>> good morning. this is bloomberg daybreak. i'm kriti gupta in london. investors holding their breath ahead of the results from the

chip making giant indicating the potential future of ai. jake sullivan is in china. meeting with chinese mr. wang li. bloomberg learned the bank's incoming c.e.o. is considering cutting layers of middle management when he takes charge next week. let's get a quick check on these markets. it is august. last week of august. people are away from their trading desk. you are seeing some marginal positivity. futures higher only by 1/10 of 1%. the same over at nasdaq futures. it is very slim peckings from the index levels. i want to go to the asset picture. we're on wait and see mode for

the equity market for nvidia. the market is doing something a little bit wonky. this is still pricing in a lot of cuts going into september. after a very strong two-year option yesterday. the currency markets to me are really interesting cable hit another high 132 handle great for ex-pats leak myself. the cuts over in the state are pushing dollar lower and lower keeping currency at the elevated level. we're still monitoring what's gong nonmiddle east and venezuela and what the chinese demand picture looks like. all of that feeding into the crude picture. not a lot of action. just an $80 handle we are seeing on brent crude. that is what's going on in your cross asset picture. avril hong standing by in singapore. >> we're seeing asia markets watching out for the event, the

countdown continues to nvidia, not just because it it is the implication on the broader ai supply chain. catching a bit of a bid today. also because this is a stock that could move huge direction either way. given its weight it has turned into a macro event. caution. we're seeing a bit of weakness coming through on the yen. the nikkei again an outlier on a day where we're seeing negatives coming through. the hang seng is down today. it is interesting also because i want to highly how this is a market that has been doing its own thing. global transcendence. if you're wondering why there are negative sentimentses, in the earnings season we got the

reminder from the china economic weakness earlier in the week talking about intensifying comp it's. that's when it really hit thee-commerce stocks days ago. today we got the spring, china's beggest bottled water producer. it showed that profit growth is slowing. it showed that intensifying competition. this stock is just tanking. 13% early in the session. lowest level since its debut. something to highlight even as we keep our eyes on the nvidia earnings. kriti: certainly something we're going to keep a close eye on. we thank you so much. there is a lot going on. avril mentioned all eyes now on nvidia. u.s. futures dipping ahead of that. not by a massive margin but we are looking -- not from an earnings perspective but a macro perspective. the micro, analysts on average

protecting the company will project growth more than 70% for the current quarter. least let's hear from robert lee. pleasure to have you on the program. it is fascinating that we're talking about 70% growth in the current quarter. analysts expecting that. that still may not be enough. that may be a negative read. walk us through your initial take what you're expecting in the earnings report today. >> ok. i guess the case with nvidia is the high bar high expectations set. there is a lot of anticipation priced into the stock particularly given the recent rally after the selloff we saw several weeks ago. from a demand point of view, the demand outlook remains robust across the sector. that is not an issue. it is more down to execution. can the company continue to deliver and execute vs. very high expectations? i think one main area of focus for investors is going to be

these production delays we saw on the blackwell side. again, as they work their way through that, it is not so much an issue for the current quarter but next quarter, into the next financial year, high expectations set a high bar. are these production issues going prolong and further delay? i think that is what people will be focused on predominantly. kriti: a blessing and a curse to be an a-plus stunt as i like to say. i'm getting deja vu here from apple. still in the ramp-up process from the ai adoption story from so many different players. you starting to see delays in the plaque well chip, what kind of precedent does it set every year moving forward? >> yeah, again, i think, i mean, just moving away from discussion of blackwell for a moment. it's bigger issues at play here.

