luigi speranza, chief global economist, bnp paribas.ring you some of the company stories in tech stories we are following today. adobe shares gained in the u.s. after trading and raised its full-year forecast revenue and profit outlook on optimism that generative ai features will spur demand. you mentioned ai, you get a rally. they say software sales will be about $19.3 billion. in europe bloomberg has learned intel received 10 billion euros in subsidies from the german government for a chip manufacturing complex. the u.s. tech company had previously postponed construction which it had agreed to with 6.8 billion euros. it blamed economic headwinds. coming up, former u.s. secretary of state, henry kissinger, spoke on china-u.s. relations. we will bring you some of that conversation, next, on bloomberg. ♪ >> i think our service revenue will grow relatively steadily in the second and third quarters. it is still hard to say how much it will grow, but it is part of the overall echo system for marketplace -- ecosystem for marketplace merchant

from where you sit as the chief economist at bnp paribas, is the u.s. economy strong? >> i think it is a more nuanced picture and, ultimately, that may mean that the fed does not deliver the rate hikes that they're signaling with the latest dot plot and economic projections. of course, we can see the median dot is looking for two more rate hikes this year, and there are even a couple of individuals, three in fact, looking for even more than that. our expectation is that while we're seeing a lot of strength and resilience in the labor market which i think is a big driver in the change of the fed's forecast as they're assessing the near to medium-term outlook, we have some concerns that stresses in the banking sector, the lagged impact of previous tightening which is 500 basis points of tightening, as more of this shows up over the course of the next several months -- liz: okay. >> -- i think they'll find it prudent to continue tightening policy in july. but i think by the time we roll around to the either the september or innovate if meeting, we will have seen enough de

bnp paribas is using c -- chat bots. caroline: i am interested in some of the risk analysis.e are more conscious than others. some have actually banned the use of chatgpt by employees. sally: we have seen some blowups in the world of advanced technology. banks are indeed being very cautious. we have heard from warren, who said once it is out there you cannot un-invent it. bank of america said you don't know what you are going into a lot of these decisions. you should potentially be concerned about the outputs. banks have a fiduciary duty not to trade on unreliable information. it makes a question about the sources of data that are pulled and when it comes to ai. caroline: how much are they building themselves? do you know how much they are looking to other ai tech outside of the world? sally: some are trying to do it in-house and others are using external consultancies. we had a great data point about talent. talent is very much at the heart of this. for all the banks really embracing ai, about 40% of their open jobs are ai related. that is for quants, ethics, analysts. jp mo

katie: joining us now, megan robson of bnp paribas out and cities richard so got on set. want to start with you richard. let's talk about the cash-strapped, cash is obviously the place to be for well over a year. is it time to get out? >> i think there are some real attractive yield opportunities out there in credit. it is hard to pick the right time to move into those. i would say that this is not a bad time to move into whether, depending on your risk appetite if you want to stay with something more high-quality or lesser quality, you gain a distant station --gain a decent return today. if we believe rates are going to peek and start to slow down it would be a good time to move in and take advantage of that. it is impossible, i wish i could pick, figure out the exact right time. if i could i probably would not be sitting here, i would be on a beach somewhere. it feels like an attractive time to move into credit in one way, shape or form. katie: i hear timing in the market is tricky. what is your risk appetite? >> from our side, we are positioning for decompression. we t

greg boutle from bnp paribas. lisa a: there is a shift. you can feel it. we walked in and it was hanging over the office that something changed. people were not saying fomo and everything would breathe upward forever and a day. tom: switzerland, norway, united kingdom. it was the idiosyncratic realities of turkiye. well-timed. i think the finance minister of turkiye which for damien salazar to come on before he puts out headlines. turkiye moments ago at headlines after a horrific 48 hours for the currency. round up, we are nearing 26 lire . it is true that things are unraveling. he says turkiye will process gradually. stick with us, adam posen later. ♪ (sirens) [due at target in 5!] copyt. make a hard left down the alley. network's got you covered. [please confirm requesting back-up.] -changing route. -go. roadblock ahead. ...back up, back up... reverse! reverse! next level moments, we're 30 seconds out. need the next level network. [north corridor, hurry!] -coming through! -or 3, let's go. the network more businesses choose. transplant received. at&t busi

and a very negative note from bnp paribas which i managed to get my hands on. they say u.k.ks are back in the danger zone and higher rates boost earnings but only to some extent. now the focus will be on credit losses, loan defaults, have any will default on loans due to higher rates? we are also seeing weakness in the homebuilders given the inflation data pushing up rate expectations ahead of the bank of england update tomorrow. all the real estate companies are getting hurt today along with the banks. the macro picture in the u.k. is key. natwest has two cell ratings, a lot of weakness and u.k. financials today. tom: the banks will be under pressure from the chancellor to increase deposit rates even if they cannot do much in terms of mortgages. what is the rate across fedex? it is a macro play in terms of sentiment. what is the read across for companies related in europe? joe: there is some read across for the bigger firms. deutsche post down 1% today coming is fedex fell 7% in the after trading yesterday in new york. it closed down 6%. we'll see how it opens this morning.

