Chip Selloff Deepens Before Wall Street Earnings

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Author: Bloomberg Television · Watch on YouTube

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Original language: English

Original video: Chip Selloff Deepens Before Wall Street Earnings · Channel: Bloomberg Television · 1:34:30 · Watch on YouTube

Topics: AI infrastructure and hardware, Markets and economy

Summary

European markets opened relatively resiliently as chip stocks sold off amid concerns about AI spending, valuations and the returns on investment. Broadcom’s CEO likened some AI investors to casino gamblers, while the IMF warned that the global economy may have limited capacity to absorb further shocks, particularly from energy prices. The program also examined Middle East tensions and oil transport risks, weakness in China’s luxury market, and the economic outlook for France, Germany and the UK. Guests discussed Blackstone’s investment plans in India, the start of US bank earnings, and how bonds and interest rates may respond to growth and inflation risks.

Key points

• Chip and semiconductor shares fell across Asia and Europe, with investors weighing Broadcom’s warning about speculative AI investment and uncertain returns.
• Market guests pointed to financing costs, capital spending and the ability of companies to monetize AI as key risks for the technology trade.
• Blackstone President Jonathan Gray said India’s long-term prospects remain attractive, citing growth, a young population and investment opportunities in infrastructure, data centers and consumer-related sectors.
• Oil eased from recent highs, but attacks in the Middle East and tanker vessels turning away from the Persian Gulf kept supply and transport risks in focus.
• The discussion of LVMH’s results highlighted weaker fashion and leather-goods sales, particularly in China, alongside a consumer backlash over a trademark dispute.
• The IMF warned that global resilience could be tested by further energy shocks; an economist said each 10% rise in oil prices could add about 20–25 basis points to headline inflation and subtract about 20 basis points from growth.
• Economists described the French outlook as weak and uncertain, while recent data supported upgrades to forecasts for Germany and the UK; UK energy costs and wages remained concerns.
• US bank earnings were expected to show about $9 billion each in stock-trading and fixed-income revenue, while guests said there were not yet clear signs of broad credit stress.
• Market strategists debated whether bonds were regaining their safe-haven role, while one guest argued that yields could continue to grind higher absent a marked US growth slowdown.

Chapters

Start	Chapter	Summary
00:04	Markets brace for a chip selloff	The hosts preview weaker technology markets, rising oil concerns and Broadcom’s criticism of speculative AI investing.
04:20	Oil, bonds and luxury-market concerns	The discussion turns to Saudi attacks, haven demand for bonds and a weak outlook for LVMH and luxury goods.
09:22	The day ahead and US bank earnings	The presenters preview bank results, consumer lending, trading revenue, an Apple event and other scheduled news.
13:23	Why semiconductor stocks are falling	A market guest explains the AI investment debate, technology-sector rotation and China’s position in the chip market.
18:50	Middle East conflict and tanker risks	A Bloomberg reporter discusses possible US involvement, attacks on Saudi Arabia and tankers avoiding the Persian Gulf.
23:52	Ukraine diplomacy and the diesel deal	The program examines Trump’s calls for talks, comments from US envoy Keith Kellogg and questions about the impact of a diesel deal.
31:04	French protests and economic uncertainty	The hosts connect French student protests and political uncertainty with concerns about growth, debt and the IMF’s warning.
35:28	Modi and Blackstone’s view of India	Jonathan Gray discusses India’s investment prospects, Blackstone’s sector priorities and the demand for AI infrastructure.
45:29	European markets open amid chip weakness	European stocks begin trading mostly higher, while ASML and other technology shares fall and investors assess sector performance.
50:15	AI valuations and portfolio resilience	A CIO discusses uncertainty around AI returns, the need for selective investing and the potential role of bonds.
59:58	Luxury stocks and European company results	The program reviews market moves in LVMH, other luxury names, industrial companies and chip stocks.
1:03:16	LVMH results and China’s luxury market	A reporter explains the shortfall in LVMH’s fashion and leather-goods division and the challenges facing luxury companies in China.
1:10:48	European growth, energy and inflation	An economist discusses regional growth forecasts, wage pressures, budgets and the potential effects of higher oil prices.
1:23:49	US bank earnings and market outlook	The hosts preview bank results and debate consumer credit, AI valuations, bond yields and the outlook for UK interest rates.

Quotes

A lot investors have no clue what they are investing in. — 02:15

Are getting return on investment from these AI tokens — 15:00

We take a long-term approach and look at an economy that is growing 7 plus percent a year — 38:45

There always are in a moment when there is an exciting new technological breakthrough — 42:31

Every 10% increase adds about 20 to 25 basis points on headline inflation. — 1:22:38

Concepts and entities

Broadcom, Artificial intelligence, Blackstone, Jonathan Gray, India, LVMH, ASML, International Monetary Fund, Meta, United States banks

Full transcript (original language)

00:04 GUY: TUESDAY THE PRESIDENT IS. TIME TO WAKE UP. THE MARKET WAS ASLEEP YESTERDAY. BROADCOM’S CEO, INVESTORS WERE GAMBLING IN A CASINO. THE I.M.F. SAYS THE WORLD ECONOMY CAN’T TAKE MANY MORE HITS. AND A STORM IN TEAPOT. EXPECT LVMH IN TO OPEN DOWN. ANNA: LET’S PUT NUMBERS ON THOSE STORIES. WE’LL START WITH THE OIL PRICE. EQUITIES AND BOND MARKETS. WE’RE DOWN BY 1.1% BECAUSE

00:37 YESTERDAY WENT UP TO 107 ON THE OIL PRICE. THAT IS ON TENSION ONGOING IN THE MIDDLE EAST. ESCALATION ON ATTACKS AGAINST SAUDI ARABIA. THE EURO STOXX 50 FEATURES PERHAPS FEATURING THE BRENT CRUDE WEAKNESS. NASDAQ FUTURES ARE CONSIDERABLY WEAKER. WHERE ARE WE GOING AS WE’REER IN NERVOUS ABOUT TECH? THE 10-YEAR YIELD COMING DOWN FOUR BASIS POINTS.

01:12 THE COUNTDOWN THE OPENING TRADE STARTS RIGHT NOW. TOM: GOOD MORNING. WE HAVE SEEN VOLATILITY AROUND THE CHIP TRADE BEFORE OF COURSE. THE INDEX OVER IN THE U.S. CLOSING LOW. ALMOST 3%. THE KOSPI IN ASIA OFF BY 1/3

01:43 SINCE HIGHS IN JUNE. THE WARNINGS FROM THE CHIP GIANT BROADCOM. THE COMP IN ADDITION CHINA STARTING TO COME TO THE FORE. YOU HAVE THE WARNINGS ABOUT THE CAPITAL FLOWS. IS THIS BECOMING A MORE STRUCTURAL CHANGE THAT WE’RE SEEING WHEN IT COMES TO MEMORY? ANNA: YES. THE QUOTE FROM THE BROADCOM CEO. THIS WAS ALMOST 24 HOURS AGO. IT SEEMS TO HAVE TAKEN UNTIL TODAY TO RIPPLE THROUGH SESSION. THE VOLUME WAS FLOW THE U.S.

02:15 YESTERDAY. IN SYMPATHY WITH THE FACT THAT BOND MARKETS WERE CLOSED. THE BROADCOM CEO SIGG SAID A LOT INVESTORS HAVE NO CLUE WHAT THEY ARE INVESTING IN. THEY SET EXPECTATIONS. IT IS ALMOST LIKE THEY ARE IN A CASINO. GUY: EUROPEAN TECH IS LOW THIS MORNING. YOU HAVE SOITEC AND ALL OF THESE KINDS OF STOCKS. THESE STOCKS HAD THIS NEWS AND

02:47 NOBODY LISTENED TO WHAT WE WERE REPORTING. NOBODY PAID ATTENTION TO WHAT’S HAPPENING. TODAY WE ARE WAKING UP BECAUSE ASIA IS WAKE UP AND AS A RESULT WE HAVE TO PRICE THIS IN. REPORTED BY THE SOUTH CHINA POST YESTERDAY MORNING AS WELL FACTORED INTO THE MARKET THIS MORNING. YESTERDAY, IT IS LIKE IT DIDN’T HAPPEN. TOM: MAYBE THE FACT THAT IT IS COMING TOGETHER AND PEOPLE ARE DRAWING THE LINKS BETWEEN THESE

03:18 POTENTIAL RISK FACTORS. GEO POLITICS WAS FRONT AND CENTER YESTERDAY. ON WHAT HAPPENED WITH ATTACKS ON RIYADH. I GUESS THE BROADER QUESTION, IS THIS A SHIFT IN TERMS OF HOW WE THINK ABOUT CHIPS? WHAT YOU’RE NOT HEARING FROM INTEL BECAUSE THE INTEL CEO WAS ON STAGE ALONGSIDE BROADCOM’S CEO IN SINGAPORE.

03:48 THEY ARE NOT SAYING DEMAND IS SLOWING. IT IS JUST WAY CAPITAL IS ATAL INDICATED. THAT WAS THE FOCUS OF THE BROADCOM CEO TALKING ABOUT THIS REACTION FROM SOME INVESTORS. PUTTING QUAY MARK OVER THE FRONTIER LAPS. YOU CAN PRINT THOSE? S. ANNA: YESTERDAY META HAD A GOOD DAY. LET’S HAVE A LOOK AT WHAT’S

04:20 GOING ON IN ENERGY MARKETS. 105 IS THE HANDLE ON THE BRENT PRICE. BONDS ACTING LIKE A HAVEN. WHAT ARE THEY A HAVEN FROM? SOME OF THE POLITICAL TENSION IT WOULD SEEM. THE SAUDIS DEALING WITH FURTHER MISSILE AND DRONE ATTACKS THROUGH MONDAY. THEY INTERCEPTED SOME HEADING TO OIL AND GAS INFRASTRUCTURE. THE QUESTION IS WHETHER THE U.S. IS GOING TO STEP IN AT ALL AND MAYBE THE MID-TERMS, THEY WON’T A NUMBER OF LLC’S, LARGE CRUDE

04:55 CARRIERS, A LOT OF THEM ARE EMPTY. WITH THIS UPTICK IN VIOLENCE THEY ARE DECIDING NOT TO GO. THAT IS WHERE WE HAVE SEEN SHIP-TO-SHIP TRANSFER. ALL OF THAT HAS A SLIGHTLY WORRYING FLAVOR TO IT AT A TIME WHEN THE I.M.F. IS WORRYING, YESTERDAY THE GROWTH IS RESILIENT AND THEY ARE WORRIED ABOUT HOW LONG IT CAN BE RESILIENT TO THESE ENERGY CHALLENGES. GUY: AND RISING YIELDS. ARE BONDS BEING A HAVEN AGAINST TECH TRADE? ANNA: BONDS WERE ALSO ASLEEP

05:28 YESTERDAY. GUY: YES. IT WAS COLUMBUS DAY. U.S. BOND MARKETS. BOND YIELDS SHOULD HAVE GONE UP, NOT DOWN. ANNA:LES THE WE HAVE SEEN PIVOT IN BOND MARKET THINKING. THE AI TEXAS RANGERS GROWTH RISK MAYBE. GUY: IF YOU ARE WORRIED ABOUT THE AI TRADE, YOU PIVOT INTO BOND, THAT SEEMS LOGICAL. IN THEORY, BOND YIELDS SHOULD HAVE GONE UP, NOT DOWN AND THAT SHOULD HAVE BEEN THE REACTION. IT IS INTERESTING THE BOND

06:02 YIELDS WENT DOWN, NOT UP. WHAT ARE THEY REACTING TO. TOM: SOME ANALYSTS SAID MAYBE THE NEXT LEVEL IS 5%. WHAT DO THE EARNINGS STORY DO TO THAT ROTATION? WE START TO ROTATES BACK INTO STOCKS? IS THIS HAVEN PLAYED INTO THE 10-YEAR AND SAFE HAVEN OF TREASURIES? ANNA: GETTING JITTERY BEFORE BIG EARNINGS RELEASES PARTICULARLY AROUND THE TECH AI TRADE. GUY:

06:36 REPORTS TOMORROW. LET’S TALK ABOUT LVMH. IN SOME WAYS COMPLETELY DIFFERENT BUT IN SOME WAYS MAYBE NOT. THE U.S. MARKET HAS BEEN SUPPORTED BY THE TECH TRADE BUT CHINA IS THE FOCUS. YOU HAVE THE Q3 NUMBERS REALLY WEAK IN THE LEATHER GOODS SECTION. BASICALLY WHAT’S HAPPENING HERE. LOOK AT ANALYST REACTIONS. THEY ARE TALKING ABOUT THE RECOVERY THAT HAD BEEN NAPPING LUXURY, COMPLETELY STALLING OUT

07:07 NOW. THESE STOCKS DOWN NOW. LVMH DIDN’T CLEAR WITH THESE SALES NUMBERS, LOWER EXPECTATIONS. ANNA: I THINK IT IS INTERESTING WE’RE GOING TO GET READ ACROSS FROM THIS INTO OTHER LUXURY STOCKS. OTHER LUXURY NAMES LOOKING WEAK. THAT WAS THE QUESTION ACTUALLY. THEY FACED A BACKLASH IN CHINA FROM THE CONSUMER THERE BECAUSE THEY TOOK LEGAL ACTION AGAINST A SMALL BUSINESS. SOME CONSUMERS IN CHINA DIDN’T LIKE THAT VERY MUCH. TOM: IT IS A FASCINATING STORY.

07:41 THEY WON THEIR INTELLECTUAL PROPERTY CASE IN CHINA. THEY FACED THAT CONSUMER BACKLASH FROM CUSTOMERS WHO WANT TO SUPPORT THE LOCAL BUSINESS. THEY POURED FUEL ON THE FIRE IN TERM TURNOVERS WEAKNESS YOU’RE SEEING IN CHINA. – IN TERMS TO HAVE WEAKNESS. GUY: IT IS INTERESTING.

08:14 DOES IT SEE LVMH OR DOES IT JUST SEE EUROPEAN? THESE COMPANIES OWN SO MANY BRANDS. IT IS HARD FOR MANY CONSUMERS TO SAY THAT IS OWNED BY THAT COMPANY. YOU WONDER IF IT IS AN EASY CONTAGION. ANNA: WE HAVE BEEN TALKING A LOT ON THIS PROGRAM REGENT WEEKS ABOUT DEBT LEVELS WHETHER IT IS THE U.S. OR EUROPE. INTERESTING HEADLINES COMING OUT OF JONATHAN GRAY, TALKING ABOUT HIS CONCERN IS AROUND EUROPE RATHER THAN? THE UNITED STATES.

08:49 THAT TIES INTO – GUY: WE GOT THIS EVENT THAT IS GOING TO TAKE PLACE TODAY. WE HEARD FROM HIM ON STAGE. WE ARE GOING TO HEAR FROM HIM AGAIN. WE’RE GOING TO DRAW DOWN A LITTLE LATER ON THE PROGRAM. WE HAVE A ONE-ON-ONE INTERVIEW WITH JONATHAN GREEN BAY PACKERS THE BLACKSTONE PRESIDENT. LITERATURE ON, U.S. INVESTMENT BANK AND EUROPEAN ECONOMIST. THAT TAKES US BACK TO THE JONATHAN GRAY COMMENTS. IS EUROPE IN A WORSE PLACE THAN

09:22 THE UNITED STATES BECAUSE THE UNITED STATES HAS BETTER GROWTH PROSPECTS. TOM: 8:40 A.M. 11:00 A.M., OPEC’S OIL MARKET REPORT. THEN YOU HAVE U.S. BANK EARNINGS. THAT IS KICKING OFF TODAY. GOLDMAN SACHS, JPMORGAN, CITI, WELLS FARGO. ALSO EXPECTING TO GET DETAILS FROM ANDY BURNHAM AND THE CHANCELLOR SET TO HOST BUSINESS

09:57 LEADERS AND THEY TRY ASSUAGE SOME CONCERNS. AND THERE IS AN APPLE EVENT. NEW HOME DEVICES ARE EXPECTED. WE’LL BRING YOU DETAILS ON THAT AS WELL. WE HAVE A PREVIEW IN TERMS OF WHAT TO EXPECT. I KNOW YOU HAVE BEEN LASER FOCUSED GUY ON THE HEALTH OF THE U.S. CONSUMER. THE RATES FOR MORTGAGES AND CREDIT CARDS AND AUTO LOANS. GUY: WHAT ARE WE GOING TO LEARN THAT IS NEW?

