON INVESTMENTS, BUT THAT — SOME OF THESE DETAILS WE WILL
HAVE TO SEE HOW THEY COME OUT. JAPAN ALSO CONCEDED SOME ON THE
BARRIERS THEY HAVE TO U.S. EXPORT SO THE HEADLINE NUMBERS
SEEM TO BE RELIEF THAT THESE TARIFF LEVELS TRUMP HAS
THREATENED HER COMING IN MUCH LESS AND LOWER THAN WHAT THEY
HAVE THAN WHAT THEY WERE ANNOUNCED IN APRIL.
THERE’S A BIT OF RELIEF OTHER COUNTRIES COULD GET SIMILAR
KINDS OF DEALS THAT WILL HURT THEIR ECONOMIES BUT WON’T
CRATER THEM. DANI: WE ARE STILL WAITING FOR TWO OF
THE BIGGER DEALS, WITH THE EU AND CHINA. ON CHINA SCOTT BESSENT WAS
SPEAKING WITH FOXBUSINESS ABOUT AN EXTENSION TO THE TARIFF
TRUCE WITH CHINA. >> CHINA, THAT DEAL EXPIRES ON
AUGUST 12 AND I WILL BE IN STOCKHOLM ON MONDAY AND TUESDAY
WITH MY CHINESE COUNTERPARTS AND WE WILL BE WORKING OUT WHAT
IS LIKELY AN EXTENSION THEN. DANI: THE CHINESE MINISTRY OF
COMMERCE AFFIRMING THAT MEETING IS HAPPENING THIS MORNING, WHAT
MIGHT WE EXPECT OUT OF THESE TALKS?
IS THERE ANY LIKELIHOOD THERE IS A DEAL OR IS IT MORE CAN
TICKING? BRENDAN: IT SEEMS CLEARLY WILL EXTEND
THE TRUCE THEY HAVE FROM THE SKY HIGH TARIFFS FOR THE PAST
COUPLE MONTHS. WE DON’T KNOW IF IT WILL BE A
THREE-MONTH EXTENSION OR SIX-MONTH EXTENSION, BUT BOTH
SIDES ARE COMING TO THE TABLE TO TRY AND FREE UP SOME EXPORT
CONTROLS THEY HAVE PUT ON EACH OTHER AND SCOTT BESSENT ALSO
SAID HE WANTS TO TALK ABOUT CHINESE PURCHASES OF OIL FROM
IRAN AND RUSSIA SO THE TALKS COULD BROADEN TO THESE WIDER
GEOPOLITICAL QUESTIONS THAT THE TRUMP ADMINISTRATION WANTS TO
ADDRESS WITH CHINA. >> THANK YOU FOR JOINING US.
TUNE INTO SURVEILLANCE IT IS AN ALL-STAR LINEUP THEY WILL SPEAK
TO SCOTT BESSENT, COMMERCE SECRETARY HOWARD LUTNICK AND
LATER IN THE PROGRAM SENATOR BILL HAGGERTY.
THE TRADE DEAL WITH JAPAN IS FUELING MORE GAINS IN EQUITIES
ALREADY CLOSING AT A RECORD HIGH.
ALLEN BOND OF JENSEN INVESTMENT MANAGEMENTS SEES A CONTINUATION
OF RISK ON SENTIMENT FROM THE RENEWED OPTIMISM AND I’M
PLEASED TO SAY HE JOINS US NOW. DOES THIS DEAL WITH JAPAN
CONFIRM THE MARKETS DESIRE TO LOOK THROUGH THE RISK OF AUGUST
1 BRITON ALLEN: THAT IS DEFINITELY WHAT WE’VE SEEN THE
MARKET IS WILLING TO LOOK THROUGH THE TARIFF RISK REALLY
POST LIBERATION DAY IN EARLY APRIL ITS FUEL ON A RISK ON
SENTIMENT. AND THIS IS GOING ALONGSIDE
EXPECTATIONS. WE EXPECT THESE DEALS GET
ANNOUNCED INCREMENTALLY AND LIKELY MENTIONED, NOTHING
REALLY SCARY YET AND IT’S ALLOWED INVESTORS TO LATCH ONTO
OTHER THEMES. THE THEME THAT STRIVING MARKET
STILL IS THE BUSINESS PERFORMANCE AND THE EARNINGS
FROM THE BIG TECH COMPANIES AND THE THEME OF AIN INVESTMENT AND
THAT THEME STILL SEEMS TO BE ALIVE AND THAT’S WHAT WE THINK
IS DRIVING THIS. DANI: AI MAKING SOME 33% OF THE INDEX
RIGHT NOW. THESE ARE COMPANIES THAT ARE
PROBABLY LESS EXPOSED TO TARIFF RISK.
