tom: good morning. this is "bloomberg daybreak: europe." these are the stories that set your agenda. manic monday. global stocks plunge and bonds rally over concerns that the fed is behind the curve. goldman sachs raises the odds of a u.s. recession to 25%.

warren buffett grows his cash pile. his second-quarter selling spree. unrest in the u.k. the prime minister calls an emergency meeting after a weekend of widespread disorder and far-right riots. tom: welcome back and happy monday. brace yourselves for a challenging day across the market. european futures, one point 3% after a loss of more than 3% across the european space last week in terms of stocks. downside stateside. it weaker jobs report and

unemployment moving to 4.3 percent. and the repricing across the curve. aggressive moves across and do -- into u.s. treasuries. markets reprice in additional cuts this year from the federal reserve. ftse futures pointing lower by 60 points. s&p futures stateside looking to further losses of almost 2%. and the nasdaq 100 in contraction territory. let's look cross asset because the moves and the japanese yen have been pronounced. the strength coming through for this currency. look at the mexican peso. down for percent. gains of 2.2% for the japanese currency.

3.8 on the two-year after a 50 basis point move. bitcoin getting crushed along with ether down almost 10%. don't forget that we were close to 74,000 at the record high in terms of bitcoin. brent, currently down close to .2%. looking at the geopolitical risks. the selloff in asia where the pain in japan has been pronounced. let's bring in avril hong standing by in singapore. what a morning. avril: i almost don't know where to begin but let's start with the japanese currency. an extreme rally as traders seem to be moving quickly out of the formerly crowded positions and reacting to the u.s. jobs report and the recalibrated expectations of what the boj and fed will do. not just the yen rallying but also the chinese renminbi.

amidst all of this the levels we are watching on dollar-yen because it has broken through the 100 week moving average. this is close to erasing the declines the yen for this year. let's talk about cross assets. the extreme selling and buying we have been seeing today depending on which asset you're looking at. the topix seeing it's worth day since 2011. we are also seeing indiscriminate selling hitting the bags. we also see a rapid coming down of yields raising the concerns about what we will see four bangs. seeing the worst day since the 1980's.

nikkei futures, jgb futures and also interesting to see that on a day like this, a china equities not fearing as badly. a bit of a safe haven. sentiment towards the chinese equities. the steep selling also being seen on the taiex losing the most. we have not seen declines like this ever. the worst decline ever on record. tech stocks taking a beating on the msci asia pacific index. berkshire hathaway halving it's stake in -- its stake in apple. tom: let's stay with the rout in global stocks and what is underpinning it. bond yields tumbling after a week u.s. jobs report.

let's get more from mark cranfield. how much of the selloff in the session today is about the jobs report and the catch up in terms of sentiment? mark: it has quite a bit to do with it. it is not the only factor. what traders are really worried about is we are getting something like a kind of policy mismatch of signals like we saw in 2022. then the fed allowed inflation to go up quickly before they started to ring it in by hiking interest rates. when they did so, they needed to do it a few times by 75 basis points. now they seem to have delayed lowering interest rates when the economy needs it. it is no wonder that traders are

already pricing 50 basis points for september and they may go further. we still have two inflation reports to come before the fed meets again and one more jobs report. if that data continues to question the state of the american economy, the traders will keep driving for lower rates. the equity markets are joining in and it was bad last week already. that is fueling the move into bonds which is the only safe haven and a massive reversal that april is talking about -- avril is talking about. tom: looking at the two-year market, 379. eight basis points in terms of the yield on the front-end. it was about a month ago that you flagged the risks of a jumbo

cup from the fed and the reaction was, you are getting ahead of your skis but now everyone is catching up to you. it is pronounced the way the markets are pivoting. as you look ahead to this week, how do you expect the market rotation to play out? what are the key risks -- is this a market that has gone too far? mark: it is certainly looking exaggerated. even so, the mood is so ugly and no one is quite sure how big the positioning is. if you think of the move up in tech stocks in the united states, and you have companies like nvidia that flew from one trillion to 3 trillion market cap. that sucks in an enormous amount of investor funds. we don't know how far it will go in the retail sector and the institutional sector.