joining me now is stefan slowinski from bnp paribas >> good morning. >> the tech is rallied by the stocksngs the a.i. play in the pre-market amd moving higher in the pre-market i have to ask you with all of the risk, is it priced in? >> i think there are some stocks where certainly they benefit more from the a.i. move the last couple months. we still see value in areas. alphabet is one you talked about and trading on 18 times earnings for 2024 the google cloud business with the a.i. services is break even. you are getting that for free within the google valuation. you have regulatory headwinds, but that has happened for some time the discount allowed for that and that is reflected in the valuation. another area is the enterprise application of space oracle is continuing in high demand now we are seeing a.i. come through. i attended the salesforce a.i. event. they will have products out in june and starting to monetize it some of the back office spending demand is holding up near term and they will benefit near term. >> i was at the salesforce event and i did not see you. one of the key th

bnp paribas saying they are facing an expectation mismatch, but they are looking at positioning thatlight, ululations that are attractive but also undemanding. sentiment still very bearish. shery: we have goldman sachs being a little more positive on the outlook for china stocks. what are they saying? annabelle: they are saying essentially equities could start to recover in the second half, but it is interesting when you take a look at this chart, which considers more technical factors at play, and that is the strong resistance we see from the 200 moving day average, because we are approaching that once again. there is one point that the csi 300 managed to rise above its 200 day moving average line and stay above it for us. you look at the technicals, it suggests there is still quite a ways to go before chinese stocks can really start to recover on a sustained basis upward, but goldman sachs, they are saying in the second half we are going to start to see a tactical recovery. they are more focused on offshore equities in particular, but the reason they are saying that is they do beli

bnp paribas are using it to detect fraud and money laundering. sounds very positive but can go back to the flesh trading as banks embrace this kind of technology at least built under technology capabilities. there have to be risks around ai. what are people saying about the concerns about how you fold artificial intelligence and largely which models into the banking sector? will: warren buffett has fly concerns on an earnings call recently about how once you have invented ai, you cannot take it back. that is probably the abstract concern. to be more specific, people say you don't really know what goes into a large language model like chatgpt at the beginning. all you see is the analysis that it puts out at the end. there's been little accountability and transparency into how it is coming to conclusions that is an sometimes some of the models have to hoover up low-grade data from all over the internet in order to train themselves to the level that they need which means sucking up analysis of reddit and chat like formats like that on the internet,

economist at bnp paribas joins us.aking care of us. learn more at getrefunds.com. so many people are overweight now and asking themselves, to keep the people that have been here taking care of us. "why can't i lose weight?" for most, the reason is insulin resistance, and they don't even know they have it. conventional starvation diets don't address insulin resistance. that's why they don't work. now, there's golo. golo helps with insulin resistance, getting rid of sugar cravings, helps control stress and emotional eating, and losing weight. go to golo.com and see how golo can change your life. that's g-o-l-o.com. lisa: welcome back. this is bloomberg surveillance. tom and jon are off today. i have nil data from renaissance macro alongside me. -- neil dutta incredibly important read for the fed. softer in the s&p, down about .1%. euro-dollar basically 1.06 seven. softening in the euro and strengthening --. kurt down to .2% despite the opec-plus cuts. -- crude down 2.2%. there is this question of how much we have to hing

yvonne: let's bring in the head of apac equity resource at bnp paribas. we have had two china bulls stay on in the last hour or so. you are also staying overweight when it comes to china. is it getting harder to stay overweight? >> i would say as far as china is concerned, there are a couple of tailwinds that still exist despite all this gloom and doom that we are seeing. first, you have certain sectors, certain pockets in the market that are likely to be significant policy beneficiaries, and we do expect policy stimulus to come through, possibly around late july/early august. around the big meetings. we think they will focus on consumption support, possibly more physical and monetary this round. second, -- possibly more fiscal and monetary this round. second, you have the authority yielding something like 8% to 10% as far as a dividend yield is concerned. that is a significant cushion. when you have dividend yields at 8% to 10% with earnings estimates remaining relatively stable, that is a significant incentive for investors to crowd in. rishaad: how do

coming up, bnp para bout explains why they are more -- bnp paribas explains why they are expecting.opens in sydney, seoul and tokyo, next. this is bloomberg. ♪ it's an amazing thing when you show generosity of spirit to someone. and you want people to be saved and to have a better life, then you don't stop. we have been able to reach over 100 million people impacted and affected, and at risk of hiv. the rocket fund takes all of the work that we're doing, all over the world, and looks at the most effective ways, to get resources to them, to get services to them. the idea that we have saved five million people's lives, it's overwhelming. it's everything. shery: we are counting down to asia's major market open after a risk on rally the new york session we have strong economic data including confidence in home sales but the key question is what it means for the federal reserve and other central banks. haidi: that's just it. it does it fuel more expectations that the fed is not done tightening yet? does it re-elevate the hard landing risks? let's get over to bell. annabelle: more talking

yeah, like greg waddle over at bnp paribas.utely. 43, 83 on rex right now, someone watching this is amy silverman had a derivative strategy. rbc capital markets. my head spinning. amy it's like the fifth cross moment. it's out worse than courtesy. and the rest of it over the weekend. how did you study the bull bear debate? yeah, obviously, you know, incorporated into the weekend was just a geopolitical news and will tell you coming into this weekend volatility tom had just been pummeled. you know one thing we were talking about is just when you look at apple, which is 20% of the contribution to return to the s&p this year, 20%, it's at a two, five and ten year low. from an options perspective. so, you know, the birkin of the market is on sale. and then on top of that, now you get this geopolitical instability. what does that mean? it's tough. but i just have to say that when you introduce this level of uncertainty, it's hard not to see, you know, option price levels as quite compelling when you see a lack of volatility of 14.43