>> good morning from bloomberg's

of european headquarters. i'm tom mackenzie, this is bloomberg daybreak: europe and here is what you need to know. >> as monetary policy tightens further, it will likely be appropriate to slow the pace of increases as we assess how our policies are affecting the economy and inflation. >> the fed delivers 75 basis points as expected, with the jay powell signaling flexibility in deciding how steep feature increases need to be. >> we think it is time to go on a meeting by meeting basis and not provide clear guidance that we had provided on the way to neutral. >> power rally, even as economists declare the fed chair hawkish, stocks surged with the nasdaq 100 climbing the most since november 2020. gains continue in asia.

tech torment. meta-slides supposed market after its 1st avenue revenue -- first ever revenue decline. attention now turns to ample -- apple and amazon. today alone around $9 trillion of market cap companies reporting earnings. owing v, the oil and gas producer in europe is reporting. second quarter net income coming in at 1.9 5 billion euros. the clean ccs net income beats for omv in the second quarter, 1.95. in terms of ccs net income -- we will be talking to this ceo of this oil and gas producer about what they can do to raise

output at this time of tight supply. that need across europe for additional gas. this is a company that has some ability potentially to raise the output from its black sea holdings off the coast of romania. they do now have regulatory permission to go ahead. we will discuss whether they can produce additional gas, and the input costs for these companies, and how they face the challenge of those supply chain constraints. the topline is not a big surprise but it was a beat given the elevated oil and gas prices we have had. as you look to the second half, if those prices start to add as we look into a recessionary environment, can these companies maintain these margin levels? questions for the cfo when we speak to him in the next few minutes. we have lots more coming through, we will bring them when they cross the terminal.

it is a massive day for earnings. companies report today at a time when concerns over the impacts of rampant inflation on corporate profitability is at a fever pitch. thorough in the rate hike and there will be a huge amount for market watchers to digest. there are some of the interviews we have on bloomberg tv throughout the day including the ceos of shell, stellantis, eddie hide airways and others. we will speak to the omv and santander cfo about the spanish bank results. we have lines from abinbev, organic revenue up 11.3%, estimates were for an increase of 10.4%. organic revenue is a beat for this brewer, the estimates were

10.4%. on an adjusted ebit databases it is also a beat. it is a bit on adjusted ebitda. underlying eps earnings per share were $.73 in the second quarter. when it comes to full-year adjusted ebitda, they see an increase of four 28 percent, -- to 8%. there is a range in terms of adjusted full-year ebitda, they see it outpacing. a beat when it comes to ab inbev. up 7.2 percent, beating estimates. having to weigh out those input costs but there is some ability to pass on those costs to customers. we are focused on the fed and

will cross to our global team to assess reactions to the raise and jay powell's speech. garfield reynolds will take us through the market reaction and juliette saly will look at how asian investors are taking to the news and earnings out of samsung. the widely anticipated 75 basis point rate hike has been delivered and signaled increases will continue until inflation is clearly heading back down. >> as it relates to september, i set another unusually large increase could be appropriate. that is a decision we will make based on the data a safe -- data we see. we think it is time to go to a meeting by beating basis again and not provide the clear guidance we had provided on the way to neutral. >> for more, we are joined by dan moss. powell declining to be specific on the size of the next heights,

why is that a good idea? >> forward guidance has been very tricky the past six months. just about every central bank of consequence have tripped up on this. the problem with pre-announcing a specific magnitude of hike as powell has done in the last few fomc meetings, is there has sometimes been a mad scramble 2 or 3 days before the meeting to get people used to the idea that there might be something more coming. that can get pretty messy. and it is undesirable. you can't keep saying we are going to do x and end up doing y and z. >> talk to us abou tthe gap in terms of expectations. i think it was four times powell

said go back to the 6-week-old dot blocks. and yet the markets are nowhere near that. they expect cuts here, what do you make of that divergence betw een markets and dot plots? >> markets took off today because many people interpreted powell's interpretation that the size of cuts going forward baby of a lesser magnitude. but this doesn't mean no cuts. excuse me, hikes. we are now at a neutral. the place they were racing to get to. once you get to neutral it is understandable. you don't have to be going 75, 7 5, 75 and entertaining even 100. you are about to reach the point where policy is restricted.

