Bloomberg Brief (04/25/2024)

Bloomberg Brief (04/25/2024)

MANUS:
GOOD MORNING FROM OUR GLOBAL
HEADQUARTERS IN NEW YORK.
I’M MANUS CRANNY WITH DANI
BURGER.
WELCOME TO "BLOOMBERG BRIEF."
DANI:
META’S DISAPPOINTING FORECAST
AND AI SPEND SHAKES TECH
INVESTORS WITH MORE MAG SEVEN
EARNINGS ON THEIR WAY.
MINING GIANT BHP APPROACHES
RIVAL ANGLO AMERICAN WITH A
TAKEOVER OFFER.
ANGLO CONSIDERS A SALE OF ITS
DIAMONDS UNIT DE BEERS.
AN AVALANCHE OF EARNINGS IN
EUROPE.
DEUTSCHE BANK REPORTS A BEAT ON
FIXED INCOME TRADING REVENUE.
MANUS:
GOOD MORNING, IT’S LIKE THE
FIELD OF DREAMS, TECH CAME TO
DIE LAST NIGHT.
META GOT TROUNCED DOWN 19%, A
DRAG THE ENTIRE COMPLEX LOWER.
IT IS TO LOWER THIS MORNING BY
13%.
ASKING FOR PATIENTS, PATIENCE
WITH MY AND MY DREAMS, WAS NOT
REWARDED FOR ZUCKERBERG TO BUT
IT WAS BY ELON MUSK.
IT WAS ABOUT THE SPEND, 35 TO
40 BILLION, MORE THAN THE
MARKET ANTICIPATED FOR THE
DREAMS. THAT’S THE SPOOKED. 10
YEAR YIELDS THIS MORNING ARE
VIRTUALLY FLAT.
WE ARE WAITING FOR ANOTHER
OPTION TODAY.
TODAY IS IT ABOUT THE SEVENS,
40 BILLION DOLLARS OF
SEVEN-YOUR PAPER WILL COME.
BROWN BROTHERS HARRIMAN SAYING
DEMAND IS SOLID EVEN THOUGH
THEY HAD TO CHEAPEN UP SLIGHTLY
YESTERDAY TO GET THE AUCTION.
DOLLAR-YEN, WE ARE ON CONSTANT
INTERVENTION WATCH, BECAUSE THE
VERY DEFINITION OF WHAT HE SAID
IS THE MOMENT IS WHEN.
THAT RINGS THE BELL FOR
INTERVENTION.
GOOD MORNING, MISS BERGER. DANI:
AND WE HAVE BREAKING NEWS TO
START OUR MORNING OFF.
THERE IS A NEW CHIPS ACT WINNER.
MICRON IS THE LATEST. THIS
CONFIRMS OUR REPORTING LAST
WEEK. THE D U.S.
WILL AWARD 6.1 BILLION DOLLARS
IN GRANTS, $7.5 BILLION IN
LOANS.
THE IDEA TO HAVE THEM BUILD A
NEW FACTORY IN AMERICA.
THE LATEST AND POTENTIALLY ONE
OF THE LAST OF THESE AWARDS WE
WILL HEAR FROM THE FED OR
GOVERNMENT. MANUS:
WILL BE INTERESTING HOW THIS
ADMINISTRATION PLAYS THIS OUT
INTO THE ELECTION, WHICH IS
ABOUT BRINGING HOME BUSINESS TO
THE SHORES OF THE UNITED STATES.
AND REALLY RING FENCING THE
INTEGRITY OF CHIPS.
INTEL GOT $20 BILLION IN GRANTS
AND LOANS IN MARCH, TSMC GOT
$11.6 BILLION, THAT WAS IN
APRIL AND SAMSUNG 6.4 BILLION
DOLLARS IN GRANTS, THEY DID NOT
GET LOANS IN APRIL.
THERE IS A DEEPENING POLITICAL
MESSAGE ABOUT MAKING AMERICA
INDEPENDENT WITHIN THE CHIPS
SPECTRUM.
BUT YOUR BIGGEST ALLY IS TAIWAN.
WHAT DOES THIS MEAN FOR YOUR
RELATIONSHIP WITH TAIWAN? DANI:
THERE HAS BEEN EXCELLENT
REPORTING, A LOT FROM THE NEW
YORK TIMES, ABOUT THE CULTURAL
DIFFERENCES AT TSMC’S ARIZONA
FACTORY.
HIGHLY RECOMMEND THAT READ.
THAT’S US.
WE MESH THOUGH, I LIVED IN THE
U.K. LONG ENOUGH.
WE HAVE TO TALK ABOUT THE TECH
ELEPHANT.
IT IS NOT THE CHIPS ACT
WINNERS, IT IS META.
PAINFUL IN THE PREMARKET, DOWN
13%. MANUS:
THIS COMES DOWN TO WHICH CEO
SET OF DREAMS DO YOU BELIEVE.
THAT IS WHAT THIS COMES DOWN
TO, THAT IS BEING FACETIOUS,
BUT WHICH CEO DO YOU BACK?
DO YOU BACK MUSK, OR DO YOU
BACK MUSK? DANI:
AFTER THE LAST EARNINGS, IT HAD
A RECORD SEARCH, IT ADDED THE
MOST MARKET CAP EVER FOR ANY
COMPANY VERSUS TESLA WHICH WAS
BEAT UP FOR ITS EARNINGS.
MAYBE THE BAR WAS DIFFERENT FOR
THE TWO. MANUS:
INDEED, SO AND SPEC FOR THIS
YEAR?
>> AS WE ARE SCALING CAP AND
ENERGY EXPENSES FOR AI, WE WILL
CONTINUE FOCUSING ON OPERATING
THE REST OF OUR COMPANY
EFFICIENTLY BUT REALISTICALLY,
EVEN WITH SHIFTING MANY OF OUR
EXISTING RESOURCES TO FOCUS ON
AI, WE WILL STILL GROW OUR
INVESTMENT BELOW MEANINGFULLY
BEFORE WE MAKE MUCH REVENUE
FROM SOME OF THE NEW PRODUCTS.
MANUS:
ALEX WEBB IS STANDING BY TO
TALK US THROUGH HIS TAKE ON
THIS.
TO QUOTE MR. ZUCKERBERG, SMART
INVESTORS SEE THE POTENTIAL IN
AI AND REALITY LABS EVEN BEFORE
THEY MAKE MONEY.
TRUST ME, I’M A GENIUS. ALEX:
IT IS A SIMPLE CALCULATION WHY
WE ARE SEEING THE STOCK DECLINE.
THEY SPENT THE PAST YEAR
TELEGRAPHING THE FACT THAT THEY
CARE ABOUT SHAREHOLDER VALUE.
THAT THEY ARE GOING TO REDUCE
EXPENSES AND THIS IS A NEW
FACEBOOK.
SUDDENLY NOT ONLY DO WE SEE A
ANTICIPATED SLOWDOWN IN GROWTH
IN TERMS OF WHAT THE MARKET
EXPECTED COMPARED TO A MAP’S —
META’S OWN FORECAST BUT THEY
WILL BE EXPANDING SPENDING.
WE ARE PUSHING OUT EARNINGS.
