♪ matt: good morning from berlin. i'm matt miller and this is daybreak europe and these are the top stories. the wage debate after jay powell downplayed the slide in u.s. inflation. will the april jobs report show a tighter labor market in the u.s.? hsbc is moderating cost growth. the cfo tells us it can continue to have positive jaws rate euros for the rest of the years. --eu commissioner plus, france's third-biggest bank sees fixed income sales weigh as troubles at its investment bank continues.

>> at the beginning of the quarter, the same order of magnitude as last year, low demand. a slight rise saw in supply and demand. ♪ matt: and the breaking, earnings continue to roll in. -- $429 million is what swiss we learned in the first quarter. the estimate was for $518.3 million. so they miss on net income. pnc reinsurance had a combined ratio of 1020%. first quarter -- 10.3%. positive r.o.e. there.

for up to one billion in swiss francs in share buybacks. that's an important headline if you hold the shares. you'll get a boost by about a billion swiss francs may 6. saleso had earnings out, were 16.2 billion euros compared to the 16.1 billion euro estimate. the bsf had an adjusted earnings before interest and taxes the operating profit line that germanic investors watched so closely. a7 3 billion, and that is beat compared to the estimate of 1.6 7 billion in a survey compiled by bloomberg. re and a by swiss ebat by -- beat by basf. announcing an extra

500 million euros in cost savings and 1600 job cuts. the deputy ceo spoke with caroline connan all in paris. >> if you look at global industry, both of this performance is for equity side, a bit better than the average. and for the technical part, in line with the average. the situation on the first quarter in terms of supply and demand was, at the beginning of quarter, was similar to last year. risee end, we saw a slight in supply and demand. so the situation in terms of volatility remains low. globally speaking, we are in line with markets in businesses. the big thing for me is the equity business is less volatile than the average. compared-5% is quarter to last year.

do you see this upturn incline activity, do you think it will continue through 2019? >> this is very much linked to the global environment and the geopolitical risk. the brexit, though global situation you have. it is too early to say. specifically on france, the first quarter in the french return has been supply and demand. the france -- of the pressure is on rates rather than client demand. caroline: in the french, retail revenues were 3.2%. aren't you concerned about the social climate, the fact it can impact business confidence? impactingtingly, it's the confidence of business managers. you look at the demand, there is no significant impact up to now. is good thing to comment on

our first quarter revenue in the french return has an stable compared to the last quarter -- has been stable compared to the last quarter, which is stable in my mind. matt: that was socgen's deputy ceo speaking with caroline connan in paris. let's check in on the markets in asia. for that, we go to rishaad salamat. getting to the: hang seng, key driver of .2%, down for much of the morning. asia-pacific stocks flat. asx 200, banking there, depressing things. hsbc is doing, down about five hong kong cents at the end of the morning session. 2.3%up 2% for hsbc stocks, effectively. the bank of china, icbc still in the doldrums, the outlier being

what's happening in agencies. the markets looking for any breakthrough in trade talks. we get u.s. numbers later today, as well as the earnings. let's have a look at the reactions we had for hsbc stocks today, after the lunch break, because we were down by five hong kong cents. there you go. up 2.3%. you can see that massive leap up. just been talking to the cfo. he was talking about this beat they had, one of the best quarters in 14 months or something like that, 14 quarters, i should say, 6.3 5 billion. those are the figures. the cost versus revenues, revenues on the way up. decent number this year. that's what we have. i think you've got more to dig deep into those numbers, matt.

matt: yeah, there was a lot to talk about with you and we've got a lot of interesting news, as well, but certainly a beat investors are rewarding with a jump in the shares. thank you very much, rishaad salamat from hong kong. joining us is tim craighead, our strategist. and still with us, benedikt kammel, the senior editor on the global business team. tim, let me start with you and let me ask what you make of earnings season so far. thatave 235 companies reported on the stoxx 600 and overall, although they are showing growth compared to the same quarter last year, they're missing analyst estimates if you tally them up together, vote on sales and on earnings. why is that? tim: so, a couple of things, matt. i guess our numbers would take

this slightly different from the standpoint of the beat versus miss. we've market weighted the number and with about half of the companies having reported, as you said, we got actually slightly better numbers than what was initially expected. we've got revenue coming in better than 5%. we've got earnings that are tracking about 3%. expectation was 2%. this is on a weighted average, set we difference than equal weight on ea. reaction has actually been positive from the standpoint of about .5% average reaction on the upside to these numbers. and so, all told, with a low bar set coming in, we've been

somewhat pleased with what we've seen coming out. matt: who do you think is doing the best, benny? where are the outperform or so far, given we have less than half of companies reporting so far? benedikt: some pockets of strength we've seen our financials, hsbc this morning. you see it in stocks. when a company does well, stock really does well. when a company doesn't do well, it doesn't get penalized that much. that's what we've seen continue. we've seen industrials and chemicals do reasonably well, benefiting from a stabilizing economy. european gdp is bottoming out. we have an oil price that's stable. that's all helping. we've seen real strength in areas like rug -- luxury. that pushed the market ahead. we've seen notable weaknesses.