NVIDIA TAKES A HIT BUT NOT AS MUCH AS GM.
DOES THAT MEAN THERE MAY BE MORE CONCERNING TRENDS UNDER
THE SURFACE OF MARGIN COMPRESSION THAT WOULDN’T
NECESSARILY SHOW UP ON A HEADLINE LEVEL BECAUSE OF AI.
ALLEN: I THINK THERE IS THAT. THE OTHER BIG UNCERTAINTY IS
THE TIMING OF THIS. WE KNOW TARIFF REVENUE IS REAL
IT IS COMING INTO THE GOVERNMENT, TARIFF REVENUE WAS
UP A LOT IN TERMS OF U.S. TREASURY COLLECTIONS.
WE HAVEN’T SEEN IT IN THE NUMBERS YET. WE ARE SEEING IT IN AUTOMAKERS
EARNINGS, WE THINK THIS IS A KEY QUESTION WE ARE HOPING TO
SEE ANSWERS TO THREE EARNINGS SEASON AND THE BIG TECH STOCKS
AREN’T IS DIRECTLY EXPOSED AND THEY ARE FINANCIALLY STRONG,
FINANCIAL FLEXIBILITY. WE THINK THEY CAN GIVE YOU THE
DRIVER OF THE TREND WE ARE SEEING. DANI:
I’VE SEEN A LOT OF PEOPLE SAYING THIS IS A HEATED RALLY,
DESICCATED RALLY. AT THE SAME TIME YOU HAVE MEME
STOCKS COMING BACK AND PEOPLE ACTING IN SPECULATIVE WAYS LIKE
22 ANYONE. HOW DO YOU GAUGE MARGIN —
MARKET SENTIMENT AND WHETHER THIS IS A MARKET THAT FEELS
STRETCHED AT RECORD HIGHS OR IF THERE’S MORE PARTICIPATION TO
COME? ALLEN: THERE’S NO DOUBT ABOUT THAT,
WHO KNOWS IF THAT’S A SIGN AT THE TOP.
THE HARD PART OF THESE TRENDS IT’S BEEN RISK ON FOR THE PAST
FOUR MONTHS. THAT COULD KEEP GOING FOR A
WHILE. IT’S REALLY HARD TO PREDICT
THAT IN THE MOMENT. OUR FOCUS IS LONG-TERM STOCK
PICKERS IS FINDING BUSINESSES THAT CAN WEATHER THE STORM AND
PARTICIPATE IN THIS UPSIDE PRIDE WE ADDED SOME STOCKS IN
EARLY APRIL WHEN THE MARKET SOLD OFF TO TRY AND HELP OUR
PORTFOLIO. BUT WE ARE LOOKING FOR
BUSINESSES THAT IF THINGS COOL OFF HAVE THE FUNDAMENTALS THAT
CAN CARRY THEMSELVES THROUGH IT. THAT’S OUR FOCUS AS WE’VE BEEN
MANAGING THIS. ONE OF THE ONES WE JUST PUT THE
PORTFOLIO IS META-. IT’S A NEWER STOCK FOR US.
