Transcripts For BLOOMBERG Bloomberg Daybreak Americas 202407

Transcripts For BLOOMBERG Bloomberg Daybreak Americas 20240713

Earnings here for twitter. Monetize a bill daley active users actually came in soft. Monetize a bowl monetizeable daily active users actually came in soft. That stuck down a whopping 10 now in premarket. Coming out ofbers twitter. In the markets, we are still going to be waiting and seeing what happens with marios press conference. With Mario Draghis press conference. The rate coming in now at 14 . There had been concerns because of conflict with syria that they wouldnt be able to cut rates because of volatility and we can inflation, but it appears they were able to do that. The ceasefire coming yesterday, sanctions being lifted by the white house. It is a 200 to be basis point cut for the turkish central bank. Time never the global exchange. We are going to bring you time now for the global exchange. We are going to bring you the mark moving news from around the world. We started in europe, where the regions economy continues to struggle. Rose,rea composite pmis missing estimates, but above the expansion level. Joining me from london, david powell. Walk me through the weakness that we saw, particularly when it comes to germany. Pmis showed is that while there has been some weakness in those surveys in recent months, the economy stabilized at the start of the Fourth Quarter after considerable deterioration in the Third Quarter. That will provide some relief from the European Central bank when it meets today, and a sense that it wont need to add to the stimulus they already announced in september with this stabilization being seen. Alix and what about other areas of europe . Not as bad as we might have thought . David no. The global trade wars had the biggest impact on germany and the Large Manufacturing sector, and that has been the source of the decline we have seen in the euro area Manufacturing Sector. Really, germany has been the worst hit, most exposed to global trade. Other parts of the euro area are holding up. Alix thank you so much. Now we go to europe again, where mario draghi has his final farewell. He will hold his final ecb policy meeting after eight years at the helm. Joining me now from outside the ecb headquarters in frankfurt is matt miller, anchor of Bloomberg Markets the european open. Were the biggest questions heading into today . Matt the main question for mario draghi is what does he want as he leaves office . What kind of demands does he make . He gets to throw off the shackles of politics and maybe be more specific about what kind of fiscal help you needs, or from where he wants to see that. He could call out berlin, for example. You can also see, in terms of the daily business of the ecb, changes to the p because there arent really enough bonds for them to buy, or maybe they want to buy more private debt than government debt. That would make it a little bit easier. You will be hearing a lot about what he expects from his successor and what economists expect, that she tries to reignite the divisions weve seen flareup in the governing council over the last couple of months. The last decision brought a lot of criticism because draghi is delving back into the Bond Purchasing Program and cutting rates even further into negative territory. Negative rates definitely one of the black marks, or the lack of those inflation targets, the black marks on his legacy. Alix thank you very much. Now we turn to brexit, where the eu left the british Prime Minister hanging as it decides whether or not to grant u. K. An extension or how long they will do so. France is pushing for november 15, while other states prefer the end of january. Joining me from brussels is maria tadeo. Give me the latest. Maria well, there is no question that the europeans will give the United Kingdom more time before it leaves the European Union for two very simple reasons. They dont want a no deal brexit, and they also believe that the Prime Minister is moving very close to delivering brexit. This is what the europeans want, to move forward and put brexit behind. The debate in brussels right now is just how much time, and we understand there are two camps. One is being led by emmanuel macron, who is not even in europe at this point. Saying an overseas trip, that delay should be very short, very technical, november 15. They need to keep the pressure on london, and they also need to use this to focus minds, to keep everyone focused on brexit, not a general election. On the other side, we know theres a number of Member States who believe we should just give them three months because this is what they asked for. At this point, it is not going to hurt anyone. Weve been here for three years. Lets just give three months. At this hour, no side is winning this argument. We are not expect thing a decision to be made today. We are looking to friday, perhaps even monday. Alix good, weekend brexit drama coming through. Thank you very much. Now i want to turn to earnings. Twitter down 14 in premarket. Tesla surprising the street, nokia getting pummeled. Give us some of the highlights here. Reporter what i dramatic 24 hours its been for some of these companies. Twitter broke at the top of the show, missing on revenue. Analysts expected a really positive quarter, cleaning up from the platform supplying usage, but that didnt pay off necessarily because they had bugs with their ads. This is the reason theyve missed on revenue. There shares are down a germanic 13 . If you compare that to what tesla is doing a dramatic 13 . If you compare that to what tesla is doing, they were up on anner earnings that surprised lot of investors. They also had a lot of other positives. They are their china factory was up and running sooner than expected. Model y also launching sooner that inspected. Still, not every analyst is convinced. Jp morgan saying this actually isnt the breakout quarter that has been claimed, so tesla clearly still facing some scrutiny despite this positive announcement. Also facing