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tom: good morning, happy friday. this is bloomberg daybreak: europe. these are the stories that set your agenda. china's lopsided recovery. factory growth moves up a gear, but consumption unexpectedly slows. chinese officials hold urgent talks to address the property crisis. stocks retreat as traders reassess the path forward for interest rates with more fed officials morning lending costs will stay higher for longer. plus, jp morgan ceo jamie timon tells bloomberg he is still more worried about price pressures the markets appeared to be citing inflationary forces ahead. we bring you more from that interview. let's check in on these markets then. on a day when there was a bit of a pullback. the dow jones crossed above the 40,000 level for the first time. the s&p coming back below the 2300 level. a breather coming through for the markets have worked so much

to add those gains year to date. pairing some of those gains by the end of the session yesterday. european futures pointing lower. markets pricing around the fed once again from two cuts just a day or two ago to one cut right now. the chinese data is a concern for the european markets, particularly when it comes to health of the chinese consumer. european futures pointing lower. ftse 100 futures in the u.k. pointing to losses of around 2/10 of a percent. s&p futures currently flat after modest losses yesterday. nasdaq futures, 18,000, also flat. we have heard from jamie dimon from china to geopolitics to inflation, take a listen. >> i think the surprise would be a higher rate because inflation didn't go down. inflation has been stubborn, may be bounces up next year. i think inflation next year may be in the cards. it may have nothing to do with what you see today. that to me is the surprise.

tom: jp morgan ceo jamie dimon that may be inflation is underpriced by the markets. let's cross a look cross asset as we see movement in terms of yields edging higher on the tenure yesterday. today, the 10 year is unchanged at 436. jamie dimon saying that headwinds that could keep prices elevated remain structural changes, particularly around things like renewable energies and the shifts to more military spending. you are -- euro-dollar at 10 eight. the ecb suggest that yes, you make get a cut in june, but don't bank on july as a cut is not warranted. concerns about it being flat. bread $83 53, up 3/10 of a percent. copper continues to grind higher. 10,429 on that industrial metal. currently flat in the session. the gains continue to come through. avril hong standing by in singapore for a breakdown, and it's a busy friday for you. what standing out for you?

avril: let me count. so many things. first with the fed narrative, there may have china data. asia stocks are already negative territory as the expectations of cuts were underground. so were declined. we have the china retail sales number, industrial production accelerating, so we see this in chinese equities. the csi 300 slipped into negative territory. the hang seng initially was in the red but wasn't managed to eke out some gains. it speaks to how sentiment driven the hong kong markets have been of late. let's take a closer look at what else we are seeing from the board, if we can. it is really about the property sector. that's a heart of the issue related to the chinese economy. it wasn't just retail sales and industrial production numbers we got, it was home price data, and that was a deeper contraction than the previous month. and i think it speaks to how the fundamental issues, they haven't been fixed, indeed, we have the

likes of morgan stanley downloading the outlook for the real estate sector as they flagged the physical market issues that haven't been resolved and we also have, if you remember, the report about how we could get some of the excess inventory resolve. that plan proposed might actually disappoint. this is what we are seeing despite that we see the chinese stocks and bonds. they have been climbing. it's really above expectations of policy. flip the board because i also wanted to take you through what we see in china bonds. of course there has been a focus as we have special bonds going on sale. those are the 30 years in the idea here is to raise funds for government spending. it was a pretty solid auction. four times the demand of what was on offer. but of course, as we look at the currency moves, the u.n. has been weakening, no thanks to the china data. japanese currency as a double whammy for the renminbi.

