♪ >> GOOD MORNING FROM LONDON.HERE’S WHAT YOU NEED TO KNOW. BONDS SELLOFF OVER NIGHT AFTERNEIL KASHKARI SAYS THE RATE IS RESTRICTIVE.BUT THEY HAVEN’T ENTIRELY RULED OUT RATE HIKES.WITH HOURS LEFT ON THE CLOCK, B.H.P.”ABOUT TEX FOR FORD’S BID TO TAKE ON ANGLOAMERICAN.AND THE CLOSEST ELECTION THAT COULD RESHAPE A POLITICALLANDSCAPE DOMINATED BY THE PARTY THAT NELSON MANDELA LEDTO POWER. >> LET’S CHECK IN ON THESEMARKETS THEN T.
BOND SELLOFF AS A RESULT, ANDWE’LL BE HEARING FROM NEIL KASHKARI.AND THE TEPID DEMAND FOR THE ISSUANCE OF U.S. TREASURIES.THE WEAKEST DEMAND IN OVER A YEAR.THE CONSUMER CONFIDENCE SURVEY. THE GOOD NEWS IS BAD NEWS INTERMS OF THE MARK REACTION TO THAT STORY. THE FUTSI100 OFF BY .4 OF APERCENT. THE SELLOFF YESTERDAY AT 4.56.THE EURO DOLLAR 1.08. AND MARKETS TODAY STARTS RIGHTNOW. ♪.
>> GOOD WEDNESDAY MORNING IF ICAN. WE’RE GOING TO GET RIGHTTY THROUGH ES A LOT GOING ON INTHE MACRO SPACE. BUT FIRST WE SHOULD TALK INTOSOME OF THE BIGGEST NEWS. HEADLINES COMING OUT OF B.H.P.THE DEADLINE WAS ABOUT 5:00 P.M. LONDON TIME.LOOKS LIKE THEY’RE CREATING AN EXTENSION.STICKY PIECES IN TERMS OF WHAT THAT SPINOFF OF THOSE TWOAFRICAN MINDS LOOK LIKE. IT DOESN’T LOOK LIKE THERE’SANY REAL CONVICTION HERE. S THAT DEAL THAT WILLULTIMATELY GO THROUGH.
>> GIVEN THE DEMANDS BY B.H.P.THAT THOSE SPINS ARE OFF BECAUSE INVESTORS WERE EXPOSEDTO RISK TO THAT GIVEN IT COULD TAKE TWO YEARS TO APPROVE THAT.THERE WAS SOME PURRBACK AND DISCON FORT AMONG ANGLO’SSHAREHOLDERS. $49 BILLION. JUST IN THE LAST MINUTE, B.H.P.SAYING THE PROPOSAL DOES OFFER SUBSTANTIAL PRO TEXT ON THATPOINT. ALSO SAYING, THOUGH, THERE’S NOCERTAINTY THAT ANY PACKET OR TRANSACTION WILL BE REACHED.THE DEAL WAS FOR 5:00 P.M. TODAY.THE LATEST DEADLINE AND AS YOU.
IS IT THEY’RE GOING TO BEPUSHING THAT TIME FRAME BACK IT SUGGESTIONS THAT THERE’S MORECONSTRUCTIVE BETWEEN THE TWO PAIRS.IT SEEMS ON THE INFORMATION WE HAVE REMAINS IN THE ABSENCE OFSOUTH AFRICA. >> YOU TALK ABOUT THE MINDS INPARTICULAR. ONE OF THE STICKIEST POINTS ISTHAT THE SHAREHOLDERS AREN’T BEING COMPENSATED WHEREAS B.H.P.STILL NEEDS COLLARTY I FELT LIKE THERE WAS A REALMISCOMMUNICATION IN TERMS OF WHERE THEY WERE GOING.I BELIEVE THEY WERE REPORT.
THESE WERE NOT ACKNOWLEDGEMENTFROM THE AREA ITSELF. >> WE NEED ACKNOWLEDGEMENT ANDFIGURE OUT THAT SOMEHOW THESE REMINDS NEED TO BE ON TOP OFTHAT. WE TALKED ABOUT SOUTH AFRICA.IF YOU LOOK THAT ANGLO ASSETS COME OUT OF SOUTH AFRICAN.WE KNOW THE GOVERNMENT IS AT RISK OF PERHAPS CENTRALIZINGSOME MORE OF THOSE ASSET WHEN IT COMES TO THE MINING STORY.WE’RE GOING TO DIVE INTO THE SOUTH AFRICA PIECE IN A LITTLEBIT. IT LOOKS LIKE THIS IS GOING LAST A LITTLE WHILE LONG.
>> ON THE REGULATORY FRONT IFTHEY COME COULD TAKE — COULD TAKE UP TO TWO YEARS.IT’S A RED HEAD RIGHT NOW. B.H.P.WANTS THE ANGLO EXTENSION FOR MORE TALKS SO B.H.P.PUSHING FOR THAT DEADLINE. B.H.P.SAYING WE LOOK — TO ALLOW FOR MORE TALKS.WE’LL SEE IF THAT COMES THROUGH. B.H.P.ARE THINKING THEY’RE MAKING SOP PROGRESS ON THIS.IT’S STILL THE NUMBER THAT WE’RE LOOKING AT.WE INDUSTRIAL ANY WAIT TO THAT.
EXTENSION OR IF THEY SAY HANDSLOOK. WE’RE DONE. IN THE MEANTIME LET’S TALKABOUT THE SOUTH AFRICAN COMMUNITY. >> WE WATCHING THE MACRO RATETHREW. I DID A LITTLE NERDYNESS. A LITTLE BIT OF A SCANDALWEDNESDAY MORNING. TALK ABOUT THE BOND REACTIONAND THE MARKET REACTION. THE SOUTH AFRICAN POLLS HAD ABOND AUCTION YESTERDAY. THERE WAS SO MUCH DEMAND FORTHIS. AND THE THOUGHT PROCESS AROUNDTHEM.
EITHER YOU BY A CHEAPLY BONDSRALLY ON FAVORABLE OUTCOME IF IT IS THE FAVORABLE — ITOFFERS ONE OF THE JUICIEST YIELDS. S THAT 1-1 YIELD. VERY THAT WHERE THE MONEY WENT? >> STRAIGHT INTO SOUTH AFRICA. >> YOU’RE BEATING ON SOME EXRISKS. GIVE HIM THE RALLY STRENGTH.SINCE THE START OF APRIL 3:5%. SO THE EXPECTATION THAT EVEN IFTHE NACC THAT CONTROL CHIPPED AWAY WHICH IS THE EXPECTATIONTHAT YOU WILL GET SOME OF THE.
STABILITY.THEY WILL PARTNER WITH THE LESS RADICAL PARTIES.THAT IS THE MARKET EXPECTATIONS, THE POLLINGEXPECTATION. THE EXPECTING THE CONTINUITYESSENTIALLY. >> IF YOU LOOK AT EVERYONEOUTSIDE, THEY’RE VOUCHING FOR THAT NATIONAL EXCEPTION.WHEN YOU’RE TALKING ABOUT ONE CON KNEWITY.YOU’RE FAMILIAR WITH THAT. BUT ALSO THIS IDEA THAT IS IT ALESS TRAILIZED. THE ECONOMIC CHALLENGE ISSOMETHING THAT JENNIFER HAS.
BEEN PURKE HER GUEST AS WELL. I’VE SEEN IT TO 0 .3%.AS THIS UNFALLS. WHAT ROLE WILL THE ECONOMY PLAYIN THE MINDS OF VOTERS TODAY IN SOUTH AFRICA? >> YEAH, TOM.I THINK YOU AND KURTI WERE NOTING HOW COMPLEX THIS IS HERE.YES, INVESTORS WERE EIGHT POLICY CONTINUITY WAS A GOODTHING. IF YOU TAKE A LOOK AT WHERE THEECONOMY HAS BEEN IN THE PAST FEW YEARS, IT’S A BUILTCONCERNING.
AND SOUTH AFRICAS ARE COMING TOVOTE THIS YEAR. RIGHT NOW, IT HAS STALLED, YOUYOU MENTIONED .03% GROWTH. THIS YEAR WE HAVE 33%.AND MUCH OF THOSE PEOPLE BEING YOUNG PEOPLE.AND OF COURSE, WE HAVE SEEN A LOT OF THE DILAPIDATED RAILS,PORTS, THE ELECTRICITY OUTAGE IN A COUNTRY REALLY THAT SHOULDBE THRIVING. SO THE ECONOMY IS AT THE SCORE.AND THE QUESTION IS WHAT DOES THE MAKEUP OF THIS ATMINISTRATION LOOK LIKE. THAT ARE VERY NEEDED HERE.
>> JEN, TALK US THROUGH THEJETTERS HERE. WHY ARE SOUTH CAN EASTERNERVOICE ABOUT THE POSSIBILITY OF A COALITION? >> I’M STANDING IN DURBIN WHICHIS ONE OF THE MAIN CITIES HERE AND THERE ARE THREE MAINPROVINCES THAT WE WERE PLAYING. SHE HOUSE JOHANNSBERG.THE QUESTION ABOUT COALITIONS, THE CONCERN IS WHAT WE’VE SEENON THE LOCAL LEVEL. THERE’S BEEN INSTABILITY WITH ALOT OF THESE COALITION GOVERNMENTS THAT WE’VE SEENACROSS THE COUNTRY AND SO.
PEOPLE ARE WONDERING WHETHER ORNOT THIS CAN ACTUALLY WORK ON A — IT IS AN — AC CAN CNN.WE’RE SEEING A LOT OF SUPPORT. NEXT TO ME I HAVE JULIUSMILEMA’S PARTY SUPPORT ERTZ HERE AND MANY PEOPLE AREWONDERING WHAT THE MAKEUP WILL BE HERE. WE WERE ABLE TO SPEAK TO JULIUS.TAKE A LISTEN AT WHAT HE TOLD US. >> M.K. PARTY IN DECEMBER.WE WENT AND HAD A SUCCESSFUL RALLY WHERE IT IS THE BASE OFMC. AND THAT DID NOT AFFECT USLE.
BUT FROM POLICY — ANDOURSELVES AN PRESIDENT SZUMA. I KNOW THAT ONE OF THE PURRCHASES THAT AFTER THE ELECTION IT WILL BE INTERESTING TOENGAGE WHERE. >> SO THAT WAS JULIUS MILAME.AND ENGAGING WITH THE FORMER UK PARTY.AND THAT IS GIVING INVESTORS A LOT OF CONCERN.YOU MENTIONED THE NATIONAL ZATION OF THE RESERVE BANK ANREMINDS. THAT IS SOMETHING THAT THE U.S.BELIEVES IN HAS TRIED TO AT LEAST SOME OF THE FRUIT OFTHEIR ECONOMIC REFORCE.
COME TO LIFE.WILL THEY BE ABLE TO GET ON THE SAME PAGE?AGAIN ABOUT THE SAME THAT ARE NEEDED. >> WE’RE WALKING YOU THROUGH INWHAT WILL BE A PIVOTAL POINT. SHE WILL BE JOINING USTHROUGHOUT THE DAY COVERING THAT FOREST. A LOOK AT SOME OFTHE OTHER THE DISPLACE. IN ADDITION TO THE SELECTION. >> DO THAT ABOUT 1P.M. TIME.THE DOUBLE SETTLEMENT COMING OUT TODAY SHOWING UP FORFRIDAY’S TRANSACTIONS CAN THIS.
MARKET HANDLE IT?IT FEELS LIKE A LOT OF PEOPLE ARE HEDGING THEIR BETS IN TERMSOF ADDITIONAL RATE HIKES. TODAY MARKS THE START OF THOSEDEBT BUYBACKS. BUT FILL SOMETHING IN THE LAST24 HOURS. THE REAL HEADLINE COMES OUT OFTHE HAWK, THE FED HAWK OF THE MINNEAPOLIS HAWK. >> WHAT A DOUG WITH WIDE WINGS.WHAT A TRANSFORMATION. IT SHOWS I THINK THE SENSATIONACTIVE OF THEIR MARKETS. BUT HE OBVIOUSLY MADE THE CASETHAT WE HAVE NOT TAKEN.
POTENTIAL HIKES OFF THE TABLE.THERE IS SENSITIVITY TO THE COMMENTARY BUT FROM THE LAKE OFNEIL CASH CARRY. >> THE FLY VIEW.IT’S A PET ACTION PRICING COMING IN HIGH IN TERMS OF THEYIELDS DEMANDED BY INVESTORS. I SAY PUTS A FLAW IN THE YIELDS.THE KEY STORY WAS EXPECTED TO STARTS IN UNIT.SOME OF THE ACTS ABOUT THE ADOPTION ABOUT THE TAKE UP OFSOME OF THESE QUESTIONS. >> THAT WAS THE CONVERSATION WEHAD. >> I SHADE YOU BETTER BE THEREAS WELL.
WE HAD SOME INFLATIONARY.THEY’RE STANDING PUT AND SAYING THIS NEEDS TO BE IN.HOTTER THAN I WOULD LIKE IT TO BE. >> IT ISN’T THE BEST CASE.WONDERING MINDS IF THAT SOMETHING THAT’S GOING TOHAPPEN AT LEAST IN THE BACK. EARLY 2025. 2022.MARKETS ARE STARTING TO FEEL THAT WAY. >> THE CHALLENGE TO FEEL LASTMILE ON INFLATION FROM 3-2. MOST OF THEIR BANKS THE TARGET.AND THE NARRATIVE. SEEMS EDGE.