IN THIS HIGH INTEREST-RATE
ENVIRONMENT, INVESTORS DON’T
HAVE AS MUCH PATIENCE FOR THAT
SORT OF THING IS THEY MIGHT
HAVE A FEW YEARS AGO. DANI:
I THOUGHT META LEARNS THIS
LESSON LAST TIME.
WHEN THEY WERE PUNISHED AND
DECIDED TO UNVEIL THE YEAR OF
EFFICIENCY, WHICH PERHAPS IT IS
NO LONGER THAT.
WE WILL ALSO HEAR FROM
MICROSOFT, CLEARLY THEIR AI
PUSH IS ALSO ONE OF SPENDING
AND A DOMINATING SOME OF THE
EARNINGS.
WHAT MATTERS FOR SHAREHOLDERS
AND ANALYZING THEIR EARNINGS?
ALEX:
MICROSOFT IS SAYING ALL THAT
EXPENSE ON BRINGING AI
CAPABILITIES PARTICULARLY INTO
DATA CENTERS IS YET STARTING TO
REAP REWARDS.
WHEN WE THINK ABOUT NVIDIA AND
THE HUGE SURGE IT’S BECAUSE
COMPANIES LIKE MARKERS, GOOGLE
AND AMAZON AND INCREASINGLY
META ARE BUYING THEIR CHIPS TO
KIT OUT THEIR DATA CENTERS WITH
THE EXPECTATION THAT COMPANIES
WILL POUR MORE OF THEIR
PROCESSORS INTO AI AND ONTO
THEIR CLOUD.
INVESTORS WANT TO SEE THAT THAT
INVESTMENT IS PAYING OFF AND
INDEED, THAT AI REVOLUTION IS
IN FACT HAPPENING. MANUS:
WHAT DOES ALPHABET NEED TO
CONVINCE THE MARKET OF THIS
EVENING? FOR THEM IS ABOUT THE
ADVERTISING DOLLAR.
ECONOMIES ARE STRONG IN UNITED
STATES OF AMERICA AND GLOBALLY
WE HAVE HAD A ROBUST
PERFORMANCE.
WHAT IS IT ALPHABET NEEDS TO
CONVINCE THE MARKET OF?
THE STOCK IS UP 14% THIS YEAR.
ALEX:
THERE IS A STRONG CLOUD PIECE
HERE.
FOR QUITE A LONG TIME, GOOGLE
HAS TRIED TO REDUCE ITS
DEPENDENCY ON THAT CORE
ADVERTISING BUSINESS, WHICH
ACCOUNTS FOR THE MAJORITY OF
REVENUE AND EARNINGS.
AND AI SEEMS TO BE PROVIDING A
TAILWINDS TO MAKE THAT HAPPEN.
ON THAT BASIS, IT’S A SIMILAR
STORY TO MICROSOFT BUT STILL
ADVERTISING IS THE LION’S SHARE
BUSINESS.
THE FACT THAT META TELEGRAPHED
SOFTNESS IN THAT SPACE, SOFTER
THAN WHAT HAD BEEN EXPECTED,
WILL MEAN THERE WILL BE
ATTENTION ON THAT AT GOOGLE.
DON’T FORGET, GOOGLE IS
COMPLACENT IF YOU ARE IN THE
BUSINESS OF SELLING CONSUMER
PRODUCTS, YOU NEED TO BE
ADVERTISING ON GOOGLE.
IT IS THE FIRST PLACE PEOPLE
WILL SPEND THEIR ADVERTISING
DOLLARS, THE LAST PLACE THEY
WILL ALMOST CERTAINLY GIVE UP
THEIR ADVERTISING DOLLARS, SO
IT HAS MORE RESILIENCE THAN
META, AND THEREFORE THERE IS
ENTHUSIASM OF OUR SPECS —
ABOUT THE PROSPECTS OF RUNN
IDING COATTAILS OF AI
RESEARCHERS. MANUS:
OUR NEXT GUEST SAYS THIS ABOUT
META.
SPENDING NEEDS TO BE TARGETED
IN LINE WITH A CLEAR STRATEGIC
VIEW. THE "SEE WHAT STICKS"
METHOD OF YEARS GONE BY WON’T
BE TOLERATED BY THE INVESTOR
BASE.
META’S RESOURCES ARE VAST BUT
THEY ARE NOT INFINITE.
THE LEAD EQUITY ANALYST AT
HARGREAVES LANSDOWNE.
SOUNDS LIKE YOUR PATIENCE IS
RUNNING THIN FOR MR.
ZUCKERBERG’S FUTURE DREAMS.
SOPHIE:
YOU CAN PROBABLY SAY THAT
REALLY SIMILAR TO WHAT ALEX
WHICH IS SAYING.
THIS IS A DIRECT REVERSAL OF
WHAT INVESTORS HAVE BEEN
PROMISED PARTICULARLY IN THIS
HIGHER RISK, HIGHER RATE
ENVIRONMENT I WOULD ARGUE NOW
IS NOT THE TIME TO TRYING TO
HARD LUNCH EXTREME SPENDING
PLANS ONCE MORE.
THE REASON THE MARKET HAD
THANKS META IN RECENT MONTHS
WAS BECAUSE IT WAS VERY MUCH
UNDERSTOOD THAT SIGNIFICANT AI
INVESTMENT WAS GOING ON IN THE
BACKGROUND.
BUT THERE HAD BEEN THIS CORE
REFOCUSING ON THE MAIN
TRADITIONAL BUSINESS ELEMENTS.
AND THEN SCRUB THAT ALL OUT AND
SPOOKED EVERYBODY AGAIN IS
ESSENTIALLY WHAT HAPPENED. DANI:
DO YOU THINK THIS IS A
ZUCKERBERG THAT IS WILLING TO
GO BACK TO BASICS?
WILLING TO GO BACK TO FOCUSING
ON AD? I THOUGHT HE LEARNED THAT
LESSON ONE SHARES LAST YEAR
WERE PUNISHED AND WHEN HE
UNVEILS THE YEAR OF EFFICIENCY.
IS HE LIKELY TO GO BACK TO THAT
OR HAVE WE LOST HIM AT THIS
POINT IF HE REVERSES COURSE?
SOPHIE: AT THIS STAGE I WOULD BE
SURPRISED IF HE REVERSES ONCE
AGAIN.
WHAT IS SLIGHTLY WORRYING TO ME
REALLY IS THIS META THE MARKET
SEEMED TO BE SUPPORTIVE OF WAS
THIS IDEA OF HALF AND HALF.
ABSOLUTELY, GO AWAY AND WORK ON
THESE MOON SHOTS AND AI
CAPABILITIES, BUT AT THE SAME
TIME REMAIN FOCUSED.
IT WAS A 50-50 APPROACH.
WHAT SEEMS TO BE HAPPENING AS
WE HAVE GONE ALL THE WAY BACK
TO ALL OR NOTHING.
I DON’T THINK WE WILL SEE A
REVERSAL OF THAT AGAIN AT THIS
STAGE.
OF COURSE, NOBODY IS ARGUING
THAT AI SHOULD BE FORGOTTEN
ABOUT OR UNDER-INVESTED IN BUT
I WOULD ARGUE THIS IS A BRIDGE
TOO FAR FOR THIS CURRENT MOMENT
IN THE MARKET. MANUS:
THE LANGUAGE DIFFERENTIAL
BETWEEN MUSK AND ZUCKERBERG WAS
CLEAR.