WE THINK — WE ALL KNOW THE BUSINESS AND MAYBE JUST QUICK
REHASH, UBIQUITOUS PLATFORMS FOR FACEBOOK, INSTAGRAM,
WHATSAPP AND IT CREATES THIS REALLY VALUABLE USER DATA THEY
CAN MONETIZE. WHAT WE THINK IS INTERESTING
ABOUT META-RIGHT NOW IS WE’VE SEEN THE NEAR TERM BENEFICIARY
FROM AI. THEY CAN USE AI TO MAKE THEIR
BUSINESS BETTER, TO INCREASE USER ENGAGEMENT AND IMPROVE
USER EXPERIENCE, THEY CAN IMPROVE THE MODERNIZATION OF
THEIR ADS. THEY ARE MAKING BIG INVESTMENTS, THAT THEY HAVE THE
CHECKBOOK TO DO IT AND WE THINK THERE IS NEAR TERM RETURNS ON
THOSE INVESTMENTS. DANI: THIS GRAB FOR TALENT DOES NOT
JUST HAVE THE IMPACT OF BENEFITING META-BUT SLOWING
EVERY BUDDY ELSE DOWN IF THEY’RE WIPING OUT TEAMS AT
APPLE, HIRING AWAY FROM OPENAI DOES THIS BECOME A COMPETITIVE
ADVANTAGE THE TOP TALENT IS NOW AT META-AND NOT ELSEWHERE.
ALLEN: I THINK THAT IS A GOOD POINT.
THE AI TALENT IS A SCARCE RESOURCE AND THAT YOU CAN SEE
IN THE BIG PRICE TAKES THESE PEOPLE ARE GARNERING.
META-HAS BEEN AGGRESSIVE AND WE ARE STILL IN THE EARLY DAYS OF
AIN THAT’S THE IMPORTANT THING IS EVERYONE TRYING TO FIGURE
OUT WHAT DOES THIS LOOK LIKE, IT LOOKS LIKE MAYBE THEY ARE
THINKING WE NEED TO REVISIT THIS.
THE THING WITH META AND OTHER TECH GIANTS THESE ARE FINANCIAL
POWERHOUSES PRINT THEY HAVE THE FLEXIBILITY TO DO THIS AND CAN
TAKE BIG SWINGS. AND OFTENTIMES IN EARLY STAGES
AGGRESSION IS REWARDED. DANI: THE EXPECTATIONS WERE EARNINGS
FOR A LOT OF THESE IS SLOWER GROWTH, NOT SLOWING.
WILL INVESTORS STILL REWARD SLOWER GROWTH OR DO THEY NEED
TO COME OUT CONTINUALLY IN THE QUARTERS WITH REALLY MIRACULOUS
AND STUNNING PROJECTIONS OF GROWTH OR CAN YOU REWARD A
STEADY EARNINGS ENVIRONMENT? ALLEN:
WHAT WE’VE SEEN IN EARNINGS SEASON A LITTLE BIT OF A TREND
WILL RESULT LOOKS GOOD BUT OUTLOOKS ARE UNDER QUESTION AND
STOCKS HAVE REACTED NEGATIVELY IN CERTAIN SITUATIONS.
IT REMAINS TO BE SEEN FOR BIG TECH.
WHAT WE ARE FOCUSED ON IS THEIR OUTLOOK FOR CAP ACCENT
INVESTMENT SPENDING. WE THINK THAT HAS BEEN THE BIG
DRIVER OF THE TECH BOOM WE ARE SEEING, THEY INVEST IN DATA
CENTERS, THAT’S A PROXY FOR THIS AI INVESTMENT THEME.
WE GOT GOOD NEWS IN THE FIRST QUARTER THEY REAFFIRMED THEIR
GUIDANCE. THOSE COMMENTS IN THE SECOND
QUARTER WE THINK WE WILL PAY CLOSE ATTENTION TO AS INVESTORS.
DANI: IF YOU HAVE MORE CAPITAL EXPENDITURES COMING YOU HAVE
ONE BIG BEAUTIFUL BILL YOU WILL SEE STIMULUS IN 2026.
MAY BE RATE CUTS AS WELL. DOES THIS POWER INTO THE NEXT
YEAR? THERE’S A LOT IN 2026 NOT TO
MENTION THE REGULATION OF BANKS AND EASING ENVIRONMENTS.
ARE WE JUST CAN CONTINUE TO SEE THIS BOOM INTO 2026 OR THERE
ARE REAL RISKS THAT SOMETHING COULD DERAIL IT? ALLEN: THERE’S A COUPLE OF KEY
QUESTIONS WE ARE LOOKING AT ANSWERS TO.
WHAT ULTIMATELY IS THE IMPACT OF THOSE TARIFFS ON PRICES FOR
CONSUMERS ON MARGINS FOR CORPORATIONS.