tom: avril hong, thank you, a check on the asian market with the reader across. thinking about when it comes to the federal reserve, but also the china data. more lines crossing now. avril hong was referencing these. senior officials meeting in beijing from key regulators to address the property crisis. and here is the redhead crossing. china will be removing the mortgage rate floor for individual homebuyers. the context is that in recent years, up until two to three years ago, chinese officials have placed restrictions on homebuying because of what was once a red-hot property market. now they are doing those restrictions in the latest move removing them mortgage rate for individual homebuyers. there may be stress on the banking sector as a result of this, but the idea is that you can see lower mortgage rates encourage consumers and how buyers and prospective house buyers to buy up some of these houses. the prices continue to drop. we see that in the most recent data. we have also heard more recently

that the cities have started to remove all curves on property purchases. let's get the details in the reaction with jill disis standing by who will be monitoring this for us. walk us through what we will be hearing. senior officials from beijing to put a floor under this property crisis, how potentially significant could these moves be? >> yes, i think obviously they could be significant here, we are still getting details on what exactly this ultimately means. we see they are lowering the minimum down payment ratio for first time buyers for 15% in second time buyers to a little bit more. this time we will ultimately see where that goes, but thanks for putting this in context. this is all part of the broader package that's up for the discussion about what the government needs to do to ultimately put a floor under this years long property crisis. bloomberg reported a couple of days ago that there are additional measures under consideration that help the housing market. maybe that means state owned enterprises, local areas take

out state loans and buy a properties from distress but developers turn it into affordable housing. that's something we have reported just a couple of days ago. i think the totality here is that it really does mean that there are additional measures they need to take to put a floor under this property crisis as we just discussed with the chinese data -- with the china data. as you said, this is a two speed recovery. manufacturing is doing really well, but look at domestic demand. it still really struggling and that's in large part because of the property crisis. tom: the two are very much interlinked. the squeeze at the softness of the property market in the link is the consumer. what does that tell us about the assessment now as to the policy response, the support that many would argue is needed in form of some type of stimulus to support the consumer, could we expect that to be stepped up? jill: we are talking now about the potential for some of these additional property related

measures. i think that could be read as some form of support. but in terms of large-scale stimulus, it does seem unlikely you would see some type of package as you did about a decade or so ago. i think that, at this point, the government also wants to see how other types of measures that they have been taken transmit into the economy. we just had, a couple of hours ago, the beginning of a sale of an ultra long government bond to sort of fun infrastructure related projects, and stuff like that. we had the initial kicking off of that sale happening this morning. that will be happening throughout the rest of the year. again, the idea being that would primarily fund infrastructure related projects to release per activity and growth within the economy. we will see what happens. maybe it takes the form of additional rate cuts throughout the rest of the year. something else has spurred demand because as we have been talking, demand continues to be an issue. it's not just the retail sales figures that were released today that were more depressed than

what a lot of economists were expecting. it's also some barely weak, barely anemic cpi numbers that came out recently. there's a lot here that continues to drag on that segment of the economy and comes with the consumer. we will have to see how that results in additional support from the government. tom: thank you very much. indeed with wrapping some of these redheads and breaking lines around the support that comes from beijing. we will see how material that is. a redhead crossing the terminal around process that houses much of the internet assets at and has a significant stake of china's tencent, which is the company behind many of the most popular gains in china. the pipeline for those gains, the we chat app. naming a new ceo, fabrizio is going to be the new ceo from july the first, replacing urban who has been at the helm since september of 2023.

so change at the top there. urban stepping down. he has been held the ceo since september of last year and a new ceo taking charge. we will see how the stock reacts to that. start a change at 8:00 a.m. u.k. time. let's get to the geopolitics of china and russia. pledging to intensify corporation against what they call u.s. containment. the two countries agreed to greater coordination between militaries in opposition to washington's destructive and hostile course, speaking after he met with vladimir putin in beijing. president xi outlined his position on the war in ukraine. >> china and russia agreed that a political solution to the ukraine crisis is the right direction. china's stance on this is consistent and clear. tom: let's bring in bloomberg's news director ross matheson to get the latest. we expect to get pictures.