MUSK SAYING LOOK, IF YOU DON’T
BELIEVE IN MY FUTURE OF
ROBOTAXIS, GET OFF MY
SHAREHOLDER LIST. ZUCKERBERG
TAKING A SIMILAR, IF YOU DON’T
BELIEVE IN THE FUTURE OF AI,
THEN YOU ARE VERY MUCH MISTAKEN
IN YOUR INTERPRETATION.
LET’S MOVE THE AGENDA ALONG.
WE HAVE MORE TO GET THROUGH IN
TERMS OF MICROSOFT AND ALPHABET.
YOU SAY MICROSOFT HAS MUSCLED
HIS WAY TO POLE POSITION IN THE
AI RACE.
WEDBUSH WOULD AGREE, THIS IS
THE IPHONE MOMENT FOR MICROSOFT.
IS IT AS EVANGELICAL A MOMENT
AS THAT? SOPHIE:
I CERTAINLY THINK IT COULD BE.
THE REASON MOST PEOPLE ARE
BULLISH ON MICROSOFT AT THE
MOMENT IS THAT HALF FROM AI
ALREADY EXISTS.
THE WAYS IT CAN BE EMBEDDED IN
EXISTING PRODUCTS AND PROCESSES.
THAT FOR ME IS HUGE, AND
SOMETHING THAT POTENTIALLY GETS
OVERLOOKED, THAT TECHNICAL
ELEMENT OF THINGS THAT CAN BE
EMBEDDED IN THAT IT IS ALREADY
SELLING.
I THINK THERE IS FURTHER UPSIDE
TO COME.
NOW I HAVE JINXED IT NOW THAT I
HAVE SAID THAT, BUT ABSOLUTELY,
MICROSOFT IS IN A BRILLIANT
SPOT IN THIS RACE.
THAT SAID, NOT TO FULLY
CONTRADICT MYSELF, IN THE
SCHEME OF THINGS WE ARE AT THE
VERY EARLY STAGES OF THIS AI
RACE.
SO WE KNOW THESE THINGS CAN
CHANGE AT SHORT NOTICE. DANI:
THEY HAVE PLENTY OF COMFY
SNAPPING AT THEIR HEELS, TOO.
LET’S ROUND IT OUT WITH
EARNINGS. WE WILL GET ALPHABET.
WE LEARN FROM FACEBOOK THAT
THEIR PROJECTION FOR ADS WERE
IN THE MIDRANGE, DIGITAL AD
PROSPECTS MAYBE NOT AS STRONG
AS THOUGHT, DOES THE SAME
TRANSLATE TO GOOGLE?
IT IS DOWN HEAVILY THIS
MORNING, MORE THAN 2% FOR
ALPHABET, CAN WE SAY FACEBOOK’S
AD REVENUE WAS NOT A STRONG AS
THOUGHT FOR THEIR FORECAST,
THEREFORE I AM CONCERNED ABOUT
WHAT ALPHABET DELIVERS TODAY?
SOPHIE:
THERE IS A PART OF ME THAT IS
EVER HUNTED. — APPREHENSIVE.
AS MUCH AS GOOGLE IS A BE ALL
AND END ALL IF YOU ARE TRYING
TO MARKET ANYTHING THESE DAYS,
IT’S NOT A SHOE-IN IN TERMS OF
CAPTURING SPENDING DOLLARS,
ESPECIALLY WHEN WE START TO
LOOK AT SMALLER TO MEDIUM
BUSINESSES THAT HAVE MORE
NIMBLE OPTIONS ON THE LIKES OF
META’S PLATFORMS. WE KNOW THERE
HAS BEEN WEAKNESS FROM ALPHABET.
WE HEARD FROM WPP TODAY THAT
THERE HAS BEEN A SLOWDOWN IN AD
SPENDING FROM TECH COMPANIES IN
NORTH AMERICA, CHINA IN
PARTICULAR, ALL IN ALL THE
GLOBAL PICTURE FOR ADS IS
LOOKING MORE CHALLENGING THAN I
WAS HOPING FOR. MANUS:
PART OF NANCY’S THESIS IS ABOUT
THE CASH GENERATION ASPECTS OF
THE BALANCE SHEETS.
AND THE ROBUSTNESS OF BIG
BLOCKBUSTER TECH IN AMERICA.
DOES THAT PILLAR PLAY INTO ANY
OF YOUR
THESIS, OR IS IT PREDICATED ON
THE SHOW AND TELL NARRATIVE ON
THE FUTURE WITH DISCIPLINE?
SOPHIE:
IT’S ABSOLUTELY HAS TO HAVE A
BOTH IN MY OPINION.
FOR ME THE ABSOLUTE
CORNERSTONE, THE BACKSTOP OF
THESE STOCKS IS THEIR BALANCE
SHEETS.
BECAUSE IT IS LOVELY TO GET
CARRIED AWAY WITH THE FUTURE,
BUT I’M QUITE TRADITIONAL, IF
YOU LOOK AT THE FINANCIAL
RESILIENCE, HE LOOK AT ALPHABET
YOU ARE LOOKING AT OVER $100
BILLION SITTING ON THE BALANCE
SHEET. AGAINST THAT, THERE IS AN
ARGUMENT THAT MORE COULD BE
DONE WITH SOME OF THOSE
BALANCES.
I THINK THEY ARE A BIT TOO
EXTREME. MANUS:
WOULD YOU LIKE TO SEE BIGGER
DIVIDENDS, BIGGER BUYBACKS,
SORRY FOR INTERRUPTING. SOPHIE:
ABSOLUTELY, THAT WOULD BE
SOMETHING THAT COULD BE PUT IN
USE WITH SOME OF THAT CASH.
THEY DON’T NEED THAT MUCH MONEY
SITTING ON THE BALANCE SHEET.
MANUS:
SOPHIE LUND YATES OF HARGREAVES
LANSDOWNE, A REALITY CHECK ON
BIG MEGA TECH.
OTHER STORIES TRENDING ON YOUR
TROLL MARK — ON YOUR BLOOMBERG
TERMINAL.
USA COUNTRY ESTATE AND STAY
BLINK AND RAISES CONCERNS ABOUT
UNFAIR TRADE PRACTICES IN HIS
MEETINGS WITH SENIOR CHINESE
OFFICIALS.
HE UNDERSCORED THE NEED FOR A
LEVEL PLAYING FIELD FOR UNITED
STATES FIRMS WHILE IN SHANGHAI.
LINCOLN WILL MEET THE CHINESE
FOREIGN MINISTER IN BEIJING ON
FRIDAY. DANI:
COLUMBIA UNIVERSITY BACKS
PRESIDENT SHAFIK DEFYING CALLS
FOR HER OUSTER.
THE BOARD SAID IT SUPPORTS HER
APPROACH TO DIVERSITY ON CAMPUS.
THE COLUMBIA FACULTY HAS BEEN
GIVEN THE OPTION TO HOLD
CLASSES ONLINE AS PROTESTS ON
CAMPUS CONTINUE. MANUS:
SHARES OF NESTLE SPIDER.
THE MAKER OF NESPRESSO COFFEE
WAS HIT BY SUPPLY CONSTRAINTS.