THAT’S A QUESTION WE ARE SETTING TO SEE THE ANSWERS TO
THAT. THE OTHER IMPLICATION IS THE
FED. THE FED HAS BEEN ON THE SIDELINES FOR 20 25.
AT ONE POINT WE THOUGHT JEAN WOULD BE ALIVE MEETING.
MAYBE NOW IN SEPTEMBER. AND IT APPEARS WHAT THEY ARE
LOOKING AT IS THE SAME UNCERTAINTY WE ARE LOOKING AT.
WE KNOW TARIFFS ARE HAPPENING, IT MIGHT BE INFLATIONARY WE
DON’T SEE IT IN THE NUMBERS YET. SO THE ANSWER TO THAT QUESTION
ABOUT WHAT HAPPENS WITH FED POLICY IS CRITICAL FOR
CONTINUING THIS RALLY AND THIS OPTIMISM. DANI: CRITICAL IN RESPONSE IF THEY’RE
NOT ABLE TO CUT RATES THIS YEAR. I WON’T DRAG YOU INTO THAT
DEBATE. THANK YOU FOR JOINING US.
ALLEN BOND OF JENSEN INVESTMENT MANAGEMENT.
LET’S GET YOU SOME OTHER TOP STORIES ON THE TERMINAL.
THE U.K. SUPREME COURT HAS JUST REVERSED
THE CONVICTIONS OF TOM HAYES AND CARLO PALOMBO.
THE TRADERS FOUND GUILTY IN THE LIBOR SCANDAL.
THE COURT STATED THAT JURIES AND MISDIRECTED AT BOTH TRIALS.
PALOMBO WAS JAILED IN 2019. JAPAN’S PRIME MINISTER SAYS
THERE IS NO TRUTH IN MEDIA REPORTS HE WILL RESIGN.
IT COMES AFTER HISTORIC ELECTION SETBACK ON SUNDAY WITH
HIS RULING COALITION LOSING THEIR MAJORITY IN THE UPPER
HOUSE OF THE JAPANESE PARLIAMENT. A BLOOMBERG EXCLUSIVE, THE U.S.
NATIONAL NUCLEAR SECURITY ADMINISTRATION, OF THE U.S.
EDUCATION DEPARTMENT AND THE RHODE ISLAND GENERAL ASSEMBLY
ARE AMONG AGENCIES BREACHED BY CHINESE STATE-SPONSORED HACKERS.
MICROSOFT WARNED THEY EXPLOITED FLAWS IN SHAREPOINT SOFTWARE TO
BREAK INTO INSTITUTIONS GLOBALLY. TEXAS INSTRUMENTS PLUNGES ON
PESSIMISM, ALPHABET AND IBM THE NEXT SET OF TECH EARNINGS THAT
WILL REPORT. WE WILL BREAK DOWN WHAT TO
EXPECT COMING UP NEXT ON YOUR BLOOMBERG BRIEF. ♪ DANI:
YOU ARE LOOKING LIVE AT THE PRINCIPAL ROOM.
AN INTERVIEW WITH TREASURY SECRETARY SCOTT BESSENT 7:00
A.M. NEW YORK TIME, CONVERSATION YOU
DO NOT WANT TO MISS. THIS IS BLOOMBERG.
YOU ARE WATCHING BLOOMBERG BRIEF. TECH EARNINGS SEASON IN FULL
SWING WITH GOOGLE AND IBM REPORTING AFTER THE MARKET
CLOSE TO KICK THINGS OFF IN EARNEST FOR MAG 7 AND THE REST
OF THE SECTOR. LET’S BRING IN BLOOMBERG TECH
YOUR OPPOSED TOM MACKENZIE. WHAT ARE WE EXPECTING FROM THE
TECH GIANT ALPHABET? TOM: A SOLID SET OF RESULTS.
YEAR-TO-DATE IT IS ESSENTIALLY FLAT.
