tom: good morning, this is "bloomberg daybreak: europe." i am tom mackenzie. ai bets, asian stocks slumped after the s&p 500's worst since

december 2022 as investors go negative on tech. the yen surges on speculations of the boj will raise rates. president biden speaks for the first time since ending his reelection campaign, telling voters it is time for younger voices to take over. reports say barack obama will endorse kamala harris for the white house. pres. biden: i have decided the best way forward is to pass the torch to a new generation. it is the best way to unite our nation. tom: it is a $2.5 trillion thursday, that is the market cap of firms reporting on the busiest day for european earnings. results from roche, nestle and more. we go to nestle with the results, the focus of audit volumes, pricing and margin as well. in terms of the latest results,

align, nestle seeing four organic revenue of at least 3% for nestle. it had seen growth of around 4%, so it is downgraded its outlook in terms of full year organic revenue to an increase of 3% from a view of around 4%. it sees underlying eps growth and mid to single digit range. in terms of 1st avenue sales, 45 billion swiss francs just a little below estimates, underlying trading operation margin in the 1st avenue coming in slightly above estimates that 17.4%. his -- we switch now to julius baer, in terms of the first half numbers that is seen is stocking 90% your today.

that is a gain beating estimates in terms of net new money, gaining 3.7 billion swiss francs. the estimates had been for 3.3, so julius baer net you have new money -- net first half new money. we switch focus to the drugmakers and roche also based in switzerland. the focus of the pipeline, stock year to date up 16%. they will further increase dividends. in terms of the outlook, the company raising its 2024 sales outlook. there is a focus on the key cancer treatment. second quarter sales coming in above estimates, it is a beat and a race of the outlook for 2024. lifting is whether full year

core eps guidance. a decent set of numbers and positive outlook for the swiss drugmaker as well. in terms of semiconductor space, st micro sees full year net revenue of $13.2 billion u.s.. we know there is been a focus on the relative softness in terms of industrial demand and auto market demand for the chips produced. their clients including the likes of apple intesa. full year net revenue of a range between 3.2 billion to 13.7 billion. that is a miss coming in softer than estimates, and in terms of second-quarter net revenue essentially and mind in terms of the second quarter, but it is the guidance looking ahead that will be important to analysts there. it is a mess in terms of the

forecast for st micro. there is plenty more of great yes coming to talk about these results on bloomberg tv as we break down an essential european earnings day. we will be hearing from top executives from julius baer, orange, astrazeneca, and roche. also ahead on the opening trade, the ceos of anglo american, unilever, and lloyd's. 2.5 trillion dollars in terms of market cap companies reporting in europe today, futures pointing lower by around .6 of 1%. the ai trade being challenged and in the way on wall street with the nasdaq 100 ending lower by 1.6%, the most since 2022. a reality check for the ai trade.

ftse 100 futures pointing lower. s&p futures turning around slightly looking to gains of around .2 of 1% but not breaking up for the losses of yesterday. nasdaq futures pointing to modest gains. let's flip the board and look cross asset. money moving into treasuries, yields down four basis points on the front end of the two year as markets ramp-up bets that the fed is getting closer to cutting. the japanese yen of rallying. copper back below $9,000 per ton, dropping 1.6%. the weakness in terms of demand around china weighing on copper. brent down .8 of 1%. avril hong standing by for a check on the asian markets in singapore. what are you looking at? avril: we are seeing a bad bleed

as the ai narrative gets challenge. investors are choosing to pull money not just out of chip and tech stocks. it is spreading to all 11 sectors of the msci asia-pacific. japanese negate --nikkei getting very hard to. a benefit double whammy project -- for japanese. a stocks a bring as much is my percent despite solid earnings from the chipmaker. that gives you a sense of sentiment in the market, and in some ways we already saw chinese markets getting a head start after the third point in disappointed today. surprising markets with a cut to the one year loan rate coming a couple of days after a cut that

reverse repo. chinese banks followed with a trim to their loan prime rates, and do some this sounds like a coordinated effort by policymakers to boost confidence , but to others this good reek of a bit of risk that the pboc is panicky, so having the opposite effect. let's take a look at the fx space, the chinese yuan as been holding up well despite the easing we have seen from china. this week the dollar slightly softer. a lot of buying going on a japanese yen. started the week at 157. there is no clear catalyst for the moves in the yen this week. we are seeing the unwinding of the carry trade, traders bracing for not just rate hike qt next week. i went to give you a sense of the momentum we are seeing in the dollar-yen, the relative

strength index hitting oversold levels gives you a sense of where we are seeing direction as well. tom: always fantastic on these asian markets. let's get more details in terms of china's central bank unexpectedly cutting the one-year policy rate by 20 basis points, the most since april 2020, but it is not been enough to boost the stagnant global stock market or the chinese market. let's bring in mark renfield. does this wreak of panic to you? >> it investors are a bit concerned, is there something much worse going on with the chinese economy because of the way these interest rates are being delivered, so we had the easing at the beginning of the week, the reverse repo rate cut down to 1.7, and that is china trying to steer investors minds by they will steer away from

some of these longer rates. the one your rate has previously been seen as a benchmark, but the pboc wants to shift in focus on short-term rates, so they did that at the beginning of the week and have been tidying up with other rates coming into mind as well, but the trouble is that they have been streaming out over a series of days. the equity market has continued to fall, but since we have had the third plenum the messaging does not seem too excited investors at all, and know you are getting rate cuts coming as well, so people are beginning to think if we cannot get momentum out of big decisions from the chinese leadership they're going to be something bad coming down the pipe. it suggests it will take a long time to rebuild the chinese economy, so the central bank is doing what they can, but it is like pushing on a string. sentiment is bad, this is not improving it, and people are

beginning to wonder how long will it be before we can get an equity market rally? tom: from surprise rate cuts in china to the ai trade unraveling overnight in the u.s., is this a turning point in terms of the ai trade or just a bump in the road? >> we will only know that for sure when we get to nvidia, but nvidia results are a month away. in the meantime we will get apple, microsoft, meta, so the season has not started well. the massive selloff already, and we have not gotten halfway through the major companies, and because nvidia who has been the one that build everybody out, they are the one who keep beating expectations looking good for the future, but it is still a month until they do, so when the meantime people will be cautious. it will be quite tough unless

something surprisingly good comes out from the other major companies in the next few days. people are likely to take a cautious approach until they see what the most important company has to say at the end of august. that means there will be a cloud over major tech companies were some time. it has gone way beyond ai. it is becoming a profit managing situation. people are cutting positions across the board whether it is cryptocurrencies, gold, commodities, anything to restore pml. today a big hedge fund manager reminded me of a quote that if you do not have any position you do not love his much as your mother, it has to go today. tom: we love that quote, brilliant. thank you very much with mothers in mind as we look at this route across global markets and maybe a pain point as we lead up to those nvidia earnings. to the politics of the u.s.,

president joe biden has made his first public remarks since ending his reelection campaign. the president framed his decision as a bid to unify the nation under a new generation of leaders. pres. biden: i have decided the best way forward is to pass the torch to a new generation. it is the best way to unite our nation. there is a time and place for long years of experience in public life, but there was also a time in a place for new voices, fresh voices, yes, younger voices. tom: let's get more from vonnie quinn. what stood out to you from this speech? >> you mentioned in passing the baton to a younger generation. that was crucial, but it was also passing the baton to the american people. it is very strong lead the defense of democracy. president biden said the great thing about america is here

kings and dictators do not rule. the people do. that was a really pointed criticism of some of the other candidates in this race. he did talk a little bit about his achievements to date. there are six more months ago in his presidency, so he did not want to make it a nostalgic run through all of his achievements speech, but he said the racial wealth gap narrowed, the u.s. is leading the world in chips and science and innovation, lowering prescription drug costs, so we took away the focus from any kind of fragility's kamala harris might be perceived to have been the focus them on the strengths of that campaign and his administration. i went to point out the good news seems to keep coming for kamala harris at the moment. nbc reporting in the last hour barack obama is very close to publicly endorsing kamala harris as the top of the ticket candidate. he had privately been doing so all along according to nbc

sources and has been in contact with her on a regular basis since sunday. tom: we have been hearing from former president donald trump. let's take a listen to what he has been saying. >> if you want socialist health care, nation wrecking inflation, the death of american energy, and a san francisco extremists as your commander-in-chief, then kamala harris is your candidate. tom: former president trump, the u.s. is now pumping more oil than it has ever done, oil and gas under president biden with the. in terms of the attack lines, what is standing unto you? >> so much and just that one paragraph alone, including the mispronunciation of her name, which is insulting. he had attacked her on her green

energy past, on border. that will be a significant place where she will be received to be vulnerable into where donald trump intends to attack her. that is one of the reasons martelly is being considered to be a topic for gp. you heard him saying she was a radical left lunatic and more to the left than bernie sanders. this is scaremongering. remind all of the other parts of her stump speech that we will hear going on. she has so many people to hire, so these are criticisms trying to get in before we have any kind of defense on the part of kamala harris, and this was another rally in a swing state, charlotte south carolina. fox news has proposed another debate and nbc also once a debate -- wants a debate.

tom: thank you for the latest. 20 of great guests as we get european earnings. starting from 7:00 a.m. you time will be hearing from top executives from julius baer, orange, and roche. on the opening trade, ceos of anglo american, unilever, and lloyd's. benjamin netanyahu gives a fiery defense of his nation's war in gaza. we have more next. this is bloomberg. ♪

tom: welcome back to "bloomberg daybreak: europe." benjamin netanyahu has given a fiery defense of his nation's war against hamas in his reached

congress in washington d.c. he asked congress to fast-track military aid and praise president biden for his support so far. >> i think president biden for his heartfelt support of israel after the savage attack on october the seventh. she rightly called hamas sheer people. he dispatched two aircraft carriers to the middle east to deter a wider war and came to israel during our darkest hour, a visit that will never be forgotten. tom: for more on this let's bring in joumanna bercetche in dubai. it is pretty significant when you get a foreign leader standing in congress giving one of these speeches. what stood out to you? >> it was the fourth time the prime minister had been invited to deliver his speech to congress. it was almost an hour long, and

to used it to launch a staunch defense of israel's war in gaza, treating it as a battle not just against hamas but their ally iran morning iran -- warning iran will look to destroy the u.s. as well. dismissing concerns about the mounting civilian casualties, over 39,000 palestinians have been killed since the war. this is a direct quote, give us the tools faster, and we will finish the job faster. what was not mentioned when sitting at the cease fire discussions. he referred to ongoing negotiations and talked about his ultimate vision for gaza, which is one of it being fully demilitarized and deradicalized, but that would only happen when they achieve

total victory. the backdrop is that there had been a lot of controversy into the events. several democratic lawmakers decided not to attend the event, including former speaker of the house nancy lizzie. aoc decided not to as well. represented shelley -- tlaib was there holding up a sign saying or criminal. the prime minister took aim at them saying any of those demonstrators are choosing to stand with the people. they should be ashamed of themselves, so he was really firing on all fronts. ultimately what he was looking to do was to remind everyone in the u.s. and back home that israel should to be very much on people's agenda. tom: how do the domestic politics of the u.s. in terms of

what we are seeing from the two main parties, the tumult we have seen, how did that play into his speech? >> it is interesting, because in his speech he thanked both president biden and president trump. he thanked president biden for the support the u.s. has offered since october 7 and expressed relief that trump had survived the assassination attempt and said i want to recognize all of the things donald trump did for israel, over recognizing the golan heights and israel's sovereignty and moving the embassy to jerusalem. listing his achievements within the region. one person who is not there was vp and presumptive presidential candidate kamala harris. she had a a conflicting engagement from long before.

she will be meeting with the israeli prime minister this afternoon alongside the president, and tomorrow netanyahu will pay a visit to mar-a-lago to meet with president trump, so what he is trying to do is appeal to all sides of the aisle and make sure the speech was one that could be perceived to be bipartisan and not warmer toward either side of the aisle. tom: not wanting to pick sides of this delicate moment. thank you very much indeed for the analysis on that speech. coming up, back to the earnings story. when all -- renault reporting its highest ever earnings. we will discuss the auto sector next. this is bloomberg. ♪

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daybreak: europe." a big day for the earnings story, a correction on roche, they have raised their profit forecast but maintained, not raise their sales outlook for 2024. they have raised their profit outlook for the full year, and it was to be coming through top line. coming up, we will be talking about nestle and breaking down the earnings on that key consumer facing company, cutting it sale guidance as prices ease off. we will have more on the world's biggest food company next. stay with us. this is bloomberg. ♪

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mackenzie in london. patient stocks slump after the s&p's worst day since 2022, investors go negative. speculation boj will raise rates and biden speaks for the first time since ending his campaign saying it is time for younger candidates to take over. obama will endorse harris. >> the best way is to pass the torch to a younger generation and unite our nation. tom: two point $5 trillion thursday, that is the market cap on the busiest day for earnings. sales guidance cut as price rises ease. the details from nestle and

numbers in terms of the auto sector, a menace for stellantis. including the likes of fiat, jeep, chrysler. net income coming in at five point six 5 billion euros below estimates shy of 7 billion euros, earnings plummeting. weak sales in the u.s., buildout of inventories and they have been hit by softness for a number of brands. for your positive industrial expectations but topline is a miss for this automaker.

nissan stock is down, falling 9% . softness in the japanese and chinese market and weakness in the u.s.. they will optimize inventories as they push out new models but they are looking at sales of 3.65 units. shares slumping in tokyo as they cut their forecast. a drugmaker listed in france, we

broke the details and the pipeline of drugs and details. first quarter sales at 10.7 billion euros in france. this company is raising its earnings-per-share growth so it has raised guidance, strong picture for them. r&d at 1.7 billion euros, in line with estimates and their key drug is part of the asked my drug pipeline -- asthma drug

pipeline. raising their full-year guidance in eps. investors take into account earnings stories. we had a route in tech stocks with the nasdaq falling 3.6% in the s&p taking a huge hit. european futures pointing lower, the ftse 100 is down. nasdaq futures point higher, flip the board and have a look at the japanese yen on a tear. 438, yields down, gdp data later

today. strengthening, is this a pivot? copper moving lower below the $9,000 mark. it has taken a turn lower. oil down. let's get more and tie in data. renault benefited from demand for expensive suv is but stellantis reporting net income below estimates. bloomberg's craig.

let's start with stellantis numbers. what stood out to you? what was the key drag? >> concern has been stacking up and stellantis is the least disciplined maintaining inventories and executives have been leaving. remarkable for that story has broken down. strong results not achieved by

volume we are seeing company is not counting on demand. starting to see cream rise to the top and they have not been executing the way toyota or gm has. >> interesting. it looks like a more challenging environment. our they executing? >> yeah, they had issues before luca kaman -- came in and he

turned them around but also getting more out of models and more profitable suvs. there is something in terms of electric vehicles and it was not long ago they were trying to spill -- been out ev business it was a good thing because there are concerns about their ability to deliver, similar story to gm where the suvs and gas powered vehicles are holding up well as the company has challenges with dvds. tom: you spent your career in japan, you understand automakers

and nissans story. in terms of this company it missed estimates, what is nissan doing wrong? craig: it's been a mess in the wake of carlos coming down, it's been consistent when you look at them used to be the case that renault was the ugly stepchild, the alliance has fallen apart and nissan looks lost. not a great story, some issues with the lineup. you look at the infinity brand and you scratch your head at the

strategy. efforts not strong, hard to find silver lining where shares reflect issues. it is across the board. tom: shares down 7%. straight talking analysis, they are a mess. greg with a wrap of earnings, thank you very much indeed. let's switch to a food producer. nestle cutting its guidance as rises in prices ease off. the world's biggest food company expects sales to grow less than 4%, let's bring in duncan fox.