it doesn't have to be 75, it can be 50 but that doesn't mean they will end. >> dan moss on that president trump jay powell and be decision to hike by 75 basis points. the guidance was particularly interesting, that reference going back to those dot plots that he mentioned about four times. and he said there would be downside pressure on the economy, the labor market is tight but to expect that to soften. that is what they need to see for jay powell on the jobs market. dan given not to this about the market reaction, there was a strong rally particularly in tech. yields came up particularly in the front end. the s&p 500 ended up 2.6%, the dow joins up 1.4%. there was a bit of drag on nasdaq after meta came out, will

be the question for us today. we will see how things break down across the yields. you still have that inversion between the 2's and 10's. bloomberg dollar index was off by about .1%, maybe there will be some relief for the em's. yields came up quite sharply on of the session yesterday. 2.79 on the 10 year. and a little movement today. the yield inversion remain self recessionary risk is still there, but coming up at the front end suggesting that markets are pricing in a slower pace of hikes after this 75 basis points. it echoes a pattern seen after earlier hikes. to dive deeper into the market reaction, let's bring in our chief rates correspondent. garfield, what do you make of this guidance from jay powell?

>> in many ways, he gave the market much more than they expected. we got the 75 basis points and we at least got the fed being open to the idea that provided the data allows them, they will slow down the pace of rate hikes. the potential disconnect looming is that the markets seem a lot more optimistic on inflation than most economists, and especially the fed. unless the data starts to show that we could be in for fresh volatility. in the meantime, the biggest move in asia that underscores this theme of peak fed aggression, is the way the yen surged about 1%, testing 135 against the dollar. that shows strong signs that investors are judging the

divergence between on ultra hawkish fed and a still uber dovish boj has taken began to as far as it can go, a 24 year low. we are expecting quite a bit more shorts in the coming days because they got the best they could get out of that trade now. that doesn't seem to be a serious downside to the yen from here unless that aggressive fed comes back. >> very interesting, 135 on you and right now, short covering as you say possibly at play and the question whether that trade against the yen has come to an end. let's get the asian market reaction with juliette saly, who is also looking at samsung earnings. juliette: well, has powell sparked a rally, we are not quite seeing the same gains on wall street but there is a broad

rally across asian equities. there is a little in the rear window for chinese investors, looking ahead to the politburo and the phone call between president biden and xi but there is upside in the csi 300 despite concerns in the property sector. we talked about the yen, i won't elaborate other than the fact that bny mellon says the rally could continue and we could see the yen move to 140 in the short term. and a miss on australian retail sales. bonds are very much bid today, the three year yield down by six basis points. also a miss was samsung. calls coming through from the big tech giants about the uncertain outlook. we heard similar from sk. the memory chip division was a 20% miss from what the market was looking for. forward pe is dropping below the

pandemic low, so the stock is looking cheap. on the call, there was direction to retail investors who have been very much net buyers have samsung, at the same time you have seen foreign and local funds dump out of the stock. >> juliette walking through the market reaction in asia, thank you. let's focus on big tech earnings after samsung and meta reported its first ever quarterly advertising sales decline. to combat the slump, the company is trying to rein in costs by slowing hiring. here is art zuckerberg. >> our plan to steadily reduce headcount over the next year. many teams will shrink so we can shift energy to other areas of the company. >> when it comes to meta e

arnings, another quote from zuckerberg, we seem to have entered an economic downturn that will have a broad impact on the digital advertising business. the situation seems worse than a quarter ago. this is facing up to that very tough competition from tiktok that seems to have been a drag. and the heavy spending around meta and the metaverse. so it was a miss, we will break down the story throughout the next few hours. let's take a look at the key things market participants are watching for today. at 10 a.m. u.k. time we will have the latest confidence surveys for the euro area. at 1 p.m., the german cpi reading for july, important for the calculation of the ecb. followed at 1:30 p.m. by data from the u.s., including initial jobless claims and gdp. later earnings season continues with apple, amazon, intel and

pfizer due to report. the u.s. economy is not in a recession. that was the message from fed chair powell, pointing to the strength of the labor market. we will speak to the payden & rygel chief economist next. this is bloomberg. ♪