BUT THE DIGITAL ADS PART OF THE BUSINESS THERE IS AN
EXPECTATION THAT WILL COME THROUGH STRONGLY, THE FOCUS
WILL BE ON THE CLOUD AS WELL THAT IS SEEN AS THE BIGGEST
DRIVER OF REVENUES OF FUTURE GROWTH FOR ALPHABET AND WHETHER
OR NOT EXECUTIVES COME OUT AND OUTLINE A STRATEGY TO DEFEND
THE SEARCH PART OF THE BUSINESS YOU SEE THAT INCREASED
COMPETITION FROM AI PLAYERS LIKE CHATGPT AS WELL PUSHING
HIM TO SEARCH. WE ARE EXPECTING DIGITAL AD
SALES TO PICK UP ANY UPDATES AROUND THEIR AI MODEL GEMINI AI
WILL BE SCRUTINIZED BY INVESTORS. DANI:
WE ARE IN THIS ENVIRONMENT WHERE TECH MIGHT BE SAFE FROM
TARIFFS BUT NOT ALL TECH IS CREATED EQUAL AND SOME
CHIPMAKERS HAVE BEEN INTERESTING IN HERE.
TEXAS INSTRUMENTS ALSO YESTERDAY TO CHIPMAKING
COMPANIES THAT ARE REALLY EXPOSED TO THE AUTO INDUSTRY.
JUST HOW MUCH ARE TARIFFS HURTING THESE COMPANIES? TOM:
IT WAS EXACTLY THAT PART OF THE SECTOR, THE AUTO INDUSTRY AND
MORGAN STANLEY ZEROED IN ON IN TERMS OF THEIR NOTE ON THE BACK
OF THESE EARNINGS SAYING THE EXPECTATIONS WERE HIGH FOR
TEXAS INSTRUMENTS AND DESPITE THE FACT THEY BEAT IN THE MOST
RECENT QUARTER THEIR FORECAST FOR THE THIRD QUARTER WAS
SLIGHTLY BETTER THAN MOST ESTIMATES. MORGAN STANLEY SAYS
EXPECTATIONS ARE HIGH BUT IS KEY AND CLEAR THAT THAT AUTO
INDUSTRY DEMAND STILL HAS NOT TURNED AROUND AND THEY ARE NOT
FORECASTING YET A TURNAROUND. SO THAT WAS A NOTE OF CAUTION
FROM MORGAN STANLEY. ONE ANALYST LOOKING AT THIS
POINT THEY HAVE 100,000 CLIENTS, THEY ARE STARTING TO
SEE IN TERMS OF WHAT THE GROWTH IS A LITTLE BIT MORE DETAIL BUT
WHAT THEY DID NOT GET IN TERMS OF THE ANALYST WAS DETAILS ON
AND TO WHAT EXTENT THERE WAS A PULL FORWARD IN ORDERS IN THE
SECOND QUARTER THEY WERE LOOKING FOR THAT CLARITY FROM
THE EXECUTIVE TEAM ON THE CALL AND THEY DID NOT GET IT AND
THAT LED TO CONCERN A LITTLE BIT MORE CAUTION FROM TEXAS
INSTRUMENTS AS WELL WAS PART OF THE FACT OF WHY YOU’RE SEEING A
BIG DROP PRE-MARKET TERMS OF THEIR SHARES.
WE LOOK AHEAD TO IBM AS WELL. SLOW AND STEADY PROGRESS IN
TERMS OF THIS BUSINESS, THE SHARES ARE UP YOU HAVE THE
GAINS YEAR-TO-DATE, THE SERVICES THE DATA CENTER
EXPECTING GROWTH OF 5% ABOVE 16 BILLION U.S.
DOLLARS FOR THE MOST RECENT QUARTER AND THE ANALYSTS SEE A
BUSINESS RETURNING DECENT PROFIT AND A STEADY RATE AS
THEY PUSH INTO SOME OF THOSE AI PRODUCTS BENEFITING FROM THAT
LEAN INTO AI, THAT IS SEEN AS A STEADY DRIVER OF GROWTH.
ONE TO WATCH LATER TODAY. >> THANK YOU SO MUCH FOR THAT.
EARNINGS TO LOOK OUT FOR NOT TO MENTION TESLA ALSO REPORTING
AFTER THE MARKET THE WASHINGTON — THE WASSER GENERAL REPORTING
MORGAN STANLEY BEING PROBED BY THE FINANCIAL INDUSTRY
REGULATORY AUTHORITY OVER THE VETTING PRACTICES OF ITS
CLIENTS THE FIRM FACING FINES FOR FEDERAL INVESTIGATIONS INTO
MONEY LAUNDERING PRACTICES. JOINING US IS NICHOLAS COMFORT.