NESTLE SHARES FELL AS MUCH AS
5% IN EARLY TRADE.
HIS BIGGEST DECLINE IN TWO
MONTHS. DANI:
I JUST DITCHED MY MACHINE FOR
ONE OF THOSE FANCY ESPRESSO
ONES.
I GOT IT AS A PRESENT, SO THAT
IS MY JUSTIFICATION.
NOT FROM MANUS.
WE WILL DISCUSS THE BIGGEST
SHAKEUP IN THE MINING INDUSTRY
IN OVER A DECADE.
WE WILL DIG INTO BHP’S OFFER TO
TAKE OVER ANGLO AMERICAN. MANUS:
BARCLAYS, DEUTSCHE BANK AND BNP
PARIBAS OFF BEAT EXPECTATIONS.
WE WILL UNPACK THE RESULTS.
CONTEXT MATTERS ON BLOOMBERG.
♪
DANI: IT IS "BLOOMBERG BRIEF."
SHARES OF ANGLO AMERICAN ARE
SEARCHING IN LONDON, UP 12.6%.
IT’S RIVAL AND THE WORLD’S
BIGGEST MINING COMPANY BHP
OFFERED A TAKEOVER BID THAT
WOULD VALUE THE COMPANY AT
ALMOST $39 BILLION.
LET’S BRING BLOOMBERG’S WILL
KENNEDY FROM LONDON ON THIS.
THIS IS THE BIGGEST DEAL OF ITS
SIZE, THE BIGGEST SHAKEUP IN AT
LEAST A DECADE.
WHY ANGLO AMERICAN AND WHY NOW?
WILL:
DHP HAVE BEEN THINKING FOR A
WHILE THEY MIGHT WANT TO DO BIG
DEALS AGAIN.
THEY HAVEN’T ALWAYS DONE THEM
IN THE PAST, BUT THE CURRENT
CEO MIKE HENRY HAS TASKED HIS
MANAGEMENT TEAM WITH LOOKING AT
DEALS LIKE THIS.
WHAT DOES HE WANT FROM THIS?
ANGLO AMERICAN’S COVER ASSETS.
IT HAS A NICE POSITION IN CHILE,
PEOPLE ARE OPTIMISTIC ABOUT
DEMAND OUTLOOK BECAUSE OF ALL
THE COPPER WE WILL NEED TO
ELECTRIFY THE GLOBAL ECONOMY,
THINK ELECTRIC CARS, NEW GRIDS,
THAT KIND OF THING.
AT A TIME WHEN SUPPLY IS FAIRLY
CONSTRAINED.
HE HAS A FLIGHT BULLISH VIEW OF
THE COPPER MARKET AND THIS IS A
WAY TO INCREASE HIS EXPOSURE TO
COPPER.
THE COMBINED COMPANIES WOULD
HAVE 10% OF THE GLOBAL MARKET.
MANUS:
THAT DRAWS THE VERY NATURAL
QUESTION WHICH WE UNDERSTAND
THE THESIS.
CAPTURE 10% OF THE MARKET,
DELIVER THE EFFICIENCIES.
I’M SURE THAT WILL BE PART OF
THE NARRATIVE SCALE.
BUT THEN YOU WILL HAVE MAJOR
COMPETITIVE ANTITRUST ISSUES.
WHERE ARE THEY GOING TO BE MOST
PRESENT.
I KNOW THERE IS A SOUTH AFRICAN
BUSINESS, BUT WHERE DO YOU SEE
THE ANTITRUST ISSUES? SOPHIE:
THERE ARE TWO BIG OBSTACLES TO
GETTING THIS DEAL DONE.
THE FIRST, LET’S TALK ABOUT
ANTITRUST FIRST. WE SAW IN THE
PREVIOUS ROUND OF CONSOLIDATION
ONE GLENCORE BID FOR A MINER,
THAT CHINA WAS OPPOSED TO THOSE
DEAL. WHILE THERE AREN’T CHINESE
ASSETS OF PLAY, CHINA WOULD BE
THE BIGGEST CUSTOMER.
IT TAKES ABOUT HALF THE WORLD’S
COVER.
SO IT WOULD HAVE AN INTEREST IN
NOT SEEING A MORE CONCENTRATED
COPPER MINING INDUSTRY.
IT MAY HAVE SOMETHING TO SAY
ABOUT ONE COMPANY HAVING 10% OF
THE GLOBAL COPPER MARKET.
THE MORE IMMEDIATE PROBLEM TO
GETTING THIS DEAL DONE IS SOUTH
AFRICA.
IN THE OFFER, BHP SAID IT IS
CONTINGENT ON ANGLO AMERICAN
DIVESTING ITSELF OF ITS MINING
BUSINESS IN SOUTH AFRICA, BOTH
FAIRLY TROUBLED BUSINESSES
WHICH DO NOT ADD MUCH TO BHP’S
PORTFOLIO.
THE PROBLEM THEY HAVE IS THE
BIGGEST SHAREHOLDER IN ANGLO
AMERICAN IS THE SOUTH AFRICAN
GOVERNMENT, AND THEY WILL WANT
TO PROTECT THAT. DANI:
WE HAVE TO END IT THERE.
THIS WON’T BE THE LAST TIME WE
TALK ABOUT THIS.
♪
MANUS: IT’S "BLOOMBERG BRIEF."
THAT IS PRETTY ALONGSIDE DANI
BURGER IN NEW YORK.
LET’S GET YOU THROUGH THE FRONT
PAGES.
FIRST UP, WE HAVE A DEEPLY
DIVIDED SUPREME COURT, DANI.
THE NEW YORK TIMES REPORTS
THERE WAS A TWO-HOUR
QUESTIONING ON WEDNESDAY WITH
THE JUSTICES ARGUING WHETHER
FEDERAL LAW SHOULD ALLOW
EMERGENCY ABORTIONS IN STATES
THAT HAVE NEAR-TOTAL BANS.
THE CASE IS FOCUSED ON THE
CONFLICT BETWEEN THE STATE OF
IDAHO AND FEDERAL LAW. DANI:
FOLLOWING IS ON THE FRONT PAGES
OF THE WALL STREET JOURNAL.
EARNINGS SHOWED A NEARLY $4
BILLION CASH BURN THE LAST
QUARTER.
THE FINANCIAL HIT STEM FROM THE
ALASKA AIRLINES MIDAIR
ACCIDENT, ADDING INSULT TO
INJURY, MOODY’S YESTERDAY
DOWNGRADED THE FIRM’S UNSECURED
DEBT TO A BBB RATING. MANUS:
I LOVE THIS STORY, THIS IS WHAT
I DREAM OF BEING ABLE TO DO ONE
DAY BUT I AM NOWHERE IN THIS
LEAGUE. DANI: DREAM BIG, MANUS.
MANUS:
JEFFERIES CEO RICH HANDLER SOLD
$65 MILLION WORTH OF SHARES IN
THE FIRM PARTLY TO BUY HIMSELF
A YACHT.
THE FIRST TIME A CEO HAS MADE A
STOCK SALE IN 34 YEARS.
TO BE FAIR, IT IS THE FIRST
TIME YOU DO SOMETHING LIKE THAT
IN 34 YEARS, WHY NOT HAVE A
YACHT?