>> welcome back to bloomberg daybreak: europe. i'm tom mackenzie in london. nasa late seeing full-year organic revenue growth of seven to 8%, raising their outlook for organic revenue growth. in terms of the margins, four year underlying trading operating margins of 17%, in

line with estimates. when it comes to first-half numbers, organic revenue numbers were a beat as well, an increase of 8.1%, the estimates were an increase of 7.3%. a beat on the first half in organic revenue, and a beat on pricing as well. a reminder that some of these big producer companies are able to pass on higher prices. they raise their pricing, organic revenue is a beat in the first half and they have raise their outlook for the full year organic revenue 7-8%. nestle appearing to steer the ship smoothly through this higher price environment at least for now. jerome powell said the federal reserve will press on with tightening to curb inflation while giving in --

officials flexibility. joining me now is the chief economist at payden & rygel. good morning and thank you for joining us, what is your take from what we heard from jay powell? was this a hawkish jay powell that some of your colleagues have suggested, or was this a dovish tilt from the head of the federal reserve as the markets seem to be suggesting? jeffrey: i think i attended a different press conference than the financial markets did. the markets the financial markets received was not the one i did. we are looking at a federal reserve that is solely focused on reining in price pressures. the chair admitted that could include inducing an economic slowdown or a session if necessary, to bring down inflation. he also said there is probably significant additional tightening in the pipeline.

that is not what we see priced in the bond market. the bond market may has another rate hike in september, and then not much in terms of tightening after that. if you look at the futures market. i think the markets could be heineman -- in for a bit of a rude awakening. the data that they are dependent on is the monthly cpi figure. i don't know how you feel but i think that will remain sticky at least the next quarter. that is going to keep the fed hiking. >> how do you explain that disconnect then? jeffrey: i think what the markets love to do, they want to front run the next big trend. when you talk to traders or investors, the next big trend everyone is convinced will happen is an economic slowdown that will force the fed to pivot. that is familiar territory for

investors who do not remember 1981, or a central bank actively restraining the economy. they only remember central banks sweeping in to help the markets. also, in recent weeks, inflation expectations have moved lower so maybe some investors have concluded the fed does not have as much to do. that is some of the rate hikes hikes you see coming out of the future markets. i suspect it is frontrunning the next big move. i think it is premature to say the pivot is coming. they have two more inflation prints that are pretty important before the next fomc meeting and we will have to see how those go. >> he made a point of saying we will take it meeting by meeting, but he did give this not to the dot plots of six weeks ago, 3.8% for next year. what does that do to the u.s.

economy, does that get us into recession? jeffrey: i was listening earlier and there was talk about where is neutral, the fed thinks it is around 2.5%. nobody actually knows where neutral is. it is quite possible we will sit at neutral and they won't do anything to restrain inflation, so maybe neutral is higher, and the fed needs to go into that three, 4% range to have an impact. we suspect we will get to poor percent by year end. but can they get there without causing a downturn? i don't think so, that was an area in the press conference where the fed chair was far too confident. last year we heard from fed speakers that inflation was transitory, now we are hearing that the fed could possibly induce a soft landing. i wonder if that is less a forecast and more of a hope, just like the transitory situation was more of a hope for policymakers. >> he isolated two factors about

the economy, some of the slowing in some areas, housing starts on one end of. but also the strength of the labor market and the however million jobs there unfulfilled. what is your take on the ability for the labor market to support this economy? can i that your base case is we get to recession in the u.s.? jeffrey: base case is recession, yes. the labor market is always the last to go, it could be adding jobs even on the cusp of recession. i wouldn't put all my exile in the labor market basket. the mixed signals of, the payroll survey and establishment portion looks good, the household survey is more m ixed. also, the layoffs.