WHAT DO WE UNDERSTAND ABOUT WHAT IS BEING ALLEGED HERE AND
THE IMPACT OF IT? NICHOLAS: FIRST OF ALL WE SHOULD START BY
SAYING MORGAN STANLEY IS POINTING OUT THEY HAVE BEEN
INVESTING FOR SEVERAL YEARS SO FOR FAIRNESS SAKE THEY ALSO SAY
REVENUE PROBES AND DIALOGUES ARE COMMONPLACE BUT WITH THE
JOURNAL IS REPORTING IS SPECIFICALLY IN THE VETTING OF
WEALTH MANAGEMENT CLIENTS AND THE DUE DILIGENCE DONE ON THESE
PEOPLE ON WEALTHY CLIENTS WHO BRING A LOT OF FEES TO BANKS
THAT MORGAN STANLEY HAS NOT BEEN DOING A GOOD ENOUGH JOB. IMPORTANT TO NOTE THAT FINRA IS
THE INDUSTRY’S OWN REGULATOR IT’S NOT A GOVERNMENT AGENCY
AND THE FINES IF THERE WERE ANY GENERALLY TEND TO BE A LOT
LOWER THAN THOSE FROM GOVERNMENT AGENCIES.
SO IT IS A MUCH LOWER FIGURE ONE WOULD BE LOOKING AT.
I THINK WHAT’S INTERESTING HERE IS FOR ALL THE TALK OF
DEREGULATION AND A CHANGE OF WIND THE TRUMPET ADMINISTRATION
THERE CLEARLY PEOPLE BEHIND THE SCENES STILL LOOKING CLOSELY AT
WHAT’S GOING ON AT BANKS AND THE STANDARD BEING UPHELD
WHETHER THERE WAS WRONGDOING, THERE ARE PEOPLE STILL ON THE
WATCH. DANI: IT’S A REALLY INTERESTING POINT
BUT ALSO THE FACT FINES MIGHT BE LOWER MIGHT BE WHY MORGAN
STANLEY SHARES AREN’T REACTING AT ALL TO THIS.
BUT WHAT COULD BE THE RESPONSE FROM MORGAN STANLEY?
YOU MENTION SOME OF THE COMMENTS BUT IS THIS A MORGAN
STANLEY THAT WILL HAVE TO SPEND MORE MONEY IN THE FUTURE TO
BEEF SOME OF THESE PROTOCOLS UP? NICHOLAS:
THEY POINT OUT THEY HAVE BEEN SPENDING FOR SEVERAL YEARS ON
THIS AS WELL AND THERE HAS BEEN A BIG PUSH BY BANKS TO REALLY
KNOW THEIR CLIENTS AND KNOW THEIR CUSTOMERS.
CLEARLY WEALTH MANAGEMENT IT’S A VERY LUCRATIVE BUSINESS
BECAUSE THESE ARE WEALTHY CLIENTS, YOU CAN SELL THEM MORE
COMPLEX PRODUCTS WHICH COMMAND HIGHER FEES.
IT’S GREAT IN TERMS OF BEING LESS DEPENDENT ON INTEREST
RATES BUT YOU HAVE TO KNOW WHERE TO THESE CLIENTS MAKE
THEIR MONEY AND WHERE DOES THIS COME FROM.
YOU HAVE TO BE KEEPING A LOOKOUT ON THE NEWS FLOW AROUND
THEM. AND TO BE AWARE ON WHERE THIS
COMES FROM ITS GOING TO BE A CONTINUAL INVESTMENT FROM
MORGAN STANLEY AND OTHER BANKS AS WELL. >> THANK YOU VERY MUCH.
COMING UP WE WILL GET YOU SET UP FOR YOUR TRADING DAY.
PRESIDENT TRUMP IS SET TO SPEAK AT THE AI SUMMIT.
YOUR TRADING DIARY UP NEXT ON BLOOMBERG. ♪ DANI:
LET’S GET YOU SET UP FOR YOUR TRADING DAY.