i think we will get pictures of putin speaking live in the northern city not far from the russian border. symbolic between russian culture in that city. the chinese city. talk to us about what we hear in terms of president xi's views on the conflict in ukraine and to what extent that aligns or not with vladimir putin. likes it's really important to see the recognition of the no limits friendship between china and russia has been important for vladimir putin with this war in ukraine. where china has done is they are not explicitly endorsing the war in ukraine. they have not overtly criticized it. just don't let it get too messy and too out of control. don't draw us into much. some chinese companies have benefited from the war in ukraine because they are now the bars of less result -- last resort for russian commodities. they can negotiate good prices for themselves. really this stance has been your

business. that's important for vladimir putin on the real stage. especially against the u.s. against russia and china together countering the u.s. tom: the trade support, economic support in china. we continue to see live pictures of the russian president. many were described as pivotal moment potentially for the conflict on the ground in ukraine. russia making some significant gains. what is the latest on that front? like they have been doing that offensive in the northeast and its around that major city. it seems like it took ukraine by surprise even though russian troops are in that border area. but certainly they are making progress in smaller towns in the area. can they take kharkiv? unlikely, given their resources.

they are stretching the ukrainian resources. ukraine has been suffering a lack of artillery ammunition, manpower, air defense and russia is probing all along the front line, particularly in the northeast to see how distressed the resources and how can i maximize. in making progress around the northeast that can extend south as well into ukraine. russia's priority is probably the southeast. and wants to get further along the black sea area, odessa being a main port in the area. ukrainian resources are being drawn to the northeast and then russia can come into the south. certainly we see signs of small breakthroughs along the entire line. tom: zelensky has been on the ground in kharkiv with the military commanders. they address the concerns or which are addressed. on the ground ukraine for what we have been hearing from putin and xi jingping. china announces new property

measures. we will get the take from the shanghai advance institute of finance and advisors and former advisor to the pboc. plus, formula one world champion max speaks to bloomberg about growing the sport in the recent personnel changes at red bull racing. we bring you that interview later in the show. this is bloomberg. ♪

tom: welcome back, happy friday. we heard some really important lines crossing from china. officials meeting in beijing to try to address a property prices. some of the most significant moves coming through to address the slowdown in the real estate market of china. in some of the lines now, the detail. china will be removing the floor on mortgage rates. it's also lowered the minimum

down payment ratios for individual homebuyers. hate is categorized as one of the most dramatic moves to shore up that property market. they are cutting down payment ratio for first time buyers to 15% and cutting it to 25% for second homes. this after property prices, sales, i should say, fell the most in a decade and property prices continue to be squeezed in china as well. how effective willie's measures be? very pleased to say that i'm joined by professor of finance institute of finance, also an advisor to the pboc. at least, in unofficial adviser to the pboc and a number of other governing bodies in china. thank you for joining us. give us your reaction to these measures, is this going to be enough in your opinion to put a floor under this property market, how substantial, how significant will these measures be? >> i think the first take is, these are very helpful measures

compared to the policies that we have already had in the past year or two. and i think it's also very important and significant to signal to the market what companies are changing its priority of the policymaking. so it is trying to put some into the property market. i think by lowering the interest rate or by allowing a greater portion of the housing pricing to go through mortgage, this is really providing some incentive for the homebuyers to consider the real market again. however, for the moment, i do not think that is sufficient to attract enough buyers to stabilize the market. for two reasons. one is, the housing market is sluggish, given the high prices relative to people's expectations of where their income it will be. i think it's still quite expensive. more importantly, over the past three years or so, housing prices have been coming down,

not going up. as we know about the theory, people tend to buy assets only when they see a potential of making money rather than losing money. as long as that is changing, i do not think the softening of the landing requirements or the reduction of the mortgage rates would have a significant -- would have a significant impact on how people and households perceive the housing market in general. tom: that's really interesting context, professor. the other key proposal that came through, we are getting more detail on it, a proposal for local governments to buy up xs infantry -- excess inventory on sold properties and units for local governments to buy those up. how significant could that be, and to what extent is this shifting the debt loan from the real estate companies to local governments and state owned banks? >> i think this is similar to the billing out of the financial institutions going into the financial crisis. i think the real estate

