le. ea. syawesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today. bloomberg's european headquarters in london. i am nejra cehic. these are today's stories. , chair slide on extended trade. jay powell and president trump me for dinner monetary policy is not discussed. steve mnuchin also attends. .p reports after rivals nejra: good morning, welcome to

"bloomberg daybreak: europe." we are a couple hours away from cash equity trading. it is a quiet session in asia. a lot of markets closed for the lunar new year. we are seeing gains in japan and australia, the msci up 0.4%. not much direction from s&p futures. the 10 year yield around the 271 handle. the dollar is fairly steady. the big story is in australia, the aussie dollar is reversing losses from earlier, but we have seen again after we did not see a dovish tilt, the aussie trading at 72.60. the banks have been rallying, 4.5% up. some seeing it as a soft touch

from regulators, some of the worst news did not combat was expected, for example the breakup of the banks. ahead tomorrow. trump we are asking, will 's speech move markets? you can reach out to us on your bloomberg. will there be particular stocks to watch out for? will he focus on economic growth? let's get first word news now. >> donald trump's inaugural committee is under scrutiny, they raised $107 million to spend on the curtain raising event in january 2017. sources say the committee has been subpoenaed a federal prosecutors and new york, questions raised about how the money was spent.

reserve's jay powell met president trump at the white house to discuss the economy. powell's demands were consistent with his news conference. policy the president would be based on incoming data. and the decisions are nonpolitical. the dinner lasted 90 minutes. steve mnuchin was in attendance. president trump is said to be nominating treasury undersecretary to lead the world bank following the resignation last month. he has per trade the world bank as too big and inefficient. other countries have defended the organization from trump. willalia's central bank shift policy.

they left its key rate unchanged. 22nd consecutive meeting. downside risks have increased. failure to agree on brexit is holding back investment, according to ray clark. -- greg clark. the japanese carmaker will have to reapply for government grants. theresa may has until next week to secure changes that will satisfy enough lawmakers to win a majority in parliament, but there are few signs that you will budge. after meeting with angela merkel, shinzo abe warned of the dangers of crashing out of the eu. >> the key impact from brexit on the eu and local economy must be at a minimum and a no deal brexit should be avoided. >> the silken big apple is the

place of tech, new york has in global tech cities. san francisco came in second. the list was put together by real estate brokers. global news, 24 hours a day on air and at tic-toc on twitter, powered by 2700 journalists and analysts in more than 120 countries. nejra: thank you so much. softbank, theon red line on the bloomberg's third-quarter operating profit has come in at ¥191 billion. looking through other headlines, softbank sees the for your .50, that is37 coming in a little soft on estimates for the full-year dividend. if we look at the full-year net billion and seeing

that sales at 3.7 trillion yen. at 191 billiont yen. alphabets lead in late trading. the internet giant spent heavily to expand its cloud and youtube businesses. joining us is former bloomberg intelligence. thank you for joining me. margins under pressure, is that something likely to continue given what we heard. it is something the company is flagging. it is down 20% in q4. inis because of the change -- mobile search is the biggest thing they do, but the margins are thinner. youtube has lower margins. that is becoming popular now

that premium youtube tv has more content is squeezing margins as well. revenues are growing. nejra: what are investors looking for? yesterdayf questions were the investments in cloud. they do not break out how much revenue they make from it, but it is a multimillion dollar business. people are frustrated they are not lifting more because they are a huge driver for growth for amazon. thea: let's talk about hundred billion dollar plus cash pile. what might they do with that? a they were sure to spend 12.5 billion dollars on a buyback, but investors are looking for them to make a push on their cloud services. nejra: thank you for joining me. great to have you with me.

says jayal reserve powell met president trump at the white house to discuss the outlook for the economy. there is less than a month to a march 1 deadline for a trade deal or increase in u.s. tariffs . some hawks fear he may fall short. >> people in markets were worried about uncertainty, whatever the uncertainty affects are, they would have had to be bigger last year than this year. we are moving things forward. we have had productive conversations. the hope is that if the deal comes through, there will be positive resolutions to uncertainty. last year you just had uncertainty. in terms of trade, last year we had 3% growth. this year, i think the uncertainty is upside risk. nejra: joining us from moscow is

mark haefele, global chief investment officer, wealth management, ubs switzerland. he oversees $2 trillion in assets. good to see you as always. thank you for joining me as guest host for the hour. we heard the update on where we ,re looking to march 1 on trade and there was a meeting yesterday with jerome powell and president trump. we feel this is a month to take stock, there are a lot of deadlines in march. what does it look like right now? mark: i think you are right to focus on what the administration's trade policy will be, how the fed is going to move forward from here with its rate policy, and of course how corporate earnings and how gdp growth is coming in.

