>> good morning, i am tom mckenzie. stocks take a breather, events set to test the ai driven rally. raphael bostic reaffirmed the higher for longer mantra. j.p. morgan boss jamie dinan lights a fire on succession talk. closer than ever. nvidia will discuss a new partnership. our exclusive conversation with the ceo. european stocks and u.s. stocks are near record highs. modest gains yesterday. nvidia will be a catalyst with earnings on wednesday.

in the u.k., inflation data crossing early. futures pointing lower, european stocks pointing to losses around 3%. the spot index reaching the highest level since january of 2023. s&p futures are flat. let's flip the board and look cross asset. we've been hearing from the central bank reiterating higher for longer. messner saying it is no longer profitable, it is appropriate to go for around two. 433 on the benchmark 10 year and that is the bloomberg index.

modest gains and vision affects. modest gainsetf speculation clod highs. will bitcoin break out of the range? copper is at 10,800. the commodity that rallied 28% year to date. keeping across commodities. let's cross over to asia. avril hong in singapore. tough day for hong kong stocks with the tech leaning. avril: it is looking pretty painful for those equities but i wanted to talk through the big picture because asia stock gauge snapped a winning streak into negative territory. yesterday was the sector leading the charge. today it is among bottom

performers. pain coming through in hong kong stocks. thanks thing is negative. declines also now seen in japanese stocks despite gains. let's talk about why. the thanks is the steepest drop in about a month no thanks to the earnings story. we've got lee auto with the sales miss reassuring the competition in the ev market. we have expo reporting, stock dragged. capping the losses, insurers reported and we had them

something we last saw in september last year. you really get the sense that given the declines in declines it will take nvidia to spur things further. what's take a look at bonds in japan, selling coming through across the curve. 10 year was hitting levels we have not seen since 2013. a bit of a recovery, but still weakness upon dollar yen. the higher u.s. yields against the backdrop of fed speak. tom: avril, a challenge day in

that region. what's go to our fed speak and an fed president rafael double down on his mantra. loretta says three rate cuts in 2024 are no longer appropriate. loretta: i was on the record saying i was at the median, three. developments i have seen right now i would not think that is appropriate because inflation risks. >> anything can happen. inflation will fall into 2025 and i think it will take a wild for us to get to 2% but i think we will get there. tom: ok, let's bring in mark cranfield in singapore. we heard from loretta messner. expectations on the number of cuts.

dot plots signaled three, what are traders looking for? mark: traders are looking for one and two rate cuts by the end of the year. probably in november. the fed meeting coming up is the one, giannis the next time and it will give us a new outlook. there is no way they can go to three. we've reached the end of the year and they were projecting this in january or march. data has not worked out in their favor. they had to dial back and that is why your hearing a longer -- higher for longer mantra. people are doing cuts. did due to or one?

certainly an amount of relief if they come through with two dot plots to show that they are squeezing in a couple before the end of the year. what would not be so promising as if they go for one. tom: two to one is the question, two or one. we will not get three in your estimation. which assets are most sensitive to a move in terms of expectations? mark: currencies and bonds are at the forefront of the reaction. if there is only one, that will hit the bond market hard. yields are low, decent selloff, one dot plot before the end of the year. people assume december.

plenty of time to turn bearish. the u.s. dollar would respond favorably, yen at the forefront of the picture. we see it every time yields pop up, we got to 160 not long ago. if it is to cuts, that will be a relief. see a bond rally. dollar will come off with emerging markets. a big sigh of relief and currencies do better in asia, latin america, eastern europeans. equity markets do not mind either way because all they care about is nvidia and if nvidia beats dictations it is gangbusters for equities regardless of what the fed does. tom: mark cranfield, excitations around cuts and reminder of earnings on wednesday.

