tv Bloomberg Daybreak Europe Bloomberg June 12, 2024 1:00am-2:00am EDT
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double whammy of u.s. inflation and a fed decision. francis finance minister warns the country could face a debt crisis if marine le pen wins the upcoming snap parliamentary election. french bonds selloff as political risk royals markets. i will speak exclusively to the great prime minister, kyriakos mitsotakis about the eu election results on the future of future president ursula von der leyen and outlook for the greek economy. i will be joined by eben upton later in the show. a big day when it comes to the inflation picture out of the u.s. with core inflation cpi expected to moderate marginally. that data coming in and a couple hours before the fed decision, with the focused on the forecast, the dot plot, and the
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commentary from jay powell. after the pain felt across french stocks, currently u.k. futures and the ftse 100 pointing up 0.4%, looking to add 31 points. we see a lift to the commodity space. modest gains but punch into a fresh record high for the s&p. the expectation is some investors will be on the sidelines until we get clarity from the cpi print, and then the fed decision is not expected to change but it is the adjustments and the most recent dot plots at three adjustments per 2024. nasdaq futures currently point to gains. what a day for apple, gains of more than 7% for that company. at the 10 year, we did see yields lower yesterday.
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currently in terms of the focus on the 10 year, 4.40 on the benchmark. brent trading $82 a barrel. inventories are shrinking in the u.s. gold currently down 0.2%. trade is unwinding bets ahead of today's double risk events. the inflation data comes out hours before the fed's interest rate decision. in terms of what the markets are expecting and to what extent markets are bracing and positioning for these events, the inflation prints followed by the fed decision, how are markets adjusting? mary: the key thing is that we
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already know the market is looking for 1-2 cuts from the fed. it is where the dot plot will be, and the likelihood is we will get two cuts, and it was shift from two to three. if inflation prices start softening faster than expected, or you see the labor market deteriorate more. transitioning to one cut would be too aggressive, and not giving that optionality forces them to revert back to two. the market is looking to see where the fed is looking, two or one cut? and we will get the cpi data first. that is likely to show -- even if it shows a softer side, we are trending in the right direction but we will need more
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what do you make of the reduced vote, what is your interpretation of what the electors' messages they are trying to send to you? >> the new democracy did win the election was 28%, and that percentage is higher than the total tally of the second and third party. we still remain the dominant political force in greece. these elections took place after electoral fatigue. we had a lower turnaround from the rest of the european union, around 40% but there was also some degree of discontent such as the cost of living which we need to address. we were elected to implement an aggressive reform for the remaining three years of our term. this is what we should do.
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we have three years without any other elections, and we will be judged on our performance in 2027. we went against a trend where incumbents and other european countries suffered heavy losses. we avoided that and we are the dominant political force in greece. tom: we look to france to the reaction and marine le pen, and the french president calling the surprise vote. and for the gains for the fda in germany. what is your interpretation of the shift in those right wing parties across the euro zone, whether a protest vote or is there something more substantial going on? prime minister mitsotakis: if you look at the total numbers, the party increased its numbers of euro mp's, and the main
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coalition, the socialist and the liberals that have governed europe over the past decade remains the dominant coalition in the european parliament. i would argue that european center held, maybe stronger than some expected, and this right wing surge took place in two important countries but not across the entire continent. maybe there is over exaggeration about the right wing shift. if you look at the numbers of the continent as a whole, the important decisions will continue to be made by the three political families, and nothing can happen with the central blocking minority in the european parliament. all in all, the results are slightly better than many expected, and i think there is momentum to drive through
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important changes in europe for the next five years. tom: what did you make of that surprise decision by the french resident to call for a parliament revote? -- parliamentary vote? what did you make of ultimately that take by the french president, and attempt to take on this far right surge inference. prime minister mitsotakis: i have a lot of respect for the president we have a strong strategic partnership so it would be inappropriate for me to comment on domestic political developments. in france what i care about is to make sure the french voice is heard loud and clear at the european council table and that france remains a pro-european
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force. with president macron, we agree on strengthening the european defense. we are a big proponent of the idea, it could be a european missile defense initiative that could be funded through joint european borrowing, and france has been a supporter of these initiatives. i look at who represents france, and president macron will continue to do that but when it comes to domestic politics in france, it is not appropriate for me to comment on those. tom: understood completely. the challenge for some is that you could and up with the prime minister from the national front , marine le pen's party, and that could challenge the stance, and the suggestion there could
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be a debt crisis in france. is france a source of political risk now in the euro zone? prime minister mitsotakis: again, it is up to the french people to decide and the markets to assess the risk of french debt. i focus more on the progress that greece has made, and i am happy that greece is no longer a source of concern for the euro zone, our economy has been over performing the rest of the euro zone. our debt is on a downward track. this is from a country that has for a long time been the bete noir of the euro zone. let's keep it to that when it comes to comments about what is happening in france. tom: you touched on the epp, and have been a supporter of ursula von der leyen.