people having losses in one part will look to shave risks in another part to make up for it. though it looks that on a long-term basis there is some relative value starting to appear, it japanese equities falling into that category but will anyone be brave enough to put their money to work when it is just selling, selling and more selling. they desperately need central bankers to come into the market and speak to the market saying don't worry. if we don't get them and the european central banks speaking to the market, it will get worse because traders will take it into their own hands. they will think something is going wrong in the background and they need to reduce their positions immediately. tom: ok, we will listen out for the fed speakers in the days ahead as we look at this continued rout as it moves into the bond market.

mark cranfield on a pretty remarkable move we are seeing across the markets right now. what a catalyst in terms of the negativity. and warren buffett's decision to sell down heavily is stakes in apple. this comes after a massive second-quarter selling spree that boost warren buffett's cash pile. let's get the details and bring in critique group to -- kriti gupta. >> there is speculation that this is a story about the consumer. warren buffett is known to have an exposure to companies like railroads and coca-cola. this slashing he has done in other parts of his portfolio including bank of america. there is a consumer story baked in. the bank of america story -- it

is a bank in the states that has a lot more consumer loan exposure than any other of some of its counterparts. that is one aspect. apple falls and the same category. it is a luxury product but a good chunk of its revenue is based on foot traffic into some of its stores. there are arguments that apple has been having a tough time getting on the ai train and getting hit by the fx exposure internationally so there is speculation that were in buffett saw this was a stock that was overvalued. if you put this in with some of the other plays he has made a could be a read on the consumer which folds in nicely with the major a selloff around the world and the stock market and specifically in japanese banks which is another warren buffett bid. tom: thank you very much.

more from berkshire hathaway. the sell down a bank of america last week and now apple, cutting that stake by 50%. significant on multiple fronts. this is involving the french bank, socgen selling private banking units in the u.k. and switzerland. socgen has signed agreements with ubp for the sale of two of its units. the transactions are to be implemented at a total price of about 900 million euros. in terms of the value of the deal including equity. and in terms of the timeframe, they expect the deals to be completed by the end of the first quarter of 2025. socgen selling its private banking units in the u.k. and switzerland. here is what else to be thinking

about. today we will get u.s. ism services index which will be published stateside giving you a clearer picture of the service sector in the u.s. services costs and inflation have been a key point for this federal reserve. how things have changed in terms of expectations. the expectation from the likes of steady that they will cut up to 50 basis points in september. on tuesday, saudi aramco earnings. one of the biggest listed companies and the world. on wednesday, talking about nordisk earnings in terms of europe. really consequential for european equities on the earnings space. coming up from israel bracing for retaliatory attacks after

the assassination of hezbollah and hamas leaders. we will have the latest from the middle east. that is next. this is bloomberg. ♪ (♪♪) (♪♪) (♪♪)

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tom: welcome back to "bloomberg daybreak: europe." the losses across asia continue to extend. earlier in the session we had a circuit breaker kicking in in japan and now the kospi and south korea falling more than 8% triggering a circuit breaker. tech is part of the selloff story in south korea and the concerns there. the readjustments to concerns that may be the fed is behind the valuations around tech have been stretched in the selling

pronounced in south korea. a similar pitch in japan where the nikkei is down close to 10%. a brutal day for asian equities. let's get back to geopolitics. in terms of the geopolitics, israel is in focus once again bracing for attacks in terms of potential retaliation for assassinating the hezbollah and hamas officials last week as the u.s. presses for a cease-fire deal. according to axios, secretary of state antony blinken told g7 foreign ministers yesterday that an attack by iran and hezbollah could begin as early as today. walk us through the developments over the weekend. >> an attack appears to be imminent. axios is reporting that antony blinken had a call with his g7 counterparts in which he warned that an attack on israel by iran and its proxies could happen in

