>> good morning. happy friday. this is "bloomberg daybreak: europe." i am tom mackenzie in london with manus cranny in dubai and these are the stories that set your agenda. manus: technically speaking, the u.s. shrinks as raging inflation undercuts consumer spending. janet yellen insists the country is not in a recession. prime time. surges post market. they posted sales that beat estimates apple also -- estimates. plus, profit tops forecast. the cfo tells bloomberg the banks markets and trading businesses held up. >> if you look at the market activities, the market activity when it comes to fixed income or equity has remained the activity , has remained strong so that is what we have seen.

we go into the primary market and the primary market has been the one that is low in demand. manus: the cfo, let me tell you what that market business did. it did splendidly, up 15%, $1.32 billion. the markets were the also the. the market penciled in 2.67. and the cfo is confident that a recession would be avoided despite the central bank action. let's take a listen. >> the growth would not be the growth from six month ago. how exactly would that be? will that be a technical recession, gravitating toward zero? what would it be? i don't have a crystal ball.

we have to be there to help our client's in all of these circumstances. manus: nobody has a crystal ball. the cfo speaking about the second earnings. put it back to you. the provisions, nearly three quarters of a billion, which -- tom: good morning. this is the question for the recessionary environment is that quality, isn't it? on the top line, a solid beat for bnp paribas. let's check in on the markets. u.s. stocks at an eight week high. european stocks at the highest level in seven weeks. the bet that the fed will be softening the rate hike cycle, there is a pivot in the works even though economists bring their hands and say not yet. we will get inflation data out of the u.s. later today.

it was led by the likes of financial services and real estate. june 16, the nasdaq is up 40%. solid results of course out of apple and the resilience of amazon as well, start complex -- start contrast to its competitor, walmart. that is closing up close to 1%. the futures point to further gains around .4%. manus. manus: happy to say i'm contributing to the prime subscription every month even though i don't use it. how many of us are like that? ron markets are on fire. they are in the grips of a real belief. you have not just the u.s. recession but a global recession. short end of the curve, we saw an implosion in yields. the three year yield dropped by 19 basis points. you give a continuation of that this morning. is there skepticism that the fed can deliver a tightening policy without imploding the economy?

bonds are on their best month run since 2020. the aussie rates are on fire. dollar-yen, keep an eye on that. are we in the sea of a much bigger momentum pushback, fight back by the end? cut and run on the short position. unless the tone changes, you want to be short dollar-yen. oil is up .3%. the americans are positive that opec-plus will deliver something of a forceful move next week. good to be optimistic. iron ore implodes but it belies that rally this week. i still think, tom, that what you have here is a lack of detail on how china will help the issues around the developers and that is what perhaps underwhelm's the iron ore market this morning. everybody is standing by. tom. tom: cute dilemma as they wrestle with what is going on in the real estate market. dan moss will help us break down

u.s. gdp figures and maybe help us understand if it really does mean a recession. it will take us through the blockbuster earnings for amazon and apple. manus: juliette saly has alibaba in the asian market session post move in the bond market. a technical recession. the u.s. economy contracted in the second quarter. inflation undercuts consumer spending. personal consumption, expanded and the biggest part of the economy rose by 1%. that is a deceleration in the first quarter. let's get to dan moss in terms of the technicalities of a recession. this could easily be revised, dan. so how technical is this technical recession? daniel: well, technicalities might be tedious but they do matter. i still meet people who reside in the united states and say a

recession is two consecutive quarters of gdp decline. not so. not the case in the united states. the arbiter is the national bureau of economic research. they specifically do not look at gdp. they look at an array of factors. there's no indication that smoke is about to come from the chimney at their headquarters in cambridge, massachusetts. tom: dan moss on the technicalities around recession. two quarters do not -- does not necessarily mean we are there. let's get to those big tech earnings. amazon shares jumped in after hours trading after reported better than expected second-quarter revenue. apple's iphone demand helped company narrowly top estimates for the quarter. joining me now is matt. key takeaways for you? decent when it comes to cloud services for amazon. matthew: also the fact that the e-commerce cells were flat and

