tom: this is "bloomberg daybreak: europe". i'm tom mackenzie in london. asian stocks extend a u.s. tech selloff on fears about slumping chip demand. asml plunges the most in 26 years as order bookings tumble and guidance is cut. lvmh slumps, the luxury giant's sales slumps for the first time since the pandemic as demand cools in china. donald trump this and misses

criticism of tariff plans in an interview with bloomberg three weeks out from the election. >> to me, the most beautiful word in the dictionary is tariff . it's my favorite word. [applause] it needs a public relations firm. all you have to do is build your plant in the united states, and you don't have any tariffs. tom: happy wednesday. the headwinds from the semiconductor sector with asml in the eye of the storm. rippling a class -- across global markets and upsetting gains in the banking sector with results that were decent from goldman sachs and citi yesterday. for now the focus is on the chip

space and headwinds around the industrial and auto parts of the demand structure. european futures pointing lower 0.6%. expect the semiconductors in this region to be a further drag today. the ftse 100 in the u.k. down 0.1 percent. s&p futures pointing to gains after losses of around 0.8% yesterday. there was a selloff by the end of close on wall street. nasdaq futures higher 0.2% after the nasdaq 100 dropped yesterday. let's look cross assets. inflation data out of the u.k. at 7:00 a.m. u.k. time on a core basis, to what extent will that lock in a further cut from the bank in november? 4.03 is with a 10-year is yielding stateside. still parsing comments from fomc officials. brent up zero point 4%, israel says it will decide how it will

retaliate against iran. gold up 0.2% so far in the session. avril hong standing by for a check on the asian markets. >> asian markets in a somber mood. that is how they started the day. what do you expect when you see a tech selloff in the u.s.? that sector has been driving the rally, when it turns tail, the pain tends to spread, and we have seen regions on the benchmark down today. msci asia pacific at its lowest level in three weeks. the tech heavy gauges are among those taking a beating, particularly bad bleed on the nikkei, the weakness in the japanese currency can't be helping things along. after all this question about the ai rally, we are getting more good news in the past 15 minutes hearing from the hong kong chief executive policy briefing. and hearing how they will relax some of these mortgage rules for

some homes. that has been a pain point of sorts, especially with everything going on in the mainland. what demand from that front as well. we are still seeing a bit of impatience growing as far as china stimulus measures and the filling of the blanks is concerned. we are seeing investors waiting out for the housing ministry briefing due tomorrow. we will hear from the likes of the pboc and hopefully get more details on any property support measures. we are seeing these double-digit gains among chinese developers in hong kdigging deeper into whe in some of these chip names for asml. the tsmc, sk hynix stocks are the biggest drags on the gauge for stocks in the region. these are asml's customers for this part of the world but interesting these double-digit

declines in the likes of lasertec, tokyo electron, some analysts pointed out this is because of how high japanese equities had been running. it gives you a sense of how far they've gone and how far they are coming down. tom: avril hong in singapore. the shock waves across the asian market from the strong grade from -- downgrade from asml. concerns amongst clients and suppliers to that maker of lithography machines. asian stocks are part of that selloff and part of the story is around the chips space. worries that the industry is running further out of steam. dutch giant asml coming is outlook after booking just half the orders expected this quarter. let's bring in tech reporter annabelle droulers with details. the results came through a day early, trying to find out why that was. no doubt questions to executives on the call later at two u.k.

time. take us through what we heard. >> some of the highlights there, the big concern was how badly they missed in the third quarter. what analysts had been expecting was $5.9 billion in sales to be booked. they came in around the $2.8 billion market, so a huge mess on what analysts had been expecting. as well as the guidance for 2025. that was lowered by the share price reaction is flowing into asia today. results a day early, something that surprised the market, the company saying it was a technical error. a lot for investors to consider. it points to that two speed recovery in the chips space. on the one hand, you have got all that excitement around ai chips persisting and that strong outlook we're seeing.