BUT AT A MUCH SLOWER PACE AND AMUCH MORE CONVINCING — WE’RE TALKING ABOUT POLICY-MAKERRERS. >> HE’S BEING BACKED UP.IN ADVANCED TALKS. CONNOR PHILLIPS TO BUY IT.REPORTING FROM THE FINANCIAL TIMES.WE’LL KEEP THAT STORY FOR YOU. IN TERMS OF THE OPENING PERIOD.AND S&P IS DOWN BY .4%. >> WE SHOULD TALK ABOUT VERYQUICKLY THE OIL MERGER STORY BECAUSE IN THE LAST 24 HOURS WEGOT HOLD HOUSE NUMBERS. WHEN IT COMES TO THE ENERGYCOMES ON TOP OF THE FACE.
GOING INTO THE OPEN ENVY YEAHGAPPING HIGHER, A FUN FACT FROM OUR DAN CURTIS TALK ABOUT THE LAST FOUR WEEKDAYS THEY’VE –$470 BILLION. IN JUST FOUR WEEKDAYS. WOW, THAT’S QUITE THE — ANDCOMING UP OUR COVERAGE OF THE ELECTIONS CONTINUES.TODAY WE’RE GOING TO HEAR FROM ONE OF THE LEADERS OF THEEUROPEAN GREENS. PLUS, ANOTHER DEADLINEAPPROACHES FOR THE MEGA MINING TIME BETWEEN B.H.P.THE TWO COMPANIES ARE TALKING.
IT SEEMS LIKE THAT 5:00 P.M.DEADLINE COULD BE PUSHED BACK. THE DOLLAR EDGES HIRE.WE’VE BUN MAKING FOR YOU. AND STRONGER THAN EXPECTED U.S.DATA AT LEAST IN TERMS OF THE CONSUMER.WHEN WE HAVE ANY QUESTIONS OF YOUR OWN FOR OUR GUESTS. ♪ >> YOU CAN SEE THE U.S.ECONOMY IS DOING ON THE SURPRISE A LITTLE BIT ON THENEGATIVE. IF YOU GET P.M.I.’S THEY’RESTILL IN CONTRACTUAL REMOTE.
AND ONLY THE SERVICE SECTOR ISDOING BETTER. THAT HAS ALWAYS DRIVEN THE EURO.SO FROM OUR POINT OF VIEW, THEY COULD CONTINUE.OUR FORECAST WILL BE 110 IN ONE YEAR’S TIME. KRITI:HE SPOKE YESTERDAY SAYING HE’S BULL ISSUE ROW.GIVEN THAT SO MANY ARE SAYING WHY IS THE EURO SO STOPPING TOBEGIN WITH? LET’S BRING IN MORE CONTEXT.THE MARKET 360 JOINS US THIS MORNING.THANK YOU VERY MUCH FOR JOINING US. TALK TO US ABOUT THIS STORY.I’LL START WITH WHY IS THE EURO.
SO STRONG RIGHT NOW? >> GOOD MORNING.AND THANK YOU FOR HAVING ME AGAIN.THE QUESTION COMING INTO KEY 2 IS CAN THEY CONTINUE.THEY WERE REFERENCED WHERE ESPECIAL COURAGING.THE ACTIVITY YOU’RE HOLDING IS OK. AND SO THE E.C.B.WILL VIEW THAT AS A POSSIBLE. IT WILL REFLECT ON THE CURRENCY.AND FROM HERE AREA NOT BULLISH ON THE EURO. >> THE EURO LACK IT IS YIELD TOCONTINUE TO APPRECIATE AGAINST.
DOLLAR. >> AND WHEN WE’RE TALKING ABOUTANY POTENTIAL UPSIDE EVEN IN THE SHORT-TERM GIVE US THENUMBERS HERE WHAT KIND OF RANGE ARE WE LOOKING SENATE >>EXACTLY. WE THINK YOU’RE BETTER PLAYINGIT WITH EUROPE APPROXIMATE SIS LIKE SCANDINAVIAN CURRENCIES.WE LIKE THE NOKI. NOT DOLLAR STRENGTH WILL NOTDOMINATE BECAUSE THAT’S BECAUSE IT MAINTAINS THE YIELDADVANTAGE AND WILL DO SO FOR SOME TIME TO COME.CUT RATES ONLY GRADUALLY AND.
ONLY STARTING IN DECEMBER. >> THE PLAN DOESN’T HAVE MUCHOF A YIELD. BUT YOU LIKE THE PLAN.LEVELS WE HAVEN’T SEEN SINCE 2008 VERSUS THE JAPAN YEN.HOW DID YOU PLAY POUND STRENGTH? >> WE THINK THE MARK COULDPERCEIVE A LANDSCAPE VICTORY AS YOU ARE ERRING A PERIOD.OR CLOSING TO THE U.K. >> THEY THINK THE MARKET HASSTARTED TO PROCESS, TOM. THE MARKET IS BULL IR.IN FACT, IT’S THE LONGEST LARGEST. IT CAN CONTINUE TOAPPRECIATE. AND THE B.O.E.
IS A AN IMPORTANT PIECE OF THEMUST PUZZLE. YES, THEY’LL START CUTTING MANYAUGUST. >> IT WILL REMAIN ONE OF TO HIGHER YIELD. >> POUND EURO 117.WHAT LEVEL WOULD YOU BE TARGETING WITH THAT CROSS? >> WE THINK EURO STERLING CANFOOL 83. >> IN TERMS OF THE DOLLAR.I FEEL LIKES THAT THE GAME CHANGER.IT FEELS LIKE IT’S AT THE WOMEN EVENT. WALK US THROUGH.IS IT JUST ABOUT THE YIELD OR.
ARE THERE OTHER FACTORS AS WELL?>> GIVE US THE LAUNDRY LIST. >> IT’S TWO THAT WE’RE WATCHING IFWE COULD SEE ON A BULLISH CALL. THE FIRST DAYS IS WHETHER ORNOT AND THE U.S. DETERIORATE. AND PAYROLL PRINTS BELOW 100BECAUSE WE NEED THAT AND THE SECOND IS WHETHER EURO ZONEACTIVITY OUTPERFORMS ACETIFIED. WE’RE NOT CONVINCED THAT ATLEAST THROUGH THAT LENS THE PATH FOR A WEAKER DOLLAR ISTHERE. >> HOW DOW DO YOU PRICE IN ANDTHE PHYSICAL FEELING. >> THE DEADLINE IS JANUARY 2025SO THE FIRST THING ON THE.
PRESIDENT’S TROPHY HOW DO YOUPLAY IT. >> DO YOU? >> I THINK IT’S SOMETHINGTHAT’S WE’RE IN THE MARRIAGE IT’S SOMETHING THAT GETSFOCUSED. AND ONE OF THEM WERE THE FED.IT REVEALS THAT THE BAR TO HIKE IS STILL QUITE HIGH BUT EQUALLYIN TERMS OF RATE CUTS, YOU HAVE CORE P.C. ABOVE 2%.SO THEY’RE NOT GOING TO CUT RATES.WE THINK IN DECEMBER IS WHEN THE FED WILL GO TO THE EXTHAT– THAT HAS CONSEQUENCES.
THE JAPANESE. 157 RIGHT NOW.IS IT A HIKE? >> I THINK IT WOULD BE A CUTFROM THE FED. BECAUSE WE’RE NOT FREQUENTINGONE FROM SOME TIME. WE DON’T THINK DOLLAR YEN ISGOING TO CHANGE FRIENDS. BECAUSE TO CARRY ON HERROOMMATES AND STRONG. THERE AREN’T MANY POSITIVE YETSPECIFICALLY CATALYSTS ON THE HORIZON. >> THEY’RE PAYING FOR IT IN AMORE IMPORTANT. THEY DON’T APIECE TO BEREPATRIATING OTHER OBJECTS.
I’M SURE SINCE NOVEMBER.IS THIS A — IS THIS A POLICY MAKING DECISION TO ALLOW ASTEADY SLOWDOWN, A STEADY WEAKNESS TO COME THROUGH.WHAT IS YOUR EXPECTATION — >> I DO WANT TO — AROUND THECURRENCY. IS THERE FURTHER PRESSURE TOCOME THROUGH. AND AGAIN TO WHAT EXTENT ISTHIS A BAD STORY. >> IT’S NOT TOO DISSIMILARWHERE WE SEE ROOM FOR MODERATE APPRECIATIONS.CARRY RISK AND THE OTHER GIRLS. >> IS THERE HEDGING AGAINSTTHAT?.
>> THERE IS. WE THINK ONE GOOD HIT THATCOULD, RIGHT NOW THE SWISS SKIDS OR THE MARKET HOLDS VERYSHORE. WE LOOK AT OUR MODEL AND THOSESHORTS CAN COMES. INCLUDING BUT THE SHORTS AREFACED ON MONETARILY POLICY. WHY WOULD YOU BE THERE WHERETHE DOLLAR IS THERE. >> CERTAINLY THE DOLLAR WOULDBE AT. WE WOULD ANSWER A QUESTIONAROUND WERE THE MOVE COULD BE LARGEST. AND THEN SWIFT REALLYTURNS AROUND ON THE METRIC.
WHAT IS IT ABOUT HIM — THENOKIA IS AN INTERESTING ONE. BUT IT DUDS HAVE A LOT GOINGFORWARD. THEY HAVE A POSITIVE FLOWSTORY, WE THINK BECAUSE. THAN IT DID IN PRIOR YEARSESPECIALLY THE LAST TWO YEARS. SO THE MARKET DOESN’T HAVE TOTRADE ON YET. ON THAT BASIS, AT LEASTACCORDING TO OUR PAY RICKS. >> THANK YOU VERY MUCH.INDEED AFTER YOU SQUEEZED FOR YOUR SIDE.CALL THAT ON THE DOLLAR AS WELL. AND MAYBE A LITTLE CAUSING WHENIT COMES TO EURO VERSUS THE.
POUNDS.FROM MARCUS 360 WITH A DEEP DIVE ON THE FX SPACE.ER NEXT YEAR THEY’LL CHOOSE ANOTHER EUROPEAN PARLIAMENT. ♪ >> THE FAR RIGHT IS STRONGBECAUSE THEY ARE SELLING SNAKE NEIL: A CERTAIN WAY.THEY ARE PROMISING SWIFT RESULTS AND THE MIRACLESOLUTIONS TO PROBLEMS THAT HAVE BEEN COMPLICATED.BUT I THINK IT’S VERY IMPORTANT TO CLEAR — TO SAY THATSOLUTIONS AND DELIVERY HAS NEVER COME FROM THE EXTREME.
>> WE ARE IN A CAMPAIGN TOFIGHT. WE ARE ON A CAMPAIGN TO CONVINCE CITIZENS TO EXPLAINWHAT IS AT STAKE. AND WHAT IS AT STAKE IS THEFUTURE OF EUROPE. IT’S CHOICE BETWEEN A STRONGEUROPE AND THE EUROPE WHICH COULD DISINTEGRATE. >> NICHOLAS SCHMITT. THE E.U.PARLIAMENT TEAR ELECTIONS KICKING OFF NEXT WEEK.400 TO CHOOSE M.E.P.’S. WE ARE ON THE GROUND IN BEERLYNN A GUEST. OLLIE? >> THAT’S RIGHT, TOM.WITH THE CONVERSATIONS YOU’VE.
BEEN HAVING AT ON THE SHOW WITHTHE E.U. ELECTION BEING KICKED OFF NEXTWEEK. THANK YOU SO MUCH FOR JOININGUS. I LIKE IF YOU COULD SET OUT FORME THE DEFINING ISSUE OF THIS ELECTION IS AND ILLUSTRATE WHATYOU THINK IS AT STAKE? >> I WOULD SAY EVERYTHING IS ATSTAKE. WHAT WE ARE FACING RIGHT NOW ISFOR EXAMPLE A SEARCH OF THE FAR RIGHT AND THE WHOLE EUROPEANPROJECT IS GOING TO BE PUT IN QUESTION.SO THAT WOULD HAVE HORRIBLE.
CONSEQUENCES FOR EUROPEANS BUTALSO ACROSS THE WORLD. ONE OF THE KEY ISSUES WE WILLBE DISCUSSING IS THE GREEN DEAL. WILL WE GO DOWN THE PATH OFNEUTRALITY OR WILL WE BASICALLY GO BACK AND NOT MEET THETARGETS BUT CREATE A LOT OF ECONOMIC INSECURITY.AND THAT WILL BE DECIDED BY EUROPEANS NEXT WEEK. >> WHAT DO YOU THINK HASHAPPENED BECAUSE THEY LOST THE GREATEST AMOUNT OF GROUND FOR– WHAT EXACTLY HAS GONE WRONG IN THE LOSS OF THE GREEN THERE?.
>> I’M GOING TO HAVE ANANALYSIS OF THE ELECTION AFTER THE ELECTION.BECAUSE IN THE LAST ELECTION WE WERE NOT FORESEEN TO BE STRONG.WE ARE IN A DIFFERENT MOMENT THAN IN 2019.THE URGENCY OF CLIMATE CHANGE IS BECOMING VERY VISIBLE FORPEOPLE. WE ARE TALKING ABOUT CONCRETEMEASURES. THERE’S A LOT OF INSECURITY.PEOPLE ARE CONCERNED ABOUT THE FUTURE.BUT I THINK WE HAVE TO MAKE THE CASE WHY IT’S IMPORTANT FORCLIMATE NEUTRALITY BUT TO.
CREATE GREEN JOBS TO HAVE ASTRONG ECONOMY IN EUROPE. >> ONE OF THE REASONS THAT ISNOT GETTING THROUGH IS THAT THE EUROPEAN APPROACH HAS BEEN MUCHMORE REGULATE FIRST RATHER THAN CREATE INCENTIVES.THE INFLATION REDUCTION ACT. DO YOU THINK THERE SHOULD BE ADIFFERENT APPROACH TO GET THESE INITIATIVES THROUGH. >> THE SETTING OF TARGETS ANDREGULATING A TERN FRAME THAT WAS THE RIGHT START.BUT YOU’RE ABSOLUTELY RIGHT THAT I THINK WE KNOW HAVE TOMAKE THIS HAPPY BECAUSE WE ARE.
