dani: this is "bloomberg daybreak: europe." i am dani burger in london with manus cranny in dubai. these are the stories that set your agenda. manus: moment of truth for restructuring loss of the third quarter, we speak to the ceo of credit suisse. the european central bank is expected to boost rates by another 75 basis points as it steps up the efforts to subdue inflation. meda sinks 20 percent after hours as sales disappoint amid a gloomy ad market. also spooking the investors. there will be axes falling across credit suisse. they need to raise capital and they have taken a major investor

from the banking side. they saw significant deposit assets under management. dani: the question is, where do those outflows go? it did not go to ups. they will cut the cost base by 15%. it will mean that they will cut about 2700 jobs in the fourth quarter. they said they had a hold of 6 billion frank. they will raise capital and according to kbw, the whole is still there. manus: absolutely. there is a radical restructuring on the way at the investment bank. the expect the workforce to fall.

you have a restructuring charge between the fourth quarter coming up and the 2025. it is the deferred that seem to be one of the bigger lines. there is a fresh headline on that. dani: we have the reporter with us who has the screw. earnings were much weaker than expected. net loss was 4 billion swiss franc. they do have a loss. they do say the net loss will continue for them in the fourth quarter. manus: investment banking had a terrible time throughout wall street. they saw u.s. revenues drop.

go to the live log. everybody is there. all the reporters are there. what i want to know, how much do they pay to take their stake, how much of a discount did they pay and is there anybody else out there that may well have been talking to credit suisse? those questions can be put to the new ceo. he joins unseen the call. it is the interview of the day at 7:00 a.m. dani: you can hold a lot of information in your head but not that many numbers. let's switch gears a little bit. sometimes a niche know what year it is, i can sympathize.

more earnings on deck. ab inbev reporting above estimates. they are seeing their full-year growth between 6%-8% in the estimate was 4%-8%. they are narrowing that range up to the high-end. a lot of these earnings have showed some solid consumer demand. manus: absolutely. it is the debate really between morgan stanley and pimco. it is a mini relief. half a percent is not much to talk about. he said, it is a rally. dani: is greg never not upset with you? they are seeing a rally in some of these. it of this idea that perhaps if you believe mark wilson, the

bear market is over. they're also saying they are nearing the end of their rate cycle. european stocks, those fall about a third of 1%. s&p and nasdaq are higher. they're not going to continue to get rate hikes. the fact that nasdaq futures are positive is quite impressive continuing to what meda did after hours. tumbling nearly 20%. it continues to be the wreck amid those tech companies that are supported by ad buyers. they missed on their forecast. zuckerberg trying to reassure markets that they are putting that investment into meta-itself. manus: it is interesting that you begin to see some of these bigger retail lot forms. -- retail platforms. we are joined on the earnings

story of the day. let's get to the credit suisse numbers purse. -- first. your first take this morning. the additional red headline, if you needed another one. there are significant job losses to come. tough news for anybody sitting inside this bank. >> yes. i don't want to see any red headlines. investors wanted to see two things today. how is credit suisse going to look like in the future and how are they going to get there. if you think about house being on fire, if you are building a

new house, that is the story of credit suisse. they are raising capital and is somewhere higher-than-expected. they are selling a big chunk. but it is below book value. i can assume the capital release will be between 2 million and 3 billion. i think of drastically reducing investment banking. it is something to have been trying for years and now they seem to be serious about it. the future will be the future. -- the future will be banking. dani: what are the risks to that plan? >> today have enough capital? -- do they have enough capital? i think the market would be somewhat disappointed on the lack of details. they would have to sell for

their assets to pay for the restructuring. you have seen the story of credit suisse over the past year. they made a lot of mistakes. it is a story of mismanagement and distress. there is always the potential for failure in execution. i think that is where we are now. manus: certainly it is not an easy job for the new ceo. diffidence from 2025 is about a $.55 pay. very different story. thank you very much. coming up, don't miss our interview with the credit suisse ceo at 7:00 a.m. u.k. time. this is also on the terminal for you. right here on bloomberg. dani: we also have some ecb