10:29 WE ARE EXPECTING TRADE TO BE WEAK. THEY TOLD US TRADE WAS GOING TO BE WEAK. WHAT DOES LENDING LOOK LIKE? IS THE REST OF THE ECONOMY BEING SQUEEZE OUT? WHAT’S HAPPENING? I THINK HAS THE INTERESTING BIT. THESE BANKS IN PARTICULAR CATER TO THE UPPER END CONSUMERS. DON’T GET THE DISTRESS IN THEIR BOOKS. ANNA: THE HISTORIC NATURE OF THE TRADING VOLUMES AND STORIES WE HAVE SEEN FROM THESE BANKS IN RECENT QUARTERS. YOU CAN’T SIMPLY KEEP GOING

11:00 WITH HISTORIC LEVELS OF TRADING BUSINESS. SO MAYBE THAT IS ONE REASON WHY THINGS CALMED DOWN A LITTLE BIT. ALSO WORTH NOTING WHERE SOME OF THOSE STOCKS HAVE BEEN. UNDER PRESSURE SINCE THE SUMMER. AS A RESULT OF THAT, DO THEIR NUMBERS HAVE DIFFERENT EXPECTATIONS? ARE THAT VERSUS JPMORGAN AND CITI? TOM: HIGHER RATES CUT BOTH WAYS. GUY: TRADING HELD THESE GUYS UP.

11:32 IT IS SUCH A BIG PART OF THESE BUSINESSES. IN SOME WAYS YOU COULD ARGUE THIS IS WHY ANYTHING WITH INVESTMENT BANK TRADES WITH A DISCOUNT. IN THEORY IT COMES WITH VOLATILITY. ANNA: YOU WANT THE IPO STORY AND THE ABILITY TO BRING SOME OF THESE GIANT AI BUSINESSES THAT ARE IN PRIVATE HANDS, SOME WILL STAY THERE BUT BRINGING THEM TO PUBLIC MARKETS, IT WILL BE GOOD TO GET AN UPDATE. GUY: ANTHROPIC.

12:04 HAS DROPPED SHARPLY IN RECENT DAYS. TOM: GIVEN EVERYTHING AND ALL THE RISKS. MAYBE THAT IS NOT A SURPRISE. TOTAL TRADES REVENUE IS EXPECTED TO COME IN AT 9 BILLION IN TERMS OF STOCK TRADING IN THIS QUARTER. WE’LL SEE IF THEY CAN BEAT. ANNA: COMING UP, FRANCE IS BRACING FOR MORE STUDENT PROFESTS. A BUSINESS UNCERTAINTY IN THE COUNTRY. ARE THOSE TWO THINGS LINKED?

12:36 UP NEXT, AN INTERVIEW WITH THE BLACKSTONE PRESIDENT AND COO FROM THE FORNUMB NEW DELHI. DAY ONE OF THE EVENT KICKED OFF TODAY. MARKED BY A KEYNOTE ADDRESS FROM THE INDIAN PRIME MINISTER MODI. WE WILL HAVE MORE ON BLOOMBERG TV AND STREAMING ON BLOOMBERG.COM. IF YOU WANT TO GET INVOLVED IN THE CONVERSATIONS AROUND THIS DESK, GO TO THE BLOOMBERG TERMINAL. THAT WAY YOU CAN GET IN TOUCH WITH THE TEAM. THIS IS BLOOMBERG.

13:23 ANNA: WELCOME BACK. THIS IS OPENING TRADE. WE ARE 16 MINUTES PAST 7:00 IN LONDON. WE SEE THAT THE FTSE 100 FUTURES PICTURE LOOKS A LITTLE BRIGHTER THAN OTHER MARKETS. PERHAPS THAT WILL BE TO DO WITH THE DIFFERENT SECTOR MAKEUP. THE INTERESTING THAT CAC FUTURES ARE DOWN BY .25%. WE COULD SEE WEAKNESS COMING FLU THE LUXURY SPACE.

13:54 ASML NUMBERS COMING UP TOMORROW. A.X. FUTURES WEAKER. GUY: OIL LOOKS LIKE IT IS GOING TO BE A FACTOR. 107 YESTERDAY. THOSE ARE THE NUMBERS WE’RE DEALING WITH. TOM: YIELDS DOWN QUITE SHARPLY ON THE BACK END OF THE TREASURY CURVE. DOWN FOUR BASIS POINTS. WE’LL SEE WHERE IT CROSS, THE EUROPEAN BOND MARKETS AND GILTS. THE SLIDE IN SEMICONDUCTOR

14:29 STOCKS CONTINUES TO DEEPEN. INVESTOR ANXIOUSST INTENSIFIES. THIS AFTER BROADCOM’S CEO SAID AI INVESTORS HAVE NO CLUE WHAT THEY ARE BUYING COMPARING THEIR BEHAVIOR TO CASINO GAMBLING. WHAT IS DRIVING THE SELLOFF TODAY? >> ONE OF THE MANY FACTORS. YOU HAVE TO LOOK AT THAT KIND OF EXPERIENCE. THE FIRST SOMEONE THIS COMMENT

15:00 FROM HIM AND THE INTEL CEO. THEY WERE REFERRING TO PEOPLE ARE SPENDING ON TOKENS WITHOUT ANY IDEA WHETHER IT IS GOING TO PAY OFF. THAT IS THAT HAS BEEN THE CORE AROUND THE AI MODEL. ARE GETTING RETURN ON INVESTMENT FROM THESE AI TOKENS AND IF NOT, ARE WE GOING TO GET RETURN ON INVESTMENT FROM THE CAPEX THAT THE HYPER SCALERS HAVE DEPLOYED INTO THE AI TOKENS. THIS IT IS IMPORTANT TO MENTION ANOTHER DRIVER IS ROTATION

15:32 WITHIN THE TECH AND DOESN’T REALLY SUIT ASIA. BEAR IN MIND THE U.S. MARKET WAS BARELY UNCHANGED BECAUSE HYPER SCALERS WERE A LOT STRONGER THAN SEMICONDUCTOR MAKERS. ASIA ONLY HAS THE SEMI CONDUCTORS AND MEMORY. IT IS MUCH SMALLER. DOING VERY WELL IF YOU LOOK AT THE CHINESE. THE ROTATION ASPECTS. CONSUMER NAMES, BANK NAMES, CYCLICAL NAMES ARE SO CHEAP COMPARED TO WHAT THE AI STOCKS HAVE DONE THAT SOME ROTATION

16:04 WITH THE LAST QUARTER OF THE YEAR IS INEVITABLE AT THIS POINT. >> IS CHINA CATCHING UP? >> THEY HAVE THE ABILITY TO DO SO. SPECULATED TO BE NATIONAL TEAM. CHINESE MARKETS ARE HAVE YOU LED THIS MOVE LOWER. ALMOST 1/3 OFF ITS HIGHS. IF IT FINDS SOME STABILITY HERE ON THE BACK OF SPECULATIVE GOVERNMENT BUYING, THAT IS REASONABLE. A MUCH MORE UNDERWEIGHT POSITION THAN THE LIKES OF U.S.

16:37 TECH AND ALSO THE LIKES OF KOREA AND TAIWAN. IT DOES NOT HAVE THE SELLING PRESSURE THAT HAS PRESSURED KOREA AND TAIWAN. DEFINITELY FINDING A LEVEL HERE THERE IS THIS AMOUNT THAT ALIBABA AND TENCENT FOLLOW AMERICA. START TO MONETIZE CHINA’S HUGE ONLINE POPULATION AND THAT IS DEFINITELY A FRAME OF START HERE. CHINA NEEDS TO CATCH UP IN THE

17:09 CAPABILITY FRONT AND THAT IS A BIG WORRY FOR INVESTORS. ANNA: NET META HAS TOUGH WORDS FOR HATERS AND ARE VERY CONFIDENT ON THEIR ABILITIES WITH ITS LATEST NEWS WONDER AI MODEL. WHAT DO YOU MAKE OF THAT? >> MAYBE IT IS MY SENSE OF HUMOR BUT I THINK ALEXANDER WANG IS HILARIOUS. HE IS TAKING A VICTORY LAP HERE. HE HAS COME INTO META AND RIGHTED THE SHIP AS FAR AS AI IS CONCERNED.

17:46 HE IS VERY MUCH ONBOARD. THE THEY HAVE DONE A FANTASTIC JOB. SO FAR GOING BY THE STATS, THE BENCH MARKS FOR NEWS WONDER, ALL OF THE PUBLIC INFORMATION OUT THERE INDICATE A VERY STRONG MODEL THAT PEOPLE LIKE AND USE OFTEN. THAT IS REALLY A SHOT ACROSS THE ENTIRE ECOSYSTEM. META SPENT A BUNCH OF MONEY ON COMPUTE. SITTING AROUND WAITING FOR A KILLER APP. MAYBE NOW THEY FOUND IT.

18:18 THAT IS A COMPLICATED CASE FOR THE REST OF THE ECOSYSTEM. THEY DON’T NEED TO GO OUT AND BUY NEW COMPETITION. THEY HAD IT. IT MAKES THE RUNWAY TO PROFITABILITY FOR THE LIKES OF OPENAI AND ANTHROPIC MUCH LONGER. THAT WILL AFFECT THEIR SUPPLY CHAIN. IT IS GOOD FOR META AND GOOD FOR META SHAREHOLDERS AND GOOD FOR THE REST OF US. BUT IT DOES COMPLICATE THE CAPITAL MARKETS PICTURE FOR THE AI TRADE. ANNA: YES. JUST HOW MUCH OF YOUR DATA DO

18:50 YOU WANT TO SHARE WITH THESE AGENTS? A QUESTION FOR ANOTHER DAY. ANTHONY STEVENS WITH THE LATEST. OIL PRICES, 105 IS THE HANDLE NOW. OIL EDGING LOWER OFF THE 107 LEVELS YESTERDAY AFTER THREE DAYS OF GAINS DUE TO CONCERN OF THE WIDENING WAR IN THE MIDDLE EAST. IT COMES AS PRESIDENT TRUMP FACES INCREASED PRESSURE TO STEP UP EFFORTS TO ASSIST SAUDI ARABIA, BATTLE THE IRAN-BACKED HOUTHIS. LET’S GET MORE NOW.

19:23 TAKE US TO THE LATEST ON THIS STORY THEN. COULD WE SEE INCREASED U.S. INVOLVEMENT? IT SEEMS THAT THE SAUDIS ARE ACTIVELY LOOKING FOR ASSISTANCE. ABEER: GOOD MORNING. THAT’S RIGHT. THIS IS THE NEXT BIG QUESTION IN THIS ATTACK THAT HAS BEEN TAKING OVER IN THE KINGDOM BY THE HOTIS. WE HAVE REPORTED ON THE DEATH COUNT OVER THE WEEKEND. AT LEAST 18 PEOPLE WERE KILLED. SEVERAL HUNDRED PEOPLE WERE INJURED IN THOSE ATTACKS OVER THE WEEKEND ON THE SAUDI

19:54 AIRPORT AT RIYADH AIRPORT. WE REPORTED MULTIPLE TIMES THIS WAR BETWEEN SAUDI ARABIA AND THE HOTIS HAS BEEN GOING ON FOR OVER A DECADE AT THIS POINT. SAUDI ARABIA RETALIATED BY HITTING THE AIRPORT UNDER THE CONTROL OF THE HOTIS BUT PERHAPS WH IS MOST IMPORTANT NOW IS THE NEXT STEPS THAT ARE ACCORDING TO A LOT OF ANALYSTS WHETHER SAUDI ARABIA IS GOING TO ASK THE UNITED STATES FOR DIRECT INVOLVEMENT. WE KNOW THE U.S. HAS ASSISTED RIYADH WITH

20:26 INTELLIGENCE AND REFUELING. THE BIG QUESTION WILL BE WHETHER PRESIDENT TRUMP WILL AGREE TO HITTING THOSE HOUTHI TARGETS IN YEMEN. PRESIDENT TRUMP SAID THEY ARE MISBEHAVING AND IT IS NO GOOD BUT DID CONFIRM WHETHER THE U.S. WILL GET INVOLVED. THAT WILL BE THE NEXT KEY THAT HAS TAKEN MULTIPLE PEOPLE OVER THE WEEKEND WHICH I HAVE MENTIONED. HAS THE QUESTION YOU HAVE RIGHTFULLY POINTED, SAUDI ARABIA IS ASKING.

20:58 HAS THE QUESTION GCC COUNTRIES ARE ALSO POSING. TOM: SUPER TANKERS ARE TURNING AWAY FROM THE PERSIAN GULF. DO WE KNOW THE REASON FOR THAT? ABEER: THIS IS BLOOMBERG TANKER TRACKING DATA THAT I THOUGHT WAS INTERESTING THIS MORNING. ABOUT 10 VERY LARGE CRUDE VESSELS WERE REPORTED TO HAVE COME TO THE PORT NORTH OVER THE UNITED ARAB EMIRATES HERE AND HAS REVERSED. THIS IS QUITE INTERESTING BECAUSE THOSE TANKERS ARE

21:31 REVERSING AT A CHIME TIME WHEN FREIGHT PRICES ARE INCREDIBLY HIGH. WE REPORTED EARLY LAST WEEK WHEN THE TRIP FROM THE PERSIAN GULF TO ASIA HAS ACCELERATED OVER 500%. QUITE BIG CHARACTER OUT TO BE TAKING THOSE VESSELS, TANKERS CHOOSING TO STAY AWAY BECAUSE THE THREAT IN THE STRAIT OF HORMUZ OF BEING ATTACKED AND TARGETED BY IRAN IS GETTING MORE HEIGHTENED. WE SPOKE ABOUT SAUDI ARABIA AND THE HOUTHIS. LET’S NOT FORGET THE WAR

22:04 BETWEEN U.S. AND IRAN AND THE FACT THAT THE THREAT IN THE STRAIT OF HORMUZ IS STILL VERY MUCH THERE. THAT IS ALSO STILL HAPPENING. OIL PRICES ARE DOWN A LITTLE BIT TODAY. THEY WERE UP ABOUT 6% OVER THE PAST THREE SESSIONS. AND ABOUT 70% HIGHER FOR THE YEAR. BLOOMBERG ECONOMICS SUGGESTS IN A RECENT REPORT THAT WE COULD SEE BRENT CRUDE AT 20 PER BARREL. IF THE DISRUPTIONS CONTINUE AND IF THIS WAR WERE TO GO ON MUCH LONGER. GUY: THANKS FOR THE UPDATE.

22:39 REALLY APPRECIATE IT. ABEER ABU OMAR JOINING US OUT OF DUBAI. WHAT HAPPENS MONDAY MORNING?

23:19 TOM: NEXT WE’LL TOUCH ON ENERGY NO DOUBT WHEN WE BRING YOU THAT INTERESTING EVEN INTERVIEW WITH BLACKSTONE PRESIDENT. THAT IS COMING UP. THIS IS BLOOMBERG.

23:52 GUY: THIRTY MINUTES TO GO UNTIL WE START EQUITY TRADING IN EUROPE. IS EUROPE GOING TO BE A HAVEN TODAY THE WAY THE BOND MARKET HAS BEEN OVER THE LAST FEW HOURS. TECH SELLING POWERFUL ARE PEOPLE GOING USE EUROPE AS A PLACE TO HIDE? LOOK AT THE FTSE. WE SAW WHAT’S HAPPENING IN SWISS MARKET. WE ARE SEEING A MORE POSITIVE PICTURE EMERGING. EUROPE IS NOT DOWN THAT MUCH. NASDAQ FUTURES DOWN .8%. ASIA HAS BEEN HIT HARD OVERNIGHT. ANNA: FTSE FUTURES UP .4% AND SWISS

24:26 UP THE SAME. MY THOUGHT GOES TO PHARMA. WE WILL SEE IF THAT IS A PLACE TO HIDE OUT. ANOTHER PLACE TO HIDE OUT POTENTIALLY, WE ASKED IF THE AI TRADE ROLLS OVER, IF IT DOES, WILL BOND MARKETS ACT AS A HAVEN? THEY ARE PROVIDING SOME PLACE TO GO IN TODAY’S MARKET. WE ARE SEEING SOME BUYING. THE GERMAN 10-YEAR, THE FRENCH 10-YEAR, THE ITALIAN 10-YEAR MAYBE TAKING THE LEAD FOR THE OPEN OF THE U.S. TREASURY MARKET. WE ARE SEEING DROPPING A LITTLE

25:00 BIT IN YIELDS. TOM: PRESIDENT TRUMP SAYS UKRAINIAN PRESIDENT VOLODYMYR ZELENSKYY AND RUSSIAN PRESIDENT VLADIMIR PUTIN HAVE TO COME TOGETHER AND END THE WAR. LET’S BRING IN OLIVER CROOK. IF ONLY IT WERE THAT EASY. ZELENSKYY SAYS HE IS READY TO DO THAT BUT HE SEEMS TO BE THE PERSON WHO PRESIDENT TRUMP IS LEAST FAVORABLE TO ONCE AGAIN AND SEEMS TO BE MORE SUPPORTIVE AT LEAST IN TERMS OF THIS DIESEL DEAL OF PRESIDENT TRUMP, THE MAN WHO STARTED THIS WAR.