IN AN IMPLEMENTATION PHASE. >> THEY TELL ME, WE NEED TOMODERNIZE OUR INFRASTRUCTURE. WE NEED TO GET HYDROGENPRODUCTION. WERE WE NEED TO WHAT WE HAVEPUT INTO TARGETS AND FOR THAT WE WILL NEED A MASSIVEINVESTMENT PROJECT. WE HAVE BEEN FAR TOO RELAXEDNOT ONLY FOR THE ECONOMIC BENEFIT, BUT ALSO IN THE LONGRUN, WE FLOW THAT THE INVESTMENT AND THE MONEY WEWILL HAVE TO PAY BE IN THE FUTURE.ARE YOU CONCERNED NOW OR AFTER.
THE INVASION OF UKRAINE ANDSPENDING THERE AND WE ARE GOING DISPLACE SOME OF THEINITIATIVES ON CLIMATE. >> THERE’S ONLY A FINITE NUMBEROF YOU ROSE. >> THESE THINGS GO HAND IN HANDBECAUSE WHEN WE SPEAK ABOUT THIS.WE HAVE TO LOOK AT THE NARROW DEFINITION OF DEFENSE.BUT SUDDENLY WE NEED TO SEE HOW WE SPEND THE MONEY.RIGHT NOW, WE HAVE OFTEN DIFFERENT MEMBER STATESDEVELOPING DIDN’T WENT IS WHILE AT THE SAME TIME, WE HAVE TOSPEAK ABOUT HOW OUR.
INFRASTRUCTURE PLAY AS CRUCIALROLL IN OUR DEFENSE CAPACITY. I WENT TO A BIG INFRASTRUCTUREPROJECT. IT’S MAKING IT POSSIBLE FORFEMALE MOVE FROM THE TEXTILE BUT FOR MILITARY MOBILITY FOREXAMPLE. WE NEED TO LOOK AT THESE ISSUESIN A — IN A — IN A — IN A WAY THAT WE ARE USING THE MONEYTHAT WE ARE USING TOGETHER FOR CREATING CLIMATE NEUTRALITY,ECONOMIC STRENGTH. I WANT TO TALK TO YOU ABOUTCHINA. THE BIDEN ADMINISTRATION PUTTING TARIFFS ON E.V.’S ANDTHE E.U.
WILL PRESUMABLY DO THE SAMENEXT WEEK. IF YOU BELIEVE CHINA’SPERSPECTIVE, THEY SAID WE’VE COME UP TO ALL OF THISTECHNOLOGY TO GET THE CLIMATE GOAL THAT YOU HAVE ASKED FOR.THERE’S THIS QUESTION OF OVERCAPACITY BUT DO YOU NOTNEED IT TO HAVE IT SET OUT? >> A LOT OF THE PRODUCTION ISHAPPENING IN CHINA RIGHT NOW. BUT THIS NEEDS NO HAPPEN ANDTHAT IS SOMETHING THAT I THINK IS UNDERSTANDABLE.I THINK THE STRATEGIC POPS THAT WE NEED TO GIVE WE CANNOT FALLBACK TO DEPENDENCIES.
GERMANY, WE LEARNED THE LESSONTHAT AN OVERDEPENDENCY ON RUSSIAN IMPORTS BASICALLY MADEUS — PUT US IN A WEAK POSITION SO FOR ME IF WE NOW TALK ABOUTHOW DO WE REACT TO THIS — TARIFFS WILL BE A DISCUSSIONBUT LOOK AT THE CRITICAL INDUSTRIES THAT WE WANT TODEVELOP IN EUROPE. AND THE QUESTION OF SOLAR WILLBE THERE. THE QUESTION OF IMMOBILITY.AND FOR THAT WE NEED TO HAVE THE INVESTMENT TO DEVELOP. >> YOU NEED BE TACTICAL TO SEEWHICH INDUSTRIES EUROPE.
SUPPORTS.THE SOLAR INDUSTRY IS A FOREGONE SOLUTION THAT EUROPESAYS WE’RE NOT GOING TO TRY TO WIN WHAT RENEWABLE CAN EUROPEWIN AT? >> SOLAR INDUSTRIES THERE WAS APOLITICAL DECISION TO BE MADE BY THE PREVIOUS GOVERNMENTS.WE HAD A SOLAR INDUSTRY THAT WAS STARTING TO DEVELOP IN GERMNORTHEAST AND THEN WRONG POLITICAL FRAME WORKS WERE SET.RIGHT NOW LOOKING AT IMMOBILITY, CAR MANUFMANUFACTURES ARE AN IMPORTANT PART BUT PRODUCTION AND WE HAVEONE OF THE BIGGEST STEEL MILLS.
PRODUCING STEEL WILL BE KEY FORTHE FUTURE. HAVING OUR OWN RENEWABLECAPACITIES. I BELIEVE EVEN COMING FROM THEMOST POPULIST AND ECONOMICALLY STRONG ESTATE WE WILL BE ABLETO DO THIS IF WE WORK TO BE EUROPEAN LEVEL BECAUSE GERMANYIS NOT DOING THAT. >> IF THEY WERE TO ALLY WITHE.C.R. AND WORK WITH THEM, WOULD YOUSUPPORT HIM FOR THE COMMISSION? >> LOOK, WE HAVE BEEN VERYCLEAR, WE ARE NOT GOING CORPORATE AND FORM MAJORITYWITH FAR RIGHT PARTIES.
I HAVE WITH US JUST TOLD YOUWHAT A CATASTROPHE IT WOULD BE MOVING TO POWER.WE ARE READY TO FORM DEMOCRATIC MAJORITIES.BUT IF THEY WERE TO BE INCLUDED IN THIS, WE NEED THECONVERSATION. >> TOM, WE’LL SEND IT UP TO YOUIN LONDON. KRITI: I WANT TO GET TO THE OTHER NEWSWE’RE WATCHING. FRENCH PRESIDENT EMMANUELMACRON SAYS UKRAINE MUST BE ABLE TO HAVE EUROPEAN WEAPONS.HIS FORCES ARE STRUGGLING TO DEFEND THE REGION.
>> HOW DO WE LINE?THE UKRAINIANS THAT WE MUST PROTECT THESE AREAS AROUND KARKYV. IN EFFECT WE WILL BE TELLINGTHEM THAT WE WILL DELIVER WENTS BUT YOU CANNOT PROTECT YOURSELF.THEY MUST ACCESS THE SIGHT WHERE THE MISSILES ARE.BUT WE CANNOT ALLOW THEM TO PURSUE OTHER TARGETS IN RUSSIA.CIVILIAN OR MILITARY. >> MEANWHILE, RUSSIA SAYS ITPLANS TO RAISE TAX ON BUSINESSES AND THE WEALTHY ASUKRAINE PUTS PRESSURE ON GOVERNMENT FINANCE.IT WOULD RAISE AN ADDITIONAL.
$29.4 BILLION WITH MORE THANHALF OF THAT COMING FROM HIGHER CORPORATE PROFIT TAX ACCORDINGTO INTERFAX. >> THE NATIONAL ELECTRONICUNION SAYS IT PLANS TO CARRY OUT ITS FIRST STRIKE.THEY ANNOUNCED THE DECISION AFTER WAGE NEGOTIATIONS STALLED.THE MOVE ADDS TO THE CHALLENGES AS IT PLACE CATCHUP INDEVELOPING MEMORY CHIPS FOR A.I. COMING UP ON THE PROGRAM,STOCKS TO WATCH INCLUDING THE MINING GIANTS B.H.P.AND ANGLOAMERICAN AFTER THEY SAID THEY WANT AN EXTENSION TOMAKE AN OFFER FOR ANGLO.
AMERICAN.MORE DETAILS ON THAT NEXT. ♪ >> AUSTRALIAN MINING GIANTB.H.P. SAYS IT WANTS AN EXTENSION INTALKS WITH ANGLOAMERICAN TO TAKE OVER THE $39 BILLION BID.IT IS SET TO EXPIRE IN LONDON TODAY.LET’S BRING IN CLARA MARQUEZ. COLLAR ACTION BRING US THELATEST. WHAT DOES THIS ACTUALLY MEAN? >> IT’S NOT ENTIRELY SURPRISING.THE TWO SIDES ARE NOT GETTING.
TO WHERE THEY WANT TO BE.WHAT B.H.P. HAS DONE IS VERY INTERESTING.THEY’VE LIED LAID OUT THE CONCESSIONS THEY’VE MADE TOANGLOAMERICAN IN TERMS OF THE SOUTH AFRICAN ASSETS.THIS IS JOB PRESS RATION. ALL MANNER OF ISSUES THAT HADBEEN RAISED ARE IN THE PUBLIC DOMAIN.AND THIS WILL BE SUFFICIENT TO PRESSURE ANGLO TO — ENCOURAGESHAREHOLDERS TO PRESSURE THE BOARD TO GRANT THAT EXTENSION.IF AN EXTENSION IS GRANTED THEY COULD HAVE ANOTHER WEEK,PERHAPS MORE.
BUT THE IMPORTANT THING THEREIS THAT WE WOULD BE GET GETTING PAST THE SOUTH AFRICAN ELECTION.AT LEAST ONE OF MANY REASONS THAT HAVE MADE THESENEGOTIATIONS SO CHALLENGING. >> THE TIMING IS RIGHT IN TERMSOF WHAT YOU SUGGEST FOR THIS DEAL.WHAT ARE YOU WATCHING NEXT FOR? IS IT THAT THAT DEADLINE ISPUSHED BACK? WHAT IS NEXT IN TERMS OF HOWTHIS UNFOLDS? >> I THINK WE ARE WAITING TOSEE THE RESPONSE. DO THEY AGREE? AND WHAT LANGUAGE DO THEY USE?IT HAS BEEN INTERESTING.
THEY’VE MOVED AWAY FROMCRITICIZING THE VALUATION AND THE STRUCTURE.THAT’S WHERE A LOT OF PEOPLE ARE FOCUSED NOW.WE’LL BE LOOKING TO SEE WHAT REMAINS A CONCERN TO THEM ANDOF COURSE, IF THEY REJECT IT WE WILL BE EXPECTING THEM TO WALKAWAY. IF THEY DO THAT, THEY HAVE TOSTAY AWAY FOR SIX MONTHS UNDER MOST CONDITIONS. >> CLARA FERIERA MARQUEZ.AND NOW MAYBE MOVES TO HELP CONSOLIDATE WITHIN THE BANKINGSPACE OF EUROPE.
GERMANY WILL NOT YIELD FOR MOREMONEY IN NEXT YEAR’S BUDGET. WE’LL GET TO THE BANKING SPACE.HE TOLD BLOOMBERG THAT EUROPE NEEDS TO GET MORE COMPASSACTIVE. ARE WE COURAGEOUS ENOUGH TOALLOW FOR BANKS WHICH ARE OPERATING ACROSS THE BORDER,OPERATIONING CROSS NATIONALLY, THE E.C.B.I WOULD BE ALLOWING THEM TO USE IT WHERE IT’S MORE EFFICIENTARE WE FIXING EVERY JURISDICTION AND THEREFORE WELOSE ECONOMIC PERSPECTIVES, AND YES, OPPORTUNITY.
>> OK. THAT WAS GERMANY’S — IN FRANKFUR. OLLIE HAS BEEN DIFFERENT. THE DISCUSSIONS ARE MOVINGFORWARD. THAT’S PUSHBACK FROM SOMESMALLER GROUP IN GERMANY. BUT MACRON PUTTING THIS NEARTHE TOP OF THE PRIORITIES. WE DO NOT HAVE JOINT DEPOSITINSURANCE. THERE ISN’T THE STRUCTURE INPLACE SO THAT REMAINS A CHALLENGE. >> THE FORMER GOVERNOR OF THEFRENCH CENTRAL BANKS AND.
DEFENSE ACTION TRILLIONIANEUROS PER YEAR. >> YOU’RE MAKING THAT COMMENTEXPECT. IT’S FASCINATING. I ON THE MAY CROW IS FEAR.DO YOU CONSOLIDATE IN TERMS OF RECESSION.AND GOOD KIND OF RORYING, FUN TIME.WE DON’T KNOW WHICH ERA THEY’RE IN. >> AND IN SPACE, JULIUS BEAR,THE REPORTED DEALS THERE, REPORTED TALKS THERE. BUT IT IS STILL NOT CROSSED THEBOARD — BORDER.
INSTEAD OF SAYING WE ABSOLUTELYNEED THAT. EVEN AS WE LOOK DOMESTICALLYINTO SOME OF THE DEAL MAKING. >> THAT THE’S — I WANT TO –AND THERE’S CONSOLIDATION. AND DEAL FLOW.YOU’RE TALKING ABOUT THE. THAT WE SEE THERE.SO LET’S BRING IN A TRUEX PERT. MARK CUD MORE JOINS US FOR HISMARKETS MINUTES. MARK, WE’RE DEALING WITH A LOTOF NEWS FLOW SPECIFICALLY WHEN IT COMES TO EMERGING MARKETS.LET’S LOT OF QUESTIONS ABOUT WHERE YOU GET THE JUICIESTYIELD RIGHT NOW IF YOUR VIEW,.
WHERE IS THAT? >> YEAH, IT’S A GREAT QUESTION. IT’S GOING TO BE A DIFFICULTBACKDROP. I THINK THAT SAID WE CAN RULEOUT YET EVEN THOUGH IT’S NOT LIKELY.AND THAT KIND OF BACK DROPPED AND MAKES IT TOUGH FOR EMERGINGMARKETS. U.S. YIELDS AREN’T ROLLING OVER.SOME OF THESE ARE EXTRAORDINARY PEELING.CAN THE PACERS ARE A LONG RUNNING ONE.YOU’VE GOT GREAT YIELDS IN.