they have picked up since april and may. powell chalked that up to seasonal adjustments. i think that bears watching. we heard on the previous segment, the big tech firms are backing off on hiring. i think there is an inflection point in the labor market, so let's wait for the second happened c. -- second half and see. >> given the unique inflationary environment, do you think the fed will be guided more by topline numbers like cpi given the elevated energy prices and the stickiness of those prices? jeffrey: the reason to look at core is it tells you where underlying inflation will end up. it is a way to get at underlying inflation. it is difficult to base your forecast on headline inflation. in the end, they look at the headline because it does

influence consumer inflation expectations, the gas price surge, so there is a good relationship there. but i think you have to look at core. core is for me, core services, core goods, it actually accelerated in the june data. i don't see any signs in that database slowdown. to beat a dead horse here, the financial markets seem to be pivoting prematurely. we don't have the evidence we need of a slowdown, we still see core inflation accelerating out of the latest set of data. >> solid insights. people are joining us this evening, your time, morning our time in england. jeffrey cleveland, chief economist at payden & rygel, his view that the markets are getting ahead of their skis in terms of pricing in a market pivot.

let's get the first word news now with juliette saly. juliette: u.s. president joe biden will speak with xi jinping today. it comes at a difficult juncture for washington and beijing with house speaker nancy pelosi not ruling out plans to visit taiwan next month. democrats have struck a deal with holdout senator joe manchin on a tax, energy and climate bill breaking a deadlock on legislation. the plan raises $740 billion in revenue over the next decade. gazprom cut natural gas supplies to the eu via the nord stream pipeline by about 20% yesterday. the russian company says the pipeline needs five functioning triplines to run at full capacity but only one is in working condition.

the u.s. senate has agreed to $ 52 billion for domestic chip manufacturing. it marks a legislative victory for president biden. the legislation is a bid to strengthen u.s. national security interests against future supply chain disruptions. global news, 24 hours a day, on air, and on bloomberg quicktake. powered by more than 2700 journalists and analysts in more than 120 countries. >> juliette saly, thank you very much indeed. the benchmark in asia pacific gaining .8%, futures in europe up this is xfinity rewards. our way of showing our appreciation. with rewards of all shapes and sizes. [ cheers ] are we actually going? yes!! and once in a lifetime moments.

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♪ tom: good morning from

bloomberg's european headquarters. this is "bloomberg daybreak: europe." and here's what you need to know. >> as the stance of monetary policy tightens further, it likely will become appropriate to slow the pace of increases while we assess how our cumulative policy adjustments are affecting the economy and inflation. tom: the fed delivers. the fomc hikes 75 basis points, as expected, with the signaling flexibility when deciding how steep future increases will need to be. >> we think it's time to, to just go to a meeting by meeting basis and not provide the kind of clear guidance that we have provided. tom: powell power rally. even as economists declared the fed chair hawkish, stoxx search, with the nasdaq 100 climbing the most since november 2020. the gains continue in asia. more tech torment.

meta-slides post market after its first-ever revenue decline, while samsung profit misses on muted chip demand. attention now turns to apple and amazon. happy thursday. it is a major day for earnings, a mega day for earnings, 9.4 trillion dollars of market cap in terms of the companies reporting. volkswagen coming out with a beat. the earnings adjusted second quarter operating profit at 4.7 4 billion, 4.7 4 billion in the second quarter. the estimates were for 4.1 billion so it's a beat in terms of vw's second-quarter adjusted operating profit. it sees a robust second half on strong demand and easing supply chain pain as well. in terms of margins, second-quarter operating margins came in at 6.5% versus 9.7% year on year.

it see -- it is seemed slightly softer margins. operating profit for the first half came in at 13.2 billion euros. the estimate had been for 11 billion euros. second-quarter operating profit, again, that was a beat of 4.74 billion. it is that forward guidance that is important from volkswagen in terms of that demand still being seen as strong, despite concerns that we are heading into a recession. they say supply chain constraints will start to ease. full year adjusted ebidta, first half revenue coming in at 16 billion for schneider electric. first half revenue coming in at 16 billion euros. the estimate had been for 15 billion euros. second-quarter revenue for schneider electric coming in, that was also a beat, 8.5

billion euros. a beat on the second quarter, on the first half. . they have boosted their full year adjusted ebitda organic growth forecast. they raised their guidance at snyder electric ahead of better results -- schneider electric after better results. let's get to another beat, and that's omv posting a second-quarter net income of 1.9 5 billion euros. this comes on the backdrop of an energy crisis in europe, which is increasing inflation. joining us now is alfred stern, ceo of omv. thank you for joining us. congratulations on the results. what stood out to you from these numbers? how does it position the company for the second half? alfred: thank you and good morning from my side. yes, as you point out, it was a really very good quarter for us, and it was really driven by all three of the segments performing very well.