google. quarter a really tough and of the stock had a three-day, quite dramatic slide, i think the worst since 2015 or something. there are pockets of strength in oil, in industrials, in finance. revenue growth is doing well. the bottom line is not holding up as well as the top line. we've seen revenues grow. leasing companies hold costs under control -- we've seen companies hold costs under control. matt: what about forecasts? it's more important to hear what businesses going to be like going forward rather than look at the historical earnings picture. tim: you're absolutely right and in this instance, quite critical. it's not so much the first quarter that really matters, although nice to see it come in better as we been cutting it. the key is profit recovery as we go into the second half, and

looking out to 2020. this is the nadir. i mentioned we've got about 5% revenue growth, but only 3% earnings growth. we've seen market contraction so far for the period. that's not something great to support, a 60% gain -- 16% gain in the market. we need earnings to celebrate. guiding earnings is somewhat modest, which is not such a big surprise because ceo's like to overpromise and under deliver. it'she crux of the story, china-u.s. trade breakthrough. it's nationalistic, populist it policies,tic resolution of brexit. and all those things need to be resolved over the second quarter to give visibility into the

second half. matt: what is the biggest issue for you, benny? about was all we talked for a long time. it seems to have moved to the back burners. the ecb has tried to normalize policy. they haven't been able to. negative interest rates have been rough. you still got the issues of banking problems in italy and greece, as well. where do you think the biggest issues are? tim: brexit remains a massive issue, for companies in particular. there is a lot of uncertainty about what this means for the consumer and will companies like unilever and nestle be able to push through price increases? will consumers stomach that? that's a big issue. globally speaking, the trade war remains a lasting issue, particularly the german car

manufacturer. they are looking at what might have come out of the white house, in terms of tariffs. and obviously, where does the fed in the latter part of the year? we heard they are in a wait and see pattern, but we don't know. we see the job report today. that might determine the way forward. pattern,s in a holding they can't lower anymore at this point. we're not going to see a lot there. oil is stable. euro is giving companies tailwind. it's more on the macro side. brexit, trade, said. -- fed. matt: i can lead a show with that everyday. benedikt kammel, our senior editor at bloomberg news for global business team. tim craighead, our bloomberg intelligence european strategist is going to stick with me for the next hour right now. i want to get to bloomberg first word news. for that, we go to olivia hows

in london. olivia: stephen moore has pulled out of the running for the federal reserve board. president trump said he decided to withdraw himself, but hours after the former picked told us he was all in. he said he would only pullout if trump asked him to. >> not too concerned about this. i think if we can steer the discussion away from things i wrote 20-25 years ago and more what i believe on, in terms of what i believe in the economy and stable prices, i think i'm going to win a big majority. olivia: -- looks to be making headway to bring costs under control. revenue gains outpaced cost increase in the first three months. that's a positive jaws. questions overd its strategy since it failed on the metric last year. >> our target is to have positive jaws throughout the year.

if you strike out the revenue this quarter, revenue growthless in line with cost growth. we think we will be able to achieve over the cutting quarters, positive jaws for the remainder of the year. olivia: donald trump doesn't want anybody to see his tax returns. one group has had a look through, deutsche bank. they had access in 2012 before agreeing to lend money to the trump organization. it had soured after the financial crisis and ascended into litigation. global news, 24 hours a day on air and at tictoc on twitter, powered by more than 2,700 journalists and analysts in more than 120 countries. this is bloomberg. matt? matt: olivia, thanks very much. olivia with your first word news. coming up, we speak with the ceo of austria's largest industrial company. we speak with runners a lot of omb up next. this is bloomberg. ♪

matt: good morning. this is bloomberg daybreak in berlin. i'm matt miller. india's most viable bank expects the most financial sector to remain stressed the next year. although the moment of crisis past, hcfc bank managing director spoke with bloomberg editor in chief john mickelthwait in mumbai. did was very clear definition of our target margin. risk, reward, and constant monitoring. if any fundamental violations -- violated, profit one up. we strongly believe in banking. you give me money, we give you bank. i think, to some extent, what happened was, at least for the