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it's her position locked in? if she was to reach out to maloney, would you have that support of ursula von der leyen? what you make of her position now? prime minister mitsotakis: i'm absently convinced ursula von der leyen will continue as commission president. we are by far the largest political family, and i think she will have the overwhelming if not unanimous support of the european council, and she will manage to obtain a majority of the european parliament again. the founding coalition will need to be the three political families that have dominated the political center. if there are parties or government that want to support her candidacy, they are most welcome to do so.
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there will be no formal negotiation with other political families to the right of the epp. i consider ursula von der leyen a given. i'm very happy about that, i was one of the first to sign her letter of support when she presented her candidacy. i think it is good for the european commission to have continuity at the level of the present of the european executive. tom: you talked about your support for ukraine and reiterated that and talked about working with france. you have rolled out the missile defense, and you need those for greece. would you work with france to send mirage fighter jets? could that be an option? prime minister mitsotakis: we do not discuss operational options when it comes to support of ukraine in public.
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what i have said and what i will repeat is we will do nothing that compromises the defense capabilities of greece. we have been big supporters of ukraine. to the extent we will continue to do that. we will but when you talk about fighter jets, you move the discussion to a different league, we are not there. tom: the economy of greece outperforming many eurozone partners. someone point to the fact there is a lot of reliance on funding from the eu. greece is the biggest recipient of eu funds. is greece overly reliant? is the recovery overly reliant on those funds from the eu? prime minister mitsotakis: first of all, it is important that a century -- that a country such as greece receives funding from
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the euro zone. we have made good use of these funds to drive productive investment. in skills training and public health, these are important european contributions. when we assess the impact of the recovery on the resilience facility, we reached the conclusion that it was a successful measure but i would argue the economy as well diversified and able to generate significant growth by encouraging significant private investment so it is not just about european but investment across the board. we are one of the largest producers of electricity wind and solar. in high-tech greece is developing a booming ecosystem of high-tech companies arid i'm
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happy the economy is not only reliant on tourism. tom: still largely dependent on tourism and shipping, does the economic model of greece need to change? prime minister mitsotakis: what we have said is we need to drive more investment in productivity in research and development to make sure the growth that we deliver is sustainable and environmentally friendly. all the investment in tourism now is driven by sustainability. we cannot afford to impact our wonderful country in the search of growth. in that respect, many fundamental reforms that we are implementing from justice reform to issues addressing our active market policies tried to change the mix of the greek economy to
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make sure we adjust to a more challenging world. this is the challenge of our second term, not just about the headline growth numbers but bringing down unemployment and driving wages, these are the big bets, the things people will actually notice. the macro growth number does not tell the whole story. tom: prime minister, we really appreciate your time. kyriakos mitsotakis, the prime minister of greece. coming up, we will speak to the ceo of coreweave, having raised $12 million in 12 months, the ceo speaking to me in a few minutes. stay with us. this is bloomberg. ♪
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tom: welcome back. coreweave is proving to be a big beneficiary of the ai boom, the cloud competing provider has raised $12 million from equity and debt investors. it's growth is fueled by increasing demand for vast data centers needed to power the ai revolution. i'm joined now by michael intrator, ceo, coreweave inc. thank you for joining us in studio. you were building data centers and expect 28 by the end of the year. you are investing in the u.k. what is powering this? michael: first of all, thank you for having me. the groundswell that is occurring within the broader ai
