pushes to ban asml -- to -- pushes the netherlands to ban asml from selling to some governments.utch government confirmed u.s. officials are seeking to expand an existing moratorium on the sale of systems to the asian nation. it has yet to agree to any additional restrictions, but we know asml are pros -- opposes the band because the equipment is already a mature technology. anna: things for joining us. cagan koc with the latest on asml. let's see where we are with european stocks. let's have a look as we head toward a break. we can tell you we are weaker, down by .2% on the stoxx 600. the dax down .2%, and the cac down .3%. this diversions between what we are seeing in europe and the u.s. quite marked today. alix: we will see that diversions and carry that through if you join me on the cable show. that is at 12:00 p.m. in new york on digital radio. you can go to apple, spotify, wherever you get your podcast. coming up, it is the third like in this european story. survival of mario draghi's government is in chaos. we are going to get the latest on what it means from carlo cottare

asking asml to do? >> so, the u.s. wants asml to restrict its china business.ppening is washington is asking it to stop selling its machine to china. this is a machine that is one generation behind the most cutting edge equipment for chipmaking, but it is indispensable in the production process for less advanced chips. everything from cars to pc's. if china has access to these ct ut off, it will become quite challenging for china to fulfill its ambition to create a world-class chip industry at home. no wonder the chinese foreign ministry had very strong action that you just heard earlier. francine: so what are the implications of this move? >> we have seen shares of asml have fallen. asml fell overnight, while the shares of the asml supplier fell more than 8% at one point. we have seen chinese domestic chipmakers --to show that china is determined to accelerate the pace of building its own chip equipment as well. francine: thank you so much, we will continue looking at some of the chips, and it's amazing tom, i feel like for the last 18 months we have said it w

is putting on asml, as well as on nikon, japan, with asml having by far the biggest market share of thisology, the ultraviolet thurber fee equipment. caroline: i won't tell you how much i had to look into some of the technology when i reported on asml's numbers, and some of the other european equipment makers. what could china do in response? what about their own innovation in the country to be able to develop such a med? eric: we have certainly seen efforts by the chinese to develop their own equipment. to date, they have not had a whole lot of success with it. asml remains by and large the sole provider of this uv etching equipment to china. this is not the most advanced etching meant. it is kind of the second generation, the older generation, but still the most commonly used in this industry. this is something the chinese definitely have a desire to still in large on. advanced, rich countries are selling and making this a med. but they have not been very successful in the effort to re-create it. caroline: do you think this will bear fruit? i know i asked this previously, but we have h

this could impact asml as well.estors might still be worried about demand, so any forward-looking comments on-demand will be a key thing to watch. dani: and finally, sap, one of germany's big tech companies, they have reoccurring revenue that might shield them from some of the downturn, will that be their saving grace this quarter? >> sap has a lot of recurring revenue. a lot of the portfolio is tied to the back office and that is the first area that gets hit in a downturn. bloomberg intelligence expects a decline in new lessons sales -- license sales. sap might not deliver the protection it normally does. dani: leonard walking us through some of the earnings to come this week. wall street banks are boosting second-quarter earnings. we will decide --dive into the results so far as well as those to calm. dani: welcome back to bloomberg daybreak: europe. happy monday, i'm dani burger in london. let's get into the earnings story. our next guest says earnings expectations in general may be too high given recent macro da

thank you for being with us edwin with the latest on the asml story.g up, the implications for the pound after a night of dramatic resignations in the u.k. government. who will walk up that street to that front door today? will there be more resignations? the pound down an eighth. this is bloomberg. ♪ manus: from and london, it is " daybreak europe. the pound holding onto declines. the dollar soaring to the strongest level since 2020 but boris johnson losing two key cabinet members. so here we go, we are taking a tank. the question is do your retest brexit lows? is there enough political angst priced in the pound? >> i think there is more room for angst. political uncertainty is rarely good for currency but in the specific circumstance, it is very unlikely a national election will be called anytime soon. basically until the end of 2024 it could be. given how much is in the polls, it is very unlikely an election will follow. the markets focus on more near-term factors. it would be the u.k. economy. with that in mind you have consumer confidence at a rec

he met with asml.y discussed this desire to limit china's access to equipment that is used in printing computer chips. the computer chips that go into vehicles, computers and mobile phones. this is a chokepoint because china produces very little equipment itself. this is an area where they have a 5% market share globally. if the netherlands prevent asml from selling to china that would cut china off. from being able to produce these chips that are not quite the most cutting edge, not the highest tech. a generation behind what they call mature technology. this is something that has been on the table since a few weeks ago and presented by the u.s. officials. heidi: we do see that pressure from the u.s. administration starting from the at times but the ban on the top administration. how much is this down to the diplomatic relationship. potential talks between proposed unrolling of some of these tariffs? >> this is something that is certainly being discussed. we know that in washington in particular on cap