are the uses of these ai chips, the big tech platforms, the hyper scalers, etc., clearly are driven by the fear of missing out. i would say that is a big driver of the industry at the moment. a degree of hype in the sector. it has proven that ai can realize significant product activity and cost savings in certain applications. it has become clearer to investors these platforms are not monetizing a significant rate at the moment. there are big questions there. i think looking forward, if they are not monetizing at a fast enough rate, does that have direct impact on nvidia's demand for chips down the line? the production issues on blackwell are a near term execution issue. there is a bigger question about the sustainability of demand looking further out. if your customers are not making money from it. kriti: you read my mind. from a macro perspective, when

you're talking about how much of their nvidia's bottom line comes, your microsofts, amston's, etc., it feels like a liquidity as they build up their ai story. companies in silicon valley are being spent on nvidia chips. it feels like a liquidity transfer. going to middle cap players and other sectors like industrials, renewables, infrastructure, biotech companies an getting that ai inambiguous into other sectors. can nvidia comments on that diversification story today? >> as well if they want to give investors or try boost confidence in the medium term story. there is more to this than bubble and the short-term hike. yes, they could do it. but the time scale they are

talking about in the medium term we're talking five to 10 years down the line. will that impact their performance in the near term, probably not. there is a very exciting long-term futures within specific subsectors. again, how quickly is nvidia and its customers going to monetize that? monetization has to be the key question and key issue in this sector at moment. kriti: we'll keep an eye out for that. thank you for bringing us that analysis. not tom highlight today but the macro event of the week. we'll be sitting down with nvidia's c.e.o. coming up at 11:30 p.m. u.k. time. a very exciting interview. you do not want to miss it. on the back of no earnings

report, it means about 310 billion dollars of shareholder value created or destroyed. let's bring in mark kranfield. this one is fascinating to me. the options market seems to be pricing in a more negative reaction. i'm curious for macro watchers leak yourself how does this show up in financial seasons, in bond market pricing? is jay powell tuning in to our interview today? your take? >> too big to ignore. nobody can afford not to be watching it what nvidia is doing today. the numbers are just extraordinary. that is why the whole macro world is watching this. if we get anything like that kind of a move and the risk is far greater if inva videoia doesn't do what it is expected to do and we get a selloff in the stock. imagine if the scenario is disacking and nvidia starts to sell off after hours.

don't forget, there is a time span where markets are not trading for a while. you'll get a huge gap down in markets in asia. a negative read across the whole day. that will spill over to europe and book is the negative feedback loop into the united states. if we get a rescue events like that, it will become a widespread risk aversion event across the markets. people will jump to treasuries for safety. the dollar may capture a bit as well. the commodities will go backwards. crypto will be affected by this. everybody who has a trade or needs to know what inoverheadio -- nvidia is doingand will be r. they have beaten so many times and the performance has been good afterwards. it will become more of an equity event after that. more of a positive read across most equity markets. china doesn't seem to care prm they seem to be in a funk of their own and can't get out of

it. chip makers across asia will probably enjoy it. whatever way it goes, when you're talking about a $300 billion plus move. kriti: you take the fundamentals and the ripplefect. the next 24 hours post nvidia, another 48 hours get the pceat the out of the states. coming off a strong two-year option yesterday, i'm curious whatever potential damage if we get a miss on invideo quarter, could the pcedata friday reverse that end of the week at netzero? what do you think? >> the pcethis time around probably is not the event it has been in the past because of the employment data coming out next week. it is pretty clear from the signaling, the language they have been using recently they are far more concerned about the jobs market than the inflation.

they think inflation is heading their way. they will probably get confirmation of that. even if there is a deviation. it is probably not going to be too substantial. but we did see a shock in previous employment report. that's what they are most worried about. if the jobs numbers, unemployment rate goes to 4.5% next time, the fed will clearly be way behind the curve. the market will be gunning for 50 basis points in september. has the fear the fed have. that is probably the reason the treasury two-year did so well. some as a hedge against nvidia and also a risk that the employment data next week is really bad. >> a fascinating one. feels like we're putting so much hype into this nvidia story. the long-term, it is the payrolls numbers that matter. the number that sparked us off a few weeks ago. a couple of things to watch besides nvidia. we get the u.s. mortgage applications. look, this usually is not a