did not shrink, and the biggest thing was keeping costs under control. that has been big for amazon shareholders recently. they invested a lot in their capacity through the pandemic. demand was not there so it's good to see that the new ceo is managing costs. they issued a range for revenue guidance that was pretty much consistent with where we are expecting it to be an prime is helping to get people spending so encouraging signs across the board for amazon. i think that apple and iphone sales held up better than expected and there's softness in the mac computer products. there is a delay to new product launches. that will help sales and encourage tim cook. they expect to see progress in revenue in the third quarter and they were adjusting spend friday economic downturn. manus: certainly been tight and

deliberate in terms of the costs and the hiring. first take on apple and amazon, our bloomberg intelligence team. despite those beats on wall street, they are having a different scenario. significant pressure this morning. juliette saly is in singapore, looking at all the moves and a little bit of a shift. good day. juliette: hello, manus. welcome back. certainly a lot of headwinds for investors in the china at home on market because you have the politburo underwhelming as you and tom were mentioning without any further millis announced to try and support this economy, particularly that ailing property sector, so that has quite a lot of demand for asian equities in the hong kong and china market with the hang seng index pointing to corrections down 10% from its peak and a lot of that weakness is coming through in the tech players. we have these reports that jack ma could be seating control of ant group. alibaba is expected to close its

first-ever negative quarterly growth. alibaba down 6.4% in the afternoon session and then these reports that regulators could be subpoenaing meituan over food safety issues, setting up a pretty ugly day for hang seng tech players. let's have a look at those yen moves. we mentioned the big rebound you have been seeing in the yen against the dollar, on track for its biggest two-week drop in around two years. the yen moving below that 50 day moving average. the dollar yen moving below that 50 day moving average, down about 4% from its peak that we saw in july. there could be more insight rather than 140. the outlook here has changed because you have oil near $100 per barrel which is better for japan's trade deficit and you have the yield differential changing as the fed has indicated a less aggressive hike. past, rather. does that mean that -- could be

a little bit under. tom:tom: what a turnaround for the yen. i remember the pause on 150 for the yen. now, one 33. thank you very much for breaking down the market action in singapore. standard chartered announces a 500 million dollars share buyback after a profit beat. do not miss our exclusive interview with bill winters. that is next. ♪

manus: it is "bloomberg daybreak: europe." i am manus cranny in dubai. tom mackenzie alongside me at london hq. we have had the standard chartered numbers. it is a nice beat but there are provisions and impairments on china. we have an earnings conversation to have. tom: we are joined on set by standard chartered's ceo after

that beat and that share buyback as well. the announcement around $500 million. bill winters, thank you for joining us on the set. let's start with your top take on the earnings beat, how it sets two up for the quarters ahead. can you sustain this momentum? bill: i think so. it is a good set of numbers. it reflects a steady growth in the strategic pillars we set out. clients are active. in the first half of the year, the economy has been relatively robust. we are seeing decent signs of recovery in asia, most specifically in hong kong after the difficult lockdown earlier in the year. we are hopeful for the same in china as we get to the second part of the year. even despite all the covid related turmoil in china, the economy is delivering and businesses are doing quite well. manus: good morning to you. good to have you with us. this bullish call on china, you have a slide called seizing the china opportunity.