25:33 WHERE DOES THIS LEAVE THINGS? >> I THINK IT IS VERY DIFFICULT TO FIGURE OUT WHERE THINGS ARE STANDING TODAY PARTICULARLY BECAUSE WE DON’T REALLY HAVE A CLEAR PICTURE OF THIS WAR, WHETHER OR NOT THERE IS AN ENERGY CEASEFIRE IN PLACE. ZELENSKYY SAID HE IS OPEN IT TO BUT IT NEEDS TO BE RECIPROCAL. WE HEARD NOTHING FROM THE RUSSIANS ON THAT SUBJECT. SOME OF THE FLOW, COMMENTARY, THE BIG FEAR – DIPLOMACY, THE

26:08 COMMENTARY, THE FEAR THAT THIS IS A RETURN TO THE BEGINNING OF 2025. AT LEAST IN TERMS OF RHETORIC BETWEEN TRUMP AND ZELENSKYY. THAT BEING SAID, WE HAVE GOT TO THESE POINTS WHERE CAN WITH THESE LEADERS WHERE PEOPLE GET UPSET. THERE ARE THESE PLAYERS IN. IT IS NOT THE CONVERSATION THAT WE WERE GETTING IN THE OVAL OFFICE. WE HAD THE OPPORTUNITY TO SPEAK WITH A NUMBER OF PEOPLE WHO HAVE INSIGHT IN THIS PROCESS INCLUDING ENVOY FOR RUSSIA AND UKRAINE. KEITH KELLOGG.

26:41 I ASKED HIM WHAT WE HAVE SEEN OVER THE LAST COUPLE OF DAYS WHETHER THIS IS U.S. POLICY TO GIVEN NIGHT DIESEL FUEL AND GIVING INSTRUCTIONS TO THE UKRAINIANS IN TERMS OF WHAT THEY CAN HIT IN RUSSIA. >> I THINK WE NEED TO STEP BACK AND LET UKRAINE MAKE DETERMINATIONS OF WHAT IT IS GOING TO DO, HOW IT IS GOING TO ACT AND APPRECIATE THAT. THE RHETORIC WILL TAKE CARE OF ITSELF.

27:13 >> I WOULD LIKE YOUR PER SPECT HAVEN TO STEP BACK. IT HAS BEEN ALMOST FIVE YEARS. HOW DO YOU SEE THAT RESOLVING? HOW DO YOU SEE THE WAR ENDING AT THIS STAGE? >> THERE WAS A COMMENT ZELENSKYY. HE SEEMS TO THINK HE IS WINNING. HE HAS NOT ACCOMPLISHED ANY STRATEGIC GOAL. HE HAS LOST BETWEEN 1.2 MILL BEYOND 15 .5 MILLION PEOPLE, SEWED SOLDIERS THAT ARE IN THIS

27:45 WAR. THE SOVIET UNION AND AFGHANISTAN LOST 18,000 IN THAT WAR AND LEFT. WE WOULD NEVER IT. HE NEEDS TO UNDERSTAND YOU’RE NOT WINNING. WHEN YOU LOOK – AFTER THE INVASION HE HAS GAINED ABOUT 1% OF LAND SINCE THAT TIME I THINK WE NEED TO KEEP PRESSURE ON HIM AND SAYING YOU’RE NOT WINNING.

28:17 WE’RE GOING TO BE HERE AS LONG AS IT TAKES TO DO SO AND KEEP PUTTING THE PRESSURE ON HIM. I THINK HIS RESPONSE RIGHT NOW IS A RESPONSE OF WEAKNESS, NOT STRENGTH. LIKE WITH THE DIESEL DEAL WITH THE UNITED STATES. THAT IS NOT REALLY A GOOD DEAL. IT IS NOT REALLY ALL ENCOMPASSING OUT THERE. IT SHOWS TO ME HIS WEAKNESS, NOT STRENGTH. HE IS TRYING TO CAPITALIZE ON OUR ELECTIONS COME UP IN THE UNITED STATES. HE IS TRYING TO CAPITALIZE ON PRESIDENT TRUMP.

28:55 MOST PEOPLE SEE THROUGH IT. >> THE COMMENTARY FROM KEITH KEITH KELLOGG. HE SAYS ON AVERAGE IT IS ABOUT 30,000 PEOPLE A MONTH LOST. WE GOT MORE PRESENT FIGURE FOR SEPTEMBER. THAT FIGURE FOR THE RUSSIAN CASUALTIES IS IN EXCESS OF 50,000 JUST IN SEPTEMBER. TO GIVE YOU A COMPARISON THAT WAS 5,000 FOR THE UKRAINIANS. IN SEPTEMBER, THESE CASUALTY

29:27 RATIO HAS BEEN 10-1. THAT PUTS INCREASED PRESSURE ON THE RUSSIANS BUT ON THE OTHER HAND, ACCORDING TO ANALYSTS I HAVE SPOKEN TO, PEOPLE WATCHING THE WAR CLOSELY, PEOPLE CONCERNED WITH THE POTENTIAL SPILLOVER INTO EUROPE THAT MAKES VLADIMIR PUTIN MUCH MORE DANGEROUS AND WILL LIKELY RAMP UP THE PRESSURE ON THAT HYBRID WARFARE. YES, IT OPENS SOME OPPORTUNITIES FOR DIPLOMACY AND POTENTIALLY ENDING THE WAR, BUT ALSO MAKES IT MORE DANGEROUS. GUY: WHAT WAS THE SENSE AT THE CONFERENCE ABOUT THE DEAL THAT WAS DONE AND THE PRAISE HEAPED

30:01 UPON VLADIMIR PUTIN BY THE PRESIDENT OF THE UNITED STATES? IF YOU WANT TO PUT PRESSURE AND END THE WAR, THAT WAS NOT IT. >> NEW YORK CITY CERTAINLY NOT. THERE IS REAL QUESTION ABOUT WHETHER THIS DEAL IS GOING TO GO FORWARD AND WHAT CAPACITY? WHAT ACTUAL IMPACT IT IS GOING TO HAVE ON THE DIESEL MARKETS. THE MID-TERMS ARE THREE WEEKS AWAY FROM UNITED STATES. THEY ARE TALKING ABOUT THE POTENTIAL INJECTION OF 13 MILLION BARRELS ON THE MARKET IN TERMS OF DIESEL. THAT IS A SIGNIFICANT FIGURE BUT DOESN’T NECESSARILY CHANGE

30:33 THE BROADER MARKET DYNAMIC. THAT WAS THE POINT A NUMBER OF PEOPLE AT THE CONFERENCE WERE MAKING. THIS ACTUALLY GIVES A LOT TO THE PRUSSIANS IN TERMS OF A DIP – RUSSIANS IN TERMS OF A DIPLOMATIC SIGNAL IN AT THE SAME TIME NOT NECESSARILY GETTING EVEN THE AIMS TO GET THE PRESSURE OFF FOR PRESIDENT TRUMP AHEAD OF THOSE MID-TERM ELECTIONS. IF YOU LOOK AT THE PRICING ON DIESEL, THE SIGNAL IT SENT TO THE MARKET HAS NOT BEEN ENOUGH TO TURN THE PICTURE AROUND FOR THOSE GAS PRICES. ANNA:

31:04 OLIVER, THANKS VERY MUCH. BLOOMBERG’S OLIVER JACKSON THE LATEST REPORTING AROUND UKRAINE. GUY: WHAT ELSE DO YOU NEED TO KNOW THIS TUESDAY MORNING? A STATEMENT COMES WITH MOUNTING SIGNS THAT THE CEO IS STRUGGLING TO FEND OFF TESLA’STISTED BID. THAT PLAN IS NOW IN DOUBT AFTER THE LARGEST SHAREHOLDERS SAID THEY DIDN’T SUPPORT IT. HUNDREDS OF SUPERMARKETS IN

31:38 FRANCE HAVE BEEN HIT BY CYBER ATTACKS THAT DISABLED FRIDGES AND DAMAGED FOOD. DOZENS OF STORES WERE AFFECTED. THE OWNERS OF THE MARKETS SAY THE HACKERS SET COOLING SYSTEMS TO DEFROST AND FRIDGES AND FREEZERS TO HEATS UP. TONS OF RUINED FOOD IS NOW BEING DUMPED AND IT IS UNCLEAR WHEN THE SUPERMARKETS WILL BE ABLE TO OPEN THEIR FRESH AND FROZEN AISLES. IN FRANCE HIGH SCHOOL STUDENTS

32:09 ARE CAMPAIGNING ABOUT A NUMBER OF ISSUES INCLUDING UNDERSTAFFING, OVERCROWDING AND CHAOTIC CLASS SCHEDULES. LAST TUESDAY THERE WERE 250,000 PEOPLE ON TO THE STREETS OF FRANCE. POLICY MAKERS SO FAR REFUSE TO AGREE TO THEIR DEMANDS. IT IS INTERESTING. YOU HAVE FRANCE REALLY STRUGGLING. I’M TALKING ABOUT STUDENT PROTESTS, NOT THE FOOD AISLES. MAYBE AT SOME POINT THEY GET CONNECTED. HE IS SAYING EUROPE DOESN’T HAVE THE GROWTH TO DEAL WITH

32:42 THE DEFICIT LEVELS THAT EUROPE HAS AT THE MOMENT. THE UNITED STATES HAS SIMILAR NUMBERS BUT AT LEAST HAS THE GROWTH IN THEORY TO CONNIVER SATE. I THINK YOU HAVE TO RAMP UP GROWTH. ANNA: THAT’S HIS CONCERNS LIE. ING IN THE CONTEXT OF FRANCE THEN YOU OVERLAY ON TOP OF THAT, THAT CHAOTIC PICTURE IN THE STREETS IN SOME PARTS OF FRANCE. IT SHOWS A SHARP JUMP FROM BUSINESS UNCERTAINTY. IT IS NOT HARD TO SEE WHY WITH THE POLITICAL UNCERTAINTY,

33:14 BUDGETS NOT GETTING PASSED AND GETTING ROLLED OVER AND THEN YOU HAVE PEOPLE ON THE STREETS AS WELL. IT IS NOT SURPRISING. TOM: THE PROTESTS COULD FADE. WE’LL SEE. THIS IS NOT THE END OF IT. NOVEMBER 5, ANOTHER PROTEST ORGANIZED AND ALL THE WAY TO APRIL AND THE PRESIDENTIAL ELECTIONS IN FRANCE. YOU CAN TIE THE MOOD ON THE STREET. 50% SAY THE FRENCH SUPPORT THIS PROTEST MOVEMENT. GUY:

33:45 YOUR GROWTH POINT IS THE POINT HE IS MAY. HE IS SAYING YOU DON’T HAVE THE GROWTH. YOU NOT GOING TO GET GROWTH AND THEREFORE YOU ARE NOT GOING TO BE ABLE TO DEAL WITH IT. YOU CANNOT DEAL WITH THESE DEBT LOADS. TOM: 0.7% GROWTH IN FRANCE IN 2027. ANNA: THE I.M.F. IS TALKING ABOUT IT. THEY ARE CONCERNED ABOUT HIGHER BOND YIELDS AND THE ECONOMY THE VIEW OF THE I.M.F. IS WHETHER THE IRAN WAR WITH A GREAT DEAL OF RESILIENCE HAS FOUND ALL KINDS OF WORKAROUNDS

34:18 AND STRATEGIC STORES AND THE LIKE. THAT IS ONLY GOING SO FAR. HIS CONCERN IS COMING PLACE HENCEY AND FURTHER SHOCKS THAT THE MARKET COULD DO DEAL WITH. GUY: WE’RE GOING TO HARE FROM JONATHAN GRAY VERY, VERY SHORTLY. COMING UP SHOW THE, A WARNING ABOUT AI. >> WE EXPECT AI CYCLE TO CONTINUE FOR SOMETIME AND THAT IS PUSHING INVESTMENT AND THE KEY QUESTION IS WHETHER THIS INVESTMENT WILL CRYSTALLIZE INTO HIGHER PRODUCTIVITY GAINS.

34:51 WE HAVE NOT SEEN THOSE PRODUCTIVITY GAINS YET IN THE MACRO DATA. GUY: ANOTHER WARNING ON AI. THIS TIME FOR THE CHIEF ECONOMIST OF THE I.M.F. SPEAKING TO BLOOMBERG. AI INVESTMENTS CERTAINLY BOOSTING GLOBAL GROWTH. CAN IT CONTINUE? HAS THE BIG THEME OF THE MORNING. WE’RE GOING TO DISCUSS IT SHORTLY. IT IS GOING TO BE A FASCINATING MARKET OPEN THIS MORNING. WE’LL FIND OUT SHORTLY WHAT IT LOOKS LIKE. THIS IS BLOOMBERG.

35:28 ANNA: WELCOME BACK. 7:45 IN LONDON. THE FUTURES PICTURE LOOKS BRIGHTER THAN IT WAS EARLIER. GUY: THE INDIAN PRIME MINISTER MODI SAYS THE WORLD IS UNDERGOING A BIG TRANSFORMATION. A NEW TECHNOLOGY THAT IS HAS THE POWER TO CREATE OPPORTUNITIES FOR MILLIONS OF PEOPLE. SPEAKING AT BLOOMBERG’S ECONOMY FORUM IN NEW DELHI. HE TALKED ABOUT THE GROWTH AND PACE OF CHANGE. >> INDIA’S REFORM EXPRESS IS

36:04 MOVING FORWARD AT A FAST PACE. FOR US, REFORMS ARE NOT A COMPULSION. THEY ARE OUR CONVICTION. GUY: MODI. JONATHAN GRAY HAS ALSO BEEN SPEAKING AT THE FORUM AND DISCUSSED APPLYING MORE CAPITAL IN INDIAN. LET’S GET MORE FROM HIM. >> HI THERE, GUY. THANKS SO MUCH FOR HAVING US. AS WE TRY HOST TWO EVENTS, TWO DIFFERENT VENUE IN ONE CITY, IT IS GOING TO BE QUITE INTERESTING TO SEE.

36:38 I WANT TO THANK JONATHAN GRAY WHO IS OVER AT THE OTHER LOCATION. BLOCK STONE’S PRESIDENT IS JOINING US. HE WAS IN THE ROOM WHEN MODI DID SPEAK. IT IS GREAT TO HAVE YOU HERE IN THE REGION AND IN NEW DELHI I WANT YOUR TAKE ON HOW IT FELT IN THAT ROOM DURING THAT SPEECH WAS THERE ANYTHING FROM THE PRIME MINISTER THAT RESONATED WITH YOU? >> WELL, IT WAS I THINK A TERRIFIC SPEECH. IT WAS VERY OPTIMISTIC. IT WAS ABOUT GROWTH AND THE

37:09 FUTURE AND HE HAD THIS MESSAGE ABOUT TO USE POWER TO EMPOWER. WHICH I THINK IN THIS WORLD TODAY PARTICULARLY AS WE ARE GRANDPARENTLING WITH THIS NEW TECHNOLOGY IT IS AN IMPORTANT MESSAGE – GRAPPLING WITH THIS NEW TECHNOLOGY IT IS AN IMPORTANT MESSAGE. LIFTING UP EDUCATION FOR PEOPLE ALL AROUND THE WORLD. THAT MESSAGE FROM ME FROM THE PRIME MINISTER REALLY RESONATED. >> OBVIOUSLY BLACKSTONE HAS BEEN INVESTING IN INDIA FOR TWO

37:41 DECADES NOW. YOU YOURSELF HAVE TALKED ABOUT THE OPPORTUNITIES, INDIA BEING THE ONE THAT HAS DELIVERED VERY GOOD RETURNS FOR BLACKSTONE BUT COMING AT A TIME WHEN WE SEE A DIFFERENT PICTURE IN PUBLIC MARKETS. EQUITY MARKETS CONTAIN A STRUGGLE. THE BIGGEST MOVE WE HAVE SEEN SINCE THE 2013 TAPER TANTRUM. HOW DO YOU SQUARE THE DISCONNECT IT SEEMS WE ARE

38:12 SEEING ACROSS PRIVATE AND PUBLIC MARKETS IN INDIA? >> THERE ARE A COUPLE OF DIFFERENT SORT OF CROSSCURRENTS GOING ON HERE. OBVIOUSLY ENERGY PRICES BEING ELEVATED HAVE HURT THE INDIAN ECONOMY, HAVE HURT THE CURRENCY. YOU ALSO HAD SOME CONCERNS AROUND THE AI IMPACT ON I.T. SERVICES COMPANIES HERE IN INDIA AND I WOULD SAY INDIA COMING OFF SORT OF 18 MONTHS AGO, TWO YEARS AGO HAD VERY

38:45 STRONG VALUATION, VERY HIGH MULTIPLES. SO THERE THERE HAS BEEN A ABOVE IT A RESET. AS INVESTORS WE TAKE A LONG-TERM APPROACH AND LOOK AT AN ECONOMY THAT IS GROWING 7 PLUS PERSON IS A YEAR AND HAS A VERY YOUNG POPULATION, A RISING MIDDLE CLASS, GOVERNMENT THAT IS PRO GROWTH AND WE SEE A PLACE THAT HAS A LOT OF OPPORTUNITIES. I THINK AS INVESTORS, THESE ARE THE MOMENTS WIND CHILL IT IS MORE ATTRACTIVE TO ENTER. PEOPLE END TO LIKE TO FOLLOW THE CROWD.