EXISTING HOME SALES DATA AT 10:00 A.M. EASTERN.
THEN ALL EYES ON SOME OF THE MAG 7 STOCKS AFTER THE TESLA
AND ALPHABET WILL BE THE FIRST TO GO THIS QUARTER AND
PRESIDENT TRUMP WILL BE DELIVERING REMARKS AT THE
WINNING THE AI RACE SUMMIT IN D.C..
INDIVIDUAL MOVERS THIS MORNING TEXAS INSTRUMENTS PLUNGING WITH
A VERY SHAKY THIRD-QUARTER REVENUE FORECAST ON
EXPECTATIONS BECAUSE OF THE CHIPMAKERS EXPOSURE TO THE AUTO
SECTOR AND TARIFFS THERE. KRISPY KREME IT IS ALL ABOUT
THE MEME STOCKS. SOMETHING ON THE INTERNET WAS
SET ABOUT THEM AND ALMOST A 19 ALMOST 20% RALLY FINALLY
CONSTELLATION ENERGY, POWER PRODUCERS GAINING GRADE AN
OPTION FOR THE LARGEST U.S. GRID THAT SET A NEW RECORD,
CAPACITY PRICE PER MEGAWATT WAS THREE HUNTER $29.17 SO
CONSTELLATION ENERGY SHARES UP 4.5%. A QUICK CHECK ON THE BOND MARKET BECAUSE IT WAS A WEEK
AUCTION IN JAPAN LEADING TO RATION LOWER.
THE HIGHEST YIELD SINCE 2008. SURVEILLANCE IS UP AHEAD WITH
THE CONVERSATION WITH THE U.S. TREASURY SECRETARY.
THIS IS BLOOMBERG. ♪

US equity futures rise on trade optimism as Washington strikes a deal with Tokyo, setting the tariff rate on Japanese imports at 15%. Tesla, Alphabet and IBM are set to report earnings after the market close. Seema Shah of Principal Asset Management discusses the latest stock rally. Allen Bond of Jensen Investment Management says the market seems to be willing to look through tariff risks. “Bloomberg Brief” delivers the market news, data and analysis you need to set your agenda.

Chapters:
00:00:00 – Intro
00:01:36 – First Look Movers
00:06:27 – Seema Shah, Principal Asset Management Chief Global Strategist
00:13:07 – Trending on the Terminal
00:19:19 – Front Page News
00:22:03 – First Look Movers
00:27:05 – Allen Bond, Jensen Investment Management Managing Director
00:33:57 – Trending on the Terminal
00:41:35 – What to Watch
——–
More on Bloomberg Television and Markets

Like this video? Subscribe and turn on notifications so you don’t miss any videos from Bloomberg Markets & Finance: https://tinyurl.com/ysu5b8a9
Visit http://www.bloomberg.com for business news & analysis, up-to-the-minute market data, features, profiles and more.

Connect with Bloomberg Television on:
X: https://twitter.com/BloombergTV
Facebook: https://www.facebook.com/BloombergTelevision
Instagram: https://www.instagram.com/bloombergtv/

Connect with Bloomberg Business on:
X: https://twitter.com/business
Facebook: https://www.facebook.com/bloombergbusiness
Instagram: https://www.instagram.com/bloombergbusiness/
TikTok: https://www.tiktok.com/@bloombergbusiness?lang=en
Reddit: https://www.reddit.com/r/bloomberg/
LinkedIn: https://www.linkedin.com/company/bloomberg-news/

More from Bloomberg:
Bloomberg Radio: https://twitter.com/BloombergRadio

Bloomberg Surveillance: https://twitter.com/bsurveillance
Bloomberg Politics: https://twitter.com/bpolitics
Bloomberg Originals: https://twitter.com/bbgoriginals

Watch more on YouTube:
Bloomberg Technology: https://www.youtube.com/@BloombergTechnology
Bloomberg Originals: https://www.youtube.com/@business
Bloomberg Quicktake: https://www.youtube.com/@BloombergQuicktake
Bloomberg Espanol: https://www.youtube.com/@bloomberg_espanol
Bloomberg Podcasts: https://www.youtube.com/@BloombergPodcasts