are you still targeting, realistically, are you targeting doubling the size by 2024 given the economic backdrop? bill: we are, manus. thanks. we had the highest ever income level in our china business in the first half of this year. that was obviously during a time of a fair amount of disruption related to covid. the chinese economy is clearly under pressure from all the things that are pressuring the global economy and our markets across the world. at the same time, it is barreling through. most important for our business, the outlook for the chinese economy is good. number one. number two, china is continuing to open up its capital markets and that is where we play a role. moving money in and out of china for companies that are investing in china and chinese companies who are investing outside. those trade flows between china and the rest of asia and still, the u.s. and europe, despite the rhetoric and the rain core, the

trade flows are strong and that is where we play. that is where we do well. that is where we are growing quite nicely. manus: i like that phrase, barreling through. nobody is trying to decry that the buyback and the good numbers that you got today. what the world is worried about is they are looking at a developer situation which is spectacular by mortgage strikes and the risk. you can tell the world this morning whether you see this as a contained crisis or something which could blow up into something much more systemic and blowout your provisions of $.25 billion. bill: it is a big question. we are confident things are under control which is not to understate the magnitude of the challenge for the real estate development sector in china. it is acute right now. we are encouraged by a number of things. one is that the chinese leadership is taking concrete steps. he reported on the news yesterday. that the people's bank, the central bank, is putting a very large liquidity facility in

place to encourage the chinese banks to keep the development sector alive. they are doing that not to protect the banks but to protect the homeowners, people who have put money down to buy houses that they want to see delivered but that of course will have the effect of reinitiating a little bit of the liquidity flow into the property sector, we believe. it is a long haul. our exposure to that sector is relatively small and very well provided for so our good numbers are despite the challenges in china real estate. you know, we will take it from here. is it contained? it looks like the chinese leadership is quite keen to contain this to the property sector and address the challenges in the property sector but everyone is a bit nervous and we see that in the markets. tom: there is a view from many china analysts that you're seeing a shift away from the pragmatic policymaking pre-2012 to an ideologically driven policymaking. how are you factoring that into your business decisions? bill: there are signs of a

social drive behind the economic policies. the whole, and drive from xi jinping is very visible but it's equally clear that this is a thriving entrepreneurial and dynamic economy. you have massive amounts of investment going into new products and services in the private sector. i think china's underlying economic momentum and that machine will carry on although the balance will shift probably regularly. tom: let's get back to the granularity of these results. how do you expect the high rates environment to play out for the quarters ahead? how will it affect your net interest income? bill: we were about 120 basis points in net interest margin next year and we are expecting 160 points next year. that is a big increase. here's the easy numbers paid when interest rates went from 3% to 0%, our profits cut in half. when it goes back the other way, why would it not be symmetrical? that is more or less what we are expecting. manus: still, with this bullish

set of numbers, it good outlook, i have the american banks cutting variable comp. rob hammer is saying no honey, no money. you don't do the deals, you don't get a rise in variable comp. are you raising the variable comp pool for the business? bill: we are. standard chartered is a little bit different. manus: by how much, bill? bill: going up directly with our profits. variable comp is a smaller component of our total expense base than it is for an investment bank. we are a large commercial bank with a very nice financial markets business and investment banking business but in the overall scheme of things, variable pay is important, goes up with profits, but it is not the big driver of our bottom line. manus: in terms of the -- tom: -- risks we are seeing in china and other parts of the

world, are you comfortable given with all of those risks? bill: we targeted a 13% to 14% range for our capital ratio. we are at 13.9% today. it would take that down to about 13 point 7% co2 were the top end of our range. we were very well provided for any bad credit so we had very low load impairments in the quarter. super high quality balance sheets. high capital. we feel they are prepared. tom: what is the loan demand looking like? commodities come off a bit. bill: it's ok. we have had good, steady loan growth on the consumer side and corporate side. tom: and you see that holding up? bill: tapering off in the second half of the year. we are looking at whether the grow slow down induced by higher interest rates lead to a recession or just a slow down. there is a lovely debate about whether the u.s. is in a recession or not that will impact loan growth.

the slowdown or the recession, which is probably likely, will be relatively shallow and relatively short. the debate is how bad is it going to be? not "is it going to get worse?" manus: if i put you around a dinner table, it could be an interesting conversation, not market variety. where do you see the terminal rate from the fed? 2.25 nigh. where do you see that terminal rate without breaking something, bill? bill: that is a very healthy qualifier, manus. the problem that we have got is quite substantial and reasonably intractable. i think the fed is going to have to hit pretty hard so i guess that means a terminal rate at 3.5 or maybe even 4%. is that what it takes to tip the u.s. into recession? i think so. speaking candidly. we hope for the best.