we are in a little bit of a lull on the data were we will not know how the economy is growing until we get to march. nejra: is that why you want to stay invested at the moment, and are maintaining overweight in global equities? we had a heck of a heckuva selloff in december, and i think a lot of reason for that was the fed press conference which had the worst response to a press conference since the early 1990's. some of the trade talk after may be getting a lump of coal in the stocking, some of the policymakers decided their talks should be more nice than naughty. we have seen a turnaround. the way we are playing back, we see earnings growth, we do not see a recession. we want to be overweight and equities. we also have asymmetrical , sosure as we have puts in

if we get a policy mistake, we would get stopped out of our equity exposure. nejra: you have that protection and even though you are staying invested in global equities. you also acknowledge that growth has slowed, but recent data points to some stabilization. that coupled with a dovish fed would make me think you might want to be bullish on emerging markets. you have had this position in emergency market sovereign debt, but you have closed that. are you closing it early? mark: perhaps. broke takingent profits. the spreads have come in a little bit, and we are doing relative value trades. we are overweight in emerging-market equities versus swiss equities, which are more defensive, and have a higher valuation. at different times in the is

exciting about it is opportunities open up, and you have to be more agile. e.m.: absolutely, sovereign bonds, you're staying overweight. you also have interesting calls on australia. this is a great day to talk about it. we had the misconduct report and have seen australian banks rally seen as ause it was soft glow. report that misconduct on australian banks impact your thinking on aussie equities? mark: we think there are a lot of factors on a relative basis that make us like canada more than australia. they are both commodity exposed, we think oil will rebound. that is a reason we prefer

canadian equities over australian equities, and the canadian dollar over the australian dollar. if you look at exposure towards china and the slowdown there, we think should there be a mistake, australia is more exposed. nejra: is there any reason australia making headlines today, we got the decision that was no surprise, but avoiding the shift of following the fed has given aussie dollar a boost today. we do prefer the canadian dollar despite what we heard today? because i think the growth outlooks for canada at this point are stronger. , globalark haefele chief investment officer, wealth management, ubs switzerland stays with us. coming up, belfast and the backstop with less than eight weeks to the brexit, the prime minister goes to ireland.

when you are going to work, tune into bloomberg radio live on your mobile device. this is bloomberg. ♪

nejra: this is "bloomberg daybreak: europe." i am nejra cehic in london. australian banks gaining after the misconduct report from the royal commission was seen as a reprieve for the banks. forced breakups did not materialize. no financial material impact. oil bounces back a little from losses yesterday. 600erday, we saw the stoxx close down, we could get a more firm open. , looking00 gained 0.7%

softer on futures. nasdaq futures not moving much despite the drop in alphabet in after-hours trading. today, we are asking will trump's state of the union speech move markets? you can join the debate, reach out to us on your bloomberg. let's get the bloomberg business flash. google parent alphabets lead in late trading. slimmer profit margins and higher spending. expenditures jumped 80%. apple that is heavily reliant as it develops cloud services and consumer hardware. >> the key drivers were acquisition costs for youtube, mostly for advertising supported content in what is a seasonally

strong quarter for youtube. it also our newer subsection businesses, youtube premium and youtube tv. which have higher revenues. buy batteryto company maxwell to speed up charging times. the deal is worth $280 million. the acquisition gives tesla the technology elon musk calls key to the future of vehicles. it is far below the $40 it saw in 1999. in exchange for assets locked away because of the death of the chief executive. $145cannot retrieve wallets lost to digital with the death of the ceo. password ands his

other records cannot be found. sachs onith goldman the share sale, they plan to forgo a traditional ipo and will sell shares directly to bidders. nejra: let's focus on brexit and get more calls to my guest mark 2 trilliono manages $ in assets. theresa may is reported to ask business leaders to help urge the european union to compromise on the irish backstop. the dup describes the backstop as toxic. let's get more with mark haefele , global chief investment officer, wealth management, ubs switzerland. great to have you with me this morning again. the risks of a disorderly brexit still remain, and in the meantime as we wait to hear how negotiations pan out, how are

you investing around u.k. assets? mark: like many international investors, we are more or less neutral to the u.k. at this time, because it is so uncertain.

