Transcripts For BLOOMBERG Bloomberg Daybreak Americas 202407

Transcripts For BLOOMBERG Bloomberg Daybreak Americas 20240714

Can see Global Growth fears permeated throughout the market. Time now for Little Exchange to bring you todays market moving news from all around the world. Joining us from hong kong is bloombergs enda curran, from k, and is seb sale bloombergs david wehner is here in new york. We start with the latest trade of element. Soy prices go nowhere even after the Chinese Government gave waivers to buy from u. S. Companies without being hit by retaliatory tariffs. What is the significance . Adds to thek it mood music that both sides are showing a bit of good will to get these talks make some progress. We are talking up to 3 million tons of soybeans that would be three of tariffs for chinese buying from u. S. Sellers. This goes to the heart of Donald Trumps constituency, and china has said to the state media they are willing to come to the table on that side of things. Both sides are at least trying to make the talks work to get to the next level. That comes on october 10, would chinas vice premier will travel to washington for talks with his u. S. Counterparts. Of course, that will be a theseal period to see if gestures are leading to some broader breakthrough, or whether we go back to where we started. Alix thank you very much. We want to turn now to london. In a unanimous ruling, the u. K. Supreme court says Prime Minister Boris Johnsons decision to suspend parliament was unlawful. The court is bound to conclude, therefore, that the decision to advise her majesty to Prorogue Parliament was unlawful. Salek joins me from outside the Supreme Court. What does this mean . The practicalities are what we are still trying to work out here. The mp who brought this case said the same in her speech. Weve got the labor conference the labour conference going on. Boris johnson is in new york at the u. N. General assembly, so very far from westminster, but the thrust of it is that power has been given back to parliament. Boris johnson has lost control. What is Parliament Going to do with that . So far, theyve not been very good at coming up with any concrete decisions. Alix the question for me is will Boris Johnson be pushed to resign, or will he stay . What does that do to his brexit negotiation power . Any normalin political times, this would be a fine opportunity for a Prime Minister to tender the resignation. It would almost be expected. But you will not fail to have noticed that these are not normal political times here in the u. K. Really, the jury is out on that one, but Boris Johnson is tenacious. Hes been waiting his whole life to get to this position. He has promised to deliver brexit by october 31. I think we can expect he will stay in the job for a little longer, push for that deal, and see whether he carries the u. K. Out by the end of october, despite we got the Law Parliament passed earlier in the month that forces him to rest to use hises him resignation. Alix thank you very much. We want to turn now to shares of volkswagen, falling after the companys top leaders were charged with market manipulation in germany. Then at a camel benedikt kammel has more. Reporter we heard from prosecutors in germany that they have charged herbert diess, the ceo of volkswagen come alongside exceo. Rman and ex the question is, did management inform markets and investors early enough when they found out about this, or did they delay this . They didation is that come to the market too late, investors lost a lot of money because of this, and they should have been quicker to come out with this ruling. Volkswagen themselves said today we did nothing wrong. The Company Acted lawfully, as quickly as they could. It will be interesting to see when and if this goes to trial, and how volkswagen and the ceo get out of this. As you mentioned, the stock is under pressure now. Asestors have liked diess the head of this company mustve it will be interesting to see how he can navigate through this. Alix thank you very much. Here in new york, World Leaders and it will mets are gathering for the u. N. General assembly,. Ith plenty of intrigue in play bloombergs u. N. Reporter david wainer joins us on the phone. Theses through behindthescenes convocations. The behindthescenes conversations. David clearly one of the key issues on the sideliness European Countries are in talks with iran. Met rouhani yesterday. Others have come close to the u. S. Position of blaming iran for the attacks on how the on saudi oil facilities. Statement yesterday, kind of hinted that there needs to be a new deal with iran, that the moment has come for a to accept its securityall in and ballistic missiles. The europeans have for a long time stuck to the argument that you need to stick to jcpoa, the nuclear deal that donald trump withdrew from, but now they are starting to move towards the u. S. Position a little bit. We need to watch that more closely and see where it goes, but that is certainly something everybody is watching here. Alix thank you so much. Heres another thing i am watching this morning, the secondbiggest ipo of the year. Ab inbev raising around 5 billion by listing its asian unit, but could the real lynn or could the real winner be the city of hong kong . It is a bright spot as protests continue to rock the market. It is still the worlds number three market for ipos this year, despite those protests. Coming up, more on your morning trade and analysis on the markets in todays first take. This is bloomberg. Pres. Trump well, they are starting to buy a lot of our ag product. [indiscernible] we didnt want there to be any confusion. Buying everyrted culture. They will schedule that as a different time. But that was at our request. Pres. Trump but i want them to buy farm products. Alix theres no confusion, but there appears