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market occurs across many different labs and companies but when it funnels down to the physical infrastructure required to build and drive the computing power, there is relatively small number of companies that have the capacity to scale up and deliver and compute at this level with the correct software so they can train these models and deliver products. coreweave is one of them. the $12 billion was raised in debt, and that debt is focused on building the physical infrastructure, purchasing the servers, standing them up and ensuring that we have top-flight best in class software layered to enable our clients to use that compute. tom: coreweave stacks that on
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top of the hardware, that is crucial. in terms of the gap between demand and supply, where are we in that evolution? michael: that is the billion dollar question. right now where we are is in a position where the market is incapable of delivering the scale and quantity of accelerated compute required for models to be trained and served, for products to be built. the company and the industry at large is in a position of headlong building as we tried to keep up with the demand. the way to think about it, we are trying to scale the physical infrastructure at the speed of software. the data center infrastructure and the compute from the last generation is not capable of
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supporting the demands of the compute required for the new use case. as quickly as software can be built and models can be trained, we are trying to ensure the data centers are built to ensure the compute is online, the servers and networking are built, all the pieces taken for granted in the last 20 years when it was more of a linear function. tom: that was suggest you are not concerned about the gap between capex a monetization on the end products? michael: the demand we are encountering and the quality of the consumers in terms of their strength of credit do not put us in a position were either we or the lenders, who are top-flight companies, are in a position of concern about the ability to pay for and make good on their
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contracts. tom: you are valued at $19 billion, and you are looking for an ipo in 2025. is that reasonable? is that an option for you and coreweave? michael: when people ask me this question, we are in an extremely capital-intensive company and my job is to help us go into the capital markets to secure funding to build according to our roadmap and the demand that our clients have. when i'm faced with that challenge, i look to the markets to find the deepest, most liquid, least expensive sources of capital to build and extend our company. it stands to reason that the public markets will be the place where i am able to achieve those three requirements. we are not committed to anything yet but we are looking at the public market as a possible way
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of increasing our access to capital. tom: there are a million other questions i would like to ask you but we have run out of time. it is a fascinating company to follow. michael intrator, ceo, coreweave inc. on the expansion plans on the fundraising. plenty more coming up. stay with us. this is bloomberg. ♪
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tom: welcome back. other stories making the news, bloomberg earning that the biden administration is considering are the restrictions on china's access to chip technology use for ai. washington may move to limit beijing's ability to use cutting edge chip architecture known as gate. apple shares rose to record after new ai offers. nvidia is the second most
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valuable company in the world again. apple shares jumped over 7%, marking their first record high of the year. coming up, british pc maker raspberry on its london trading debut. i will speak to the ceo, eben upton, next. this is bloomberg. ♪ her uncle's unhappy. i'm sensing an underlying issue. it's t-mobile. it started when we tried to get him under a new plan. but they they unexpectedly unraveled their “price lock” guarantee. which has made him, a bit... unruly. you called yourself the “un-carrier”. you sing about “price lock” on those commercials. “the price lock, the price lock...” so, if you could change the price, change the name! it's not a lock, i know a lock. so how can we undo the damage? we could all unsubscribe and switch to xfinity. their connection is unreal. and we could all un-experience this whole session. okay, that's uncalled for.
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for a double whammy of u.s. inflation and a fed decision. fran france's finance minister warns the country could face a debt crisis if le pin win it is parliamentary election. bonds selloff, political risk royals mash. plus, the london trading debut. i'll be joined by the company's c.e.o. later. fresh rallies coming through for u.s. stocks. once again punching through new highs. apple as factor adding 7% and notching its first record of the year. u.s. futures .30 of a percent. the phytase 100 is looking to -- futsi100 is looking to increase. and the inflation of course will drop just two hours or so before that fed decision.