one of the factors is in a world howolitical uncertainty, should clients invest around back? and some people question, do i need to be invested in the u.k. in the longer term, or how should i deploy assets? bettingsaw last year, on anyone political regime probably was certainly one of the more volatile strategies. diversification probably helped out. another topic, a lot of clients have not figured out how much liquidity they need for day-to-day lives. when you get a market selloff, a lot of them will pull more assets out of the market. they miss some of the rebound. most exciting is the interest we have had in sustainable

investing, and we will do a couple of panels and moscow on sustainable investing. in this world tour i have done, starting at the beginning of the new year and going around the world, it has been amazing to see how much the u.s. and the u.k. lag on sustainable investing compared to investors in other parts of the world. the approach to sustainable investing, what our clients wanting to focus on. mark: how do i do well? how do i find an investment ?ortfolio i think there are ways of doing that, that is what we focused on creating multi-asset portfolios that over the cycle have similar

risk-reward characteristics. that is looking long-term investing. ,et's talk about something president trump's speech at the .tate of the union see any opportunities from trumps state of the union speech? i personally do not think trading on the content of the speech, a lot of things have been revealed ahead of time will .e a more successful strategy you can look back to the famous comments about switchgrass that president bush made in 2007 or

stocks might have moved. i would not recommend looking at it that way. what many participants will be around for is the town the potential china deal. that is something international investors should be focused on. a lot a speech will be domestic focused, and a lot of people will be watching how nancy pelosi who will sit behind president trump, how she decides to play things. -- that is what a lot of americans will be watching. nejra: when it comes to the ecb, i find it interesting that one way of playing that -- mark: there again it is about

the strength of the norwegian economy. again,oil prices rise and the inflation a stronger than what we are seeing in switzerland is one of the reasons we are looking at this position at that time. that is not playing the euro directly, and what the ecb is doing, where unfortunately many central banks will feel their policy is constrained with what the federal reserve decides to do. nejra: final thoughts on the fed. dovish tilt tohe change midyear. they say they are data dependent and we have to take them at their word. it is about language. if you say you are on autopilot and you will keep hiking and the economy is strong, the economy

will not like that. -- the market will not like that. if you say we are responding to a strong labor market, the markets may like that. nejra: mark haefele, global chief investment officer, wealth management, ubs switzerland delighted to have you with us this moment. revenue slippage and more debt season isp, earnings getting underway. this is bloomberg. oomberg.

nejra: this is "bloomberg daybreak: europe." i am nejra cehic in london. let's get a check on markets around the world. a little bit of a quiet session in asia, a lot of markets closed for the lunar new year. indian markets have been trading flat. are investors waiting on the sidelines? morning. you could say that they may be waiting on the sidelines. maybe that is the most crucial point to monitor.

the markets have opened flat and stayed flat. what the markets have done in the year-to-date performance is something that brings back memories of 2018, the benchmark indices and the principal indices have stayed flat. the broader markets have corrected there a steep, and the chart shows you how in the 20 trading sessions thus far, the mid-cap and small-cap are about 6.5%. if you look at the benchmark index, that is not a side anyone wants to see. that is something i am keenly watching.

portfolios -- portfolios are bleeding. you have a way with words. i have been excited by this. 2%, this has to do with financials lifting up the main benchmark index. there was not positive news and the banking industry, they stopped short of demanding structural overhaul. even as the s&p 500 closed at a two-month high, the focus will be on president trump on the delayed state of the union speech. u.s. oil will be a focus tomorrow when we get industry data. it will rise for a third straight week. in commodities in iron ore, in singapore it is up 4%.

you can see it blowing past medium-term expectations for 2018 and 2019. today it comes back down. be a production loss of 30 million metric tons, which analysts say can be incremental supply shock. this comes after the january 25 devastating disaster at the dam. it is creating a tighter market there. nejra: we are seeing a lot of green on the commodity spectrum today. asking will trump's state of the union speech move markets? you can join the debate and reach out to us on your bloomberg. let's get the first word news. trump's inaugural

committee is under scrutiny, the group raised $107 million to spend on the trump administration's curtain raising event in january 2017. sources say the committee has subpoenaed. the federal reserve says chairman jay powell met president trump at the white house to discuss the outlook of the economy. powell's remarks were consistent with his most recent news conference. he also told the president the policy would be based on data, and the decisions are not political. the dinner lasted 60 to 90 inutes with steve mnuchin attendance.