tradeable event but keep an eye on the u.s. housing market because we may see a potential slowdown. we're waiting for the tightening effect to show up and the expectation of a cut does not encourage a bump in mortgage applications. we'll keep an eye on that at 12:00 p.m. u.k. time and then cathy lynn mann will be speaking. it is a story in the u.k. where we're talking about inflation, employment, wages, the food data that we got this week. the prices starting to come down. what'll kathryn m mann have to say about that? and the nvidia earnings, 159% rally year to date. is the party going to continue? we will have full analysis here on bloomberg television. you get a full roundup of the stories you need to know in today's edition of daybreak. go to your bloomberg terminal. we'll be talking about stories,

warren buffett. those are your stories. coming up on the program, jake sullivan in china to try to steady chips. we'll dive into what to expect from those meetings. stick with us. this is bloomberg. ♪

kriti: welcome back to bloomberg daybreak. i'm kriti gupta in london. jake sullivan is in china to try and lower tensions between the two nations. meeting with the china foreign minister where they are expected to discuss tech, sanctions and taiwan. let's get more on the story prm jill, talks resuming today. there is a lot to cover here. can you walks through everything

on the docket? >> yeah, look, kriti. it is quite a lot on the plate for both jake sullivan and wong lee today. the u.s. feels very strongly about china's involvement and backing russian forces fighting the war in ukraine. you have a lot of concerns over semi conductors and tariffs, some of the measures the u.s. and its allies have taken on chinese projects this week. canada has implemented new tariffs on chinese e.v.'s. that is on the agenda. and also any issues surrounding taiwan which china claims as its own territory even though it operates independently. we're running the gamut of a lot of things that happen within the u.s.-china relationship. at this point ultimately, from the u.s. side there is a goal here to make sure that ties remain stable, particularly as

we get into the u.s. election in november. we'll see whether or not it is kamala harris, the current vice president under president joe biden who prevails or if it is donald trump who would then be returning to another term in the presidency. you have a lot of uncertainty of what's going to happen with this. it shows from the biden side at this point they want to keep things stable as they go forward to the end of the year. kriti: it is a fascinating one as well. we should make sure our global audience knows this, jake sullivan is the national security adviser. china has been a major sticking point in the war y ukraine. where china is playing that diplomatic role, walk us through what is at stake here. what buttons and levers can they push in terms of persuading china to take maybe a tougher stance on russia? >> well, at this i think there

is maybe a bit more leverage on the political and economic the u.s. ultimately has in this relationship now. china is still the world's second largest economy but they have dealt with a lot of different economic issues over the past few years. we know that growth is ultimately slowing in the country. consumer demand internally in china is facing a lot of headway. maybe that gives the u.s. more leverage over the foreign championship here. here to twist the screws in a little bit. we have seen when it comes to china's relationship with russia in the past, certain types of sanctions or criticisms the u.s. has levied on chinese businesses, chinese actors they have accused of having this relationship. china has defended either as you play along those line. that might be something, obviously it is a topic for discussion. we'll have to see if anything major comes out of that. all of that being said, i think at this point there is this idea that they want to keep things stable moving forward at least

through the end of the year here. kriti: something we'll be keeping an eye on. you make a right point about that as economic leefers especially at a time there are still tariffs levied on china and even sanctions. thank you so much for bringing us up to date there. other stories making news around the world. we were talking about russia and ukraine. ukrainian president will announce a plan to president biden just weeks before the u.s. election and said he will brief kamala harris and donald trump during his next trip to the u.n. general asimply. he said it has diplomatic and economic steps. the u.s. council investigating trump is pressing ahead on charges to try to overturn to the 2020 election. jack smith update his indictment

after the supreme court ruled trump was partially immune. the republican nominee says the new indictment is ridiculous and should be dismissed immediately. sticking with donnel trump, he is adding robert f. kennedy jr. and tulsi gabbard to his team. two former democrats who are endorsing his campaign. kennedy is a prom nantz vaccine skeptic and gabbard accused the u.s. government of spying on her. could it be a weren't of discontent for ryanair? we'll hear from the c.e.o. michael o'leary next. stick with us. this is bloomberg. ♪