BRAZIL AND MANY OF THE AREAYIELDS. SO THERE ARE SOME APPEALINGONES. AND I DO THINK — IN THE TERM,MAYBE THIS IS DIFFICULT THAN IN THE SHORT-TERM TIMING. >> THE MEXICAN PACEO — MEXICOS– HE TALK ABOUT THE BOND RALLY. IN THE LAST TWO OR THREE DAYSOR SO, ENVY YEAH HAS GAPPED HIGHER EVEN THOUGH WE’RE TALKAT THIS ECONOMIC BACKDROP INTO THE NARRATIVE. NOT BASE CASE.BUT CALMNESS HAS MOVED THE MARK. THEN THE R.B.I., HOW LONG DOESTHE EQUITY MOMENTUM GO IN THE.
FACE OF THAT NARRATIVE? >> I THINK EQUITY MARK GOES ACHUNG. IT’S GOING TO RUN THROUGH. WE’RE GETTING THE HIGHER YIELDS.THE DATA SHOWED LIKE CONSUMER CONFIDENCE.IT DIDN’T LOOK LIKE THE CONSUMER IS ROLLING OVER.THEREFORE THE ECONOMY IS NOT JUST YET.IT WON’T BE AT THE PAY IT WAS BEFORE.I THINK THE REST OF THE WORLD CAN OUTPERFORM IN THAT ME A.EQUITIES DO BETTER.
BEFORE LU — IT MIGHT BE ASLIGHT AND GAINS TO BE MADE. >> MARK CUD MORE TAKE US TO ATRUE AROUND THE WORLD. ALL YOU HAVE TO DO IS TYPE INMLIV GO. >> JOE YOU HAVE TO START WITHTHIS TODAY. THE >> THE AUSTRALIAN COMPANYLO LOOKING TO EXTEND THE DEADLINE.THAT WAS THE DEADLINE FOR THEM TONIGHT.A FIRM BIT FOR ANGLO AMERICAN AND NOW B.H.P.AS KARA WAS EXPLAINING A FEW MOMENTS AGO HAS ACTUALLY MADESOME PROMISES TO FIX SOME.
SOCIAL ECONOMIC MEASURES THATWERE AMONG THE CONCERNS BY ANGLO AMERICANS.SO PERHAPS THEY WILL HELP GETTING OVER THE LINE.IT WAS THE 5:00 P.M. DEADLINE THAT WE’RE EXCITING TOBE EXT EXTENDED. AN OFFER THAT THEY OFFERED.BUT I STORMED THE CALCULATIONS THAT WE CAN DO, BUT WE CAN SEETHE STOP. TRADING 25-58.SUGGESTING SOME PEOPLE IN THE MARKET DON’T THINK.THEY STILL WILL GO, SOME EXECUTION REST. THAT MIGHT,THOUGH, BE POSITIVE NEWS FOR.
B.H.P. BECAUSE WE CAN SEE ON THESCREEN THERE. WE SUGGESTED B.H.P.’S OWN SHARESHOULDERS DON’T LIKE — BUT WE’LL WEIGH WAIT TO SEE OF THATONE I EXTENDED TODAY. NOW, WE’VE SEEN SOME BIGPOTENTIAL JOB CUTS. IT WOULD BE AS MUCH AS 4, ANDTHAT FOLLOWS A REPORT OUT OF A UNION YESTERDAY.POTENTIALLY WE COULD SEE LOSSS IN DENMARK.SPAIN AND GERMANY AS WELL. INCLUDING SOME DEFECTIVE WINDTURN BI. IT SHOWS YOU SEMENS — SIEMENSENERGY DROPPING.
IT IS DROPPING AS MUCH AS 77%IN NOVEMBER LAST YEAR FOR THAT ECONOMY.NOW, IF WE BRING UP, CHUCK. WE CAN SAY THAT I’VE COVERED.IT SPAN OFF FROM THE MAIN COMPANY.SIEMENS AROUND FOUR YEARS AGO. WE GO AIRLINES, H NEGATIVE.IT’S AMERICAN AIRLINES. FOLLOWING THE WRITING IS UP ONTHE WALL. >> THEY’VE DOWN GRADE FORPRICING. SOME OF THE PROFITS WEREN’T TOOBAD. IT WAS THE PRICING SUGGESTED.GOOD NEWS FOR TRAVELERS.
AND POTENTIALLY NOT GOOD NEWSFOR THE LIKES OF FRANCE. AND THE MAIN THING IS ALL WELOOK AT THAT. >> THEY OPENED THIS MORNING. >> JOEY FROM OUR EQUITIES TEAMI DEED FOR SOME OF THE STOCKS TO KEEP AN EYE ON FROM EUROPEANOPEN. IF YOU WERE — U.S. FUTURES LOOKING THERE. >> WE’RE GOING TO SWEEP AN EYEON THE MACRO. THE AIRLINE SAID WE’RE GOING TOKEEP AN EYE ON YOUR OIL MAKER. AND TRADING AT ABOUT 84 HANDLE.AND YOUR B.
PERFORM’S ARE DROUGHT RESISTANT. KRITI:WELCOME BACK TO MARCUS TODAY, A FEW MINUTES AGO UNTIL THE STARTOF CASH EQUITY TRADING. WE ARE LOOKING AT THEINDIVIDUAL MOVES AND WE MAY GET MORE VOLATILITY.BHP ANGLO'S TOP OF MINE DO WE POTENTIALLY SEE WITH THISEXTENDED DEADLINE, DOES BHP TRADE HIGHER BECAUSE OF THETRADITIONAL M&A FLOW OR DOES THE VOLATILITY BECOME MORE OF AWEIGHT? TOM: IT'S DOWN AROUND 13% YEAR TODATE SO THEY LOOKING TO PUSH.
BACK THAT 5:00 P.M. DEADLINE.TWO BOARDS ARE IN CONVERSATION. 49 BILLION DOLLAR CONVERSATION– VALUATION WITH THAT DEAL IN THE FOCUS ON RESTRUCTURINGAROUND THE PLATINUM AND OTHER ASSETS THAT ANGLO HAS IN SOUTHAFRICA. A BIG DAY THERE WITH THE ELECTIONS.OF COURSE YOU ARE CURRENTLY LOOKING AS WE COUNT DOWN TO THEOPEN. A LOSS OF 2/10 OF A PERCENT.WOULD YOU BE PUTTING MONEY TO PLAY? — POTENTIAL FOR THE BONDMARKET WHERE WE COULD RALLY.
LOOKING AT 455 ON THE BONDMARKET. THERE ARE SECTORIAL STORIES.OIL IS ONE OF THEM. REPORTS OF POTENTIALCONSOLIDATION OUT OF CONOCOPHILLIPS, MARATHON OIL.MASSIVE DEAL IF IT IS TRUE. STILL REPORTS AT THE MOMENT.STORY OF CONSOLIDATION IS IMPORTANT IN THE STATE AS ISTHE AIRLINE SECTOR. AMERICAN AIRLINES, OVERNIGHT,CUTTING THEIR PROFIT OUTLOOK, DO WE SEE A READ THROUGH AND IHG LUFTHANSA, ETC.? TOM: THAT POTENTIAL READER COST.GEOPOLITICAL RISK AROUND OIL TO.
WHAT EXTENT IS THAT PRICED INAS WE LOOK AT THE ISRAELI FORCES IN THE CENTER OF RAFAHAND RED SEA AND A REMINDER OF THE ATTACKS CONTINUED BY THEIRANIAN BACK TO THESE. UP 3/10 OF A PERCENT.WTI UP ABOUT $80 A BARREL. FOUR SECONDS AWAY FROM YOURMARKET OPEN THIS WEDNESDAY. >> WE ARE OFFICIALLY OPEN ONTHE U.K., THE FTSE 100 AND YOU ARE GETTING EARLY INDICATIONSIN THE OIL SPACE. BP IS ONE OF YOUR BIGGEST INDEXCONTRIBUTORS TO THE UPSIDE. STILL WAITING FOR OTHER TRADESTO SHAKE OUT, BUT IT LOOKS LIKE.
YOUR UTILITIES THE NATIONALGRID, WE HAVE BEEN MONITORING THE UTILITY STORY OUT OF THATCOMPANY. TOM: LOOKING AT BHP ON THE BACK OFTHAT STORY, CURRENTLY GAINING. TRYING TO GET THE RICE ACTIONLOOKING TO PUSH BACK THE TIMING. 5:00 P.M.FOR ANGLO CURRENTLY UP 1% IN THE SESSION, COUPLE OF SECONDSIN, CROSS THE BENCHMARK YOU ARE STILL DOWN AS THE FUTURES HADFLAGGED SECTOR BY SECTOR. YOU WERE TOUCHING ON SOME OFTHESE TOUCHING ON THE SECTOR STORY WITH THE FOCUS ON THEENERGY MARKET.
YOU CALL THAT ENERGY IN EARLYDOORS UP 6/10 OF A PERCENT. TECH GETTING A LIFT SHY A 10THOF A PERCENT. NVIDIA GAINING 7% YESTERDAY INTHE U.S. LOOKING AT THE READ ACROSS HEREWITH THE LIKES OF AM — ASML AND INFINIUM IN FOCUS.LIFTING THE NASDAQ TO A FRESH RECORD.FUTURES ARE ON THE NASDAQ POINTING. STILL COMMODITIES TAKING THECAKE, SHELL, TOE TALENT BP AS SAP.
I KNOW A LOT OF EUROPEANSFROWNED OUT ON THE ATLANTIC. WHEN YOU GAP HIGHER ONCE, YOUTEND TO SEE IF A PULLBACK. GAPPING HIGHER TWICE IS TESTINGFATE TO SOME EXTENT. LOOK AT THE EUROPEAN READTHROUGH AND IT DOESN’'T SEEM TO BE TRUE. TOM:NOT UNUSUAL TO SEE HUNDRED DOLLAR CAP MOVES.THEY'VE ADDED $470 BILLION TO THEIR MARKET CAP JUST IN THELAST FOUR DAYS WITH THE MARKET CAP NOW JUST SHY OF 3 TRILLIONU.S. DOLLARS STILL BEHIND APPLE ANDMICROSOFT BUT CATCHING UP FAST.
SO THE POST OFFICE STORYCONTINUES TO BE IN FOCUS IN TERMS OF THE GAINS COMINGTHROUGH FOR IDS UP THREE POINT 3%, ALSO GETTING 2%.RENAULT OVER IN FRANCE UP 2%. ON THE DOWNSIDE, YOU HAVE ANGLOOFF BY 2%. AT LEAST SO FAR, TAKING IT OFFTO PRESENT. ANGLO 2% DOWN. BHP GETTING A LIFT OF 1% AS WECONTINUE TO WATCH THE DETAILS ON THAT DEAL. KRITI:WE ARE SETTING OURSELVES UP FOR VOLATILITY AS WE GET READTHROUGH AND COMMENTARY FROM.
ANGLO, STEVENS ENERGY IS ONE OFTHE STOXX JOE FLAG GIVEN THERE'S CUTS IN TERMS OF LABORFORCE, THOSE SHARES TAKING HITS OF 5/10 OF 1%.THIS IS WHERE YOU SEE EFFICIENCY CUTS, THE STOCKBENEFITS AND DOES NOT SEEM TO BE THE CASE. TOM:YOU MENTIONED ASML, UP 1%. WE WILL GET DETAILS ON THE VIEWOF THE AI STORY BECAUSE ASML PROVIDING EQUIPMENT WITH WHICHYOU NEED TO CRUNCH OUT THESE VERY SOPHISTICATED AI CHIPSTHAT NVIDIA IS BENEFITING FROM. ON THE STORY AROUND AI REMAINSA KEY CATALYST FOR MANY IN THE.
MARKETS.SOME ARE SUGGESTING THERE IS A BIT OF NEED FOR SKEPTICISM.TAKE A LISTEN. >> A SOLID CONSENSUS ONLY ACOUPLE YEARS AGO THAT CRYPTOCURRENCIES WERE GOING TOCHANGE EVERYTHING, THEN SUDDENLY THAT CONSENSUS JUSTGOES AWAY, SO I THINK THERE IS WAY TOO MUCH CONFIDENCE ABOUTTHE FUTURE TRAJECTORY OF AI. I PROMISE YOU WHEN WE TALK INTWO YEARS WE WILL SAY, IT REALLY WAS A BUBBLE, WEOVERESTIMATED WHERE WAS GOING. TOM:I PROMISE YOU WE WILL LOOK BACK.
AT THIS AS A BUBBLE.NOBEL LAUREATE FORMAL — FORMER WORLD CHIEF ECONOMIST SPEAKINGTO BLOOMBERG. THAT SPRING AND DIRECTOR OFMACRO ECONOMIC RESEARCH AT WISDOM TREE. GOOD MORNING.ARE WE PUTTING TOO MUCH WEIGHT ON THE AI CATALYST FOR THESEMARKETS? >> A VERY GOOD MORNING.UNDENIABLY, NVIDIA'S RESULTS WERE SUCH A BIG GAME CHANGER FOR THE MARKETS, IT HASN'T YETPERMEATED THROUGH THE MARKET. WE ARE SEEING A VERY LARGEDIVERSIONS PLAYING OUT ACROSS.
U.S.EQUITIES WERE THE TECH HEAVY NASDAQ CONTINUES TO OUTPERFORM,BUT THE BROADER S&P 500 IS ACTUALLY LAGGING IN PERFORMANCE.I THINK THE STRENGTH OF NVIDIA'S PERFORMANCE IS CLEARLYTEMPTED MAINLY TO THOSE GROWTH ORIENTED SECTORS WHILE THE RESTOF THE EQUITY MARKET CONTINUES TO BE PLAYED BY THESE RATESREMAINING HIGHER FOR LONGER IN THE U.S. TOM:ON THE GREAT STORY, SWITCHING FOCUS BUT RATES TIES INTO THETECH STORY, DO YOU NEED TO READJUST YOUR PORTFOLIO, DO YOUNEED TO BE PUTTING HEDGES IN.