at the same time, the legacy chips for things like consumer electronics and automotive's, that is still finding his way out of the industry slump. tom: that distinction is important, i'm glad you brought that down. because nvidia down close to 5% by the end of close yesterday on some levels doesn't make sense because they are the maker of these accelerators. the evidence adjusts that demand is still there. the european car space should not come as a major surprise but you are right to point out the segmentation of the chips space. talk about the china part of the story for asml and the broader read-across. >> this is something that feeds into the concern around the stock. something that is perhaps not being happily pointed out is how much stockpiling we saw of asml's equipment ahead of the restrictions taking effect. there is lots of different

geopolitical tensions facing asml in particular. before it produces euv machines, these are the machines critical to producing the most advanced ai chips out there. if those are restricted from being sold to china, there is that question around the serviceability of those machines, that is playing intuit as well, because these machines need a lot of maintenance every few months, definitely at the year mark, so there's a question of how much chinese companies are trying to get ahead of these restrictions. that could be feeding into these numbers. tom: excellent context and breakdown. tech reporter annabelle droulers on the asml numbers. this ties when we talk about u.s. restrictions to the politics of the u.s. donald trump has been telling us up about tariff plans, he defended his plans to

dramatically increase tariffs, partly on china, and see greater influence with the federal reserve if he returns to the white house. the republican presidential nominee has been speaking to bloomberg news' editor in chief john micklethwait. >> we're all about growth. want to bring companies back to our country. to me, the most beautiful word in the dictionary is tariff. and it's my favorite word. it needs a public elation's firm. -- relations firm.had a great relationship with president xi , with putin, kim jong-un. the dollar is so secure, your reserve currency is the strongest it will ever be. i think if you are a good president with good sense, you should be able to at least talk to him, i don't say make the decision at all. take a look at our cities, we are a developing nation. we have to develop more than they do. tom: let's bring in bill faries

in singapore for context with the republican nominee. trump defending economic proposals, including tariffs, and how he thinks about his relationship with the fed and fed chair. what do we know, bill, about the costs of trump's plans as we currently understand them? >> if you asked donald trump, he will say most of his plans will largely pay for themselves. or that he will get enough revenue from these tariffs he is proposing to offset expenses elsewhere. the vast majority of economists disagree with that. they say a 10% across-the-board tariff will have a huge impact on everyday costs that americans pay. a bloomberg analysis was done several weeks ago, before trump introduced additional tax

proposals. that calculated a cost of $10 trillion over the coming decade. the peterson institute has updated that to as much as $15 trillion over a decade. potentially huge costs. donald trump, not surprisingly, not buying into that argument. he said in that clip, we are all about growth. he thinks the revenue and boost to the u.s. economy will overcome any of those shortfalls. tom: we also heard him taking a tougher line on u.s. allies, the european union in the mix, but adversaries like north korea and russia, he took another shot at the eu. we know the eu is not sitting idly by this time, they don't want to be caught out by a trump presidency. what do we know about how the eu is preparing for potential trump tariffs if he wins? >> the eu, along with many

countries, hedging their bets on the november election. the eu coming up with a list of goods and services it can target i donald trump wins the election and follows through on his proposal to put in that 10% tariff, or higher in some other places. we don't know the exact list of goods but we recall from donald trump's first term that the eu went after some politically potent symbols of the american economy. they added tariffs on things like harley-davidson motorcycles, levi strauss jeans. i would expect a similar list put together if trump wins just held in the back pocket to see what he does on election day. but gold would be to make it more politically painful for the trump administration to carry through on those promises. tom: bill faries in singapore

thank you very much indeed. we talked about the fed and how trump thinks about the federal reserve. we've been hearing from rafael bostic. he expects u.s. growth to slow in 2024 but remain robust. mary daly says the central bank must stay vigilant as an nation and labor market -- inflation and the labor market cool. valerie, do we have clarity from these fed speakers as to the next steps? >> there are -- they are using the same lines they have been. this b word of balance. this is mary bailey yesterday talking about the risks to inflation and unemployment. she went on to say they must be vigilant to guard growth. sounds like the fed put is still alive. i want to draw your attention to one survey by the new york fed yesterday on credit card billing and sees -- delinquencies.

they show that the odds of missing a debt payment in three months has risen on a steady incline. we now see a one in seven chance that a u.s. consumer misses a payment in the next three months. video forward-looking expectations when it comes to the help of the u.s. consumer. tom: a warning on some segments of the u.s. consumer. lvmh sales falling for the first time since the pandemic. we will look at why the luxury goods maker is failing to catch the eye of chinese consumers. they are running out of money basically. this is bloomberg. ♪

tom: welcome back to "bloomberg daybreak europe." lvmh fell as much as 10% in u.s. trading after the luxury goods giant missed estimates with third-quter earnings. lower chinese emand led to sales falling for the first time since the pandemic. we are joined by global managing editor rachel chang. not a big surprise on some levels that there is software demand out of china for luxury goods.