you have the incremental burden of energy prices. that is tough. the good news is china is probably still going to produce 4% plus growth this year and better into next year. the inflation problem is a little bit less acute in asia. those trade flows within the asian region are very strong and we think that asia could be a little bit of an engine to pull the global economy back from the edge while the u.s. and europe are going through their cyclical downturn. manus: with that in mind, to deliver that engine of growth, do you see a much more significant policy divergence, bill, between pboc to the fed, to the ecb? is that what stokes that engine? bill: what is stoking the engine is asia has been suppressed by covid in a way that the west has not been for the past year or so. and it is just coming out of that period of repression.

of course, if there would be interest-rate policies that would be reflective of the domestic economic situation and the domestic inflation outlook, and as we sit here today, the growth outlook in asia is on a cyclical upswing together with inflation which is relatively contained. that is not to say that inflation in the west will not impact asia. of course it will. it will impact trade flows. it will impact fdi. it will keep the u.s. dollar strong. but on balance, we see a bit of a synchronization -- a synchronization between the west and east. it should cycle through this economic cycle and it's pretty good for standard chartered bank. tom: bill winters, ceo of standard chartered. thank you it was a beat on the results. gains of about 16%. buybacks being announced at 500 million u.s. dollars from standard chartered. coming up, bnp paribas posted

second-quarter earnings that beat estimates we are going to hear from the cfo, next. -- estimates. we are going to hear from the cfo, next. this is bloomberg. ♪

>> if you look at the markets activities, the market activity when it comes to fixed income or equity has remained -- the activity overall has remained strong so that is what we have seen. it should not go into the primary market. the primary market has been the one which has been very low in demand. what you clearly see is that the activities -- global banking for example -- you have the primary markets which are lower. we basically more than compensate that through things like cash management but also m&a, all activities which are -- >> some of your competitors

including deutsche bank have flagged rising costs including obviously labor costs but also travel expenses, energy bills. are you feeling and how are you managing those rising costs at bnp paribas? >> we put in motion for the next plan all kind of activities that lead to $2 billion in cost reduction. of all the things we put in motion to basically have an operation which is at marginal cost so revenue is going faster than cost, so therefore, operating -- >> what is your view at bnp paribas on the environment? do you feel the recession risk, the inflation risk? give us a bit more substance as to what exactly you think. lars: caroline, my crystal ball broke down so i have no clue what it will be. if you look at the trend, if you see, it is a bit overweight. so, yes, the growth will not be

the growth that we would have thought six months ago. that is what the environment will be different. how will it be? will it be slowing down? will it be a technical recession, basically gravitating towards zero? what will it be? as i mentioned, i do not have a crystal ball. the thing that has to be there as a bank, we have to be there to help our clients in all of the circumstances. caroline: do you think soft lending is the more likely scenario? lars: that is if i listen to the central bank. that is what they go for. they go for handling of the inflation without it triggering a recession. tom: c this is xfinity rewards. our way of showing our appreciation. with rewards of all shapes and sizes. [ cheers ] are we actually going? yes!!

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manus: it is daybreak europe. these are the stories to set your agenda. >> the u.s. shrinks for the second straight quarter as raging inflation undercuts consumer spending. janet yellen insists the country is not in a recession. prime time. amazon surges post market after giving a bullish revenue forecast and posting sales that beat estimates. apple also climbed on the back of iphone demand. plus bnp paribas, profits match forecasts. the bank's markets and trading businesses held up. >> if you look at the market opportunities, the market activity when it comes to fixed income or equity has remained. the activity overall has remained strong. it should not go into the primary market.

