>> good morning. asian shares jump at the start of a big week for tech earnings with investors looking for rate decisions from other central banks. israel attacks has blood targets

and threatens retaliation for a rocket strike that attacks hezbollah -- attacks hezbollah targets and threatens retaliation for a rocket strike. apple's new ai features won't make it in time for the next iphone and ipad software updates. good morning. a good morning. we are beginning the show with earnings from phillips, the dutch maker of medical gear. results for the second quarter. adjusting ebid at 49 million euros, so a big beat. you are seeing comparable order intake, up 9% in the second

quarter, and sales also beating estimates, but only slightly there. here we have a hot headlines crossing the terminal. adjusted ebit for the second quarter coming in at 4000 95 million euros so a big beat -- at 400 95 million euros so a big beat. they are still down 45% since they issued that recall for sleep apnea in june 2021. these are the results. we will speak to roy jacobs, the ceo, and delve into those results. we have results from heineken, the beer producer. analysts had been producing -- had been expecting a confident set of results. they see for your operating profit growth in a range of 4% to 8%. a narrowing of the guidance.

also seeing heineken taking an impairment charge of 874 million euros. they see first organic beer volumes at a growth rate of 2.1%, so actually a lower rate than the estimate of 3.7. we will be speaking to a heineken functionary. let's get a broader check of the markets this hour, because it's a busy week ahead. we have lots of earnings. we have results from four of the magnificent seven. we have a slew of economic data and central-bank decisions from seven economies, including the boj, the fed and the boe. as we look ahead to the start of the cash trade, things pointing higher on both sides. you can see on friday you had bets on a september fed put

reinforced. that bull market broadening into small caps, so you can see the s&p futures higher at four tenths of a percent. you have the 10 year u.s. treasury yield currently lower two basis points at 4.17%. bond traders wrapping up bets for a more aggressive fed. euro-dollar currently at 1.08 so pretty steady. the yen at a 1.53 handle and brent trading at $81 a barrel, so near a six-week low. analysts divided over whether the group will boost supplies next quarter. latona now on asian markets. avril hong is standing by in singapore. what's happening where you are? avril: investors are in wait and watch mode.

it's a big week. we have earnings not just from some of the mag sevens but samsung as well and chinese pmi's said to drop, so a lot of the could turn in the way of market drivers.

lizzie: we are not expecting a cut from the fed yet but walk us through the signaling we could get. >> the eco-data has been clear that the situation has moved markedly towards an environment certainly that investors think means the fed should be cutting sooner rather than later and so we have as you say -- there is nothing priced in for this week but september is fully priced in for a cut and then at least one more cut this year possibly two is currently priced and you would think if jay powell does the talk to sort of dovish talk that is expected, you would have

three cuts priced in for the year by the time he finishes speaking, so there's a lot at stake for a meeting where nothing is supposed to actually happen on meeting day. it's all very much going to be about how confident powell and other speakers are that they will be able to be sure that inflation is returning to target and will owe a fair build as well to what goes on with the labor market that we get both running into the fed and after the fed actually meets a weak jobs report in the wake of a fed meeting where maybe they are not as dovish as investors might have thought. that would lead traders to go never mind what the fed said. they will have to act. >> so potentially a lot of movement in pricing around the future path for rates even if we don't get a cut this week.

let's talk about the boe as well, garfield, because the expectation is it will be a coin toss. do you think the pound can continue its strength after this decision? >> if they cut, it could -- the pound could still remain strong. if they sound, you know, cautious about where the path is from here -- the pound might actually end up doing better than otherwise because they can go we know what the boe has done now. we can see that they are going to take baby steps, as it were, so unless you have a boe decision where the central bank cuts in signals more cuts are coming rapidly -- and signals more cuts are coming rapidly, then an environment like that, the pound could end up strong unless you get a definitive turn