the numbers within the mix for lvmh causing angst for investors. >> definitely so, we have seen bad numbers for luxury brands in china for most of the year but this set of results was a shock to the market and will continue to play out as europe wakes up because things seem worse than expected. the drop in china revenue was expected. that happened last quarter but there was a drop lower than estimates in the important fashion and leather sector for lvmh. that hasn't shown bad results since the lockdown in 2020. this is as bad as then pay last quarter, we saw bright spots. japan was doing well for lvmh last quarter because we saw chinese tourists going to japan to buy bags instead of china. this quarter, we're not seeing japan hold upgrade we see japa going down as well for lvmh.

no green shoots, no bright spots for them anywhere at all in the china story. people are panicking now. tom: that leads to the obvious question as to what next for luxury brands in china? is this as bad as it gets or is there more pain on the horizon. >> that is the question people want an answer to. all eyes will turn to hermes next week. hermes is the one luxury brand that has done really well in china throughout. they are at the top, the billionaires, people who are not really suffering. they don't discount. hermes reports weakness, that means weakness at the top end of chinese consumer, then there will really be panic. now all the european luxury houses are questioning whether that massive investment in china is a short-term problem or that

long-term the chinese consumer will not be a big a part of the luxury story as previously thought. tom: does that suggest some of these companies might look at restructuring operations in china, at price cuts, we have clarity on how executives are adjusting their businesses? is there an expectation that the stimulus from the chinese government turn things around for the chinese consumer? >> the stimulus disappointment has set in quickly. we are not seeing efforts to boost the consumer. we are not seeing consumer confidence rise. for the luxury houses anyway, i think some of that deep conversation is already happening about pulling back on investments in china. we just reported tiffany's is how things the size -- halving the size of its flagship shanghai store.

probably those long-term strategies will have to be withdrawn. they will be looking at other regions, for example, the middle east prop up they are no longer expecting from china. this is a big turning point for the luxury industry. tom: interesting context, i remember going to that tiffany's store when they first opened it, all bells and whistles. thank you for the context as we look ahead to hermes, in terms of the next litmus test in terms of exposure to china. shein is adding more banks to arrange its potential listing in london. barclays and ubs have been picked as book runners for the online fashion retailer's ipo. the listing could happen as soon as early next year. valuing the company at around $65 billion. it started in china, it is now singapore-based and

headquarters, but originally his origins were in china. we have data out of the u.k. on the inflation story. 7:00 p.m. u.k. time, it is the cpi print, corn asian expected -- core inflation expected to edge lower, we are expected to see a print of 3.4% on a year on year basis, down from 3.6%, will that cement that cut being priced in by the markets from the boe in november? data we will break for you live at 7:00 a.m. u.k. time. on the earnings front, decent numbers from goldman sachs and bank of america yesterday. the focus switching to morgan stanley. 12:30 p.m. u.k. time today. will morgan stanley repeat the beads from the likes of jp morgan and goldman? will it be a similar story when it comes to the investment banking and trading parts of the business? at 7:40 pm u.k. time, the ecb

president christine lagarde will be speaking. as markets increasingly lock in a more aggressive cutting cycle from the ecb. that decision coming on thursday from the european central bank. there is plenty more coming u. this is bloomberg. ♪

tom: welcome back to "bloomberg daybreak europe." she is the ceo of the world's largest environmental services company, veolia. she has been at veolia two decades helping guide the company's global growth. she told francine lacqua on