president trump is said to be nominating treasury undersecretary to lead the world bank. the former chief resigned last month. the nomination risks provoking opposition from countries that have defended the global order against trump's criticisms. the board has the final decision to choose the leader. hasralia central bank stared down calls to shift policy. they left their key rate unchanged for a 27th consecutive meeting. governor philip lowe says downside risks have increased. parliament's failure to agree on brexit is holding back investors according to greg clark.

carmaker will have to reapply for government grants. theresa may has until next week to secure changes that will satisfy enough lawmakers to win a majority in parliament, but there are few signs that you will budge. japanese prime minister shinzo abe warned of the dangers of crashing out of the eu. impactave to keep the from brexit to a minimum, a no deal brexit should be avoided. move over silicon valley, the silicon big apple is the best face for tech. new york ranks first in global tech cities. san francisco came in second, london and third. the list was put together by real estate brokers. new york hold ahead thanks to capital and a pool of talent. global news, 24 hours a day on

air and at tic-toc on twitter, powered by 2700 journalists and analysts in more than 120 countries. nejra: thank you so much. let's get to breaking news. and thecent pain semiconductor industry, we are getting an update. the supplier to apple suspends its dividends. the first quarter revenue forecast missing estimates, that is a key red headline on the bloomberg. ams suspending dividends. as we go through other numbers, the first quarter revenue coming to $3900 million million, a miss on the estimate. looking at the four year -- thatnt, coming in at looks like a strong beat, that

is what the headline is saying. the fourth-quarter revenue coming in at $491 million, a .iss on the estimate o on numbersng a miss and ams suspending dividends and first quarter revenue forecasts missing estimates. let's move on to another part of the semiconductor industry. 2019 growth at the lower end of the range, cutting investment as well. by 100 cut investments million euro and 200 million euro. infineon seeing 2019 revenue of theat the lower end forecast range. that is iner revenue

line with the estimate. it looks like it is the cut in the investment that is on the negative side. pandora, a stock under severe pressure last year. it is now worth less than $5 billion compared with $18 billion at its peak in 2017. it cut its outlook and abandoned long-term sales. it said it would cut back on store acquisitions and expansion. ceo sincewithout a august. the numbers we have so far, full-year net income 5.0 5 billion danish krone. some of these numbers are coming in stronger than expected.

the estimate was stronger, 7.4 2 billion danish krone. we are seeing a beat on some of and is going to buy back its own shares up to 2.2 billion danish krone. i will be speaking to the pandora cfo later in the show. looking forward to that interview. earnings season for the banking sector in europe, the lenders say the painful cocktail of margin pressure, revenue slippage, and bad debt cleanup. they expect a bumpy ride. here is dani burger with what to expect. dani: we will kick into high gear on wednesday.

they are expecting double-digit declines in fixed income trading. we also get ing. despite settlements they had over money laundering. banks getting their say. it is normally a haven, we can see four cells on here, will he be immune to the difficult fourth-quarter. that is in question at this moment. soc-gen has some of the worst analyst ratings this week. it has already warned of a 20% slide in global markets revenue, so potentially tumultuous trading once that stock opens on thursday. finally, unicredit getting high marks, will be closely watched. these results are days after italy entered into a recession.

1.5 trillion euros of italian debt sits on the balance sheets of italian banks. it extends beyond italy, so i have this map for us that is telling of how much a concern the debt problem can be. euros not oflion italian banks balance sheet. 285 billion euros of exposure to italian debt. even half of that is bnp. we have from them tomorrow. at 59big holders, germany billion euros, belgian, 25 billion euros. the connection 20 economy and these banks is called the doom loop. being that we have this government at odds with the eu,

no one knows where the tipping point will come, and banks, the weakest sector in the stoxx 600 these past 12 months. dani burger, thank you so much. our teams now is leader for mliv. we have had dani set up the bank earnings, yesterday you were asking if euro stoxx 50 needed a lift from shares? talk about directionality. answerf yesterday, the to that question was a resounding yes. look at the euro stocks history in the years were banks dominated the top five worst performers of the index. that coincided with annual losses. that speaks to how important it is.