to the banking space jamie dinan saying succession plans are on the way. timetable is not five years after he asked how long he would remain in charge. jamie: i have energy. i leave basically on the board, it's up to them. i think the -- we are on the way, moving people around. tom: for more let's bring in bloomberg's anchor of markets today. well on the way jamie dinan says. he has joked about the five year time horizon. how seriously should we take this. how well positioned is j.p. morgan for a change? >> remember 2021, he reshuffled

lieutenants, key names. troy, i apologize to him. but were talking about a time when we've never been in this environment with volatility so you have leadership changing and commercial banking. marianne and jen ran the business, those are the three candidates to be put up for succession. one key piece is they've never had a female ceo. so this signals a move that these women could be in the running as much as male counterparts, a really big deal when you talk about j.p. morgan in the next decade. that is why this matters.

not the timeline, what part of the business is getting the most and who will take the helm. tom: he will keep playing for j.p. morgan. when it comes to his legacy, he hit back against regulators again. it is not new but he has been the most vocal. host: when it comes to strict capital requirements, we are in the fallout of svp. a lot of people said maybe banks need to be cushioned. a depression kind of rhetoric, jamie dinan saying more reserves means less lending. it hurts the economy. two thirds of consumers would have to pay a monthly service fee if current proposals were

implemented. the fact that they were having reports from the wall street journal that proposals are pulled back on colleague's behest is a good sign indicative of the influence he has. not only running the largest bank in the world. he gets on the field and gets involved in policy and buybacks. tom: the stock dipped on that comment. thank you indeed from our markets today 18 anchor indeed in the succession plans at the bank. here is what we're thinking about today. the annual general meeting of shell, any lines crossing for that, later today in emerging markets you will get a rate decision from nigeria.

getting that as well. analysis in the u.s. from macy's and lowe's. a touch point on u.s. consumer. those data points crossing today in u.s. time. get a roundup of stories you need to know. subscribers can go to the terminal. coming up, a new a.i. powered partnership in an exclusive interview with ed ludlow later in the show. this is bloomberg. ♪

♪ the ics application for arrest warrants against israeli leaders. we reject the application against israel.

and it should be said that it is not just the israeli prime minister of war crimes. it is not just the prime minister, near accusing others. these are not the only names in it is worth putting out that they have not issued them yet. both sides are saying allegations are unwarranted for the reaction including the israeli prime minister.

he said it was a moral outrage. it was met with the u.s. president calling it outrageous. antony blink and says they reject the decision. it is important to know that the decision has stopped short of a warrant. in terms of significance, at this point it is unlikely to affect the course of the war, but yet another illustration on how much pressure is on the prime minister as we have been talking about. they're poised for another attack. tom: as you suggested, it seems like a knock to israel's reputation.

in terms of the timeframe, they have not arrested or put forward the rest warrants. what is the timeframe in the weeks and months ahead? joumanna: right, so the decision gets taken to a group of magistrates. there are three of them with a couple of months to deliberate. it could take one month for five months and we could see appeals, a process being submitted from israel and other leaders. essentially what the court has to decide is whether there are quote reasonable grounds to believe war crimes or crimes against humanity have been committed. if that is the case, the warrant will be issued. but when it comes to the warrant, it is unlikely members will enforce. remember the u.s. is not a signatory of icc. so an arrest warrant could be

issued but it is unlikely these could be implemented should a leader travel. tom: limburg's joumanna -- bloomberg's joumanna joining us. gold and copper trades near all-time highs. more on what is powering the rally next. this is bloomberg. ♪

i can't believe you corporate types are still at it.

just stop calling each other rock stars. and using workday to put finance and h.r. on one platform. tim, you are a rock star. using responsible ai doesn't make you a rock star. it kinda does. you are not rock stars. (clears throat) okay. most of you are not rock stars. oooh. data driven insights, and large language models. oh, that's so rock roll. it is, right. he gets it. yeah. ♪ tom: welcome back to bloomberg daybreak europe, happy tuesday. gold is near an all-time high as traders focus on an optimistic shift for rate cuts as copper surged to its highest level. futures jumping more than 4%.