developers are in a fairly dire situation. so without that stepping in, it is very likely that almost all the private and real estate developers will go into distressed by the end of the year. i think it is probably an option that has to be taken for some kind of government credit to support the real estate sector in the real estate developer. that being said, we are talking about chileans of real estate. so the local government will have enough for the report and stash for apartments to be finished. there is another logistic of challenge, which is how do we make the distinction about whether you should buy at this product versus the other one. there will be some rent seeking an acid issues in the implementations of the policy. in a way, i think it is encouraging to see the local

government stepping into stabilize the market. but in the end, unless the central government is stepping in and extending its own credit to the rest of the market, it is a little difficult or a little too premature for us to believe we are out of the woods. i think there is still a lot of unfinished projects on the market for the moment. tom: really interesting. we have also had significant economic data crossing today from china. the consumer seems to still be challenged and we can tie that to the real estate sector. professor, there's an argument for some that china needs a shift from investment led growth to consumer led growth. do you buy into that argument and the steps taken to get to that point? >> yes, i have been a strong advocate for the transition from investment to the consumption driven growth model in the past decade or so. i think real estate has been a very enduring factor in the past decade because real estate has been crowding out household

consumption because so much money has been poured into buying apartment and servicing a mortgage. unfortunately i think we see the flip side of the story with the softening of the housing market, even though people do have more disposable income at the moment, they are losing the confidence at their houses will be more expensive in the future them now or their jobs will be paying more than they did in the past. i think we are talking about the transition and i think with that, the government has been more committed to providing both social welfare programs and some stimulus or subsidy. tom: professor, unfortunately, we have run out of time. really smart analysis as always. professor of finance at shanghai advanced institute of finance. plenty more coming up. stay with us. ♪

tom: this week president biden announced new tariffs and billions of dollars of chinese goods. they raised levees on clean energy imports, including batteries for solar panels and electric vehicles. i'm joined now by associate and bloomberg energy storage team for some of the details around this, the context, and -- andy, are these tariffs going a heart -- help kickstart the battery industry in the u.s.? >> the united states has been importing an increasing number of lithium-ion batteries from china. this is around $3 billion a quarter at the moment, this is in part due to the fact that china has a large advantage in battery manufacturing capacity and there have been massive drops in prices in battery manufacturing. 40% prices we've seen over the last year and this isn't in reaction to that. as well as the approach to

increasing these tariffs there has been incentives. the inflation reduction act is bringing a lot to try to build the battery manufacturing industry, and we have seen over $100 million of investments since the act was passed under two years ago. as well as trying to increase the number of battery manufacturing capacity, there is a push to go upstream. one of the things the u.s. has been doing is putting a lot more money into batteries. once they are imported, they can be recycled within the u.s. to produce u.s.-made batteries in the future. tom: trying to create a closed loop system when it comes to researching batteries. talk to us about the broader implications and the demand picture in a needy market that seems to be softening. andy: at the moment, 2030, we expect different batteries between lithium and lithium cobalt, which is our three battery metals. 10% to 18% of demand in 2030 can

be met by recycling. this is different by different metals in different regions. lithium and this number is around 10%. and this is all batteries going into grid scale applications as well as ev. for nickel and cobalt this is higher. nickel and cobalt are not used an iron phosphate batteries. so this type of battery is becoming increasingly popular with ev manufacturers. tom: thank you very much. for some of the details around what this could mean for the build out of battery capacity and the recycling on it as well in the u.s. associate in the energy storage team. thank you. plenty more is coming up. stay with us. this is bloomberg. ♪ and they're all coming? those who are still with us, yes. grandpa! what's this? your wings. light 'em up!

gentlemen, it's a beautiful... ...day to fly.