we will get more information from the earnings season and how banks arguing the future in terms of net interest margins, and the impact of the ecb low rate environment. we will also get information on how they are dealing with nonperforming modes. all of these things will factor , and toestor decisions answer the question more broadly, how stocks need to get before we see willing buyers. nejra: to that point, at the end of last year there was a comment about euro stocks set for a revival, but first the pain. when do get past the pain? >> the earnings season will be important in determining when that happens. or onld be a year two euro stocks investors. and seeing how that factors into

banks future outlooks, and how long payments can last. transitory, the outlook for european stocks, investors see a revival in stocks. it is a matter of the earnings. the current prices matching up to earnings expectation, and aligning with each other before european investors deemed them cheap enough to buy. , great tostine aquino have you on set today, thank you for joining us. eak to up next, we sp pandora's cfo. when you are traveling to work, tune into bloomberg radio live on your mobile device in the london area. this is bloomberg. ♪

nejra: this is "bloomberg daybreak: europe." i am nejra cehic in london. will trump's state of the union speech move market? you can reach out on your bloomberg. let's get the bloomberg business flash. google parent alphabets led in late trading, the company reporting profit margins and higher spending, fourth-quarter capital expenditure jumped. they are heavily reliant on ad business for profit growth. this as they developed a new offerings such as cloud service. profitable than the original google search service. >> the key drivers were content acquisition costs for youtube, mostly for our advertising

supported content, and a seasonably strong quarter for youtube. but also for numerous its caption businesses, youtube premium and youtube tv, which have higher revenues. world hasptocurrency a new problem, and exchange with assets locked away because of the death of the chief executive. retrieve-based cannot $145 million, lost access to the digital wallet with the death of the ceo in december. he was assessed with security. his widow says his password and other records cannot be found. messaging platform slack has filed to go public in the u.s. slack plans to forgo a traditional ipo and will sell shares to bidders in a direct listing.

that is your bloomberg business flash. nejra: thank you so much. pandora, europe's largest jewelry maker sees negative in 2019,rowth of 3.7% after suffering a pronounced slowdown leading investors to question its long-term prospect. joining us from denmark, anders boyer-sogaard, chief financial officer, pandora. pleasure to have you with us this morning. essentially you are predicting negative organic growth this year, so a contraction for 2019, changing your guidance metrics. is this about you managing investor expectations? thank you very much for having me back on the program. starting with the last question about changing our guidance metrics, that has been a decision for the last couple of quarters. is changes we are announcing

very much expected and appreciated by our investors and analysts across the world. beis great, there will negative organic growth in 2019 -3% to -7%. a big part of that decline is a commercial reset using the promotional lever they have had the last couple of years. nejra: it is hard to see how investors will see this as a positive thing, having negative organic growth, even though i understand you are trying to put a positive spin on it. do you expect the buyback to offset negative reaction from investors? we do think what they are announcing this morning is

what our investors are expecting us to do. the promotional level has been 2018. high in 2017 and there is a general understanding that in order to protect our increase the price sales through in our company it is the right thing to use the promotional lever. the good thing is that it is a deliberate decision, a one -time thing that happens where we reset our revenue slightly lower the more sustainable. reducingll you be those promotional levels globally, and in certain markets? it is a thing we will do across markets in general.

there will still be promotions in pandora, but what we are reducing is the promotions between the main gifting periods. it is a phenomenon you will see across some markets more than others, but it is not a few selected markets. ceoa: you are without a since august, why is it taking so long to put in place a new ceo? is it that nobody wants to catch a falling knife? ongoing,he search is and what is clear from our announcement this morning and in november is that we are executing forcefully and with full speed, even though we only have interim joint leadership in place. the search is ongoing. nejra: what skill sets are

needed in leadership in terms of people joining the board? late december, it was announced we are proposing two new senior members of the board of directors to be elected at the annual general meeting in a month's time in mid-march. meanwhile, the proposed candidates are working as advisors, and advising the board as of late 2018. analysts, rbc a revolution,eeds not an evolution. it says the store network is overextended. instead of making changes to promotions, will you start cutting back in terms of closing

stores? that is part of the plan. stores in opening new 2019, and we expect to open 75 isres, but in that number also a number of closing of stores across the world. opened around 250 reduction it is a 70% of the net opening of new stores in 2019. we see a of potential to open new stores, but mainly in white space areas like in china, and less in america. nejra: thank you so much for joining us, anders boyer-sogaard , chief financial officer, pandora, coming up, we get earnings from bp. we speak to the ceo.