the next 24-48 hours. this as he simultaneously in both sized -- emphasized the need for a de-escalation of tensions. the u.s. central command leader arrived in the middle east on saturday plan that part of a planned trip where he is expected to shore up regional and international support to put together a coalition in defense of israel's air defense system. centcom in conjunction with the other members of the coalition were key to defending israel's air defense system at the time of the barrage of the attack that came through from iran. it is interesting that he is there in the region. this alongside embassies in the region specifically lebanon urging its citizens to get out

immediately. it certainly does appear that if it does happen, it will happen sooner rather than later. the region is very much on edge. tom: ok, the latest out of the middle east as we watch for any potential retaliation from iran and its proxies. it is a big news day. a different story, this is around dealmaking and l'oreal agreeing to buy a 10% stake in a swiss company focused on dermatology. a few details coming through in terms of what this could mean. they agreed to work towards a scientific partnership. the ceo of l'oreal saying they support the strategy. the top line is that l'oreal is

buying a 10% stake in this swiss listed company focused on dermatology. our exclusive interview with a billionaire as we begin a week of special coverage on his business and succession plans with unprecedented access to the adani group and its next generation of leaders. this is bloomberg. ♪

tom: welcome back to "bloomberg daybreak: europe." today we begin special coverage of one of india's most controversial and largest business groups in our exclusive interview with the founder. he reveals how he is putting in motion one of the largest and most challenging succession

plans as the adani group continues to face the fallout from last year. adani dismisses allegations -- >> it has been a volatile a few years for adani. the indian billionaire has built the adani group into a sprawling conglomerate that controls critical infrastructure projects in one of the world's fastest-growing economies. it has made adani one of the world's richest people but it has attracted accusations of cronyism over his close ties with the prime minister as well as questions about corporate governance. in january 2023 those concerns erupted onto the global stage when hendon berg research accused the adani group of stock-price manipulation. though they deny accusations the

report still triggered a meltdown in shares of the groups listed firms and cast a shadow over the company just as it was eying a wider global play. the stocks have since paired most losses and the adanis have pried up fresh financing. they won a reprieve from india's supreme court. but fears linger as investigations by india's market regulator and the u.s. department of justice continue. it is with this backdrop that the 62-year-old founder spoke with bloomberg to say he is setting in motion a succession plan will hand the running of his massive conglomerate in eight years to the next generation of his family which he dubs a g-tube. adani limited on camera questions to succession. we asked him about the impact the short seller report and its aftermath had on this transition plan. >> mr. adani, you said the

succession plan was conceived about 10 years back. in the last two years since the hindenburg report has it hindered the plans implementation? >> this incident makes family more together and work very hard in fighting back. and i definitely believe you will see that this incident will be a great opportunity for family unity. secondly, they work hard and working on the connections in each and every aspect of the business that we have to do. the adani group history is high-performance. >> your company's strategies and

priorities -- is there something that will continue? >> i strongly believe [ indiscernible] you always get the tailwinds and not that headwinds. and that helps the group to grow faster. >> that strategy has meant the adanis controls big chunks of india's infrastructure. so the decision on how the adani group will be managed in the future will have ramifications beyond the conglomerate and the family. >> tell us about your succession plans. what steps are you putting in place to ensure this goes smoothly for the investors, the family and the company. >> succession is a very important -- is very important

for the business sustainability. it has to be organic and gradual and very systemic. succession is a long journey. and my plan of succession started almost a decade ago and i gradually conducted our g2. the succession will be completed according to my planning in the next 8-10 years. tom: the adani group chairman speaking exclusively with bloomberg. and our special coverage of the adani group continues all week and culminates with a special report on friday with an encore presentation midday and the u.k. at 4:30 p.m. in mumbai.

let's check back on the markets. we are seeing a meltdown. the topix is down as you can see in japan. the nikkei 225 is down 11%. you are seeing basically the gains of the year being wiped out. the kospi, the circuit breaker kicking in, down 8%. the nasdaq futures pointing to further losses of 4% and in europe you're looking at losses of 1.7% after with so much entertainment out there wouldn't it be great... ...if you could find what you want, all in one place? show me paris. xfinity internet customers can enjoy the ultimate entertainment experience and save on some of the biggest names in streaming, all for just $15 a month. get the fastest connection to paris with xfinity.

