manage all your sales from one place with a partner that always puts you first. (we did it) start today at godaddy.com dani: good morning. this is "bloomberg daybreak europe."

i am dani burger in london. holding steady, philly fed parker said the end of the hiking cycle may be near with potential cuts to come next year. treasuries extend a rally. the u.s. curbs its ambition bloomberg learns that investment into restrictions in china are more limited than first expected. plus, after bank stocks stumble, italy clarifies its new tax on windfall profits, saying it will cap. all right, we are going to give it -- get earnings but first let us look at markets because it has been quite the rally in the 10 year yield. we saw a drop by six basis points yesterday. most of the gains on the front end of your screen happened during the asia and europe session. those gains are maintained today, about two basis points. if we can have such a risk off day, such a flight to haven, flight to bonds on such little information, we have a lot about banking stocks --we knew the

picture for regional banks underscores the fragility of the summer market. let me show the stocks because yesterday it was banking stocks that led the slide. perhaps there is the idea that the moody's downgrade challenged our current narrative of a soft landing. and that there wouldn't be scars from march. perhaps it will be scars. perhaps that is why we continue to see stocks priced out a soft landing. all right, let me show you what is happening in asia because we did get china cpi, ppi and china officially back to deflation for the first time since 2020. not a big reaction and equity markets. a lot of this is baked in. let me get you to breaking earnings. let's start with abn amro. second quarter profit coming in stronger than expected. 170 million euros. the estimate was for 576 known euros -- one million euros. that is a beat, a large one i

should say. one of the issues have been costs. now they are having their full year estimates for cost at 5.2 one million euros. the estimate was for i .3 billion euros. there you go, losses come in. additionally, the second quarter loan-loss recovery, 60 9 million euros. the estimated provision had been 96 million euros. across the board, beats when it comes to provisions, costs and the profit. good news there. let's get to our top stories now and get to our morning roundtable. we are going to be joined by valerie, stephan you and -- tim. let's start with the china story and get over to bloomberg opinions tim culpan. thank you for joining. we had been expecting potentially some news when it comes to this long-awaited u.s. restriction into china investments. part of me is surprised we have not quite gotten that yet but it

sounds like these are going to be more limited than the initial expectation of what u.s. would do. tim: yeah, it seems nonsensical to be honest with you. the reports we are hearing is they will dial it down and specifically as it relates to ai. some of the investment restrictions going into china will basically say we are only going to restrict it if ai is the primary business of that specific company, which is ridiculous because i is more of a tool -- ai is more retooled than service or product. a lot of companies would use ai and a lot are already using it but they are not ai specifically. this dialing down of the restrictions as it has been discussed, i don't know what the point is. when you've got investment restrictions, it is easy to limit investment inbound into the u.s. for example. you could say you are an entity that we don't like and we won't allow it. how do you decide what is a u.s. entity or u.s. person and so on

and so forth? the restrictions there on outbound investment out of the u.s. and into china something that will be hard for them to enforce. of course, there is parts of the u.s. government and bureaucracy will do their best to do so and we probably will find those that have breached the law if they do but it is a very difficult area. there will be a lot of gray area that lawyers will be pouring over. the rules at their -- as they are being discussed don't make sense and we need to wait for more clarity to see what the rules exactly and what is the of them? -- what is the point of them? dani: we are supposed to get an announcement soon and hopefully we will get clarification. while we are talking about investments, my inelegant segue, we have been talking about the arm ipo and is thrown back into the spotlight after softbank's earnings. the most recent reporting is that amazon will be an anchor investor in this ipo. this is expected to be a monster ipo comparatively given the fact

that we have had barely any ipo's this year. what is the significance of having amazon? tim: we really have had an ipo drought recently especially in tech. any drop of water seems like a flood. this is a big deal, even beyond the numbers that we are expecting, it is a big important company. by size, it is relatively small but the significance amazon is really, really important because arm is probably the most ubiquitous proprietary technology in use today. pretty much everybody on the planet of the earth is somehow exposed to arm technology. it is more ubiquitous than windows or android or even apple 's ios. traditionally we have seen arm and its technology which is the core of its ship used in smartphones and thought of it as a very efficient kind of technology. with amazon coming aboard, if they do, amazon does not sell smartphones. they are all about big services.

they design their own chips that go into their own servers. it is a recognition that arm is 14 itself away from smartphones into big data, ai, and so forth. it is a company really going big into big types of chips and data centers not just in your hand. if amazon does come on board beyond actually being a nice investment to have, it is a badge of honor and a seal of approval from one of the world's largest technology companies to say yeah, arm is our kind company. dani: tim, i love that metaphor. when there is a drought, a drop like a flood. i will still that one from you so apologies in advance. thank you for the latest on arm. that's continue the roundtable and get to our regular, bloomberg's valerie tytel. valerie, thank you for joining. look, that rally we saw yesterday in the bond market, it continued drought the day. it continued this morning perhaps adding fuel to the fire with the philly fed's patrick

harker. we have the sound of him so let's take a listen and get her thoughts >> the soft landing is quite possible and quite possible at this point. now, things could happen. another tragic move by putin in ukraine could cause incredible pain and anguish for just the human toll but also could take a big toll on the economy. but god forbid that happens, i think we can get back there. dani: he went on to say perhaps more importantly that we look closely into the hiking cycle and later said we could even see cuts next year. how much of the bond rally was about that versus banks yesterday? valerie: there was a big risk off bid into the market there but you had harker just commenting on the possible risks ahead and i think the market really focused on maybe perhaps a financial crisis in china could be the thing that ends the cycle for the fed. that was a worry estimate, this country garden missed payment.

remember the developer in china? country garden is one the blue-chip companies among them and if they are struggling, maybe that is a hint to the more economic pain underlying what is going on, underlying the chinese economy. perhaps it is a current -- financial crisis in china which will turn this around but a lot of negativity the markets yesterday, especially the bond market. the equity selloff turned around at the end of the session yesterday. unsure of what spooked that, but yields are now 15 basis points off their highs last week. and these options were not enough to spook the market where there the three-year auction was rather stellar yesterday. we had the tenure today. dani: we had the tenure --10-yaer today in 30 year tomorrow. this feels more height than usual. valerie: this is the first of the upsides treasury auctions. i think the long end supply on thursday is going to be more closely watched because of a lot

of the selloff last week was led by the long and an reversal of the rally this week has been led by the long end as well. we want to know if that is going to continue but also on thursday we get cpi heard from not only harker is today but also bargain who commented that we have the cpi on thursday, a lot more data ahead of us until september and he was quite hesitant to pencil in what the fed to move become september. he wants to leave his options on the cards just saying it is too early to decide he does not see any reason to prejudge. dani: they could say the rate hike cycle is done and then they have to move again. the fed has made similar but not the same mistake similar mistakes before. thank you so much. we will get you back cpi preview. hold fire, valerie. the other top story, the thing that moved markets yesterday was italian banks and news that a surprise windfall profits tax could be levied against them.

let's get over to stefania bianchi on this. we have heard more from italy and perhaps they are spooked with how much the market was spooked. they have given a clarification trying to calm things down. what was a clarification? stefania: that's right. it has been quite an eventful 24 hours financially as you say. yesterday, about $10 million wiped off the value of italian banks. italy late last night came out with some of clarification, not clear to much how much it is but what they are saying is that it will be limited. this tax limited on some banks and levy won't exceed 0.1% of the firm's assets but again, it is not clear exactly what measure they are using for this. so, it might go some way to calm markets today. we will have to see when they open but i am sure there are still lots of questions to be answered. dani: there is also a lot of

banking story is happening right now. don't go anywhere. were going to be with us later in the program to talk more about it because again, there is so much to cover. stefania bianchi, thank you so much. a quick look at what we are watching out for today. it is kind of a thin day when it comes to really big earnings and really big data but this is the one to watch out for. it is the 10 year treasury auction. i believe it is about $38 billion. as new 10 year notes will be auction. what will the reception be like as we swallow this new deluge of treasuries because of the ballooning deficit? that capturing the attention of markets. most in the u.s. we will get disney earnings. we learned yesterday that disney's espn has signed a new agreement with the casino penn in order to have them license espn brand. we'll see if we get commentary on that in the disney earnings. the entertainment segment is little changed slightly. the parks are growing but there

has been waning attendance. what will that show us about the consumer? you can get a roundup of these and all the stories you need to know to get your day going in today's edition of daybreak. thank you to everyone who joined our morning roundtable. coming up, we will get back to the markets and back to the treasury auction. $38 billion of 10 year yields to absorb what will be the impact. more on that next. this is bloomberg. ♪

>> inflation does remain too high, there is still a plausible story out there that inflation normalizes in short order and economy dodges additional pain. there is a lot of talk about the potential for what is often called a soft landing. certainly, last month's inflation rate was a good one and i hope it is a sign because to be sure, the fed's objective is not to cause a recession. it is to reduce inflation in line with our mandate. dani: fed president thomas barkin sounding different than what we heard from harker. harker says he might be at the week to stop embarking not ready to call that -- and bargain not ready to call that yet. this week's historic treasury

debt auctions follows trepidation from last week when the sizes were announced and the top expectations. we have a three year auction yesterday that produced lower-than-expected yield. demand was stronger than anticipated. today, we get more duration out there. $38 billion of new 10 year notes. let's get to mark cranfield joins us. first of all, we were talking about me slacking a faye and i want know that mark cranfield is currently at work at home despite the fact that is a holiday in singapore. thank you so much. second of all, what are you expecting on the 10 year option today? what should you be looking out for despite should be on holiday today. mark: it's going to be much tougher than the three-year yesterday. it would have been much easier for the 10 year last week when it was trading around 4.2%. that level most people would say is a no-brainer. now we are trading back at 4% flat basically which makes it a

lot more difficult and there is a 30 year auction following day. people might be a little bit cautious about going too far on the 10 year when they know there is a daily of bonds following day. it makes a prettied up -- pretty tough sell. markets will be relieved there is no negative reaction. if it goes through people except that pricing is pretty much in line and there is no big tail, let's get on with life after that. that would probably be the best result today. the last thing they would want to see is a auction that has a wide tail because that would upset the balance for the 30 year auction which is usually much more to get through anyway. so, although we had a good three-year to start, if by no means as we are going to have a very smooth week. there's a long way to go in of course, you've got all these frictions with the rating agencies in the background looking at the banks. who knows who will be the next

one to give us a negative feedback another sector within the economy. i would suggest not an easy option today and the 30 year is going to be a tough one as well. dani: it's a good point you make of all the pressures that are simmering in the background. what do you make of the thought out there that when it comes to banks, specifically moody's, this is not new information versus the idea that it challenges a soft landing? can we say the ratings agency changes on u.s. banks? that they challenge a narrative for equities of a soft landing? mark: it might not go that far because in general, banks are indecent help in the unit -- health in the united states. what does is asterisk to sentiment in the general equity universe and the bond universe as well, corporate bonds which would be affected with the rating agencies are doing as

well. as soon as you start to bring in questions over the health of the whole structure and whether things are priced correctly. that is probably another factor for people to consider. a lot of things are virtually price. corporate spreads are tight. there's not much merging of error -- margin of error here. as soon as people start to question the metrics within the system, you have a bit of a problem because the only way to go is to reduce exposure. that can hurt confidence. dani: we are in a place where it feels like the china worries are truly everywhere. we are firmly in deflation. maybe the market does not react much to that for yesterday, the concerns about country garden and the huge chinese property developer, how concerning is it? how concerning is missing in other coupon payment yet again on their dollar bonds? what is the implication of that apple mark: for people outside

asia they may not fully appreciate how important country garden is. it was the poster board -- boy for years and years, the poster boy of the china properties sector. seen as a safe, secure company who had great products, was well-managed, whether you had equity or bonds, you were in a very good place. suddenly, that has been turned on its head. it is a huge hit to sentiment both domestically and externally in terms of the market for china. if the chinese authorities don't get their act together very quickly, they could find it takes years to restore confidence in the property sector in china. country garden is the face of china property. you cannot just make impact. -- you cannot underestimate the impact. dani: you'vedani: got to imagine this has some sort of bearing on the bond really cared valerie tytel reminding me we were worried about evergrande country

garden has four times as many projects and was china's biggest developer by sales in the last years. we will have to leave it there. that is bloomberg mliv strategist mark cranfield. still had, novo nordisk shares to a record after an obesity drug showed benefits. we will bring you that story and many more. this is bloomberg. ♪

dani: it is "bloomberg daybreak europe." i am dani burger and london. president and ceo of marigold has told bloomberg that china's economy is not going back to where it was very he spoke to us about the hortons of comfort -- comfort to his business. >> we should be 30% of our

business which will be copper by the end of the decade. and it might be very much more on the bottom line because -- the bottom line of the copper price because copper is going to run out. if you believe in the forecast growth for copper, and i do. >> it feels like for the energy transition you have to have a lot of copper. in the short term, mark, it was dismal trade data out of china. trade data is getting hit hard today -- copper is getting hard today. what is your take on it now? mark: we are not going to see china go back to where it was. it is a very big component of the global economy. it is a consumer of all metals, but also, i think we got reminded by the fact that if we get a bold and better world for everyone, we need to invest and develop so all metals are important. copper is the most strategic of

all those modules. whatever you do, if you want to green the world or the grids, industrialize any more modern, more user-friendly way, copper is a key metal. we don't have enough of it. not enough in our minds today --mines today. i will come back to your first question. what we have is real organic growth. eric is looking to -- barrick is looking to grow 25% organically by the end of the decade. dani: barrick gold president and ceo, mark bristow. let's get to our top stories. wework slump, falling 24% in the u.s. after hours. the company said in the earnings that there is substantial doubt

about its ability to continue operating. not something you want to hear from a company. the co-working business sustained losses in canceled membership to its office spaces. as for what is next, we work says it will spend its next year reducing rental costs, negotiating favorable leases and increasing revenue. bloomberg has learned that -- as in banks -- is an advanced talks to take it private for evaluation of $6.5 billion. the billionaire chairman has been discussing a possible offer for the shares that he does not own any 37% premium at tuesday's closing hong kong. that chairman has lined up financing for the proposed bid including announcing a deal in the coming days if he decides to move ahead. it is credit card debt at the top of the morning. credit card balances now topping $1 trillion.

delinquency rates of return to pre-covid levels too. this survey shows and appears to show stabilization but really shows how widespread credit has been used in recovery from the pandemic. they also said despite the many headwinds that consumers are facing in america, there is little evidence of widespread financial distress for consumers. a letter credit card use but no concern about the consumer still. still had, novo nordisk shares it a high effort obesity drug showed a heart benefits. we will get you the story behind the company. this is bloomberg. ♪ every business deserves a great deal. that's why comcast business is launching the mobile made free event. with our business internet, new and existing customers can get one year of unlimited mobile for free. it's our best internet. powered by the next generation 10g network and with 99.9% reliability. plus one line of free mobile for an entire year. it's the mobile made free event-happening now.

get started for just $39 a month. plus, ask how to get one free line of unlimited mobile. comcast business, powering possibilities.

>> welcome back to bloomberg daybreak: europe. i'm dani burger. the end to the hiking cycle may be near. potentially cuts to come next year. treasuries extend a rally. investor restrictions into china now more limited than first expect. italy clarifies new tax on profit. that treasury rally is continuing. there are a lot of things that could set it.

treasury auction. if you look at yesterday almost a drop 10 basis points. usually this kind of news is not enough to get this type of action. volumes are lighter, edgy market. at least bonds are acting as some sort of edge for the folio. s&p 500 futures are little changed this morning. yesterday we did see a pretty sizable drop. here is the futures session. yesterday we saw a lot of the losses happening during the u.s. session.

banks were the worst performing stock. i come back to the fact that will learn yesterday was not new. more downgrades are to come. downgrades no ball. cpi epi data, they came in at six acted, but they were deflationary. they do show that china not necessarily growing areas both declined. the sign of inflation pressure. let's get to bloomberg in hong kong. not that big of a market reaction to this. perhaps baked in some of this data. let's not lose sight of what is happening in china.

the big takeaway is on the consumer inflation number. cpi and ppi have been inflation near in year. it begs the question what is going on in china.

the absolute throes of the pandemic. does this put pressure on beijing to introduce more stimulus measures, come up with ways to boost spending. we will have to see how that unfolds in the coming months. dani: domestic issues, but good news on the front of u.s. restrictions. still not great news because the u.s. has been planning to restrict that, but a great scoop from the bloomberg team that it will be more limited than we expected. what will be more limited? >> ultimately, these investment

curbs ultimately, it does seem like these investment curbs would be a lot more limited in scope. restrictions on investing in companies most of the revenue. presumably you would still be safe to do that. there is a question of timing. ultimately yes, this is something that depending on how this is limited in scope than a ban on the wide variety of technology and investment sector there is. dani: we're still waiting for

some details. jill, thank you was always. let's get another big story impacting or really impacted the trade in europe. the decision originally took investors by surprise. by sure the biggest dragon europe. how much to french with this clarification make? $10 billion for wiped off the value.

italy made the move last night to try to calm these markets. it is not clear what measure they are going to use for this account. the measures still need to be approved by parliament. for now, it seems investors are already pricing the announcement in heaven they have announced $10 billion wiped off. dani: i'm looking at the ftse mid futures. some losses were paired. maybe not a huge difference yet. there is a study on u.s. m&a banker bonuses.

dealer activity has been slumping at banks. how unfavorable this will impact bonuses. traders also going to be impacted. there is one area for some optimism and that is for wealth management. people may not be impacted as much. new clients and markets that have been rising.

perhaps it is the best time to move into wealth management. dani: if you are looking for a new job, ai might still that one. some other banking news for you. wells fargo and and bnp paribas will pay penalties for those using whatsapp and others to crackdown. total fines over violating messages of top $2.5 billion. elsewhere in deal news, amazon wants to join other tech companies has an acre investor in the chip designer arm.

it could list as soon as next month. can europe's most second valuable company. it is nova noticed. ♪

dani: it was talked about the oscars, elon musk is said to love it. i'm talking about weight loss drug.

the firm struggles to meet demand are raising questions. cannot live up to the hype those are explored in the big take. a reduction in heart disease. you had nova noticed announcement and eli lilly. that trial when it comes to heart impact, what has come back so positive. now that we have this positive news in hand. >> the real drama was the connection between weight loss

and heart. these are the things that had not been shown previously. >> what is unique about it. those might not not so well. they are really insulated from some short-term stresses that they have been able to have a long-term viewpoint.

he really fascinating big take. let me just to reiterate what the share price is. eli lilly reporting they will be talking to the man himself. that will be thursday at 9:00. coming up, substantial doubt

about its ability to continue operating. more on the post market earnings moves you need to know stateside . that is next. this is bloomberg. ♪

dani: welcome back to bloomberg daybreak: europe. i'm dani burger in london. some breaking news on it comes to earnings. they have reported their first half, that is coming in at $.49. this is a beat.

operating margin is stronger-than-expected. that is going to be a wealth of news. are they still able to push prices higher to consumers. operating margin coming in at 4.1%. net sales, those basically online. their free cash flow guidance will be in a range from 2 billion euros to 2.2 billion euros. they have reiterated the rest of their 2023 cash flow. they're also saying that that recognized 108 billion euro

payments summarized. we will dive into them in the next program. it does show some of the consumer resiliency in your. they are able to upgrade key cash flow figures. we will be speaking to the ceo, that will be at 7:10 a.m.. the other earning's. abn amro. this is a very common banking story we have seen through the industry. many are enjoying higher interest,. it is also boosting shareholder

payout. in the three months through june, the expert patient for profit, the interest income 1.6 2 billion euros. abn amro will indeed be hiking borrowing costs. italy banking news scared us across the board. if italy makes it political decision, what other companies will start to do that? let's talk about the world of currency. mike nova gracias, to regulating

dual assets. take a listen. >> the approach from the sec to our industry which feels like it has come from elizabeth warren and sharon round and lyle maynard, we call it choque .2 .0 seems obvious and is just un-american. dani: mike nova grass again to david rubenstein for bloomberg wealth. i want to stay with that subject. paypal says sees theme revenue speaking to bloomberg about the company more and more users will

be able to see it on. we will enable it in venmo. you will be able to send value venmo to venmo paypal to paypal. we will not up to external parties. we built stablecoin to be able to be easily except by crypto exchange's and the apps and wallets will see more and more of that going forward. so that it is an easier total bid in a more ok ecosystem. >> i'm just wondering why you would want to be first. are you worried about other regulation. >> i don't think we are worried about going first.

we take our structure very seriously. what we are doing here when we think about the stablecoin, we think of it as an extension of the paypal balance. what we're doing now is increasing the value proposition and making will outside the paypal constraints. one of the reasons we went to new york is that there is a solid framework for stablecoins. >> in terms of the interest income you will generate from the stablecoin, how do you split that? who gets how much? >> the leaders of the commercial

regulation, we think historically it has been the way in which stablecoins get monetized and that will continue to the case. this is a high-margin revenue stream. over time going back to us as the payments company, we were to be monetizing a number of ways. dani: paypal senior vice president of blockchain for crypto and digital currencies jose ferdinand as. if i can find my words. some notable u.s. post market moves. what you might have missed. some of the days on earnings results. we were chairs plunged in the

late trade, down 24%. they said there is substantial doubt about the ability to continue operating and said the reasons were sustained losses and canceled memberships to office space is. they say they will spend the next month looking for more favorable leases and increasing revenue. the other post market move is again from penn, a casino company signed to espn. it will allow penn to use the espn brand for sports betting online and helps espn grow their online gambling business and sold its barstool subsidiary to founder david portnoy. palantir falling 5.3% yesterday. that's it for daybreak. the openness up next on bloomberg. ♪

so why do we leave so much untapped potential on the table? this is a next level bed, for a next level you. my circadian rhythm is kicking your circadian rhythms butt! it's not a competition. i know, but i'm still winning! so, it is a competition. save 50% on the sleep number limited edition smart bed. plus, 36-month financing on select smart beds. (jennifer)p now only at the reason why golo customers have such long term success is because we focus on real foods in the right balance so you get the results you want.

when i tell people how easy it was for me to lose weight on golo, they don't believe me. they don't believe i can eat real food and lose this much weight. the release supplement makes losing weight easy. release sets you up for successful weight loss because it supports your blood sugar levels between meals so you aren't hungry or fatigued. after i started taking release, the weight just started falling off. since starting golo and taking release, i've gone from a size 12 to a 4. before golo, i was hungry all the time and constantly thinking about food. after taking release, that stopped. with release, i didn't feel that hunger that comes with dieting. which made the golo plan really easy to stick to. since starting golo and release, i have dropped seven pant sizes and i've kept it off. golo is real, our customers are real, and our success stories are real. why not give it a try? it's an amazing thing

when you show generosity of spirit to someone. and you want people to be saved and to have a better life, then you don't stop. we have been able to reach over 100 million people impacted and affected, and at risk of hiv. the rocket fund takes all of the work that we're doing, all over the world, and looks at the most effective ways, to get resources to them, to get services to them. the idea that we have saved five million people's lives, it's overwhelming. it's everything. >> this is bloomberg markets today. mark cudmore joins us from