action. this will combat inflation. members in frankfurt. what are we expecting today from the ecb? maria: what a busy day today. in terms of the ecb and today, you mentioned this big rate hike that everyone is expecting. that is 75 basis points. this is the governing council. if you look at the different members of it that have spoken the past weeks and guiding the market, 50 basis points is the bare minimum. it is taken as a given by the markets. 75 basis points. the thing that is not clear, they say the think they are watching out for is what to do. it is the chip funding doing the

rounds. they are sitting on 2 trillion euros. with european central bank, it is a problem. they want to begin to drain some of the excess and is starting to look like a subsidy for banks. there are expectations that it could be changed. this is one thing that i am sure many investors will be keeping a close eye on in the press conference. manus: we are certainly keeping and i on that. thank you maria tadeo. despite all those earnings disappointments over the past 40 -- 48 hours, some are still moving higher with tech. one is samsung. >> one of the world's biggest chipmakers.

they were a disappointment so we did see that drop. what led that was this decline in the chip division. we did see a drop their of 14%. what is really interesting is when you compare to where it is, those others are cutting their capital spending. samsung on the other hand is still ramping up. it is notable because it is tech heavy. the green you are seeing is being repeated across the scene in asia. they are looking at the function with a higher on the day view. you can see gains being led higher. also playing out the korean won and japanese yen. that is still below the run. as is the offshore currency. it comes through in the

commodity space as well. any price in dollars is more attractive when we are seeing that bit of weakness coming through. this is particular in the long end of the curve. dani: thank you so much, annabelle. let's look at some of what will we watching out for today. we will have a ecb rate decision with the ecb. will they pull a bank of canada and surprised to the downside? we will also have data points in the u.s. including third-quarter gdp and initial jobless claims. manus: we will have the bank of england speaking in the city of london event. the financial update from downing street has been delayed. finally amazon reported quarterly earnings as if the tech has not had enough to chew on. that is later tonight. dani: coming up, we will listen

in to our interview with credit suisse ceo ulrich korner. manus: and we have volvo cars, we catch up with the ceo to see what is going on. this is bloomberg. ♪

manus: it is "bloomberg daybreak: europe." i am manus cranny in dubai with dani burger in london. it looks like there is some kitchen sinking of many numbers. credit suisse with a

restructuring charge and they will restructure the investment bank. headlines are in in terms of job losses. this is the workforce. it will shrink about 17% between now and 2025. dani: the changes they are making, restructuring, selling products to pimco, most of it. accelerating the rundown for these nonstrategic items. and they will allocate almost 80% of capital markets to wealth management. this will be a radically different credit suisse. manus: they saw outflows in terms of money leaving the bank in october. i asked the ubs ceo and he said, no. will he did not say no but he did indicate that there was a massive move of funds flowing

from credit suisse. maybe, maybe not. let's talk about these markets. let's speak to mads pedersen. what i want your judgment on is this moment, there has been a tech explosion in the past 48 hours. would you buy massive tech after this kind of destruction in meta, google, etc.? how do you look at tech today? mads: i think it is too early to buy in massively. when we do get the return to more stable numbers, it is important for people to not only by what they normally by --

cyclically valued stocks -- we are undergoing a transition to a cleaner world. it will play a stronger part in the economy. we are looking to scale over there for a more sustainable investment, lower energy consumption. dani: it is interesting that the idea that value is packed with these oil and gas companies and perhaps it does not make sense. -- perhaps it does not make sense. if it is too early, what is the point where you focus? mads: we need more knowledge on what we would get today. next week we need to know that central banks have a plan. it looks like a central banks are driving the market but it is the markets reaction to the central banks lack of control that is driving the market. we need central banks to have a

little more confidence. they have been unconfident with very good reasons. we need them to gain more control, hopefully in the coming weeks. dani: the central banks need more [speaking foreign language] manus: i can think of something else. with inflation, whether it is dollar or the peak in narrative building momentum, what does it mean for a ceo like you? are we at peak dollar, peak narrative, peak inflation? mads: i think we are at peak inflation but not peak dollar. we are closer to peak interest rates. the thing that has been most dramatic is the selloff in relative terms.