PLACE AROUND THE POTENTIALPROSPECT EVEN IF THERE IS AN OUTSIDE CHANCE OF A RATE HIKETHAT WAS FLAGGED BY NEEL KASHKARI?IT'S NOT THE BASE CASE BUT HE IT REMAINS ON THE TABLE. >> I THINK THOSE HEDGES DO NEEDTO BE IN PLACE. I THINK THE THEME IN THE EQUITYMARKETS IS ABOUT TAILORED MONETARY CALIBRATION GIVEN THEFACT THAT EACH OF THE COUNTRIES HAVE SUCH A DIFFERENT CLEAR ORTHEIR OUTPUT GAPS VERSUS THEIR UNDERLYING PERFORMANCE IN THEECONOMY.
HENCE, IF WE LOOK AT IT, WEHAVE THE ECB AND THE BANK OF CANADA LIKELY TO GO AHEAD WITHTHEIR FIRST RATE CUT NEXT WEEK. HOWEVER, EXPECTATIONS OF RATECUTS BY THE BANK OF ENGLAND AND THE FED HAVE BEEN PUSHED BACK. HENCE, IT'S VERY DIFFICULT TOTAKE A RATE HIKE OFF THE TABLE. FOR US, WE ARE ADOPTING A LOWPROBABILITY TO THE POSSIBILITY OF A RATE HIKE.I BELIEVE IT COULD BE A POLICY ERA GIVEN THE FACT WE ARESEEING SOME WEAKNESS SEEPING WITHIN THE LABOR MARKET IN THEU.S. WE SEE A SLOWDOWN IN THE.
ECONOMIC DATA AND HENCE OURVIEWERS, WE ARE LIKELY TO GET A RATE CUT AND IT'S REALLY AQUESTION OF WHETHER WE GET THE TWO GREAT CUTS FOR 2024 ITBOILS DOWN TO ONE RATE CUT FOR THE U.S. ECONOMY. KRITI:WHAT IS THE READ THROUGH? SHOULD WE BE MORE WORRIED ABOUTTHE INTERNATIONAL READ THROUGH IN TERMS OF A DIVERSIONSBETWEEN WHAT'S GOING ON IN THE U.S., CONTINUED TALK OF APOTENTIAL HIKE FROM MARKETS PERSPECTIVE, AND ALMOSTDOUBLING DOWN ON THE CUTS NARRATIVE IN THE ECB AND THEBOE, HOW CONCERNING IS THAT.
DIVERSIONS? >> IT IS CONCERNING AND IT'SLIKELY TO PAY — PLAY OUT AGGRESSIVELY FOR THE FX MARKETS.THE EURO HAS BEEN QUITE RESILIENT IN THE FACE OFEXPECTATION OF RATE CUTS TO BEGIN IN THE EXPECTATION OF ATOTAL OF THREE RATE CUTS TO BE EXECUTED BY THE ECB.HOWEVER, THE EURO HAS REMAINED RESILIENT AND I THINK THAT'SLARGELY BECAUSE THE ECONOMY HAS TURNED AROUND THE CORNER.WE SEEN STABILITY IN THE MACROECONOMIC DATA PRINTS.
THAT BEING SAID, IT'S VERYUNLIKELY FOR IT TO HOLD THAT STRENGTH IN THE FACE OF ASTRONGER DOLLAR GIVEN THE FACT AS YOU POINTED OUT TO THE MUCHSTRONGER ECONOMIC DATA COMING OUT OF THE U.S.IN COMPARISON TO THE REST OF THE WORLD, AND RATES, THATYIELD DIFFERENTIAL WITH RATES REMAINING HIGHER, THAT'S GOINGTO FAVOR THE DOLLAR OVER THE EURO, FOR SURE. KRITI: IS THERE SUCH A THING AS TOOSTRONG OF A DOLLAR AND I SAY THAT WITH SARCASM GIVEN THATTHE MARKETS ARE STILL NET LONG.
THE DOLLAR.I'M CONCERNED ABOUT WHETHER OR NOT THAT POSITIONING ISACCURATE DESPITE THE FACT THAT DOLLAR OF THE ECONOMIC STRENGTHCAN ONLY LAST SO LONG OF THE REST OF THE WORLD IS SEEINGWEAKNESS. >> I COMES BACK TO THE ALLIMPORTANT OF FISCAL STABILITY THEN BEING PLENTY OF CONCERNS AND WARNINGS ON THE U.S.FISCAL STANCE, HOW STABLE IS THAT IN HOW IT'S GOING TOCHANGE GIVEN THE ELECTIONS COMING INTO FOCUS.WHEN YOU TRY TO WEIGH THE PROS.
AND CONS, YOU HAVE MUCHSTRONGER ECONOMIC DATA, BUT DOES COME ALONGSIDE ATREMENDOUS AMOUNT OF DEBT BURDEN AND OBVIOUSLY THATRAISES THE QUESTION OF, IS THIS GROWTH LIKELY TO CONTINUE TOREMAIN STABLE, HOW LONG CAN THE U.S.CONTINUE TO EXPAND ITS FISCAL BALANCE?THAT'S THE KEY QUESTION IF THAT GROWTH CONTINUES TO COME IN, ITWILL KEEP IT A LOT STRONGER. HOWEVER, IF THAT GROWTH COMESIN IN A WAY AGAINST A BALLOONING BUDGET DEFICIT,THAT'S WHEN I THINK THERE WILL.
BE A STRENGTH OF STABILITY OFTHE DOLLAR. TOM: THE BLOOMBERG COMMODITY INDEXIS OFF THE HIGHS OF 2022 A YEAR TO DATE IT'S UP 8%.ARE WE UNDERESTIMATING THE POTENTIAL INFLATIONARY IMPACTGLOBALLY OF HIGHER COMMODITY PRICES? >> I WOULD DEFINITELY SAY WEARE, 2024 HAS BEEN THE YEAR OF THE METALS. INDUSTRIAL METALS, PRECIOUSMETALS, THEY BOTH GAINED IN THE FACE OF THESE EXPECTATIONS OFRATE CUTS ALONGSIDE VERY.
LONG-TERM THEMES OF THE ENERGYTRANSITION, WHICH IS VERY METAL INTENSIVE, WE'VE ALSO HAD CONCERNS OF THE AIFRENZY REQUIRING TREMENDOUS AMOUNT OF POWER IN THAT POWERIS FALLING BACK ON COMMODITY RESEARCH — RESOURCES SUCH ASCOPPER WHICH IS A HIGHLY CONDUCTIVE METAL, THIS ISSPURRING A LOT OF DEMAND FOR INDUSTRIAL METALS.I THINK THE STORY IN 2023 WAS THOSE SUPPLY DEFICITS STILLREMAINED INTACT, HOWEVER THERE WERE CONCERNS OVER CHINA'SSLOWDOWN AND THAT JUST WEIGHED.
DOWN ON SENTIMENT.WHAT'S HAPPENING IN 2024 AS YOU HAVE IMPROVING ECONOMIC DATA INCHINA ALONGSIDE THE FACT THAT SUPPLY DEFICITS CONTINUE TOGROW AND I THINK THAT HAS BECOME THE NEW WAKE-UP CALL FORINVESTORS OF WE DO HAVE SUPPLY FOR THESE METALS, DEMAND ISSTRONG IN CHINESE ECONOMIC DATA IS IMPROVING AND THAT HASTRIGGERED THAT STRONG PRICE PERFORMANCE FOR THE PRECIOUSMETAL SPACE AND INDUSTRIAL METALS. TOM:ON THE DAY WHEN THE IMF UPGRADES ITS FORECAST FROM 4.6%TO 25%.
WHEN IT COMES TO THE ELECTIONSTORY IN EUROPE, DO YOU START TO PRICE IN, DO YOU START TOADJUST FOR A RAMP FISCAL SPENDING FROM THE EUROPEANGOVERNMENTS ON THE BACK OF THE SELECTION THAT COMES THROUGH IFTHERE'S A SHIFT TO THE RIGHT? HOW DO YOU THINK ABOUT THEPOLITICS OF EUROPE AND HOW THAT TIES INTO YOUR INVESTMENTS? >> THAT'S A VERY PERTINENTQUESTION, WE HAVE ELECTIONS COMING OUT THE FIRST WEEK OFJUNE, CLEARLY THE POLLS ARE INDICATING A STRONG SHIFT TOTHE RIGHT, AND CLEARLY THE TOP.
FOCUS REMAINS IMMIGRATION, THEBIG CONCERN IS HOW ARE WE GOING TO SEE THE EU DEAL WITH ACRISIS OF EMIGRATION ALONGSIDE THE CLIMATE CRISIS, I THINKFISCAL BUDGET WILL HAVE TO BE EXPANDED SLIGHTLY, WE HAVE SEENTHAT TAKE PLACE IN COUNTRIES SUCH AS ITALY AS WELL AS SPAIN. SO FAR, WHAT WE HAVE SEEN ISFISCAL SPENDING IS LIKELY TO SHRINK.HOWEVER, LOOKING AHEAD, IF EUROPE IS SERIOUS ABOUT THEENERGY TRANSITION, IF THEY ARE SERIOUS ABOUT TACKLING ALL OFTHESE CASES THAT EUROPE IS.
FACING, I THINK THEY WILL HAVETO PULL THOSE STRINGS A LOT FURTHER. KRITI:WE THANK YOU FOR BRINGING US THAT CRUCIAL CONTEXT, DIRECTOROF MACROECONOMIC RESEARCH OVER AD WISDOM TREE, WE THANK YOU SOMUCH. I WANT TO CHECK ON THE SENSATIONAL SIX.I WANT TO REALLY SHOW YOU THIS TALE OF TWO HEAVYWEIGHTSBECAUSE YOU'RE ONLY MOVER TO THE UPSIDE IS ASML, HIGHER BY8/10 OF 1%. THAT LIKELY IN NVIDIAREADTHROUGH. LVMH TAKING A BEATING HERE.THAT'S A READTHROUGH FROM THE.
SCREEN WE SAW ON THE ASIANSESSION. FERRARI, SCHNEIDER ELECTRIC NOTGETTING IN ON THE AI TRADE. WE TRADITIONALLY SEE THIS EVENTHOUGH IT IS A UTILITY AND IT GETS SOME OF THAT.NESTLE DOWN 3/10 OF 1%. I WANT TO GET A CHECK ON THEEND OF — THE OTHER INDIVIDUAL STOCKS ON THE MOVE.JOE EASTON IS HERE. JOE: THE U.K.DEALS ARE SHOWING US A CLEAR STORY.ANGLO AMERICA COMING DOWN ONE .2%. BHP EDGING SLIGHTLY HIGHER.BHP REQUESTING AN EXTENSION TO.
THEIR DEADLINE TO MAKE A FORMALBID FOR ANGLO AMERICAN. AND PERHAPS SOME PEOPLE IN THEMARKET STARTING TO PRICING LESS OF A CHANCE OF THIS DEAL GOINGTHROUGH WITH ANGLO COMING FURTHER DOWN.WE SAID EARLIER THAT IT WAS PRICED AT ABOVE 31 POUNDS ASHARE IN ANGLO IS ONLY TRADING AT 25.WHAT IS THAT TELL YOU ABOUT THE CHANCES OF THIS GOING THROUGH.IN TERMS OF ANOTHER ONE TRADING MASSIVELY BELOW THE TAKEOVERPRICE. ITS ROYAL MAIL THE COMPANYANNOUNCING IT IS BACKING A.
TAKEOVER OVER FROM THE CHECKBILLIONAIRE KRASINSKI. THAT WAS IN A STATEMENT.BUT THE DEAL IS UP 370 PENCE A SHARE. IT'S ONLY TRADING AT 330.THE ISSUE IS WITH THE U.K. — WOULD THE U.K.GOVERNOR — GOVERNMENT BLOCK THIS DEAL?IT WOULD MAKE THIS DEAL EVEN LESS LIKELY.WE'VE GOT IWG DOWN THE BOTTOM. THIS IS THE OWNER OF REGIS, THESHARED WORKSPACE BUSINESS. A LONG-TERM INVESTOR ORFLOATING A CHUNK OF STOCK. THAT ONE IS DROPPING AT THEMOMENT.
WE WILL TAKE A LOOK AT SOMEAIRLINES, BECAUSE I DID SEE SOME MOVES LOWER IN THOSESTOCKS. WE'VE GOT A COUPLE ON THESCREEN. WE STILL GOT A COUPLE OF THEOTHER ONES. WE'VE GOT THE MINORS BACK ONTHE SCREEN AND WE WILL TRY TO GET THAT FIXED, BUT I HAVENOTICED WE'VE GOT AIRLINES MOVING.I SAW THEM ON THE SCREEN, YOU HAVE TO TAKE MY WORD FOR IT.WE SAW LUFTHANSA AND AIR FRANCE DROPPING AROUND 2%.SOME OF THE WORST PERFORMERS.
TODAY BECAUSE WE HAD NEWS OFAMERICAN AIRLINE DOWNGRADING ITS EARNINGS FORECAST LASTNIGHT, THAT STOCK FELL 6%, THE LONG HAUL SECTOR SEEMS TO BESEEING THE WEAKEST PRICING AT THE MOMENT ACCORDING TOANALYSTS, AIRLINES ARE GETTING HIT.WE WILL LOOK AT OIL STOCKS, WE DID SEE GAINS IN BP, SHELL, ACOUPLE OF ITS DEALS FROM THE U.S., ALL POTENTIALLY TYING UPACCORDING TO THE FINANCIAL TIMES IN A MASSIVE MERGER THATWOULD POSSIBLY TAKE PLACE AND WE DID ALSO SEE SHAREHOLDERVOTES BEING TAKEN OVER AS WELL,.