THAT IS SOMEBODY WHO IS LOCKED
UP THEIR WEALTH, BUILT A
BUSINESS, AND NOW YOU TAKE A
LITTLE BIT OUT.
IT IS 7% OF HIS AGGREGATE
HOLDINGS, SO HE IS NOT EXACTLY
BAILING ON JEFFRIES. DANI:
IF WE DON’T MIND JEFF BEZOS
SELLING AMAZON SHARES JUST
BECAUSE HE MOVED TO MIAMI, WHY
SHOULD WE CARE IF SOMEBODY DID
IT TO BUY A YACHT?
I DON’T UNDERSTAND, WHEN I DO
THE THING MOST BILLIONAIRES DO,
USE YOUR SHARES AS COLLATERAL
AND TAKE OUT A LOAN.
THEN YOU DON’T HAVE TO DEAL
WITH ALL THESE QUESTIONS. MANUS:
YOU ARE WORKING ON THE
ASSUMPTION THAT HE HASN’T
LEVERAGE THE STOCK. DANI:
I WAS GOING TO SAY MAYBE RATES
ARE TOO HIGH INTO THIS PURCHASE
OF A YACHT IS A REASON THE FED
SHOULD CUT. MANUS:
WHO WANTS TO BORROW MONEY .
THAT JUST SHOWS YOU HOW OLD I
AM.
WHO WAS TO BORROW AT 5% PLUS 2%
EXTRA FOR THE OUT, MAYBE HE GOT
GOOD TERMS FROM JEFFRIES ON
REVOLVING CREDIT LINE. DANI:
THE MAN HAS DONE ENOUGH FOR
THEM, HOPEFULLY THEY GAVE HIM
THAT AT LEAST. MANUS:
PRAISE INDEED FROM DANI BURGER.
KEEP AN EYE ON DOLLAR-YEN. DANI:
IT HAS CROSSED 155. MANUS:
CROSSED THE RUBICON. DANI:
TODAY IS DAY TWO OF THAT BOJ
MEETING. MANUS:
ONE LADY IS ON THE SIDE OF THE
SET, NANCY OF LATTER TENGLER
INVESTMENTS, WHAT IS SHE THINK
OF BIG TECH?
♪
DANI:
FROM OUR GLOBAL HEADQUARTERS IN
NEW YORK, I’M DANI BURGER WITH
MANUS CRANNY.
LET’S SET YOUR AGENDA. MANUS:
AI SHAKES OUT THE TECH
INVESTORS.
BHP APPROACHES RIVAL ANGLO
AMERICAN FOR A TAKEOVER.
AND AND AVALANCHE OF EARN
INFORMATION NEW YORK WITH
DEUTSCHE BANK WITH A BEAT ON
FIXED INCOME TRADING.
IT IS ABOUT GETTING SHAKEN UP
WITH BIG, BAD TECH. DANI:
GOOD NEWS FOR THE BANKS.
BAD NEWS FOR THE TECH.
BEAUTIFUL ALLITERATION, MANUS.
THE NAZ DOCK DOWN .9%.
DOWN 13% AFTER THEIR EARNINGS.
U.S. 10-YEAR YIELDS DOWN 4.6%.
THERE WAS A SLIGHT SELLOFF IN
DEBT YESTERDAY LED BY AUSTRALIA.
WE’RE GOING TO GET $44 BILLION
WORTH OF ISSUANCE FOR SEVEN
YEARS.
DOLLAR-YEN, WE WERE TALKING
ABOUT THIS.
BACK ABOVE 155 PER DOLLAR.
EVERYONE IS SCREAMING
INTERVENTION.
WE’RE GOING TO GET A BOJ
DECISION TOMORROW.
RABOBANK SAYING THEY WILL
PROBABLY BE HOPING THE BANK OF
JAPAN CAN OFFER SOME HAWKISH
COMMENTARY AFTER FRIDAY’S
POLICY MEETING. MANUS:
ACCORDING TO THE NARRATIVE FROM
THE BANK OF JAPAN IT IS A MOVE
OF 4% OVER THE PACE OF TWO
WEEKS THAT WOULD INVOKE THE
R.T.A.
OF INTERVENTION WE SAW IN 2022.
IT IS THE MOMENTUM DRIVER.
IT IS INTERESTING.
IT IS ABOUT TWO DIFFERENT
C.E.O.S BOTH BASICALLY SAYING
BE PATIENT. WE HAVE A FUTURE.
ONE OF THEM MANAGED TO SELL
INTO THE MARKET.
HIS NAME WAS ELON MUSK ALTHOUGH
THE BAR WAS LOW AND THE OTHER
IS ZUCKERBERG SAYING IF YOU
CAN’T SEE THE BEAUTY OF AI.
DANI:
MUSK, WHAT YOU SEE IS WHAT YOU
GET. HE ALWAYS HAD THIS LINE.
ZUCKERBERG SAYING LAST YEAR
THIS IS THE YEAR OF EFFICIENCY.
WE’RE GOING TO REIGN SPENDING
IN. HE SAID TO YOUR POINT
HISTORICALLY INVESTING TO BUILD
THESE NEW SCALED EXPERIENCES IN
OUR APP HAS BEEN GOOD LONG-TERM
INVESTMENT FOR US AND FOR
INVESTORS WHO HAVE STUCK WITH
US SAYING DOESN’T IT PAY TO BE
LOYAL? JOINING US NOW IS NANCY
TENGLER, C.E.O.
OF TENGLER INVESTMENTS.
ZUCKERBERG POINTING TO THINGS
LIKE MOVING FROM DESKTOP TO
MOBILE, ALL OF THAT PAYING OFF.
DO YOU TRUST HIM THIS TIME
AROUND, NANCY?
>> NO. DANI: WHY?
>> WE DON’T OWN THE STOCK.
WE SOLD IT A WHILE AGO.
WE BOUGHT SPOTIFY.
YOU COULD SAY WE WERE RIGHT.
THAT IS THE DILEMMA OF BEING A
PORTFOLIO MANAGER.
ASKING INVESTORS TO BE PATIENT
IS NEVER A GOOD PLAN FOR A
C.E.O.
YOU NEED TO LAY OUT THE VISION.
EVEN THOUGH TESLA’S C.E.O.
IS LONG ON SPECIFICS AND HAS A
HISTORY OF DOING THAT AND
ULTIMATELY DELIVERING.
I THINK THIS IS GOING TO BE A
ROCKY PERIOD FOR META. MANUS:
YOU WERE SO EMPHATIC.
I KNOW YOU DON’T OWN THE STOCK.
DO YOU TRUST C.E.O.? NO.
HERE IS THE ISSUE, WHICH IS IT
IS ABOUT A BLOAF OF PRODUCT AND
DELIVERY.
WHEN YOU SEE C.E.O.S THAT KEEP
EXTENDING CAPEX HIGHER WITH
PERHAPS MORE MEDIOCRE GUIDANCE
ON THE REVENUE IN A HIGHER FOR
LONGER ENVIRONMENT, IS THAT
WHAT CHALLENGES GROWTH MORE SO
AT THIS MOMENT IN TIME?
>> YEAH, I THINK YOU COULD
ARGUE — WE USED TO OWN THE
STOCK.
I THINK YOU COULD ARGUE HE
HASN’T LEARNED HIS LESSON.