kriti: ryanair expects lower fares and flash sales will be needed to attract would be flyers. they are expecting fares to continue tracking lower in the months ahead after seeing a 5%

yearover year decline. the c.e.o. michael o'leary spoke to our very own guy johnson. >> fares are getting cheaper but the decline has leveled off. that is reasonably good news for our shareholders. guy: what does the winter look like? >> we have an 8% capacity growth this it is reasonable to think pricing will continue to be down. guy: down? >> 5% is my best guess at that stable. every time i come up with a guess, people think it is a forecast. new routs which are -- guy: you have not -- >> we have to stimulate demand. i think that is good. we have come off two years where prices went up by 20%. how do you stimulate demand? it is good for consumers.

guy: are costs falling faster than fares? >> at the same rate as fares. burning less fuel. less co2 emissions. it is government that has committed to growth. we should scrap atg, a tax on air travel. it doesn't need to tax air travel. guy: let's talk about boeing for a second. have you spoke on the kelly yet? >> no. i speak to stephanie on a weekly basis. i think they are making some progress. we hope to get seven aircraft in july. they only delivered us five. we expected 10 in august. only got three. the problem is they are still having production issues and challenges in seattle. the supply chain is still challenged. both airbus and boeing are struggling to get their production rates up. we think and hope that it will

improve during the winter when they are under less pressure from aircraft for deliveries. stephanie is the one sitting in seattle trying to fix the production issues. so far despite some addition, she has done a good job. i'm not confident we will get the max 10's on time. i think we get certified. boeing certified in 2025. as long as that doesn't slip, our first deliveries are due in june of 2027. boeing has to start getting their production numbers up on a monthly basis and not have any more screwups like the last couple of years. guy: do lower interest rates stimulate air demand? >> i don't know but lower interest rates would stimulate more consumer confidence and spending. no doubt that higher interest rates, have depressed consumer spending.

people are paying lower air fares. there are some prices, lowering interest rates would easy that in summer 25 and 26. kriti: ryanair c.e.o. michael o'leary speaking to guy johnson. bloomberg has learned that hsbc's incoming c.e.o. is considering plans that could remove layers of middle management. we'll talk about what that management signals about hsbc and whether or not this is something that other banks can use around the world. also seeing the likes of apple. we'll dive into the details. stick with us. this is bloomberg.

♪ >> good morning, this is

daybreak europe. all eyes on nvidia, a highly anticipated result and the future of ai. u.s. national security advisor meeting as tensions rise. we will give you all the stories and a quick check on the headlines. slim pickings. higher 1/10 of 1%. slight pickup, putting the u.s. is quiet. futures underperform in all bets

are off until nvidia earnings but for the broader asset story here is the picture. solid demand. people are diving into rate cut bets, it is pushing the dollar down. 132.28 on cable. strongest level in two years and brent crude shy of $80. it is a mawo of then. let's take a deeper dive. we were talking earlier about

what we can expect from nvidia and i'm curious about the sticking points. set the tone for the broader tech sector. robert: good question. with the volatility, delays on the black will chip, there have been bigger questions about sustainability in the long term outlook looks good. new technology has significantly use. savings in the long run -- the question in people's minds, companies are driven by fear of missing out, 10 million plus

spent in capex per quarter, how sustainable is that? that question is an overhang at the moment. the degree to which they can address that remains to be seen. production delays on chips, another focus. kriti: talk about the demand. the concern is hyper scalars have 40 or 50% of the bottom line. robert: it is a concentrated base at the moment, looking to broaden the business out to

increase demand from lower corporate customers. chips are not cheap, 20 or $30,000 plus, and expensive hobby, there needs to be a firm business plan and realistic chance of making profit. again wider proliferation outside hyper scalars -- there is demand but market expectations with the stock pricing in punch evaluations. pretty -- critique -- gritty --kriti: in response to

sanctions in limits to china, it is handy you are sitting in hong kong where they had to cater to the audience. this is something peers have not done. asml in europe talking about how to navigate controls. what does the broader sector look like given those headwinds? robert: yeah, no, again, great question. geopolitics is driving within the sector. not just taiwan but also increasing economic competition in technology between the u.s., europe and china. so tied into ai, the major driver of this tension.