scrutiny, nokia shares falling the most since 1991. The Finnish Telecom company and cuttheir outlook their dividends. They are basically saying that because theyve had to spend a lot on competitors, staving off the competition, that means that the boost they got from watching their 5g network hasnt paid off as soon they hoped for. That the 2020g outlook is dramatically challenging. Alix thank you very much update. Rounding out with microsoft here in new york, reporting resorts after the bell yesterday, topping analyst forecasts, lifted by demand for azure, its cloudbased program. Here in new york is bloombergs Senior Analyst covering Technology Software and services. Give us your analysis. Reporter a very good quarter, broadbased strength across the board, both unplowed and noncloud products. Cloud and both on noncloud product. Microsoft is someone who will will fare better you than other companies. The risk is macro spending. This is one area that we think will see slowdown in the six to 12 months. Having said that, we think microsoftup grew revenue about 15 . We think the rate of growth will slow down. We expect there will still be overall growth, but the rate will most likely slowdown. Alix thank you very much. Pg e Cutting Service to customers and part of northern california, trying to keep powerlines from sparking wildfires in high winds yet again. Joining me on the phone, kate conley of bloomberg intelligence. What joining me on the phone, me on the phone, kit konolige of bloomberg intelligence. What can me expect this time . Kit it appears this is a less extensive outage, and while like the previous one, they have outages with the website, that is also looking less extensive. You dont think of it is good news, but the neighboring utilities to the south either have warned or have put into effect some outages, and there are wildfires down in socal territory. That is good for pg e in a way because it shows at least two some people that it is not completely their fault. When they say there is a wildfire risk, it is a serious problem outside their immediate control. Alix thank you very much. Some breaking news for you. We have a headline that china is willing to buy 20 billion of u. S. Farm goods in one year. That a substantial. That would be a lot of Agricultural Products china would be buying. They are willing to buy 20 billion of u. S. Farm goods. S p futures are higher on the news, but still a modest 0. 2 . That is the macro as we head into mike pences speech later today, which many had been fearing in the market. Then the macro, the haves and the havenots. The havenots is definitely twitter, down by as much as 15 after they disappointed on daily active users and fourthquarter revenue outlook. Coming up on this program, much more on your morning trade and analysis of the markets in todays first take. This is bloomberg. Alix time now for bloomberg first take. Joining me from our inhouse team of wall street veterans and experts, Vincent Cignarella, former trader and voice of bloomberg audio squawk, michael mckee, and also with us on set, jens nordvig, exante data founder and ceo. I want to pick up on that news that china is willing to buy 20 billion of u. S. Farm goods in one year. What does this do for you as a traitor . As a trader it is ps we seen in prior years, so a mix a lot of news on headlines, but it is really no further along than we are now. The good news is it keeps the calm or reduces the tension, lowers the temperature of the trade talks. But it is not really advancing the story. We have to wait and see what happens around 8 00 a. M. When mike pence gives his speech on china. Michael theres no detail in the story about what they would start buying or when, but if donald trump hasnt put the trade war on, we would probably be higher than 20 billion because 2017 was about 20 billion, and since then, demand has only grown, especially with chinas problems with its hog industry, so you would think we would be higher than that. It is hard to know how they do that, and where the demand comes from. Do they really need that much . It would mean switching away from other countries, so whether they can follow through, it is hard to see. Jens i think the key thing is we have a crucial meeting scheduled in chile and a couple of weeks, some more than these headline announcements, it is what they physically buy in the next couple of weeks that is going to set the tone. Alix they can say, look at what we did, or we are holding back . Jens weve had situations in the past where weve had big announcements and no followthrough on the purchases, so i think the actual purchases that are going to take place is the key in the coming weeks. Vincent i think thats very key. Michael we have this december 15 deadline coming for the next round of tariff increases from the president , and we have a late november meeting in chile. You may be seeing the chinese try to manage donald trump. We will give you just enough, just enough to keep the tariffs from coming on, and keep stringing out the negotiations. Vincent we seen it with syria and turkey. Take the first step, the president steps back. China makes the first step, the president is likely to step back. They want those terrace in december removed, and i think this is a point toward that. The market is in a really deal good place right now. We are feeling better about brexit, better about trade. The president is going to need to keep this momentum Going Forward because we are getting a lot of flak from democrats, a lot of hostility in washington. This is kind of an easy win for him, and i think he is going to take it. Alix as long as you are not long twitter stock, you are feeling pretty good in the market. To the point of what they are going to buy, one, you would need them to diversified away from brazil, which is a whole question in terms of whether they would do that, and two, their pigs need to stop buying because they import soy to feed their pigs, so they need them to live to feed them. Those are two big wildcards. Michael we are seeing a very large increase in the u. S. Herd in anticipation. Bloomberg was writing about it yesterday. For all of those really worried about their bacon. [laughter] michael but it goes beyond pork and soybeans. 