this was, of course, led by our exploration and production sector because of the high oil and gas prices, but also refining and marketing, and chemicals and materials delivered very good results. tom: where do you see oil prices heading into the second half? there has been softness in the last couple of weeks. what is your expectation, what is your forecast around oil and gas prices for the second half? alfred: our expectation for the full year year of 2022 is that brent oil will be about $100 per barrel. and as it comes to gas prices, we have a mix of different international gas prices, so we look at our realized gas price and we are estimating that to be around 45 euros per megawatt hour, which is about a tripling from last year. tom: ok, so that's the price picture. what do you see in terms of demand? goldman sachs telling us their

base case is that europe ends up in a recession. what are you seeing in terms of demand from your customers and your clients? any concerns about this recessionary environment we could be facing in europe? alfred: the current situation is volatile and making predictions is very difficult for the months to come. however, i would like to also say that it is not just demand, but also the supply/demand picture. this is one that is driving the high prices, the high price environment in europe. we are seeing a tight market in gas and we are also seeing a tight market in oil. currently, if you look at our retail stations, if you look at oil demand, we are seeing continued good demand. but of course, we will see how we are heading into the second half of the year. tom: what is your ability to increase output? i think particularly of gas,

given the very acute need that europe has? alfred: our worked there is really to also look at diversifying different sources of supply. as it comes to, let's say austria, in particular austria, of course, is a landlocked country. it's about also making sure to secure pipeline logistics, capacities. we have made quite a big move a few days back by securing significant pipeline capacity into austria. tom: and you are sitting on a gas field in the black sea close to romania. romania, the government has pushed through and given the green light to exploration of that. when is the quickest, when are you able to get that online? alfred: yeah, this is a big move in the second quarter of this year. we were working hard and working

closely with the government to get the offshore law amended to make the exploration of this neptune gas field possible. there are still some discussions that are ongoing in order to finalize those. and then also, the transaction needs to be closed with eggs on. once this is happening -- exxon. once this is happening, it's going to take 9-12 months to come to final investment decision. if that happens middle of next year, we could be producing gas in that field by 2027. tom: ok, quite a time away. 2027. in the meantime, when we think about russia, omv, you still got a 25% stake in russia's giant and that gas field. can you give us an update on where things stand in terms of unwinding the investment? alfred: sure. as you point out, we own 24.99%

share in the gas field in west siberia. we have the consolidated are -- de-consolidated our activities in russia so you no longer have them as part of our p&l, or cash flow statement. the production in that field is still going on and we are exploring different options, how we can move forward with this interest. and these options also include eggs and investment. -- exit and divestment. tom: you have been saying you don't see a full cut off from russia. what gives you that confidence? if we were to get that, because we are now down to about 20% of the original flows, if we were to get a full cut, what would that mean for the energy industry, the energy complex of europe? alfred: so, the reductions that we are seeing, the 80% reduction, so 20% left, is on

the nord stream 1 pipeline going to germany. we have different pipelines coming to austria and we are currently at the level of about 40%, so higher deliveries than we saw also during the turnaround of nord stream 1. this is what we are saying. we have seen gas flows throughout that time come into austria, some now also come to germany. we anticipate that there would be continued discussions around what levels of supply will happen there. and we are, of course, in ongoing discussions also how to make sure we can continue the supply close to austria hereby diversifying our supply sources. i mentioned that pipeline capacities before already. tom: yeah. we know that you had to write off your investment in nord stream 2.

