dani: this is "bloomberg daybreak: europe." is otis teresa set your agenda. >> -- these are the stories that set her agenda. >> we decided to raise interest rates. dani: ecb ends eight years of negative rates. election countdown. italy will choose nejra -- mario draghi's successor. earnings snap. snapshot revenue sends shares plunging.

the day after a historic decision from the ecb. it has been and a radically news flow. of course, italy, some disappointment when it comes to second-quarter earnings. we are looking at a second-quarter coming in below estimates. 11.5, krona. they are talking about starring -- starting a share buyback program. they are also adding a cash dividend of 3 billion. their pain investors back despite this miss.

noticing the outlook quite yet. giving out more cash to shareholders. let's get back to the overall market. we are looking at a weaker future session. yesterday it was a trio of negative data. those leading indicators, that was the weakest since 1979. also weekly jog -- job claims as well. interesting, unable to trade on gains. italy qualified for tv guide.

finally, nasdaq futures are underperforming. these are after hours actions. this all comes down to snapshot. they are missing on some of the revenue. there is concern there because of economic damage. you can see the other at giants falling. let's get to some of our top stories from around the world. juliette saly will take us through the market action in asia. gerald colton will bring us the change in the italian landscape. who also look ahead to twitter's earnings. they have renewed optimism.

let's get straight to juliette saly. >> certainly we saw that $1.2 billion. that is going to wrap this up. this could help boost some of this. we are seeing a little bit of movement to the upside. also, goldman sachs remaining positive. they have lowered their 12 month target. you will see a recovery in the overall economy. we have learned that there is a bit of a dip as well. they are saying a rate hike is needed. it has been a great one for stocks in general. this weaker dollar giving a little bit of her spite.

it has been a better week here. the best week since mid-march. dani: thank you very much. to the ecb, which doubled its first rate hike in more than a decade. this will determine the size of future moves. >> we expect inflation to remain high for some time. there also pipeline pressures. dani: for more, we get to a reporter in frankfurt. we are already seeing some of the consequences come through. of course, this was a decision

that was last change of heart. what pushed the ecb into that direction? >> she said that some of the inflation risks they have identified have materialized. he said, there are upsets in the short term. at the time, they made that commitment to 25 basis waits. more importantly, they have decided on this production and direction. they have made it a lot easier.

this is a response to that. dani: what about the crisis tool? is anyone satisfied? >> there were not all the details that people were looking for. there are some things that they would not share in order to keep that effective and keep them guessing. what we did learn is that the ecb would focus on the public sector. maturity will be within one and 10 years. she landed on a number of conditions on what countries need to fulfill to qualify to go

above and beyond that. the ecb said they would be at their very own discretion. they also set they will not hesitate to use it. dani: thank you very much, bloomberg's yana randolph. also, factoring into that, italy will hold an early election with the coalition currently leading in the polls. we are joined by our editor drilled colton. what is the significance of this election in september? >> an election has never taken place in italy in the fall. they are traditionally held here in spring. it is seen as the time that they work on governments and it is

considered to not have that while a budget is going on. that certainly makes things more complicated. it is also, quite a short election. i don't think voters will pay that much attention to campaigning next month. it will be something like one month campaign. dani: especially considering it is during budget season. in terms of what the policy looks like, who is currently leading in the polls and how will that factor in? >> things look a lot different when he was prime minister. at the very least, you can try

to hold things together, continue to push for the reforms but, it is the first full since draghi resigned and it shows that the party is ahead in the polls and they are part of a coalition which would be well ahead in the polls. that is a worrying prospect for anyone, considering their views on the euro but they have said some things about the euro. if we see that government, i think the markets will be quite concerned. dani: thank you very much. we also have more tech earnings.

this is all against the backdrop in the tussle against elon musk. i do want to look at twitter quickly. of course, we saw alphabet fall. the post market session is down. of course snap has tumbled. all of this is whether or not they win in court. there is a post market action. we will have the latest rate decision from russia. also, the ecb releases a survey on forecasters. we will also have second-quarter results from american express and verizon.

coming up, one analyst calls them awful. a share company has tumbled after concerns about online advertising.

>> i don't think it has peaked yet. our team basically says it will raise rates. this is the research team that the bank of america has. it is a slight recession. that is not accompanied by high enough employment.

it is more the impact of the fed raising rates. dani: that was the ceo talking about peeking but has not yet peaked. the other focus is the economic turmoil and with that means for some companies. snapchat's parent company more than 25% there after concerns about the outlook. joining us now is the portfolio manager. i know you have noted this before, the idea that we are pessimistic. i look at something like snap falling 30%.

is this warranted? >> they are selective around some of these names. we're still early in these earnings seasons. some of these are negative expectations. the market -- promote -- most companies, the outlook is quite negative. some of these companies are not able to deliver. dani: what does that mean for big tech investors? a lot of these investors have punished this so far. it does not look like this will let up soon.

has the calculus changed the viability of strategy along these names? louise: some of these more mature names, we have seen some positive numbers. some of these names are doing well. there are areas where we see opportunity. there is still room to run. the largest names are probably the best faces for sale. dani: we were talking the other day about supply chain improvements. tesla said something similar. i note these are the beginning stages of supply chains easing.

we have seen these head fakes before. if we are looking at these cues from companies, at what point do you say, the supply chain story is starting to get better i can adjust my strategy? louise: we have deftly heard previously that it was going to get better. i think it has eased a little bit. there is definitely a lot of strength in the market. a lot of that is the ongoing zero covid policy. i think that is the key thing at the moment. takes a long time to increase supply. still seeing that pent demand coming through in those

constraints as we go through various covid waves. that will be another headache and we are seeing that across supply chains as well. dani: china has the same growth as previous decades. is that a short-term view? louise: there's still a lot of overhang for china. generally, we do expect it to slow. it is definitely a plus.

dani: earlier in the week, we have survey data will be have seen asset allocation. they are saying that we have not yet seen capitulation, what say you? louise: it is definitely a mixed message. there are some reviews internally and some people think we are at the bottom and can get better. that certainly cannot get more risk adverse. that said, that does not mean we are going to bounce back. there are all those positive metrics at the moment. it is more of a downside of

ongoing lockdowns and we're seeing the impact of these rate hikes. at the moment, it still feels nervous. particularly when we are not at peak inflation yet. although there are signs that we are getting there. are we going to be getting out of a recession as people are pointing to? i don't think we are quite there yet, still quite bearish. dani: thank you for joining us, louise dudley at federated hermes. coming up, we will get the latest on that generate six hearings were testimonies against former president trump. this is bloomberg. ♪

dani: welcome back to "bloomberg markets: europe." --"bloomberg daybreak: europe." president biden said he is doing great after catching covid. pres. biden: i'm doing well. getting a lot of work done. in the meantime, thank you for your concern. dani: let's go to bruce with the latest. >> this comes amid a rising wave of covid. where do we know about his condition? >> as we just saw, there is a video we just saw about him talking about his condition. we heard he has mild symptoms.

he is fully vaccinated and has had two boosters. he has said the is expecting to continue working while he isolates. we also know that kamala harris, the vice president has tested negative. this is part of another wave sweeping through the u.s. at the moment. the january 6 committee, the chairman was not there. he could be there in person. dani: a perfect segue. the january 6 panel, we heard from insiders. take a listen. >> looked to me like the opposite, a de-escalation. that is why i said earlier that

it look like fuel being poured on the fire. that is the moment i decided to resign. i did not want to be associated with the events that were unfolding at the capital. dani: that was the national security advisor there. what did we learn from the hearing? >> many of the previous hearings focus on the lead up to january 6. this hearing really focused on the events of the day, this crucial time, 187 minutes during which he did not act. one of the republicans on the committee said that he did not fail to act, he chose not to act. we heard from several advisors,

the deputy press secretary spoke about what happened or did not happen. the former white house counsel talked about how he advised the president to act but he did not. the news that we are coming away from with this hearing is that there will be more hearings. they are whether this will be the final hearing or if there will be more. she said there will be more. we are likely to have more of these hearings in september. dani: psst. girl. you can do better. ok. wow. i'm right here. and you can do better, too. at least with your big name wireless carrier. with xfinity mobile, you can get unlimited for $30 per month on the nation's most reliable 5g network. they can even save you hundreds a year on your wireless bill,