39:16 FOR US, WE TAKE A SLOW AND STEADY APPROACH. WE FIND GREAT BUSINESSES AND THE RIGHT SECTORS, INVEST IN THEM AND HERE IN INDIA TRY TO BUILD THOSE COMPANIES. I THINK WHEN YOU LOOK AT THE PROSPECTS OF THIS COUNTRY OVER TIME, EVEN IF THEY ARE NEAR TERM HEADWINDS, THEY REMAIN INCREDIBLY BRIGHT. >> BLACKSTONE ITSELF TALKED ABOUT DOUBLING INY AND TO OVER 00 BILLION IN THE NEXT FEW YEARS.

39:48 YOUR PORTFOLIO IS EVENLY SPLIT BETWEEN REAL ESTATE AND PRIVATE EQUITY. HOW DO YOU SEE THIS MIX EVOLVING? AS YOU DOUBLE YOUR A.U.M. HERE? >> YEAH. WE TRY TO IDENTIFY THEMES. NEIGHBORHOODS WE REALLY LIKE. PLACES LIKE AI, INFRASTRUCTURE, DATA CENTERS, NEE CLOUD, THE RISING MIDDLE CLASS, WHICH I HAVE TALKED ABOUT WHERE YOU SEE THINGS LIKE HEALTHCARE AND EDUCATION, FINANCIAL SERVICES, TRAVEL. THOSE ARE AREAS WE LIKE. AND YOU CAN EXPRESS THOSE

40:21 THROUGH COMPANIES. WE OWN A STAKE IN ONE OF THE LARGEST HOSPITAL CHAINS HERE. WE ALSO OWN ONE OF THE BIGGEST MALL COMPANIES HERE AS WELL. WE HAVE TAKEN 14 COMPANIES PUBLIC OVER TIME. THERE IS A LOT OF LIQUIDITY ON THE BACKSIDE WHEN WE INVEST IN BUSINESSES IN INDIA, BUT AGAIN IT IS IN THEMES WE LIKE, INFRASTRUCTURE, ENERGY, GIVEN THE ENORMOUS NEEDS AROUND BOTE AS WELL AS WHAT’S HAPPENING IN

40:53 THE UNDERLINING COUNTRY. TRYING TO IDENTIFY SECTORS WE LIKE, EXPRESS IT IN REAL ESTATE, PRIVATE EQUITY AND INFRASTRUCTURE. THAT HAS BEEN A GOOD FORMULA FOR US. >> JONATHAN, YOU GUYS ARE ONE OF THE MORE ACTIVE INVESTORS WHEN IT COMES TO THIS AI INFRASTRUCTURE BUILDOUT GLOBALLY NOW. I’M WONDERING GIVEN THE WARNINGS WE HAVE SEEN ABOUT AI INVESTORS AND THE RISING COST OF CAPITAL COULD BE THE KEY CONSTRAINT IN THIS AI BUILDOUT.

41:24 DID YOU SHARE THOSE CONCERNS IN ANY WAY? DO YOU WORRY THAT PRIVATE CAPITAL ARE CHASING THE SAME ASSETS AND COMPRESSING YOUR RETURNS? >> WELL, I THINK THERE IS ENORMOUS NEED AND DEMAND FOR COMPUTE. IF YOU THINK ABOUT IT FROM A SUPPLY DEMAND STANDPOINT. WE’RE SEEING AT OUR COMPANIES HARDEN THE WORLD A REAL DESIRE TO USE AI TO MAKE THEIR BUSINESSES BETTER, TO SERVE THEIR CUSTOMERS TO, MAKE A

41:58 LEASE APPLICATION PROCESS 90% FASTER. TO MAKE VISUALIZATION TECHNIQUES AT A STRATEGY DOOR OPENING BUSINESS MUCH BETTER. WE’RE SEEING ALL OF THESE USE CASES AND NOW WE’RE SEEING IT WITH INDIVIDUALS WITH THESE PERSONALIZED TOOLS, INSTINCT. WE’RE SEEING USAGE GO UP AND TO THE RIGHT YET THE SUPPLY SIDE WHICH IS GOVERNED BY THE REAL WORLD BY GRAVITY AND CHIPS AND THE NEED FOR POWER AND ENTITLEMENTS AND CAPITAL, THAT IS MOVING MUCH MORE SLOWLY. SO I THINK THERE IS STILL A LOT

42:31 OF BALANCE AND MOST OF WHAT WE DO IN THIS SPACE IS LONG-TERM LEASE INFRASTRUCTURE TO SOME OF THE BIGGEST COMPANIES IN THE WORLD. YES, WILL THERE BE EXCESS? THERE ALWAYS ARE IN A MOMENT WHEN THERE IS AN EXCITING NEW TECHNOLOGICAL BREAKTHROUGH BUT IN AGGREGATE WHEN I LOOK BACK AT THIS VERSUS OTHER PERIODS ACCESS LIKE TO TELECOM BOOM, WHERE THAT WAS TON OF LEVERAGE THIS LOOKS AND FEELS VERY DIFFERENT. WE’RE VERY DISCIPLINED AS A

43:04 FIRM WHERE WE’RE DEPLOYING CAPITAL BUT WE THINK FOCUSING ON THE AI INFRASTRUCTURE HERE IN INDIA AND AROUND THE WORLD IS THE RIGHT PLACE TO TO BE. >> DO YOU SEE THE SAME KIND OF CONCENTRATION RISKS PARTICULARLY IN ASIA? I KNOW YOU HAVE DONE A LOT OF DATA THAT ARE KEYS IN THIS PART OF THE WORLD AS WELL. >> WE HAVE A COMPANY HERE WHICH IS THE BIGGEST DATA CENTER PLAYER. WE HAVE A NEO CLOUD COMPANY HERE. IT IS MUCH EARLIER IN THE DEVELOPMENT HERE.

43:36 IF YOU LOOK AT THE NUMBER OF GIG WATTS IN ASIA OUTSIDE OF CHINA, IT IS STILL VERY, VERY SMALL. SO I THINK WE’RE A LONG WAY FROM NIGHT UNDERLYING DEMAND FOR COME PUETZ THAT EXISTS. I DON’T SEE ANY – FOR COMPUTE THAT EXISTS. I DON’T SEE ANY IMBALANCE. THE MARKETS ARE PROVIDE MANAGER DECEMBER MINUTE. A NUMBER OF THE PUBLIC OFFERINGS HAVE HAD TO BE – DELAYED. IT IS A HEALTHY SIGN. IT STOPS WITH THINGS GETTING OUT OF HAND. IN THE LONG-TERM I THINK THIS

44:10 DEMAND FOR COMPUTE WILL CONTINUE AND THEREFORE IF WE’RE ABLE TO AGGREGATE CAPITAL THE WAY WE ARE, CHIP FINANCING AS WELL, ALL OF THAT IS GOING TO BE CRITICAL TO THAT I CAN TECHNOLOGY FORWARD AND I KNOW THE TECHNOLOGY IS GOING TO BE POWERFUL IN ITS IMPACT. >> JONATHAN, GREAT TO HAVE YOU IN THE REGION. JONATHAN GRAY, PRESIDENT OF BLACKSTONE. BACK TO YOU GUYS. TOM: FANTASTIC STUFF AT THE NEW

44:46 ECONOMY FORUM IN NEW DELHI. EUROPEAN FUTURES POINTING JUST A SMIDGE HIGHER. GUY: YOU SEE ASIA TECH OVERNIGHT. EUROPE FEELS LIKE A PLACE TO HIDE OUT. ANNA: FTSE 100, SWISS MARKET. WE’RE A LITTLE WORRIED. COMING UP, OPENING TRADE. THIS IS BLOOMBERG.

45:29 GUY: TUESDAY MORNING. A COUPLE OF MINUTES TO GO BEFORE WE START TRADING IN EUROPE. IN SOME WAYS THE U.S. SESSION YESTERDAY WAS A NONEVENT. CHIPS WERE TOWN THE FOURTH DAY THEY WERE DOWN. BUT WE DIDN’T GET THE KIND OF VOLATILITY OVERNIGHT IN ASIA DESPITE THE FACT MOST OF THE NEWS WE ARE REACTING TO TODAY, THIS TIME YESTERDAY. ANYWAY, WE’LL PARK THAT ONE FOR NOW. THIS IS WHERE EUROPE WEPT OUT. – WENT OUT. THERE’S NOT MUCH IN IT. IN TERMS OF THE LEAD WE’RE LOOKING FOR. BUT EUROPE ACTUALLY LOOKS FAIRLY GOOD THIS MORNING. RELATIVE TO U.S. FUTURES, TOM. TOM:

46:00 THAT’S IN THE CONTEXT OF TWO DAYS OF GAPES FOR EUROPEAN STOCKS. – GAINS FOR EUROPEAN STOCKS. TODAY, POINTING HIGHER BY FOUR POINTS BUT IN THE CONTEXT OF THE SELLOFF IN SAY SHAH AND THE CONTEXT OF THE SELLOFF IN THE SEMI SPACE IN WALL STREET IT IS NOTABLE. FTSE 100 UP .6%. SET FOR A STRONG SESSION HERE. ANNA: LET’S THINK ABOUT TECHNOLOGY. BECAUSE YES, EUROPE MIGHT BE A

46:32 LITTLE BIT INSULATED THIS MORNING. WE MIGHT SEE EUROPE ACTING AS A LITTLE BIT OF A HAVEN FROM TECH JITTERS. BUT THOSE TECH JITTERS COULD SHOW UP IN SOME PLACES. SO WE’LL WATCH TECH STOCKS AS NASDAQ FUTURES ARE DOWN BY .7%. ASIA HAS BEEN UNDER PRESSURE. LVMH SETS THE STAGE FOR SOME WEAKNESS ACROSS THE LUXURY SPACE AS WELL. THE KEY LOUIS VUITTON BRAND LOOKED WEAK AND LEGAL ACTION THAT THEY WON. BUT THAT HAS HAD A NEGATIVE KNOCK-ON IMPACT AND BP IS INTERESTING. THEIR DEBT LEVEL SHRINKING WITH

47:04 A BOOST FROM OIL AND GAS TRADING. AND ALSO FROM REFINING. SO WE’LL SEE WHETHER THE MARKET IS FOCUSED ON THAT AT THE TIME OF RISING YIELDS BROADLY, GUY. GUY: SURE. AND THAT’S OUTPERFORMING RECENTLY. THE ENERGY SPACE. OK. HERE WE GO. TIME FOR SOME OPENING TRADES. LET’S SHOW YOU SOME NUMBERS. AND GIVE YOU AN IDEA OF THE PICTURE WE’RE SEEING HERE IN EUROPE. WE’VE LAID OUT SOME OF THE SINGLE STOCKS AND THE THEMES. LET’S SEE YOU GET PRICED IN TO THESE MARKETS. THE FTSE 100 IS EXPECTED TO HAVE A REASONABLE MORNING THIS MORNING. IS THE FTSE. SOME PEOPLE TALK ABOUT THE PLACE TO HIDE OUT. IF YOU’RE WORRIED ABOUT TECH JITTERS. IF YOU’RE WORRIED THAT APE AND

47:40 THE TRADE AROUND IT RESEMBLES A CASINO MAYBE SOME EVIDENCE. UP .4%. OUTPERFORMING THE 600 AND WAIT FOR SOME OF THE OTHER MARKETS TO GET GOING. THE CAC WILL BE INTERESTING. LOTS OF LUXURY. HOW WILL THAT GET PRICED? THE AEX IS SOFT. NOW, THAT’S AN INTERESTING TELL. HOW FAR DOWN IS ASML GOING TO BE THIS MORNING? AND WHY WASN’T IT DOWN YESTERDAY AND WE’RE GOING INTO EARNINGS TOMORROW. I’M ASSUMING THAT IT’S DOWN. THAT IS JUST GENERALLY MY TAKE HERE. ON THE BACK OF THE UNDERPERFORMANCE OF THE AMSTERDAM MARKET. THE IBEX IS UP BY .4%. THE CAC IS STILL POSITIVE THIS MORNING.

48:11 BUT THE FTSE OUTPERFORMS. TOM, SECTORS. TOM: GUY. THAT’S A CORRECT ASSUMPTION ON ASML. DOWN CURRENTLY 3%. SO THAT’S – IT’S A BIG DROP IN THE CONTEXT OF COURSE. FOR ASML ON THE BACK OF THE WEAKNESS AROUND THE CHIP STORY THAT WE’VE BEEN SEEING PLAYING OUT IN ASIA AND IN THE U.S. AS YOU WERE SAYING. ACROSS YOUR SECTORS RIGHT NOW, IN TERMS OF THE GAINS COMING THROUGH, IT’S MEDIA GAINING, YOU GOT FOOD AND BEVERAGE UP 1.5% AND CHEMICALS UP 1.3%. OPT DOWNSIDE IT IS THE TECH SECTOR. TAKEN THE BIGGEST HIT AND NOT A BIG SURPRISE GIVEN THE DYNAMICS WE’VE BEEN DISCUSSING. THAT SECTOR IS DOWN 1% AND ASML

48:42 IS IN THE MIX. BASIC RESOURCES ALSO SOFTER BY .6%. YOU HAVE SIX SECTORS IN NEGATIVE TERRITORY HERE IN EUROPE. IT’S MEDIA THAT’S POSTING THE STRONGEST GAINS AT 1.6%. ANNA: AND I’M DRAWN TO PUBLICIS THEN AT THE TOP OF THE MEDIA BASKET. THEY PUT OUT SOME NUMBERS EARLIER ON TODAY. THEY STUCK TO THEIR GUIDANCE. CONFIRMING THEIR GUIDANCE AND MAYBE IN TODAY’S MARKET THAT IS ENOUGH. THEY GAVE US SOME BACKWARD LOOKING NUMBERS FOR THE LAST QUARTER AND FORWARD EXPECTATIONS. FOURTH QUARTER ORGANIC REVENUE UP 4% TO 5%. THE ESTIMATE WAS 4.9% AND

49:13 WONDERED HOW THAT WOULD TRADE THIS MORNING AND SEEMS TO BE POSITIVE UP BY .2.6%. THAT SETS THE STAGE FOR MEDIA TO BE ONE OF THE BEST PERFORMING SECTORS THIS THIS MORNING’S SESSION. WE DO HAVE TECHNOLOGY TO THE DOWNSIDE THEN. GUY: INTERESTING. ASML HAS GAPPED LOWER THIS MORNING. YOU LOOK AT THE FIVE-DAY CHART. IT’S BEEN CHOPPING AROUND BUT DROPPED YESTERDAY. BUT NOT THAT MUCH. IT DID DROP YESTERDAY. AND IT WAS INTERESTING. TOWARD THE BACK END OF THE EUROPEAN SESSION THAT WE SAW THAT DROP COME THROUGH DESPITE THE FACT THAT ALL THE NEWS WE’RE APPARENTLY FACTORING IN THIS MORNING CAME THIS TIME YESTERDAY. NUMBERS COME TOMORROW. WHICH I THINK IS ALSO QUITE