bonds are an asset class which can give you a real return. if we accept that, that is what we are looking for. you invest in the dollar and get a real return. if you dare to take a credit risk, there is some interesting credit out there. that is what we have been doing, buying bonds in europe. not exactly high yields yet but the move means you can get a longer and positive return. dani: i want to get to some more details. we are going to take a break and come back. don't go mads pedersen anywhere. mads pedersen, -- don't go anywhere. mads pedersen there, cio and founder of human edge investment. manus: 1.5 billion is coming from a capital raise. the interesting issue is in the

form of a rights offering. 9.9% holding in credit suisse. dani: the s&b may take part. we are getting some more players. credit suisse was hesitant to do a rights offering because of the event. we will speak with the credit suisse ceo ulrich korner at 7:00 am u.k. time. this is bloomberg. ♪

dani: let's bring back our guest for this half hour. mads pedersen, cio of human edge investment.

it is a tough time to invest in bonds. i feel like everyone that has had this call to buy bonds has gotten burned. you are interested in them again, white now -- why now? mads: when something resets, no one wants it. this is not a courageous call. you see what is likely to happen and while he could go up a can go down. it has been flat and shortened and yields are higher. bonds are attractive again s8 rebalancing. this is just as the 60/40 has become very popular. at the moment, we have been buying and credit and portfolios set of cash, for very defensive clients, you can now buy other

companies which have a high sustainable profile and you can get real yields. you could not do that six months ago. both in terms of her folio balancing and there is room for bonds again. bonds are a very big part of the world. manus: we are very happy, we pivot easily here. the fact you're interested in high-yield bonds, we love a bond story. we will squeeze a little bit and get some calls. you could build a case for a hard landing, do you expect that kind of monster move in yields to the downside in bonds? mads: no, i do not. but what happens with things i don't expect to happen.

in the situation, even if we get a slowdown, we could get a very nice move. that rebalancing, what you do not have with that yield we now have when it is close to 4%. they move so much around now. dani: because you put together these systematic investment strategies, what does the profile mean for allocation when all of a sudden these bonds are not moving the same anymore? mads: it was about half as normal and that is what we have now. we are trying to get a balanced portfolio to move towards a normal duration.

i am saying, if you have two or three, you want to go back to three or four in the coming months. if you want to buy cash bonds, -- the next thing i'm going to buy before christmas, investment-grade and high-yield but more substantial. what we need for the world to heal is tighter credit conditions. then, the equity can rally. manus: mads, thank you very much. i know what dani will put in when people come, they say they've tried lots of diets, nothing's worked or they've lost the same 10, 20, 50 pounds over and over again. they need a real solution. i've always fought with 5-10 pounds all the time. eating all these different things and nothing's ever working. i've done the diets, all the diets.

before golo, i was barely eating but the weight wasn't going anywhere. the secret to losing weight and keeping it off is managing insulin and glucose. golo takes a systematic approach to eating that focuses on optimizing insulin levels. we tackle the cause of weight gain, not just the symptom. when you have good metabolic health, weight loss is easy. i always thought it would be so difficult to lose weight, but with golo, it wasn't. the weight just fell off. i have people come up to me all the time and ask me, "does it really work?" and all i have to say is, "here i am. it works." my advice for everyone is to go with golo. it will release your fat and it will release you.

>> this is bloomberg daybreak: europe. i manus cranny in dubai with dani burger in the dust london with the stories that set your agenda. dani: credit suisse announces restructuring, we speak with the ceo and await the market verdict. the european central bank is expected to raise rates another 75 basis points as it steps up efforts to subdue inflation. we are live in frankfurt. meta sinks after sales disappoint amid amamiya ad market -- gloomy, ad market. earnings reports coming fast antithetic, a big restructuring. manus: exactly.

the other red headline is of course they are going to raise 4 billion overall, a radical overhaul at the investment bank. the swiss national bank taking on 9.9% equity holding in credit suisse. the qataris haven't shown up yet, nor have the m iraqis -- emiratis, we understood it would be the sovereign wealth funds that would step in here. the workforce will be measurably changed from 52,000 down to 43,000, a monster set of job cuts. the headcount cut of 2007 our jobs is already underway. dani: it's tough regardless of where you are even for wealth management.

you talk about this line earlier. they saw significant deposit in a um outflows in early october. the cfo saying that social media noise led to wealth outflows. we saw strange rumors on twitter last month about the idea of potentially a bank going under. those were completely unfounded, manus, but that led to panic over the weekend. the cfo saying that social media noise led to wealth outflows. the question is, where did those outflows go? manus: when i caught up with ralph hamers, i asked if there was a massive outflow of money, he said there wasn't. they had a big move in terms of assets for generating fees, net new fee generating assets were $17 billion. we will listen to the deutsche bank cfo in just a moment.

the other line is understanding the 4 billion dollars loss, we were expecting half $1 billion. the impairment is the critical point, that is $3.7 billion in this quarter. dani: they are expecting losses to continue in the fourth quarter. you teased it so we have to use it. i asked the cfo of deutsche bank because they also went through restructuring if he had advice for credit suisse. >> if i think back to july 19, the things we did -- the restructuring was decisive and was understood in the market to have been decisive. so we started to regain that sense of stability and confidence. not just investors, also employees and clients. the second thing was disciplined execution. dani: with that hindsight what would be your advice? >> be patient but very focused

on literally every detail of what it is you are executing, and bring your people. those were two important ingredients we managed over the last several years. dani: the deutsche bank cfo there. he said you have to bring your people along, but credit suisse is letting go quite a few folks we have learned in this earnings report. manus: absolutely, and if you're sitting inside the bank and holding equity which the price-to-book value on forward earnings is .3, if you are sitting on an long-term incentive program inside credit suisse, you would ask major questions whether you would stay, or if you would get tuesday. which businesses will face slice aggressively because they are monster job cuts they are announcing. but dani, who is on the block to speak about this? dani: we have the ceo of credit suisse, the man himself ulrich koerner at 7:00 a.m. u.k. time. to stay up-to-date with all of

these lines of credit suisse, tliv is where you had on your terminal. manus: mark zuckerberg has asked for patients from investors after the company gave weaker than expected revenue forecast for q4. zuckerberg's metaverse project, let's get to matt bloxham with bloomberg intelligence, another difficult report for meta. the #and there are good, the daily usage isn't tragic, what is your first take the market didn't like it down 20%. >> revenue is under pressure, costs going up which isn't a great combination. revenue fell 4.5% over the quarter. could be down as much as 10 or 11% next quarter. that's the big problem, you've got an issue. they are on the pressure in

their current business from people like tiktok, and advertisers spending less, and the metaverse transition is uncertain. and it is a long way off. they have this big cap where costs are going up and there is not revenue to fill it. he is asking for patients, i think he needs to sell people more convincingly on the vision. dani: we are going to have apple, amazon, how does that look? >> apple launched the iphone 14, and new watches in september, we will get the first sense of how they are lining with consumers. a recent survey we did suggested there could be strong-sales in the u.s. which would be contradictory to the overall view. microsoft had slightly weaker cloud outlook. amazon is a big player in cloud so we will see what they are saying. they had that prime day which might've helped retail sales, but potential weakness in e-commerce going forward.

they are getting bigger into the advertising market, it might be a counter-cyclical signal for advertising because they are gaining market share. manus: and just looking at elon musk, apparently he visited the hq and deflected this 75% of you all will be gone if and when i take over. >> as you say, it sounds like he is at twitter hq now calling himself cheese -- chief twit and lining up to make an announcement on friday when that deal is likely to go through. there has been so much noise about big staff cuts at twitter, that anybody working there is going to be concerned about what the near-term outlook is going to be. i think he wants to make some really fundamental changes to how that business works but at the same time he has to avoid a

mass exodus because people are worried they will not have long-term employment. it's a difficult balancing act to achieve. manus: thank you very much, matt bloxham from bloomberg intelligence. we had the volvo car numbers hitting the tape, what if we got? dani: we did see worse than expected profit in the third quarter. it's all about the deteriorating macro climate and this ongoing supply chain constraints. joining us now is the volvo cars ceo jim rohan, how hard is it to supply semiconductors right now? james: good morning. actually it's not so much about semiconductors, the turbulence in the manufacturing supply chain has been more to do with china then this ongoing forward situation. that's been the largest part of

supply constraints. semiconductors are still sporadic in terms of they are difficult to get. if you look at that two or three quarters ago, they were much harder to get. now you get more semiconductors but you need to play in the stock market at higher prices to attain them. there has been a slight change in -- mainly because of lockdowns in china. manus: good morning to you, jim. a lot of do with, -- deal with, i'm looking at third-quarter growth margins coming in at 17.3%. there is a squeeze here, why the compression in margin? jim: a few things at this point, you have increased logistics costs. that additional cost to attain those semiconductors many are trying to source.

we have played in the spot market in order to attract those components. and we've got the rising cost of raw materials, specifically lithium. that come edition of increased logistics costs as well as raw material costs and spot buying has been the lions share of that reduction in margin. dani: what do you do in the meantime, play for time and wait for cost pressures to ease, or do you look at cost cuts in the business? jim: we've already had an efficiency drive through the company. we did raise pricing earlier in the year. we are at a situation where the present we have raised because we have many thousands of backorders, that increased pricing has not flown through yet. whereas the cost increases in raw material has. the price is lighting -- the price increases lighting the cost of raw materials.

in addition to that, we are also connecting directly with some of the raw material suppliers to cut the cost of metal. we are looking at that for the fourth quarter of next year. we have a huge amount of activity to reduce the cost base and reduce that raw material cost, specifically as it applies to lithium. manus: jim, the structure of your company's 84% owned by a chinese company, 20% of revenue comes from china. xi grabbed for power, what this third period of power means for him, as you listen to those policies are you filled with angst? are you concerned about relationships in china?

how do you view the business they are and what is your take away from xi's grab for power? jim: we are not concerned, the rebalancing if you like and that move was created four or five years ago. we are already playing into a new supply chain architecture where we manufacture much more in the region. we have manufacturing facilities in china and in europe. we just announced a brand-new manufacturing facility in europe that will start up in a few years in slovakia. and we have manufacturing facilities in the u.s. in addition, we have over the last few years started to reposition to be closer to those end region manufacturing locations. that allows us as we play forward to be able to manufacture in region for region, which takes away tariffs

and some of the turbulence you have seen over the last three or four years. dani: to be fair, you still have operations in china regardless of the structural changes you have made. when you look at antony blinken for example talking about china speeding up the timeline, being more aggressive with taiwan, have you stress tested what more china sanctions would be? -- mean? jim: at this point, that's not one of the major concerns in terms of trade tariffs mainly because the bigger part of those trade tariffs in relation to china and the u.s. should that change into higher tariffs from china to europe that puts us into a different situation and becomes a bigger issue. but at this point in time it helps our manufacturing footprint across our different sales regions. manus: that is the volvo cars

ceo jim rowan on the business. coming up, the u.s. secretary of state antony blinken says beijing wants to speed up the seizure of taiwan as dani has just asked the volvo ceo. that's not a heightened working for him but what is the story, on bloomberg? ♪

manus: the u.s. secretary of state antony blinken has accused china of undermining a decades long status quo that has kept both nations from going to war over taiwan. he spoke in a bloomberg interview yesterday. >> what's strange is this, the decision by the government in beijing is no longer acceptable. they wanted to speed up the process by which they would

pursue reunification. manus: let's get to bruce einhorn in hong kong. very strange, strong language coming from blinken. china has downplayed the likelihood of a envision, what is convincing him of something else? >> this isn't the first time secretary of state blinken has said this. just last week, he said that timeline for a forced reunification of china with taiwan would come much faster than had previously been expected. this is part of a broader concern from the biden administration about china's position toward taiwan. they're looking at greater pressure china has been putting on taiwan following the visit by house speaker nancy pelosi a few months ago.