to a rapid easing from the boe. lizzy: all right. garfield reynolds with a preview of those central-bank decisions this week, thank you. for more markets discussion, go to mliv . geopolitics. israel is threatening retaliation after striking hezbollah targets in lebanon after a rocket attack that killed a dozen young people in the israeli occupied golan heights. hezbollah has denied responsibility for the attack. we get analysis now from joumanna bercetche in dubai. what is the latest on these strikes? >> the attack in the golan heights marks a serious escalation on the northern border of israel, and just to recap, what happened, a rocket exploded on a football field on saturday evening, killing around a dozen youngsters between the age of 10 and 20, wounding more

than 40 others. the idf were quick to say that hezbollah were behind the rocket fired. they pointed to a specific type of rocket use -- used that could only have originated from the lebanon militia, hezbollah. hezbollah denied the attacks but antony blinken said there is every indication that it was fired by hezbollah. benjamin netanyahu had to cut short his speech and flew back to israel to consider their options. throughout the course of the day sunday, we did get or see a very targeted retaliation from israel, hitting specific has below infrastructure -- specific hezbollah infrastructure. this may be the catalyst for this to grow into a full-blown more. there has been almost daily exchange of crossfire between

the southern parts of lebanon from hezbollah into the northern parts of israel since october 7, but there was always a concern this might actually blowout into something bigger should there be a miscalculation. many are saying saturday's attack was that miscalculation and the next 24 to 48 hours will be crucial to see how both sides respond. the lebanon prime minister is calling for de-escalation of tensions, saying that there needs to be a cease-fire on the southern border of lebanon and an implementation of resolution 1701, put in place after the 2006 war, but tension is high and people are concerned about what could happen. >> how are those cease-fire talks progressing? i know you have israel's parliament about to take a three month break. >> yes. in parallel to this, it is also worth pointing out that the cease-fire discussions around gonzo are continuing in rome --

around gonzo are continuing in rome -- around gaza are continuing in rome. there was a meeting. both qatar and egypt have been crucial to mediating the talks that are ongoing between israel and hamas. the prime minister's office put out a statement saying negotiations over the main issues will continue. even when the prime minister met with president biden in the u.s., there seemed to be positive signals from that meeting that the use cease-fire discussions were moving in the right direction, at least for phase one, which would allow the secure release of hostages in exchange for prisoners held within israel as well, but how the negotiations proceed from phase one to phase two, which would entail a permanent cease-fire, is one of the blocks upon which one might stumble,

because israel has said they will not stop until they see a full demilitarization and de-radicalization of the gaza strip, and whether or not the conditions right now warrant for them to move on to the phase two part of those negotiations is a question mark but there is pressure on netanyahu internally to approve the exchange of hostages, which is maybe why we might see phase one implemented with more discussions to take place leading to a permanent cease-fire later on. lizzy: an incredibly difficult diplomatic dance. thank you for bringing us the details, joumanna bercetche, anchor of the horizons program, joumanna bercetche. get the stories you need to know to get your day going in today's edition of daybreak. they lead on markets kicking off higher as we look ahead to the bank of japan decision, the federal reserve decision. they also have president nicolas maduro winning venezuela's presidential election.

more on that later in the program. and they have the u.k. chancellor rachel reeves planning to fix economic foundations. a preview of the speech jesus said to give at 3:30 p.m. london time -- speech she is set to give at 3:30 p.m. london time. coming up, lies some new iphones may be shipped without the highly anticipated apple intelligence features. the latest on popple delays to apple's ai rollout next. this is bloomberg. ♪

lizzy: welcome back. looking at futures pointing higher in the u.s. and europe as we look to another big week of earnings, especially for the magnificent seven. apple's new ai features will come later than expected, missing the initial launch of its upcoming iphone and ipad software overhauls. i am joined by tom mackenzie. what do we know about these delays? >> this is going to be a disappointment for those who have been building up to this announcement expected in september. there have been expectation and anticipation around apple's ai devices and the way they are