49:44 INTERESTING, TOO. AND IN SOME WAYS, YOU WOULD HAVE THOUGHT THE BROADCOM COMMENTS ACTUALLY WOULD SPEAK QUITE POSITIVELY TO THE IDEA THAT ACTUALLY ASML IS IN A FAIRLY GOOD PLACE THIS MORNING. TOM: BOTH INTEL AND BROADCOM AND STILL HUGE DEMAND. AND WE’VE SEEN THE PRICING STORY OUT OF ASIA FOR ASML IN TERMS OF PRICES UP. AND YET THE STOCK TAKING A HIT. GUY: ON A FIVE-DAY BASIS DOWN BY .7%. AND THE SOX IN THE STATES HAS BEEN DOWN FOR THE LAST FOUR SESSIONS. THERE HAS BEEN SOME NEGATIVITY BEING PRICED INTO THE CHIPS. ASML, IT’S AMAZING THAT WE’RE PRICING THIS THIS MORNING. ANNA: RIGHT. YES. EXACTLY. WHEN WE HAD SOME OF THIS NEWS

50:15 YESTERDAY. THE DAX JUST OPENING UP AND IT IS UP BY .2%. THE SMI IS UP BY .8%. LET’S TALK ABOUT WHAT WE’RE SEEING IN EUROPE THIS MORNING THEN. JOINING US AROUND THE DESK CIO AT BROOKS McDONALD. NICE TO SPEAK TO YOU THIS MORNING. AND I WONDER IF WE CAN THINK ABOUT WHAT EUROPE OFFERS AT THIS TIME. IF WE’RE WORRIED ABOUT TECH AND WORRIED ABOUT AI AND WHETHER IT ROLLS OVER. MAYBE IT DOES. MAYBE IT DOESN’T. DOES EUROPE PROVIDE SOME SORT OF HAVEN? IS THAT WHAT WE’RE SEEING WITH THE FTSE 100 UP .7%, THE SMI UP

50:47 .8% OR .9% THIS MORNING? >> I THINK SO, ANNA. THE PROBLEM YOU HAVE FOR ALL INVESTORS RIGHT NOW IS THERE ARE THREE KEY QUESTIONS AT THE HEART OF THE AI TRADE. THEY ARE NOT GOING TO BE ANSWERED FOR SOME TIME YET. AT LEAST CONVINCINGLY OR COHERENTLY. AND WHAT IS THE ULTIMATE SIZE OF THE MARKET? WHAT ARE THE ECONOMICS LOOK LIKE? AND WHERE ARE THE POTENTIAL MOATS? AND I THINK, YOU KNOW, IF YOU THINK WE’RE GOING TO BE GETTING CRUMBS INCREASINGLY OVER THE NEXT FEW QUARTERS, AND YEARS, AND WE’RE GOING TO HAVE TO TRY TO BUILD THOSE INTO SOMETHING COHERENT IT’S QUITE A DIFFICULT THING TO LOOK AT. NOW, IF YOU THINK ABOUT THE

51:20 NEXT PHASE OF THE INDUSTRIAL REVOLUTION, AND WE ALWAYS TALK ABOUT THIS, THIS IS WHERE YOU CAN MESH VALUATION DISCIPLINE AND AN UNDERSTANDING OF HOW THESE REVOLUTIONS WORK. AND THAT’S REALLY THAT THE REAL JUICE OF THESE REVOLUTIONS AND INVESTMENT TERMS IS ABOUT WHEN PEOPLE AND BUSINESSES START REORGANIZING THEIR PROCESSES. AROUND THIS MORE FLEXIBLE TECHNOLOGY. ANNA: OK. >> THAT’S EUROPE IN A WAY. ANNA: AND WE’VE HAD THAT FROM A FEW VOICES AND NOT GOOD ENOUGH TO IMPOSE THIS TECH. YOU REALLY NEED TO REINVENT BUSINESSES TO MAKE THE MOST OF IT. BUT WE’RE – IN THE HERE AND NOW WE’RE WAITING FOR ANOTHER EARNINGS SEASON. AND THERE’S A LOT AT STAKE FOR

51:54 TECHNOLOGY NAMES AND ELSE WHERE. YOU’RE WATCHING RETURN ON INVESTED CAPITAL FOR THE TECHNOLOGY SECTOR. SO WHAT IS IT SPECIFICALLY YOU WANT TO SEE HERE? BECAUSE I’M NOT SURE WHAT WE WANT FROM CAPEX AT THIS TIME OR FROM – INVESTED CAPITAL? >> THE FUNNY THING IS NO ONE IS. THEY’RE JUST LOOKING FOR THE SAME WARM FEELING THEY LEFT THE HYPERSCALERS OF THE HYPERSCALERS LEFT US WITH AFTER Q2. THE POINT IS THAT WHEN YOU’RE LOOKING AT THOSE HYPERSCALERS AND ONE OF THE PROBLEMS WE HAVE WITH EXACTLY THIS STORY IS THAT WE KNOW THAT THIS IS NOT BUILDING GIANT AMOUNTS OF

52:26 INFRASTRUCTURE INTO A REGULATED CONTEXT. THIS IS AN UNREGULATED CONTEXT. THIS IS FIVE, SIX COCKY GUYS SITTING AROUND A POKER TABLE AND EVERYONE THINKING THEY’RE GOING TO WIN. SO THERE ARE GOING TO BE LOSERS. REALLY, WE MIGHT NOT FIND THAT OUT FOR A WHILE. BUT IT DOES DEFINITELY THINK – IT DOES DEFINITELY SPEAK TO US OF THE NEED FOR ACTIVE SELECTION. NOT JUST WITHIN THOSE HYPERSCALERS. BUT ALSO THINKING TO THAT NEXT PHASE. AND I THINK, YOU KNOW, OUR FEELING IS THAT AT SOME POINT IN THE NEXT FEW YEARS, THE PICKS AND SHOVELS PHASE ENDS AND REALLY YOU GOT TO BE

52:57 PREPARED AND IT WON’T BE ENOUGH TO SORT OF SWITCH IN THAT TWO-YEAR TIME. YOU HAVE TO BE BUILDING POSITIONS DURING THE NEXT FEW YEARS IN ORDER TO BUILD RESILIENCE. AND I THINK THAT’S THE STORY MORE BROADLY IN MARKETS AT THE MOMENT. THE STRENGTH YOU’RE SEEING IN QUITE A NARROW CORNER – OF THE MARKET AT THE MOMENT, THAT IS A GOOD CHANCE TO BE BUILDING AND PORTFOLIO RESILIENCE. ADDING TO DURATION. YOU KNOW, COMMODITY PREMIA. THOSE KIND OF THINGS. AND I THINK WE’RE REALLY JUST USING THE STRENGTH IN ONE PART OF THE MARKET TO BUILD RESILIENCE AND PORTFOLIOS AND FUNDS OTHERWISE. TOM: THIS IS A HEALTHY SHAKEOUT.

53:27 OR AT LEAST AN OPPORTUNITY FOR INVESTORS TO GET EXPOSURE TO SOME OF THE NAMES. BUT THE FUNDAMENTALS CONTINUE TO SUPPORT THE BUILDOUT. AND YOU WANT – YOU WANT TO BE SELECTIVE IN HOW YOU – IN HOW YOU GET EXPOSURE. >> I THINK THAT’S RIGHT, TOM. YOU KNOW, ONE OF THE THINGS THAT’S QUITE INTERESTING ABOUT THE MARKET IN THE LAST MONTH OR SO IS THAT BUILDUP IN DURATION IS – WAS PERFECTLY HEALTHY, LOW VOL KIND OF MOVE IN RATES FOR MUCH OF THAT TIME. THE LAST LITTLE BIT HAS BEEN A BIT KEYSIER AND THAT’S WHERE

54:01 YOU’VE SEEN MARKET BREADTH EVAPORATE. NOW, YOU KNOW, YOU HAVE SEEN SOME PARTS OF THE MORE INTEREST RATE SENSITIVE PARTS OF THE MARKET HAVE KIND OF BEEN PART OF THAT. BUT OUR SUSPICION IS THAT IF YOU LOOK AT HOW THIS TECHNOLOGY MIGHT EVOLVE, ONE OF THE AREAS YOU CAN THINK ABOUT, SERVICES, DATA, ENTERPRISE DATA, HEAVY AREAS, THE REVENUE PULL PARTICULARLY. SOME AREAS OF SMALL CAP ARE INTERESTING FROM THIS PERSPECTIVE. BECAUSE ALSO THIS IS A TECHNOLOGY THAT MAY END UP BEING MORE ACCESSIBLE TO THOSE WITHOUT MEGAIT DEPARTMENTS AND KNOWS KIND OF THINGS.

54:32 SO IN A WAY, IT’S A TIME TO BE THINKING VERY CAREFULLY ABOUT DD, ACTIVE SHOPPING. NOW, THE OTHER POINT TO PUT ALONGSIDE THAT IS IN THAT HIGH RATE ENVIRONMENT, THE REWARDS TO SORT OF GOLD-PLATED DD ARE GREATER IN OUR OPINION. SO IT’S REALLY THE TIME TO SORT OF, YOU KNOW, GET YOUR MAGNIFYING GLASS OUT AND REALLY LOOK THROUGH THESE COMPANIES. TOM: CAN WE PUT THE MAGNIFYING GLASS AWAY FOR JUST A SECOND AND BRING IT OUT AGAIN. THE ROTATION WE’VE SEEN FROM STOCKS INTO BONDS, DOES THAT CONTINUE? >> SO I WOULD ARGUE THAT IN THE NEAR TERM, YES, IT SHOULD. I WOULD HAVE THOUGHT THAT YOU’RE GOING TO START TO SEE

55:06 BOND MARKETS RETURN TO A MORE TRADITIONAL ROLE. THERE ARE RISKS TO THAT VIEW. BECAUSE AS YOU KNOW, THAT LAST MONTH OR SO AN INCREASING CORRELATION WITH OIL PRICES. WE JUST CAN’T PREDICT WHERE THE ESCALATION COULD GO IN THE NEXT MONTH OR SO. BUT YES. I THINK BUILDING DURATION POSITIONS IS A VERY SENSIBLE STRATEGIC MOVE AT THE MOMENT. GUY: WHAT DO YOU MAKE OF THE COMMENTS IN THE BROADCOM CEO? LIKENING MANY AI INVESTORS TO CASINO GAMBLERS AND YOU JUST TALKED ABOUT POKER TABLES.

55:38 AND SO MANY PEOPLE AROUND THIS TABLE. >> I THINK ONE OF THE PROBLEMS, GUY, YOU HAVE WITH THIS IS IDENTIFYING WHAT IS AND ISN’T AI. IT’S BECOME A DIFFICULT THING TO SEGREGATE OUT. I WOULD ARGUE THAT IF YOU’RE THINKING ABOUT INVESTING AT THE MOMENT WHAT YOU’RE REALLY THINKING ABOUT IS INVESTING IN AN INFORMATION REVOLUTION OF WHICH GENERATIVE AI, MACHINE LEARNING ARE JUST PART. NOW, YOU CAN PLAY THIS IN A NUMBER OF DIFFERENT WAYS. I WOULD SAY YES, THERE ARE ELEMENTS OF GAMBLING WITH REGARD TO SOME OF THE SORT OF – SOME OF THE STORIES DOING THE ROUNDS IN TERMS OF TRYING TO GUESS WHERE THIS TECHNOLOGY GOES AND SO OP.

56:11 BUT THAT’S – YOU KNOW, THAT’S ONE OF THE PROBLEMS YOU HAVE. BECAUSE YOU KNOW, WITH EVERY EARNINGS SEASON, PEOPLE ARE TRYING TO WORK OUT EXACTLY WHERE THIS TECHNOLOGY ENDS UP. IT’S JUST TOO EARLY TO SAY. AND THAT IS THE PROBLEM IS THAT YOU HAVEN’T REALLY SEEN THE PROCESS CHANGES THAT WOULD COME TO MAKE THIS TECHNOLOGY REALLY, REALLY VERY POWERFUL. GUY: HE TALKS ALSO ABOUT THE FACT THAT A LOT OF COMPANIES OUT THERE ARE JUST SPENDING TOKENS LIKE THEY’RE KIDS GOING DOWN TO THE AMUSEMENT ARCADE. AND DIDN’T LEARN ANYTHING AND JUST SPENDING MONEY AT THE MOMENT AND NOT GETTING ANY RETURN OFF IT AND THEY DON’T UNDERSTAND HOW THEIR BUSINESSES ARE GOING TO CHANGE. AT SOME POINT WE ARE GOING TO

56:44 NEED BUSINESSES TO PAY FOR THIS STUFF. >> YEAH. GUY: AND AT THE MOMENT, THEY DON’T KNOW WHAT THEY’RE DOING ACCORDING TO THE CEO OF BROADCOM AND AT SOME POINT THE CREDIT MARKET WILL HAVE TO STOP FUNDING IT AND END USELERS HAVE TO STOP FUNDING IT. IS THERE GOING TO BE A GAP THERE? >> SO THERE IS. AND THAT’S SOMETHING WE HAVE TO KEEP IN MIND IS THAT – WHERE TECHNOLOGY DOESN’T DELIVER AND YOU GET AN ACCOUNTING CARNAGE, MARKET CARNAGE, ALL OF THESE KIND OF THINGS. THAT’S ONE SCENARIO TO CONSIDER.

57:16 I WOULD SAY THAT THERE ARE ALSO MANY IN BETWEEN THE SORT OF MORE BULLISH SCENARIO WHERE THE TECHNOLOGY STARTS TO WORK A BIT MORE COHERENTLY. WHERE PEOPLE IMAGINE ACTIVELY AND CREATIVELY – THE LEARNING CURVE CATCHES UP AND THE TECHNOLOGY STARTS TO BE A BIT MORE – GUY: BUT WE DON’T KNOW AND DEPOSE BACK TO THE GAMBLING POINT. IF I MAKE A BET, I DON’T KNOW I’M MAKING A BET. IF I KNOW AND I HAVE SOME SORT OF IDEA AND INFORMATION AND FUNDAMENTALS TO WORK ON, I’M INVESTING. THAT SEEMS LIKE A QUITE – AN – >> THE LINE IS ALWAYS QUITE BLURRY ANYWAY, ISN’T IT? BECAUSE WE’RE TALKING ABOUT HERE, WE’RE PRICING A LOT, PARTICULARLY WHEN – THESE ARE

57:48 LONG DURATION CASH FLOWS WE’RE TALKING ABOUT. THESE TECHNOLOGY COMPANIES – GUY: ALSO TRUE. >> THE VALLEY OF THEIR VALUE IS DEEP INTO THE FUTURE. SO WE’RE MAKING PSALMSES BASED ON CRUMBS – ASSUMPTIONS BASED ON CRUMBS OF TRUTH TODAY AND EXTRAPOLATING THEM DISTANT OUT. TOM: REASSURING. >> YEAH. [LAUGHTER] >> BY NOW IT’S GOING TO BE OK. ANNA: I’M THINKING ABOUT WHERE THESE THINGS GO FROM HERE, AND ALL THE LACK OF VISIBILITY PERHAPS THAT WE HAVE. TAKES US BACK TO OTHER PAST EXPERIENCES. AND I WAS DRAWN TO SOME RESEARCH AND OUR COLLEAGUE PUT

58:19 OUT THIS CHART YESTERDAY. THAT SHOWS YOU HAVE TO GO BACK TO 1980 TO FIND A TIME WHERE CONSUMER CONFIDENCE IN THE STATES WAS SO LOW, COMBINED WITH YIELDS BEING AT THIS SORT OF CYCLE HIGH. >> YES. ANNA: I MEAN, IS THAT A WORRYING SIGN TO YOU? DOES – IT DIDN’T END WELL THEN. BUT – THAT DOESN’T NECESSARILY TELL US WHERE WE ARE NOW. BUT IT – IT’S AN UNUSUAL CIRCUMSTANCE. >> IT’S AN UNUSUAL MOMENT. I THINK THERE ARE A COUPLE OF CONTEXT POINTS TO JUST RAISE TO THAT QUESTION. WHICH IS THAT ONE, INTERESTING CHART TO PUT ALONGSIDE THIS WOULD BE THE MISERY INDICES. AND TO SEE – I MEAN, BECAUSE

58:53 BACK BACK THEN YOUR MISERY INDEX WOULD HAVE BEEN WAY HIGHER JUST GUESSING UNEMPLOYMENT PLUS INFLATION RELATIVE TO TODAY. AND I’M NOT SURE WHAT THAT SAYS ABOUT THE DIFFERING CONTEXT. THE OTHER POINT TO THINK ABOUT HERE IS THE CONSUMER CONFIDENCE INDICES, THEY AMONG MANY OTHER DATA POINTS SINCE THE PANDEMIC, THEY PLUMMETED. IN TERMS OF – ANNA: DON’T TELL ME THEY ARE BROKEN, TOO. >> THEY ARE UNFORTUNATELY BECAUSE THE SURVEY RESPONSES HAVE BEEN GOING DOWN AND DOWN. AND I JUST DON’T – THAT’S ONE OF THE PROBLEMS WITH READING, YOU KNOW, THE TROUBLE THAT YOU AND I WE HAVE AT THE MOMENT THAT WHAT THAT DOES AS WE’VE

59:26 SEEN IN THE UK IS THAT IT LEAVES A COHORT OF RESPONDENTS WHO ARE MORE AGITATED, MORE LIKELY – ANNA: CYNICAL TO ANSWER SURVEYS. >> YES. THAT’S – GUY: IF WE’RE ANSWERING THEM. >> AND I THINK THAT’S THE MAIN THING. TOM: ANOTHER STALE CRUMB. >> A STALE CRUMB THAT WE’RE TRYING TO MAKE A BAD CAKE – GUY: MAYBE NICE FOOD WITH STALE CRUMBS. >> YOU CAN INDEED. ANNA: IT HAS TO BE THE RIGHT FOOT. WE STRETCHED THIS METAPHOR TOO LONG. GUY: WE WILL FINISH. BREAKFAST IS CALLING. CEO AT BROOKS McDONALD.