we will bring you earnings, including novartis, chipmaker asml, and sap.his is bloomberg. ♪ tom: welcome back to the open, 22 minutes into the european trading day read risk on, gains of almost 1%. gains on italian stocks, the etsy gaining -- the ftse gaining .4% despite political rancor. the dollar is down, bloomberg dollar index by .5%, feeding into risk on. nordea, the biggest nordic bank with a beat on second-quarter earnings. vodafone is up .7%, they sold off part of their towers business in new zealand for $1.1 billion. deliveroo cutting guidance, that stock is off 1.2%, year-to-date down 60%. it is a big week for european earnings with a number of major companies due to post reports. for more, we are joined by our reporter who has been looking at companies, particularly novartis, and health care companies. they are usually guarantors first steady growth, can they keep delivering? >> novartis is expected to take a hit from the strong u.s. dollar but adjusted for those effects they are still on track for single-digit growth, and roche, which reports o

officials have been pressuring the netherlands and asml to stop providing china with this equipment.duces very little of its own equipment for this process. this is an area where if china can't get access to it through asml which provides about 95% of this equipment globally, it could put the brakes on their ability to catch up with the u.s. on printing not even just the most high-tech kinds of computer chips, but even more mature, older chips. caroline: do you think the netherlands will agree? reporter: that is something we understand they have not yet agreed to what the u.s. has been asking for. this is certainly a place where the biden administration has been looking to build consensus with allies. we understand a similar request has been made of japan and nikon in terms of the other major company, a small percentage of that market, the part that asml does not have. this is been an area where the biden administration is working with allies globally to try and align export patrols to make sure it is something china can't get. caroline: great scoop. we thank you for bringing it. a t

is pushing for asml to stop selling chipmaking gear to china.netherlands agrees, it would constrict the availability of chipmaking. we are seeing asian chipmakers lower on that report. checking in on japan, we are waiting for the stock to trade to the upside. we understand the company has received priority reviews. shery: let's turn to some of the first word headlines. boris johnson digging in despite the resignation of two senior cabinet ministers. the chancellor quit with a health secretary, saying we cannot continue like this. earlier johnson publicly apologized. he has appointed a new chancellor. nato members including turkey have signed off on plans to bring sweden and finland into the alliance. turkey signed protocols while renewing its threat to block expansion if the nordic nations do not extradite people it considers terrorist. the expansion must be ratified by the legislatures, a process that can take many months. india is set to be seeking advance payments for a supply of fuel to sri lanka as the island nation runs out of dollars amid

wants the netherlands to ban asml holdings from selling to china.d would expand an existing moratorium on the sale of the most-advanced systems to beijing. the dutch government has not agreed yet. the move could hurt its trade ties with china. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm ritika gupta. this is bloomberg. kriti: thank you, as always. as we worry about the r word, we are awaiting minutes from the fifth meeting last month. with a preview is michael mckee, bloomberg's policy correspondent. thank you, as always. how much are we really going to find out that we did not already know? mike: i would add to that question by saying, what is it we are going to learn that we are not going to learn in a couple of weeks? we are looking at a lot of data yet to come. this is a look backwards at june 15, when the fed put out its latest forecasts and raised interest rates by 75 basis points. they put out a dot plot where they think interest rates are goin

we are getting breaking news on earnings, starting with asml, the maker of chip equipment. third quarter net sales, the estimate has been downgraded or at least is lower than estimated. 5.1 billion euros at the low end to five point 4 billion at the high-end, nearly one billion under the estimate. the estimate was 6.5 billion. the issue, gross margin estimate is off. the estimate was 53.5%, at the high end they see 50 percent. it is all about supply chain snarls and costs. other chipmakers like tsmc, micron morning about demand. -- warning about demand. part of the reason sales will look weaker for asml, they were able to beat net sales on the second quarter but the gross margin was a slight mist, 49 point five. the estimate, that was the estimate and the actual margin was 49.1. other earnings coming in, volvo cars, the second quarter revenue is amiss. the estimate was 74, 45 billion krona, came in at 71. second-quarter retail sales declined 27%, operating income as well. that looks stronger. a pretty large be down there margin which is rare for companies struggling with co

this expansion is expected to create 1000 new jobs and will support asml. i was thrilled to join not just because our partners are creating jobs in the u.s. but because of the recognition that american manufacturing is back at. as time where -- attracting this kind of investment to the u.s. is central to our work in the commerce department. asml is one member of the ecosystem of private sector companies around the globe to -- for choosing to invest in the united states as her home for semiconductors. it is a part of a larger story about america's re-engagement to the world. these types of investments that are crucial, they don't happen automatically. date require effort on the part of the -- they require effort on the part of the government. i will take time to discuss how the u.s. department of congress is delivering on president biden's international engagement and how it is critical to being what he is calling the defined chairman -- defining challenge of our time, ensuring democratic institutions make gains for the american people. throughout our histor