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now, nasdaq futures of .010 of a percent. some volatility around inflation and the felt. there was a successful auction of 10-year debt stateside well absorbed by the markets. euro dollar at 1.07 that has faced the fact of political risk. 82 on brent. up .5%. gold, 2013 just down .10. a.i. is front and center as investors and tech giants explore what is on the horizon and how it's reshaping industries. russ shore is the founder of advocates a group designed to address some of the biggest
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challenges facing tech companies and russ has a finger firmly on all things uk and global tech. he's an informal adviser on questions of technology. russ a great person to kick things off with. what are you hearing at london tech week? what is exciting people? what are the key things? >> yeah, i mean, lots of buzz. we've got 45,000 expected throughout the week, which is fantastic. we're hearing a lot on artificial intelligence. he was one of our speakers. we're hearing a lot on other emerging technology. we've got the a.i. summit tomorrow and thursday. and you know, green technologies. a lot of interest in that space some of that's one piece of it. but what's exciting that the word is has come here. we have over 140 countries respected from all around the world really focused on not just
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london but the uk overall. uk is the third largest system in the world. tom: sales force an cole and microsoft choosing london as their european headquarters. what is behind that and do you see that continuing? >> what's behind it is there's strong track record of london become an a.i. hub. that's when google acquired deep mind and building their center of excellence and you've seen the growth of scaleups emerging in london. so i'm not surprised that microsoft open a.i. and sales force is saying that london is the flies be. the talent is here. the talent is here. i think there's a lot of enthusiasm and hype. we have to be careful not to overhype this. but the fundamentals and the foundation for london being a global a.i. hub.
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>> on the question of hub any concerns about the a.i. hype in particular the fun flows crowding out other parts of this ecosystem? >> yes, i think -- the joke is around every company is saying they're an a.i. company. we have to be careful. we have to make sure that the diligence is happening. money is going into many of these companies. that's not to the detriment of thin tech which continues to do well. and london is the number one city for green finance. climate tech investment is very strong. there might be other sectors that might be impactinged on that a bit on health tech, e-commerce, ed-tech which had been good sectors might be hitting a little bit of well, i'm interested in a.i. and climate tech. but overall, the money is there. and if you've got a big business or a good product you'll get funding. >> we talked about the fact that politician, governments tap you on the shoulder and they plum your insights in this space.
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the labour party, they have a decent chance to take power. we'll wait to see what happens on july the fourth. how convinced are you that that party that a government will be as supportive for this echo system? >> all of the conversations that i've had are focused on a fair degree of continue knew tip they've seen the uk in over 10 years become this massive tech echo system. i don't think they want to rock the apple cart too much in that regard. that said, they've had opportunities to address. i've spoken to them about rescaling the workforce for digital skills for green skills. making sure that our immigration visas are fit for purpose and the process that we put migrants through to come here, the best talent in the world that's fit for purpose. and then the other piece which
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our current chancellor has been addressing called the mansion house compact or reform getting that scaling capital in place with the pension funds near the uk so that we can sustain the growth of scaling businesses, i think a new government will want to continue that focus. it's absolutely vital. >> russ show thank you very much. and i appreciate your time with the finger on the pulse of uk and global tech space as we cop to monitor what is unfolding at london tech with the founder of glow global tech advocates. shares in british p.c.raspberry p.i. soares in london. very pleased to say i'm joined by their c.e.o. eben upton what a day yesterday. it was overscribed that the shares popped. you saw that gain of close to 40%. what does it step us about
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appetite for raspberry p.i.? what was your reaction to the way it was received? >> it was a wonderful reception for raspberry pi. >> when did you make that decision to list on the on don market? why choose london over new york? because many executives that i speak to startups will say look, frankly, it's still liquidity, it's still that retail investor and the understanding of tech that draws us to the u.s. why did you choose london ultimately? >> i actually went out to new york in the middle of last year to mean meet with some potential investors to get a look whether new york would be a better place
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for us. but there is a feeling that there are advantages to a particular class of company and listing in new york. and i got -- the interesting thing is i got on the plane coming back about 70-30 the other way and that hardened over time. the thing they discovered once you look at detail not at the broad market but there's an idea of a liquidity count and a multiples count and valuation gap but you become more granular and you look at the specific companies and you look at the valuation which will be likely to affect a particular company. it's effect of the data some of we got more comfortable. there wasn't a valuation arbitrag. maybe if you're a $50 billion company it may be different. there isn't a meaningful liquidity gap there's a lot of smart money in america but that money will find
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you in the uk. if you're prepared you can. you're not going to is it and not talk to people. if you compel them on the proposition investment that much will find you one way or the other. >> very interesting. you've raised $100 million u.s. dollars. how are you going to be putting that money to play? >> some of that money -- we're an unyou usual technology company. the money raced by the charity will go to -- allow it to scale its operations in the second decade. just takes many of the lessons they've learned -- they're focused on getting young people excited. i was excited when i was competing when i was a child. they've learned a lot of important lessons and they scaled around the world. that's what the money will do for them. for us is to scale our
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technology pipeline. and as we sale more to the industrial space which is where the heart of this is still about the enthusiasm and the educators and the volume and the money is increasing. you need be able to convince your customers that you have product. the product will be made available reliably and on time. that means investments an inventory and the finished goods. so that's going to be a an important part of how we put that capital to work. tom: and that is interesting. i have the raspberry pi iv so we can get an imagine if of it so viewers can see because just for the background you started as making very easy to use very affordable computers that children could use to learn about this technology. and now you're selling increasingly to industry. you've outlined plans to
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increase to $4 million what does the. a i. demand. you can run models on one off your raspberry p.i.'s. what is the a.i. component? >> a lot of the applications and the industry embedded applications for our computers and have been for a long time are a.i. related. being out in the world looking at data that's coming from your environment and classifying that data and making decisions. that's what a.i. is. what we tried to do is suggestive jeb ration and put enough performance into the design that the workloads run like some of these lower end models will run natively on the platform and where we have for that -- that small number of these cases which are vastly larger performance the goal is
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to be the largest embed host. we launched a product called air kit which runs an accelerator. so you can clip it on top of the raspberry pi five. it becomes the most cost effective way to address it in an embedded environment. >> and you touched on supply chains. and this was in your finding as a potential risk because of course, you do depend unities it's global supply chains even with a relatively simple computer. you can see the complexity of what is needed in terms of the different components. how do you mitigate it? >> it's amazing how complicated a simple computer can be. >> obvious, the challenge for you, the challenge that we confronted over the last few years is if you have 149 of those components you can't bailed computer what you have is
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100 components worth component industry and you can't build or sell anything some of we're lucky that our manufacture is in the uk some of we're -- unusual another way where we're an unusual organizationful we manufacture every competer that we build. we build in south wales some of we can claim some to benefits of local zation of that element of our supply chain. it's important for us that they're holding everything to go into our product. we're holding certain finished goods so they can design with raspberry pi. >> much of this money or some of this money will be put to use in terms of innovation. give us a little flavor of what kind of innovations we might be seeing from you and the team in the months and years ahead. >> we talked in our filing about one particular example of a
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platform we call amethyst. we build chips. and the platform will be launched in 2021. so it's successful driven in part of the availabilities. it was a wonderful time to launch a similar product. we have a product coming up later this year. 2350 which is the second generation of that run when we launch it in 2015, six times as powerful as the original raspberry pi. it was a more capable platform. but also because when you do something for the second time, it really convinces people to stay. this is something you really care about so we're hoping 2350, is it vastly more powerful. but it really is an indication that it's going to be an important part of our future. >> really, really interesting. we appreciate you joinings on the back of that successful
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♪ tom: welcome back. traders are rapidly unwinding bets for a rally in u.s. treasuries ahead of today's double-header. the latest c.p.i. print followed by the fed's rate decision. let's bring in the chief economist. charlotte, thanks for joining us in the studio. we know the decision they're going to hold that's widely expected. it's focus on the forecast. and your base case is they revise the.block from three that they had in march to two. but you say there's an
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underappreciated risk they move from three to one. explain that thinking. >> yep, so the base case is that may move the dot plot. that would be because of stubborn inflation. as we've mean? the data. and the rest of the governing committee being more cautious some of that would be the key risk to watch for markets. the other key thing is economic projections where they might raise up the unemployment rate and the g.d.p. forecast. >> and we know there's potentially members that will not be putting that to your point. given what we know at this stage though, how you do see the rate cycle unfolding through this year and into 2025? >> so we have one to two rate cuts penciled in for this year. the fed could start earliest incept.