SO IT COUPLE OF DEALS IN HIGHERCRUDE PRICES FEEDING THROUGH INTO A COUPLE OF THOSE STOCKSTODAY. BP, SHELL, TOU THAO ALL AROUND1% THIS MORNING, THEN WE WILL QUICKLY BRING YOU SOME MORNINGCALLS. RENAULT HAS UPGRADED AT GOLDMANSACHS, THEY RECOMMENDED YOU SHOULD BE BUYING IN GOLDMANRECKONS YOU CAN BUY BECAUSE THEY'VE GOT 10 NEW CARS COMINGOUT OVER THE NEXT 12 MONTHS WITH A LOT OF NEW VEHICLES.FINALLY, TIME TO BOOK YOUR SUMMER HOLIDAY LAST-MINUTE ONTHE BEACH, THIS ONE IS UPGRADED.
AS THE COMPANY SAYS LIFE ISBETTER ON THE BEACH. THAT ONE IS UP 2%.THE APPETITE FOR HOLIDAYS WILL NOT WANE DESPITE THE ONGOINGCOST OF LIVING PRICES, THEY LIKE THAT ONE AND IT'S UP TOPRESENT THIS MORNING. TOM: THE CHANCES OF THEM DRIVING ARENAUD ARE ABOUT AS SLIM AS YOU DRIVING A RENAULT.I KNOW YOU HAVE THE MASERATI PARKED OUTSIDE. JOE:IT'S NEXT TO KRUDYS ASTON MARTIN. TOM:ALSO THINKING ABOUT HIS SPEECH HOLIDAY.THANK YOU FOR THE STOCKS.
THE PRODUCERS HAVE HAD ENOUGHOF THIS BUT NOT ENOUGH OF YOU, WHICH IS IMPORTANT.BHP ASKED FOR MORE TIME TO DISCUSS ITS 49 BILLION DOLLARTAKEOVER BID FOR ANGLO AMERICA. WITH IT, MORE DETAILS ON THAT.STAY TUNED FOR THE LATEST ON WHAT COULD BE A MEGAMERGER INTHE MINING SPACE. LOTS OF DETAILS AND CAVEATS TOUNPACK. THIS IS BLOOMBERG. KRITI:WE ARE ABOUT 20 MINUTES INTO THE EUROPEAN TRADING DAY, ALOWER DAY THAT WE ARE SEEING IN HER READTHROUGH FROM ASIASESSION.
ONLY LOWER BY 2/10 OF 1%.WHERE YOU ARE SEEING MAJOR MOVES ARE IN THE INDIVIDUALNAMES. AUSTRALIAN MINING GIANT BHPSAYS IT WANTS AN EXTENSION IN TALKS WITH RIVAL ANGLO AMERICANTO SAVE ITS $49 BILLION TAKEOVER BID.THE DEADLINE SET FOR 5:00 P.M. IN LONDON.ALL OVER THE STORY, BLOOMBERG SENIOR EXECUTIVE EDITOR FORENERGY AND COMMODITIES, WE APPRECIATE YOU MAKING TIME.WALK US THROUGH WHAT THIS MEANS, BHP ASKING FOR ANEXTENSION FOR WHAT?.
>> THEY SAID THEY WANTED TO BUYANGLO AMERICAN WITH THE U.K. TAKEOVER RULES YOU HAVE ACERTAIN AMOUNT OF TIME TO EVEN MAKE A DEAL AND WALK AWAY FORSIX MONTHS. WE HAD WHEN EXTENSION A WEEKAGO, WE ARE ABOUT TO HIT THAT SECOND DEADLINE THIS AFTERNOON,BHP IS OBVIOUSLY STILL KEEN TO ACQUIRE ANGLO AMERICA, BUT THESENSE WE GET IS ANGLO AMERICA IS RESOLUTE IN SAYING THE DEALDOESN'T WORK FOR THEM, THE RESERVATIONS ARE LESS ABOUTVALUATION AND MORE ABOUT THE DEAL STRUCTURE, WHICH INVOLVESTHE DIVERSE SURE OF TWO SOUTH.
AFRICAN SUBSIDIARIES, ONE THATMINDS PLATINUM AND THE SECOND LINES.BHP SAYS THAT PART OF A DEAL CAN WORK AND THERE'S A PLANTHEY SAY IT CAN'T WITH ITS BIG IMPEDIMENT TO THE DEAL AND THATBHP HASN'T BEEN ABLE TO REASSURE THEM THAT THEY CAN GETIT DONE. SO THEY SEEM SOMEWHERE APARTAND THIS IS BHP BASICALLY APPEALING TO SAY LET'S CARRY ONAND HOPING THAT ANGLO SHAREHOLDERS MIGHT PUT PRESSUREON THE ANGLO MANAGEMENT TEAM TO TALK SOME MORE. TOM:SOME MORE ABOUT MAYBE PUTTING.
PRESSURE ON THOSE SHAREHOLDERSRATHER THAN SUGGESTING BHP CAN SOFTEN SOME OF THE DEMANDSAROUND THE STRUCTURAL CHANGE. IS AT OUR READ AT THIS POINT? >> THEY HAVE BEEN TALKING, IDON'T THINK THE TWO COMPANIES HAVE BEEN ENGAGING OVER THELAST WEEK AS THEY SAID THEY WOULD DO. OUR SENSES THAT THOSE ENGAGEMENTS HAVEN'T BEENPARTICULARLY FOR A LONG AND TO YOUR POINT ON STRUCTURE, ITHINK BHP HAS TRIED TO MAKE CLEAR THROUGHOUT THEY THINK ITSSTRUCTURE WORKS AND THAT THEY.
ARE JUST TRYING TO CONVINCEANGLO. ONE CONCESSION THEY DO SEEM TOMAKE IS TO INTRODUCE A BIG BREAK FEE INTO THE NEGOTIATIONSAS A STATEMENT OF INTENT. BUT SO FAR, ANGLO AMERICANMANAGEMENT SEEMS UNMOVED. KRITI: WE WILL KEEP AN EYE ON THAT.WHETHER ANGLO PUSHES THAT. IS NOT THE ONLY PLACE WE SEEPOTENTIAL CONSOLIDATION. WE SEE IT IN THE OIL SPACE.REPORTING COMING OUT OF THE FT. IN ADVANCED TALKS TO BUYMARATHON OIL. FOR OUR FRIENDS ON THIS SIDE OFTHE ATLANTIC, WHY IS THIS DEAL.
VALUABLE? >> IT'S PART OF A CONSOLIDATIONTREND WE SEE WITHIN THE U.S. OIL SECTOR OVER THE LAST YEAROR SO. PEOPLE ARE STARTING TO GETBIGGER TO DRIVE DOWN COST TO ACQUIRE OTHER SHALE PRODUCERSESPECIALLY RETURNS. AND IT'S BEEN PART OF THATCOMPANY. ALSO FOR EXAMPLE IN SHELLSHARERS. SO IT'S CLEARLY KEEN TO BULK UPIN ITS U.S. PRODUCTION AND BUYING ASSETS INSEVERAL U.S. FIELDS.
AND IS IN 95% U.S.PRODUCER WOULD ENABLE IT TO DO THAT.THE BIGGER PICTURE IS BIG DEALS THROUGHOUT THE SECTOR WE HADSEEN IT SELL ITSELF TO SET — X ACQUIRED ONE OF THE BIGGESTSHELL PRODUCERS. IT'S SET WITHIN THAT TREND INCONICAL TRYING TO GIVE ITSELF THE HEFT TO COMPETE IN THESPACE. TOM: IS THIS REPORTING TO NORM –REVERTING TO NORM AND THE ENERGY SPACE WITH IT BECOMINGBIFURCATED AND FRACTURED AROUND FRACKING ANOTHER'SCONSOLIDATION, ALSO TO THE.
REGULATOR SAID TO ONE SIDE ONTHESE DEALS ARE THEY JUST LET THESE GO THROUGH? >> ON YOUR FIRST POINT, THESHALE INDUSTRY IS NOT DRIVEN BY THE ALL MAJORS, IS DRIVEN BYTHE PIONEERS, ETC. WHAT WE HAVE SEEN IN THE LASTFEW YEARS IS THE MAJORS COME INTO THE SPACE AND MAKE IT APART OF THEIR FUTURES AND WE HAVE SEEN THAT BE THE DEAL ONTHE OTHER SET I MENTIONED. REGULATORS SEEM PRETTY RELAXEDABOUT OIL DEALS ON THE WHOLE. ON THE UPSTREAM IT TRIES TODRIVE UP.
PEOPLE PUMP AS MUCH OIL AS THEYCAN, TYPICALLY. SO THEY WOULD ARGUE THAT THEYWOULD ALSO DRIVE DOWN COSTS WHICH MAY ULTIMATELY FEEDTHROUGH TO CONSUMERS. THERE HASN'T BEEN CONTENTIONAMONG REGULATORS BUT THEY DENIED EXXON BOARD SEAT TO THEPIONEER FOUNDER. BUT ON THE WHOLE, THEY AREPRETTY RELAXED ABOUT THIS DEAL. TOM:LEADING OUR ENERGY TEAM ON THAT DEAL.IN MARATHON, GETTING US UP TO SPEED ON THE DEVELOPMENTSAROUND BHP AND ANGLO.
SWITCHING FOCUS TO THE AIRLINESPACE AND THERE'S A READ ACROSS ALSO WHEN IT COMES TO WHAT'SHAPPENING IN THE U.S. WITH AMERICAN AIRLINES CUTTINGTHEIR OUTLOOK. PROFIT OUTLET BEING THE CUT INTHE READ ACROSS TO THE EUROPEAN OUTLOOK.AMERICAN AIRLINES TOOK A BIG MOVE LOWER DOWN 6%. ENDED LOWER.EUROPEAN AIRLINES FEELING THE PRESSURE AS A RESULT OF THAT,CONTINUED CONCERNS. IAG DOWN 3%. DONALD'S 2% AND AIR FRANCE ASWELL. KRITI: IT'S COMING AT A TIME WHEN THEYTALK ABOUT RECORD SUMMER DEMAND.
THEY ARE SAYING THESE HIGHCOSTS ARE SIMPLY TOO HIGH. COMES FROM JET FUEL IN WAGES.ALL LINES HAVE BEEN NEGOTIATING WITH PILOTS, FLIGHT ATTENDANTSAND AIR TRAFFIC CONTROLLER, SO THIS KIND OF READTHROUGH ISHAVING A REAL EFFECT ON BEING ABLE TO CAPITALIZE.THAT DOESN'T EVEN INCLUDE THE CAPACITY CONSTRAINTS IN EUROPE.,: RYANAIR AND EASYJET SAY THEY HAVE CLARITY.RYANAIR SEEMS LIKE SOFTER PRICING.COMING UP, PULLS OPEN FOR SOUTH AFRICA'S CRUCIAL ELECTION.WE TAKE A LOOK AT THE EMBATTLED.
ECONOMY AND WHY THERE ARECONCERNS ARE ON POTENTIAL COALITION. THIS IS BLOOMBERG. TOM:ISRAEL'S ARMY SAYS TANKS HAVE REACHED THE CENTER OF ROUGH.RESIDENTS HAVE BEEN REPORTING CLASHES BETWEEN ISRAELI ANDHAMAS FORCES IN THE CENTER OF TOWN.THE WHITE HOUSE SAYS IT DOES NOT SUPPORT OR MAJOR GROUNDOPERATION IN RAFAH, BUT HAS YET TO SEE ISRAEL CROSSED PRESIDENTBIDEN'S READ MINDS. LET'S GET MORE ON THE STORYWITH BLOOMBERG'S HORIZON ANCHOR.
WHO IS IN DUBAI.WHAT IS THE LATEST THERE ON THE GROUND? >> THE LATEST IS THAT THEISRAELI TANKS HAVE STARTED ROLLING IN CLOSER TO THE CENTEROF RAFAH. THE ISRAELI PRIME MINISTER HASSAID THAT THIS OFFENSIVE IS NEEDED IN ORDER TO WEED OUT THELAST OF THOSE HAMAS OFFICIALS, BUT THE BACKDROP TO ALL OF THISWAS THE DEADLY AIRSTRIKE ON THE RAFAH CAMP OVER THE WEEKENDKILLING UP TO 45 PALESTINIAN CHILDREN, WOMEN, MANY OF THEMINCLUDED, BUT OF COURSE PER.
ISRAEL DOCUMENTATION, THEY ALSOTOOK OUT TO SENIOR HAMAS OFFICIALS. KEY TO THAT WAS WHETHER OR NOTTHE U.S. ADMINISTRATION SAW THAT ATTACKON SUNDAY AS A CROSSING OF THE SO-CALLED REDLINE.I THINK IT WAS INTERESTING TO GET COMMENTARY OUT OF THE WHITEHOUSE SAYING THAT NO PLAN IS EXPECTED TO BE CHANGED ON THEBACK OF THIS. THEY DO NOT DEEM SUNDAY'SATTACK TO BE ONE THAT HAS CROSSED THE REDLINE MAINLYBECAUSE ON MONDAY AFTERNOON HE.
ISRAELI PRIME MINISTER CAME OUTAND SAID THAT HAD BEEN A TRAGIC MISTAKE.THE IDF SAID THAT THEY HAD USED SMALL MUNITIONS THAT WOULDN'THAVE BEEN CAPABLE OF SETTING UP THE BLAZE THAT THEN ENGULFEDTHAT ENCAMPMENT AND THAT AN INVESTIGATION IS ONGOING. THE LONGER THIS ENCOURAGE –INCURSION INTO ROUGHER GOES ON THE LONGER IT'S GETTING NOTNECESSARILY FROM THE U.S., BUT EUROPEANS AS WE SPOKE ABOUTPRESIDENT MICRON TWEETING HE WAS OUTRAGED BY THE EVENTS THATOCCURRED IN RAPHAEL AND HAVE.