large -- that accumulated, was probably less than optimal assessment of the capital project risk. john: is that an oblique way of saying the state banks were not very good at this? >> i will leave it at what i said. i said that we didn't do that because we didn't find the risk report matching. john: but there is a massive gap between the private banks, such as yourselves, which have low nonperforming loans. want to include the state banks, it becomes a lot. >> did we need a lot of improvement in the state banks? i would say yes. have we made progress? substantial progress. if you see what the regulator has done, they did it as a quality review. mechanisms forp faster recognition of problems. three, they set up the bankruptcy court and some people started thinking they didn't

have to repay the bank loans. four, they moved in terms of changing their in checks and -- inspection basis. five, they are moving in terms of consolidating banks to improves risk. the state bank and india bank are not the same. john: do you think the election makes any difference? i'm not asking you to rate them, but would there be a change if we were to switch in terms of how banks are treated? >> the good thing in india, once things are public domain, it doesn't matter who's in power. this will stay its natural course. performs,s in place plus what is required going into the future, my answer would be yes. john: is there one particular financial reform you would like to see? >> well, there are a couple of them. i think we need a debt market.

i think we must understand that liquidity is definitely important. thinkthan that, i don't -- the debt markets is a lot. john: you have all these nonbank financial companies and they have not always been great success. is that mess being sorted out? when,, roughly do you expect that to be finished? herethink it's recognized -- not backed financial companies -- need to have regulated themselves better. but now regulators are putting in place. what happened, there are asset liability mismatched. they didn't have liquidity cushion. and they probably needed more inspection. we had a crisis. the crisis is gone, the problem remains. two things are happening.

one is the banks are tightened up. two, the regulators are tightened up. three, slow growth. there will beis, -- john: do you have been and eight? >> i would say -- an end date? >> i would say the next 10-12 months. >> let's get back to what's going on. omb reported first-quarter profits missing estimates. the austrian oil and gas group says for your will be in the billions of euros. but the production target will depend on output from libya. i'm excited to be joined by -- thank you for joining us this morning. i want to start with what's going on in libya. you mentioned in march, you were able to return production and at the here and, meeting your -- at

the year-end, meeting your production target. would you be able to extract production from libya given your situation? >> the situation continues to be very fragile. we have produced at the end of march and seen no interruptions and no operations. if you see that the main unrest is focusing on the capital of tripoli, the operations are not really in the main focus or infected. but this can change from one day to another, therefore we are calculating with a stable production because we don't see any unrest in our operations. and therefore, i think we can calculate with stable production, but it's very fragile with a big question mark. >> that question mark, that's going to impact the possible 500,000 production target. how much are you worried you won't be able to make that

full-year target? >> as i said, it all depends on libya. give libya is running smoothly with our expectation of something around 335,000 barrels per day, olympia will meet the 500,000 barrels per day target. turmoil,e libya in venezuela in upheaval. we still have the iranian sanctions now. we have contaminated oil from russia. i just want to ask you, why aren't we seeing in oil at $90 or $100 a barrel? >> first of all, the market and the traders really are observing what are the consequences. as we have said, sanctions are coming in on a higher level. but we have to see, it depends strongly on how much china, india, and turkey will comply with the new sanctions. and the market has priced in already that there will be a little shortage of iranian oil.

we have to wait and see how opec plus is going to react on the new situation. the sanctions always out balance the market. opec always rebalances the market. we have to see whether or not this mechanism will also be in place for the rest of the year. annmarie: do you think the current situation will put pressure on opec and their ability to maintain production discipline? rainer: well, they have done quite good last year and i don't see that there is a disharmony in opec right now coming up. russia is also an opec plus member in full compliance. right now, i don't see that opec will do worse. seele, thankner you so much for joining bloomberg television. coming up, we're going to keep on oil. we speak to the ceo. don't miss that interview in 15

minutes time. this is bloomberg. ♪

matt: this is daybreak europe. we look at the markets around the world. for that, we go to our reporter in mumbai, nejra shop. and annmarie hordern, as well. how are the markets in india looking? --aj: well, they started off good morning to you, of course. they started off flatish. what was working was flat. and you could argue that banks gained esteem, private banks in particular. as a result, the bank index is

up one whole percent. and that's significant weightage. as a result, the others are up .4%, as well. that's the good news. the bad news is that the natural calamity, the cyclone phony, is about to land. and that will have a big bearing on what will happen to businesses across the region. the maps show you the entire area that could get impacted at different time frames. there's a bunch of financial companies which have got small finance banks and lenders in that region. those companies stand to get impacted. metal companies, that gets impacted. a couple of cement plants. largest cement plants exist and that gets infected, too. you can't place value on human lives. there is significant potential

impact of economy, but officials told us, they have said typically, a cyclone of this nature tends to weaken after four hours. once it lands, it tends to weaken, maybe the impact could be lesser. we only get to know about it when we know about it. back to you. matt: we will be following that cyclone in india very closely for you, as well. thank you. you're looking at how global markets are doing. what do you see? annmarie: not a lot of conviction in other direction. hong kong stocks are positive, edging higher, nearly up .3%. this is after hsbc had earnings and topped profit estimates. we are seeing strength in u.s. dollar. brent crude down .4%. oil headed for its first back-to-back weekly loss this year.