the primary market has been the one which has been very low in demand. manus: the cfo of bnp paribas. more from him in a minute. we have gdp beating estimates by a growth of 0.5%. the market estimated 0.2 percent after having contracted by 0.2%. the debate around the recession in europe is palpable. france resumes growth as we have deep concerns over the trajectory of the european rates from the ecb raising rates by 50 basis points. as a price contraction at the start of the year. -- a surprise contraction at the start of the year. the bond market is the tale that is wagging the dog this morning. let me show you dollar-yen. this is a dollar rally which is fading quicker than normal desmond's close-up.

you are looking at yen higher, we are not to the infancy of a rally. the big short is over. do you need a shift from the bank of japan to consolidate the rally into yen? you have seen the short end of the car rally. crude has been up zero point 5%. the americans are optimistic opec-plus will deliver something. mohammed bin salman comes in from the cold, shakes hands with macron. a little disappointment on stimulus, the containment of the developer crisis in china which bill winters says will be contained. tom: is it the soft data that has proven supportive now for these equities? certainly the idea the fed is going to start to slow the space of -- the pace of rate hikes, that was part of the narrative yesterday building on gains we saw wednesday.

you have eight weekly highs in terms of the gains we have seen in the u.s. at eight week highs. in europe you have seven week highs and you are just building momentum, but for how long? economists have questioned the stability of that given the need to address inflation. in terms of the futures, currently the s&p pointing to gains of 0.7%. since mid june, gains of 11% for the s&p. 14% on the nasdaq, looking to build on gains as well, 0.4%, propelled by what we have seen on apple, beating earnings. amazon is well diverging from walmart and maintaining that momentum. e-commerce better than many expected. there is something of a rout again. it happens. hstech and china, hstech

currently lower by 4.3%. manus: we can debate this technical recession forever. elon musk says inflation trending down, tesla commodities trending down. peak inflation? recession? let's put together. inflation undercut consumer spending. the fed hikes stymie business investment. housing demand slept. personal consumption, the biggest part of the economy, rose 1%, less than estimated, and deceleration for the first quarter. how brutal is it? or are we dealing with semantics ? an opinion columnist can give you his thoughts. dan? >> something that is missed in all of this is while much of the world defines a recession technical or otherwise as two consecutive quarters of gdp contraction, and in the united states, the arbiter is the

national bureau of economic research in cambridge massachusetts. they have a business committee. a guy named ben bernanke used to sit on it. they look at an array of factors and gdp is not one of them. at some point these folks might exchange emails and we might see whitesmoke from the chimney, but until that time, it is tough to say with any degree of certainty the u.s. is in a recession. this is not an economy that is crippled. i spent the better part of the last month traveling around the united states. throughout western states there are help-wanted signs everywhere and people are even blaming an absence of chocolate ice cream at water parks on supply chain disruptions. >> did you say chocolate ice cream at water parks, dan? >> i did, i did. tom: this has been a crucial

data point we need to zero in on. when it comes to the jobs market, that is what janet yellen is pointing to. that is what jay powell was pointing to. >> the trouble is many people will tell you the unemployment is lagging -- is a lagging indicator. naysayers may point to jobless claims, which has been creeping up. it is also true that officials like jay powell or janet yellen are never actually going to say we are in a recession. until it is absolutely clear. they are both institutionalis ts. they may wait for the nba are. if they are ahead of it, the question becomes, what are you going to do about it? mark: -- manus: isn't the biggest risk

that you have all this copywritten, the fed is going to step out, the terminal rate is here, the whole point is if they pause or hint at any kind of applause, you undo this very deflationary pain they have to inflict upon us all to try to cap inflation. it could be the biggest folly of all. if they were behind the curve last year they could double smack themselves if they pause or show signs of pausing at all. >> if you listen to the entirety of jay powell's press conference on wednesday, this is not a guy who sounds remotely like he is done. it is only natural that the case -- the increase is slow. the fed has said the neutral rate -- after all of this we are only just that neutral. the pace is going to slow down but this does not sound like a

guy who is going to stop by any stretch of the imagination. tom: dan moss, bloomberg opinion, thank you very much indeed, breaking down the macro, the fed, gdp. are we in a recession or not? i wonder whether the markets are looking through another risk which is, are you looking at stagflation were growth slows but inflation -- maybe that stays high. we see the pc later today. that will give us some kind of guide. mark: -- manus: the consumption numbers are -- [indiscernible] all the way around. the question is whether it is a deep recession. which winters did not call at all. how do you feel? yesterday was super thursday for tom mackenzie. your first three or second?