STRONG CRITICISM FROM ARABCOUNTRIES, SAUDI ARABIA, THE FOREIGN AFFAIRS MINISTRYREFERRING TO GENOCIDAL MASSACRES, VERY STRONG WORDINGCOMING OUT OF ARAB COUNTRIES HERE.BUT ULTIMATELY, IT SEEMS AS THOUGH ISRAEL IS GOING TOCONTINUE WITH THIS GROUND OFFENSIVE SO LONG AS THE U.S.SEE — DON'T SEE ISRAEL AS HAVING CROSSED THAT REDLINE ANDSO FAR, IN THEIR EYES, THEY HAVEN'T. KRITI:320 MILLION DOLLAR THAT THE UNITED STATES MILITARY BUILTINFRASTRUCTURE ISSUES DELAYING.
THAT HUMANITARIAN AID.OUR BLOOMBERG'S HORIZON ANCHOR, WE THANK YOU FOR THAT CRUCIALCONTEXT. WE WANT TO STICK WITH TOPSTORIES AROUND THE WORLD ON TOP OF THE AGENDA AS WELL IS INSOUTH AFRICA WHERE VOTING IS WELL UNDERWAY IN ONE OF THEMOST CONSEQUENTIAL ELECTION SINCE THE END OF APARTHEID.BLOOMBERG'S JENNIFER ZABASAJJA IS IN DURBAN, A CITY WITH AVOTE COULD BE WON OR LOST FOR THE GOVERNING ANC.WALK US THROUGH THE KEY BATTLEGROUNDS HERE. JENNIFER:.
THAT'S RIGHT, WE ARE PAYINGCLOSE ATTENTION TO THREE KEY BATTLEGROUND PROVINCES.THERE IS THE HOME TO JOHANNESBURG, THE WESTERN CAPEHOME TO CAPE TOWN AND ALSO, AS YOU MENTIONED HERE IS HOME TOTHIS CITY, DURBAN. I WANT TO ZERO IN ON DURBANBECAUSE THERE IS A REASON WE ARE HERE.IT IS VERY SIGNIFICANT FOR A NUMBER OF REASONS.IT HAS ONE OF THE BUSIEST PORTS, THE BUSIEST PORT INSUB-SAHARAN AFRICA, BUT IT ALSO COULD BE A VERY INTERESTINGSPLIT IN TERMS OF WHAT WE SEE.
OUT OF THE OUTCOME OF THISELECTION AND THE SPLIT COULD COME FROM THE URBAN VOTERS HEREIN DURBAN AND ALSO THE RULE VOTERS.IT'S NOT JUST THAT, IT'S ALSO THAT THEY HAVE BEEN IN ANCSTRONGHOLD, I DON'T KNOW IF YOU COULD SEE THE PEOPLE BEHIND MEAREN'T ANC VOTERS, BUT TWO FORMER ANC MEMBERS WHO FORM TWONEW OPPOSITION PARTIES ARE FORMING A REAL THREAT.SO THE QUESTION IS, ARE THEY GOING TO BE ABLE TO SPLIT UPTHE MAJORITY VOTE THAT THE ANC IS SEEKING THAT THEY HAVEGOTTEN FOR THE PAST 30 YEARS.
AND WHAT COULD THAT POTENTIALLYLOOK LIKE? THAT IS REALLY WHY WE AREFOCUSED IN ON DURBAN IN PARTICULAR. TOM:WHAT IS THE NERVOUSNESS, THE ANXIETY AROUND A POTENTIALCOALITION ON THE BACK OF THE SELECTION? JENNIFER: IT'S INTERESTING BECAUSE IF WETHINK IT AN INVESTOR PERSPECTIVE THEY HAVE LOOKED ATTHE LOCAL MUNICIPALITIES AND PROVINCES THAT HAVE BEEN RUN BYCOALITION GOVERNMENTS AND THERE HAS BEEN INSTABILITY.NOT JUST THAT, IT IS.
INTERESTING WHEN YOU LOOK ATTHE MAKEUP OF THE OPPOSITION PARTIES AND WHAT A POTENTIALCOALITION COULD LOOK LIKE IF WE DO SEE THAT FROM THE ANC.JUST A FEW WEEKS AGO, I ACTUALLY SPOKE TO THE SECONDMOST SENIOR MEMBER OF THE ANC WHO GAVE US PERSPECTIVE ON WHATA POTENTIAL COALITION COULD LOOK LIKE IF THE ANC WERE TOPARTNER UP WITH ONE OF ITS FORMER MEMBERS, TAKE A LOOK ATWHAT HE SAID. QUAKES WE NEED TO CONSOLIDATE THAT BASE BECAUSE WE ARE TESTEDBUT WE HAVE TO FOCUS ON WHAT.
HAS JUST WON A CASE AGAINST USIN COURT AND TEND TO THEM. THAT IS NOT WHERE IT COMES FROM.JENNIFER: YOU DON'T THINK THE MK PARTY ISGOING TO BE A THREAT? >> IT'S GOING TO BE A NUISANCEBUT THE THREAT IS COMING FROM IAP. JENNIFER:HE WAS SPEAKING ABOUT THE MK PARTY I MENTIONED TO FORMER AMCMEMBERS, ONE BEING THE FORMER PRESIDENT WHO IS THE LEADER INTHE FACE OF THE MK PARTY. I MENTIONED THE SPLIT BETWEENTHE URBAN AND THE RULE VOTERS,.
BUT IT'S VERY MUCH WHEREJACOB'S SUPPORT COMES FROM, THAT'S FOR HIS SUPPORT HASALWAYS BEEN, SO IF THERE IS TO BE A COALITION, WOULD BE LIKELYSEE AMC TEAM UP WITH THESE FORMER MEMBERS, WHAT WOULD ITLOOK LIKE, AND WHEN THERE PETE — AND WOULD THERE BE STABILITYCONSIDERING WE HAVEN'T SEEN THAT MUCH? TOM: BLOOMBERG'S JENNIFER ZABASAJJAIN THE GROUND IN DURBAN ON A HISTORIC DAY FOR THE PEOPLE OFSOUTH AFRICA. THANK YOU VERY MUCH.WE STAY ON THE STORY AND DIG.
INTO THE ECONOMICS ABOUT SAFT– OF SOUTH AFRICA BRING IN BLOOMBERG ECONOMICS WITH OUREXPERT LENS. WHAT IS AT STAKE FOR THEECONOMY IN THE SELECTION FOR SOUTH AFRICA? >> ARE A REFORM MOMENTUM IS ATRISK. WE'VE HAD SEVERAL YEARS OF THEINVESTMENT INVESTING IN PIE INFRASTRUCTURE.WE ARE JUST BEGINNING TO SEE THE FRUIT OF THOSE INVESTMENTS.IF THE ROUTING PARTY LOSES ITS OUTRIGHT MAJORITY AND ARECOMPELLED TO SEEK COALITION.
PARTNERS, WE COULD SEE A CHANGEIN THAT TRAJECTORY. KRITI: WALK US THROUGH THE MARKETREACTION, I'M INTERESTED TO SEE AHEAD OF THIS ELECTION YOUACTUALLY SAW VERY STRONG DEMAND IN THE BOND AUCTION.SOME SAYING IT'S A FUNCTION OF THE YIELD.EVEN COMPARED TO PREVIOUS SOUTH AFRICAN OPTIONS, THIS WASPARTICULARLY STRONG, WHAT IS THE LOGIC? >> IT IS IRRELEVANT BECAUSE THERULING PARTY MAY LOSE AN OUTRIGHT MAJORITY COMPARING ITTO THE FORMER COALITION.
GOVERNMENT.THE POLICY DIRECTION SHOULDN'T CHANGE BECAUSE THE POLICIES OFTHE MAIN PARTY ARE BROADLY SIMILAR.THEIR PRIORITIES MAY DIFFER ABOUT POLICY SHOULDN'T CHANGE.IN ADDITION, SOUTH AFRICAN ASSETS TEND TO BE UNDERVALUED.AND IT'S A CONTINUED INTEREST WE HAVE SEEN THIS CONTRIBUTEDTO THE BRAND STRENGTHENING INTO THE ELECTIONS.– THE RAND STRENGTHENING INTO THE CONTINUATION OF THEELECTION. KRITI: CONTINUITY WILL BE THE FABLEOUTCOME FOR THE RAND.
BUT WHAT THROWS A WRENCH INTHAT? IF YOU DO SEE A COALITION GOVERNMENT OR A CENTRAL DRIVINGFORCE FROM THE GOVERNMENT IN TERMS OF NATIONALIZING MINES ORCERTAIN PARTS OF CERTAIN COUNTRIES, HOW DOES THATTRANSLATED INTO THE RAND IN THE BOND MARKET? >> THAT'S A LOW PROBABILITYOUTCOME. THAT SUGGESTS AND PROPOSESTHOSE REFORMS. IT'S UNLIKELY THEY WOULD SEEK A COALITION OFTHEM FINANCIALLY IF WE GOT TO GO DOWN THAT ROAD, THE CURRENCYWOULD TAKE A HIT AND WE WOULD.
SEE INVESTMENT INFLOWS SLOWINTO THE COUNTRY, BORROWING COSTS WOULD INCREASE AND WEWOULD SEEK GROWTH SLOW GOING FORWARD. TOM: WHERE ARE WE AND INVESTMENTFLOWS INTO SOUTH AFRICA AND TO WHAT EXTENT WILL IT BEIMPORTANT IN TERMS OF DRIVING THE ECONOMY FORWARD IN THEMONTHS AHEAD? >> GOING INTO THE ELECTIONSTHEY HAVE BEEN ANNOYED ON THE EQUITIES FRONT.GOING FORWARD WE DO EXPECT THAT TO PICK UP ON THE DIRECTINVESTMENT SIDE ON THE BACK OF.
THE ONGOING REFORMS THAT WE ARESEEING. THAT'S ASSUMING THAT THE MOMENTUM DOES CONTINUE GOINGFORWARD. THERE IS THE BASE CASE SCENARIOON THE POLICY BEING SUSTAINED. WE SEE GROWTH PICKING UP ANDRETURNING BACK TO THE LONG-TERM AVERAGE OF 2%.THAT'S ON THE BACK OF THE PICKUP OF INVESTMENT AS THEBUSINESS LANDSCAPE IMPROVES IN THE COUNTRY. THIS IS BLOOMBERG. ♪ — KRITI: THIS IS COMING INTHE BACKGROUND OF YOUR DEALERS — YEARS OF THESE ROLLING BACK– ROLLING BLACKOUTS.
HOW DO YOU GET INVESTORCONFIDENCE AND A NEW GOVERNMENT? HOW LONG DOES IT TAKE WHEN ITCOMES TO CREDIBILITY WHERE ANY INVESTMENT IN SOUTH AFRICA ISSAFE OR MAYBE NOT WORTH THE RISK PREMIUM IN THE BOND MARKETRIGHT NOW? YVONNE: THAT'S A FAIR POINT.IF YOU LOOK AT THE COALITION SCENARIO, YOU FIND THATINVESTORS PREFER DEMOCRATIC ALLIANCE AND THE PARTY IS PROBUSINESS AND THEY ARE LIKELY TO PLACE THE COUNTRY BACK TOFISCAL HEALTH. HE COULD RETURN TO THE COUNTRYA LOT QUICKER AND THE.
CORRUPTION BEING TACKLED MORETHAN WE'VE SEEN IN PREVIOUS YEARS ALLOWING FOR BIGGER PICKUP INVESTMENT INFLOWS. KRITI: IVANKA CONNECTING THE DOTS FORUS. THANK YOU FOR THAT CONTEXT. WE TAKE A LOOK AT THE MARKETSFOLLOW NEEL KASHKARI'S POTENTIAL FOR A RATE HIKE MAYNOT BEING ROLLED OUT. WE WILL DIVE INTO WHAT THATMEANS FOR THE BOND THIS IS BLOOMBERG. ♪ MARKET.THIS IS BLOOMBERG. >> I HAVE BEEN ASKED MANY TIMESWILL BE TAKE POTENTIAL INTEREST RATE INCREASES OFF THE TABLE, IDON'T THINK ANYBODY HAS.
FORMALLY TAKEN THEM OFF THETABLE, EVEN ME. I SAY THAT WE COULD SIT HEREFOR AS LONG AS NECESSARY UNTIL WE GET CONVINCED THAT INFLATIONIS SUSTAINABLY GOING BACK DOWN TO A 2% TARGET.I'M NOT RULING OUT POTENTIAL INTEREST RATE INCREASES FROMHERE. BUT SITTING WHERE WE ARE FOR ANEXTENDED TIME IS A MORE LIKELY OUTCOME.BUT IF WE GET SURPRISED BY THE DATA THEN WE WOULD DO WHAT WENEED TO DO. KRITI: MINNEAPOLIS FED PRESIDENT NEELKASHKARI TALKING ABOUT THE.
POTENTIAL OF A RATE HIKE SAYINGALL OPTIONS ARE ON THE TABLE. THEY ARE DATA-DEPENDENT.ALSO REMEMBER TO KEEP IN MIND HE'S NOT A VOTING MEMBER ON THEFOMC. WHAT IS IT THEY WILL MEAN FORTHE TRADE IN THE LAST 24 HOURS? THE BOND MARKET MOVE 10 PIZZASHIGHER ON THE 10 YEAR YIELD. WE BRING IN JUSTINA LEE FOR ALITTLE BIT OF INSIGHT. THERE IS A WELL-KNOWN HAWK THATA HIKE MAY JUST BE ON THE TABLE. HOW DO YOU PLAY THIS? >> I THINK IT'S INTERESTINGBECAUSE I THINK WHAT HE WAS.
ECHOING IS WHAT WE SAW IN THEFED MINUTES LAST WEEK, WHICH IS THAT SOME FED OFFICIALS THINKRATE HIKES ARE POSSIBLE. BEFORE THAT, JEROME POWELLACTUALLY TOLD MARKETS AT THAT SAME MEETING THAT THAT WASPROBABLY NOT GOING TO BE THE CASE.A LOT OF TRADERS TOOK COMFORT IN THAT. NOW THAT IS GOING BACK AGAINSTTHIS MORE BULLISH TREND WE HAVE SEEN RECENTLY. KRITI:MICHELLE BOWMAN AND LORETTA.