so we have an email out to the commerce department and asml, as an example, the stock is down 4% today of moving parts over here but of course the united states with the chip stock going nowhere is trying its best to maintain its footing on the global stage. >> i learned a lot about that in aspen last week talking to intel ceo pat gelsinger. it's pretty scary stuff if we don't pass that bill >>> is that a sector you should continue to steer clear from because they are cyclically oriented >> so chips are to the u.s. what oil and gas is to europe we both -- europe let itself get too reliant on an undependable supplier in russia, and we let ourselves get too reliant on an undependable suppliers throughout asia. it was just a strategic mistake. i think we realize it. frankly, i didn't think it would take two years to fix, but it has and it continues to be a problem. everybody's you talk to in the space says it is not going to get fixed in the next six months so this is a tough industry, it's a competitive industry, it's a capital intensive industry it's billions of dollars to open up a new

from the chinese and away from their ability to even see it or steal it or buy it and in this case asmlle most important photolithographic process which enables chips to be printed via light so far we've been able to keep this technology away from the malign activities of the communist party and i hope we can dkeep doing so going forwar. listen to the joint conference between fbi director wray and mi-5 director and you'll see that we're opening a new case on chinese ip theft or malign activities every 12 hours in the united states. think about this we're opening 700 chinese cases a year, and yet wall street can't wait for another chinese deal to go through and we can't wait to invest more money in chinese companies. it's a schism -- >> to be fair, they might be in a better spot than we are right now. they're stimulating. their inflation is very low. their stocks are doing really well because they have a pent-up demand surge coming from the covid lockdowns. you can't deny that's a good spot to be in for the markets at least. >> i smile because they have a closed capital account their cur

this would affect asml and nikon. we hope that you did hear from the spokesman who blasted the u.s.nment for this. they did not announce any retaliatory measures but it was significant criticism coming from china on this move. the u.s. is working with the netherlands and perhaps with the japanese government to get it to extent the moratorium and expand the moratorium. this is souring relations further. haidi: samsung is expected to report the slowest quarterly earnings growth in more than two years. let us bring in annabelle. we are seeing another set of the inflation hate it when it comes to company profits -- side of the inflation hitting when it comes to company profits. >> the impact of inflation and the lockdowns in china. operating income is coming in at $11.2 billion. that is growth of 16% on the year. more than 50% expansion of the previous two quarters. the impact of inflation has been two fold because not only does it stop consumers from reaching into their wallets to buy a and other gadgets come on the flipside you have high import costs. high costs of production and raw

is essentially asking the dutch asml in focus to stop selling to the chinese. can get more details on your bloomberg terminal. declines across the board, as you can see. some other names we are tracking, similar stories affecting these markets to varying degrees. 1.1% decline. do we have two boards? rish? rishaad: taking a look at crude oil because we will talk a lot about it. the last five days, wti down 8.8%. and we've got a call from citi saying that crude may collapse to $65 a barrel. that is of a recession hits the u.s. economy. just going to see what they're thinking is and getting the outlook for crude oil. that is coming your way next. brent trading at $103.88 a barrel. this is bloomberg. ♪ psst. girl. you can do better. ok. wow. i'm right here. and you can do better, too. at least with your big name wireless carrier. with xfinity mobile, you can get unlimited for $30 per month on the nation's most reliable 5g network. they can even save you hundreds a year on your wireless bill, over t-mobile, at&t and verizon. wow. i can do better. yes, you can. i can

asml property down 1.4%. they cut their sales growth from 1% -- 1 -- 10% to 1%.'ve been gaining almost 5%, details about the parlor industrial losses coming. royal mail down more than .5%. coming up's of the future in question, mario draghi will speak to the american senate in rome and friday, this is bloomberg. bloomberg. mom: how was school? dad: wow! ♪ vo: music can help you express how you're feeling. when you can't find the language, find the lyrics. francine: welcome back to the open. we are 30 minutes into the european trading day. her are your top stories. we start with italy, d-day for draghi. he faces lawmakers to date. the future of his government hangs in the balance. a sea of green, netflix urges on better-than-expected subscriber numbers. gazprom set to resume shipments to nord stream. a 15% cut demand. as always, inflation, we look at gas markets, markets in general seem to be more at ease than they were a couple days ago. tom: relatively benign around the political risk and italy. we have some earnings positivity to filter through in terms of the