tom: good morning. this is "bloomberg daybreak: europe." these are the stories that set your agenda. manic monday.

global stocks plunge and bonds at rally over concerns the fed is behind the curve. japan's topix and south korea's kospi sink. goldman sachs raises the chance for a u.s. recession to 25%. berkshire hathaway slashes its shares of apple in half. and keir starmer calls an emergency security meeting after a weekend of widespread disorder and far-right riots. let's check in on these markets. a meltdown in asia. the msci asia-pacific pacific has wiped out the gains of the year. topix is down 2% for the year. the bengs getting crushed in japan and in south korea. european futures pointing lower by 1.8% after 3% loss last week.

the nasdaq 100 with losses again today. looking at further losses of close to 4% on the nasdaq 100 paired ftse 100 futures pointing lower by a full percent with the s&p futures looking at losses of close to 2%. let's look cross asset. the move into treasuries and the bond market rally continues after the gains we saw last week. the two-year saw gains, 50 basis points. a 10 basis point move lower today and building on the bond market rally with the expectation that the fed could go with a jumbo cut. it is a view of citi and jp morgan in september. markets pricing in a full percentage point of cuts by the federal reserve. rally in the yen, 143. not long ago it was 161. we have moved from 161 to 143 in

a space of days. unwinding the carry trade's. the mexican peso crushed. bitcoin feeling the pressure down 10% after losses of 10% last week for the largest cryptocurrency. brent down .5%. breaking lines when it comes to the early story. infineon, fourth-quarter segment result margin. the margins coming in at about 20%, below the estimates of just shy of 22%. the estimates were for 21 point 6%. they now see fourth-quarter margins of around 20%. in terms of full-year revenue, that is coming in lower than estimates. 15 billion euros versus 15.1 3

billion. in terms of the full-year forecast, within the guided range but we know there has been a challenge particularly in terms of the v-chip demand and smartphones. we saw that with the likes of samsung and qualcomm. let's cross over to get a more broad look at the equity market story. u.s. stocks and the index futures something we have discussed. mounting concerns over the economy. japan's topix crashing more than 10%. let's bring in mliv's paul dobson. is this an overreaction of the jobs report that we had on friday? a number of jobs added came in well below the estimates. is this an overreaction? paul: it is certainly a grim reaction in markets today and part of that catalyst was the

payrolls report. a lot else going on in the background but if you think about the jobs numbers it was a mess but still a positive number. not an immediate signal that we are in contractionary territory which you might think was the case based on the market reaction. what we do know is the fed has been concerned about the labor market and has paid close attention to it and a lot of the literature has been pointing to the idea that actually job losses have been more extensive than the data has so far shown. in taking it a step further you can interpret from some of the data out there on the labor market that the u.s. could already be in a recession. the fact that we suddenly saw this turning point that everyone had been waiting for maybe has lit the fuse in terms of this

market selloff. so yes, the news we have today is very extreme even in u.s. futures and asia's markets and not looking so good for europe. and the single data point is not enough to get us there. there is a lot else going on in the background but there is a reason to be more concerned about the u.s. economy and therefore the global economy. tom: the benchmark in your part of the world, the msci asia-pacific pacific is down 6%. the nikkei 225 down 12.2%. the kospi down more than a percent. why so much bloodletting in asia? paul: it really is asia that has been bearing the brunt and not just because of the u.s. issues. there is also the fact that tech has been bearing the brunt of the selloff and asia has a number of tech heavy gauges particularly when you look at

what is going on in south korea and taiwan today. a fairly grim reading as well. and in the background we have the japan story which is connected and not connected with the rest of the market. everyone in the world has been cutting rates or talking about it while japan has been hiking and it seems to be at the wrong moment. it has caused a reversal in dollar-yen. central banks moving in opposite directions. potentially. and that seems to have whipped up volatility in other markets causing an unwinding of carry trades. it is -- it almost becomes self-fulfilling. the more we get those increases in realize volatility the less appetite for risk the market has and it has to retrench and that pullback is what we are seeing. people are selling first and asking questions later.