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the key indicator to look is inflation. and the extent of the rate cuts will be determined by labor markets and how the overall economy is going. generally it will be a cautious easing cycle some of policy rates are still in restrictive territory. central banks are dialing back interest rates from less -- to be less restrictive. but it's still overall restrictive. >> what's your projection when the u.s. gets to that 2% target? and how depen den that is on seeing a softening within services that parts of the inflation basket? is that where the silence right now? >> yes. when it comes to core p.c. which is the feds' preferred gauge, the target will be reached next year. the question is can inflation come down to targets on the sustainable bases? and what we're looking out for
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are the labor markets. if you want to solve inflation you need to address wage inflation and that's an issue in europe and the u.s. >> let's go to europe then. the reaction -- the market reaction pronounced around the political risk coming out of france. the finance minister of france, saying that they could face a debt crisis. is that something that they should start to see seriously now a potential debt crisis in france in >> so it certainly is a key to watch. there are some steps to go before we could get to that step. first of all with trance now calling the legislative elections, there are two rounds some of to go to this scenario of a debt crisis where you would get them potentially there the far right gaining seats, you have two rounds to go forward. and that -- that can penalize potentially those far rights or more extreme parties some of it's not clear that they would get the majority in any case.
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later and even if we did have the adverse scenario where the far right did get the majority, the question is would le pen play the liz trust playbook or the maloney playbook? if her eye is to get the next presidentstial election in 2027, maybe she wants to play more the maloney playbook. >> i really appreciate it. chief economist from swissry on the views on the fed and how to think about the adjustments we may get later today and the fiscal risks. charlotte, thank you for joining us a very, very important day because all of those season s. we'll do a deep dive in materials of the inflation picture in china. you may ask what inflation because prices continues to drop? we'll see on the market reaction for apple. stay with us. this is bloomberg.
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♪ >> welcome back to bloomberg daybreak. happy wednesday. you saw fresh record highs across u.s. stocks. and apple can take a lot of the credit for that. the stock rallying a little over 7%. it's the first record high of the year for apple. it's faced all these challenges around the slowdown in terms of demand out of china. concern about a slump in sale in smart phones and a. inch. it seems that the event on monday -- a.i., and it seems that the event has won over a significant number of investors. they want to make it easier. they want to embed it. so you saw that in the apple stock and is now sniffing on the heels of microsoft second after microsoft followed by n have you
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had yeah. -- n vida. part of the challenge is to weak domestic demand. you had a reminder today with the c.p.i. consumer prices in china increasing just 0 .3%. essentially in line with the estimates. but you're not able to turn this around. the real estate crisis remains a dominant concern. jobs and the lack of jobs quickly for those turned age of 25 is a significant challenge. and then industrial prices actually firmly in deflation territory contracting 1.4%. that makes it much more difficult for those companies to pay down the heavy debt loads what is the fiscal space for the government of china particularly with the fed holding rates at these levels? that is a challenge for china going forward. let's flip the board quickly and look at the volatility question talking of the fed because that is reminder that today is going to be volatile.
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one-day volatility in the vicks of the year is the highest it has been year to day. this is the biggest pop we've seen in terms of volatility because you're going to see that inflation print a couple of hours ahead of the decision. the jury ask out in terms of where they go on the dot plots. we'll preview more market insight coming up on "markets today." stay with us. this is bloomberg.
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her uncle's unhappy. i'm sensing an underlying issue. it's t-mobile. it started when we tried to get him under a new plan. but they they unexpectedly unraveled their “price lock” guarantee. which has made him, a bit... unruly. you called yourself the “un-carrier”. you sing about “price lock” on those commercials. “the price lock, the price lock...” so, if you could change the price, change the name! it's not a lock, i know a lock. so how can we undo the damage? we could all unsubscribe and switch to xfinity. their connection is unreal. and we could all un-experience this whole session. okay, that's uncalled for. i'm amanda and i've struggled my whole life with my weight. i had some health issues which affected my hormones and my metabolism literally just crashed on me. i've tried everything and starving myself just didn't work. what appealed to me about golo was that it focused on losing fat weight and maintaining my muscle.
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great opportunity to think about it. we need to think about what i can have for the next fight years, 10 years. what's the best way to contribute to the world? ♪ >> good morning from london, this is bloomberg market. i'm anna edwards along with tom mckenzie. here's what you need to know. franz's finance minister warns the country could face a debt crisis if le pen wins the parliamentary election. u.s. stocks power to another record but a rally in treasury takes pause as
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