>> i think it was six executive interviews in a couple hours. more today. you are old-school at this stuff. i will throw it back to you. manus: look, it has been a big week for earnings. the consumer demand, you have unilateral -- unilever. in comparison you have luxury goods that remain in high demand. >> we are seeing continued inflationary pressures on our goods. >> we try to offer a good, better, best assortment so people who need a more value offering can find it. >> we are not sensitive to where people spend or what they spend on, only to how much they spend in total. >> we have not seen reduction in demand for mercedes.

demand for us currently is strong. >> big brands, in some categories and some countries, we are seeing strengthening of private-label label market shares. >> we have multiple levers that help us to handle the inflation. we are very surgical and careful on how much pricing we take and where. tom: what is happening is manus cranny is spending on high-end luxury goods. that is what this means. it is all down to manus and that revenge spend. manus: you seem to think i have the disposable income. the really sort of curious thing, you go to zurich, the heart of luxury, they are queuing up outside chanel. there are plenty of rolexes, i assure you. our offices are above the rolex shop and i can tell you, luxury

is roaring. at least in zurich. tom: there we go. manus: i did not buy a rolex. tom: it was the submariner during the 2021 period. there were no submariner's. people in banking were looking for their submariner's. always get updates on instagram from manus cranny. my guest believes inflation is structural and sees continued earnings downgrades in the months ahead. dan, you don't believe in the rally we are seeing? >> it is after what has been a brutal half of the year. expectations got so negative toward the end of june that what we are seeing is a relief rally. the fear is as we progress throughout the year, interest rates continue to rise. commodities starting to rally a little bit. the consumer is going to be

under increasing pressure and that is going to feed to corporate earnings and lead to a tough rest of the year in our thinking. manus: do you know what i'm surprised about? in the apple numbers they talked about strength of the dollar. it is a low-lying level in these reports. i would have thought dollar strength would have been a much bigger feature of the u.s. reporting season but it is not. >> it surprised me as well at has not been dominant. has played in the u.k. with a large ftse 100 consumer goods names we have seen this week. the dollar strength has been beneficial. it has surprised me as well. numbers were relatively good and slightly better than the market was expecting. what worries me, is you know, less than 10% of revenue is recurring.

as we head through the rest of the year we will continue to see a slowdown in consumer spending and people having to prioritize fuel and food and various other necessities. i think demand is going to weaken. >> how do you allocate around that? >> you want stability whether that is stability of earnings or cash flow or dividend yields. we have quite a lot in consumer goods at the moment. which has been relatively helpful. we have quite a large amount in cash on client portfolios. we see pressure further down the road. such a variability in outcomes for the rest of the year. appoints the downside -- it points to the downside for us.

i suspect that will change over the next few months. not buying into this current rally. + so this is a -- manus: so this is a fairly doomy and to a rally. what you are telling us is to hunker down? i might as well hide under a carpet for the back six months. with that in mind how much lower do these rates, these yields go? tom and i were looking at the short end of the curve. threes dropped by 19 basis points and they continue on this morning. where does the bond market rallied to at the short end of this curve and how much deeper do we invert? >> that is very tricky. it is the trillion dollar question. the market seems to have its head around rates increases over the last eight weeks really. that's one of the reasons we have seen such a strong rally in markets. what concerns me, it is not my

central -- what concerns me is if inflation stays higher because may be russia starts to europe or there are other -- starts to turn off the taps to europe or there are other supply affects, inflation will have to tilt from a dovish tone and rhetoric on wednesday to something that is more hawkish. it is going to take each meeting meeting by meeting. + they have high depth of forward guidance. thank you very much for being with us. dan the cio at bri. we have a very presidential scene. tom: joe biden and xi jinping plan for an in person meeting after their call yesterday amid tensions over taiwan.