integrating ai into their devices because their competitors are already doing this. they will delay the full rollout until about october. the full rollout one happen until next year. the partial rollout will come in october. it had been expected in september. this is down to the fact that they want to ensure they iron out any bugs before they release this to the public. they have had to take time in terms of integrating ai into the hardware to ensure it is ready to go. in terms of what these features involve, things like an upgrade to siri, integrating chatgpt into some of their software services, and things like note summaries. that's part of apple intelligence. in terms of the software updates, those will not include these features. that will be delayed until october and won't even be the full suite. lizzy: consumers will have to wait but software developers will get to test out apple

intelligence as soon as this week. >> yes. that is relatively rare for apple. these developers that make applications for apple's hardware will get access to this as soon as this week. that's important as far as ensuring this is ready. this is complicated stuff. apple has not done this before to this kind of scale so they need software developers to be getting hold of this. in terms of time frames, initial parts of it will come through in october, but the full suite, including some of the most significant changes to siri, will not be coming through until next year. we will have to see how the stock reacts. when apple finally came through it announced its plan, there was a lot of hope and expectation. lizzy: what will happen to the stock off the back of this? you say it's kind of rare to bring in external software developers.

i'm not sure how often we see delays like this. do you expect the stock to get knocked? >> first of all there was anticipation and concern and handwringing and the stock was dragged and moved lower as people were concerned about the fact they were delaying with their plans were around ai. when i got to the stage and announced it earlier this year in june, that lifted optimism. this is a company with a touch point across hundreds of millions of consumers. they integrated ai into their hardware. they have hundreds of millions of people globally. the hope is that will drive sales. the ai software upgrades will only be available for the most high end iphone fifteens in the iphone 16 -- and the iphone 16, which launched in september. they're looking to shed 90 million additional iphones globally by the end of this year. lizzy: teasing us there with all the latest features that we can get from apple intelligence but

will have to wait. tom mackenzie with the details. thanks. earnings will ramp up. will results turnaround sentiment or deep in rotation trade? we will bring you a preview later. stay with us. this is bloomberg. ♪

lizzy: venezuela's electoral authorities says maduro has been reelected as president for another six year term. the opposition claim their candidate took 70% of the vote in tabulations. the u.s. says it has serious

concerns the result does not reflect the will of the venezuelan people. italian prime minister giorgia meloni has vowed to relaunch bilateral cooperation with china since snubbing the belt and road initiative last year. they signed a plan to strengthen ties with meloni expected to visit and meet president xi jinping during the trip. elsewhere, republican presidential candidate donald trump says the u.s. needs to double its electricity production to dominate the ai and crypto sectors. the former u.s. president gave a keynote address in the bitcoin 2024 conference in nashville, saying he wants america to lead the way. the speech marked an about face of his stance on the asset class, which he labeled a crime riddled scam while in office. >> this afternoon i'm laying out my plan to ensure the u.s. will be the crypto capital of the planet and the bitcoin

superpower of the world and we will get it done. lizzy: vice president kamala harris has raised $200 million in her first week as 2024 president for contender, highlighting a search of enthusiasm. she is zeroing in on a group of potential running mates. sources tell us the short list includes arizona senator mark kelly, pennsylvania governor josh shapiro, and minnesota governor tim walz. those are some of our top stories this morning from around the world. we are looking at futures pointing higher in the u.s., higher .5% nearly. we are going to be looking ahead in the u.k. towards a big speech from the u.k. chancellor, rachel reeves, at 3:30 p.m. london time. she will unveil a budget date and also be telling us about what she thinks is the real

state of the u.k. fiscal situation. do we know about all this -- did we know about all this before the election? that's the debate. lots of criticism from think tanks. we can debate all of this with former shadow minister jonathan ashworth coming up. he is the director of labor together, a left-wing think tank. plenty to discuss with him on the program. that is coming up next. this is bloomberg. ♪

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lizzy: good morning. this is bloomberg daybreak: europe.

i'm lizzy . asian jump at the start of a of big tech also for rate decisions from the , boj bank of england. more retaliation for a rocket strike while signaling openness to a truce. the u.k. chancellor promises to fix the foundations of the british economy. we will preview a major speech. welcome to a busy week. not just for earnings but for central banks and economic data. we have over $27 trillion of market cap reporting results this week that includes , apple, amazon and microsoft. plenty to watch. we have futures pointing higher on both sides of the pond this morning we look towards the start of the cash trade. cross asset, you have the 10 year u.s. treasury yield two basis points 4.17%.