i want to show you something we don't see everyday. this is the ipo we saw yesterday. it made history, the biggest ipo since the financial crisis. it's a vegan burger maker. they serve 163%. they are bigger at the moment than traditional meet powerhouses like sanderson, and this brazilian beef company. they're below tyson or gbs, but it just goes to show this new age in the meat world, and how much excitement there was around this ipo. you don't normally see a company like this swell 163% in one day on their ipo. they are making history in the vegan market. matt: the biggest ipo pop we've seen since before the financial crisis. i think a lot of people are excited about the climate affects of switching diets for meet to plant-based products. -- from meat to plant-based

products. novo nordisk coming out with earnings before interest and 14 .20 4.2 4 -- billion kroner. we were looking for -- 14.24 billion kroner. we are getting audited oscars wasng out with -- avid us 5.8 8 billion euros. selling almost 6 billion euros worth of stuff in the first quarter, and confirming its 2019 forecast. as we were talking with tim craighead just a moment ago, the forecast, even more important, really fortinet -- clearly for investors than the historical numbers. adidas,arter revenue at 5.8 billion euros. we're going to speak with the ceo of adidas coming up.

the chief executive, don't miss that interview at 7:30 a.m. london time. let's get bloomberg first word news. for that, we go to olivia hows in london. olivia: it's too early to predict the trading outlook for 2019. the net income fell twice 6% from a year earlier. trading was also down. but the equity business is showing resilience. the firstuation on quarter in terms of supply and demand was the same order of magnitude than last year. with low demand -- at the end, we saw a slight rise in terms of client demand. olivia: john flint looks to be making headway to bring costs under control. that's as hsbc first-quarter profits beat estimates. revenue gains outpaced cost increase in the first three months.

that's a trend referred to as positive jaws. europe has faced questions over its strategy since it failed on metric last year. >> our target certainly is to have positive jaws throughout the year. if you strip out the revenue this quarter, revenue growthless -- growth was positively in line with cost growth. we think we will be able to achieve over the cutting quarters, positive jaws for the remainder of the year. olivia: turkey's inflation seems to be reversing course. economists predict prices rose at a faster pace. that follows a slowdown of five percentage points since last summer. this comes at the wrong time for a bank that wants to undo prices. inflation data is out today at 8:00 a.m. london time. global news, 24 hours a day on air and at tictoc on twitter, powered by more than 2,700 journalists and analysts in more than 120 countries. this is bloomberg. matt? matt: thanks very much, olivia hows in london.

let's get back to earnings. with more than 50% of earnings out so far this season, the results in europe have been mixed. just over half of the companies have eaten estimates, -- beaten estimates. but can european companies catch-up with their counterparts? let's get back to tim craighead. all, for some reason i feel like 76% of companies beating on the s&p 500 is nothing unusual. exactthat almost the average number of people that beat the earnings every season? tim: interesting thing, absolutely right. and it's not the case in europe the past year or so. in the states, it seems like companies have got the routine down. underpromise, overdeliver a little bit, and it sounds

phenomenal that you've got three quarters of companies actually but it expectation, seems like everybody sort of plays the game. that's being a little skeptical, but i think over here, there's a couple of things that play into consideration. europe has had a more difficult economic picture than the u.s. over the course of the past year. we didn't have the tax cut boosting results. secondly, there's less transparency into what a deep consensus is in europe because it is still broken into different markets. there's a lot of particulars that play into numbers that i think make a beat here maybe a little bit more valuable than just the typical beat in the u.s. matt: what about the setup into this year in europe? will it hold up this year? tim: i't's an interesting thing

there. expectations dropped from late last year into the first quarter reporting period. depends on which market you look at, but as much as 300-400 basis points on your and earnings growth, -- year and earnings growth, that was the thing into set up. we had a concern expectations had gotten too high and words discounting slow down and other factors. it's made it easier to get through the first quarter. prove to be the low point in your on your growth if our expectations hold. a lot of this depends on factors on what'syond simply