LISTEN TO WHAT I SAY.
YOU NAILED IT IN THE OPENING,
DANI. WE HAVE BEEN HERE BEFORE.
WHERE THE CAPEX FOR THE
METAVERSE AND NOW WE’RE IN AI
CHAT BOX.
WITH MICROSOFT THE USE CASES
ARE MULTIPLYING.
WE OWN SERVICE NOW.
THEY HAD A FANTASTIC REPORT
LAST NIGHT IF YOU ASK ME.
THE THE STOCK IS DOWN A LITTLE
BIT THIS MORNING.
BILL MCDETERMINE IT MCDERMOTT
IS AN EXCELLENT C.E.O.
AND A HELL OF A SALESMAN. MANUS:
HE SOLD HELMS TO YOU.
>> YEAH, WHY NOT? DANI:
WHY CAN’T I SAY SURE,
ZUCKERBERG WANTS US TO TRUST IN
THE FUTURE HE IS BUILDING.
WHY CAN’T I GIVE HIM THE TIME?
HE HAS THAT BALANCE SHEET THAT
PAYS OFF AS LONG AS RATES ARE
HIGH.
WHY DOESN’T THAT AFFORD HIM
MORE TIME?
>> YOU CAN.
I THINK THERE IS BETTER PLACES
TO BE PARTICULARLY IN THE AI
REALM.
I HAVEN’T USED THE FACEBOOK,
META CHAT BOX.
IT FEELS LOW ON PRODUCTIVITY
AND HIGH ON TIME WASTING.
THAT IS NOT WHAT WE’RE LOOKING
FOR.
OUR ANALOGY TO THE 90’S, I WAS
MANAGING MONEY THEN.
I THINK THAT IS WHAT WE’RE
GOING TO SEE WITH A INCH IN THE
NEXT FEW YEARS. MANUS:
THAT’S WHY YOU BELIEVE MUCH
MORE IN THE MICROSOFT, THE
POTENTIAL DELIVER MORE
AGGRESSIVELY.
THEY HAVE THEIR OPEN AI.
THEY HAVE A MUCH BETTER
NARRATIVE TO SELLING YOU?
>> ABSOLUTELY.
THAT IS ALSO THE CASE WITH NOW.
THAT IS SOMETHING YOU WANT TO
LOOK FOR.
THEY ARE IN THE SWEET SPOT IN
THE GENERATIVE CLOUD AI AREA.
GOOGLE IS IN A BETTER POSITION
THAN FACEBOOK GOING FORWARD.
THEY ARE STARTING TO ACT LIKE A
GROWNUP COMPANY MOVE PROGRESS
TESTERS OUT OF THE COMPANY.
DANI:
CAN I ASK NANCY QUESTION WE
BOTH WANT TO ASK? MANUS:
GO AHEAD. DANI: I’M SO SORRY.
MANUS: IT IS A GREAT BENCH MARK.
>> YOU GIVE ME MORE THAN THAT.
MANUS:
VERY HONEST. I CAN GIVE YOU
OUTSTAND.
YOU ROLLED WITH PRETTY MUCH ANY
PUNCH WE THROW AT YOU. DANI:
YOU STICK TO YOUR PRINCIPLE AND
ONE OF THEM HAS BEEN NVIDIA IS
TOO EXPENSIVE.
HERE IS THE QUESTION WE ASK
EVERY TIME.
IT FALLS 13.5% NEXT WEEK.
DID YOU BUY?
>> WE DIDN’T.
WE’RE WAITING STILL.
IT NEEDS TO BE CHEAPER FOR US.
THE STOCK IS NOT EXPENSIVE.
WHAT AM I PAYING FOR A UNIT OF
SALES? IT IS STILL A LITTLE BIT
EXPENSIVE.
I PUT IN AN ORDER TO BITE
PERSONALLY BUT MISSED IT AGAIN.
I WAS BUSY DOING WHO KNOWS WHAT.
WE WANT TO OWN IT FOR OUR
CLIENTS BUT WE STILL ARE PRETTY
HAPPY WITH OUR AI EXPOSURE.
DANI:
AT LEAST YOU HAVE SOME EXPOSURE
EVEN IF IT IS YOUR OWN PERSONAL
POLY. MANUS:
TESLA WAS DOWN 40% BEFORE IT
WENT INTO THE EARNINGS.
YOU BOUGHT IT ON THE DIP, DID
YOU?
>> WE DID. MANUS:
JUST FROM A PRICE ACTION VALUE
AND THE BELIEF IN ROBO TAXI.
WHICH DID YOU BELIEVE?
>> LONG ON PROMISES, SHORT ON
SPECIFICS.
WE OWNED THE STOCK FOR THE
BATTERY. UTILITY GRADE BATTERY.
IT IS THE FASTEST GROWING PART
OF THEIR BUSINESS.
WE THINK IT IS GOING TO BE
BIGGER THAN CARS IN THREE TO
FIVE YEARS.
I THINK IF YOU ARE A BELIEVER
IN RENEWABLES, THAT IS THE PART
OF BUSINESS YOU WANT TO BE
FOCUSED ON, BUT IT TRADES AS A
CAR COMPANY.
IT TRADES ON EEV NUMBERS.
THREE TO FIVE YEARS FROM NOW,
WE’LL HAVE A DIFFERENT
DISCUSSION.
I COMMUTE 1/3 OF A MILE EVERY
DAY.
IN ARIZONA, I CAN’T GET IN MY
CAR AND GET TO THE OFFICE
WITHOUT SEEING AWAYMO COMING
AND GOING.
THEY ARE ALL OVER PHOENIX AND
SCOTTSDALE.
TESLA HAS 300 BILLION DRIVER
MILES IN THE BOOKS.
THEY ARE LEARNING.
THEY ARE GOING TO BE SECOND TO
MARKET.
THAT IS NOT A BAD PLACE TO BE.
DANI:
SHE RESTORED OUR NEW YORK CITY
BUBBLE. MANUS:
THAT IS THE WHOLE DISCUSSION
AROUND POLITICS AND STOCKS.
THE METROPOLITAN ELITE THAT
TALK ABOUT POLITICS AND STOCKS
IN A VERY DIFFERENT WAY TO THE
REALITY ON THE GROUND. DANI:
IT IS TRUE AS IS EVIDENCED BY
THE TESLAS. MANUS:
NANCY, GOOD TO SEE YOU.
SORRY YOU DIDN’T MANAGE TO GET
OI OF THE STOCK ONBOARD FOR THE
PA — ROLLING WITH THE PUNCHES.
COMING UP ON THE SHOW, HERMES
DEIFIES ANALYST EXPECTATIONS,
WANING DEMAND FROM CHINA.
MORE ON THE CONTEXT THAT
MATTERS FOR HERMES.
♪
DANI: THIS IS "BLOOMBERG BRIEF."
YOU’RE LOOKING LIVE AT THE
PRINCIPLE ROOM.
COMING UP, AN EXCLUSIVE
INTERVIEW WITH THE C.E.O.
OF AIRBUS AT 2:30 EASTERN HERE
ON BLOOMBERG.
MANUS: "BLOOMBERG BRIEF."
I’M MANUS CRANNY ALONG WITH
DANI BURGER.