"leaders with lacqua" goes green about their ai prospects. >> ai can be part of the solution and is a problem of the same time. if i start with the problem, ai data centers consume a lot of energy and need a lot of water. actually we are providing services to the companies doing ai and it is a growing market. on the other side, ai can benefit ecological transformation saving water and energy, so on and so forth a nd make a company like veolia more efficient. tom: if you want, watch the full interview on "leaders with lacqua" goes green airing 9:30 p.m. new york time tonight in the u.s., 6:30 p.m. london time on thursday. boeing shares advanced yesterday

after the planemaker took a step towards raising $25 billion in bond or share sales to help withstand a long strike. secured a $10 billion credit agreement with u.s. banks. the funds could help boeing improve its bargaining position with striking workers who want higher wages and a reinstatement of pensions. adidas raised its annual profit target for the third order in a row thanks to be sustained boon for retro sneakers like the samba and more sales from its shrinking stockpile of yeezy footwear it expects operating profit of 1.2 billion euros. up the previous forecast of one billion euros. a change in fortunes at adidas. let's check back on the asian session with a focus on the tech space, semiconductors.

this was the shock arguably from asml with its earnings yesterday coming out a day before they were meant to, apparently a tecnial glitch, but more portly, a cut guidance t 2025 and a shipment of ordrs less than half the expectation. the ripple across the semiconductors base being felt in asia. we will get more details on asml. stay with us. this is bloomberg. hi, i'm rashod and i've lost 118 pounds on golo. the highest i've seen on the scale was 417. it was a real reality check, it was really scary. diabetes and high blood pressure runs in my family. i knew i had to do something, so i starved myself and i lost 100 pounds. but i ended up with an injury and i gained almost all of the weight back and fast. i was super defeated. so i went to the golo website and ordered a 90 day supply and i never looked back. if you tried everything else and you're just about ready to give up, give golo a try.

♪ tom: good morning, i'm tom. asian stocks extended a selloff, fears for slumping demand. asml plunges.

lvmh sales drop, demand cools in china. trump dismisses criticism and interview three weeks out from the election. >> close forward tara, my favorite word. he needs public relations. build in the u.s. and no tariffs. tom: let's check in on markets, the chip sector, asml, pressure on asian suppliers and a big miss, so ripple effects are

being felt. futures down and tech in focus. filters across energy.ow it s&p up after dropping yesterday. nasdaq up, 1.4%. we bee hearing from fed speakers talking abo moderation, living rates lower. 4.03 is yielded on the 10 year. inflation dater drops at 7:0 a.m. u.k. time. brent at $74 in gold up.

surprised earnings mornin from asml, they booked only half, just half of third quarter ernngs. amid ai euphoria, shares plunged, sending other big names into the red. john, thank you for joining us. what are the key takeaways? john: asml results were scheduled today, but the company publish them yesterday evening,

a technical error. less than half of ordersking estimated. cut guce or next year, surprising slowdown. delays were cited, the company will hold a call later today and we are hoping for clues. tom: what are the implications? >> weakness signals struggles for the wider chip sector so a sml is the market leader, a bellwether, a monopoly on making machines allowing companies to

produce advanced chips powering apple smartphones, nvidia artificial trainers. weakness is set to continue. tom: can we carve out accelerators, put to one side concerns about ai demand and gp use? this is more about autos, is there an overreaction? asml may not be signaling a downside? >> can see in the market nvidia dropped a little less than peers

. they plunged 10 or 15 percent so you can hope but results sent stocks falling. tom: like the number on the back of these results. in amsterdam with the context, indeed. a web of u.s. restrictions curbs some conductor business with china in here are the regulations and the impact on chip companies. >> the highest of high tech chip

firms are caught in geopolitical crosswinds between washington and beijing. steaks could hardly be greater with america fearful of chinese advances from design to equipntrom asml to materials to make the chips and manufacturing by tsmc, global supply chain winds through many countries. us attempts have not been successful, not just the parts themselves, the netherlands curved asml's ability in china.

twine supply chains, slapping restrictions is harder than it looks and there is risk of chinese retaliation. >> ok. qualcomm will probably wait until after the election, they want later clarity because of the impact the white house has on china. trump insists he will boost growth despite economists predicting otherwise. he will offset trillions of

dollars by raising tariffs on imports. he spoke to bloomberg's editor. >> four years of no inflation, four years of no inflation. for years, biden who has no idea where he is went two years with no inflation from me and then they started spending money like drunken sailors. ridiculous, the green scam, conceived of by aoc, she never studied the environment. she said agreement new scam. >> you are making promises,

flooding the thing with giveaways. i was kind to you. upper estimate was 15 trillion. wall street journal criticized eu. the norm its debt. trump: they've been wrong and so have you. john: you're trying to turn this, you're trying to turn this -- you're trying to turn this -- you're trying to turn this into a debate. trump: let me tell you about currency. reserve currency is where you started. reserve currency is under threat because you have iran, russia, china. they want the yuan to be the

thing of power so here is what i'm telling you. if somebody says and i know countries do not respect our leadership. she is worse than him, i never thought i would say this, not as smart as biden. we had four years of this -- this -- this -- this lunacy and we will not have a country left. if you want to go to third world status lose your reserve currency. we cannot lose it. you will go to third world status, look how things are running. if a country says we are not adhering to reserve currency, not saluting the dollar, i say that's ok and you will pay a