how challenging is this? duncan: excuse me, it is challenging because pricing had to go up for two years and consumers got bruised so excuse me, they have to show volume can come back and make sure advertising goes up so that we by their brands. tom: eight or 10% increase, what does volume mean for prices? duncan: they will not be going up. they don't need pricing. it is a good mix from where i

can come, have not read them extensively but it seems coffee and pet food are doing well. tom: the strength of margins is in coffee and pet food but are they holding up? >> margin was better than expected. they are focusing on premium brands some the pricing should give them good news and short-term they taken numbers down by 3% so there is a short-term negative but reasonably solid, it's a problem. tom: duncan, indeed with the

analysis. coming up after years of preparation the paris olympic games finally open. we are alive hearing from celine from goldman sachs next. this is bloomberg. ♪

♪ >> welcome back to daybreak europe, happy thursday. the olympics opening ceremony is tomorrow night, bringing in 10 million boroughs -- euros. let's bring in caroline connor for a preview with great guests.

>> one day before the opening ceremony and what better person to talk to them goldman sachs cohead. thank you for joining bloomberg tv. >> good morning, nice to see you. i would not say the wall street lineup is here, but it is a huge pleasure. >> you will clients meetings, executives are here. one month of political uncertainty in france, is that

over? >> the latest political developments where unexpected and we are waiting to see what government we will have. i do not think it will change policy because greg's it moves where decided a long time ago and it translated into moving 420 people. it created volatility and might delay transactions. >> ok. does that mean we are going to have this delay until we get more clarity?

guest: i expect uncertainty to lift after the olympics when the government is appointed over summer, but the olympics is positive. businesswise it can only be. >> the impact on gdp will be 10 billion euros. >> that is significant in a country addressing a deficit. >> french finance minister pledged to make the games economical, cheap. do you agree that the damage to public spending will be controlled? >> think so, the city has never been that clean so it is positive. >> businesses might be worried

about restrictions. hotels are saying they will have a revenue shortfall. >> it's an exceptional time so people need to show adaptability because paris is not functioning as usual but having advertising and focus can only be positive. caroline: what is your outlook for private equity in the second half of the year given possibly to rate cuts? >> we are in a year of recovery, volumes are up. so the expectation that interest rates would decrease across

corporate and private equity -- i can only hope this will continue. we are more or less back to 2019 statistics, pretty covid. capital markets are functioning, a good example is high-yield bonds in french frozen food and we priced another deal. caroline: you are a woman leader , do you practice any sports? do you think it is important for women to become female leader? >> sports is essential so i do horse riding, i love horses. i will be in versailles.

sports has a lot to teach us in resilience, leadership and control. >> [indiscernible] followed the competitions we are going to see. tom: thank you indeed with that interview of the cohead of the paris office of goldman sachs on the boost to the french economy. plenty more coming up, this is bloomberg.

♪ >> i would not cut rates next week, we need to be careful about making the move since when

the fed starts to cut there will be expectation of cascading rate cuts. tom: larry summers of course on caution about when the fed should go. william dudley writing that the fed should cut next week and his focus was on unemployment, labor and softness that he is seeing. it might be too late to fend off a recession but dawdling now increases the risk. william dudley talking about softness tying into a slowdown from households and weighing on business sentiment. then you get into recessionary

territory. fascinating switch of view from dudley. what's have a look at ai trade because rates tie into that but this is more about soft earnings underwhelming, not gangbusters, that has led to concerns. tessler taking a hit. as ai hit a wall? nvidia down 7%. how much volatility around the ai theme before we get clarity. rotation as well. tremendous earnings day in size

and scope, numbers mixed. drug companies doing a little better. earnings of $2.5 trillion and we will break that down for you and bring you key interviews from the most important companies. names in terms of executives, ceo of astrazeneca, roche. stay with us for key conversations. this is bloomberg. ♪

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>> good morning, i'm in with kriti gupta. market cap affirmance