59:58 ASML THE STANDOUT STORY. ANY SECOND NOW. THERE YOU GOFF IT IS DOWN AND DOWN HARD. WHAT I THINK IS INTERESTING IS THAT LVMH IS NOT. LVMH – LVMH IS TRACKING HIGHER THIS MORNING DESPITE THE FACT THAT THE ADR’S GOT DINGED PRETTY BADLY IN THE STATES AFTER THE EUROPEAN CLOSE. STAPLES, NESTLE IS UP PHARMA IS DOING WELL. LOOK WHAT’S HAPPENING WITH NOVEMBER NOVO. OLIVIA WITH MORE DETAILS. >> INTERESTING WHAT WE’RE SEEING IN THE LUXURY SPACE. IT’S WORTH – LVMH’S HEADLINE FIGURES WERE ACTUALLY IN LINE WITH EXPECTATIONS. THE BIG MISS CAME SPECIFICALLY

1:00:32 IN THE FASHION AND – AND LEATHER GOODS SECTOR AND HIGHLY IMPACTED BY WHAT WAS GOING ON IN CHINA. WHAT IS INTERESTING HERE IS KERING IS UP BY .6%. IT’S IN LINE WITH LVMH. BUT KERING’S BRAND IGUCHI HAS BEEN FLOAT AS A POTENTIAL WINNER OF ALL OF WHAT’S GOING ON IN CHINA WHEN IT COMES TO LEECH. THAT’S AN INTERESTING ONE TO WATCH. REACH MONTREAL WAS FLAGGED AS A – RICHEMONT WAS FLAGGED AS A POTENTIAL RISK AND SAYING RICHEMONT COULD BE HIT AS A KNOCK-ON EFFECT. AND YOU ARE ACTUALLY SEEING RICHEMONT DOWN ABOUT HALF A PERCENT TODAY.

1:01:04 EVEN THOUGH THE BROADER EU LUXURY SPACE IS UP BY .3%. STILL DOWN MORE THAN 20% YEAR TO DATE. SO IT COULD JUST BE SOME RELIEF THERE FOR A SECTOR THAT’S BEEN HEAVILY SOLD COMING INTO THIS PRINT. MOVING OVER, WE HAVE FURTHER EARNINGS RESULTS THAT ARE IMPACTING THE MARKET QUITE SUBSTANTIALLY. MASTONS, GOOD FORWARD LOOKING GUIDANCE AND STOCK IS UP BY 11%. STRONG ORGANIC GROWTH FOR

1:01:35 GERDANE. AND BP, STRONG REFINING MARGINS AND GROWTH IN THEIR GAS TRADING SECTOR, EXPECTED TO BOOST THEIR THIRD QUARTER EARNINGS. THAT STOCK UP ABOUT 1.2% RIGHT NOW. FLIPPING THE BOARD OVER TO RATINGS CHANGES, ONE QUICKLY IS NATIONAL WEST – NATWEST. RAISE BID BARCLAYS. U.S. PEER EARNINGS COMING OUT LATER TODAY. WE’VE GOT MAVERICK LOWER AND SCHNEIDER ELECTRIC DOWN AND IT WAS UPGRADED. AND THAT MOVE IN SCHNEIDER IS

1:02:10 PROBABLY DUE TO THIS WHOLE AI MOVE THAT WE’RE SEEING. THE DOWN – KOSPI DOWN MORE THAN 5%. WE SAW SAMSUNG, HK HYNIX, DOWN BY 8% AND 10% AND A BIG RISK OFF MOVE AND WE FLIP UP THE BOARD AND THE CHIP NAMES. ASML DOWN SIGNIFICANTLY. ST MICRO, ALL OF THESE NAMES GETTING HIT SUBSTANTIALLY. A BASKET OF EU-AI WINNERS IS ONLY DOWN 2.2% AND PARED SOME OF THAT DECLINE. BUT STILL SIGNIFICANT WEAKNESS IN EUROPE, EUROPEAN CHIP NAMES

1:02:43 AND THOSE EXPOSED TO THE AI TRADE. TOM: THANK YOU VERY MUCH. OLIVIA WITH THE STOCKS ON THE MOVE THIS TUESDAY. SHE MENTIONED LEIF. WE’LL GET MORE DETAILS ON THAT COMPANY REPORTING SLUMPING SALES PARTICULARLY IN CHINA. WE’RE GOING TO UNPACK THE FRENCH COMPANY’S THIRD QUARTER RESULTS. THAT’S NEXT. THIS IS BLOOMBERG.

1:03:16 ANNA: GOOD MORNING, EVERYBODY. WELCOME BACK TO “THE OPENING TRADE.” WE GOT A DECENT SESSION UNDER WAY HERE IN EUROPE. DESPITE NERVOUSNESS AROUND TECH STOCKS IN OTHER PARTS OF THE WORLD, AND TO SOME FREE HERE BECAUSE TECHNOLOGY IS THE WORST PERFORMING SECTOR IN TODAY’S EUROPEAN SESSION, BUT ALMOST ALL OTHER SECTORS ARE IN POSITIVE TERRITORY. CHEMICALS SUPPORTED BY EARNINGS UP BY 2%. FOOD, BEVERAGE AND TOBE AND – TOBACCO AND HEALTH CARE, AND THE HAVEN TRADE SENDING THE SMI UP. TOM: SUNNY OPTIMISM TO NEGATIVITY.

1:03:47 ANNA: TOO MUCH? TOM: APPROPRIATE GIVEN WHAT WE’RE SEEING AND IN THE CONTEXT. BUT THERE IS PRESSURE AS YOU SAY ON THE TECH STOCKS AND CHIP NAMES IN EUROPE. GIVEN THE SELLOFF THAT WE SAW IN ASIA AND THE SEMIS INDEX YESTERDAY. STATE SIDE. YOU’RE SEEING ASML AND ST MICROAND SWIATEK UNDER PRESSURE TODAY. AND INFINEON OFF BY ALMOST 5% AND NOKIA AS WELL WITH THAT EXPOSURE TO THE INFRASTRUCTURE STORY. A LITTLE WEAKER.

1:04:18 THIS AFTER THE AI TRADE SAW INCREASED ANGST OVER ANOTHER EARNING THIS TIME FROM BROADCOM CEO WHO LIKENED THE AI MARKET TO A CASINO. THE CONTEXT AND DETAILS. TO WHAT EXTENT IS THE SELLOFF DOWN TO WHAT WE HEARD FROM THE CEO OF BROADCOM? DOES IT FALL – DOES IT FALL AT THE FEET OR A COMBINATION OF EFFECTS? >> IT’S A COMBINATION OF THINGS. BUT THAT WAS THE BIG CATALYST THAT DROVE THE MARKET LOWER. HE DID LIKEN IT TO A CASINO. BUT ONE OF THE OTHER KEY COMMENTS THAT HE MADE WAS –

1:04:51 AROUND THE AI BOTTLE BOTTLENECK AND ACTUALLY NOT COMPUTE THAT’S – THAT’S GOING TO BE THE BIG BOTTLENECK. IT’S GOING TO BE THE FINANCING GOING FORWARD. WE KNOW THAT THERE’S A – HUGE SUMS OF MONEY BEING INVESTED INTO THE ECOSYSTEM. BOND YIELDS ARE ELEVATED. AND THE MARKET IS INCREASINGLY NERVOUS. AND ACTUALLY ARE THESE COMPANIES GOING TO GENERATE AN ADEQUATE RETURN ON THEIR INVESTMENT WITH BOND YIELDS WHERE THEY ARE? BECAUSE THAT RAISES THE COST OF CAPITAL. AND HAS ALL SORTS OF IMPACT IN TERMS OF HOW YOU MODEL THE RETURNS. ANNA: SO THAT WAS ONE OF THE AREAS THAT THE MARKET FOCUSED ON THE DOWNSIDE AND THOSE COMMENTS

1:05:23 FROM THE CEO AROUND CASINOS. ALTHOUGH USED – HE SAID OTHER THINGS. AND CHINA STORY AROUND CXMT IN THE PAST 4 HOURS ALSO IN NEGATIVE. AND THEN META SEEMINGLY TAKEN QUITE POSITIVELY UNVEILING THEIR MUSE ONE TO AI MODEL WHICH THEY SAY TAKES THEM RIGHT UP TO THE FRONTIER. WHAT DID YOU MAKE OF THE TRADE AROUND THAT? >> VERY MUCH SO, YES. I THINK THAT WAS A VERY POSITIVE DEVELOPMENT. WE KNOW THAT META HAS BEEN SPENDING A LOT OF MONEY IN THIS SPACE. I THINK 50 BILLION OF CAPEX. AND THEY DESCRIBE IT AS PENGUIN ON PAR WITH ANTHROPIC AND OPENAI IN TERMS OF THEIR

1:05:55 FRONTIER MODELS. OBVIOUSLY META HAS A HUGE CONSUMER ECOSYSTEM WITH FACEBOOK, WHATSAPP AND INSTAGRAM AND IF THEY CAN GET THESE MODELS CORRECT, THEY CAN DISTRIBUTE IT AT SCALE AND MONEY ADVERTISE IT VERY QUICKLY – MONETIZE IT VERY QUICKLY AND WHY YOU SAW THE POP IN THE STOCK YESTERDAY. GUY: OK. INTERESTING 24 HOURS. JOINING US WITH THE TECH TRADE. AND LET’S TALK ABOUT WHAT’S HAPPENING WITH LVMH THIS MORNING AND THE LUXURY TRADE. A LITTLE BIT OF A REVERSAL BEGINNING TO HAPPEN WITH THAT STOCK. WHICH IS WORTH PAYING ATTENTION TO. ADR’S GOT DINGED YESTERDAY AFTER THE NUMBERS CAME OUT. THEN WE HAVE TO PRICE IT IN FIRST THING HERE IN EUROPE.

1:06:29 WE ARE NOW NEGATIVE ON LVMH. THIS AFTER THE LUXURY GOODS MAKER’S BIGGEST DIVISION SLUMPED AS A WORSENING ECONOMIC CONDITION AND A CONSUMER BACKLASH IN CHINA HIT ITS KEY LOUIS VUITTON BRAND. WE ARE JOINED BY LUXURY REPORTER ANGELINA WESGRAY. WE EXPECTED THE NUMBERS TO BE TOUGH AND HOW TOUGH AND HARD WAS THE HIT IN CHINA? IS THAT WHAT STOOD OUT? >> YES, HI, GUY. ABSOLUTELY. THAT’S WHAT STOOD OUT. THE RESULTS FOR THE KID DIVISION, THE FASHION AND

1:07:01 LEATHER GOODS UNIT, THE SALES WERE DOWN 5% IN THE THIRD QUARTER. WE WERE EXPECTING SALES TO BE DOWN ABOUT 1.6%. SO THAT’S THE DIVISION THAT INCLUDES LOUIS VUITTON AND CHRISTIAN AND LOUIS VUITTON WHAT HAPPENED DURING THE QUARTER THAT NOT ONLY THERE WAS A LOWER – LOWER CONSUMPTION FOR LUXURY GOODS IN CHINA. BUT LOUIS VUITTON ALSO SUFFERED FROM A BACKLASH FROM A CONSUMER BACKLASH AFTER LOUIS VUITTON WON A TRADEMARK LAWSUIT AGAINST

1:07:35 MOLLY T WHICH IS A LOCAL CHAIN THAT SELLS TEA. AND THEY WONDER – THEIR IP LAWSUIT BUT A CONSUMER BACKLASH BECAUSE IT WAS SEEN – I GUESS A – CONSUMERS DIDN’T LIKE THE FACT THAT SUCH A BIG COMPANY LIKE LOUIS VUITTON WENT OUT AGAINST A RELATIVELY SMALL CHINESE LOCAL TEA COMPANY. SO THAT – THAT IS WHAT STOOD OUT. AND WHAT WAS INTERESTING AS WELL IS THAT THE CFO, IT WAS PRETTY DOWNBEAT DURING THE CALL

1:08:06 AND SAID THE RECOVERY HAS BEEN DELAYED. AND SHE ALSO WARNED THAT EVEN THOUGH LVMH WILL CONTROL COSTS AND WILL SEEK TO WORK ON EFFICIENCIES, COST CUTTING ALONE WILL NOT BRING SALES. TOM: WHAT IS THAT BROADER WEAKNESS OR THE FACT THAT THE TURNAROUND IN THE CHINESE MARKET HAS BEEN DELAYED IS THE WAY THAT SHE CHARACTERIZED IT. WHAT DOES THAT MEAN FOR THE BROADER EUROPEAN LUXURY SECTOR? >> YES. ABSOLUTELY. I THINK THERE HAD BEEN MANY

1:08:37 HOPES IN THE PAST THAT THE RECOVERY WAS AROUND THE CORNER IN CHINA AND SO FAR, WE HAVEN’T REALLY SEEN THAT. THERE’S A DIFFERENT FACTOR FOR THAT. THERE WAS A PROPERTY CRISIS. THERE WAS ALSO YOUTH UNEMPLOYMENT. OVER THE SUMMER. AUTHORITIES STARTED TO – DECIDED TO TAX OFFSHORE REVENUES. SO THAT ACTUALLY HIT THE WEALTHIEST. AND OF COURSE, THE FEARS THAT THIS IS GOING TO AFFECT THE REST OF THE SECTOR.

1:09:09 SO CONGLOMERATES LIKE – WHICH OWNS GUICEI AND ARAMEZ AND ARAMEZ IS ONE OF THE MOST EXCLUSIVE BRANDS. BUS IT’S – ITS SHARES HAVE WELL HAVE SLUMPED BY 40% THIS YEAR ON PAR WITH LVMH. SO THE SECTOR HAS REALLY, REALLY RESET THIS YEAR. AND WE’RE GOING TO – WE’RE GOING TO GET MORE DETAILS ON OCTOBER 22. FOR THE RESULTS OF – ANNA: ANGELINA, THANK YOU VERY MUCH.