INVESTMENT BANKERS STEPPED UP
TO THE PLATE TO HELP THE GERMAN
BANK DELIVER. THE C.E.O.
PROJECTS CONTINUED RECOVERY.
>> RECOVERY WILL CONTINUE
ACROSS THE YEAR.
Q1 WAS STRONG IN DEBT PRODUCTS
AND INVESTMENT GRADE AND
RECOVERY AND NONINVESTMENT
GRADE.
WE EXPECT THAT TO CONTINUE AND
WILL HOPEFULLY SEE A FURTHER
RECOVERY IN M&A AND EQUITY
ACTIVITY. MANUS:
THE DEUTSCHE DANK CFO SITTING
DOWN WITH OLIVER.
GOOD TO SEE YOU THIS MORNING.
TALK US THROUGH THE
CONVERSATION.
BONUSES, PRIVATE CREDIT.
WHAT STOOD OUT?
>> THE HEADLINE IS THE
INVESTMENT BANK. UP 13%.
THAT TOOK THE SPOTLIGHT HERE
FOR DEUTSCHE BANK UP 7% WHEN
YOU COMPARE IT TO WHAT HAPPENED
IN THE UNITED STATES WHERE ON
AVERAGE IT WAS DOWN 3% AND THE
ONLY U.S.
BANK TO BEAT THEM WAS GOLDMAN
SACHS.
WHEN YOU LOOK AT THE NUMBERS
OUT OF BARCLAYS AND BNP,
NUMBERS DOWN SOME 20%.
THEY HAVE SOMETHING TO BE HAPPY
ABOUT THIS THERE.
GOING FORWARD, THICK TRADING
MODERATING A LITTLE BIT.
COMMENTS ON THE ECB SLOWING
DOWN IN ANTICIPATION OF WHERE
RATES ARE GOING TO GO HE DOES
SEE M&A COMING BACK.
WHAT I THINK IS INTERESTING
WHEN WE SPEAK TO DEUTSCHE BANK,
THEY LEND TO THE MANUFACTURING
SECTOR WHICH HAS BEEN DEAD FLAT
FOR QUARTERS AND QUARTERS, NOW
SEEING THE DIP, THE GREEN
SHOOTS THERE STARTING TO COME
BACK. A LITTLE BIT OF POSITIVITY
THERE. DANI:
OLIVER, GIVE THE PEOPLE WHAT
THEY WANT.
WHAT DO THEY HAVE TO SAY ABOUT
BUYBACKS AND BONUSES?
>> IT IS ABOUT THE BUYBACKS AND
BONUSES.
UNFORTUNATELY ON BUYBACKS WE
HAVE TO WAIT WE HAVE 3 BILLION
EUROS SITTING ON THE SIDELINES.
THEY HAVE THOD DETERMINED HOW
MUCH IS GOING TO GO BACK TO
SHERYLS IN TERMS OF BUYBACKS.
THE U.S. H U.K.
HAS CHANGED THE LAW HOW MUCH
THEY CAN PAY OUT.
ALL OF THESE BANKS ARE GOING TO
VOTE ON THIS.
>> WE OPERATE OBVIOUSLY
GLOBALLY COMPETITIVE MARKETS
AND ANYWHERE WHERE REGULATION
— BY THE WAY, FOR US IT
APPLIES GLOBALLY.
THE EUROPEAN REGULATION.
SO IT CAN PUT US AT A
COMPETITIVE DISADVANTAGE.
WE TRY TO WORK WITHIN THE RULES
AND REGULATIONS THAT APPLY TO
US TO BE C COMPETITIVE FROM
COMPENSATION, BE AN ATTRACTIVE
EMPLOYER ACROSS A RANGE OF
CONSIDERATIONS, BUT IT IS
CERTAINLY A CONCERN WHEN
REGULATIONS IN THE U.S. AND U.K.
WHERE WE ARE ACTIVE IN A NUMBER
OF OUR BUSINESSES START TO MOVE
IN A WAY THAT PLACES EUROPEAN
COMPETITORS AT A DISADVANTAGE.
IT HAS OUR ATTENTION.
>> THE COMPENSATION QUESTION
REALLY IS A BIG ONE FOR
DEUTSCHE BANK.
ONE OF THE CORNER STONES IS TO
KEEP THE COSTS DOWN.
THE CONCERN IS ARE THEY GOING
TO BE HAM STRUNG BY SOME OF THE
E.U.
REGULATIONS, NOT BEING ABLE TO
LIFT THOSE BONUSES FOR TALENT.
DANI:
STRUGGLING WITH THE SAME THING,
PERHAPS OVERHIRING AND DEALING
WITH THOSE COSTS.
BARCLAYS POSTED FIRST QUARTER
PROFIT THAT TOPPED ANALYST
ESTIMATES.
THE STOCK TRADERS COLLECTED A
SURPRISE WINDFALL FROM A
VOLATILE GLOBAL MARKET.
ITS C.E.O.
SPOKE WITH BLOOMBERG EARLIER.
>> DO YOU FEEL THE EQUITY
MARKETS THEMSELVES HAVE BEEN
STARTING TO SHOW SOME BUOYANCY?
ON OUR EQUITY FLOOR HERE AND
OUR EQUITIES HAVE SHOWN AN
UPTICK THIS QUARTER AND THE
SAME QUARTER LAST YEAR.
OUR OWN ENERGY BUSINESS, OUR
SUSTAINABILITY BUSINESS AND THE
TRANSITION BUSINESS, WE HAVE
SEEN — IN THE LAST QUARTER.
I THINK THERE IS A DEAL
HAPPENING.
I THINK IT IS VERY EARLY.
YOU HAVE TO GIVE IT A QUARTER
OR TWO TO CEMENT.
>> THE BARCLAYS PREPARED TO
CAPITALIZE ON THAT WHEN IT
ULTIMATELY COMES TO FRUITION
AND CEASE MORE MOMENTUM?
IS BARCLAYS POSITIONED TO
CAPITALIZE ON THAT GIVEN A
LITTLE BIT OF AN EXODE US IN
TERMS OF YOUR BANKERS, RELATIVE
TO YOUR AMERICAN PEERS.
HOW DO YOU TACKLE THAT?
>> IT HAS BEEN AND IT IS A VERY
VERY IMPORTANT AREA OF FOCUS
FOR US.
WE WANT TO INCREASE WHAT WE DO
IN M&A AND WHAT WE DO IN
EQUITIES.
WE HAVE HIRED A LOT OF VERY
TALENTED BANKERS.
WE HAVE FOCUSED ON THE ENERGY
TRANSITION AND ACROSS THE
IMPORTANT SECTORS OF TECHNOLOGY
AND HEALTHCARE.
WE ARE POSITIONED TO CAPITALIZE
ON IT.
YOU SHOULD SEE THE RESULTS IN
THE COMING QUARTERS.
IT IS NOT DAYS, WEEKS AND
MONTHS, BUT OVER A LONGER
PERIOD OF TIME AND WE RUT PUT
THE SKILLED INVESTMENT BEHIND
IT AND WILL CONTINUE TO DO SO.
>> CAN I ASK YOU ABOUT THE
MARKET IN TUCH?
M&A TAKING PLACE, BARCLAYS.
YOU IN IN THE PROCESS OF
ACQUIRING IT’S COAST. THE
BUILDING SOCIETY WE SEE
CONSOLIDATION THERE AS WELL.
IS THIS A SECTOR WHERE WE SEE
MORE AND ARE YOU GOING TO PLAY
MORE OF A ROLE IN THAT?
>> I THINK AT ANY TIME YOU HAVE
INFLATION INTEREST RATE CYCLE
AS WE HAVE HAD, WITH CHANGING
CAPITAL MODELS AND CONSUMER
REGULATION, IT STRESSES
BUSINESS MODELS AND THEREFORE
DRIVES M&A.
TESCO BANK IS SOMETHING THAT IS
WIN-WIN FOR TESCO AND FOR US.
WE WERE LOOKING TO GROW OUR
UNSECURED LENDING.
WE HAVE BEEN VE VERY, OUR PLAN
FOR GROWTH IS PREDICATED AS AN
ORGANIC ONE. DANI:
THE BARCLAYS C.E.O.
SPEAKING WITH BLOOMBERG EARLIER.
LET’S BRING IN TOM METCALF, OUR
BLOOMBERG FINANCE EDITOR.
IS IT REALLY JUST THE EQUITY
TRADERS THAT COME IN TO SAVE
THE DAY FOR BARCLAYS?
>> IT WAS DEFINITELY A SURPRISE
WIN, 25%.
BARCLAYS RATE TRADER, A BIT OF
A SUBDUED PERFORMANCE THERE.
THE FASCINATING THING IS
COMPARING THE BARCLAYS SHARE
PRICE TODAY WITH DEUTSCHE BANK.
IT IS THE INVERSE — VERY
STRONG, MORE THAN 4% WHEN I
LAST LOOKED. NOW WE’RE AT 3.4%.
DEUTSCHE BANK IS LARGELY FLAT.
THAT SHOWS FOCUS ON TRADE, ETC.
ULTIMATELY THE SHERYLS ARE MOST
INTERESTED IN BUYBACKS AS YOU
SAID EARLIER, DANI. MANUS:
TOM, OBVIOUSLY YOU’RE TALKING
ABOUT THE STOCK PRICE GOING IN
TWO DIFFERENT DIRECTIONS TODAY.
ARE WE COMPARING APPLES WITH
APPLES?
THEY ARE SIMILAR BUSINESSES.
WHAT IS THE DIFFERENCE BETWEEN
THE TWO?
>> PRETTY EASY TO COMPARE.
AMONG THE FEW EUROPEAN BANKS
WITH SUBSTANTIVE INVESTMENT
BANKING UNITS.
OFTEN PEOPLE SHORTHAND THEM AS
BOTH BEING FIXED INCOME HOUSES.
IN TERMS OF COMPARING THEM
TODAY, A LOT OF TO US IS CUST
IS FOCUS IS WHERE ARE THEY
GOING?
THERE WASN’T AS MUCH CLARITY AS
BARCLAYS ON THE BUYBACK FRONT.
THE EXECUTIVES ARE SAYING WE
ARE GOING TO PRIORITIZE
BUYBACKS IN TERMS OF
ACQUISITION OR EVEN DIVIDENDS.
MANUS:
BARCLAYS HAD THAT ACTIVIST
SHAREHOLDER IN YEARS GONE BY
THE THE INVESTMENT BANK HAS
BEEN LIKE A NORTHERN BARCLAYS
SIDE IN TERMS OF WHAT THEY DO
THANK YOU VERY MUCH.
LET’S SEE IF THERE IS MORE
ABOUT VISM TO PLAY FOR CHINA’S
LUXURY DEMAND MAY BE SLOWING
FOR THE SECTOR.
SLOWING DEMAND. LVMH.
THERE IS NOTHING QUITE LIKE A
HERMES BAG IS THERE?
IT IS THE ULTIMATE SYMBOL OF
RESILIENCE. GOOD MORNING.
>> GOOD MORNING, MANUS.
I DON’T KNOW IF YOU PREFER THE
BERKIN BAG. MANUS:
I CAN’T AFFORD TO BUY ANY OF
THEM.
>> LOT OF PEOPLE — IN THE
FIRST QUARTER, THE SALES AT
HERMES ARE UP 17% EVEN THOUGH
SHARES ARE ACTUALLY DOWN AT THE
MOMENT. WHY?
INVESTORS HAVE PRICED IN A LOT
OF THE POSITIVE HERMES STORY.
THEY ARE A LITTLE BIT CAUTIOUS
IN THE SECOND QUARTER AND THE
REST OF THE YEAR BECAUSE HERMES
MENTIONED THIS QUARTER AND
TRAFFIC IN SOME OF THEIR
CHINESE TOURS, ESPECIALLY FOR
— WHAT YOU COULD AFFORD, THE
CHEAPER PRODUCTS FROM HERMES,
THE PERFUMES.
STILL OF COURSE THERE IS A
POLARIZATION OF THE CHINESE
CUSTOMERS.
THEY TEND TO GO FOR THE VERY
HIGH END SUCH AS HERMES OR THE
CHEAPER, MORE AFFORDABLE
PRODUCTS. THAT DIDN’T PLAY WELL.
YOU SAW THE PROFIT WARNING
EARLIER THIS WEEK.
HERMES ON THE OTHER SIDE HAS
HUGE PRICING POWER AND MANAGED
TO PASS ON AN 8% PRICE
INCREASING IN THE FIRST QUARTER.
THEY ARE PROMMINGS THERE IS NOT
GOING TO BE ANY MORE PRICE
INCREASES FOR THE REST OF THE
YEAR. DANI:
YOU CAN SAVE UP FOR CHRISTMAS
TO GET ME ONE.
I’LL TAKE A SCARF EVEN.
COMING UP, WE’RE GOING TO SET
YOU UP FOR THE TRADING DAY ON
BLOOMBERG. ♪
DANI: IT’S "BLOOMBERG BRIEF"
DANI BURGER AND MANUS CRANNY IN
NEW YORK.
LET’S GET YOU SET UP FOR YOUR
TRADING DAY.
ECODATA COMES OUT AND GDP AND
WHOLESALE INVENTORIES AND
INITIAL JOBLESS CLAIMS. MORE
TECH, ALPHABET AND SNAP.
AND THE SUPREME COURT HEARS
ARGUMENTS RELATED TO THE
ATTEMPTS TO OVERTURN THE 2020
ELECTION RESULTS. MANUS:
DISAPPOINTING REVENUE.
ZUCKERBERG IS IN RETREAT MODE.
I.B.M., THE COMPANY
DISAPPOINTING INVESTORS.
FORD IS UP 3%.
IT IS ALL ABOUT THE TRUCKS.
DANI:
IT IS ALL ABOUT META, MANUS.
THOSE DECLINES HITTING THE REST
OF THE TECH.
CAN MICROSOFT AND ALPHABET SAVE
THE MARKET TODAY? MANUS:
A CHALLENGING TIME FOR
ZUCKERBERG.
DID HE LEARN NOTHING IN 2023? ♪

“Bloomberg Brief” delivers the market news, data and analysis you need to set your agenda. Today’s guests: Sophie Lund-Yates, Hargreaves Lansdown PLC Equity Analyst; Nancy Tengler, Laffer Tengler Investments CEO/CIO.
——–
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