a breather for copper. let's get analysis on commodities and bring in clara in singapore. let's start with the copper question. a faint coming through above 10,000. it crossed above 11,000, it is up, does the softness in the session suggest maybe this has been over rocked? clara: what we are seeing in copper is a tussle between short-term demand and long-term demand. short term, you have a pullback by china's unimpressive economy. lots of questions about the robbery nectar, consumer confidence. long-term has fueled a speculative run, a push past 11,000 is about long-term demand. it is about the energy transition, ev's, a shortage of

metal and that is what you are seeing today. bulls straining to keep optimism up today. tom: straining to keep it up, we will see whether or not the fundamental story is there to give copper legs. on gold then, a number of catalysts that analysts are pointing to, whether it is the central bank feingold gold, geopolitics, fed expectations, what is the standout catalyst for the yellow metal? clara: the thing i would point to is the china import figures. they are down significantly and if you think about the role china plays you obviously have big macro figures, a push for gold, the inflation, you have the fed, you have geopolitical risks all over the place. all of which push higher and

then when you look at china which is the single factor pushing us to record levels, that is looking cooler. exports, we had central bank buying cooler so that's the one to watch. a little too high at the moment. tom: that's really interesting. 2416 right now. the other element when we look at the copper story is the php bid and with eyes on copper assets, the deadline is wednesday. talk to us about where we stand? clara: so we are approaching the deadline of the takeover, the end of the day in london tomorrow. what we are awaiting is to see whether bhp will put in a firm bid for anglo-american in despite signals that it is not ready to engage or whether they

walk away, wait and see what they do, whether they can pull this off and then either come back with a lower price or have a go at buying the rump which will be left, that is the copper story going back to sentiment feeling the price higher. tom: clara in singapore, thank you indeed with a deep dive on commodities. we appreciate the context. let's check in on futures where it is looking soggy. european stocks are close to record highs. the nasdaq crossing a fresh record. european futures are lower by 3/10 of 1%. it challenged session in asia. the ms is down.

$.10 is dragging my index lower. it is down 1.7%, a reminder of challenges in china. sales dropping to the lowest levels in eight years as well. at a local provincial level. but see futures are lower. s&p is flat. coming up, how prepared are the world's biggest companies for a world dramatic transformation? we will bring you the scorecard next. this is bloomberg. ♪ life's daily battles are not meant to be fought alone. - we're not powerless. so long as we don't lose sight of what's important. don't be afraid to seize that moment to talk to your friends. - cloud, you okay? because checking in on a friend can create a safe space.

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tom: good morning, this is bloomberg daybreak: europe. i'm tom mackenzie in london, these other stories that set your agenda. traders begin to focus on nvidia earnings setting to test the ai driven rally. raphael bostic reaffirmed the higher for longer mantra in a exclusive interviews with bloomberg. not five years anymore. jp morgan boss jamie dimon lights a fire under succession talk in america's biggest bank, signaling his retirement is closer than ever. nvidia and dell discussed a new ai powered partnership. we can bring you our exclusive conversation with the two ceos. let's check in on these markets. the nvidia catalyst is going to be there for the equity markets, dropping on wednesday. you have inflation out of the u.k. tomorrow. european futures pointing to losses of 3/10 of a percent. close to the record levels.

ftse 100 looking to losses around 46 points at 8300 99. s&p futures are flat. nasdaq futures and similar territory, 18,700 52. let's look cross asset with a commentary from those fed officials once again reiterating higher for longer. that mantra ringing in our collective ears. 441 on the u.s. 10 year period loretta mester saying it would be inappropriate to go for three cuts. the dollar is slightly stronger in the session. bitcoin interesting on speculation around either etf's and approvals. it is just speculation at this point but that's powering the crypto space higher getting the leg up. that 7900 44. copper softer after that incredible rally your today 27% in the session down. dell ceo says the company is unveiling a new line of personal computers optimized for ai tasks. bloomberg's ed ludlow spoke exclusively with michael dell

nvidia chief jansson wong at the dell world conference in las vegas. >> all of our new pcs will be ai pcs. the reason is that anything you are doing that has an edit prompt is going to be sped up because every software developer in the world is figuring out how to use all this new power in the gp use, and use in this new ai pc. so that experience will be better. when your pc is now four years old, it's time for you to get a new one. you are going to want the one that speeds up those new capabilities. inside your company, they are going to want to make sure you have -- they don't want to buy a machine that's going to last for several years that doesn't have that capability. ed: where is nvidia's place in the ai pc?

i know it's gaming, again, i grew up with the gaming side of nvidia, do you have a place in the ai pc market? >> come back next year. >> bunch of nvidia gpu's and dell pcs and dell workstations, all of our gpu's have the same tensor cores that are running in h 100s in the cloud. so every one of our gpu's use ai to do its work. ai is going to transform gaming. all the end pcs, the nonplayer characters, they are going to be chatbots. ed: how will it be cut, for example? >> creating world will be easier. instead of instruction driven it's now intention driven. it's easier to write python programs. videoconferencing will be a lot better because of it. ed: what you did with blackwell and other products, you innovated by saying let's combine gpu, cpu. is that the next iteration for

ai pc? you say here's the cpu that goes with it? >> we want to support every cpu the world makes. there are places like x 86. there are places that support arm. we support arm. we went to ifc, the top most energy-efficient supercomputers in the world are powered by greece hoppers. wherever it makes sense we will support the right cpus. tom: the ceos of nvidia and dell speaking exclusively to bloomberg's ed ludlow in las vegas. ai is a key theme of a new report just released the ranks of the world's top corporations on the resilience focuses on finance, autos and consumer goods companies. the top ranking organizations are prioritizing innovation to meet the growing expectations of today's customers. let's bring in howard here, professor at the imd business school for the take on this

list, this ranking dropping today. thank you for joining us. what stood out to you in terms of the resilience or the lack of resilience across these corporations? >> competition really keeps up these days, the way i see it. it is ever more difficult to stay on top of the ranking. second thing we noticed is, across all industry, whether it's fmc g, fast consumer groups, every one of these sectors feels like a technology sector these days. tom: how close is the correlation between innovation and success because there's a risk for these companies as well, they have to play catch up, they have to be seen to be reacting to the ai revolution as a capex been. there's a lot of uncertainty in terms of how you implement these models and these products in the layering that goes on, how you get the team's stuff. there's a risk clearly. is there a clear link between

innovation and success of the corporate level? >> absolutely. one needs to be careful to keep an eye on the bottom line. the way we think about becoming future ready is doing a 360 assessment. this time it scanning the health of the business. so you need to look at the near term of grow revenue grow cash and debt ratio. make sure they have a fortress balance sheet. jamie dimon would talk about it. meanwhile, they would invest aggressively in the future. r&d spend, new innovation, whether they could scale this new innovation or not. that's the approach you could assess companies these days. tom: a couple of big name stand out from this report. i will zoom in on brodrick's unexpectedly. of course tesla, top of the list for you. interesting in terms of the ev space. on some levels, not surprising.

cutting prices, challenging the china market. stock is down 30% year today. how sustainable is the leadership at tesla and their ability to continue to invest at this level on things like r&d? >> or observation is spot on. for the last few years it is just unparalleled. this year for the first time is the bandage is almost completely eroded, except for ai. what we are seeing in the report is byd and other car players in terms of the relative score they really have improved dramatically this year. meaning the top has been crowded out. the biggest implication is the smaller player, the lower on our ranking they become increasingly vulnerable. after all, that ev transition requires so much capex investment, if you are not big enough, it's very hard to make that transition.

tom: how much consolidation do you expect to see whether in china or globally? are we had a moment where we will see rapid consolidation in the space? quakes in china we already see a lot of the smaller ev players. of course you have companies like byd, but even the auto just came out from earning announcement and they see the profit plunge. in essence, we are facing this tsunami of energy consolidation. in a few years you see it emerged by consolidating. that is just almost like a primer of what is coming in the coming years, i would imagine. tom: in the financial sector, howard, you have hsbc, j.p. morgan, you have touched on them all near the top of the list. one of those companies doing right? you speak to small fintech startups in london and they say, we will challenge these