you can catch that interview after 7:30 a.m. london time. this is bloomberg. ♪

nejra: good morning from the city of london, i am nejra cehic. these are today's top stories. head in the cloud, alphabet scoops the market is jumps on data spending, shares slide in extended trade. jay powell and president trump need for dinner but monetary myicy is not discussed richard clarida and steven mnuchin also attend. corporate results set the tone on lunar new year, growth concerns dominate earnings. bp reports imminently after its rivals the the street last week.

welcome to daybreak europe, it has gone 7:00 a.m. in london, under an hour and the start of cash equity trading. let's get to the ap numbers, fourth-quarter adjusted net for bp is coming in at 3.4 8 billion dollars, the estimate, 2.6 $4 billion, the fourth-quarter dividend per share coming in at 10.2 five cents, 10 .2 five cents. we have the beat there on that fourth-quarter adjusted net area just to give you some context, four of the largest competitors exceeded estimates last week weathering volatile oil prices to generate mountains of cash. the cash flow is one of the key things we're looking at for the oil majors, going into the earnings season there is some high expectations from investors, they want to know if

the oil majors are investing and want to know that they are bringing their debt down and they want to have those dividends and the return of money to shareholders. high expectations, a lot of the oil majors, we spoke to shell and the ceo and said we will do it out of those investors, that is the context in which we are going into the numbers. fourth-quarter organic capex coming at $4.4 billion. live blog top desktop that you can follow everything on as the numbers come through. we will bring you more as they come to you on the bloomberg and we speak to bps ceo bob dudley, can catch that interview after 7:00 a.m. london time. sticking with the same industry, let's take a look at rosneft. 102.5 billionas rubles, a miss on the fourth-quarter net for rosneft.

fourth order free cash flow comes in at $4 billion for rest aft. -- rosneft to. billion dollar drop in debt. that is the key headline. ebitda fourth-quarter billion rubles, that is a miss, fourth-quarter revenue at 8.2 4 trillion rubles , that is a bead on the estimate of 2.13 but key numbers to focus on, the fourth-quarter net, 109 billion rubles. still keeping an eye on bp but let me get to a different sector of the on rock -- online grocery sector. seeing a decline in 2019 given retail revenue,

growth between 10% to 15% in the final year, the full-year at five point 9 million pounds. a miss on the full-year ebitda. is 1.6 2 billion pounds. been taking a look at the futures. we take a look at how they are doing, these are the earnings coming through, we are getting a positive direction from futures, futures, dac, and ftse futures coming up. let's get the bloomberg first word news. >> donald trump's inaugural committee is under scrutiny. they raise to $1.7 million to spend on the curtain raising event in january 2017.

sources say the committee has been subpoenaed by federal prosecutors in new york. questions have been raised about how the money was spent. the federal reserve says chairman jay powell met with president trump at the white house to discuss the outlook for the economy. powell's remarks were consistent with his most recent news conference when he talked of a new rise in decisions. he said it would be based on incoming data and decisions are nonpolitical. dinner lasted 60 to 90 minutes. with richard clarida also in attendance. president trump is nominating treasury undersecretary david malpass to leave the world bank. he has for trade the world bank is being too big and too inefficient.

the nomination risks provoking opposition from countries that have defended the existing global order against trump's criticisms. the board has the final say in choosing the leader. parliament's failure to agree on brexit is holding back investment according to business secretary gregg clark. expandere abandoned to production. they will have to reapply to government grants. they have until next week to secure changes that will satisfy enough lawmakers to win a majority in parliament. there are few signs the eu will budge. after a meeting with angela merkel, the japanese prime minister warned of the dangers of crashing out of the eu. global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. thank you so much. european earnings season getting

into full swing, infineon sees 2019 revenue growth at the lower end of the forecast range am growth concerns dominating earnings from pandora. bp reported fourth-quarter adjusted net earnings of 3.4 8 billion pounds, well ahead of estimates. let's get the thoughts of our guest. great to have you with me. i want to start with the chipmakers, not only from ams, we are getting signals of pain and the semiconductor industry. it suspended its dividend, the first quarter revenue forecast missed estimates. is this setting a negative tone for the earnings season going forward what we are hearing and what we have heard so far? guest: the peak in earnings was a year ago and so we are -- we

have the peak and now we start to see a tax on earnings. there is nothing really new but investors seem to be -- there is this feeling, it seems to be concerned about this momentum with earnings which is across the globe and across all sectors. it is a macro story, declining growth that we are seeing. you makeat make sense, the point about the semiconductor industry. we got the numbers from amazon yesterday and saw a drop in after-hours trading. not that much but it was down 3%. do you take what you see in the semiconductor industry and translate that into your view of ae broader tech industry or part of the industry you like, we have seen some of the banks do ok in earnings.

if you'll give the next two to five years, this is a lot of potential. there is -- in the short-term what we see is a cyclical sector, very explosive growth and it is exposed to any interruption in global trade. it is expensive compared to the sector so i feel the upside is in the sector. i do not feel this is the right time to invest right now in the sector. are saying this is a macro picture that is having an impact on earnings and there are concerns around global growth. the relief rally and's soon. the sector is depressed, there was talk about a u.s. recession. fed overhe risk of a

tightening. most of the risk is manageable. we had the big rally and markets. the really fizz over. there is the direction of the market determined by growth. there will be an acceleration in the decline. there is the key question for investors going forward. nejra: you do think there is great value in china. is that based on valuations rather than a view that growth will not be as bad as people expect? luca: it is the fact that expectations are too large, it is the only country in the world that is [inaudible] and valuation is attractive. we like emerging markets because what -- growth is weakening but still descent. so we are feeling that the emerging market in general will have positive growth in china is on the equity side, the market

looks more attractive because of valuation because growth is stabilizing and many investors are still negative on china. because of the trade wars in these kinds of things. emergingu mentioned markets, you ceo and a sweet spot but given that you think there are concerns around global growth, your view on being be to doon em must that you see this paschi continuing the fed -- with the fed. how does that and the cycle? luca: i am not so sure, the fed is not making a policy mistake am a they are not tightening too much because of inflation, because of growth acceleration. they may heighten -- hike in another time but it does not make a big difference. the emerging market is a valuation of growth but i want to be honest with you, i would , welike emerging markets

expect a recession to happen in the next six to 12 months. have time to think about it. for now, growth has been relatively decent, china's reflation, there are all elements that suggest a positive outcome. an overall to get view on how you would allocate, you're still somewhat pro-risk in certain parts of the portfolio. market currencies -- we are cautious on equities. the rally is pretty much over and we are of the view that it is a place where investors should invest, they are expensive and we are cautiously optimistic in some areas of the market but in general defensive in our sector of allocation. nejra: talk to me about that, would you have any positive views on oil? position,educed our

there is strong performance in the energy sectors, investors are becoming more optimistic. i do not -- we feel there is more upside in other cyclical mining, potentially much more exposed to china's inflation story but for the energy sector during, we feel that is -- it is the nice -- right time to reduce exposure. nejra: you are reducing exposure in the oil sector at the moment. let's get a recap on the results from bp that was breaking at the top of the hour. first of all, we do have a tliv lot where you can follow all the commentary around this. taking a look through some of the numbers coming through, for bp, the fourth-quarter adjusted net came in at $3.48 billion, the estimate was $2.64 billion. that is the number on the fourth-quarter adjusted net.

full-year organic capex, bp sees that as 15 billion to $17 billion, other investments at $3.5 billion and then saying the 33%ating cash flow is up for the full year. these are the numbers coming through from bp at the moment. blog,g at the tliv dividend per share coming in at 10.2 five cents. having a look at some of the first comments from the ceo, this is from the company's press release, we have a powerful track record of safe and reliable performance, and we are doing this while growing the business, he said. we speak to bob dudley, you can catch that interview after 7:30 a.m. london time. also, the u.k., germany, and

france recognize juan guaido as the country's interim president but the eu fails to support him at italy. we will bring you the latest. this is bloomberg. ♪

nejra: it is 7:18 a.m. in london, we are 42 minutes away from the start of cash equity trading. i am nejra cehic. we could get gains, the euro weaker.- eurostoxx nasdaq futures not showing a direction.f unchanged on a 272 handle, the dollars drifting. i am focusing on the aussie,

reversing losses, it dropped on retail sales but gained after the rba tech policy unchanged. we did not get the dovish tilt some were expecting. back from losses, we look ahead to crude inventories tomorrow and in the oil sector, it is bp you want to focus on in terms of european earnings, adjusted that coming in at a strong beat, copper on a tear, up 8% -- .8%. today we are asking the question on mliv, will trump's state of the union speech move markets? the bloomberg business flash, dudley humphrey has that in dubai. >> ims is suspending its dividend and postponing plans for a secondary listing in hong kong. this as company's first quarter misses estimatet

. an uncertain macroeconomic environment. the stock is falling. the cryptocurrency world has a new problem, and exchange with its assets locked way because of the death of its chief executive. they cannot retrieve $145 million worth of digital tokens, and lost access to the digital wallet with the death of the ceo in december. he was obsessed with security, his widow says his passwords and other records cannot be found. platform slack has filed to go public in the u.s., it is said to be working with gore -- goldman sachs and morgan stanley. they will sale shares to bidders in a direct listing. that is your bloomberg business flash. nejra: thank you. the u.k., germany, and france let a host of european countries in recognizing one glide oh at

the country's interim president. they joined an international push criticizing nicolas maduro and calling for new elections. the eu fail to jointly support guaido with countries including italy doing the decision. great to speak to you. does not having a common position in the eu we can the venezuelan position? >> this was the situation, the eu is supposed to come out with a joint statement. this is a question they have but it was unable to do that. the government lock the language and feet of the document and what you had was member states recognize the opposition as the president of venezuela, we disavow nicolas maduro. mean good news for them because you have germany, france, and spain which came out and publicly and vocally

supported him but when it comes to the eu, foreign policy is still an issue and if you were you -- looking at sanctions could get a situation that would be difficult to agree on what to do. nejra: trading a venezuelan debt came to a standstill yesterday after the trump administration updated its sanctions guidelines in the past two days. at same time you have jpmorgan being said to be reviewing venezuela's status in bond indexes. maria: this is a fascinating andry which seems -- sc because of the sanctions that were put into place by the treasury, it is unclear with the language means, a lot of these traders think they can get into legal trouble if they sell and buy them. what is interesting is the bonds have rallied. investors are saying there is money to be made if you get a change in the government because

they could go into restructuring the way that argentina did or you could get any administration empowered, if you see a country that is able to grow them of the problem is the legal language is unclear and it does seem the u.s. treasury department wants to keep it that way to stop the cash flow into the government. nejra: a great roundup, thank you. little bit about emerging markets earlier, i know that one of your biggest overweight positions is em local bonds. ms. venezuela an area that bears looking at? of the bank sot we look at it, our view on emerging markets is more general, we like mexican bonds and countries where we see an improvement in fundamentals where rates are high and relative to the [inaudible] that is why we look at

especially russia. do you look at russian equities or is it the bond space? luca: equities are attractive. we are not bullish on energy. the country has a big advantage. there is no foreign debt, a very there issense, we feel a lot of potential in russia. we do not think the risk of sanctions now are high relative to europe. we feel russia on equities and bonds is a good investment. nejra: you mentioned valuation quite a few times, the best opportunities are found for you see missed pricing by other investors. luca: that is the case when the market is in the range, sentiment indicators should become much more relevant. about picking is the right countries, the right whens, the right sectors,

there is a positive but also when investors are still skeptical, cautious, this is where the most interesting investment ideas are. nejra: we're looking at the state of the union speech by president trump, not many people see it as a trading opportunity but you does u.s. tips are one of your biggest overweight positions. earlier, you're saying you do not expect a misstep from the fed so tight that together with thisview on u.s. tips, is to do with inflation? luca: it is a mix, government bonds are the few areas where it is a developed side. global, think of the u.s., we are at levels where they are interesting. the second is more about risk management. of the risks that we have is the potential spike in u.s.

inflation, we can create a lot of problems, some kind of hedge on this would be positive. 1% is not great but we feel that there is a combination of factors especially that makes tips it attractive. nejra: is gold hedges well? on thee are optimistic long-term. gold is a play on the weaker dollar. still low interest rates, political risks, we feel that gold is one of the best investments. 20% innot want to have gold. to two or 3% makes a lot of sense. great to have you with me this morning. that is it for daybreak europe.

the european open is next. we speak to bps ceo bob dudley after the strong beat, you can catch that interview after 7:30 a.m. london time. this is bloomberg. ♪

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bloombergome to markets, the european open. we are live here in the city of london. anna edwards. matt: liv-ex falls to its lowest level since september of last year, asian markets provide little sense of direction as european futures rise slightly. the cash trade kicks off in 30 minutes time. ♪ anna: head in the