♪

>> good morning, this is daybreak europe. these are the stories that set your agenda. china removes the lore on interest rates and a drastic move to prop up the property sector. stocks retreat, the path forward with fed officials morning lending costs will stay higher for longer and jamie dimon tells bloomberg he is more worried about price pressures than markets appear to be, citing inflation. we bring you more from the interview. lines crossing from the luxury retailer in the jewelry business with demand out of the u.s.. full year sales very marginally below estimates. we are getting the full year end

quarterly numbers coming in at 20.6 billion, estimates had been 20.65, below full year sales. operating profit is a miss, 4.7 9 billion. we know the luxury space has been challenged. sales are up and estimates had been for an increase of 7.7 so well below the estimates in terms of full-year sales and they are naming nicholas boss as the ceo effective june 1. that is when you will see change at the top with nicholas boss becoming the ceo the first day

of that month. we are looking for details around china and you had a pandemic boom in demand, that has softened. how much is that weighing on sales? revenue is constant, america doing well. estimates were north of 3%. japan performing well. china will be the drag. revenues up 10%. that is some detail. we will bring more on that. let's check in on markets, cpi came in soft at the coolest

level in six months, rates are higher. european futures are down, china data is a concern, but the consumer is feeling pressure. futures are down. s&p futures are flat. a bit of a breather after the solid run, s&p was above 5000 for the first time, currently at 5390. we saw a move in yields currently 436. he may get a cut in june but not july. frank is up in copper grinds higher. let's cross to asia, avril is

standing by. avril: looking at chinese property sector, pboc lines, scrapping the law for homebuyers, lowering down payment ratios. drastic measures. this is in a week where authorities mull a proposal on inventory of homes. it's about how they supported property stocks and bonds. look at the gauge of developers since april, they climbed 15%,

flip the board. it's not really moving the needle. csi is lower. thanks thing is flat. more meat on the bones for the property sector on a day when retail sales disappointed. take away is supply and demand imbalances. demand is not holding up on a day where a retracing of games was underway. let's take a look at other assets in china because god is fallen still, demand was solid.

the long end of the curve is under pressure. dollar china has been high not just because of china data. external environment and tensions between the u.s. and china. tom: thank you indeed, geopolitics and measures to suit for the chinese real estate market with a focus on the consumer, thank you. jamie diamond says the u.s. has to stay engaged with china. washington and beijing are not enemies. >> geopolitical situation is tense,.

terrorism in israel. this is affecting our relationship with china. put taiwan aside, it's the right thing for america to engage with china, every nation want to what is in their own interest, unfair trade, what you need to do, but china is not a natural enemy. we could work together. we have common interests. >> what does it mean for a bank? >> cautious. china used to be good, not anymore. we bank, 1500 full-time

nationals are not leaving. we are cognizant of the risk. we look at china and hong kong as one >>. what does trump mean for the u.s. economy? >> >> >> i don't know. >> too>> soon figure out the policies? who was elected may not affect the next year. it is likely our a big tanker. the most important thing is the geopolitical situation. leadership is divided and that means economic alliances which will trade, it means nato, russia should end when because if they do it can tear apart the

western world. >> what would it take to get you into politics? jamie: i love my job. i love my job and i have no intent to leave. tom: that was jamie diamond at the lenders global market summit in paris. let's wrap what has been happening. asia-pacific in the u.s. correct thing that affects sales so just correcting a line, numbers have been in adjustment. increase above 8%, full-year

sales came in with the new face. these earnings meet estimates. we've had the naming of nicholas boss as the ceo from june and revenue is at a constant rate above estimates. asia-pacific is below estimates and china will drag. more analysis now with dosha who has been looking at the numbers. what is jumping out at you? dosha: nicholas boss is the chief executives so he's been with the company for a while. but what is interesting is he is starting june 1 and he is chief

operating officer, they're doing a switcheroo. interesting to see that brings in any changes because they've been with the company for a long time. what is intriguing is the idea, we knew normalization would follow covid, the strength of china and asia. overall they met expectations, a bit of patching this in asia tom: how do the numbers compared

to the luxury landscape? >> if you look at the landscape, a tough time, called into question the idea that luxury will grow. healthy mh is better, but if you look at the ratio which mom is getting -- ridgemont is getting speaks to the specialists and high-end jewelry. the street has 20 buys routine. upside in the valuation. tom: ok. the results for ridgemont and the broader read.