happening with geopolitics, economics, were germany is the poster child of the current slowdown. a lot of it depends on u.s., china, and other factors. europe has a lot of exposure beyond the region and we need a recovery in earnings growth in the second half and looking into 2020 to support the rally that we've had thus far, which has been pretty much on par with the u.s. matt: tim, thanks very much. tim craighead from bloomberg intelligence talking us a little bit through earnings season. just over halfway through on the stoxx 600. coming up on bloomberg, we speak with the chief executive of the oil giant, ecuador, after its earnings. also, we speak exclusively to the cfo of norway's biggest bank, dnb. that interview coming up in the

next 15 minutes. this is bloomberg. ♪

matt: this is bloomberg daybreak: europe. i'm matt miller live from berlin. beaten's products have estimates. the company is increasing spending this year after making drastic cuts during the market slump. it says it plans to invest about $11 billion. annmarie hordern is in london for us. annmarie: thank you so much. i'm excited to be joined on the phone by the ceo of equinor. congratulations on earnings, the estimate producing more oil than expected. i want to ask you about your reduced debt ratio, now below 20%. is now the time to start possibly buybacks? >> well, first of all, good

morning. it's good to be with you. it's a strong number. we are very happy with that. around $6.5 billion in operating cash coming in, and that has given an introduction to debt ratio. our priority is still the cash debt. we erased that by 30% in the fourth quarter and maintained that for this quarter. and that is due to the improvement we have seen in the capacity to maintain those improvements. and then it's still a priority for us to go to lower-level. still, we are able to invest in growing production, production goals into the mid-20's and also to increase portfolio. annmarie: wendy you think you'll be able to possibly start buybacks -- when do you think

you'll be able to start buybacks? isar: the priority for us the cash dividend. we raise it to competitive levels and we want to decrease ratios going forward. buybacks are an important part. that's something that might be relevant. at the time being, our priorities are the. annmarie: i want to ask you about the united states with intentionnd chevron, to grow in the permian. does that force you guys to make strategic moves and participate in this consolidation? well, firstnal -- of all, we know organic opportunities are something we look for. that also includes the onshore. position tolid produce more than 3000 barrels a day from the u.s. onshore and we will continue to produce at a

high level on u.s. onshore. we, in our permian, is a very heated place to be, where entry tickets are pretty high. it's not relevant for us to consider entry into permian for the time being. annmarie: you have said before you consider the permian too expensive. does this potential deal reinforce that option? you still think the permian is a too expensive place? eldar: it's a lot more than the permian, right? i think that doesn't make any change to the sentiment. what we see, the entry into the program is still high, a high cost. but it has toe, be meaningful in terms of entry. as we see it now, it's not what we're looking for. annmarie: i want to ask you

about politics in norway. i was there when they were divesting from oil companies. i know that has no bearing on equinor, but there is political debate. we recently saw the labour party to no longer push for exploration on the loft and islands. norway is no longer the most stable oil regime. how worried are you about this? there's really able political support for the industry. that's really important when it comes to some of the discussions. there are different views on oil and gas of session, the longevity -- of session, the -- obsession, the longevity of that. think this should be worked thisd get more facts on

but there's been an intense political debate on the sensitivities and how we as industry can cope with that. it's important to separate the discussions a little bit. there's another discussion into climate change and low carbon future and oil and gas and all that. we see the same discussions in norway as in many other places. annmarie: i want to finally quickly ask you about the price of oil. we have disruptions in venezuela, libya, sanctions on iran, contaminated oil in russia. what are we not seeing brent in the 90-$100 a barrel? a prettythink we see stable growth in demand, 1.3, 1.4. then you have the political component. and then there is opec. you look into that position by $100 six i think the

to balance the markets. we think there is room for high oil prices. but if not in the short-term, that's more in the medium-term, and that could be driven by the fact we haven't seen impact from low investment levels through the downturn. these projects, with the there could be a tighter market down the road. but we see it on the current levels. annmarie: thank you so much, the ceo of equinor, norway's petroleum producer. thank you for joining us and congratulations on beating estimates. back to you. matt: thanks very much. let's get back to the business flash. for that, we go to olivia hows in london. olivia: a blockbuster first day of trading. that's what they gave us as the vegan substitute salt 109%, the first opening day for a u.s. ipo

this year. also the best for a company raising $200 million since the financial crisis. beyond meat has high-profile backers, including bill gates and the and order the patio. -- and a leonardo dicaprio. it's already contemplating its next move. >> they will be tasting a ghost because we have moved on to the next platform, innovation. it's my goal to have a new product on the market every year. whether we'll get that, we'll see, but that's the frantic pace of innovation we need to maintain to deliver on this promise. olivia: berkshire hathaway acquired a stake in amazon. warren buffett said it undomesticated -- underestimated jeff bezos and is an idiot for not buying shares in the past. that's your bloomberg business flash. matt? matt: alright, thanks very much, olivia hows in london.