crypto as well having a particularly grim day. people are selling liquid assets and assets that have done well which tells you that sentiment is turning negative and asia is taking a big hit as a result of that. tom: 142.81 on the japanese currency. paul dobson with some of the factors feeding into the market losses. losses in the treasury -- we are not seeing losses in the treasury market but significant gains. some of the biggest names in terms of the earnings story all reporting this week. will the earnings story give some respite to these markets? we are expecting results from iht, airbnb and nordisk.

thank you for joining us on set. another big week in terms of the earnings story for europe. where will you focus --can we expect some reprieve? >> unfortunately earnings have not been that supportive as we have seen so far through the earnings reporting period. on the one hand, results so far are showing 50% beat versus 30% miss. you might think it is all right. earnings growth for the quarter is 3% versus 1% going into the quarter. but, the second half estimates for growth have actually come down a little bit from 7% growth now the market expecting 4%-5% growth. the second quarter beat is not

following through from the standpoint of expected earnings growth going forward. so i would say it is not such a great signal so far along with whatever else is going on in the market. tom: i'm surprised that you are still speaking to me after i butchered your name. interesting in terms of earnings expectations. novo nordisk -- the gains have been phenomenal for this company. what are you looking for within novo? >> you have eli lilly and novo. these are the two plays for the anti-obesity world which has been what has driven these stocks to these magnificent levels. novo has come back down delay from the standpoint of

highflying stocks and the valuation premium has come off a bit. it will be interesting to see what both companies say about this product. not only is it allowing you to lose weight but there have been indications about what does it mean for your heart. there are indications about even possibly alzheimer's. tom: almost on a weekly basis. >> notwithstanding the market mess, i think seeing what happens in terms of further discussion about the longer term potential of this miracle drug will be on everyone's mind. tom: a great set up on another big week in terms of the earnings story. the director of equity research for bloomberg intelligence. to politics, the u.s. vice president kamala harris is set

to -- is said to have met with her possible running mates. sources say harris met with arizona senator mark kelly, the pennsylvania governor and the minnesota governor tim walz. the democratic national committee plans to nominate a ticket virtually this week. the president of ukraine has ushered in a new era. two f-16 fighter jets passed overhead while reporters toward an airbase on the outskirts of kyiv on sunday. and in the u.k., the prime minister has called an emergency security meeting in a bid to quell far right riots that have ripped communities across do kate -- across the u.k. the disorder fueled by an online misinformation campaign since an

attack we could go left three young girls dead. let's bring in roz madsen. what has sparked this in a number of cities in the ok? -- in the u.k.? >> the spark seems to have been the stabbing of young children at a dance party in southport. quickly a bunch of this information circulated online that seemed to be propagated i far-right groups from inside or outside the u.k. alleging that the perpetrator was a muslim and an asylum seeker. both which seem to be inaccurate. that spread quickly fanning that migrants are causing problems in the u.k. which led to people gathering outside refugee centers, asylum centers and in some cases attempting to set them on fire. it is a bit evocative of the

2000 riots that we saw in the u.k. that keir starmer was the key prosecutor of. brags it was supposed to in a way send down these issues around migration in the u.k. but migration has only become more of the political debate here fanned by these right wing groups and by disinformation. the idea that migration is a fundamental problem for the u.k. which snowballed into what we are seeing here with more protests and gatherings planned by these groups. tom: thuggery as the prime minister describes them. a number of factors feeding into this. roz madsen, thank you for the latest. back to the markets and those superlatives keep coming. thailand's taiex down 8.4%, the

worst day on record. in japan, you are looking at the topix heading for its worst selloff since 1987. there is a meltdown in asia. u.s. futures, nasdaq futures pointing lower by 4.6%. coming up, we take a look at emerging market credit and the position they're given the about -- given the volatility we are seeing. this is bloomberg. ♪

tom: welcome back to "bloomberg daybreak: europe." traders pricing it fed cuts of more than 1% this year following friday's soft jobs report.