to be some confusion between u. S. Secretary of the treasury and President Trump on what happened with the farm visit with china. We are going to dig deeper into that and buying of soybeans for china in the bloomberg first take. Me, romainening ,ostick and Vincent Cignarella and joining us, Julian Emanuel, btig chief equity and derivatives strategist. We are going to start with brexit. I had dreams of being able to start with soybean buying, but brexit instead. The speaker of the house now saying we will see Parliament Reconvene at 11 30 a. M. Would you be trading this right now . Vincent its not like you can walk away from this and sit back. What does happen is the tail risk moves out. From a trader standpoint, youve seen the better chances of a delay by law. Johnson is now supposed to advocate for an extension, which is probably going to be about three months. Whether the eu responds positively, they probably will come of their hope is to a second referendum, all this goes away, and we are back where we started, and the last three and a half years are magically gone. [laughter] alix basically how i feel every time we talk about brexit. Romaine theres no clarity for these last three years, and if you look at the u. K. Equity market, the volumes have diminished, the valuation has diminished. People feel it is reasonably untreatable, and we are still of the view that if you get a little bit of clarity at some point, and at some point you are going to have to get some timety, it is a matter of that it could be an interesting investment prospect. Romaine in theory come about the same time, when you look at thebusiness sentiment, lowest since right before the financial crisis, you talk about pushing the tail risk further out. Effect of the matter is we have no idea what is going to happen by the end of the year or by the end of october. The bets are on some sort of deal with regard to brexit, but at the end of the day, no one knows. We are no closer to knowing what is going to happen tomorrow than we were three years ago. Vincent it is most likely the can will be kicked threemonth stunned the road. Alix this is what is challenging the premise, and i think it is the same conversation with trade. At some point we will get some clarity. What if that is not true . You can have can kicking for a while. The same for trade. You get soybean buying. Whats two to 3 million tons . Its nothing. Things have to get really, really bad for them to actually do something. Julian things are already bed in the Manufacturing Sector already bad in the Manufacturing Sector. The spread between the nonManufacturing Sector and the Manufacturing Sector is very wide. 70 of the German Economy is not great, but it is not awful. The fact is, when you can about how this is coming on shore to the u. S. And the drop in ceo confidence, something is going to have to give. The lessons of 1992 for an incumbent president walking into Election Year with a weak economy are not forgotten, and our view. Vincent i wasvincent going to say, its about the economy, stupid. That was the comment. It is also starting to bleed into the services sector. You talk to people in the u. K. , one of the lively discussions is London Real Estate becoming very attractive for Foreign Investors. Given where the pound is and where real estate prices have gone, it is really starting to look like a real frisky opportunity for Foreign Investors to step into that space because when you look at the european economy, the numbers this morning were mixed, not terrible, like pmis yesterday. Overall, the German Economy seems to be slowing even more so on a trajectory than the u. K. Economy, and once brexit is set aside, things are going to return to some sort of normalcy, even if you go back to wto rules. Trade will be trade. Romaine when you look at whats happened over the last couple of the 2016 u. S. Into election, we are undergoing a fundamental shift in how policymakers view trade in the u. S. And certain parts of europe. At the end of the day, while we have this drop in sentiment and contraction in certain areas of the economy, we dont know what it is going to look like. Are we going to go back to where we were three to five years ago . Possibly, but right now thats a roll of the dice. Vincent big time. You look at what the trade deal with japan. We want to make a trade deal. We are not taking autos off the table. We are back to square one. Raising twok it is sides of the coin. One is the markets can be priced in some ways for so much pessimism. It is not going to take a lot of pushing back on brexit to have a boost. On the flipside, if things get really bad, you dont have Monetary Policy to be that support. This chart is from bloomberg economics. The range is baseline tariffs plus uncertainty with more Monetary Policy. 0 global gdp. Does not help at all. Julian this is all about whether europe in particular and germany specifically can adopt hasmindset that the u. S. Had it essentially since the reagan years, deficit spending. If there is a potential for fiscal stimulus, and granted, weve actually started to see in another lens, hints of it. Frances budging budget is expanding. But if you think about it, it is particularly in these places were nationalism is percolating. Germany is sort of interesting in that the nationalist sentiment is actually antispend for the most part because of the green emphasis come about at some point, youre going to have and madameon where, lagarde is probably going to help in this matter given her background. We think germany is going to open the pursestrings at some point. Romaine germany really needs to be shown the way, and it is going to take some of the other nations to move ahead in terms of growth antigrowth percentages, as well as a little bit of nudging from the new ecb president , to sort of show them that this is