40 billion is an awful lot. Can we produce that much stuff for just one country, or are we going to be cutting back sales to other nations . Its all kind of a mystery how this is going to work. Jens maybe i can make one final point. The other thing part of this equation going into this trumpxi meeting is what is happening with the currency. Theres a sort of implicit deal that the chinese currency needs to move somewhat stronger into this event, and they arent delivering on that front. They have the daily fixing. It is not moving a lot, but it is moving slightly stronger since we had the mini deal, or whatever you want to call it. So we are moving in the right direction. Vincent the market is willing to help with that as well because the speculation of selling, that some fallout is going to happen, is not really there. So the market is on board. The speculators are stepping back, so it is a lot more manageable for the pboc to move that rate towards the seven level. Michael can i ask a question of these two gentlemen . The treasury currency report is overdue now. Should come out anytime. If the u. S. Takes china off the currency manipulation list, which we all know is kind of silly, does that make any difference to the currency value or to the markets . The first thing i would say is the actual manipulation announcement was a very unusual one in that it was a one page, rushed sort of announcement. That was done in a very political way, so clearly it will be removed and a political way as well. I think that is tied to what is going on with this negotiation now. They can delay that report. If it suits them to have it come out with a couple of weeks delay, that is what they would do. Olive branch, not fig leaf. Vincent i agree. They are not a currency manipulator. If anything, they are manipulating their currency stronger in the past year or so, so it is a total political game. It was rushed to make some noise against china to just cause some trouble. I think that was pushed through in a one night meeting, maybe the night before. If all goes well and smoothly, this will be the quid pro quo that the Trump Administration will offer back to china, and everybody will be all combined. Alix i wonder how much it actually matters in the broader sense. You have Central Banks cutting rates, south Korean Growth like 0. 4 . Buyingr its just 50 billion a soybeans will really do it for anyone. Vincent i think what we need to really remove is the uncertainty. If the trade war fizzles out, just sits on the back burner for the next 12 months or so, that gives corporate america, everyone the opportunity to make some decisions going into 2020 knowing that there isnt going to be fire coming from every direction, and the uncertainty is really what needs to be lifted more than the token ag purchase. Alix i cant believe we lasted 10 minutes and have not talked to the ecb. Ces the rela, thank you Vincent Cignarella, thank you. Be seeingkee, we will you later. Jens nordvig of exante data will be sticking with me. Coming up, elon musk proving tesla naysayers wrong, at least for today, reporting a profit that meets some timelines of analyst estimates. More on that next. This is bloomberg. Viviana youre watching bloomberg daybreak. Southwest Airlines Taking a hit from the grounding of the boeing 737 mac. Through august, operating income fell 435 million. About 9 ding reduced of its fleet. Elon musk flipping the script on those who doubt tesla. The electric carmaker delivering positive earnings few saw coming. Plus, the companys founder declaring he is ahead of schedule with a new factory in china. Teslas profit and margin were better than expected. Shares are surging in the premarket. That is your Bloomberg Business flash. Alix thanks so much. Rush,re on tesla, colin oppenheimers managing director and Senior Analyst, joins us now. Why do using this profit might be sustained when we saw the same thing in the Third Quarter of last year . Colin does a couple of really important things going on. Issue ishe bigger really about Operational Efficiency that theyve been able to achieve. On the manufacturing side, they are true they are clearly driving costs out, and they are demonstrating that with their gross profit. More importantly in our view, from a cash flow and resiliency perspective, they took out wondered 75 million of took out 175 million. That not only helps the cash flow profile, but the ability of the organization to operate efficiently and profitably Going Forward. Alix can they replicate that Going Forward . Even if they take the costs out now and it stays out, do they have more low hanging fruit to cut iesco to cut . Colin as you see the china factory come on and they drive additional costs out of the product, they are going to be able to drive increment of demand. Make ato in thetion other ems space, where we are seeing massive problems across the auto sector in terms of volumes and labor issues. Alix true. What is the next catalyst . Colin for us, it is really just exit fusion on a few key things. One, they are going to roll out the pickup truck in in the next month or so, and really ramping the china factory. It is not that complicated here for the stock over the next four months. Alix really appreciate your take this morning, colin rush of oppenheimer. Coming up, twitter falls after a big earnings miss, especially when it comes to daily active users. American airlines on deck on this busy earnings day. An ecb Rate Decision just about 20 minutes away. What will the future be with the tolerance for more negative rates and rate cuts coming from emerging markets . This is bloomberg. Here, it all starts with a simple. Hello hi how can i help . A data plan for everyone. Everyone . Everyone. Lets send to everyone [ camera clicking ] wifi up

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