MESTER, WHEN IT COMES TO THEVOTING POLICY AND THEN ADDING JAY POWELL, GUIDE JOHNSON LOVESTO ASK IF JAY POWELL IS THE ENTIRE REPRESENTATIVE OF THEFOMC? IS IT JUST MORE OF A QUESTIONOF A 4 — FLOOR YIELD AS OPPOSED TO A CEILING? >> THAT'S A GREAT QUESTION,WE'VE HAD CONTRADICTORY ECONOMIC SIGNALS. AND IT CAME IN PRETTY STRONGEVEN AFTER COOLING ECONOMIC DATA.I THINK WE ARE SEEING CLASHING.
TRENDS. WE ARE SEEING KEY INFLATIONDATA COMING UP THIS WEEK. TOM: THE CONSUMER CONFIDENCE STORYIS INTERESTING BECAUSE IT'S THOSE WITH EXPOSURE TO THESTOCK MARKET THAT ARE FEELING MORE OPTIMISTIC.HIGHER NET WORTH INDIVIDUALS. THOSE AT THE LOW END THAT FEELTHINGS ARE TOUGHER. THE EXPECTATION THAT THERE'S ANINCREASED RISK OF RECESSION. TO WHAT EXTENT IS THE PCE, THEPERSONAL CONSUMPTION EXPENDITURES COME OUT FRIDAY.TO WHAT EXTENT ARE THE RISKS.
ASYMMETRIC OR SYMMETRICAL WHENIT COMES TO THE DATA POINT? TO WHAT EXTENT ARE THE MARKETSAT RISK AS A RESULT OF WHAT'S EXPECTED TO BE IN INFLATIONPRINT THAT COMES IN LINER GIVES THE FED SOME COMFORT? >> CURRENTLY, PEOPLE AREEXPECTING IT WILL FURTHER ADD TO EVIDENCE THAT INFLATION ISSCHOOLING. I THINK WHAT YOU'VE HEARD FROMA LOT OF THE FED HAWKS IS THAT THEY ARE NOT JUST COUNTING ONONE PRINT, THEY WANT TO SEE A SERIES OF PRINTS SHOWING THATINFLATION IS SCHOOLING AND.
LOWER THAN EXPECTED WOULD BEHELPFUL, BUT IT FEELS LIKE IT MIGHT NOT BE ENTIRELYSUFFICIENT TO TURN THE TIDE. TOM:THEY NEED A NUMBER OF MONTHS AND SOME ARE PREVIOUS GUESTSSAYING THEY PUSH BACK THE EXPECTATION FOR THE FED. DOT PLOTS COMING THROUGH FORTHE NEXT MEETING ON THE REVISIONS THERE. THE DOT PLOTS ARE FORECASTEDFOR THREE, IT WILL BE REVISED. IF YOU PUT JAY POWELL TO ONESIDE, THE DOVE IN THE ROOM AS.
SOME MIGHT ARGUE, IT SEEMS LIKEYOU GO FROM THREE TO TWO OR DO YOU GO FROM THREE TO ONE? >> I THINK THOSE WOULD BEREALLY BIG MOVES. I THINK THE MARKETS ALL YEARLONG HAVE BEEN A BIT ON THE DOVE OR SIDE AND THEY AREWILLING TO BELIEVE WHENEVER WE GET DOVISH SIGNALS, IT WOULD BEA PRETTY BIG SHOCK TO THE MARKETS.WE'VE HEARD A LOT OF SINGLES FROM FED OFFICIALS LATELY THATTHEY ARE NOT JUST LOOKING AT THE CYCLICAL FACTORS, IT SEEMSPOSSIBLE THAT THE STRUCTURAL.
TRENDS HAVE TURNED TO THEEXTENT WHERE THE NEUTRAL RATE OF INTEREST IN WHICH THEECONOMY IS NEITHER GROWING OR SHRINKING.IT SEEMS LIKE THAT HAS SHIFTED HIGHER. KRITI:THERE IS A STORY FROM A FUND THAT IS SHORTING 10 YEARTREASURIES. I IMAGINE THEY ARE NOT ALONE.WHAT STOOD OUT ABOUT THIS PARTICULAR FUND IS THAT THEYBEAT MOST OF THEIR PEERS, 94%. $7 BILLION IN ASSETS WITH THERETURN OF $14 BILLION.
WHAT STRUCK ME IS WHAT THEIRCIO SAID. IT'S NOT CLEAR HOW YOU CAN GETRATES DOWN WITHOUT GETTING INFLATION BACK UP.HOW MUCH OF THAT SETS THE PRECEDENT FOR THE ECB, ETC.? HOW DOES THAT HAVE RIPPLEEFFECTS? >> MAY BE EUROPE IS MORECONFIDENT RIGHT NOW THAT THEY CAN GO AHEAD AND CUT RATES ANDWHAT WE ARE SEEING IN THE U.S. IS A LOT OF SUPPLY-SIDE FACTORSCOMING IN AS WELL. SO THOSE ARE WEST WITHIN THECONTROL OF CENTRAL BANKS.
WHAT YOU DO AND THAT FACE OFTHAT AND WITH THE ECB CAN YOU AFFORD TO DIVERGE FROM THE FEDNOW THAT IT'S LOOKING LIKE THAT'S GOING TO HAPPEN THISYEAR? TOM: GIVEN THE TREASURY AND THE LACKOF DEMAND, 70 BILLION DOLLARS ISSUED BY THE TREASURYYESTERDAY AND YIELDS UP ABOVE THE PRE-AUCTION PRICE, THIS ATA CANARY IN THE COAL MINE FOR THESE MARKETS OVER TO WE LOOKPAST IT? >> I THINK EUROPE WILL BE ADIFFERENT STORY, SO MAYBE WE DO LOOK PAST A. TOM:JUSTINA LEE ON THE MACRO AND.
FED STORY. WE LOOK AHEAD TO THEEXPENDITURES INDEX, THE FAVORED GAUGE OF THE FED EXPECTED TOCOME IN IN LINE WITH THE PREVIOUS MESSAGE TO HAVE MODESTCONFIDENCE, SAYING YOU ARE GOING TO NEED MORE THAN ONEMONTH TO ASSUAGE MOST MEMBERS OF THE FOMC. >> THE FACT THAT WE STILL SEE9, 10 BASIS POINT MOVES FROM A NONVOTING MEMBER SPEAKS TO THISUNCERTAINTY OF THESE JITTERS BAKED INTO THE MARKET, ARGUABLYBAKED INTO THE EQUITY MARKET. NVIDIA WAS THE GAME CHANGER INTHE LAST FIVE YEARS A CAP TIRE.
BUT IN EUROPE WE ARE WATCHINGTHE DEAL FRED. BASICALLY SAYING, WE NEED MORETIME AND WE WANT TO CHECK ON SHARE PRICES BECAUSE THEY ARERALLYING ON THE BACK. THE DEADLINE WAS 5:00 P.M. U.K.TIME AND SHARES ARE HIGHER. DOES ANGLO THEN GIVE THEM THATEXTENSION? TOM: 5:00 P.M. U.K. TIME, THEY ARE PUSHING TO HAVETHAT EXTENDING, THE EXPECTATIONS, WE WAIT FOR THATRESPONSE AND IT IS THEIR ASSETS IN SOUTH AFRICA THAT REMAIN ASTICKING POINT IN TERMS OF HOW THEY ARE RESTRUCTURED AND WHATTHAT WOULD MEAN FOR THEIR.
INVESTORS.THIS IS ONE KRITI JUMPED ON. TO READ ACROSS FROM AMERICANAIRLINES AND THEY CUT TO THE AIR — OUTLOOKS AND THEN CUT TOIT TILL LUFTHANSA AND IAG IN EUROPE.OUT OF CONCERN AROUND THE AIRLINE'S BASED ON THE BACK OFTHAT CUT OUTLOOK AS WE HEAD INTO THAT CRUCIAL SUMMERSEASON, IHT DOWN A FULL 3%. AIR FRANCE DOWN 2.5 PERCENT.ENERGY ALSO JUMPED. . >> THERE IS A READ THROUGH HEREAND AT THE CORE OF IT ITS LABOR COSTS.TALKING ABOUT LESSENING THEIR.
WORKFORCE BY 4000 JOBS.IT'S MASSIVE. AND I THINK IT SPEAKS TO SOMEOF THE ISSUES YOU SEE IN SIEMENS ENERGY.BUT EVEN IN AN AIRLINE INDUSTRY THEY CONTINUE CONVERSATIONS ANDIT SHOULD BE MUSIC TO SO MANY EXECUTIVES YEARS, THEY SAY WECANNOT CAPITALIZE BECAUSE JET FUEL COSTS ARE RISING, YOU SEELABOR COSTS RISING AS WELL, YOU ARE ALSO NOT ABLE TO REALLYINCREASE SOME OF THESE AIRLINE FEES, SO WHEREAS YOU TALKEDABOUT HIGHER AIRFARES IN EUROPE, TO CAPITALIZE ON IT,THERE'S POLITICAL PUSHBACK IN.
THE STATES BECAUSE AT THE ENDOF THEY — OF THE DAY THE AIRLINES HAVE BEEN DRIVING SOMEOF THOSE PRESSURES ON PEOPLE'S WALLETS. TOM: YOU CANNOT GET A HOLD OFAIRCRAFT BECAUSE OF WHAT'S GOING ON WITH BOWEN, RYANRYANAIR AND THE EFFECT OF AMERICAN AIRLINES.RYANAIR ITS JETS, ALL OF ITS JETS FROM BOEING SO THEY FACETHAT IS A CHALLENGE. RYANAIR FACING SOFTERCHALLENGES DESPITE YOU SEE CAPACITY BECAUSE THEY CANNOTGET MORE AIRCRAFT.
THEY TOLD US THEY COULDN'T GETA PRICING FOR THE NUMBER. THAT'S A SOFT SPOT.THE CRUCIAL SUMMER SEASON IS NOT WITH THE AIRLINES HELPED.KRITI: WE SHOULD TALK ABOUT THE THEMEBECAUSE THERE'S CONCERN ABOUT GETTING THE FLEET INTO ISRAEL,TEL AVIV BEERI — BEING A MAJOR HUB AND WHEN YOU REMOVE THATDEMAND AND RATE ALLOCATED, THERE ARE STILL TAKING A HIT ONLOST TICKET REVENUE FROM THE REGION BECAUSE OF GEOPOLITICSIN THE WAR WE SEE. THAT'S SOMETHING WE WILLMONITOR CLOSELY.
THERE IS PLENTY TO DIGEST ONTHE ECONOMIC FRONT WHEN IT COMES TO HOW WE GET COMMENTARYCOMING OUT FROM THE POLITICS FROM THE REST OF EUROPE.HERE WE ARE, THE FINANCE MINISTER WILL YIELD TO PLEASEFROM CABINET COLLEAGUES FOR MORE MONEY IN NEXT YEARS BUDGETACCORDING TO THE GERMAN DEPUTY FINANCE MINISTER WHO TOLDBLOOMBERG THAT EUROPE NEEDS TO GET MORE COMPETITIVE. QUAKES THE CRUCIAL THINGSTRATEGICALLY IS, ARE WE COURAGEOUS ENOUGH TO ALLOW FORBANKS WHICH ARE OPERATING IN.
EUROPE, OPERATINGTRANSNATIONALLY UNDER A COMMON SUPERVISOR, THE ECB, ARE WEREALLY ALLOWING THEM TO USE THEIR CAPITAL WHERE IT'S MOSTEFFICIENT OR ARE WE REINFORCING EVERY — WHERE WE HAVE ABANKING MARKET AND WE LOSE ECONOMIC PERSPECTIVES ANDOPPORTUNITIES? TOM: THAT WAS GERMANY'S DEPUTYFINANCE MINISTER SPEAKING TO OLIVER CROOK IN FRANKFURT ABOUTCLOSER MONETARY UNION AND THE NEED TO PUT IN PLACE TO MAKE ITEASIER TO WIND DOWN SMALL BANKS. THEY ARE GETTING CLOSER TOAGREEING TO A MECHANISM THAT.
WOULD MAKE IT EASIER TO WINDDOWN SMALLER BANKS THAT ARE TROUBLED.WHAT THEY NEED TO MOVE ON TO HIS JOINT INSURANCE DEPOSIT,THE KIND OF SYSTEM YOU HAVE IN THE U.S.THAT'S NOT YET IN PLACE IN EUROPE. IN THE NEED FOR THIS ISSIGNIFICANT GIVEN THE DEMAND AROUND ENERGY AND DEFENSESPENDING. KRITI: I NEVER CONNECTED THE DOTS THATWE HAD THAT FDIC PROTECTION. IT'S INTERESTING BECAUSE IT'SCOMING AT A TIME AND WE HAVE REAL NUMBERS.YOU MENTION THE FORMER BANK OF.
FRANCE GOVERNOR AND HE SAID ONETRILLION NEEDED BY 2030 AND SAID IF YOU LOOK AT THESAVINGS, YOU CAN GET THERE, SORT OF, 200 BILLION IS WHAT HESAID PER YEAR. YOU GET THERE BUT IS NOT FULLTO GET TO THE FULL ONE TRILLION. THERE SEEMS TO BE A LOT OFQUESTIONS ABOUT DOING THAT AT A TIME WHEN PEOPLE ARE PULLINGOUT OF EUROPE. TOM: QUESTIONS ABOUT IMPLEMENTATION.SOUTH AFRICA FLOATS, THEY ARE GOING TO THE POLLS AND ONE OFTHE MOST CONSEQUENTIAL GENERAL ELECTIONS SINCE 1994.GERMAN CPI COMES OUT 1:00 P.M.
U.K. TIME.LOOKING AT THE FED'S BOOKS. 7:00 P.M. U.K.TIME AND MORE TREASURY DETAILS AROUND THE DEBT BUYBACK.