more on that story and potential implications next. ♪

tom: welcome back to "bloomberg daybreak: europe." joe biden and xi jinping -- go for it manus. manus: joe biden and xi jinping told aides that the plan is to have an in-person meeting according to u.s. official. taiwan is front and center. our head of china coverage, good to have you with us, thanks for staying late. if you were to take a first flush from this, do you think we see progress now that we are

slating a physical meeting? >> the read out from this meeting, the word -- there were not any specific deliverables but the fact that this meeting took place with all the tension around taiwan was potentially a visit by speaker pelosi, but the president's were able to get together and have a discussion, i think that is a good thing. there is a floor under this relationship at the least. the idea of a face-to-face meeting is interesting. if you believe in the personal touch being able to solve problems you cannot solve over the phone, that is very important to look forward to. obviously you have taiwan, tariffs, but lots of other questions including russia and ukraine that are on the table. tom: maybe we are looking ahead to the face-to-face meeting. when it comes to taiwan, what do we understand about china's

potential response if nancy pelosi does go? >> this would be the most senior visit to an american official since the new english visited more than 20 years ago -- newt gingrich visited more than 20 years ago. they are seriously preparing for her visit. there are commentators in beijing saying the pla mayfly jets to escort speaker pelosi's plane as it reaches taiwan. that would be provocative. we have a u.s. carrier group heading north across the south china sea in the direction of taiwan. the risk, the escalation of tension is very real. manus: tom came on the call this morning and the top of his agenda was jack ma, the red headline. jack ma seating control. -- ceding control of ant group.

is this the beginning of the end of the rout on tech? >> executives from ant have signaled jack ma is willing to give up control of the fintech company. the shares of alibaba today, alibaba owns about a third of ant. they are down because there is concern if jack ma were to step down, if there was a change in the structure of ant shareholding and leadership, that would undermine and push further back a potential listing for ant. the market is looking for any potential fundraising the company could do when that happens. tom: the phone call at least, maybe the in person meeting coming up. coming up, amazon surges post market after giving a bullish revenue forecast and posting sales that beat estimates.

apple also climbs on the back of iphone demand. we will look at the numbers next. this is bloomberg. ♪

manus: it is "daybreak europe." tom? tom: let's get into the big tech earnings. amazon shares jumped in after hours trading after better-than-expected second-quarter revenue. apple's iphone demand helped the company top estimates for the quarter. joining us now is not block some from bloomberg intelligence. what stood out to you? >> on amazon it was the commentary around costs. through the pandemic they built a lot of extra capacity. that squeezed margins. in last quarter, we start to see the first evidence.

margins are better-than-expected and the commentary about cloud containing headcount and costs for next quarter was encouraging together with better-than-expected revenue guidance for the next quarter. similar messages on apple. the iphone was quite resilient. tim cook saying revenue would improve in the next quarter compared to this one. lots of recessionary concerns but generally things holding up better than people thought. manus: the one thing that caught my eye was on intel. the ceo says the third quarter will be the bottom. do you think that is going to build as a consensus in tech? >> potentially. we have so many mixed messages about where we are. i think people take that as a pinch of salt. we need more evidence of how

things are going to play out. manus: there you go. take it with a pinch of salt. great to have you with us, matthew bloxham on big tech and reporting season. our man at bloomberg intelligence. tom good to be back with you on terra firma. stock futures are rising. maybe the intel ceo is right. good morning, tom. tom: always a pleasure. a lot more interviews coming up, so stay with us. futures stateside and in europe pointing to gains after a solid session yesterday. this is bloomberg. ♪

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>> welcome