there was a lot of action by the chinese military toward taiwan. president biden has also talked about this, saying that the u.s. would come to taiwan's defense if there were any military action by china. president biden has been much more explicit compared to previous u.s. presidents. china has said it has no intention of attacking taiwan right now but it has said it does want to have reunification. and at the clock is ticking on that. dani: bruce, thank you very much, bruce einhorn there giving an update on u.s.-china relations. don't miss our interview with credit suisse ceo ulrich koerner at 7:00 a.m. u.k. time as the swiss bank announces major restructuring. this is bloomberg. ♪

dani: a busy day ahead of us. let's take a look at events manus and everyone should be following, at 1 p.m. u.k. time the ecb rate decision. markets at the moment pricing 75 basis points of hikes. from the u.s. we will get third-quarter gdp, initial jobless claims and durable goods. manus: 4:38 we get the deputy governor of the bank of england to speak at a city of london event. finally, we get amazon and apple earnings later tonight. that's going to round off a pretty tortured week in tech. the u.k. delayed its fiscal statement until the middle of november. we understand what jeremy hunt has, a big gap to fill.

35 billion pounds. a spokesman for him called that figure speculative. here's what the chancellor said about his priorities. >> our number one priority is economic stability, and restoring confidence that the united kingdom is a country that pays its way. dani: just to have the timeline, november 3 is when we have the boe rate decision. the 17th is when we get that statement. now the way this is restructured, we will get a boe decision before they been able to incorporate this new autumn statement and the output from the obr, so how aggressive can they really get if they don't know what that will look like? manus: the consensus is around 100 basis points of a hike to come, sterling has recovered dramatically from its lows of 103. you are on a later show, you

left me on my own. but kit basically said we had seen the worst in sterling, but then the risk for sterling was more lured by europe's nadir. so you have this just went between with the bank of england might need to do and what they need to do later to calibrate the market. dani: you opened up to kit duke saying would you sell vol bond sterling, and he said yes and perhaps that is the benefit of announcing a budget one volatility has calmed down. our big story we have to go back to, credit suisse and the restructuring they are announcing. manus: yes, they've delivered a third-quarter loss over 4.0 $3 billion, we had expected a loss of 5 billion them.

is about this radical restructuring within the investment bank and capital raising. we now know the one of the pillar investors is going to become the saudi national bank investing a 9.9% equity chunk. that's about $1.5 billion. dani: they say they intend to raise about 4 billion swiss francs, the remainder will come through a rights offering for existing shareholders. that of course course first needs approval from the an extraordinary general meeting that will take place. but raising more capital from a rights offering is something they had resisted because of the dilutive effect, and because credit suisse has lost so much market value already. but the question is, will a hole still exist after the capital raise? manus: meaningful dividends will not be on the slate until 2025.

you are looking at a restructuring impairment charge of 2.9 billion through 2024 but they have already started dramatic job cuts. they have had big cash outflows. a lot of that has to do with highly speculative commentary on social media. the ubs ceo said he did not have a monster credit inflow move, where did that go to? dani: morgan stanley says the market is coming back, so potentially more buying from retail investors but doesn't so far seem like that has gone to ubs, where has it gone? we will have that interview with the credits we ceo in just a few minutes. this is bloomberg. ♪

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>> good morning. welcome to "bloomberg markets: europe." i am dani burger in london and mark cudmore joins us to take us through the market action. the cash trade is less than an hour away. i am going to be honest, basically, all i have read is about credit suisse and their plan restructuring. what is happening elsewhere in the world? mark: credit suisse is pretty exciting. it's a risk on date. there is some funny things going on in fx that we will get back to later in the show. dani: the big story, credit suisse ceo ulrich koerner spoke to bloomberg's francine lacqua. take a listen. ulrich: this is, as you say, a big day. it's a big day also for all of our people. when we are announcing now today what is basically new credit suisse.