united states i believe this week is trying to speak to the netherlands about perhaps restricting some asml technology to china. connect the geopolitics of it for us. woo: sure. the geopolitics has been long-lasting. if we go back to 2016, we had the tariffs implemented or the trade war starting in 2016, 2017 during the trump presidency. the tariffs are still baked in. what we are starting to realize is we were highly dependent china in terms of chip manufacturing. at onto that, we have concerns about the chinese-taiwanese tensions and we have a lot of chip manufacturing outside on the eastern pacific fronts. one of the things congress is trying to do is bring more manufacturing to the u.s., intel trying to break ground, samsung trying to break ground in the u.s., but that capacity is probably not going to come online until 2024 with a full wrap-up 2025. if in reading the congressional documents, looks like it will only alleviate roughly 25% of the capacity. we will be highly reliant on china for not only the chips but also a lot of the secondary and tertiary components. kriti: you can see

haidi: there is the ongoing ship or for asml as well. craig: that's been a great story. we know that the u.s. has been telling people who make chips to cooldown sales to china. they are doing a more aggressive stance. they ask them to cut off sales to china. that's a very big step asking a company in another nation to change its entire policy dealing with an individual customer. that is how seriously the biden administration is taking the chip or. it is yet another thing weighing on the presidency. the shortage of chips, the higher prices, it's a lot to contend with right now. >> u.s. national editor craig gordon there with the latest on u.s. and china. japan's ruling coalition expanding its majority in sunday's election two days after the assassination of the former prime minister shinzo abe. let's bring in our tokyo bureau correspondent. shinzo abe looms large right up to his death when it came to the impact of campaigning in the parting dynamic -- party dynamic. how do we see his assassination having impacted this election? kana: it seems like the tragedy friday has i

the asml put out numbers on the chip industry. big disappointments for what they are announcing about the full year. we just wonder if we hadn't seen people pessimism, perhaps there would be more to that news to spark a selloff. katie, that is the more fundamental side, thinking about where we are. what are the technicals about what they are doing here? >> we did bounce above the s&p 500 today. that will be important if we remain above that. you been trading above it since last april, really went last earnings season kicked into care. you did see some by ends to the risk. he saw even crypto get a bit. it feels like there is some sort of set up here for a sustainable move. i think some of it will come down to earnings, may come down today fixture. alix: we have to get to the ecb tomorrow, which will have a huge impact potentially. thanks a lot. really great for us today. thank you very much. more questions on the day. are we at peak pessimism? we will break it down with cameron dawson. this is bloomberg. ♪ >> i still think that all

taiwan semiconductor indicating the 2021 capex will come at the lower end of its range and although asmler, it cut its revenue growth guidance for the rest of this year and analysts are finally taking notice. goldman sachs chip analyst recently slashed their 2023 earnings forecast by an average of 20% for chip and chip equipmentmakers. deutsche bank and key bank made similar moves and then citibank today wrote a note that they believe not one semiconductor company will be spared in the second half of this year and they do believe an earnings pop is coming in the near-term placing bets on nxp and semi nxp will be out with earnings on monday so there is no doubt, semiconductor demand will remain robust with the transition to auto, a.i. and data centers and the street is warning that the upcoming rally may be a rally in risk. >> kristina, thank you very much kristina partsinevelos that does it for "the exchange," everybody. a very busy hour of "power lunch qwe lunch," begins right now >> indeed it does. welcome, everybody, with "power lunch. i'm tyler matheson we begin with big news from th

given that we still have the chip wars happening with asml then, what is the latest when it comes tohat the white house is saying about the rollback of carrots? jodi: we heard from president biden today, speaking in delaware to reporters from his vacation home. he basically said u.s. is considering lifting those tariffs or relaxing some of those tariffs. there had been a lot of talk in recent weeks that the u.s. would do this. the u.s. is considering although we heard from the commerce secretary on sunday and talk shows today that this would be coming and coming weeks. though she said not to expect a significant incline -- decline in inflationary pressures as a result. there is a tension within the administration on whether to lift tariffs. some like janet yellen, who sat on bloomberg news and television -- who said on bloomberg news that she wants the trade representative to provide leverage against china. >> another big question, the secretary of state antony blinken's message to his chinese counterpart over the weekend, how powerful was it? jodi: they had a five hour discussion wi

asml, based in the netherlands, it has a monopoly we think of the netherlands as our friend right nowng, i mean they have patents, so i don't know what you're going to do about it, but do you think that's something that needs to be fixed >> we need to create a level playing field and invest in american ingenuity that's not a throw-away line we are the ones who have created so much of this technology in fact that china steals over and over again i can tell you. the reality is we need to invest in the support for r&d, the incentives to do their here. how do we make sure that those jobs are coming home to america? and i will say also, the european union watched what we did in the senate on chips and decided that they'd better compete with us. they've passed their own chips bill that is almost word for word our bill and are going to move ahead, whether we do or not. so we're in a global competition right now. and we immediate to support american business, american interests. >> senator stabenow, thanks for coming on the show this morning. appreciate it. >>> when we come back, transportati