there's been some discussion from some of your colleagues around the possibility of getting back into nord stream 2 if nord stream 1 and the flows through nord stream 1 are canceled completely. where do you stand on that debate? alfred: so, the german government have positioned this quite clearly. at this moment, i am not aware of any new discussions concerning nord stream 2. of course, technically, it would be a possibility if nord stream 1 does not work to consider other options. but at this moment, i am not aware of any discussions in that direction. tom: ok, alfred stern, ceo of omv, thank you. on the back of those results, still seeing strong demand on oil and gas. tom: spanish lender banco santander, second quarter net income, and earning a result slightly delayed from previous

orders, second-quarter net income is a big, 2.3 5 billion euros. the estimate had been for 2.2 5 billion. . there was a beach on the second quarter net income for santander . in terms of net interest income, 9.55 billion for the second quarter. that was also a beat. that estimates had been for 9.2 billion in terms of net interest income. so, it is abeat for santander. they say they are on track to meet their 2022 targets. we will be speaking to the cfo, we hope, in the next fume it's. we will get into a deep dive and questions around what happens with the tax question. we know the government of spain have put in place a levy on the banking sector, what that will mean for the margins going forward. let's check in on the market data. across the agent benchmark -- the agent benchmark, gains of -- asian benchmark, gains of zero point percent. it was a stomping day -- 0.9%.

it was a stomping day. s&p 500 up 2.6%. economists saying markets are getting ahead of themselves in terms of pricing in any pivot from the fed given the very sticky inflationary picture. dow jones gained 1.4%. when it comes to the futures in europe, you are looking at gains of 0.5%. you had a move lower, particularly at the front end, as markets start to price in the idea that the fed is going to go slow. that's what jay powell said. you could get another mega hike at the next meeting in september or you may get a slowdown. at some. point, there will be a slowdown of the hikes was jay powell's call. they will go meeting by meeting, data dependent. the bloomberg dollar index fell yesterday, down a little over 0.1%. that yield inversion continues between the 2's and the 10's. coming up, meta miss and for the first quarter ever, the facebook

owner's sales declined. tech earnings in focus, next. this is bloomberg. ♪

♪ tom: welcome back to "bloomberg daybreak: europe." i am tom mackenzie in london. coming up right here on bloomberg tv, on the biggest earnings day of the season, we will be speaking to the ceo's of shell and plenty of other companies. top executives from dr, stellantis, accor and anglo american join us. don't miss those conversations right here on bloomberg tv. meta platforms, the social media giant that includes facebook and instagram, reported its first ever quarterly sales decline,

setting advertisers shrinking budgets. joining me now, after he's had his nose powdered, is matt bloxham. what were the key takeaways when it comes to meta-? matt: obviously, a slight decline in revenue for the first time, which for a company that has been growing double-digit growth forever, is a big reversal. they cited slower ad spend. advertisers might be pulling back a bit on budgets. we have not seen the big pullback it. for facebook and instagram, it's more about rivalry, particularly tiktok. they said they are getting less traction against their kind of product to rival tiktok, which is called reels. they are getting less engagement with that. i think it is more that budgets are shifting to other platforms rather than necessarily we are seeing the big shrinkage in that budget. we think that will come, but it's more of a kind of company

specific competition issue. they have also been hit by this change in ad tracking, as well as all the changes at apple, which has removed some of the ad spend to other platforms like a google. tom: it sounds like your take is that things could get worse on the advertising front in the courses ahead? matt: i think it definitely could. now, it's more of a company specific issue hurting facebook, snap and twitter, to some degree google. it's going to become a bigger issue. they are probably going to show slightly, you know, robust advertising for now, but the next three, four quarters where things might start to get a bit more difficult for everybody that is reliant on advertising. tom: let's look ahead to apple and amazon, two big names reporting today. you've got the hardware and services of apple and amazon, expanded very aggressively during the pandemic and they conceded that they had maybe gone a little too far. what are you looking for? matt: there is this whole issue

of consumer spending. i think we will see both of them kind of talk, you know, there is definitely a growing headwind to consumer spending that will affect them in different ways. the market is expecting fairly subdued revenue group travel. facebook -- revenue growth for apple. facebook hitting a wall. iphone and ipad sales under some pressure. given that walmart profit wandered in the, there will be a big concern about amazon's business. perhaps some margin pressures. the question will be whether the cloud business, which we heard from microsoft during the week is still doing pretty well, to what extent the cloud business is continuing to deliver very strong topline growth and contributing a good profit in the mix. tom: on the question of apple, we saw those price cuts in terms of china. china has its own policies in terms of covid zero and the slowing there.