bond traders ramping up bets for a more aggressive fed. pretty steady as we to this inflation and gdp data out of europe this week. the na 153 handle ahead of the boj decision. trent deaf brent trading near a six week low -- brent trading near a six-week low. the u.k. chancellor is expected to accuse the previous administration of overseeing a nearly 20 billion pound shortfall in the government's financing. we are joined by the chief executive of a think tank and former labour party mp, jonathan ashworth. good morning. i wonder whether this is necessary when you have had the office for budget responsibility psalms open for the public --

responsibility su,s open -- sums open to the public for all to see. >> projections for growth. what it does not do and what we don't know outside of government is the changing trajectory of the spending profiles of particular projects, of commitments that are coming in the ministers and have stayed on their desks, if you like, gathering dust, and what rachel reuse has done and hurt that rachel reeves has done and other colleagues -- and what rachel reeves has tone and other colleagues of hers in the cabinet and what we will see is a full analysis of the spending commitments that have been piling up in the interim not being dealt with and we have heard for example or suspect details about deals and we know that the backlog in the asylum

system and hotel projections or cost projections have been astronomically astronomical and so she will present these commitments that are building up and outline the plan for now she has to grip the situation. >> our viewers have seen chancellors do this many times before and it's a classic play to tell us what is under the carpet and is it actually just a spin exercise to justify tax cuts that the chancellor and the prime minister new were to unpalatable to mention before the election? >> remember the chancellor and the prime minister -- >> yeah. >> indeed. i don't anticipate any change. but i think the incoming

government will want to do a full audit of what they have inherited. you say all governments do this but it makes sense. if you take over a government department, if you want to understand all the issues and problems you have now got to deal with, and, look, maybe it's human nature to a certain extent, if you are a government or are not expecting to lose, it's not surprising you put off difficult decisions, but someone has to pick up the pieces, although that does delay the decision, and that's what we have today. >> you rollout raises in the main rates attacks but can you categorically rule out increases in capital gains and inheritance taxes? >> well i mean i have the advantage now not an advantage i chose but the electorate chose for me of not being a politician so it's not for me i don't need

to answer those questions anymore and the way i would usually have to duck and dive and that's a matter for the chancellor and she will present a true picture of where she thinks public finances are today and she's going to bring out all the dead and problems and then i imagine she will get pressed on that today but of course we will have a budget in the autumn where we will see what the government's position is on how she is going to repair public finances going forward. lizzy: what you can see from your perspective is, if britain is so broken and so broke, as the chancellor is going to tell us, why would you want to come and invest here? >> well, because i think you have also got, with this government, a razor -- beg your pardon -- a laserlike focus on economic growth. tomorrow, you're going to hear reforms from angela rayner, deputy prime minister, to the planning regime. i think investors know that

planning is a problem in this country. we do not build infrastructure, the houses we need. investors are not necessarily interested in that obviously but i think it's important as a message to the business community across the world that britain is open for business and we are prepared to take tough decisions and we know that in this country one of the reasons we don't build is because it's not easy to get local communities to accept new infrastructure projects or planning projects. we are going to change the planning regime and we are going to build in this country so i think that's one example, and it's quite symbolic and that way, of how we are open for business, and investors should be looking at the u.k. a fresh. lizzy: investors also looking at the bank of england decision on thursday. if they don't get on and cut rates now, if inflation rises again later in the year, they could lose the window and leave working families stuck with hire

more chick that higher mortgage costs -- stuck with higher mortgage costs. >> however, however, however, however, however -- however -- i would suspect the bank of england would feel reassured that there was a chancellor making announcements today and is prepared to get a grip on the state of public finances and wants to retain -- inject discipline in the public finances. the bank of england will have to take into account all kinds of things when it makes its decisions, obviously, but being on top of the public finances is an obvious one. lizzy: jonathan ashworth, chief executive labor -- executive of labour together. on a knife edge when it comes to