thank you very much indeed. walmart has breezed through sales growth indeed. and they expect sales growth to be better. they reported a rise in sales with e-commerce a big driver indeed, jumping 22%. higher households drove the bulk of gains. biggest one-day gain since march of 2020. bloomberg learned hsbc shareholder is reducing 8% stake. divesting to a sovereign wealth fund in the middle east are being considered. were told they are visiting the gulf, but it is unclear if talks are being held. holtzman saying we must be sure cpi is on the path to target.

known to be on the hawkish end of the spectrum, too early rate cuts risk refueling inflation. euro at 108. this is bloomberg. ♪

>> welcome back to bloomberg. elon musk's star link transforms communication. we've been looking at how dominance is sparking scrutiny and encouraging deep pocketed rivals. >> the largest constellation orbiting our planet is run by an

individual who needs no introduction, this guy. they maintain a vast network in orbit higher than a jetliner but below a gps. >> starling has more than 5000 satellites. >> they accomplish this in less time than it took james cameron to make a second avatar movie. >> space x invision 42,000 satellites. >> speed has raised eyebrows in government. in the boardroom of rivals. reporter: they're trying to disrupt a complacent market. tom: watch the full documentary on your terminal. or the website or youtube.

now to a.i., registered -- read it surging. shares which had their ipo in march jumped 15%. they will offer ai-based tools bait -- built on models. financial terms were not disclosed. coming up, champion max speaks about growing the sport and recent changes. we bring you the interview next, this is bloomberg. ♪

♪ >> welcome back to bloomberg.

formula one has been riding a wave of success in part due to a netflix documentary. valuations are soaring and fans are flocking. rebels max spoke to jason kelly about how formula one to consider growing and how to keep fans engaged. >> it depends how you want to attract fans. from the entertainment side or the sport has been growing lately from the entertainment side but you need to question what you want because it is important to keep diehard fans engaged. these kind of things, i'm

focused on my performance and trying to be on top of my game and in touch with my team and what we can prove. how should i grow in the sport? i am a shareholder and i'm here to win the race. >> that's a fair point. commercial success does rely on success on the track. no one would question your success. there is a big change with adrian leaving. what is your confidence level about that side of the equation, >> yeah. it has been quite -- you know, a

change. adrian will be leaving and it would be nice for him to be a part of what we are doing. he is incredibly important from the start i would say. and yeah. you have a lot of good people, strong technical department for the future so confidence is very high. very excited. but yeah, it would be nice for him to see that. when people want new challenges you cannot stop them. tom: that was a driver max speaking to jason kelly. he keeps winning and that is making the sport less interesting. jamie diamond, brian moynihan

spoke to us from france and they weighed in on fed policy. >> u.s. economy is chugging along. good health. >> everything is good. >> the chance of something going wrong is high. >> how much of the slowdown we see we have to watch the data. >> it is probably half the soft landing. >> have a 2% growth rate. guest: higher than people expect. guest: on one hand the economy is there and we can't overshoot the other way. guest: the patient right now. tom: jamie diamond, dvd solomon -- david solomon speaking to bloomberg.

yesterday you have the dow crossing the 40,000 level, a breather yesterday. officials reiterated higher for longer as we saw inflation looking benign. rhetoric continues and you had the s&p above the 2000 300 level. closer now to the 2300 level. where we go next, where the next catalyst for this market is, it's not coming from china. let's have a look at what has been happening with the squeeze of property prices. property stocks have performed well with additional measures. this links to the consumer when the consumer is under pressure. oh and making it easier to buy.

you could get an improved consumer outlook but that is a big if. a lot more coming up including an interview with the euro group. that interview at 9:30. the president of georgia will speak to bloomberg as the ruling party faces protests, really interesting interview. markets today is next. stay with us, this is bloomberg. ♪

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anna: good morning, i'm anna edwards. here's what