100% tariff on everything you sell. we hope you sell a lot but you will pay 100% and they will say it will be an honor to stay with reserve currency. that's not chess, that's checkers. tom: donald trump speaking to editor in chief john. citigroup shares closed lower despite the best third quarter in a decade among big banks reporting earnings like goldman sachs and bank of america. charlie wells joins us. what seems to be driving the upside, what is the secret sauce?

>> u.s. economy is strong and when you hear executives talk they are talking about soft landing, no landing. a sense of optimism. there is a low rate environment driving investment activity. reaching the trough, huge revenue source but also still volatility so traders have made money, goldman equities traders are on track for their best year ever. tom: how does that set us up for morgan stanley?

>> they've got skin in the game. last report and a couple hours today, looking good but expectations are higher than before. think about equities it bodes well for them. when you think about investment activity it bodes well. city took a hit but bank of america, solid, goldman solid. the market loves financials. they are outperforming. s&p is up, goldman sachs is up so favorable for banks that say

are positioned for the next phase. tom: indeed. with the details on bank earnings. bloomberg expects u.k. inflation to fall, the dater is out, a preview next. this is bloomberg. ♪

>> welcome back. data will drop in 13 minutes and rachel reeves faces unease over spending cuts.

40 billion pounds, lizzie, talk about how inflation could inform the boe? >> will drop, less than the forecast, the job will him down and give them the green light to t rates. remember yesterday you had jobs numbers and wages growing slowest pace at levels higher than boe is comfortable with.

you've got a divide between bailey and huw pill, all eyes on the dater but don't get excited because inflation will go up by the end of the year. tom: meanwhile maybe the stars align in november. charge of 22 billion, two 40 billion -- to 40 billion. >> she wants to raise a buffer to make sure spending is

covered, she will take difficult decisions when it comes to taxes and welfare. they had a cabinet meeting, various ministers raising the alarm. not feasible savings. not just usual suspects, lots of high capital spending, broad range of departments. no one wants their taxes rising so you got imf warning you could see adverse reactions. tom: indeed. lizzy burden will be on the inflation dater when it drops. italy banks and insurers will finance the budget. cap charge, giorgia meloni says

no new taxes for citizens. thanks and insurance will be allocated. the plan was provided with no further details in the budget needs to be signed off by parliament. lots more coming up,this is bloomberg. ♪

♪ >> progress is not guaranteed so we must stay vigilant. assess economy and balance objectives, really focused on delivering while ensuring the labor market remains in line. tom: mary daly talking about the next decision. one effective on u.s. households, the labor market.

households are divided by age group from youngest to oldest and you can see moving up expectations that they could miss payments, so a reminder, segments of households are doing well. in others there is concern. four straight months of increases. let's have a look at the corporate story, asml numbers less than half of estimates. 2.6 billion estimate.

stock plunging we will industry. they're blaming it on a technical error and weaker demand with intel sidelining plans. we continue to monitor. biggest drop since 1998 for asml . let's look at china, down day. maybe more clarity around real estate.

pullback, csi we hundred down 9.4%, a drop from the peak. hsi similar, down 12%. 9:30 am, with ahead of a bank in ukraine. opening trade is next. this is bloomberg. ♪ i asked myself, why doesn't pilates exist in harlem? so i started my own studio. getting a brick and mortar in new york is not easy. chase ink has supported us from studio one to studio three. when you start small, you need some big help. and chase ink was that for me. earn up to 5% cash back on business essentials with the chase ink business cash card from chase for business. make more of what's yours.

anna: good morning, i am anner edwards. sales at lvmh drop as the player is hit with a slump. stock drops 10% and asml shares see their biggest drop after missing estimates and