going to have to be done, are you are going to be left behind. Vincent the problem is the hardliners waiting for the jobs data to rollover. Theyre feeling is as long as jobs continue to perform, they see that as economic growth, which it should be. Jobs are a lagging indicator, so by the time jobs do rollover and start to decline, maybe way too late for germany to come to the table. Im not sure that they have the appetite. , yet major people are continuing to talk. Deutsche bank talking about helicopter money. This is no longer a fringe idea. You can laugh all you want. [laughter] alix they had a longerterm study and basically said the big difference between now and the last decade is you have to see governments spending all the free money that Central Banks have served up. Thats basically what they are talking about. Julian that is essentially it in a nutshell. Mmt is a little bit too out there in general, certainly with regards to the United States. It is difficult to be able to know when it is time to increase taxes to defend against inflation. That is not going to happen. But you dont have that problem in europe. Romaine do we get helicopter money with a different name . You look at it different name . You look at what europe is doing with the tltros. The money is coming. It is just a matter of how theyre going to sell it. Vincent theyve been doing it for 30 years and its accomplished nothing. Alix you could argue they are in a better spot than we are. Some are more bullish on japan because pockets are good. Vincent some. [laughter] alix guys, thanks a lot. Julian emanuel of btig will be sticking with me. You can find all of the charts we use and more. Go to gtv under terminal. Browse the features under terminal. Browse the features and check it out. We just saw ab inbev put up one of the biggest ipos of the year. Ater this week we have peloton this is bloomberg. Viviana you are watching bloomberg daybreak. In germany, prosecutors charging volkswagen ceo herbert diess, as well as the chairman and former ceo, of informing Capital Markets to late about expected fallout from the diesel emissions scandal. The charges from german prosecutors are related to market manipulation. The u. S. Sec finding nissan and former chairman carlos ghosn a combined 16 million after they failed to disclose 100 40 million disclose 140 million in compensation. The sec says the automaker granted ghosn authority over pay decisions and was able to set. Compensation for himself. Set compensation for himself. That is your Bloomberg Business flash. Alix thank you so much. After ab inbev, we are going to watch pelotons ipo later this week. Btigs Julian Emanuel is still with me. What is your big take away . Julian the take away is actually the market is acting rationally. And 2000. T 1999 there have been some winners, spectacular winners, and there have been some losers. That the message is move toward private investment over the last seven and nine years is showing you theres perhaps some froth within that, i know we are getting to the price to for every point. There are going to be losses, but it is an efficient market working efficiently. Alix if you go inside to bloomberg, this is quarterly volume for ipos being announced. How is what you just said translating into the private and ipo market. Les ipos, or they come to a fullbefore they have valuation . Julian youve got a lot of unicorns out there still who are certainly hoping to go public before the cycle ends. A lot of this has been brought forth because of fears of recession, which we dont think happens prior to the election. Essentially, theres no real way to categorize how its going to happen. It really is company specific. Alix more importantly, do you have a peloton . [laughter] julian im a very dedicated jogger, all weather come around the neighborhood. Alix Julian Emanuel is sticking with me. We will take a look at contrarian calls next. This is bloomberg. Devices are like doorways that could allow hackers into your home. And like all doors, theyre safer when locked. Thats why you need xfinity xfi. With the xfi gateway, devices connected to your homes wifi are protected. Which helps keep people outside from accessing your passwords, credit cards and cameras. And people inside from accidentally visiting sites that arent secure. And if someone trys well let you know. Xfi advanced security. If its connected, its protected. Call, click, or visit a store today. Alix this is bloomberg daybreak. Weve got a couple of things going on. Theres some brexit conversations. The Supreme Court had a historic ruling against Boris Johnson suspending parliament. Equities move higher. Maybe it is trade optimism. If you change of the board, you can see the reverberation of potentially having a soft brexit. Cable rate jumping by 0. 3 . You also have it stronger against the euro as well. The spread in the u. S. , twostens a little flatter. If you wind up having a deal with china and the u. S. To buy soybeans, maybe that is supposed to be good for crude. No one really believes Saudi Arabia Oil production will be up and running in a couple of weeks. Thats a question mark for me. What we are watching later is the appetite for treasuries for u. S. Investors. We have the twoyear auction today, tomorrow the fiveyear, and seven year. Part of the issue with issuance is that its going to affect the repo rate, which is what we saw last week. Will there really be the demand . Still with me is Julian Emanuel of btig. We are going to start off with someone who says yes, and that on harnett of hold absolute strategy, there we go. Hes a bond bull for sure. This is what he had to say about a week ago. In the past when you seen recessionary environments, yields have fallen 200 basis points from the previous peak. That will take you to 1

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