pricing from traders, whether they will cut rates this week. it's also a big week for big tech earnings with the majority of the magnificent seven reporting. we will kick with microsoft tomorrow, followed by meta on wednesday, then thursday numbers from apple, amazon and end intel -- and intel. more from tim. can we expect a turnaround in sentiment or more of a selloff from big tech? >> the $64,000 question so to speak. i would argue that the tech selloff has been more of a rotation in advance of expected, you know, fed easing than it has been about a worry about tech earnings per say. look at what's moved in the market over the last couple of weeks and it's been things like homebuilders and property companies and tech has been on the other end of that. if you look at earnings coming

up, maybe there's a bit of an asymmetric risk here. if earnings are met, it doesn't really change the story. if earnings disappoint, then valuations are high and it's a sort of take no prisoner market we are in currently. those companies that are reporting i think all have individual items that are really interesting to look at. you think about microsoft and it's got really high expectations. something like 14% sales growth expected for next year. that creates a high bar for them to hit. even though we think we will hear good things about a, the overalls -- about ai, the overall spending cycle is on the soft side. amazon has strong e-commerce sales. i don't -- we think that aws is their cloud service ended -- and

it expands quite rapidly. magnificent seven. question i had 20 market. nothing impresses these traders. shania twain. >> it's actually been a good season. in europe. half the market cap reported. and we have got roughly half of the companies that have beat expectations. 30% have missed. it's been strong on earnings, weaker on sales. there has been margin compression after several quarters of continued solid expansion and we look at what has worked. it's been a variety of industry groups. what stuck out his what's not. you look at the autos and they have been harangued is from the standpoint of profit growth and,

you know, china is certainly a key part of that for the european auto industry so we will be continuing to watch there. >> also a continued key theme. we have heard phillips results, heineken results at the top of the hour. we will speak to the leaders of both companies later. tim kreger, director of equity research, good to get your analysis. it's a busy week. it's a busy day. we have the u.k. chancellor rachel reeves speaking, there she is, on a recent visit to bloomberg, and she will be unveiling just how bad the u.k. fiscal picture is as she announces a date for the u.k. budget later this year, her first as labour chancellor. we will get the latest euro area data tomorrow. this should gear up the ecb for

its next rate decision. on wednesday we have the fed rate decision. no cut expected yet but all is tuned into the fed speak as they set up expectations for potentially a cut in september and more perhaps later this year. we will speak to the phillips ceo after the company posted a gain in orders for the first time in eight quarters. we will ask in the latest on the sleep apnea machines as well. all of that next. this is bloomberg. ♪

lizzy: welcome back to bloomberg daybreak: europe. phillips has requested an increased order intake for the first time in eight quarters this morning related to the equipment maker's faulty sleep

apnea machines receded and i'm joined by the phillips ceo for an analysis. you must be pleased. a big beat. gaining for the first time in eight quarters. what's driven it? >> i am encouraged. the strong order intake actually was from a strong north american performance but also growth in other pockets. they rallied. orders coming in from strong informatics. that is encouraging. we saw strong profit improvement and cash improvement with a solid sales performance so overall we did what we promised that we would do and that also gives us the confidence for reiterating our full-year outlook for 2024. lizzy: ok.

is that consistent with what you saw in your china business in the second quarter? last quarter you said anticorruption measures there and subdued -- were waiting on your company. >> if you look at china, they are going through a change from an economic perspective, but fundamentally the market is strong. we have been there a long time to we also see active buildup. at the same time indeed, correction is weighing on the market. it is expanding order leadtimes as well as the stimulus package announced that is coming into play but not yet materializing so we expect an improving china in the second half, but if you look at the global picture, we see that desk contribution -- we see that contribution from other

places is also strong. lizzy: on the global scene, are you still struggling with supply chain issues and what are you doing to stabilize supply? >> supply is an important theme. when we launched the plan, first priority is safety and quality, second supply chain reliability. we have started to stabilize the components. good, great conversion. providing for your leadtimes are back on market levels. that helps us to get that auto intake further up and growing