so that's forcing china to double up on efforts to become sustainable in manufacturing and ai and the impact on nvidia is china is a supporter of their business that has been shrinking and export plans are not helping. it is not a prime driver of revenue, but a potential headwind that is likely to grow, chiner doubles down on its sustainability objectives. pretty -- critique -- kriti: jake sullivan on what is happening. we thank you for the analysis. even more plus an interview with jensen long coming up at 11:30

p.m. u.k. time, full analysis and immediate reaction after we got those numbers. we will go to big banking, the incoming chief executive is considering plans to remove middle-management. minmin low joins us. walk us through what we know. reporter: hsbc is looking to remove country managers in its global network and change up roles reporting to the ceo when he takes over in september. early signal of how the ceo is putting his stamp on the company and a continuation of changes over the past months.

noel quinn -- we have seen thousands of job cuts in the company offloading its largest operations in north america including french and canadian operations, trying to rein in, asking bankers to scale down on spending. slowing down hiring or choosing not to replace some who have left and this idea that we are seeing the global economy slowing down, that will cut into profit margins so hsbc is doing what rivals are doing like standard chartered and citigroup. they have been removing dental staff. kriti: walk us through the other

competitors, is this catching up? minmin: global economy is slowing down, china not looking very hot, dealmaking looking lackluster. citigroup cut five layers of middle-management and restructured their banking segment. hsbc is trying to restructure the banking segment to mimic citigroup and we spoke to the head of investment banking who said restructuring has paid off, it is becoming more lean. hsbc is looking to pivot to china, hong kong as well. we know they have ambition to

build up on wealth management segments. they want to be the leading provider for the ultrarich, overtaking ubs, the market leader, trying to shift to areas of core business where they think it will maximize investor return. kriti: we thank you so much for walking us through the story, we will keep her eyes on. other stories making news, keir starmer is in germany for a meeting with olaf scholz to advance talks on a cooperation deal covering security, technology and clean energy. negotiations are unlikely before next year but an agreement is expected in the next few months. micro shares closed lower after hindenburg research disclosed a

short position and accused them of red flags and sanctions failures. a spokesperson says the company does not comment on rumors. revenue at klarna jumped with adjusted profit. there one of the most anticipated up-and-coming ipos when it comes to ai replacing jobs. bots are conducting two thirds of all interaction equaling 700 full-time agents. you can buy zepbound for half-price through lily's all hands on deck effort to ramp up supply, setting the tone with

competitors like novo nordisk. on your agenda as well in the day ahead, mortgage applications not usually tradable but seeing whether the consumer is picking up on lower rate cuts. we will let you know at 12 p.m.. opening ceremony for the paralympics. nvidia earnings after the market and catherine man from boe to be hitting the wire as well rafael bostic on the opposite spectrum, vouching for a cut with jay powell. we will dive into those details. coming up, the paralympics opening ceremony begins in paris seeking to continue the magic of the olympics. we speak to the deputy mayor next. this is bloomberg. ♪

kriti: welcome back to bloomberg daybreak europe. the paris paralympics begins today. 44 hundred athletes will compete over 12 days. joining me is the paris deputy mayor pierre. pleasure to have you, thank you for joining us. exciting time for paris. so many questions about participation from tourists around the world. whether paris wanted deal with bics. walk us through the paralympics.

are you seeing the same excitement or lack thereof? pierre: there is more excitement than before the olympics because every time we had a lot of questions. good things to welcome the olympic games and we can discover and i hope after today the massive support of the crowd from paris, from all international venues, we are really excited to start the second projects of the games. i can -- i can -- i can feel the excitement. people want to restart the party and we are ready for that. kriti: as someone who has been

to paris during the olympics the excitement was relevant even though i felt like the lead up lacked the excitement, i was the only one thrilled. talk about the economic impact. we looked at french inflation and services data last month and there was a big bump. the economic impact was coming through. do you expect the same as a result of the paralympics? pierre: we had a lot to do to be able to welcome the world and we had a week before the olympics with the opening ceremony in the heart of the city and we have a security system, a small impact the last week before but we have many more people than you can imagine who came to paris.

it was not exactly the same between the olympics and paralympic games and it is now going up for the paralympic games and we hope it will be the same for the longtime paris destination in the activity, the venue in the center of the city. kriti: yeah. >> an attractive and positive time. kriti: fascinating. as a government official i have to ask during the olympics president emmanuel macron had been vocal about a truce when it came to pushing forward next steps of government after snap elections. i'm curious if you foresee further delays from the

government in terms of the prime minister or other ways of governing in the face of the paralympics. could we see a truce? pierre: hard to say. instead of the president he had a different time just before the olympics because the decision of creating new elections was uncertain but after that we were able to deliver those games and now we are awaiting the nomination of a government. it will be close but we are not sure about anything related to that. people want to restart after the great first part of the games we had and we are waiting for the

new government. i hope we will have it soon. kriti: in addition to being the deputy mayor and being in charge of sports you are in charge of the river that runs through paris and the kind of set of a lot of the competition for the olympics. there has been controversy that several competitions were delayed because of concerns of bacteria and health. walk us through what you are doing to ensure that it is swimmable every summer. pierre: we did all what we had to do in the last eight years exactly starting on the olympian paralympians project. when you are swimming in the river it is a natural system,

not a swimming. so we have a lot of rain it has consequences and an impact on the river. now we know we are able to manage the quality of water to a good result in one or two days. now the quality of the water, excellence in the last 15 days. we are really confident you will have the official competition in a couple of days. i'm talking to you today, but we had a new swimming time altogether yesterday in the river. and as i told you, the quality is good because the work well done before. that is an example i hope many, many cities will follow in a couple of years coming to take care of our environment, so that is a positive point.

really much more important the fact of making competition in the river, the reconnection with the natural environment, sustainable for the world. kriti: all right, we will leave the conversation there. paris deputy mayor year, we thank you very much. coming up, we are diving into the markets next. stay with us. this is bloomberg. ♪ not spreadsheets. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

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kriti: welcome back to daybreak europe. the big events of the day and maybe even online is the idea that we will get a rally and

were seeing nervousness in the s&p and nvidia options. first time we are seeing hedging and this is not massive. impossibility that nvidia may not come through with an a plus record. that is just one part of what we have to watch. rewinds in terms of a two-year option. second largest, solid demand. we will get that up in a moment. indirect got a good chunk and it shows that people may hedge down , they could just be pricing in rate cuts pushing us forward to

fridays pce data, that is so significant. the idea that that is the gauge that the federal reserve will be watching and central banks where you are starting to see uptick in data. does that coincide with labor data. labor data is in focus. 25 basis points and stone, plenty to talk about we are not done. guy johnson and all of her joining me around the table. stick with us. this is bloomberg. ♪ ♪♪ ♪♪ sandals jamaica sale is now on. visit sandals.com or call 1-800-sandals

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♪ ow! whoa! watch where you're going. yeah mom, pay attention. what if it's a concussion? hang on, i'll look it up. kriti: good morning from london, uh... i'm probably fine... probably? we noticed something wasn't right and got her to a doctor. i thought i was okay, but i had a concussion. sometimes, it's hard to tell on your own. don't mess with your melon. if you hit it, get it checked.

i'm pretty good alongside guy johnson and oliver crook. markets a