it's not the only region that slowing. could we see further price cuts from apple? matt: maybe not price cuts. i think they will probably do something clever when they launch the new round of upgrades in september. there will mask price cuts into have a package on bread that upgrade -- how they package and brand that upgrade. samsung overnight, they are expecting slower consumer demand for these expensive technology goods. i think that's going to come into play for apple in the coming quarter. tom: going back to the job situation in the technology space, and mark zuckerberg said they have to be more cautious on hiring. what is your take on where things stand in terms of how these companies are thinking about jobs, hiring and that reduction? matt: we heard similar messages from google. throughout the pandemic, they all invested heavily because their businesses were going gangbusters. they invested too much.

they having to think harder and in a more grown-up way, if you like, about how they resource their businesses and staffing levels is going to be an important part of that scrutiny. tom: matt bloxham, excellent as ever. thanks. walking through those earnings from meta, that mess when it comes to slowing ad sales, slowing profitability across the advertising space for meta. and a preview around apple and amazon, both reported later today. let's get the bloomberg business flash juliette saly in singapore. juliette: nestlé has pushed another round of price increases on consumers during the second quarter. the world's largest food maker now expects organic sales growth of between 7% and 8% this fiscal year, up from previous guidance of growth of around 5%. nestlé joins rivals unilever, danon and reckon benckiser, which are raised forecasts this week as demand for goods holds up. the u.s. senate has agreed $52

billion in grants and incentives for domestic chip manufacturing. the vote comes more than a year -- after more than a year after bay and marks a major legislative victory for president biden, whose agenda has largely stalled in the senate. the legislation is a bid to strengthen u.s. national security interests against future supply chain disruptions. twitter is cutting back office space at sites around the world. . in an email to stuff, the social network says that it is ditching space in cities include san francisco, new york and sydney, as well as several european locations. twitter says it does not plan job cuts. forward's profits soared after after miss and sales prude and compresses increased. i just interest after -- adjuster profit after interest and taxes more than tripled, while about the $2.3 billion estimate. the carmaker is doubling down on its ev future, saying it will cut thousands of jobs to fund the business. . that is your bloomberg business flash. tom?

tom: u.s. president joe biden and china's xi jinping are expected to hold a call today as tensions grow over time one. more on that story, next. this is bloomberg. ♪

♪ tom: welcome back to "bloomberg daybreak: europe." i am tom mackenzie in london. let's take a look at some of the things to watch out for today. at 10:00 a.m. u.k. time, we will have the latest confidence surveys for the euro area as data, particularly around pmi's, has pointed to ace softening growth picture. we will have the german cpi readings, a gauge of inflation out of europe'largest economy for the month ofs july, quickly followed by some data from the u.s., including initial jobless claims and gdp figures after that federal reserve raised

rates by 75 basis points. earnings season continues with apple, amazon, intel and pfizer some of the big names stateside due to report. let's get back to the geopolitics. u.s. president joe biden will speak with chinese leader xi jinping today. it comes at a particularly difficult juncture for washington and beijing. we have been saying that a few times, haven't we? with house speaker nancy pelosi not ruling out plans to visit taiwan next month. and yes, the two presidents may discuss tariffs and yes, they may discuss trade, and yes, they may discuss energy and they may even discuss covid. the importance is around what happens with taiwan. this visit by nancy pelosi, if it indeed does happen, and she's being pressured not to back down, is potentially another geopolitical hotspot. we will see what the chinese reaction is. they have said they will take serious actions and there will be a serious response of nancy

pelosi does go to taiwan. the context is that domestically, xi jinping is facing pressure as the economy slows. he has the party congress, a very important event for the communist party, later this year. the question is, if those factors, how they play into his decision in terms of how to respond to the question of any visit to taiwan. gains of 0.6%, building on a very solid session and wall street. the futures in the u.s. looking at paring some gains. the s&p down by 0.2%. the nasdaq looking at losses of around 0.4%. bloomberg dollar index is up. bloomberg markets: europe up next. stay with us. this is bloomberg. ♪

♪ tom: