host: good morning.

this is "bloomberg: daybreak europe." asian stocks rally after better-than-expected economic data coming out of china. or support measures from the central bank there. autoworkers striking at the largest carmakers are the first time in history as the midnight deadline expires. the euro flies as markets bed the ecb's 10th and latest rate hike could be latticed though the president will not confirm. a lot to digest and a lot of things moving the markets. we talked about the ecb but one of the biggest stories overnight has been the biggest ipo listing of the year. arm coming out and surging almost 25% into their debut. this will be significant. it surged 25%. the take away is enormous.

10% of the company floated with softbank. this is giving a lift to the broader markets. you saw a 25% increase carrying a bid into tech broadly. the idea of futures showing -- the green on the screen we saw in early trading overnight. euro stoxx 50 higher by .7% led by the defense a bit. s&p futures and nasdaq futures higher by 10%. we will get more information about the strike with uaw and what it will entail. aussie dollar's strengthened. and a constant check on brent crude inching closer to $100 a barrel. time for stories from around the world. we are joined by our reporters from around the world.

a truly global take on all the major stories. but first to asia to see how the markets are faring. >> we are seeing positive story coming through in the asian stocks. it is about the chinese economic data and how it surprised to the upside. and support measures coming from the pboc for the struggling chinese economy providing a tailwind for a lot of these asia-pacific stocks. we saw the chinese proxies outperforming the market. the aussie climbing. it is a positive day in the markets. hang seng building on the earlier gains. the onshore and offshore currency rallying moving further from the 730 level. the onshore heading towards its best weekly advance since january. host: focusing on the chinese

data, what did we find out overnight? >> it was a big beat on the retail sales and the industrial production figures. this was thanks in large part to a travel boom and we had a heftier stimulus push. the chinese economy is stabilizing. we have been cautioned that one month is not a trend make. it is important to look at the high-frequency indicators. we had slowing in the fixed asset segment. there are concerns of the property decline is worsening. cautious optimism though in the markets at least where the chinese economic numbers are concerned. >> a lot to digest. thank you as always. from singapore we go to breaking news in the last hour coming from the u.s., the uaw

officially going on strike. united autoworkers in detroit working for the largest three carmakers in the country. major reproductive -- major repercussions. a fellow american knows just how important this story really is. the market implications are huge. we have talked about this resurgence of unions factoring into the overall monetary fiscal story. >> my initial take is there is still a lot we don't know. the most important question is how long will those strikes roll-on for? that will impact the hit to growth. the car industry makes up 3% of gdp in the u.s. bloomberg has estimated if work stops for 10 days it could reduce gdp by $6 billion. the second round affects to watch for are the possible

availability of cars and the price. used car prices and new car prices drove a lot of the initial run-up in inflation recently. a possible reinvigoration of that is not what the market wants to see as we want to make sure inflation is heading back down to 2%. and the effect on wages. these uaw workers saw what happened with ups when those workers renegotiated a strong upgrade to their contracts. these moves in the labor market are contagious. a successful uaw strike could tempt other industries to go on strike as well. >> what is important for our global audience is that this has massive economic effects. and the pricing of facts. the mercedes-benz ceo said this could make wages globally more expensive. that will feed into prices

around the world. coming to you, valerie on this. a study is out that the state of michigan could go into recession if the strike lasted long enough. talk to us about whether this overshadows some of the progress being made on the inflation front. >> it all depends on whether the strike lasts for a month or if it is wrapped up in a matter of days. that is the unknown. one thing i can mention is that there has been some revisions downward to gdp after retail sales yesterday showed big revisions to the prior month's but the prior two months and it comes to the core retail sales component that feeds into gdp. on the inflation picture, it is looking better. ppi yesterday after christine

lagarde made her decision. the headline showed a bit hot. what we want to know from ppi is the components that feed into pce and those came in soft. those things combined showed the narrative is heading in the right direction but the uaw strike could be a big heck of a. >> at -- could be a big hiccup. >> you heard valerie, she mentioned that ecb playing a part in the global market narrative. we heard from the president on the hike yesterday. >> the governing council decided to raise three key ecb interest rates by 25 basis points. based on our current assessment, we consider the key ecb interest rates have reached levels that maintain for a sufficiently long

duration will make a substantial contribution to the timely return to our target. >> let's get more. our reporter from frankfurt. yesterday we talked about a 50-50 odds between a hike and a whole. no one expected this to be the last hike on the table. why? >> christine lagarde was adamant about saying that this is not necessarily last hike. if you look at the decision one could say the hawks won the decision but the doves won the markets. orchids are saying this is probably the last hike -- markets are saying this is probably the last hike. >> that is going to be something we talk a lot about. the recessionary story.

will germany tilt the rest of europe to that decline? >> there was a big concerned about whether this would be one hike to many. >> it is too early to say if this is one hike too many. ecb cut its growth forecast for the next -- this year and the next two years considerably. that means we are in a stagflation situation. policymakers last month were concerned about that. and at the same time they did also raise the inflation forecast for this year and for next year. the classic situation where we have strong inflation readings and at the same time little or no growth is something the ecb has to be worried about.

that also leads markets to believe this will be the last one. but christine lagarde did not want to give that impression and when asked directly she said no one could say this is the final hike. >> the jury is still out. nothing will stop the markets from creating an event. thank you as always for your analysis. you and get a round about the top stories to get your day going in today's edition of the daybreak terminal. you need is dayb . top stories, china, uaw and a big deal coming out of disney. softbank's arm holding sores in its trading debut delivering good news. this is bloomberg. ♪

kriti: welcome back and good morning. this is "bloomberg: daybreak europe." the story of the morning, the night and perhaps the year, arm shares rocketed in their debut. remaining bullish on the growth prospects of the company. >> we have a unique business model which gives us the ability to have a good vision in terms of people using our products. we have high confidence that the growth rate we talked about will be sustained. kriti: let's get more on that with our bloomberg reporter. one huge moment for ipos broadly. it felt like dealmaking was dead after the 2021 craze or speculation. talk to us about this 25% surge.

is this setting us up for a bigger decline? >> it is a good first day news and it is great for softbank. what it means is investors bought into arm's pitch that they can sustain the growth rate and it is predicting a growth rate of 20% next year boosted by regenerative ai and its strategy to pivot away from the smartphone market where it is dominant but it is stagnating. whether the 25% ends up being just a nice first day pop or if it is sustained will depend on the results in the coming quarters and whether the company manages to sustain the growth rate that it has told investors it is expecting. kriti: it will be good news of our softbank. let's talk proudly about ipos.

it is interesting because when we talk about tech ipos we think about airbnb or doordash. they had similar increases on their trading debut. pretty significant jobs. the expectation was that perhaps they left money on the table only for the realization to come a few months later that it was a broader macro narrative. what is the case for tech ipos going into 2024? >> this is a good start whether it will open the floodgates is yet to be seen. the valuation, it priced at the top of the range but still lower than the $60 billion that was expected a while back. they will probably not go back to the 2021 levels which were on the exuberant side. 25% is nice on day one but it is not just about day one but about

its performance end of the coming years and whether it will be seen effectively as a success. for now, it is a great start and it sets the stage for other companies waiting in the wings including instacart. always good to have such a good debut like this. such an important ipo, the world's biggest but more to come. kriti: our bloomberg reporter talking about arm. a really important ipo that perhaps starts the turnaround story for ipos and speculate up markets -- and speculative markets broadly. byron allen has submitted a 10 billion dollar offer to walt disney to acquire its abc-tv network and several other stations. this has been in the works for a while. bob iger thinking about selling.

let's take a step back. why even talk about selling in the first place? >> bob iger has been under massive pressure. the disney stock at a multiyear low recently. bloomberg has just reported about the subscriber pressures that disney plus is under and it could fall tens of millions of subscribers short of its target. a tasty deal potentially. bob iger made no secret in july saying he was thinking about selling some of their traditional brands. earlier in the week we heard from the next star former president informing the ceo that it was a good idea to buy up legacy media owners like disney looking to restructure. in terms of saving traditional tv. kriti: they are kind of getting creative about streaming.

offers are getting creative. they are not your traditional apple buying disney narrative. talk to me about the players and what the deals could look like. >> you could draw the parallel to espn looking to sell a minority stake but it is more about bringing in the right skill set so they can bring espn online and sell directly to consumers. in terms of the players here, disney has been holding talks -- it is -- next star is already a big owner. still a long way away from a deal and disney is having these difficult struggles. kriti: bayern allen was a tv anchor -- byron allen was a tv anchor himself and at the weather channel to be fair has been entertainment for a long

time. coming up on the program, the eu and ivory coast negotiating new environmental rules for european exports of cocoa. does chocolate get more expensive? we will discuss that next. this is bloomberg. ♪

>> while the chinese economy slowed down from double digit and now it is about single-digit. it will give us the opportunity to grow very aggressive -- the scale of the economy is 17 trillion for the chinese economy. roughly 18% of the global gdp.

even right now with 5% of gdp growth, the absolute incremental growth of the economy is around 900 billion. to put things into perspective, it is about roughly --. the absolute scale of the market gives us the opportunity. that is .1. point number two is if we look at customers in china roughly there are about 400 million. this is a very successful brand and so is pizza hut. our membership right now is about 445 million which is roughly the size of the chinese middle class. if we take the glass half empty, it means there are still roughly

a billion customers in china who either don't have convenient access to our store or our price point is still beyond their reach. if we look at almost one billion customers we could still serve, it would make sense to see why we can pick up the pace of development much faster. internally of course right now our average cost is a bit lower for each store so we could make it work. i hope it gives you the prospective why this is an opportunity for more customers in china. >> it is restaurants, catering. these are still bright spots in the economy right now if you look at the data. what do you think are the key drivers of this? do you think this resilient demand we are seeing when it comes to catering in that sector

can be sustained? >> we are talking about the consumer aside. there are a few trends of consumer consumption behavior. consumers are definitely getting more rational with their consumption choice. the point of value for money is important. it is not only the price but also the quality of the experience of the product that work for the consumers. and of course, in china contest after the few years of the pandemic, this trend has become even more important. that is a point. consumers are focusing more on experience. experiential consumption. and food and dining is certainly one of them and the other is tourism. local tourism is doing well in

china. and number three, there is an interest in exploring interesting cities in china. kriti: the ceo speaking exclusively with bloomberg television. let's get a quick check of the markets. a lot coming from the chinese region. industrial region -- industrial numbers coming out. and that is creating strength in the yuan and the aussie dollar by extension. the pboc creating more policy support pushing things like the hang seng higher, higher by 1%. 726 on the offshore is what we will be keeping an eye on. other news, the u.s. -- the son of the u.s. president has been indicted on federal charges

about lying about his drug use when purchasing a gun. hunter biden would plead lt to misdemeanor tax crimes and acknowledge a firearms violation without conviction, that is the deal that fell. the son of the president said he was in the grip of a long-standing struggle with substance abuse. the state of georgia's plan to keep donald trump and 18 other defendants in a mega trial over the you 2020 election has fallen apart. the prosecution was split into and said more divisions may be necessary leaving the date of the former president's trial up in the air for now. a lot going on in the lead up to the election. to the commodity space. a global story. cocoa futures trading near a 12 year high on out port -- output worries. ivory coast is negotiating with

the european commission over environmental rules. ivory coast has been holding off on new sales tracks since july. cocoa products really surging and likely to have a read through into the u.s. and even global consumers. anyone having chocolate, it is about to get more expensive. the ecb hikes again by 25 basis points. we break down the decision and the market reaction. stick with us. this is bloomberg. ♪

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welcome back to bloomberg daybreak. i'm kriti gupta. autoworkers strike for the first time in history as the midnight deadline expires. over in asia stocks rally after better than expected data in china and australia as well as more support measures from the pboc. the e.c.b.'s 10th consecutive rate hike. it could be its last even to president lagarde hasn't confirmed the policy has indeed peaked. a lot to digest, a lot of geo politics. you have to factor in the strike reaction. the i.p.o. market may be back on. the i.p.o. surging at its trading debut. higher been 25%, enormous when we're talk about the precedent to see. how much comfort level do these newer companies have to access the equity market.

it was shut going into 2022 given the market that you saw especially in the equity market, a lot of people switching to the debt side. now perhaps leading the way for other i.p.o. that's going to have a macro impact specifically when it comes to futures. take a look at what you're seeing in the european and the premarket. a lot of that is led bay of the i.p.o. that you really saw really perform quite well on day one. also i want to get a quick mention of the aussie dollar. because it's the biggest contributor of the dollar. jobs data coming out of australia as well as positive chinese data. so strength again for the aussie. and a quick check on brent crude because is it getting closer to that barrel. 94.36. thousands of members of the

united autoworkers have gone on strike at selected g.m. ford banks. it comes after the union and the automakers fail to make a deal. ollie is all over the story. it's not just about detroit or michigan. you're going to see an impact everywhere. walk us through how. ollie: absolutely. let's deal with what's going on in the united states and across the states because as you said it's not just michigan. we're talk about strikes across michigan, ohio, missouri. this is going to hit ford broncos, jeeps. it's the big three. and the president of the union was clear to kind of explain how far that reaches and they're going keep people guessing. what it's coming down to is they want 36% in wages that's down from 46%. and the cost of living adjustments have insurance for the inflation on their wages. g.m. and ford has offered 20

apiece. they're still too far apart. we heard from the president of the union just a couple to hours ago. let's have a listen to that. >> this strategy will keep the companies guessing. it will give our national negotiators maximum leverage and flexibility in bargaining. and if we need to go all out, we will. everything is on the table. ollie: so emphasizing that they're only doing a partial strike so far but the potential here is a lot larger. 13,000 workers that are on trike right now. they want to keep them guessing. they want to keep the strongest negotiating table possible. we are in the foothills of what could be a pretty pro tracted process. kriti: 46%, 36% and even the 20% that ford and g.m. are offering still over four and a half years, that's pretty substantial at a time when they're being graded pretty harshly by that.

how are they reacting to this? >> they're not by any means at the kind of peak of their -- of their histories right now. they are disappointed by the -- by the outcome. and ford as well. let's take ford for one second. we had the earnings out if other day. they lost $4.5 billion. they've talked about figures upwards of $8 billion trying to get this transition through. the ford c.e.o. just a couple of days ago telling cnn telling them that it would put them out of business. you have pressure coming from competition abroad. you have pressure from trying to rework this industry. and the workers and the high labor market in the united states trying to take advantage of that to try to get their moment. but it's a very complex situation. kriti: certainly a lot to digest when labor doesn't come easily to a lot of companies right now. oliver crook all over that

story. we thank you as always. we go from europe to asia. there's a lot of actual economic data to digest. avril, walk us through it. avery: a bit of chinese economic data. it was a beat on the retail sales and industrial production numbers. and we had the pboc with those support measures for the struggling chinese economies. overall, the mood is optimistic, all be it cautiously. you can see the bench mark on the mainland is slipping into negative territory after earlier gains. they look to be building where we're seeing the action is from the currency moves where the on shore and off-shore are moving past the 730 level. the best weekly advance since

january. kriti? kriti: the pboc is not really making it easy. avery thank you for walking us through that story. christine lagarde has raised the european central banks heat lending rates by 25 basis points. is it the 10th executive hike. peter gave his take on the announcement. >> markets we're seeing cuts of rates by middle of next year. i think with the decision of today what we observe in markets is there is almost no change market expectation. the rate cuts by mid year, something like this. i think markets are probably right. i think the growth expectations of the e.c.b. are too optimistic. we had five quarters of sluggish growth.

>> the growth expectations of the e.c.b. are too optimistic coming from the chief economist. zoe, is he right? is the market agreeing with peter prade and is the forecast too optimistic? zo e: they did cut it for all three years for 2023, 2024 and 2025. 0.7% growth for this year. next year's was cut quite substantially. they're expecting 1.5% growth and now they're just expecting 1%. and now they've increased it. the markets pricing that there will be a cut clearly is an indication that the market says they're too optimistic. now, overall though, if we think that the ecb might keep now stay

at peak rates now all the way through next june, that actually would be the highest peak they've ever had. if we go back in history in year one of the euro, they had a seven-month peak rate and then back in 2011, they only had four months. so overall, this is one of those things that, yes, the economy is going really slow. the fact though that they did hike yesterday is one of those signs if that they just wanted to show we are here to fight inflation and growth is just one of those things that mite have to suffer. >> i love that you said it's the highest level in history when it comes to interest rates. i immediately worry about falling off. when we're talking about an e.c.b. and a potential policy is the market enter prosecute breathing it as a positive or are is there more pain to come? >> think the market is saying that there is more pain to come.

the mountain now has been cited again and again is the table mountain so that they'll be staying up at a high level for quite some time. we've heard that from the bank of english. -- england. the fresh central bank governor said that the actual peak they reach isn't as important as staying there for quite some time. overall by staying at that high level for quite some time it also means that more hikes might not be needed. the problem here a little bit is that economic models are not very good at thinking of sustained periods of very high interest rates and that's something that models don't quite work out which is why there's all this uncertainty and markets and economists think that cuts will be coming fairly soon. kriti: leave it to i to turn this into a nature track. we thank you for joining the

program. a bit part of the conversation will be inflation specifically in the united states and in europe when we're talking about the commodity increases. we're getting closer and closer to to that $100 a barrel level. coming from supplies from russia and saudi arabia. bloomberg's steven is joining us. we're getting closer to 100. it doesn't feel like the market is freaking out just yet. are we going to hit 100? >> if you were to ask me that three months ige would would have said no. i think a lot of analysts were weren't expecting this tightness to come together. we weren't supposed to hit $100 again this year. but a lot of things have changed. you do have the saudi cuts. they're extending their cuts, 1 million barrels a day. russia joined them and then the

situation isn't as bad as folks were expecting. the u.s. might be able to avoid a recession. the demand for gasoline and diesel has been relatively strong and even the data in china where there's a rozier economy. while the growth isn't what people are expecting, it is still showing that demand for oil -- it's still been pretty resilient. meanwhile, you have inventories around the world slowly dropping. and i think you've got to -- kriti: having a few technical difficulties. the narrative has changed. simply this idea that you're going to be seeing the oil story now really making a complete turnover. we're going to get more announcements in the weeks and months to come. coming up, as we get the latest on the world's second largest economy reporting better than

expecting retail sales data. everything you need to know. this is bloomberg

♪ >> deserted shopping malls, half empty apartment complexes, abandoned construction sights. these are things that have happened to the property market here in china. in the early 2000, there was an

enormous construction boom f there was this fundamental belief that property prices could only go up. >> chinese developers would launch the project for presales get the money and immediately invest a sum of money into new land parcels and all worked fine until sales tumbled. >> china's proxy market is in a bunch of trouble and because property is the biggest single contributor, when the property sector is in trouble the rest of the economy is in trouble as well. >> if china's economy stumbles the global implications will be far reaching. kriti: you can see that full documentary on bloomberg originals on lean, youtube and for subscribers on the terminal. that's one you don't want to miss. i want to stick with the chinese story because is it driving markets.

but economic activity gathered pace last month coming in way better than expected. blew bloomburg rebecca chung wilkins. rebecca, i keep hearing this idea that things are going poorly in china. there are going to have these global repercussions and then you get data like today. what's going on? rebecca: well, maybe we really found the bottom. but the data suggests we are edging towards a place where we might see the stabilization coming in i want to pick up one standard piece of data which is the retail sales because consumption is so critical. the retail sales coming at 4.6%. flew past estimates at 3.6%. and a really strong showing that's been boosted by summer

travel and in the summer months and whatnot. and of course, that is likely fade a little bit. but it does suggest that we have seen this chinese consumer back out and spending again. >> mean, what's interesting is that the chinese consumer does match the global economy. i don't mean it as patronizing. to see the rise in wealth in the chinese consumer is interesting only when it comes to the property sector. talk to us about whether or not the propertying is or the is keeping in pace with the chinese consumer. >> yeah, that's an absolute critical question there. hit right on the nail. not all of the data was so rosy. and the area where we did see those numbers is in property.

what we've seen so far is that stimulus measures from authorities trying to help boost sales have filed be sustainable. so that rally that we saw actually dropped last weekend in beijing. and they dropped by 35% comparing to some of those weekends. now, it's really hard to actually keep these momentum going. one of the big reasons is because there's still this overhang of country garden. will they or won't they default? what is actually going to be happening? it's such a familiar name. and the worries are one of the reasons that moody's has downgraded four china's property sector because home buyers are much more risk it as they weigh what's going to happen with this giant piece of chinese real estate. >> it gets really scary when you

start to think about the global repercussions. rebecca chung wilkins, we thank you as always. in other major storying driving the global economy complex, the e.u. and the ivory coast are trying to come up with different rules for cocoa. who should be paying for tougher regulation? we're going to discuss that next. this is bloomberg.

♪ kriti: cocoa is trading near a 12-year high as the world's biggest cocoa producer at the heart of it the ivory coast negotiating with the european commission over new environmental rules. the west african nation has been holding off since july as two sides disagree on all the details.

we are joined by the second biggest cocoa produceer what are the negotiations like between the ivory coast and the e.u.? what's at the heart of it? >> theseus these have been ongoing negotiations. but basically what's happened now is that the law is being decided. and the e.u. is getting ready to implement it as early as 2025 or mid 2025. and what it's about is about basically cutting what they call consumer deforestation. it's the consumption contributes to the forestation by consuming goods that are produced. one day what they wanted to do is cut -- to basically stop that by requiring producers to prove when the experts say that it

wasn't on forested land. even if these producers have been committed for a long time to curve the forestation, the new element there is the traceability for every chocolate bar you're going to need able to prove on which it was grown in west africa. and so that system doesn't currently exist. elements of it does do. we're going to see who will pay for it fully. >> talk to us about the law at play. it's a noble cause what you just outlined. there's an e.u. anti-defest takes law. what does that look like? quickly. very quickly. >> >> so it's the focus on forested land from palm oil to beef to

cocoa. but in west africa, what they have been fighting for is for increased farmer pay. and so the issue now is that it seems like these two issues macon flick because the law will actually increase the cost of production for potentially for west african farmers even though it was the economy that are held responsible. that's the issue. the conflict and who pays for it at the end of the day i'm making sure that farmer's incomes are also protected. >> a really interesting dynamic. i'm curious how they take and whether or not for me chocolate is going to get more expensive. it's getting cold here soon. we're going to needa hot chocolate to break out thank you for joining us there with the crucial story that will affect the commodity conflict. there's a lot driving mar cut. valerie taitel joining us.

valerie: we've got some interesting lines at on the top of the hour saying that the gap between the u.a.d.a. reaction and the market reaction. they're said not to be a new policy signal. we definitely took them as a policy signal on monday. it has changed on that move from -- from -- the top of the hour. i wanted to show you what the move was on the week though. the other thing that i wanted mentioned is the u.a.w. strikes. they've done very little. the good thing that could do that is if we get these two headlines that they're very part apart in negotiations leading us to believe that this strike could be quite lengthy. it could possibly turn around these equity markets. >> bloomberg's valerie all over it.

you weren't seeing a market reaction right now from the u.a.w. strikes. give it some time. when you start to see negotiations not come through in a week or two, the market will take a really hard hit. really you want to keep that in mine. for now, we are getting ready. you have an interesting lineup from a lot of crucial players, throughout the rest of bloomberg television program and we're going to hear from nadia calvino and bruno lamare. we are going to be hearing from the c.e.o. of burr bare. these are conversations you do not want to miss. stick with us. market today is up next. this is bloomberg. it's time to sleep next level on the sleep number climate360 smart bed. the only smart bed in the world that actively cools, warms, and effortlessly responds to help relieve pressure points for both of you. for up to 44 minutes more restful sleep per night.

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