1:09:40 YEAH. NOTED. IN PARIS WITH THE LATEST ON THE LUXURY SECTOR. YEAH. IT’S INTERESTING HOW LVMH, TO YOUR POINT, GUY, HAS ROLLED OVER A BIT NOW, HASN’T IT? DOWN BY 1% AND THE REST OF THE LUXURY SECTOR A LITTLE BIT WEAKER IN WHAT IS A BROADLY STRONG SESSION FOR EUROPE. GUY: IT WAS INTERESTING. WHY DID THAT HAPPEN AT THE BEGINNING OF TRADE? THE ADR’S WERE DOWN AND DOES MAKE YOU WONDER IF SOMEBODY CAME IN OR THE EUROPEAN OPEN PEOPLE ARE BUYING EUROPE AS A BLOCK TRADE TO DEFEND THEMSELVES AGAINST THE AI TRADE THAT’S ROLLING OVER. LVMH BENEFITS FROM THAT AND THEN YOU GET MAYBE SINGLE STOCK

1:10:12 SELLING AND SECTOR SELLING. AND MAYBE KICKS IN AFTER THAT. TOM: ON THE DOWNSIDE IS THE TECH STORY AND THAT IS – GUY: YEAH. TOM: THAT IS STILL THE CASE. THAT HAS NOT CHANGED. AND DOWN 1.7%. IN THE CONTEXT AS ANNA WAS SAYING OF A BROADLY ROBUST PICTURE FOR EUROPEAN STOCKS, JUST FOUR SECTORS IN NEGATIVE TERRITORY. AND YOU GOT CHEMICALS, FOOD AND BEVERAGE, REAL ESTATE ALL PERFORMING QUITE WELL. ANNA: WE’VE HAD THE E SEASON SORT OF QUIETLY CREEPING IN THIS MORNING IN THE SHAPE OF – BOTH GOING DOWN WITH MARKETS AND INTERESTING FOR EUROPE AND ITS EARNINGS STORY. COMING UP, THE IMF FORECASTS A

1:10:48 PICKUP IN GLOBAL GROWTH BUT IS THE WORLD ECONOMY REACHING ITS RESILIENCE LIMITS? WE WILL DISCUSS THE OUTLOOK FOR THE EUROPEAN ECONOMY. THIS IS BLOOMBERG. >> WELCOME BACK, HAPPY TUESDAY. 30 MINUTES INTO THE SESSION

1:11:21 TODAY, STOXX 600, TEAMS OF 3/10 OF 1%. IS THERE A SAFE HAVEN MOVE HERE INTO EUROPEAN EQUITIES? DESPITE THE SOFTNESS WE ARE SEEING IN OIL PRICES TODAY, THE DAX IS GAINING JUST TO TENS OF 1%. THE NASDAQ FUTURES AS WELL COOLER BY ABOUT A 10TH OF 1% ON THE CONTINUING CONCERNS ABOUT THE CHIP SELLOFF. GUY:

1:11:54 WHAT IS REALLY INTERESTING HERE IS TO GET THAT LIFT YOU’RE TALKING ABOUT IN EUROPEAN STOCKS YOU NEED 456 OF THE STOXX 600 TO GO HIGHER. ONLY 130 ARE DOWN THIS MORNING THAT THEY ARE BIG STOCKS AND THEY ARE HAVING A BIG GRAVITATIONAL POINTS IMPACT ON THE DOWNSIDE. WE ARE FADING OF THAT RECENTLY ELEVATED LEVEL. LVMH DID HAVE SOME GOOD POINTS. ONE OF THE AREAS THAT WAS GOOD WITH WINE AND SPIRITS.

1:12:26 BEGINNING TO SEE SOME STABILITY. PERNOD-RICARD, A BENEFICIARY OF THAT. WHITBREAD, THE MARKET LIKE THAT. GIVA UDAU, UP BY 6.6% ON THE BACK OF THOSE NUMBERS BUT THERE ARE HEAVYWEIGHTS THAT ARE HITTING THIS MORNING. IT’S TAKE A LOOK AT SOME OF THE

1:12:59 CHIP STOCKS AND HOW THEY ARE BEING IMPACT BY THE SELLOFF WE ARE SEEING IN THIS SPACE. ANSON MEL OF ITS NUMBERS TOMORROW DOWN BY 3.2%. WHEN WE FIRST CAME INTO THE MARKET OPEN THIS MORNING BE EXPECTED LVMH TO SOFTEN UP. THAT SOFTNESS IS NOW COMING IN AND WE ARE DOWN BY 1.5% ON LVMH. ANNA: LET’S GET AN UPDATE ON SOME OF THE OTHER STORIES WE ARE COVERING THIS MORNING. THE BROADCOM CEO O – THIS OUT WITH A FRESH WARNING ABOUT THE

1:13:30 FLOOD OF MONEY INTO AI. HE SAYS SOME INVESTORS HAVE NO CLUE WHAT THEY ARE BETTING ON, COMPARING IT TO GAMBLERS AT A CASINO. HE ALSO CRITICIZED BUSINESSES FOR POTENTIALLY WASTING MONEY ON AI INITIATIVE AND QUESTIONED THE LONGER-TERM ECONOMICS OF MONEY-LOSING AI LABS. SOUTH KOREA HAS INTERCEPTED MORE BALLISTIC MISSILES LAUNCHED BY YEMEN’S HOUTHIS, A SIGN THE CONFLICT IS FAR FROM SUBSIDING. THE U.S.

1:14:02 IS FACING INCREASED EFFORTS TO – TRUMP SAID OF THE WEEK AND HE IS CONSIDERING JOINING THE FIGHT. AND FRENCH HIGH SCHOOL STUDENTS ARE SAID TO EXTEND THEIR MOVEMENT INTO A THIRD WEEK. THE STUDENTS ARE PROTESTING AGAINST ISSUES INCLUDING UNDERSTAFFING AND OVERCROWDING AND PUSHING FOR MORE FUNDING DESPITE EMERGENCY MEASURES AMOUNT LAST WEEK TO ADDRESS SOME OF THEIR CONCERNS. TOM: LET’S TIE THE PROTESTS TO THE ECONOMY. THE IMF WARNING THAT THE WORLD ECONOMY IS NEARING THE LIMIT OF ITS RESILIENCE AT THE ENERGY SQUEEZE AND FINANCIAL RISKS

1:14:36 BUILD. WITHIN EUROPE, THE U.K. AT GERMANY. A MODEST GROWTH UPGRADE TOOK A HIT WITH THE FRENCH ECONOMY SAID TO EXPAND ONLY 0.4% THIS YEAR., GOOD MORNING. DID THAT ALIGN WITH YOUR VIEWS, OR ARE YOU MORE BULLISH ON FRANCE? >> AND I WOULD LOOK AT THE REVISIONS, RECENTLY REDONE SOMETHING SIMILAR WHERE HE TOOK DOWN OUR EXPECTATIONS FOR FRANCE. THAT LARGELY REFLECTED A SOMEWHAT WEAKER START TO THE

1:15:08 YEAR IN TERMS OF ACTIVITY, BUT ALSO TAKING INTO CONSIDERATION THE LIKELY UNCERTAINTY THAT WILL LAST UNTIL THE END OF THIS YEAR, EARLY NEXT YEAR. WHEN IT COMES TO GERMANY, WE DID INDEED UPGRADE OUR FORECAST BECAUSE WE ARE SEEING THE ECONOMY HOLDING UP RELATIVELY WELL. >> WHAT ASSUMPTIONS ARE YOU MAKING TO UPGRADE THE U.K. AND GERMANY? >> THE UPGRADES SO FAR HAVE BEEN LARGELY BACKWARD-LOOKING ESPECIALLY WHEN IT COMES TO THE U.K..

1:15:39 WE’VE SEEN GDP SURPRISING TO THE UPSIDE BUT IN THE FIRST AND SECOND QUARTER, THE INCOMING DATA FOR THE THIRD QUARTER ALSO SUGGESTING ANOTHER STRONG QUARTER OF GROWTH. ALSO WE ARE NOW STARTING TO SEE SIGNS OF AI INVESTMENT CYCLE SPILLING OVER INTO THE U.K., ALSO SUPPORTING ACTIVITY. HOWEVER, WE DO EXPECT SOME SLOW INTO FOURTH AND ALSO FIRST QUARTER OF NEXT YEAR, GIVEN THAT ENERGY SHOT IS YET TO FULLY PASS THROUGH IN THE U.K. WE KNOW ENERGY BILLS ARE SET TO

1:16:11 RISE IN OCTOBER AND EVEN MORE SO AT THE START OF NEXT YOUR. GUY: TALKING ABOUT THE IDEA THIS IS STRONGER GROWTH THAT IS A REASON TO PUSH THROUGH. IT IS THIS LABOR MARKET QUESTION THAT I THINK A LOT OF ECONOMISTS ARE STILL WONDERING ABOUT, WONDERING WHETHER OR NOT THERE IS ENOUGH SLACK IN THE ECONOMY FOR THE BANK OF ENGLAND TO HOLD OFF. IF STRONG GROWTH CONTINUES, THERAPY ENOUGH ARGUMENT TO SAY

1:16:41 WE ARE GOING TO SEE SECOND ROUND EFFECTS? HOW DO WE MAKE THAT DECISION? >> KIDS VERY TOUGH, AND AT THE MOMENT WE DON’T HAVE MANY INDICATIONS OR SURVEYS THAT WOULD POINT IN TERMS OF WHAT COMPANIES ARE EXPECTING IN TERMS OF WAGE GROWTH. TENTATIVELY SO FAR, WE HAVEN’T SEEN IF THE SPIKE IN WAGE EXPECTATION. DESPITE THIS RESILIENCE, THE STARTING POINT FOR THE ECONOMY IS QUITE DIFFERENT COMPARED TO 2022, SO WE ARE EXPECTING MUCH LESS. GUY: IT NORMALLY HAPPENS WITH A LAG. CONSUMERS SEE THE PRICES BUT

1:17:15 WAGE GROWTH HAS COME LATER. THESE PRICES CONTINUE TO PUSH HIGHER AT THE SUPERMARKET AND WE ARE EXPECTING GROCERY PRICES CONTINUE TO RISE, AT SOME POINT CONSUMERS ARE GOING TO GO ENOUGH IS ENOUGH. HOW FAR AWAKE AT THAT POINT BE AND WHAT SIGNALS WOULD YOU LOOK FOR? >> IT’S LARGELY GOING TO COME THROUGH VARIOUS INDICATORS AND WE THINK THAT THE CRUNCH TIME IS GOING TO BE LATE THIS YEAR, EARLY NEXT YEAR. THAT IS WHEN A LOT OF WAGE DROUGHTS START TAKING PLACE. COMPLETELY AGREE THAT ENOUGH

1:17:47 COULD BE ENOUGH FOR CONSUMERS, THEY COULD START ASKING FOR HIGHER WAGE INCREASES, BUT THEY ALSO NEED TO CONSIDER THE SORT OF TRADE-OFF BETWEEN ASKING FOR HIGHER WAGES VS. JOB SECURITY, AND WE ARE SEEING IN THE LABOR MARKET THAT THERE IS NOT MUCH HIRING HAPPENING, SO THAT MIGHT BE ONE CONSIDERATION THEY COULD KEEP CONSUMERS MORE CAREFUL. ON THE FLIPSIDE FROM A COMPANY PERSPECTIVE AS WELL, WHEN WE SPEAK TO OUR CONSUMER ANALYSTS, THEY ARE SAYING THAT COMPANIES ARE STILL WORRIED ABOUT RELATIVELY SOFT DEMAND, SO FROM

1:18:21 THAT PERSPECTIVE, COMPANIES MIGHT NOT HAVE VERY STRONG PRICING POWER, AND THEREFORE THEY WOULDN’T FEEL CONFIDENT THAT THEY COULD PASS ON THIS WAGE INCREASE, THEREFORE AGAIN PUSHING AGAINST THESE BIG WAGE ASKS. ANNA: THAT IS AN INTERESTING DYNAMIC TO WATCH. HEADING TOWARD A BUDGET IN THE U.K. COME IS THIS SOMETHING YOU’RE WATCHING AS AN EVENT THAT IS GOING TO LEAVE A MARK, OR NOT REALLY? WE’VE GOT A NEW PRIME MINISTER COMING WITH A LOT OF BIG

1:18:54 AMBITION. SO CAN THE BUDGET DO ANYTHING THAT CHANGES THE NARRATIVE ON THE U.K., DO YOU THINK? >> IN TERMS OF WATCHING THE BUDGET OVER THE SUMMER, THAT WAS ONE OF THE KEY CONCERNS AND SOMETHING THAT EVERYONE WAS REALLY SORT OF WATCHING FOR ANY CONCERNS THAT WE MIGHT GET SOME NEGATIVE SURPRISES. HOWEVER, SINCE THEN WHAT WE SEE IS THAT THE LANGUAGE FROM THE CHANCELLOR, FROM THE NEW PRIME MINISTER HAS BEEN SORT OF TRYING TO CONVINCE MARKETS ABOUT THE ADHERENCE TO FISCAL RULES, AND ESSENTIALLY SET

1:19:27 EXPECTATIONS THERE ARE NO BIG SURPRISES GOING INTO THE BUDGET. THE EXPECTATIONS ARE THAT MOST OF THE DIFFICULT DECISIONS IN TERMS OF SPENDING WILL LIKELY BE PUSHED INTO THE NEXT YEAR, SO AS THINGS CURRENTLY STAND, IT SEEMS THAT EXPECTATIONS OR ANY CONCERNS ABOUT THE BUDGET AS A RISK EVENT HAVE SUBSIDED SOME. ANNA: WEEKLY COVERAGE SEEMED TO SUGGESTED WANTED TO FLY BENEATH THE RADAR. AND TALKING OF BUDGETS TAKES US TO FRANCE. BUT EVEN EXPECT THERE? THE PROTESTS WE ARE SEEING ON

1:19:58 THE STREETS ARE NOT SPECIFICALLY ABOUT THE BUDGET THAT THEY ARE ABOUT EVERY REST FOR MORE MONEY FROM THAT BUDGET, AND THAT IS AROUND EDUCATION. HOW ARE YOU EXPECTING THESE DYNAMICS TO ADD UP AND FRANCE? EVEN IF WE GET THE BUDGET PASSED, WE STILL HAVE A LOT OF POLITICAL QUESTIONS. >> I THINK WE NEED TO DISTINGUISH BETWEEN SHORT-TERM DEVELOPMENTS WHICH ARE ABOUT PASSING NEXT YEAR’S BUDGET AND A BASELINE THAT WE COULD END UP IN THE SCENARIO WHERE PROBABLY THE PARLIAMENT IS GOING TO APPROVE IT ENOUGH TO INCREASE

1:20:30 THIS GOING INTO THE NEXT ELECTION AND NOT TO RAISE FURTHER CONCERNS. HOWEVER, WHEN IT COMES TO NEXT YEAR AND ELECTIONS, RISKS ARE NOT GOING AWAY. WE’VE HEARD THE FIRST INDICATIONS ABOUT WHAT WE COULD POTENTIALLY EXPECT FROM MARINE LE PEN. SHE SAID THAT SHE WANTS TO BRING DOWN SPENDING, HOWEVER WHEN WE LOOK AT THE PER LUMINARY DETAILS THAT SHE PROVIDED, WE THINK THAT THEY DON’T FULLY ADD UP.

1:21:01 SHE STILL WANTS TO PUSH AHEAD WITH THE EXPENSIVE CUT IN TERMS OF RETIREMENT AGE WHILE SHE WANTS AT THE SAME TIME TO DO UNPRECEDENTED SCALE IN TERMS OF SPENDING CUTS. WE THINK THAT IT COULD BE QUITE DIFFICULT TO PUSH ALL OF THIS THROUGH AND GET APPROVAL. ANNA: HOW MUCH OF THE WORK OF CENTRAL BANKS IS BEING DONE RIGHT NOW BY HIGHER YIELDS? >> OBVIOUSLY WHAT WE ARE SEEING IS BROAD FINANCIAL CONDITIONS TIGHTENING. THAT IS PLAYING A ROLE.

1:21:33 WE CAN SEE THAT FOR EXAMPLE IF WE COMPARE U.K. VERSUS EUROZONE GIVEN THE DIFFERENCES IN THE HOUSING MARKET AND MORTGAGE MARKET, WE ARE SEEING IT AS HAVING A MUCH MORE PRONOUNCED EFFECT IN THE U.K. THAN IN SOME LARGER EUROZONE COUNTRIES WHERE MORTGAGE RATES TEND TO BE FIXED FOR A LONGER TIME. TOM: SO THE DLE DOESN’T HAVE TO GO MAYBE AS MANY TIMES. >> OUR BASELINE IS THAT THEY STILL GO AHEAD AND HIKE TWICE. IT’S NOT REALLY BECAUSE OF THE DIFFERENCE IN THE STRUCTURE OF

1:22:05 THE HOUSING MARKET, IT IS MORE TAKING INTO ACCOUNT A DIFFERENCE IN STARTING POINTS BETWEEN THE BANK OF ENGLAND AND THE ECB, BUT IT IS THE CASE THAT WE’VE SEEN MORE AT LEAST WHEN IT COMES TO THE HOUSING MARKET, MORE TIGHTENING IN THE U.K. VS. THE EUROZONE. GUY: WHEN YOU LOOK AT 00 A BARREL, WHAT IS THE DIFFERENCE BETWEEN 00 A BARREL AND 10, 20? WHAT IS THE MARGINAL EFFECT OF GOING FROM $110 TO $120?

1:22:38 >> IN GENERAL, EVERY 10% INCREASE ADDS ABOUT 20 TO 25 BASIS POINTS ON HEADLINE INFLATION. SUBTRACT ABOUT 20 BASIS POINTS FROM GROWTH. GUY: IS THAT LINEAR? >> THAT IS THE KEY QUESTION THAT AT SOME POINT WE COULD POTENTIALLY SEE SOME NONLINEAR EFFECT. BUT THEN WHEN WE LOOK AT DEVELOPMENT OVER THE COURSE OF THIS YEAR, WE THINK IT IS QUITE APPARENT THE ECONOMY HAS BEEN QUITE RESILIENT. SO FAR WE WORK SORT OF LINEAR SENSITIVITIES, BUT WE ARE

1:23:10 CAUTIOUS THAT AT SOME POINT WE COULD REACH THE LEVEL OF OIL PRICES WHERE THINGS COULD GET NONLINEAR. ANNA: THANK YOU VERY MUCH. GUY: COMING UP, THE U.S. EARNINGS SEASON KICKS OFF WITH MAJOR BANKS REPORTING BETTER TODAY. WE ARE GOING TO BREAK DOWN WHAT YOU NEED TO KNOW AHEAD OF THOSE NUMBERS. 42 MINUTES PAST THE HOUR. THIS IS BLOOMBERG.

1:23:49 ANNA: WELCOME BACK. THIS IS “THE OPENING TRADE.” TUESDAY MORNING. AND THE EUROPEAN SESSION LOOKS NOT AS BAD AS IT COULD HAVE BEEN ESSENTIALLY. WE’RE WORRIED ABOUT TECH AND TECHNOLOGY STOCKS ARE WEAKER IN EUROPE. WE ARE CERTAINLY SEEING THAT DOWN BY 1.3% ON TECH STOCKS. BUT ELSE WHERE, MOST OF THE SECTORS ARE IN POSITIVE TERRITORY. WE GOT CHEMICALS, HEALTH CARE, UTILITIES DOING QUITE A LOT OF THE HEAVY LIFTING TO THE UPSIDE IN THE FACE OF THAT TECH WEAKNESS, TOM. TOM: LET’S LOOK AHEAD TO WHAT WE ARE WATCHING THROUGHOUT DAY. JUST A FEW MINUTES THE FED’S CHRIS WALLER WILL BE SPEAKING AT THE BLOOMBERG NEW ECONOMY

1:24:21 FORUM AND WE WILL BRING YOU THOSE LINES. AND DIP INTO THAT WHEN WE DO HEAR FROM HIM. AT 11:00 AM UK TIME THE OPEC OIL MARKET REPORT WILL COME OUT AND MORE DOE TAILS IN TERMS OF WHAT HE WAS HAPPENING ON THAT FRONT WITH A CONTINUED FOCUS ON THE GEOPOLITICAL STRAINS AND THE CONFLICT IN THE MIDDLE EAST. U.S. BANK EARNINGS, J.P. MORGAN, GOLDMAN SACHS, WELLS FARGO, A PREVIEW IN THE NEXT COUPLE OF MINUTES AND UK PRIME MINISTER ANDY BURNHAM WILL HOST BUSINESS LEADERS AS THEY TRY TO ASSUAGE CONCERNS AHEAD OF THE BUDGET ON OCTOBER 28. AND AN APPLE EVENT.

1:24:54 NEW HOME DEVICES ARE EXPECTED TO BE UNVEILED AT THAT EVENT. LET’S FOCUS ON THOSE U.S. BANK EARNINGS. WALL STREET’S LARGEST BANKS EXPECTED TO UNVEIL A QUARTERLY STOCK TRADING HAUL OF NEARLY 9 BILLION. THIS IS ACCORDING TO ANALYST ESTIMATES, COMPILED BY BLOOMBERG. LET’S BRING IN TOM METCALF, BLOOMBERG’S FINANCING MANAGING EDITOR FOR NOW. TOM, WHAT – YOU’RE CHANGING ROLES I SHOULD EXPLAIN THAT. TO THE AUDIENCE. YOU’RE CHANGING ROLES. AFTER TODAY. WE’RE VERY LUCKY TO HAVE YOU TODAY BEFORE YOU SWITCH ROLES TO FOCUS ON WHAT’S HAPPENING

1:25:25 WITH U.S. BANK EARNINGS. >> YEP. TOM: YOU WILL BE FOCUSED ON TRADING AND THE CONSUMER AND WHAT’S – WHAT ARE THE LINES THAT YOU AND THE TEAM ARE GOING TO BE MOST FOCUSED ON? >> I THINK CERTAINLY THE STOCK TRADING. 9 BILLION AS YOU SAY THIS QUARTER. AND THEN ALSO ON THE OTHER SIDE OF THE COIN, FIXED INCOME WHICH IS ALSO EXPECTED TO BRING IN ABOUT 9 BILLION OF REVENUE QUITE HELPFULLY. YOU KNOW, I THINK – AND ONE OF THESE QUARTERS WHERE YOU’RE GOING TO LOOK AT EVERY BANK INDIVIDUALLY. AND SORT OF SOUNDINGS WE’RE GETTING IS THERE IS NOT GOING TO BE ONE BARRIER STORY OR ONE

1:25:58 DOWN ARROW AND YOU MIGHT HAVE GOLDMAN. VERY MARKETS LED AND ABLE TO RIDE THESE VERY VOLATILE MARKETS VERY PROFITABLY. I EXPECT ALMOST EVERY TIME THESE EARNINGS COME OUT, YOU’LL GET A SLIGHT DIFFERENT PICTURE OF THE U.S. ECONOMY AND THE CAPITAL MARKETS. BUT THE GREAT THING IS THEY’RE SO CONDENSED, FOUR BANKS TOMORROW AND THEN MORGAN STANLEY, BANK OF AMERICA, ON WEDNESDAY OF THE SO REALLY BY THURSDAY, WE WILL HAVE SEEN ALL THE BIGGEST U.S. BANKS AND WE’LL JUST AT LEAST GOT THAT SNAPSHOT OF HOW THE QUARTER HAS GONE. ANNA: IT’S INTERESTING, THAT THE SHARE PRICE PERFORMANCE FOR THESE BANKS HAS BEEN QUITE VARIED. GOING INTO THESE NUMBERS. SO GOLDMAN SACHS, MORGAN

1:26:30 STANLEY, BEEN PULLING BACK QUITE A BIT FROM THE SUMMER’S HIGHS. MAYBE AROUND THAT TRADING CONVERSATION THAT WAS SORT OF DOMINANT A FEW MONTHS AGO. OTHER BANKS MAY BE MORE RESILIENT OR AT LEAST NOT DROPPING QUITE SO MUCH. THAT – THAT CAN HAVE APPEAR AN IMPACT ON HOW THESE NUMBERS LAND IN THE MARKETS. >> ABSOLUTELY. AND LOOK, SORT OF BAR THEY HAVE TO CLEAR IS INCREDIBLY HIGH. QUARTER AFTER QUARTER THEY’VE BEEN – QUITE INSANE NUMBERS IN SOME WAYS. AND LOOK, THOSE SHARE PRICES – AND ALMOST A PROXY FOR THE AI BOOM, RIGHT? AND THESE – THESE BANKS ARE

1:27:01 THE ONES TO HAVE BENEFITED FROM THE SPACEX IPO, ALL THESE

1:28:35 CREDIT CARD RATES ARE GOING UP. RATES GOING UP ON AUTO LOANS AND MORTGAGES ABOVE 7%. IS THERE A CREDIT STRESS STORY THAT WE SHOULD BE THINKING ABOUT AS WELL OR ARE WE STILL A WAYS FROM THAT? >> WELL, MAKE IT ALL ABOUT ME. AND CHANGING ROLES. THE LAST SIX YEARS, I’VE OPINION LOOKING FOR CREDIT STRESS EVERY SINGLE BANK EARNINGS. AND FOR MY LAST ONE, MAYBE WE’LL GET LUCKY AND I’LL SEE SOME PROPER THINGS. QUITE EXTRAORDINARY. EVERY TIME THE BIG BANKS, NOT – TRADITIONALLY BANK RICH – YOU JUST ARE NOT SEEING THAT IN THE NUMBERS.

1:29:08 NOW, RECENTLY IN THE U.S. ECONOMY, YOU ARE SEEING U.S. CONSUMERS REALLY – HOW MUCH FURTHER CAN THEY SPEND WHICH IS ONE OF THE BIG SORT OF PILLARS OF THIS BOOM. BUT BROADLY SPEAKING, THERE’S NO SORT OF EARLY SIGNS OR REPORTING BEFORE HAND GOING – A BIG REVISION HERE. AND THE MOST FUN ONES ARE THE UNEXPECTED ONES. SO THERE COULD BE – YOU START TO SEE THOSE BIG PROVISIONS MOVING THROUGH. AND I WOULD BE SURPRISED IF IT WAS THIS QUARTER. ANNA: WHAT’S YOUR ADVICE? DON’T UNDERESTIMATE THE U.S. CONSUMER? >> IGNORE EVERYTHING I SAY. GUY: AND WHAT – AND A – AND WE’LL

1:29:41 WATCH COSTS AS WELL. TOM, GREAT STUFF. CONGRATULATIONS. WE LOOK FORWARD TO NOT SEEING YOU IN THE NEW WORLD. TOM METCALF. LET’S TALK ABOUT WHAT WE’RE SEEING IN THE MARKETS THIS MORNING. IT’S REALLY INTERESTING. ASIA GOT DINGED OVERNIGHT. ON THE TECH FRONT. U.S. FUTURES ARE LOOKING FAIRLY NEGATIVE. BOND MARKETS ALSO OF INTEREST AS WELL. AND JOINING US FROM OUR MLIV TEAM. AND AGAIN, WE ASKED THIS QUESTION SO MANY TIMES. IS THERE SOMETHING IN WHAT WE JUST HEARD FROM THE BROADCOM CEO THAT IS GOING TO CRACK THESE MARKETS? U.S. EQUITY MARKETS GIBB TO REACH

1:30:12 THE POINT AT WHICH THEY ARE GOING TO STRUGGLE TO MAKE FURTHER HEAD ROOM? >> WELL, I THINK THAT THE – THEY ARE GOING TO BE BUOYANT. I THINK VALUATIONS ARE LOFTY. EVERYONE KNOWS ABOUT THE AI BUBBLE AND THE LOFTY VALUATION STRETCHES AND ALL THAT. BUT I THINK THAT WHAT THE MARKETS ARE WAITING FOR IS A PIN TO PRICK THE BUBBLE AND THAT PIN IS ABSENT. AND I THINK THAT THE MARKETS ARE GOING TO BE EXTENDING THESE GAINS UNTIL SOMETHING IN THE ECONOMY SNAPS. AND I THINK THAT THAT IS GOING TO TAKE A KIND OF A SLOWDOWN,

1:30:43 REMARKABLE SLOWDOWN IN THE ECONOMY FOR THAT TO HAPPEN. AND WITHOUT THAT – INCREASE IN YIELDS FURTHER EVEN MORE THAN WHAT WE HAVE SEEN AT THE LONG END, PERHAPS THE 30-YEAR GOING TO 6%. THEN I THINK THAT THE MARKETS WILL START TO RUMBLE OF THE BUT NOT BEFORE THEN. ANNA: BEN, WHAT KIND OF ROLE DO YOU SEE BOND MARKETS PLAYING RIGHT NOW? WE WERE ASKING THE QUESTION EARLIER ON IN THE PROGRAM WHEN DO WE SEE A PIVOT IN BOND MARKET PSYCHEE WHERE THEY STOP

1:31:15 WORRYING ABOUT INFLATION AND INSTEAD INVESTORS THINK ABOUT THREATS TO GROWTH AND THAT PIVOTS US INTO BOND MARKETS. MAYBE. AND WE’RE SEEING BOND MARKETS ACT AS A BIT OF A HAVEN TODAY. AWAY FROM THE TECH TRADE. >> SO I THINK THAT THE – THE INFLECTION POINT FOR THE BOND MARKETS WILL COME FROM AGAIN, FROM THE GROWTH – FROM GROWTH CRUMBLING IN THE U.S. AT THE MOMENT, THERE IS NO EVIDENCE THAT IT’S HAPPENING. MIND YOU, WE ARE IN A – A STORY WHERE REAL GROWTH IN THE U.S. IS ABOVE TREND. WELL ABOVE TREND. AND EXPECTED TO CONTINUE LIKE

1:31:48 THAT FOR SOME TIME TO COME. AND IF – GOT THE SAME NARRATIVES, DEFICIT FUNDING, AI DEBT, CROWDING OUT THE MARKETS AND ALL THAT. SO I THINK THAT, YOU KNOW, THE PART OF LEAST RESISTANCE IS FOR YIELDS TO GRIND HIGHER FROM HERE, ALBEIT PERHAPS AT A SLOWER PACE. BUT IF YOU’RE – SIMULATIONS WHICH HAVE JUST BEEN DOING, I THINK THAT WHAT IT SHOWS THAT THERE IS CONSIDERABLE SCOPE FOR YIELDS TO RISE. EVEN THOUGH THE MIDTERM ANCHOR,

1:32:20 THE LONG-TERM ANCHOR IS MUCH LOWER. TOM: BEN, I THINK I’M RIGHT IN SAYING YOU’VE BEEN A LONG-TERM BEAR ON UK GILTS. DOES WHAT WE’VE HEARD FROM MEGAN GREENE WHO SITS OF COURSE ON THE MPC ADD TO THAT BEARISH VIEW? >> YES. ABSOLUTELY. I THINK THAT WHAT – WHAT HAS BEEN SET UP BY THE MARKETS AND WHAT THE MARKETS RECKON IS THAT THE BOE WILL HAVE TO GO RAISE RATES AT LEAST FOUR TIMES OVER THE NEXT ONE YEAR. I DON’T THINK I’M SKEPTICAL KNOWING THE BOE THAT THEY WILL RAISE RATES BY ANYTHING NEAR THAT MAGNITUDE. BUT I DO THINK THERE IS A CASE

1:32:55 FOR THE B THE BOE TO GO A COUPLE OF TIMES FROM HERE. COME NEXT YEAR, I THINK THAT THE INFLATION NUMBERS WILL BE MUCH HIGHER THAN WHAT WE HAVE BEEN WITNESS TO AND ALREADY THE BOE HAS MISSED THE INFLATION TARGET FOR THE BETTER PART OF FIVE YEARS NOW. SO I THINK THAT THE WRITING IS ON THE WALL. BOE WILL HAVE TO RAISE RATES. THERE IS NO WIGGLE ROOM FOR THEM NOT TO RAISE RATES. EVEN THOUGH IT’S A SUPPLY SHOCK AND ALL THAT. BUT I THINK WHAT MEGAN GREENE WAS POINTING TO IS THAT RATES ARE NOT RESTRICT HE HAVE ENOUGH AND THAT’S A SOBER WARNING FROM

1:33:25 A BOE – NOT RESTRICT YOU HAVE ENOUGH AND THAT’S A SOBER BORN FROM A BOE – ANNA: THANK YOU FOR HELPING US FOCUS ON THE MARKETS. EUROPEAN STOCKS ON THE FRONT FOOT LOOKING AHEAD TO U.S. FUTURES WHICH LOOK WEAKER AND NASDAQ FUTURES DO. WE’RE NOT LOSING SIGHT OF ALL DEVELOPMENTS IN NEW DEHLI. THE BLOOMBERG NEW ECONOMY FORUM IS TAKING PLACE AND UNDER WAY IN NEW DEHLI. FORMER U.S. COMMERCE SECRETARY GINO RECOMMENDEDO IS OPENING UP THE AFTERNOON SESSION CURRENTLY SPEAKING. FRANCINE LACQA WILL BE PRESENTING THE PULSE FROM THE FORUM WITH GUESTS INCLUDING THE

1:33:58 GLOBAL CHAIRMAN AND THE EXECUTIVE CHAIR OF THE INDIAN PHARMACEUTICAL COMPANY BIOCON SO LOTS TO COME FROM NEW DEHLI TODAY. GUY: WE WILL LOOK FORWARD TO GETTING A TAKE ON WHAT EXACTLY IS HAPPENING WITH THE FED. AND – AND QUITE KIND OF HAWKISH YESTERDAY I THOUGHT WAS INTERESTING. THE CPI NUMBER IS COMING. IS IT TOMORROW OR – TOM: CPI ON WEDNESDAY AND PPI ON THURSDAY. EUROPEAN STOCKS UP .6%. STRONG PERFORMANCE IN THE UK. FTSE UP BY .9%.

1:34:30 THE FUTURES PICTURE STATE SIDE NASDAQ LOWER BY .6%. STAY WITH US. PLENTY MORE COMING UP. THIS IS BLOOMBERG.