incumbents but it seems like they are getting the mix right >> it's a mixed message interestingly in the world of finance because i think leading players, such as mastercard and visa, they really have understood, and finance is always frenemy's. sometimes you are friends, sometimes you compete. master visa, bps and jp morgan chase have opened up the infrastructure to embrace banking, to open up the infrastructure so that another fintech innovator can use their existing system to go in battle financing in another situation. in a way, this is how these existing players keep their product attractive. in short, if you cannot outrun fintech innovator, you let them join your system. tom: one name that stood out to me from this list in the consumer product space is -- and

i hadn't expected them to be leading on innovation, but you say the cosmetics maker is at the cutting edge of technology, innovation, implementing things like ai, what are they doing? >> it is a remarkable way of selling seemingly low-tech product. color cosmetics, eyeliner, by the way you look from the digital supply chain all the way to engaging consumer is what the future e-commerce would look like. for one instance, they have this augmented reality ad allowing consumer to try out different hair colors or color cosmetics in the see the conversion triple, then they put these technology to all brand under uriel whether it is all the way to sephora, that third distributing channel. so they scale this emerging technology and engage consumers around the clock to understand

what they need before they start creating the next blockbuster. i think that mine step is so pronounced, so, yes, you are right, the technology companies happen to make hair color, for instance. tom: a tech company that's essentially selling lipstick. professor at the imd business school, thank you very much with a deep dive on how these big corporate's are adjusting in terms of innovation, what they are doing right and what they are doing wrong. howard, thank you for the analysis and context. other stories making the news this tuesday, u.k. employers are offering a 40% wage premium for jobs that require skills in ai, staying on innovation is booming demand reshapes the labor market, research by consulting firm pwc shows posting for ai roles have risen almost four times faster than the average for other jobs over the last decade. searching to man is pushing up wages as companies compete for a limited pool of workers with

technical skills like machine learning. a coalition of texts -- tesla share owners is urging others to reject ceo elon musk's proposed 56 billion dollars pay package. 56 billion dollars pay package. investors are said to vote at the tesla annual meeting in mid june. the rebel say musk is distracted by his commitments to five other companies, preventing him from serving the ev maker's best interest. in the head of the federal deposit insurance corporation is to step down after findings of a toxic work environment but the regulator at the center of a heated political fight. martin bloomberg faced mounting pressure following a scathing report that detailed allegations of harassment and discrimination at the bank regulator during his tenure. the reports after a lot -- a month-long probe was based on accounts for more than 500 people. coming up, cleveland fed president no longer thinks three rate cuts are appropriate this

year. our exclusive interview is next. this is bloomberg. ♪

tom: welcome back to bloomberg daybreak: europe. raphael bostic, the atlanta fed president has doubled down on the higher for longer mantra. fed president loretta mester says three rate cuts in 2024 and no longer appropriate. >> i was on the record before saying i was at the medium, which was three. the developments i see in their economy right now, i would not think that's appropriate because the inflation risks have moved up. it's too soon to tell what inflation is on.

we need to collect more information. in the first part of the year what we saw the risk that we were too restricted with going down. last year people were worried about the fed may be getting too restrictive, therefore it will dampen the economy. those risks were going down. the risk for inflation were tilted to the upside and remain so. that's the balancing we have to do as we see policy going forward. >> i do think that our new steady state is likely to be higher than what people have seen over the last decade. maybe back to where we were in the 1990's and 2000's, we will just have to see if anything could happen. my outlook is how inflation will continue to fall for this year and into 2025. i think that it will take quite a while for us to get all of 2%. but i do think we will get there. tom: atlanta fed president rafael bostic and loretta speaking exclusively to bloomberg. let's go to the director of macroeconomic research.

good morning, thank you for joining us. is this an equity market that needs a cut from the fed? >> good morning, tom. i think we are seeing industry calibrations now settling again into markets. i think markets do need to see an interest rate cut. based on the data last week, bad news is again being viewed through a lens of good news because they have the slightly bad economic data that we have coming out of sales and a slightly hotter cpi print that's being viewed from the lens of giving way to the possibility of an interest rate cut by the fed. and i think it's quite important because we are seeing overall earnings and proven the u.s., but it seems like a split market where we are leaving on their earnings front whereas the rest of the market is lagging.