let's bring you another exclusive interview. d&b reported net interest income for the first quarter of 9.2 9 billion norwegian krone, that number from the biggest bank missed lower analyst estimates. let me ask why the mess? what happened that analysts were so far ahead of the results you delivered? >> thank you. first of all, i would like to point out that we believe the first quarter is supporting a very strong start to the year for d&b and we continue to show profitable growth in all of our customer segments and this is underpinned by strong norwegian economy where investments continue to go up, and unemployment continues to decline. 3% mri i is up more than

compared to first quarter last year. we continue to see a positive effect from the repricing completed in the third quarter last year, and also from the volume growth. tos is being offset by cost the resolution fund, where there is a runoff of 50 million kroner for poland in the first quarter, and also a negative effect for -16 and some lower revenue. but overall, we believe tit a strong number --i it's a strong number and we beat rate hikes and think it's strong for weeks to come. matt: what's your expectations for rates in the quarters to come, and how difficult is that situation for you? the central bank of norway recently announced their second rate hike in six months during the month of february.

completed a repricing of our personal mortgage book and also fostered the sme book. the impact of this is expected to be within the area of the previous rate hike. that is we repriced about $700 billion worth of debt, somewhere between 15-25 basis points. this will be a positive driver going forward, and we also expect to continue growing and believe that we will grow in the area, 3-4% for the year. the competitive situation, of course, is something that we live with every day, and it is fierce competition in the norwegian markets. but you see a very rational behavior from banks and all the banks repriced their books within days after the central bank hikes for the previous time. matt: do you have any -- you have business outside of business -- norway, obviously.

do you plan to expand outside of norway? kjerstin: our main focus is organic growth within our core market. we have strong positions in the real estate market and large corporate's. our brand outside of norway is primarily related to large corporates, where we work in industry specifics. we are focused on investment banking activity and capital raising. we don't have other concrete plans to extend the on that, but growth inatisfying the corporation between the large corporate and investment banking area. matt: are you going in heavier into the oil business? they've obviously had oil producers, a fantastic quarter behind them, and prices are holding steady at high levels. that must be good for dmv. -- dnb. kjerstin: it's good for the

norwegian economy. and what's good for the norwegian economy is good for dnb. we are active in the oil sector, but we are not looking to increase that part, which is on our books as such. the last few years, we worked to rebalance activity and reduce our exposure to some of these cyclical industries that we've taken down by 100 billion kroner. but even so, we maintain the level of activity with. we're more focused on raising capital rates and solving financial means without necessarily using our own balance sheets in the equation. matt: thank you so much for joining us. appreciate your time. the cfo of dnb. coming up, we're going to speak with more executives. next up, the chief executive of

adidas, after the sports apparel company put out earnings. don't miss that interview at 7:30 london time. this is bloomberg. ♪ s bloomberg. ♪

matt: good morning, live from berlin. i am matt miller. this is "bloomberg daybreak: europe." hsbc shares jump in hong kong as it beats on the bottom line. the cfo strikes a positive note on income growth. >> the target throughout the year, if you strip out the revenue this quarter, underlying revenue growth was in line. matt: the wage debate after jay powell downplayed the slide in u.s. inflation. will the april jobs report show a tighter labor market? there is a host of big interviews still ahead,

including adidas ceo kasper rorsted. good morning from the bloomberg bureau. i am matt miller. this is "bloomberg daybreak: europe." take a look at what futures are pointing to an hour ahead of european trading. green arrows across the continent, but not big sized. 0.2%.utures in london up let's look at the bond market as we kick off trading. with little indication of what becauset out of japan asian markets are closed for the golden week holiday.

as a result, we will have a slow start, probably even the balloons trading -- bunds trading. ten-year bund futures pointing down. u.s. 10 year bond the future pointing up. these will be moves in price, and the moves and yield will be the opposite of what you see there. it has been quite a year for equity investors, but is it time to cash out and had to the beach ? in the words of the oldest vantage, is it time to sell in may and go away? strategist,uropean sell in may and come back when? >> late ledger day. u.k.eptember in the

the u.s. adage twisted it, sell in may and come back on labor day. same timeframe. it is an interesting thing statistically. it is not a miss. if you look over the course of 2006 to 2018, the vast majority modests have seen a pullback of a couple of percent in europe over the summer months. equally the september through following may period has seen a rise of the 6%. it is true for the euro stocks and it is true to the ftse 100. both the continent and here in the u.k. as well. heard ofave never saint ledger day. i have been covering wall street for 20 years.