markets also watching the uncertainty around the u.s. elections. the election in november. take a closer look at what this means for emerging market credit. and who better to join us for this then trang nguyen. let's start with the fed story and the rapid repricing as we look at money moving into treasuries in an aggressive manner in the session today. and then you have the political risk of the u.s. how do you see that impacting flows into em credit? trang: we have had a lot of conversations about doubt. -- about that. chances are we are getting the rate cuts that we are talking about. at the moment, as we wake up today, risk assets are in the red. we might be getting the rate cuts but the changing narrative around wide the fed is cutting

-- moving away from this immaculate disinflation narrative the markets were thrilled about earlier this year into reassessing the scenario where recession risks are back on the table and that is risk off. i think the rate cuts are still required to see the inflow story returned em that we also need to see stabilization in markets. this is an environment where we need to see some decisive policy actions. tom: in terms of this policy actions, none of the central banks in the em world were ahead of the curve in terms of getting in place those rate reductions given the way inflation has adjusted in that part of the world. is there much more that central banks in em can do? trang: we are looking at an environment complicated by politics. markets are now reassessing the potential implications of trump

2.0. one of the key channels of risk, from the trade and tariff angle. that has a negative implication on growth but also on inflation dynamics. that will complicate central bank's ability to deliver cuts. beyond that, there are a lot of other issues that markets are assessing when it comes to the future of nato, what it means for middle east tensions and ukraine and migration issues in latin america. a lot of issues that are nuanced in terms of the implications on specific em markets and there is an undercurrent from the sentiment challenge -- sentiment channel that is negative. trump 2.0 increasing the narrative around fragmentation, deglobalization and multipolar is some. tom: dollar denominated debt in ems have outperformed local. trang: i have been advocating a

positive narrative for em credit for some time. there is a positive fundamental improvement. we have the restructuring story coming to a conclusion whether it be zambia, ukraine or ghana trade we have improving reaching trends as well could if you look at the ratio of upgrades and downgrades, it is the highest it has been in a long time reflecting and improving trend. in the last two weeks we have had two countries be upgraded to investment grade. it bucks a trend that we have seen in 10 years. this trend is taking shape in a gradual manner but i think it is worth highlighting. em credit is still a good trade. i still advocate the high-yield ers.

the selloff environment -- tom: give us some names. where are you finding alpha? trang: ukraine has been one of my favorite trades for some time. and some of the stories where there is a strong imf backing and positive momentum in terms of reforms including egypt, argentina and ecuador. tom: the bnp paribas global head on em credit strategy. fred could be cutting and political risk could be rising. there is plenty more coming up. this is bloomberg. ♪

tom: welcome back. brace yourselves for more volatility. here is a gauge. the inversion you are seeing, on the front and in terms of pricing of options around volatility you are seeing more pronounced moves. the inversion is there. interestingly, the last four times this has happened, the s&p is nearing a bottom. the other space is getting crushed again today and you can see that in terms of bitcoin and ether. 74,000 was a record high and we are now around 53,000 for bitcoin. and the pressure around the cryptocurrency space remains. you have seen an outflow in terms of bitcoin etf's, the most

in about three months. the biggest drop since the implosion of ftx. is this a buying opportunity? the other negative factor for these markets is what berkshire hathaway is doing. warren buffett cutting its stake in apple 50% after cutting its stake in bank of america last week. it has a cash pile. the question is, how will they deploy that? superlatives coming fast. the pressure and the selloff -- this is a meltdown in asia markets. the kospi down on most 11%. the banking sector being crushed in japan. the msci asia-pacific pacific wiping out all of its gains this year. japanese banks really facing the pressure. s&p pointing lower by almost 3%. the nasdaq 100 looking at losses

of five point 5%, already in correction territory prior to the start. later today, 9:30 a.m. u.k. time we will speak exclusively to the ceo of novo holdings. novo nordisk reporting earnings later. we will be walking through trades and the wild they for the markets. that is up next. this is bloomberg. ♪

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>> good morning, i'm guy johnson. we are an hour away from the opening trade. aggressive selling, european and u.s. futures are