and gives us confidence for the second half of the year in terms of growth. lizzy: we have to talk about the sleep apnea devices. the fda wants you to conduct further toxicology tests. when can we expect the results? >> as you know, we have done testing. testing so far has shown that no appreciable harm was done. we are collaborating with the fda and conducting further testing. that is still in progress. we will come forward when we have results. we believe those results will be further strengthening the set of results that we have had but it is too early currently to talk about that. we will have to wait until those results are finalized. we're are seeing growth outside the u.s. and we see things coming back in the

profitability. we also now see the business coming back in a positive manner. lizzy: when do you expect to be able to sell new respiratory care medical devices in the u.s. ? >> there will be -- we are still selling her face. the ones under pre-it is -- under the consent decree, it is too early to know. we are all focused on the totality of philips to bring that back into growth, stronger profitability and cash in relation, and i think that is what we showed this quarter and in growing momentum around the total phillips portfolio and what we can deliver. we have big deals being closed in north america and europe.

we are working on significant collaborations also in asia. we see globally that there is demand for the innovations we are working with customers to fulfill. lizzy: investors really are regaining confidence in phillips. you have had your two biggest investors raising their stake in the company just last month. i wonder if they told you why they bought more shares and whether you expect them to buy even more stake. >> i think we were indeed very encouraged to see that. we saw 15% earlier as a strong signal of confidence. we saw them upping their stake even after the settlement. they have been looking at our plane and great depth so they know what we are executing. we launched our plan they looked into what we were doing with safety, supply chain, simple

location of the organization. adding assets to support health care in hospital and home. they are excited about the value we can on tap for phillips but also customers and that's what's been driving further investment and what we see when we engage with other investors because after the settlement we had in the first quarter, we see them focusing on the business, focusing on the innovation potential we have to support a big sector in need, health care, which does not have enough doctors and nurses, and they need innovation. that's a technology company. we can make a meaningful difference. that is still a lot of opportunity to, and unlock -- to come and unlock. we have made the progress. we will focus on the next steps and doing so step-by-step to build back phillips to wording

on that château where it longs -- to build back phillips to where it belongs. lizzy: thanks for joining from amsterdam. those shares are up 16% year to date but still down 45% since philips recalled those sleep apnea devices in 2021. we will see what happens in just over an hour's time. we have plenty more coming up on the program so stay with us and this is bloomberg. ♪

lizzy: welcome back to bloomberg daybreak: europe. it's a busy week ahead not just for earnings but also politics. take a look at what's happened over the weekend. you can see the trump polling average in the red and the democrats in the blue. kamala harris taking over as the presumptive nominee for the

democrats before she is confirmed and look at that poll gap narrowing over the weekend. we continue to mind that. the bump from the assassination attempt really doesn't appear to have been erased. we will mind the politics and the central banks this week. we have the fed decision, a boj decision and a boe decision. let's take a look at the bank of japan. markets do see more hikes ahead from the boj. you can see the pricing here. they are expecting currently this week potentially to have also action on bond buying, but if we take a look over to the federal reserve, we are not expecting any action this week, just something to garris up for a september rate cut. the action is likely potentially to come from the bank of england.

you have economists saying it could be a tight vote on the monetary policy committee, but in terms of the decision this week, really on a knife said in terms of traders expectations. it will be interesting to see how on committee member votes. we have plenty more to bring you on bloomberg. we will be speaking to heineken's ceo. that's coming up in the next hour at 7:45 a.m. that does it for bloomberg daybreak: europe. the opening trade is coming up for you next. stay with us. this is bloomberg. ♪ (♪♪) sandals rhythm and blues caribbean sale is now on. visit sandals.com or call 1-800-sandals.

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kriti: good morning from london, i am kriti gupta alongside tom mackenzie. earnings from the biggest companies on both sides of the atlantic are coupled with the right out of the federal reserve, boe, and boj.