so this interest rate cut would be quite beneficial for equities going forward, especially given the fact that we started the year with such a strong expectation of more than seven cuts and it got dialed down. now we are seeing to interest rate cuts being brought back. tom: from seven to just shy of two, markets breaking it -- pricing and 40 basis points or so. the first locked in for november. with the dot plot revisions that come through in the next week or so from the fed. if we go from two to one, is there a sensitivity or vulnerability across the market in which part of the equity space would be vulnerable from a move from two to one? >> i think it will be the cyclical part of the market that would be most sensitive. most of the technology names, growth oriented stocks would get back if we see those interest rate expectations revised again.

there has been tremendous amount of interest rate volatility and to see that again would imply higher yields and those yields are going to press on and put under pressure those longer duration equity setbacks to the market. tom: what do you see in terms of that valuation gap between europe and the u.s., does that converge further, is that supportive for european equities in the quarters ahead? x absolutely. we are at a point where european equities have come for the u.s. we have seen the legacy evaluation gap now begin to converge since 2008, the financial crisis we have seen the u.s. equities really outperform european equities. this has been a remarkable year where europe has done much better, and this is really on the back of better economic

sitting. we've seen improving economic data in europe. we are also seeing the expectation of interest rate cuts, the interest rate cut cycle beginning in june and taking fruition by the ecb. alongside that, we see a better earnings distribution. so now we see european companies increased their share buybacks, and that's enhancing results for investors in europe. and i think more importantly, this valuation gap, not just between the u.s. and europe, but other countries geographically, even if you bring japan into the mix, we are seeing investors globally now want to diversify their exposure. hence, it is benefiting other geographies such as china, europe as well as japan and we have seen that play out in 2024. tom: so that diversification theme. i wonder if nvidia earnings that drop on wednesday will change that and it all gravitates back

to the u.s. if they come through with a strong beat. how important is nvidia for this global stock market? >> i think it's going to be very important. given the size and the sheer weight of nvidia, within the magnificent seven, the buzz around ai, its long-term implications as well as short-term implications. the market is on hooks in terms of how these results play out. if we do see a be transpire again in nvidia's result, that will set off a very positive elective solve the tech space that could offset some of the risk that you mention of whether we get interest rate expectations from two to one. it could offset some of that negativity and provide that positive momentum and have a

further swell that we are seeing in the u.s. play out this year. tom: the valuation gap between europe and the u.s. and how that could prove supportive for european stocks in the quarters weeks and months ahead. 20 more coming up, stay with us. this is bloomberg. ♪

tom: welcome back to bloomberg daybreak: europe. wisdom tree talking to us in the last few minutes about the importance of the nvidia earnings that draws on wednesday out of the u.s. in terms of the potential catalytic effect. i will get that word out. in terms of global stock markets. the importance of nvidia earnings and if they come through for a solid beat to put

aside concerns whether or not the fed goes in if they go. as the sales picture going back then to 2018 for nvidia is a pivot from the gpu's that underpin these nvidia or these ai models. the sales strength that has power through. 265 billion dollars in terms of revenue on the sales front. can they continue that pace of growth or is that growth starting to slow? that's the importance of the earnings story nvidia. it ties into your views around the s&p more broadly. u.s. stocks more broadly. at the time when jp morgan is the only prominent bear that remains and this is his target. he's looking past the ai effect with a target of 4200. 4200, that's a 20% gap we are talking about from currently at 5300 on the s&p. you have mike wilson reversing calls yesterday. he is now targeting around 5000 400. goldman sachs is there's barely any more upside to come through for the s&p.

but they are still there expecting that 20%. he got it wrong last year and he got her on year before as well. he was overly bullish last year and overly bearer the year prior to that. but nonetheless, that's his view in the stand out. nvidia in the ai effect. he said geopolitics concern, risk around the consumer being freed. those are all on his list of concerns. plenty more coming up. we will speak with the cfo of astrazeneca on the companies once in a decade capital market today. that is next on markets today. plus, the president of the european people's party is going to speak to the polls ahead of those upcoming european parliamentary elections. up next it is markets today. this is bloomberg. ♪

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