york we say new sell in may and go away, because it is time to move to the hamptons until you come back post-labor day. is it going to hold up this year? i am not sure what the track record is, but it has not been perfect. is this year going to be it's time to shine? , not to beteresting inconclusive, it makes good sense this year following a 16% rally in europe overall to take a pause. to refresh if nothing else. markets do not move in a straight line, but there are other considerations. number one, we are part of the way through a decent earnings period, if the bar is set low. there are hopes of

improvement in the second half if not in 2020 on a global bases . number three, it depends on what timeframe you look at. year to date, yes, the market is up 16%. since last september it is only couple, and some european markets are down because fourth quarter was a trader for european and global markets. in short, it makes sense to move we havehis seen in the market, but it is not the obvious set up you might guess. if you are in the u.s., you can go to long island. if you are in the city, you go to the cornwall's over the summer, i have no idea. is that adage more relevant to those places than it is in other markets? >> is an interesting thing, if

certainlyross europe, the setup varies country by country. the one that stands out from arguably the most extended at this juncture is switzerland. it is a big market from a european context. the u.k.'s largest then france and germany, but switzerland is number four and it is substantive. it is stereotyped as the defensive haven with pharmaceuticals and consumer staples. those are the groups, the defensive's that have risen hard this year in switzerland, and it is less of the upside in that ,arket very cyclically exposed if you think about where upside is, expectations and targets. if there is one market that seems set for a pause, maybe it

is switzerland. you very much, tim craig, bloomberg intelligence european strategist helping us out as we get halfway through earnings season this morning. hsbc shares have jumped in hong kong after the bank delivered first-quarter profit comfortably analyst estimates. the results were driven by faster than expected revenue growth that increased triple the operatingjusted expenses. i spoke with the cfo and began by asking how they achieved this positive ratio. >> it is a combination of revenue growth and cost growth. revenue growth was flat, but overall very pleased on an adjusted basis. revenues were up 9%. pleased andcularly we managed to moderate cost

growth this quarter down to over 3%. we are continuing to invest substantially, investment was up 15% year on year. it is not a full year, a good start for one quarter, very pleased. matt: will you be able to continue that? spendingtaggered some in order to achieve this goal. are you going to continue to have a positive jaws ratio through the year? target is to have that throughout the year. if you strip out the revenue this quarter, underlying revenue growth was in line with cost growth. we think we will be able to achieve over the coming quarters continuing positive jaws for the remainder of the year. matt: where did you do with the staggered spending?

which expenses did you hold back? onch are you holding back now, and which are so important that you have to continue to spend? we are continuing to 15%ritize investment higher, we are investing heavily in growth. we are investing heavily in the shift from physical to digital distribution. onare trying to cut back what the bank spends. matt: you do some of that through projects and make it easier for your divisions to do that in this internal plan. how much money do you save with project oak? got any projects running, what we are doing is systematically going across the bank and saying, where can we be

more efficient? ongoingpart of an series of work that we will continue at the bank. we will talk to our own people before we do anything. that is hsbc cfo speaking to us this morning post earnings. let's get the first word news. matt: we are told stephen moore was told to go all in and then bailing out.

coming up on bloomberg, we speak with the eu competition commissioner. do not miss that interview after 9:00 a.m. london time. this is bloomberg. ♪

matt: good morning. :14 in berlin. we are about 45 minutes away from cash trading across europe and the u.k. this is "bloomberg daybreak: europe." i am matt miller live in berlin. let's look at how the markets look ahead of the open. we have in hong kong the hang seng gaining 0.3%. chinese and japanese markets are closed for the golden week holiday. we have the yen unchanged.

111.50. get for yen.an oil continues its slump after last week $68 a barrel. german bunds unchanged. euro stoxx 50 futures rising about 0.1%. 0.2%.tures let's get the business flash. elon musk tells investors self driving technology will be transformative to tesla, as he tries to win interest in a stock offering of $2 billion. he says the new technology could push the company to have a trillion dollar market cap.

a blockbuster thursday trading, the vegan substitute company saw 190% jump. it is the best of for a company raising more than $200 million since the financial cri ses. it is already planning its next move. >> if you are trying to copy what we are doing, you will be chasing a ghost. we will be moving on to the next platform and product. it is my goal to have a new product on the market every year. that is the frantic pace of innovation we need to maintain. huawei claimed the number two spot in global phone markets.

shipments have jumped 50% from a year earlier despite a barrage of accusations that it aids chinese espionage. that is your bloomberg business flash. much.thank you very on next week's election in south africa. the president has urged patience to give his government time to deal with the issues.corruption he took over from jacob zuma last year, describing his predecessors role as nine wasted years. that the party will draw between half and 60% of the vote on wednesday. joining us now is goolam ballim, chief economist, standard bank group. thank you for your time. ramaphosa isink

doing? he points out jacob zuma had nine wasted years. it is not as if rem opposer was amaphosa was- rom oppos not around? goolam: the deputy president can .rgue he was impotent the power vested in the president jacob zuma as well as the former president. especially the criminal justice system, it all meant he had an astonishing amount of absolute power that left of the former ramaphosasident impotent to affect change. the amc and of both state, the authority he is able to wield to reform his agenda

has already been shown over the last year. voters going to reward him for the job he has done thus far? do they think he has done well or will it be difficult to convince them to give him the time he wants? goolam: already president ramaphosa has been able to affect significant change, especially with regard to leadership positions at a variety of government institutions. that he isprising quite towering in terms of poses. he towers relative to former president jacob zuma and to opposition leaders. and also the economic freedom fighters. president the former and deputy president is polling

at twice the levels of popularity relative to the leaders of the opposition parties. that suggests he likely will be rewarded with another term in office. as far as business confidence, it has been a wait and see for south african companies since ramaphosa took over the presidency. what do you think businesses want to see ramaphosa do if he were to win a convincing mandate? describe south africa's reform process in two stages. stage one has been institutional reform, allocating new personnel to the heads of the tax authority, the prosecutorial body, and empowering the national treasury and state

owned, ministries with more effective leadership. we think stage one has been largely successful. aroundwo will revolve macro and micro economic reform approaches. we think to the extent south mandateives ramaphosa a , that will galvanize within the party and more broadly to be able to more piercingly pushed through reforms, even if he faces some opposition within the alliance, broader which includes the south african communist party as well as the labor federation, which typically functions as an alliance with the anc. matt: you have recently cut your outlook for south african growth

, saying the economy probably contracted in the first quarter. where did you put the chances for a recession? goolam: i would suggest a recession is fairly low, admittedly growth is likely to be around 1% at best, mostly relocked by electricity supply. we should be looking more medium to longer term, and appreciate are moldingd 2019 years. they reflect a turning point, and the two years largely encapsulating a reform process that will yield results from 2020 onwards. we see on the investment cycle and livening in the second half of the year with powerful traction in 2020, and the growth path beginning to accelerate

with greater business confidence, more investment, finding traction in 2020. think abouto you ?he cabinet after the election if ramaphosa were to win, what do you think he does with the cabinet? cabinet will likely shrink, and we do think along with the theme over the last has been morere constructive personnel changes with good outcomes and good suggestions with regard to policy choices and governance. we think the cabinet he forms after a successful outcome next .eek will echo that theme i do not think necessarily finance ministers will continue. clearly ineffective,

bold, and a welcome caretaker with regard to the national treasury over the last couple of quarters. sees his role as temporary, and a new finance minister we'll probably be incoming. irrespective of who that is, i am comfortable the national treasury has been stabilized, and the public policy choices suggested especially in the budget statement published in february will continue to find resonance over the coming years. matt: thank you very much, goolam ballim, chief economist, standard bank group. talking to us about south africa and the important elections coming up next week. in the u.s. it is jobs day. to addntry is predicted

190,000 jobs in april, according to a bloomberg survey as unemployment probably stayed flat at 3.8%. the debate continues over the federal reserve about the next move after jay powell signaled no bias in either direction. annmarie hordern is here to tell us what to expect. annmarie: we have been talking to analysts, james foley says in all likelihood we will have further indications of good u.s. growth coupled with benign inflationary pressures. we heard from some others, the labor market is getting tighter with upper pressure on wages. cutting rates and 2019 will be pushed to 2020. job growth rates should continue above 100,000. thing i was looking at, americans seem to be looking at with confidence the jobs market,

a brighter picture. sharp growth in the yellow, that is the americans who think the job market is plan a full. is those who say jobs are hard to get. this is showing a healthy jobs market on the american consumer point of view. says 190,000, i don't know where you have put your bet in yet. matt: i do not think i am allowed to place my own whisper that. -- whisper bet. i am pretty sure bloomberg anchors are banned from playing. annmarie hordern on jobs expectations. coming up on bloomberg tv, we rorsted, theasper

chief executive of adidas. do not miss that interview. this is bloomberg. ♪

matt: good morning, welcome to "bloomberg markets: european open." i am matt miller live in berlin. today the market say, what next? stocks trade mixed as the fed fits on the fence in a crucial trade deal between washington and beijing. the cash trade is less than 30 minutes away. hsbc beats on the bli