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dani: this is "bloomberg daybreak: europe." happy friday. these are the stories that set your agenda. >> we decided to raise by 50 basis points. dani: we are all hawks now. christine lagarde says surging inflation made it an easier call. the election countdown. political uncertainty and economic concerns mount. earnings snap.

this is on revenue, sending shares plunging and dragging down tech stocks. tech that missed. it is the ecb, italian politics and weak u.s. data. so far, u.s. futures are being dominated by the negative data. we also had a factory survey. and weekly jobless claims. all of that is shaping up to hit the recession concern. we are selling 10 year yields, those are up. it is worth noting that yesterday we were over.

those hike rates initially lifted up bonds. spreads widened in that seems to be what dominated trade in the euro. that is weaker. finally, nasdaq futures, they are down 8/10 of a percent. snapchat falling 27%. we also had other had giants, a lot of passes -- pessimism as a whole. off a bit down nearly 3%. let's go back to that top story. the central bank saying the data will determine the size of future moves. that is our guidance. zoe, this is a big change. they were so explicit. what does this mean for the

future direction of rate hikes? >> it does look like forward guidance is more or less dead. in the past, they have been given clear guidelines. now speaking at the actual rate decision where they have very clear guidance. and then, that will be at least 25 basis points. they went to 50 basis points, much bigger than economists anticipated. at the same time, they are adopting a data-dependent approach. that means, they do get new economic forecasts. that is one of the things that should help them. last year, we had forward

guidance. in the way, that might be the end of that. dani: when it comes to the crisis tool, there were big expectations or hopes that we would get a lot of details. is that enough to satisfy these markets? >> not quite. some of us are a bit surprised at how much they provided. the question is, that left markets underwhelmed. there is a danger that they might test on what is needed for the ecb to do something. that does put them in a difficult situation. that is like when do they react, that is something they

understand they are not looking at right now. the situation we have is where there is no reason for a widening. what do they do and when do they agree to back that data? dani: hard to say. thank you so much. of course, let's stay on that italy story. the turmoil of the resignations prime minister over disagreements in the coalition. >> it is a turning point. the entire community.

not just the business. >> it is a country with massive opportunities. this never happened in the first place. >> [indiscernible] for the first time, it will be a fantastic agenda. [indiscernible] >> it is not good news.

they were very strong. italy was one of the most supportive companies. dani: joining us now is fabio fois, head of research at a nima. it was interesting in the press conference yesterday, christine lagarde tried to battle questions with italy, she would not even say italy. when we look at the framework that they laid out, there are different frameworks. what is your take on how it will qualify?

>> if you look at the details, at the moment, it has to be compliant. the point is, going forward, how will this play out? when it comes to politics, there are situations and how this could play out. you could assume there is no change.

[indiscernible] on the other, you look at the history. that could be very interesting. dani: assuming we do get a new political equilibrium, what could that look like? especially in terms of how that applies to the fiscal landscape? fabio: it is within the center, the main policies in italy.

it is very difficult. it may be strong enough for the majority in parliament. it could be key for the formation of the next government. let's assume they would not be able to have that. then we can assume there is a sort of draghi leadership. . dani: some potential outcomes there.

what is that mean the fact that these elections are taking place at a time when the government is 10 -- is forming. what kind of danger does that present in consequences like being able to access new funds? fabio: that is unusual. budget season would be similar to winter. we have to follow-up to some of the promises made during the campaign in order to be in that position.

if we have traditional government, they will have to follow-up on the promises. then, it would be supported. dani: thank you, fabio fois. let's get to our bloomberg business flash which juliette saly. juliette: late trade after a major slowdown in ad spending.

snapchat had a slump. one of elon musk's top lieutenants is in internal investigation. terms of his exit are being worked out. as many as 100,000 electric vans. more than 40,000 packages. speaking on bloomberg tv, they have confirmed plans to cut 5% of nonmanufacturing roles. >> these are some of the things

we have to consider. this does not impact our manufacturing teams. juliette: second quarter margins strength in mattel. gross margin shrank to 44 point -- 44.7%. chief executive says they still expect growth in the second half of next year. dani: thank you so much, juliette saly. the governor is speaking at the conference. the ruby has been trading at the

lowest level. they will continue to engage with the market. no tolerance for movement and no particular level of ruby in mind. maybe some verbal intervention. of course, the ruby weakness has come from the immense outflow of indian equities. it is interesting to see how these have virtually little impact. not to similar of what we saw. it has attempted to strengthen due to some intervention in pesos. we are seeing some emerging markets want to get the currency back. that is what we are looking at. coming

>> this week on bloomberg green, how to make her hydrogen and its benefits the planet. flying high, green hydrogen as jet fuel. >> is now the best approach from fuel efficiency and mitigation. >> from a small part of the energy picture to making it available for all. we talk about access to hydrogen. >> my biggest dream is to see it become mainstream.

kailey: don't miss the latest of "uber green" -- "bloomberg green". dani: welcome back to "bloomberg daybreak: europe." russia has resumed sending gas to europe through the nurturing pipeline. it is bringing relief to the economy. how long will that relief last? let's bring in our bloomberg energy reporter. some relief.

how do we interpret all this? >> the fact of the matter, it is good they are getting gas but how long will it continue? they are at 40% capacity, that is not great. some say it is enough to refill. it depends on how much the demand will be and how they can reduce the demand. there is some worry that the capacity could be reduced to 20%. there is turbine, maintenance, large drama to help float the gas to the pipeline. if they do not get that turbine, they will not have it at the same level. they are preparing to reduce flows. even beyond that, can europe

still trust putin, russia? they have been very unpredictable. dani: we have a couple possibilities here. 40%, 0%, somewhere in between. what does this scale mean? are there big nuances? >> 40% keep the euro zone safe and maybe avoid any possible gas rationing. that is best case scenario. if there are 0% flows, the eurozone could see the gdp shrink by 1.5%. that is a big gap. if you do not have any flow, you cannot fill inventory.

potentially, households. they cannot consume or produce. it is a big disruption. there is a big difference but it depends on what the demand will be. they have asked that all the nation cut demand starting from august through winter. not all the countries want to do that. dani: thank you for the update. our bloomberg energy reporter. coming up, fuel prices have keep -- cap consumer confidence at a low. we will have more, next. this is bloomberg. ♪

dani: welcome back to "bloomberg daybreak: europe." i am dani burger. thanks we are watching out for today. we'll have the latest rate decision from russia central bank. retail sale data from canada. also today, ecb action. second-quarter earnings from american express, bryson and twitter. france, germany, the u.s.. at the same time, u.k.. according to research, almost all of the measures that makeup the confidence index main in negative territory.

what are we anticipating today? this survey is an ominous warning. what is showing is that it is weighing on sentiment. it is a new thing, it shows that all the staples are up. when comes to we tell cells, such -- a slight improvement. you will get a boost from the jubilee weekend. 70 years of the queen on the throne, the inflation story, but we have not reached peak inflation yet. when you add all of this together, we have already had a inflation print.

-- a strong inflation print. when you put that together, the ecb looks very much on the table. dani: elections? >> one of the bright spots was the outlook for the financial position. people are bit more optimistic. they are bit more optimistic post johnson. trust now has a 24 in the polls. that is because of the impact and perspectives on brexit and the boe. dani: thank you. always impressed with you, lizzy burden. coming up next, "bloomberg markets: europe." i will be sticking around for

that. this is bloomberg. ♪

dani: