US Blacklists China Tech Giants, Used Rolex Prices Fall to 3-Yr Low | The Opening Trade 01/07

KRITI: WE ARE ONE HOUR AWAY FROM THE OPENING TRADE, A SURPRISE MOVE LESS THAN TWO WEEKS BEFORE TRUMP TAKES OFFICE. JUSTIN TRUDEAU SETS THE STAGE FOR A CONSERVATIVE APPROACH, INFLATION FIGURES ACROSS EUROPE, THE DATA. >> FUTURES POINTING LOLA, BIG RALLY, WILL WE HAVE A TECH IT? TRUMP DENIED PARING BACK PLANS, THE YEN CARRY EARLY A MOVES, FOREIGN MINISTER SAYING THERE WILL BE A PRO -- PRE-ACTION. AWAITING DATER BACKING ECB CAUTION. THE COUNT DOWN THE OPENING TRY YOU NEED STARTS NOW -- TRADE STARTS NOW. ♪ >> TUESDAY THE SEVENTH, GOOD MORNING, IT'S GUY.

A FEW LITTLE FACTS ABOUT THE AUTO SECTOR,CATL MAKES A FURRED -- A THIRD OF BATTERIES, BYD PLUS SEE ATL MAKE HALF THE BATTERIES. WE'VE GOT TENCENT BLACKLISTED WHAT I CAN'T WORK OUT IS IS THIS A GEOPOLITICAL, OR STOCKMARKET STORY? KRITI: STELLANTIS AND VOLKSWAGEN ARE AFFECTED, GETTING UH, UH, UH, A HIT. WILL SUPPLY GET REROUTED? GUY: IN THEORY SHOULD BE NO EFFECT, IN THEORY THAT'S THE WEIGHT SHOULD HAPPEN, IN THEORY THAT'S HOW IT SHOULD BE. IS THAT SOMETHING DONALD TRUMP WILL BE COMFORTABLE WITH? LIZZIE: NO SANCTIONS HERE, IT DISCOURAGES FIRMS BUT INTERESTING SIGNAL WHEN YOU TIDED WITH TRUE SAYING HE'S NOT PARING BACK HIS PLANS, KIND OF SHOWING THEIR THINKING ABOUT TARIFFS PLANS IN AHEAD AND ADVANCED OF COMING BACK WHEREAS MAYBE WE DIDN'T HAVE SUCH FEELINGS BEFORE. GUY: TARIFFS ARE A BIG ISSUE FOR CHINA. THIS IS COMING OUT OF THE BIDEN ADMINISTRATION, THIS IS BIDED AND YOU WONDER HOW MUCH FURTHER IT WILL GO.

KRITI: ANTI-CHINA IS THE ONLY THING DEMOCRATS AND REPUBLICANS AGREE ON, POLICY ITEMS FROM MEETING FRACTURING AND CHIPS AND THE LIKE HAS BIPARTISAN SUPPORT AND ITS WHY POINTING WAS MET WITH LOVE AND PASSION. GUY: YES CHIPS IS A MASSIVE SPOT, WE VIEW CHINA HAD A LEAD, THIS JUST AGAIN THIS REINFORCES HOW DOMINANT CHINER IS. CAN WE SEE THE U.S. INDUSTRY WITHOUT CHINA?

CHEMISTRY IS CONTROLLED BY CHINA. KRITI: IT COMES OUT OF -- OUT OF AFRICA AND SOUTH AMERICA AND CHIPS IS CRUCIAL, NVIDIA DROVE GAINS UNTIL LAST NIGHT. JENSEN LONG DID NOT RUFFLE FEATHERS. GUY: YOU -- DON -- MARKETS LOVED WHAT HE HAD TO SAY BROADENING OUT THE -- THE -- THE STORY, BUT -- BUT -- BUT, WHAT DID YOU SAY? I LOVE IT THAT'S THE WAY THE MARKET IS REACTING. LIZZY: WHEN YOU DELVE INTO WHAT HE AS BEEN SAYING WORKING ON SELF DRIVING THE TOYOTA SHARE HIS BACKUP BUT WE COME TO EXPECT SUCH HIGH BIG THINGS. GUY:

THIS IS THE -- THIS IS THE -- THE PUZZLE, HOW DO YOU MAKE THIS PAT OF THE NARRATIVE, HOW DO YOU BROADEN IT OUT? KRITI: NEED TALK SO MUCH ABOUT CHIPMAKERS, I WANT TO BRING YOU THIS CHART THAT YOU SEE ON YOUR -- ON YOUR SCREEN SHOWING NASDAQ TED CORRELATION CAN IF YOU LOOK CLOSELY YOU SAW BIG BIG CORRELATION, CHIPMAKERS TRADING ON THE BIDEN GRANTS, THE TECH PERFORMANCE IS GETTING DARROW. SOMEONE CALL THAT A BIDEN ON. GUY: IS -- IS -- IS IT THE NVIDIA UNWIND? IF THAT DOES NOT DELIVER THAN THERE IS A PROBLEM, OR -- NO, NO, NO, IT'S A DATER TOOL ON YOUR DESKTOP WITH AN NVIDIA CHIP AND YOU CAN RUN AI. LET'S TALK ABOUT CANADA, IT'S VERY. LIZZY: THE DOMINOES FALLING, OLAF SCHOLZ LOOKS SET TO LOSE SO LIBERALS WILL PICK A NEW LEADER, THE RULERS AND RIDERS, THE WOMAN WHO DELIVERED THE BLOW TO TRUDELL, THE BANK OF CANADA OR BRILLIANT UPHILL BATTLE FOR WHO HAVE A. GUY:

WHO CARES, WHO CARES? IT'S LIKE I THINK THERE WAS A NICE CARD TALKING ABOUT A PLANE HITTING THE GROUND AND JUSTIN TRUDEAU POPPING OUT, THIS IS -- THIS IS -- THIS IS -- THIS IS -- THIS IS ABOUT CONSERVATIVES TAKING OVER. LIZZY: MOVING DECK CHAIRS ON THE TITANIC. KRITI: IT -- IT -- IT -- IT -- THE SHIFT YOU HAVE SEEN IS ECONOMIC, THIS IS THE -- THIS IS THE FALLOUT OF INFLATION AND IMMIGRATION, YOU'VE SEEN A DECLINE IN I THINK THE HOUSING PIECE IS CRUCIAL, CANADA IS NO STRANGER TO HOUSING ISSUES, IT HAS ONE OF THE MOST DOVISH CENTRAL BANKS AND HAS NOT BEEN ABLE TO STEM THE ISSUES. GUY:

NOT A LOT OF HOUSING. ANYWAY FELIX FROM SOCGEN JOINING US, A FUND MANAGER TO TALK ABOUT MARKETS, A BIT OF DATER AS WELL. LIZZY: ITALY CPI, EURO AREA CPI AFTER THE GENTLEMAN PRINT AND THEN YOU'VE GOT THE THE JEWEL NUMBERS, UH. UH, JOB OPENINGS ABOUT TO STABILIZE AND SERVICES EXPECT TO EXPAND SO VIEWS THERE. GUY: WE WILL SEE, WE WILL SEE WHAT THE DATER SAYS. LIZZY:

SOFT DATER AND HARD DATER , CONFIDENCE TO GET THE PROOF. GUY: MONTHS AGO EVERY POINT WAS MANICALLY DISSECTED AND SLICED AND DICED, BIG DATA POINTS GO BY THE WAYSIDE NOW. KRITI: WE HAVE SEEN EVEN EVEN THE EURO MOVING ON GERMAN INFLATION, AT LEAST HIGHER TODAY. GUY: THE GAS STORY IS A BIG ONE PROVIDING INFLATIONARY POLLS. LET'S TALK ABOUT WHAT YOU NEED TO KNOW AND LET'S JUST BRING UP THE SALES NUMBERS, LET ME BRING YOU THE DETAILS, I THOUGHT THE DATA WAS WEAK OVERNIGHT SO THE U.K.

CONSUMER, FULL-YEAR BOOST, HAVE NOT SEEN COMMENTARY BUT THEY CONTINUE TO OUTPERFORM. NOT EXCITING. FRANCE FINANCE MINISTER IS LOOKING TO PRODUCE THE DEFICIT, TARGETING 510 FIVE AND A HALF PERCENT, ALSO BUDGET WILL CONTAIN TAX RISES AND SPENDING CUTS, LESS THAN THE LAST PROPOSALS, CUTS AFFECT 90 EMPLOYEES IN THE WORLD'S BIGGEST HEDGE FUND. BRIDGEWATER IS FOCUSED ON SETTING BIG GOALS AND DOING HOT THINGS. FEDERAL RESERVE VICE CHAIR

MICHAEL BAR PLANS TO STEP DOWN MORE THAN A YEAR BEFORE THE END OF HIS TERM BY PASSING A BATTLE, FORCING BANKS TO HOLD CAPITAL THE FED SAYS BORROWING TO SUSTAIN, THE ONLY AREA TRUMP COULD HAVE IMPACTED, INTERESTING DECIDED NOT TO. LIZZY: HE SAID HE WOULD STAY ON. KRITI: I WONDER HOW MARKETS TRADE? SOMEONE WHO HAS BEEN TOUGH NOW THAT HE IS GONE ANY HURDLES FALL THIS IS WHERE EUROPE HAS TO COMPETE AND SOMETHING NOT EVERYONE TRIED TO ADDRESS, THIS QUESTION OF DO YOU SEE SWISS CAPITAL REQUIREMENTS PULLED BACK ? GUY: THE SHAPE OF THE YIELD CURVE STEEPEN, LESS REGULATION MEANS BANKS CAN DO MORE, YIELDS DROPPING, LOOK AT THE U.K. 30 YEAR, THE STORY IS EXTREME. KRITI: COMING UP U.S. PRICES FALL TO THREE YEAR LOWS,

THE LATEST. MICROSOFT CEO TAPS AI INVESTMENTS, UP NEXT DONALD TRUMP'S PRESIDENCY DOMINATES THE MARKET, IF YOU HAVE QUESTIONS SEND THEM TO US ON YOUR TERMINAL. THIS IS BLOOMBERG. ♪ >> HAVING TROUBLE COMMUNICATING, IF THEY ARE TARGETED THAT HAS A DIFFERENT IMPLICATION, AND A LOT OF UNCERTAINTY. GUY:

THAT WAS BILL DUDLEY A BLU- UH-- BLOOMBERG ECONOMIST. TRADERS HAVING ABOUT BE READ, A WASHINGTON POST STORY HAD AN IMPACT, WE GOT THROUGH ONE OF FOUR, VALERIE IS HERE. VALERIE: REACTIONS ARE FOCUSED ON FX. A LOT OF THE MOVE TAKING APART EURO-DOLLAR ON THE BACK OF HEADLINES FLIRTING WITH ONE OF FOUR AND THERE IS SHORT POSITIONING AND OPTIONS VOLUMES SURGE, I THINK IT SHOWS WE'VE SEEN SOME SHORTS GET STOMPED OUT. 30 YEAR YIELDS HIT 14 MONTH HINES, JAPAN SEEING HIGHS NOT SEEN IN YEARS AND 30 YEAR YIELDS RISE HITTING HIGHS WE HAVE NOT SEEN SINCE 1998.

HEADROOM ERODED IN THE U.K. BY THE TREASURY MARKET, YIELDS RISE AND YEN WEAKNESS, ATTRACTING VERBAL INTERVENTION. GUY: WE WILL SEE WHAT FOLLOWS. HEAD OF MACRO AT LOMBARD JOINS US. EURO-DOLLAR ONE OF FOUR UNWOUND, TO WHAT EXTENT DOES EVERYONE HATE THEM? HOW MUCH OF THEIR IS THE POSSIBILITY THAT EUROPE IS UNDERAPPRECIATED? >> VERY LARGE, LACK OF PERCEPTION , RECOVERY ONGOING, YOU CAN SEE THAT, LOOK AT THE INDICATORS SHOWING MAJORITY OF IMPROVING DATA BUT IT'S JUST THE BEGINNING OF IT.

A LOT OF BAD NEWS, COVERING IS ONLY STARTING , IT PLACES YOU IN A SITUATION BUT REMEMBER EVERY FIRST QUARTER WE'VE SEEN EUROPE DOING EXPECTATIONS MASSIVELY EVERY Q1, THE CAT ONE IS THE NEW NASDAQ. [CROSSTALK] GUY: IS THE ECB BEING TOO CAUTIOUS? YOU GOT STRONG WAGE DEMAND, IS ECB KILLING IT OFF? FLORIAN: ONE OF THE TWO OR THREE MAIN GREECE SIX, HIGHER INFLATION SURPRISINGLY HIGHER, BASE EFFECT AND INFLATION PRESSURES, WE ARE SEEING 80% OF DATA PUSHING HIRE AND NOW IT IS 40 PERCENT SO WE DON'T THINK IT'S A LONG-LASTING TREND AND WE CAN PUT ON THE SIDE ONE OF THEM. KRITI:: WHAT IS THAT DO IN TERMS OF EUROPE? DOES IT SET UP VULNERABILITY? EURO VERSUS GAS PRICES FOR EXAMPLE? FLORIAN: IT DEPENDS ON GROWTH, STRONGER GROWTH CAN BE BAD. ALL OF THAT IS WEIGHING ON THE EUROZONE GROWTH, IT WOULD BE A CATALYST. KRITI: IT WAYS ON MARGINS. MARGIN PRESSURE DOESN'T THAT KILL A CUSHION? FLORIAN: ONLY WAY YOU CAN GAIN IS THROUGH ECONOMY FUELED BY ECB CUTS ESSENTIAL, YOU WILL KILL THE FIRST OFFSPRING OF THE RECOVERY AND MOVE BACK TO THE TECH FIVE NAMES. LIZZY:

WE ARE TALKING ABOUT RACHEL REEVES, GLOOMY SURVEYS. MANY THINGS POINT TO TAX HIKES, SHOULD WE WORRY ABOUT THE IMPACT? FLORIAN: WE HAVE PROFITED SO MUCH, SHELTERING INVESTORS FROM POLICIES MEANING SLOWLY INVESTMENT SHOULD WAY ON PROFITS AND WE NEED TO MOVE AWAY. THE COUNTRIES IMPROVING -- NOT IMPROVING ARE BEING PUNISHED AND YOU GET JAPAN IN BETTER POSITION. LIZZY: HEAD OF MACRO AT LOMBARDO, WE THANK YOU. JUSTIN TRUDEAU RESIGNS AFTER NINE YEARS AS PRIME MINISTER, WHO WILL REPLACE HIM IS NEXT? >> I'M DRIVEN BY MY LOVE FOR CANADA TO SERVE CANADIANS AND CANADIANS DESERVE A REAL CHOICE AND IT IS OBVIOUS TO ME WITH THE BATTLES THAT I CANNOT BE THE ONE IN THE NEXT ELECTION.

KRITI:: JUSTIN TRUDEAU ANNOUNCING RESIGNATION, SETTING THE STAGE FOR A SHIFT FROM PROGRESSIVE TO A CONSERVATIVE APPROACH. LET'S BRING IN JILL, AT THE CORE THIS FEELS LIKE ECONOMIC STORY. JILL YES, WHAT YOU ARE SEEING IS NOT DISSIMILAR TO WHAT WE SAW ALL OVER THE WORLD, DISSATISFACTION AND INFLATION TOPPLED OR WEEKEND LEADERS REGARDLESS OF WHICH PARTY, NOT ENTIRELY DIFFERENT IN CANADA. THE COUNTRY WORKED TO GET INFLATION UNDER CONTROL. SEVERE DISCONTENT, PEOPLE INJURED DOES PARTY PUSHING HIM -- IN JUSTIN TRUDEAU'S PARTY PUSHING HIM TO RESIDE. AGAINST THE BACKDROP OF DONALD TRUMP IN THE U.S..

LIZZY: SUCH AN UPHILL BATTLE FOR THOSE LOOKING TO REPLACE HIM, WHAT THEY STAND CHANCE? JILL: I DON'T KNOW BUT AT LEAST IN THE ELECTION THERE ARE NAMES THAT SEEM LIKELY TO CONTENT, THE FINANCE MINISTER IS A CANDIDATE AND WE'VE HEARD MARK CARNEY OF BOE AND THE CHAIRMAN STEP FORWARD IN A COUPLE OF OTHERS HAVE CONSERVATIVES FAVORED TO TAKE THE NEXT ELECTION SO PARTY LEADER FROM TRUDEAU WILL FACE A MASSIVE CHALLENGE. GUY: HI, IT'S GUY. NEVERTHELESS WHAT WILL HAPPEN TO CANADIANS UNDER A CONSERVATIVE GOVERNMENT? JILL: PROBABLY DISMANTLING OF SIGNATURE POLICY IS, PIERRE INDICATED HE WANTS TO TAKE THE COUNTRY IN ANOTHER DIRECTION SO IT IS A COUNTRY TAKING ON CONSERVATIVE POLICIES, REALLY INTERESTING BECAUSE TRUDEAU PUSHED A PROGRESSIVE AGENDA SO A SWING DOES HAVE INTERESTING IMPLICATIONS PAIRED WITH TRUMP IT WILL MAKE FOR AN INTERESTING YEAR. GUY: THANKS FOR THE UPDATE REALLY APPRECIATE IT, MARK CARNEY CHAIR OF BLOOMBERG'S BOARD OF DIRECTORS. WHILE WERE TALKING ABOUT POLITICS WE'VE GOT ECONOMIC NEWS, CPI CORE NUMBER LITTLE SOFT, THE SPIKE EMPHASIZES THE LEVEL OF THE MOVE. THE EURO HAS BEEN GAINING MOMENTUM AGAINST THE DOLLAR, A LITTLE BIT HIGHER THIS MORNING FOR THE CURRENCY. LIZZY:

SHARES IN TENCENT HAVE TUMBLED AFTER THEY WERE BLACKLISTED SAYING INCLUSION IS A MISTAKE BUT LET'S SPEAK TO THE GLOBAL HEAD OF EMERGING MARKETS AT SOCGEN. WE'VE SEEN IMPACT OF BLACKLISTING AND TRUMPS DENIAL OF A REPORT, I WONDER HOW ONE IS MEANT TO DEAL WITH THIS? GUEST: DIFFICULT QUESTION, I WOULD CHARACTERIZE THIS AS THE DARKNESS BEFORE THE DAWN, PUSHED OUT BY THE DICHOTOMY FROM THE SERVICES SECTOR VERSUS THE WORLD, VERSUS CHINA, INVESTORS AWAITING FOR THOSE TO COME AND THEY HAVE BEEN TRYING TO PLAY FOR TIME TO SEE THE TERRORISTS AND TRYING TO PRESERVE SOME POWDER SO SO MUCH POLICY UNCERTAINTY AND STRONG DOLLAR, CORRELATION BETWEEN X WHY AND FX EXPLAINS VARIATION, SO STRONG GETTING POUNDED ESSENTIALLY. LIZZY: TRUMP DENIED PAIRING TARIFF PLANS, DO YOU SEE THE TARIFF YIELD ABOVE 5% AND WHEN DO YET? GUEST: IT IS UNSUSTAINABLE BEYOND 5%, IT BECOMES RESTRICTIVE AND SOWS THE SEEDS OF RECESSION AND THEN REPEATS, EXPECTING RANGE BOUND BUT YES, TREND HIGHER BECAUSE OF FISCAL STRESS TO REALIZING ON BALANCE SHEETS. GUY: CHINESE BONDS UNDER PRESSURE, HOW MUCH LONGER CAN THEY TOLERATE THAT? GUEST: IT IS A QUESTION OF PACE AND THEY DON'T WANT FAST PACE SIGNALING SHORT INTEREST, THEY WANT IT TO BE GRADUAL. WE ARE TARGETING 7.5 SO SOME ROOM BUT FASTER PACE THAN PAST YEAR.

GUY: COULD IT GO FOR THE -- FURTHER? GUEST: NO, THEY DON'T WANT TO SHIFT THE IMPACT BECAUSE IT WILL UNDERMINE CONFIDENCE WHICH IS CRITICAL TO SUPPORT AND GOES AGAINST THE OBJECTIVE. WE DON'T THINK THEY WILL TRY TO LET IT MOVE. MORE ROUNDS BUYING STIMULUS MEASURES AND BOOSTING CONFIDENCE. KRITI:

WE LOOK TO CAPEX BUT NOW THAT WE KNOW THE DIRECTION I'M CURIOUS IF THERE IS A WAY TO PLAY THROUGH THE MARKET? ARE YOU SEEING IT OUTSIDE OF THE FX? GUEST: TOP RATES LEVELS WHERE THERE IS TWO-WAY FLOWS OUTSIDE BRAZIL. IN OTHER ASPECTS THERE IS A SCOPE GROUP TO COME DOWN AND INTERESTING TO NOTE POSITIONING HAS GONE BACK TO NEUTRAL AND MEXICO AND THEN DOWN, RELATIVELY FLAT, NOT HINDRANCE SO THERE IS SCOPE TO RALLY WANTS WE HAVE REPORT WITH THE TRUMP ADMINISTRATION. KRITI: IN TERMS OF THE CARRY TRADE DOES THIS CREATE A TAILWIND? I IMAGINE IT WOULD BE JUICY, IS THE RISK TOO HIGH? GUEST: AVERAGE CARRIE IS LESS THAN 1% SO YOU HAVE MEXICO BETWEEN FIVE AND 6%, IT IS IDIOSYNCRATIC SO TURKEY, EGYPT, VIETNAM, KENYA BUT IT IS SPORADIC AND FEW AND FAR BETWEEN , RISK REDUCTION UNTIL WE GET MORE CERTAINTY. KRITI:: I'M CURIOUS WE'VE SEEN A SHIFT, SHIFTS AWAY FROM STOCK AND BOND MARKET PLACE, IF WE SEE THE STOCK MARKET TO EXPENSIVE AND COMMODITIES TO CHALLENGING IS IT FAIR OR NOT TO SAY AND MAYBE NOT A SAFE PLACE BUT STILL MIGHT FIND INVESTORS ON THE IDEA THAT THERE IS NOT YIELD? GUEST: YES, FAIR ARGUMENT, IT WILL PUSH PEOPLE TO LOOK BUT I THINK BECAUSE VOLATILITY HAS RISEN THAT IS A FACTOR ERODING METRICS, QUITE IMPORTANT TO CHOOSE WHAT KIND OF CURRENCY. GUY: WHAT DO YOU NEED TO SEE FROM TRUMP? DOES THE PICTURE CHANGE? WHEN COULD IT CHANGE? GUEST: YEAH, WE ARE JUST DEALING WITH HEADLINES AND IF WE HAVE ANSWERS AROUND RENEGOTIATION AND WHAT WILL IT LOOK LIKE PLUS IMMIGRATION BORDER DEAL, WHAT IS THY RESPONSE TO TERRORISTS? WHAT MIGHT BE IMPOSED? IT IS SUCH A TIME-CONSUMING PROCESS AND WILL TAKE LOTS OF MONTHS. SO IT IS A MATTER OF CONFIDENCE. GUY:

QUIET A YEAR. GLOBAL HEAD OF EMERGING MARKETS RESEARCH TALKING ABOUT FX AND EM , CONSENSUS SEEMS TO BE THE STORY, WEAKNESS IS THE THEME. GUY: ARE THERE COLD SPRINGS THAT ARE GOING TO UNWIND? BIG EVENTS WHERE YOU GET SOME BIG MOVES AND CLARITY, WHERE WILL THEY EMERGE? KRITI:: I'M NOT SURE, FRENCH CPI DROPS, PRELIMINARY DATA RISING, NOT A TON OF MOVEMENT THOSE THE EXPECTATION WAS 2% DRIVEN BY ENERGY AND FOOD PRICES. GUY:'TIS THIS SHORT-TERM OR GATHERING MOMENTUM? I WAS LOOKING AT ENERGY PRICES UP 50%, NOT BACK TO THE PRICES WE WERE TALKING ABOUT BUT THERE HIGHER AND A PROBLEM NOT ONLY THIS WINTER BUT NEXT WINTER, CONTINUING TO CLIMB. ARE WE IN ANOTHER RESURGENCE AND WILL THAT TIE THE HANDS OF THE ECB? LIZZY: LET'S NOT BE CAUTIOUS. GUY: ECB IS QUITE DIVIDED.

NEXT WE WILL TALK WITH A U.K. RETAILER, FINGER-POINTING AT RACHEL REEVES, PLUS OTHER STOCKS AT THE OPEN COMING UP NEXT, THIS IS BLOOMBERG. GUY: EARLY LOOK AT FRENCH INFLATION A LITTLE HIGHER BUT WHAT SHOULD WE READ INTO THIS DATER? VEN RAM JOINING US TO WORK THROUGH THE NUMBERS, WHAT DO YOU MAKE OF THE DATER? VEN : FRENCH INFLATION SPEAKS TO THE ECB'S PROBLEM, INFLATION MODERATELY HIGHER BUT SET WITH UNCERTAINTY, GERMAN NUMBERS TICK TIRED SO THAT SPEAKS TO EURO AREA INFLATION, THIS MEANS MOST MISPRICED HAS TO BE TRAJECTORY, ECB WILL CUT RATES, THEY ARE BARKING UP THE WRONG TREE.

HOLY GRAIL OF CENTRAL BANK POLICYMAKING SUGGESTS THE NEAR TERM RATE IS BETWEEN 230 AND 250, TWO AND TO AND TO 50, SO MARKETS ARE SAYING ECB WILL TAKE ITS RATE WELL BELOW NEUTRAL, THAT IS NOT HAPPENING IF YOU LOOK AT INFLATION, WHAT THE MARKETS ARE FARING IS CUTTING RATES BELOW NEUTRAL WHICH IS NOT MY BASE CASE, ESPECIALLY IN A WORLD WHERE THE FED IS ON HOLD. UNLESS THE ECONOMY FALLS INTO AN ABYSS. LIZZY: THE THREAT FROM BOND VIGILANTES, GORDON BROWN IS AT LEVELS FROM 20 YEARS AGO BUT WHY FACTOR IN JUST TO RATE CUTS? VEN: JUST LOOK AT INFLATION, THE TWO-YEAR RATE SHOT UP, INFLATION WILL BE 3.6% SO THE QUESTION REALLY IS WHERE SHOULD

THE BENCHMARK BE? THE ROOM TO CUT WILLY-NILLY IS RAW THE LIMITED -- RATHER LIMITED AND AROUND 442 IS THE LEVEL THEY WILL FIND IT VERY HARD TO SHAKE OFF. KRITI: ALL RIGHT. WALKING US THROUGH SOME ECB AND BOE. LET'S GET OUR STOCKS TO WATCH WITH JOE EASTON. JOE: JUMP IN SALES WARNING OF IMPACT OF RISING COSTS HAS A NEGATIVE FOR THE SECTOR, MIXED YEAR LAST YEAR UNDERPERFORMING BUT THERE WERE BIG DROPS POTENTIALLY HAVING A READ ACROSS AND THEN AMSTERDAM REALLY FELL OFF A CLIFF AFTER SHAREHOLDER IN TENCENT WAS ADDED TO A PENTA GET LIST OF COUNTRIES OPERATING WITH THE CHINESE MILITARY BUT AS WE CAN SEE NOT A SINGLE CELL RATING, ONE OF THE FAVORITE TECH STOCKS AND SUBJECT SO IN FRANCE MISSED EXPECTATIONS, NOT DOING SO WELL, BOUNCING AROUND BUT IT LOOKS DISAPPOINTING. LIZZIE: THANK YOU, JOE EASTON AND WE ARE LOOKING AT FTSE FUTURES DOWN 4/10 OF 1%, EURO STOCKS TEACHERS DOWN AS WE HEAD TOWARD GUY: LET'S CHECK THE REAR VIEW MIRROR BEFORE WE GET STARTED WITH TUESDAY AND FIGURE OUT WHAT HAPPENED MONDAY.

RALLYING INTO THE CLOSE YESTERDAY, WHAT WE SAW WAS U.S. MARKETS ROLLING OVER. BUMPY SESSION YESTERDAY IN THE UNITED STATES. LOTS GOING ON IN TERMS OF THE POLITICAL NARRATIVE. YOU SAW THAT TOWARDS THE BACK END OF THE SESSION. THIS FADE THAT WE STILL HAVE

THE PRICE AND THIS MORNING TO EUROPE. >> WE'VE HAD DEUTSCHE BANK STRATEGISTS RAISING EUROPEAN STOCKS OVERWEIGHT. THE OPTIMISM OF FEEDING THROUGH TO FUTURES. EURO STOXX 50 FUTURES DOWN, EVEN MORE NEGATIVITY FOR FTSE FUTURES. DOWN. TALKING ABOUT NEXT NEGATIVE OUTLOOK. YOU'VE ALSO GOT A BIT OF THAT CHINA SENTIMENT FEEDING THROUGH BECAUSE OF BANKS BACK -- BLACKLISTING.

THE FUTURES DOWN TO THE FLAT SIDE. LOOKS LIKE THEY WILL GET OFF LIGHTLY. MCCREADY: WE DID HAVE THAT DROP IN THE FORECAST BUT THEY ARE RAISING GUIDANCE ON THE EXPECTATIONS OF THEIR CHRISTMAS SALES. THAT'S MIXED DYNAMICS THERE WHEN IT COMES TO ONE OF U.K.'S LARGEST RETAILERS. THIS IS ANOTHER ONE WE'VE GOT OUR ION.

LIZZIE MENTIONED WE HAVE THE CHINA FOCUS. THE U.S. BLACKLISTING, TENCENT AND SEE ATL WHEN IT COMES TO ALLEGED MILITARY TIES. THEY HAVE BOTH DENIED IT BUT THEY OWN A QUARTER OF THE SHARES. WE MAY SEE A READTHROUGH GIVEN THE MOVE WE SAW IN ASIA. CONTINUING THAT THEME,CATL GIVES BATTERIES TO A PERIOD OF EV MAKERS AROUND THE WORLD INCLUDING STELLANTIS AND VOLKSWAGEN. WE WILL SEE IF IT MOVES THE MARKETS WHEN IT COMES

TO THE OPENING MARKETS. GUY: THERE ARE A FEW IDIOSYNCRATIC STORIES. NEXT WILL BE MORE GOOD NEWS FOR THE EV SECTOR IN EUROPE COMING OUT OF THAT STORY. LET'S GET THE TRADE GOING, TIME FOR THE OPENING TRADE IN EUROPE.

LET'S LOOK AT NUMBERS AND FIGURE OUT WHAT'S HAPPENING. THE FTSE 100 OUT OF THE GATE, A LITTLE BIT SOFT, NOT BY MUCH. DOWN 5.1%. FAIRLY WELL-BALANCED, DIPPING A LITTLE BIT NOW. LET'S SEE WHAT WE GET ELSEWHERE. STOXX 600 IS FAIRLY FLAT. YOU'VE GOT POTENTIALLY THE SAME STORY COMING THROUGH ELSEWHERE. BUT IT COULD BE A LITTLE SOFTER

THIS MORNING. WATCH HOW IT OPENS, AS YOU SAY, THERE COULD BE NAMES LIKE STELLANTIS THAT COULD BE FIRMLY IN FOCUS THIS MORNING. I THINK THERE'S MUCH REALLY TO GET OUR ARMS AROUND. FTSE 100 UNDERPERFORMS A LITTLE BIT AGAIN, NOT BY MUCH. ELSEWHERE IN EUROPE, A FLATTISH OPEN, WHAT'S GOING ON BELOW THE SURFACE, LET'S FIND OUT. KRITI: WHEN YOU LOOK AT THE MOVEMENT,

TO THE DOWNSIDE, I START WITH THE NEGATIVITY COME EASY BASIC RESOURCES TAKING A LITTLE BIT OF A STEP DOWN RIGHT ALONGSIDE HEALTH CARE. AN INTERESTING MOVE. NOVO NORDISK WILL BE YOUR BIGGEST INDEX CONTRIBUTOR TO THE DOWNS'S. YOU ARE ALSO SEEING TECH ON THE BACK FOOT. ASML, WHICH ENJOYED THAT MAJOR

RALLY YESTERDAY PEERING SOME OF THOSE GAINS TODAY, RIO TINTO TAKING A BIGGER HIT. IT'S NOT ALL DOOM AND GLOOM FOR THE TECH SPACE. SCHNEIDER ELECTRIC CONTINUES ITS RALLY FROM YESTERDAY, WHICH WAS ONE OF THE MAJOR MOVERS. SAP HIGHER. I'M CURIOUS HOW MUCH MAY BE A

LITTLE BIT OF THE JENSEN LONG READTHROUGH. LIZZY: I'M TRYING TO SEE IF MY EYES ARE CORRECT. THE DECK SO UP 6.4 PERCENT. WE WERE MINING THE CHIP STOCKS. ASML DOWN .25 PERCENT. BREAK IT DOWN BY SECTOR. ABOUT HALF IN POSITIVE TERRITORY.

WE GOT RETAIL AT THE TOP THE BASKET, HIGHER .5%. HEALTH CARE DOWN .7%. GUY: NOVO NORDISK IS DOWN AGAIN. THE STOCK HAS BEEN UNDER PRESSURE. I WAS JUST GOING TO BRING UP A SHARE PRICE TO SEE WHAT IT'S BEEN DOING OVER THE LAST 30 DAYS. WE HAD THAT BIG DROP AT THE BACK END OF LAST YEAR THAT IS WORTH PAYING ATTENTION TO. BUT NOVO NORDISK, OVER THE LAST

30 DAYS THE STOCK IS DOWN BY 16% STILL. LAST FEW SESSIONS HAS MOVED LOWER AND LOWER. IT SEEMS TO BE A STOCK UNDER PRESSURE. IT HASN'T REALLY RECOVERED, HASN'T FILLED THE GAP THAT WE SAW BACK ON THE 20TH OF DECEMBER WHAT WE SAW THAT HUGE MOVE LOWER. IT JUST HASN'T BEEN ABLE TO FILL THE STORY. ONCE AGAIN, THE BOTTOM END OF

THE STOXX 600. KRITI: DOWN 40% FROM LAST YEAR'S HIGH. MAJOR MOVE FROM THE CORE SIX, SENSATIONAL SIX. WE MENTION THE TECH SPACE IS FRONT AND CENTER. SCHNEIDER ELECTRIC IS YOUR BIGGEST INDEX CONTRIBUTOR TO THE UPSIDE. THAT'S CONTINUING THE MOVE WE

SAW YESTERDAY. AT THE SAME TIME IT'S A DOUBLE TAILWIND FROM MAY BE THE COMMITMENT, WHAT WAS ON FRIDAY FOR MICROSOFT, $80 BILLION OF INVESTMENT AI SPACE BOOSTED THE TECH SPACE. POTENTIALLY A LITTLE BIT OF THE TAILWINDS TODAY, DESPITE JENSEN LONG NOT MAKING A TON OF WAVES IN HIS KEYNOTE SPEECH. WE ARE ALSO HEARING FROM THE MICROSOFT CEO WHO IS SPEAKING ON THE AI THEME IN BANGALORE, INDIA AT A VENUE THAT IS HOSTED AND MODERATED BY THE INDUSTRIAL SPACE OF -- INDUSTRIAL UNION, INDUSTRIAL ASSOCIATION IN THAT SPACE IN THE MAJOR TECH HUB. YOU CAN SEE THOSE LIVE SHOTS ON YOUR SCREEN. THIS REALLY BRINGS UP THE QUESTION OF JUST HOW MUCH OF THESE OVERSIZED VALUATIONS THAT WE TEND TO ASSOCIATE WITH THE TECH STORY MAY ACTUALLY BE JUSTIFIED. GUY: IT WILL BE INTERESTING TO WATCH

WHICH ONE OF THESE COMPANIES CAN MAKE IT WORK. I WROTE OVERNIGHT, THE NVIDIA EVENT WAS AT THE MANDALAY BAY ULTRA ARENA IN VEGAS. PEOPLE WORK QUEUING FOR HOURS TO GET IN. THIS SPEAKS TO THE IDEA THAT WE

HAVE REACHED ROCK STATUS FOR JEN-HSUN HUANG. OBVIOUSLY MICROSOFT IS IN THAT CAMP AS WELL. BUT IT'S FASCINATING TO SEE JUST A BUZZ AROUND WHAT'S HAPPENING ON THE AI STORY AND HOW DOMINANT IT IS. TRYING TO FIND OUT WITH THE SIGNAL AND THE NOISES HERE IS REALLY DIFFICULT. I THINK THAT'S GOING TO BE THE NARRATIVE THAT NEEDS TO DEVELOP THROUGHOUT 2025.

I STILL COME BACK TO THE IDEA JENSEN LONG WAS TALKING ABOUT THE BROADENING OUT. HE WAS TALKING ABOUT HOW YOU USE AI, HOW COMPANIES FACTOR IT IN TO THEIR THINKING. HE'S TALKING ABOUT BRINGING COMPUTERS FROM NVIDIA TO MARKET AND HOW YOU INCORPORATED. THIS IS THE STORY OF 2025. DOES THAT HOLD UP THE SCRUTINY WILL BE THE KEY QUESTION BECAUSE THE USE CASE HAS TO BE THERE. FOR MICROSOFT, FOR NVIDIA, THAT WILL BE A FASCINATING STORY FOR THIS YEAR. IT WILL HAVE A MASSIVE IMPACT

ON VALUATIONS. KRITI: LET'S BRING SOMEONE WHO DEALS WITH THOSE VALUATIONS. GLOBAL EQUITIES FUND MANAGER. YOU HAVE THE FUN JOB OF FIGURING OUT WHETHER THE VALUATIONS ARE TOO HIGH OR TOO LOW, JUICY ENOUGH TO GET YOUR INTERESTS, WHAT DO YOU THINK? >> THE VALUATIONS SEEM TO BE EXCESSIVE, RELATIVE TO HISTORY YOU PAY A SIGNIFICANT PREMIUM FOR THE STOCKS. I THINK ALL INVESTORS LOOK AT DIFFERENT STOCKS IN THE MARKET IN DIFFERENT OPPORTUNITIES. THE PROBLEM WE FACE TODAY IS WHERE ELSE DO WE GO. THE GROWTH RATES OF THESE

STOCKS ARE 4, 5 TIMES THE AVERAGE DOG IN THE MARKET. REALISTICALLY YOU WILL HAVE TO PAY A PREMIUM. I THINK WHEN YOU LOOK AT DIFFERENT MARKETS AROUND THE WORLD IN DIFFERENT GROWTH RATES IN DIFFERENT ECONOMIES WHETHER EUROPE OR THE U.S., THAT SEEMS TO BE THE TREND IN PLACE NOT FOR THE 12 MONTHS, BUT THE LAST 24 MONTHS, WHICH IS, TO PAY OR GET GROWTH YOU HAVE TO PAY A PREMIUM. KRITI: ONE OF MY FAVORITE QUOTES IS FROM DAN IVES WHO SAYS IF PEOPLE LOOKED AT VALUATION LIKE FACEBOOK IPO, THEY WOULD HAVE MISSED THE FACEBOOK RALLY. SO VALUATIONS MAY HOLD AS MUCH

WEIGHT. DO YOU THINK MISSING OUT ON THIS MASSIVE GROWTH REQUIRES EXECUTION? THAT GROWTH REQUIRES THIS MASSIVE SCALE OF WHAT YOU ARE SEEING IN INFRASTRUCTURE AND AI, ETC.. BUT THERE IS STILL A LOT TO BE LEFT TO DESIRE IN TERMS OF SEEING THE EXPECTATIONS. THIS IS GROWTH OVER THE NEXT 10 YEARS. WHAT DO YOU NEED TO BE MORE CONFIDENT THAT THAT GROWTH IS ACTUALLY GOING TO SHOW UP AS OPPOSED TO THE IDEA OF IT IN SOME SORT OF 1999 PARTY? >> THIS ISN'T LIKE 1999, WE SEE THE GROWTH ALREADY. SOME OF THESE STOCKS ARE GROWING 30%-50%.

THIS IS TO GUY'S POINT ABOUT BROADENING OUT, THAT'S WHAT WE SEE. WE ARE AT THE EARLY INNINGS OF THIS NEW TECHNOLOGY. THAT WILL BE THE PART OF THAT. I THINK THAT'S WHERE WE SEE THE GROWTH STORY GO BEYOND THE MANUFACTURERS, JUST A SOFTWARE COMPANIES TO OTHER PARTS OF THE ECONOMY. THAT'S THE HOPE STORY. LIZZY: WHAT DOES THAT LOOK LIKE. WE CALL -- CARE ALL ABOUT AGENTS. IS HE GOING TO BE A GAME CHANGER IS A JUST A TWEAK UNTIL WE WAIT FOR A KILLER APP TO MAKE THEM A GAME CHANGER? >> YOU HAVE TO BEAR IN MIND THERE'S A LOT OF VOLATILITY AROUND THIS. AND WE START WITH THE TREND IN 2023 WHERE THERE WAS A BIG EXPLOSION OF THE PERFORMANCE OF THE STOCKS, IT WAS VERY BROAD BASED, IT WAS ALMOST EVERY STOCK YOU COULD FIND. IT WAS A CASE OF CAN WE GET ON

THE AI ON THE TRAIN. LAST YEAR WAS A BIT OF A REALITY CHECK. QUITE A FEW OF THE NAMES HAD VERY POOR PERFORMANCES. ALL OF US ARE SITTING HERE GOING WE NEED TO BE MORE CAREFUL ABOUT HOW THIS IS GOING TO END. WE HAVE TO FOCUS ON THE WINNING

STOCKS AND THE ONES I HAVE THE BEST OPPORTUNITIES AS YOU RIGHTLY SAY, LOOK FOR OPPORTUNITIES. SECTORS OUTSIDE OF TECHNOLOGY, INDUSTRIALS, CONSUMER. ALL THE DIFFERENT SECTORS THAT WILL TAKE ADVANTAGE BUT AT THE MOMENT IT'S LIMITED TO SEE. LIZZY: PERHAPS HARSHLY AS I DESCRIBED JENSEN LONG'S SPEECH. YOU DON'T HOLD MUCH NVIDIA.

>> IT'S BEEN ONE OF OUR BIGGEST HOLDINGS. WE HAVE TRADED AROUND IT BECAUSE IT'S QUITE A VOLATILE STOCK. ANYONE WHO HELD THAT STOCK KNOWS IN 2020 LOST 50% OF YOUR VALUE. I THINK WE HAVE TO BE RELATIVELY CAREFUL ABOUT HOW WE EARN IT. IT'S NOW ONE OF OUR BIGGEST HOLDINGS AND I PROBABLY WILL BE. LIZZY: YOU DON'T LOVE IT LIKE MICROSOFT.

>> WEED OUT. WE LOVE THE STORY IN TERMS OF THE TYPE OF STOCKS WE LIKE, WHICH IS A HIGH GROWTH SUSTAINABLE GROWTH STORY BUT WE HAVE TO BE CAREFUL ABOUT WITH THESE STOCKS IS TO MAKE SURE YOU TRADE AROUND THEM. THAT MEANS THAT SOMETIMES IT WILL BE ONE OF THE TOP TWO OR THREE HOLDINGS. OTHERS MAY BE DOWN AT NUMBER 10. THAT'S HOW WE HAVE LOOKED AT THOSE TOP HOLDINGS THE LAST COUPLE OF YEARS. GUY: YOU SAID YOU ARE CAUTIOUSLY OPTIMISTIC. I TRY TO LOOK OUT FOR THIS CONVERSATION WHETHER CAUTIOUS OR OPTIMISTIC. WHICH DO YOU THINK IT IS RIGHT

NOW? >> I'M A NATURAL OPTIMIST. I THINK YOU HAVE TO BE OPTIMISTIC ABOUT EQUITIES. IT'S A MISTAKE NOT TO BE. IF YOU LOOK AT WHERE WE START THIS YEAR, THE REASON I'M CAUTIOUS AS WE START ON ELEVATED VALUATIONS AND ON INTEREST RATES AT HIGH LEVELS. WE WILL BE DEALING WITH ALL THE

PROBLEMS THAT ARE WELL KNOWN, WHICH IS GOVERNMENT POLICIES, FISCAL POLICIES STARTING TO IMPACT ON GROWTH THIS YEAR. MY CAUTION IS, I THINK SOME OF THE BEST STOCKS WILL DO WELL AND I THINK SOME OF THE STOCKS, WHICH ARE CHALLENGED ASKED GUY: YOU KNOW WHERE THE BEST STOCKS ARE NOW? NOVO NORDISK, YOU TALK ABOUT NVIDIA AND THE STOCKS, YOU TALK ABOUT MICROSOFT. NOVO NORDISK BACK END OF LAST YEAR, 20TH OF DECEMBER DROPS MASSIVELY, HASN'T FILLED THE GAP SINCE. STOCKS STILL DOWN BY 16%. THAT WAS A STOCK WITH HIGH EXPECTATIONS BUILT INTO IT. WE SAW THAT KIND OF A DROP. THE MARKET HASN'T COME BACK

FROM YET. IS THAT SOMETHING YOU COULD SEE BEING REPLICATED WITH SOME OF THESE OTHER HIGH EXPECTATIONS STOCKS AROUND THE WORLD. >> I THINK THERE'S A BROADER REASON FOR WHY THIS IS HAPPENING, THERE'S BEEN A LACK OF GROWTH OPPORTUNITIES. EVERYONE KNOWS ABOUT THE MAGNIFICENT SEVEN OF THESE GREAT COMPANIES IN THE U.S. HAVE PERFORMED WELL IN THE LAST FEW YEARS. WHAT THEY ARE NOT TALKING ABOUT IS THE FACT THAT OTHER STOCKS ARE NOT.

IF YOU LOOK AT THE GROWTH RATE OF THE S&P 500 AND HE STRIPPED OUT THE MAGNIFICENT SEVEN, WE HAVE 3% PROFITS GROWTH, THAT'S ALMOST ZERO. GUY: THE S&P IS OUTPERFORMING THE EQUAL WAY. >> WHAT IT'S DOING IS RAISING THE PROFILE FOR SOME OF THE NAMES GOING. THAT'S WHAT WE SEE WITH NOVO

NORDISK AND EVEN NVIDIA AT ONE POINT LAST YEAR HAD A BIG PULLBACK OVER THE SUMMER WHEN YOU'VE GOT EVERYBODY CROWDING INTO A NARROW PART OF STOCKS THAT CREATES A RISK TO THE VALUATION OF THE COMPANY. THE GROWTH STORY IS INTACT. IF YOU ARE A LONG-TERM INVESTOR AS WE ARE, YOU HAVE TO PICK YOUR ENTRY POINTS. IF YOU ARE LONGER TERM AND THINKING THREE TO FIVE YEARS OUT, THEY GET BACK INTO THE STOCKS OF THE LONGER TERM. KRITI: IF YOU LOOK AT THE HEDGING COSTS AROUND SOME OF THESE MAJOR, MAJOR COMPANIES, THEY ARE NOT EXACTLY EASY TO BID ON THE UPSIDE, FOR EXAMPLE. THE CHEAPER HEDGING COSTS ARE

FROM THE DOWNSIDE BECAUSE NOBODY WANTS THEM. HOW DO YOU TRADE AROUND THEM? >> TRADING IS JUST SIZING. WE CAN GET ANYWHERE FROM 4% TO 10% IN A PARTICULAR STOCK. MOST OF THESE NAMES ARE SUPER LARGE CAPITAL LIQUIDS. IT'S EASY TO GET IN AND OUT OF THEM. PROBABLY YOU HAVE WHEN YOU ARE

IN THE SMALL-CAP OR MID-CAP SPACE, YOU CAN'T DO THAT. GUY: CHALLENGE SIZING OR ENTRY POINTS. IS PICKING THE ENTRY POINT EASY BUT SIZING IS A DIFFICULT BIT? >> ANY FUND MANAGER WHO SAYS THEY CAN PICK THE ENTRY POINT IS NOT TELLING THE TRUTH. BUT WE TRY TO DO IS LOOK AT THE LONG-TERM PROFILE OF THE STOCK. IF IT BECOMES CHEAPER THAN WHAT WE BELIEVE IT'S WORTH, IT'S A GREAT ENTRY POINT. WE ARE LOOKING AT A LOT OF STOCKS TODAY.

THE EXAMPLES IN EUROPE, THERE'S A LOT OF COMPANIES THAT MEET OUR CRITERIA AND HAVE BEEN LONGTIME WINNERS THAT ARE TRADING LOWER VALUATIONS AND THEY HAVE DONE PREVIOUSLY. GUY: ARE YOU SIDING INTO THOSE POSITIONS? >> I THINK THAT'S WHERE WE SEE THE BIGGEST OPPORTUNITY. NOT REALLY IN THE U.S. BECAUSE THEY TRADE AT THE HIGH-END OF THE VALUATIONS. BUT IN EUROPE BECAUSE EVERYONE

SHIFTED TOWARDS THE BANKS, THE DOMESTIC EUROPEAN STORIES, ALL OF A SUDDEN, LIKE NOVO NORDISK AND THE LUXURY GOOD STOCKS THAT ARE TRADING ON RELATIVELY LOW VALUATIONS COMPARED TO HISTORY. LIZZY: IF I CAN SQUEEZE IN LUXURY, HERMES, ONE OF THE BIG NAMES YOU HOLD, DO NOT WORRY LUXURY WILL GET TIED INTO DONALD TRUMP'S TIER FOUR ON EUROPE? >> I THINK THIS IS WHERE EUROPE -- I'M NOT THE BIGGEST EUROPEAN BULL, I THINK THE GREATEST STOCKS STILL EXIST WITHIN THE U.S., BUT AS THE PRICING WE SIGN EUROPE AND EUROPE UNDERPERFORMING HAS CREATED THIS OPPORTUNITY FOR EUROPE THAT THE RISKS THAT YOU HIGHLIGHTED, THE TARIFFS, GEOPOLITICS, EVEN THE CURRENCY WEAKNESS, THERE ARE SO MANY THINGS THAT EUROPE HAS HAD AGAINST IT, EVEN GOVERNMENT POLICY AND TAXATION OF EUROPE OF CORPORATE'S, THESE ARE ALL THINGS THAT WERE A MASSIVE NEGATIVE HEADWIND FOR EUROPEAN STOCKS LAST YEAR AND THAT'S LAST YEAR. THE QUESTION IS, HAS THE MARKET DISCOUNTED THAT? I THINK THAT'S WHAT'S QUITE INTERESTING. LIZZY: I THINK THEY TOLD ME IT WAS SO 2024. KRITI: YOU MENTIONED THAT NAMES YOU MAY BE POSITIVE ON, COULD YOU GIVE US A TASTE? >> THIS A BROAD REMINDER OF THE STRATEGY WE HOLD, HIGH QUALITY COMPANIES THAT ARE COMPOUNDING AND REINVESTING FOR THE FUTURE.

GENERALLY OUR VIEW IS WE ARE INVESTING IN STOCKS OF THREE TO FIVE YEARS. IN TERMS OF THE OPPORTUNITY, WE LOOK FOR STOCKS WHERE THERE HAS BEEN A DISCONNECT. EITHER THE MARKET IS FOCUSING ON SOMETHING THAT IS SHORT-TERM AND WE DISCUSSED A FEW OF THOSE IDEAS, WHERE IS GEOPOLITICS.

S&P, LONG-TERM HOLDING, HERMES, FERRARI. IN EUROPE, BUT OUR CORE PORTFOLIO 16 PLUS PERCENT U.S.. EUROPEAN STOCKS TODAY HAVE BEEN DISLOCATED LAST YEAR THAT I THINK LOOK A LITTLE BIT MORE INTERESTING ON A RELATIVE BASIS. GUY: THANK YOU FOR STOPPING BY. GLOBAL EQUITIES FUND MANAGER JOINING US. THANK YOU VERY MUCH. MENTIONING SOME OF THE NAMES ON

THE CORE SIX, LET'S LOOK AT HOW THEY PERFORM. WE MENTIONED NOVO IS AND REMAINS UNDER PRESSURE YET TO FILL THE GAP THAT IS GENERATED ON DECEMBER THE 20TH. FOR IS SOFT. KEEP AN EYE ON THE SPACE. TECHNOLOGY CATCHING A BID. ASML IS UP. SNYDER'S TRACKING HIGHER. NESTLE IS HAVING A BETTER DAY.

LVMH IS THE OUTPERFORMER UP BY .4%. LET'S SEE WHAT ELSE IS HAPPENING. OVER TO YOU JOE EASTON. JOE: A GAIN AND SHARE. IN LONDON, THE COMPANY REPORTING SALES UP AROUND 6% IN THE KEY CHRISTMAS WEEKS.

THE NINE WEEK TIMEFRAME. ALSO, THE IMPACT OF THE RISE OF NATIONAL INSURANCE WAS ANNOUNCED BY RACHEL REEVES A FEW MONTHS AGO, TAKING THE SHINE OFF THAT. DECENT GAIN UP 2% FOR NEXT THIS MORNING. IN TERMS OF SAID XO, THAT GETTING HIT HARD OVER IN PARIS TODAY. A REALLY BIG DECLINE, DOWN ALMOST 7%.

THIS IS AROUND A 10 BILLION EURO CATERING AND FACILITIES MANAGEMENT COMPANIES. THE FACILITIES PART OF THE BUSINESS DOES SEEM TO BE WEEK ACCORDING TO ANALYSTS FOLLOWING THEIR TRADING REPORT. THAT ONE IS A REALLY UNDERPERFORMING STOCK THIS MORNING ON THE FRENCH MARKET. REMEMBER THE BIG MOVE IN THAT ONE WAS YESTERDAY. OF COURSE FALLING AROUND 2% ON THE HEADLINES AROUND TENCENT AND POTENTIAL LINKS TO CHINA. CHINESE MILITARY FLAG BY THE

PENTAGON TO DOWN AROUND 10% ON A TWO DAY BASIS FULL PROCESS, ONE OF THE MOST FAVORITE TECH STOCKS ON THE STREET. ONE TECH STOCK GOING UP THIS MORNING. THIS IS A SEMICONDUCTOR-BASED COMPANY. THEY DO WORK WITH SOME OF THE BIG FIRMS AND ROBOTICS. THEY'VE GOT A PACT WITH ACCENTURE AND ALSO NVIDIA ACCORDING TO RECENT STATEMENTS. THAT WAS ANNOUNCED SET UP A

CONFERENCE IN LAS VEGAS. A ROBOTICS DEAL WITH NVIDIA. THAT WAS THE BEST PERFORMER THAT I SAW. LOTS OF RATINGS. ANALYSTS GETTING THEM ALL OUT AS THEY COME BACK FROM CHRISTMAS, PE SAMMY, A BIG OUTPERFORMANCE. THEY RECKON THEY ARE ABOUT TO SEE A BIG REBOUND IN DEMAND FOR SOME OF THEIR CHIPS APPLYING PRODUCT. BUT THAT ONE REALLY CAUGHT MY EYE THIS MORNING.

GOLDMAN SACHS CUTTING THIS ONE TO SELL THIS MORNING. NOT MANY SALES ON THAT. IS DOWN 4% TODAY. GOLDMAN SPENDING IN THE RAIL SECTOR IS GOING TO DECLINE THIS YEAR, THEREFORE THEY RECOMMEND YOU SELL SHARES. BIG UNDERPERFORMER TODAY DOWN 4% . LIZZY: JOE EASTON, WE THANK YOU. SOME OF THE BIG MOVERS AT THE OPEN. LOOK AT THE STOXX 600 LOWER.

THE FTSE 100 EVEN MORE LOW. .7% DOWN THIS MORNING. IN THE TAX DOWN. I TOLD YOU IT MIGHT BE A BIT OF A TEPID TUESDAY. WE WILL DIG INTO IT BLIND NEXT. NVIDIA UNVEILING NEW CHIPS AND SOFTWARE AS A LOOKS TO STAY AHEAD IN THE RACE. BUT HAS JEN-HSUN HUANG DONE ENOUGH TO IMPRESS THE MARKETS. MORE ON THAT, NEXT. THIS IS BLOOMBERG.

LIZZY: WELCOME BACK TO THE OPENING TRADE WHERE WE ARE 20 MINUTES INTO THE CASH SESSION. STOXX 600 IS DOWN. PERHAPS A BIT OF CAUTION AHEAD OF THE EURO ZONE INFLATION NUMBERS LATER IN THE DAY. GUY: WE WILL FIGURE OUT EXACTLY WHAT THOSE NUMBERS ARE GOING TO MEAN. THE MARKET FEELS LIKE IT'S ON AN AI STORY THIS MORNING.

YOU'VE GOT WHAT IS HAPPENING. YOU HAVE MICROSOFT SPEAKING. JUST BEEN LISTENING TO WHAT HE'S BEEN SAYING IN THE BREAK. TALKING VERY MUCH ABOUT THE USE CASE THAT AI IS GOING TO PROVIDE AND HOW MICROSOFT IS GOING TO TRY AND DISSEMINATE THE AI STORY INTO A BROADER AND BROADER RANGE OF TOPICS.

THIS TAKE A QUICK LISTEN TO WHAT HE IS SAYING. >> THESE DATA CENTERS ARE EVERYTHING FROM HOW WE THINK ABOUT THE CONSTRUCTION OF A DATA CENTER THAT IS OPTIMIZED FOR LIQUID COOL AI ACCELERATORS IS A NEW ENGINEERING FEAT. SO, THAT'S WHAT WE'RE DOING. EVERYTHING FROM HOW DO WE THEN

WORK FROM UPSTREAM WITH RENEWABLE ENERGY FOLKS TO GET ONTO THE GRID BASED A LOAD THAT COMES OUR DATA CENTERS, THAT THEN HAS THE RIGHT COOLING INFRASTRUCTURE WITH ZERO WASTE AND ZERO WATER USAGE. HOW DO WE REALLY MAKE SURE ALL OF THAT GETS BUILT INTO A SYSTEM LEVEL. AND THEN OF COURSE SILICA AND INNOVATION.

WE ARE INNOVATING WITH NVIDIA. IN FACT TODAY I THINK WE HAVE OUR FIRST CLUSTERS UP LIVE IN ONE OF OUR DATA CENTERS. WE'RE EXCITED ABOUT WHAT THAT WOULD MEAN ARE WE ARE THEN WORKING WITH AMD BUILDING OUT OUR INFRASTRUCTURE AND BUILDING OUR OWN SILICONE WITH HER TODAY THAT TAKING A LOT OF THE CUSTOMER SERVICE TRAFFIC IN MICROSOFT.COM. SO WE ARE BUILDING WORLD AI ACCELERATOR INFRASTRUCTURE.

BUT THE ENTIRE SYSTEM STACKED OPTIMIZED FOR TRAINING AND OPTIMIZING FOR THE KERNELS FOR INFERENCING. SO THAT IS SIGNIFICANT INVESTMENT AND INNOVATION THAT IS HAPPENING TO US, OUR PARTNERS, SO WE ARE REALLY EXCITED. I THINK OF THIS AS A GOLDEN AGE FOR SYSTEMS WHEN IT COMES TO INNOVATION. NOW, IF YOU HAVE THE

INFRASTRUCTURE, THE NEXT BIG CONSIDERATION -- IN FACT, TODAY I MET MANY PARTNERS, MANY CUSTOMERS, THE FIRST THING EVERYONE WANTS TO TALK ABOUT IS IT'S FANTASTIC, TALK ABOUT AI, HOW DO I GET MY DATA IN SHAPE. GUY: HE'S ON A ROLL. HE'S TALKING ABOUT A LOT OF BIG THINGS COMING DOWN THE PIPE TOWARDS MICROSOFT TOWARDS ITS CUSTOMERS. USE CASE FOR AI, A BIG FUTURE OF WHAT HE'S BEEN MENTIONING. BUT THE INVESTMENT THAT BACKS IT UP, A GOLDEN AGE FOR SYSTEMS WILL REQUIRE AN AWFUL LOT OF MONEY. HE'S TALKING ABOUT THE ENERGY STORY AND TALKED ABOUT THE IDEA THAT HE'S NOT SHIP CONSTRAINED, HIS ENERGY CONSTRAINT. THAT'S THE CHALLENGE IS THAT THE ASTORIA GENERATING.

HOW DO YOU BROADEN THIS OUT IS SOMETHING WE ARE HEARING IS A CLEAR THEME. YOU HEARD IT LAST NIGHT FROM NVIDIA, YOU HEAR IT FROM MICROSOFT, TOM MACKENZIE IS HERE WITH US NOW. JOIN THE DOTS FOR US BETWEEN -- WHAT JENSEN LONG HAS BEEN TALKING ABOUT, WHAT ARE WE GUESSING AT THE BEGINNING OF 20 25 THAT IS DIFFERENT TO WHAT WE GOT IN 2024? TOM: YOU ARE NOT GOING TO GET ANYMORE BACK IN TERMS OF ENTHUSIASM. THERE IS NO WAY THEY ARE WALKING BACK FROM THIS IN ANY WAY, THEY ARE DOUBLING DOWN.

THAT COMMITMENT AROUND THE 80 BILLION AND THIS YEAR, WHICH LED TO THE UPSIDE WE SAW IN TECH SO FAR THIS YEAR EARLIER THIS WEEK IS A TALE IN TERMS OF MICROSOFT'S COMMITMENT TO THE SPACE. IN TERMS OF JOINING THE DOTS, HE TALKED ABOUT PARTNERING WITH NVIDIA AND AMD AS WELL. THAT GETS US TO THE QUESTION OF HOW JENSEN LONGEST POSITIONING.

YOU TOUCH ON THIS HOW HE WANTS A BROADEN OUT INTO OTHER SEGMENTS. THE CEO OF NVIDIA IS -- OF THE FACT WHERE THEY DIVERSE THE PRODUCT MIX. THAT'S WHAT WE HEARD IN TERMS OF THIS SPEECH -- KEYNOTE SPEECH WHERE HE TALKS ABOUT NOT JUST THE HARDWARE BUT THE SOFTWARE COMPONENT.

IT'S GOT THE SOFTWARE THAT GOES WITH THE AI ACCELERATORS, BUT ALSO A FOUNDATIONAL MODEL THAT DEVELOPERS CAN TWEAK AND USE IS GOING TO PRODUCE NEW SYNTHETIC DATA. DATA IS A CHOKEPOINT. ON THE ENERGY POINT THEY TALK ABOUT THE ENERGY CONSTRAINTS. SAM ALTMAN OF OPENAI, A PARTNER WITH MICROSOFT SAID IT'S GOING TO SOLVE THAT QUESTION WHEN HE SPOKE TO BLOOMBERG YESTERDAY. KEY LINES COMING THROUGH FROM JENSEN LONG. PUSHING OUT TO ROBOTICS, GENETIC AI, EMBEDDING AI INTO AUTOS. WE HAD EXAMPLES OF THAT INTO

ROBOTICS TALKING OF A VISION AND A FUTURE WE HAD 1.5 BILLION HUMANOID ROBOTS AND AUTONOMOUS VEHICLES. THE QUESTION FOR ANALYSTS IS HOW YOU MAKE A CHEAP ENOUGH OR HARDWARE GETTING INTO THE SYSTEMS TO MAKE IT COMPELLING. KRITI: IN THE CONVERSATION WE DIPPED INTO, HE TALKS ABOUT $3 BILLION OF INVESTMENT AND IS PARTNERING WITH THE LOCAL FAMILY COMMUNICATION SYSTEM. HE'S TALKING ABOUT PARTNERING WITH THE GOVERNMENT. THIS IS THE WAY TO DIVERSIFY REGIONALLY WHEN IT COMES TO MAKING THIS CHEAPER FOR EVERYDAY USE? TOM: THERE'S A PARALLEL THERE BETWEEN WHAT THEY ARE DOING IN INDIA AND THE PARTNERSHIPS AT GOVERNMENT LEVEL.

JENSEN LONG TALKED ABOUT THIS LAST YEAR, SOVEREIGN AI. REALLY TRYING TO LOBBY GOVERNMENTS AROUND THE WORLD TO BUILD OUT -- IF THEY HAVE THE CAPACITY AND FINANCIAL MEANS TO BUILD OUT THEIR OWN AI CLUSTERS. THAT HAS BEEN A KEY DRIVER FOR JENSEN LONG, YOU EXPECT THAT TO CONTINUE AS WELL. BUT ALSO THE MORE CONSUMER LEVEL, WHETHER IN TERMS OF HOW INTERFACE GOING FORWARD. THE PARTNERSHIP THAT JENSEN

LONG AND NVIDIA HAVE PARTNERED WITH TOYOTA. YOU WILL HAVE INTERFACES IN CARS. THEY WILL READ YOUR FACIAL RECOGNITION TO MAKE SURE YOU ARE NOT FALLING ASLEEP AT THE WHEEL. ALL OF THAT IS THE FUTURE NVIDIA IS LOOKING AT IF THEY CAN BEAT THE PRICE POINT AND GET THE EFFICIENCIES. KRITI:

IF YOU CAN EXPLAIN IT AND AFFORD IT, THAT'S THE WAY YOU GET INTO THE HEARTS AND MINDS OF EVERYONE. BLOOMBERG TOM MACKENZIE BREAKING IS DOWN. STICK WITH US. KRITI: 30 MINUTES INTO TODAY'S SESSION. READ ON THE SCREEN ACROSS THE BOARD WHEN YOU LOOK AT THE CONTINENT. THE SOLE OUTPERFORMER IS A SWEDISH STOCK INDEX. INTERESTING PLAYS.

BUT YOU ARE SEEING RED ON THE SCREEN ACROSS THE BOARD. PERHAPS A LITTLE BIT OF PARING BACK THE MOVES WE SAW YESTERDAY. OUTPERFORMANCE IN TECH, THE HINDRANCE FOR TODAY.

WE ARE ALSO ON TOP OF THAT GETTING A HOST OF INFLATION DATA FROM EUROPE. CPI TAKE ME HIGHER COSTS. BLOOMBERG'S -- IN FRANKFURT JOINS ME ALL OVER THE STORY. WE GOT SWISS CPI, FRENCH CPI, EURO AREA CPI AND ITALIAN CPI, WHAT IS THE COMMON THEME IN A BACKDROP ARE SO MANY PEOPLE ARE TALKING ABOUT PREPARING FOR SOME SORT OF COST PUSH INFLATION? >> THE OVERALL TREND IS AN UPTICK IN INFLATION FOR THE DECEMBER READ. WE'VE ALREADY HAD THAT LAST WEEK WHEN WE HAD THE SPANISH NUMBER AND BECAUSE OF THE HOLIDAYS THEY WERE DELAYED A LITTLE BIT. WE GOT GERMAN DATA AND FRENCH DATA THIS MORNING AND ALL OF THEM SEE THE UPTICK. GERMAN UPTICK WAS STRONGER THAN ANTICIPATED. THE FRENCH NOT QUITE AS STRONG.

OVERALL, ALL THAT WILL FILTER THROUGH THE EURO AREA WHICH WE GET IN ABOUT AN HOUR AND A HALF. THAT NUMBER IS LIKELY TO SEE AN UPTICK. IN NOVEMBER, INFLATION STOOD AT TWO POINT 2%, NOW WE GET THE DECEMBER READING.

THE ECONOMIST ESTIMATE IS THAT IT WILL BE AT 2.4% GIVEN THE VERY STRONG GERMAN PRINT. IT COULD BE A TAD STRONGER BUT STILL OVERALL THERE WILL BE AN UPTICK HERE. GUY: I'M GOING TO HEAR THE WORD GRADUAL A LOT MORE AS A RESULT.

EASY BE INCREASINGLY GRADUAL. ALSO HOW MANY VARIATIONS THERE ARE ON GRADUAL BUT DOES THIS IMPACT THE GREAT PATH, THIS DATA? >> IT DOES GIVE THOSE MEMBERS OF THE GOVERNING COUNCIL SOME SUPPORT WHO SAYS WE SHOULD STICK TO 25 BASIS POINTS. GRADUAL IS THE OVERALL THEME. THE OVERALL EXPECTATION HERE IS

THE FIRST FOUR GREAT DECISIONS OF THE YEAR AND BECAUSE OF THE TIMING OF ECB RATE DECISIONS, THAT WOULD BE THE DECISION THROUGH JUNE. THERE WILL BE 25 BASIS POINT CUTS AT EACH ONE OF THESE MEETINGS, WHICH WOULD TAKE A DEPOSIT RATE FROM CURRENTLY 3% TO THEM IT WOULD BE 2%. THERE ARE SOME POLICY MAKERS, ESPECIALLY THE AUSTRIAN WHO SAY, WE MAY BE SHOULD WAIT A LITTLE BIT. AND OTHERS HAVE SAID WE CAN STOP ONE MEETING. AND OTHERS HAVE SAID IF NEEDED, 50 BASIS POINTS, WHICH IS SOMETHING THE ECB HASN'T DEPLOYED IN THIS GREAT GETTING CYCLE COULD BE ON THE TABLE AS WELL. OVERALL, THE GENERAL CONSENSUS DOES SEEM TO BE 25 BASIS POINTS AND GIVEN ALL THE UNCERTAINTIES THAT ARE OUT THERE, THE GERMAN ELECTIONS, THE SITUATION IN FRANCE AND THAT OF COURSE TRUMP TARIFFS, THAT IS COMPLETELY SURPRISING THAT THEY WOULD WANT TO BE CAUTIOUS HERE. LIZZY:

TALK US THROUGH THE OTHER RISKS OUT THERE AS WE TALKED THROUGH THE ECB. IT SOUNDS LIKE A SHOULD NOT BE CANCELING MY NEXT FLIGHT TO FRANKFURT. >> THE RATE DECISION IS ON JANUARY 30.

THAT'S AN INCONVENIENT DAY FOR THE ECB EDITS A DAY THAT THE BIG EURO AREA ECONOMIES ALL SAY HOW THEY PERFORMED IN THE FOURTH QUARTER OF LAST YEAR. OVERALL ECONOMIC WEAKNESS IS SOMETHING THE ECB IS QUITE WORRIED ABOUT. AND BECAUSE THE ECONOMY IS WEAK, IT FEEDS THROUGH TO INFLATION AND STOPS PRICES INCREASING. AS WE KNOW, THE ECB WANTS PRICE INCREASES OF 2%. THAT'S THE ONE ISSUE. THEN WE GOT THE GERMAN ELECTIONS, WHICH ARE JUST A MONTH AND A HALF AWAY, WHERE WE ARE VERY LIKELY TO SEE A REGIME CHANGE IN GERMANY.

WE'VE GOT INSURGENCY OVER FRANCE WHERE IT'S UNCLEAR HOW THIS NEW GOVERNMENT IS GOING TO GET THROUGH BUDGET. THAN THE TRUMP TARIFFS IS ONE OF THE THINGS. WE SAW HOW MARKETS REACTED YESTERDAY WITH ALL THE REPORTS AND REJECTIONS OF REPORTS REGARDING TRUMP TARIFFS.

SO ANYTHING THAT HAPPENS THERE DOES CREATE A LOT OF UNCERTAINTY AND ALSO TARIFFS, IF THEY ARE IMPLEMENTED, AND IF THERE MIGHT BE RETALIATION, THAT JUST AS A HUGE IMPACT ON THE EURO AREA ECONOMY AND THEREFORE IN THE ECB. >> WE THANK YOU AS WE WALKED TOWARDS AT EURO AREA INFLATION PRINT AT 10:00 A EM NGUYEN DIDN'T TIME. STAYING WITH THE ECONOMICS AND HOW IT FEEDS INTO THE POLITICS, LET'S GO TO CANADA NEXT. JUSTIN TRUDEAU TO BE THE LATEST WORLD LEADER TO BE TOPPLED BY A STRUGGLING ECONOMY.

FALLING IN THE WAKE OF U.S. PRESIDENT JOE BIDEN, RICHIE SUNAK AND THE U.K. AND OLAF SCHOLZ APPEARS SET TO LEAVE NEXT WITH THIS ELECTION IN GERMANY AS WELL.

LET'S TIE THIS ALL TOGETHER AND BRING IN BLOOMBERG'S OLIVER CROOK FOR THE EUROPEAN IMPLICATIONS. JUST TALK US THROUGH THIS INSTABILITY WE ARE SEEING ACROSS DEVELOPED ECONOMIES. OLIVER: I THINK IT'S FUNDAMENTALLY CONNECTED TO EXACTLY WOULD SO HE WAS TALKING ABOUT. THIS ISSUE OF INFLATION WHERE YOU HAVE THIS PHENOMENON SINCE COVID AND WE ARE STILL GRAPPLING WITH THE POLITICAL CONSEQUENCES OF EXTREME INFLATION ACROSS THE WESTERN WORLD ARE EFFECTIVELY PEOPLE WHO ARE EARNING MONEY WHO DO NOT OWN ASSETS, THE VALUE OF THE MONEY GOES DOWN ON THE VALUE OF ASSETS IS GONE UP. IT'S EFFECTIVELY A WEALTH TRANSFER FROM PEOPLE WHO DON'T HAVE THE GREAT DEAL IS BEING FELT POLITICALLY. THIS IS THE THEME WE HAVE SEEN ACROSS THE WORLD.

INFLATION, COST OF LIVING. THIS HAS LED TO THE OUSTING'S OF THESE GOVERNMENTS. THIS ALSO THIS QUESTION OF CLIMATE BACKLASH. THIS IDEA THAT WE ARE PUTTING THESE PRINCIPLES ON THESE IDEAS ABOVE THE DAY TO DAY PRACTICALITIES OF HAVING CHEAP ENERGY COSTS.

ALSO SEEING IT MATERIALIZE IN IMMIGRATION. I WAS LOOKING UP THE G7 LEADERS. YOU PULL OUT THE SCREEN OF THE G7 LEADERS. IN THE LAST YEAR THEY HAVE ALMOST ALL BEEN REPLACED, INCREDIBLY WEAKENED OR ARE ABOUT TO BE PUSHED OUT. WHETHER JOE BIDEN, OLAF SCHOLZ,

NOW JUSTIN TRUDEAU. THERE WAS AN ELECTION ALSO IN JAPAN AND KEIR STARMER, MACRON, THE ONLY PERSON COMING FROM A NEW POSITION OF POWER IS GIORGIA MELONI, WHO'S BEEN HOLDING ON FOR A WHILE AND THAT WAS AFTER A LONG TIME OF INSTABILITY OVER IN ITALY. WHEN YOU THINK ABOUT THE GLOBAL RAMIFICATIONS OF THIS, THE G7 IS SUPPOSED TO BE THE STABLE CORE OF THE MULTILATERAL ORDER. THAT IS NOT AT ALL WHAT WE HAVE GOING INTO THE YEAR WERE A CANDIDATE IS SUPPOSED TO TAKE OVER THE PRESIDENCY OF THE G7. KRITI:

A LOT OF THE ISSUES YOU HAVE OUTLINED, INFLATION, IMMIGRATION, DRIVING THE STORY IN AUSTRIA AS WELL, GIVE US THE STATE OF PLAY THERE. OLIVER: THERE ARE SO MANY ECHOES ACROSS EUROPEAN POLITICS. NOW YOU HAVE THE FAR RIGHT LEADER, THE LEADER OF THE FREEDOM PARTY IN AUSTRIA, HERBERT, WHO WON THE ELECTION IN SEPTEMBER BUT WAS NOT GIVEN A MANDATE TO FORM A GOVERNMENT BECAUSE NOBODY WOULD WORK WITH HIM. HE WAS BOYCOTTED. NOW THE CHANCELLOR HAS RESIGNED

AFTER THEY CANNOT BRING TOGETHER A CENTRIST COALITION AND WHAT YOU HAVE IS THEM WORKING WITH THE NEW HEAD OF THE CONSERVATIVE PARTY IN ORDER TO FORM A GOVERNMENT. HIS PLATFORM IS RUNNING ON ANTI-IMMIGRATION, SO-CALLED FORTRESS AUSTRIA TO SUSPEND ASYLUM-SEEKERS AND TO DEPORT PEOPLE. AS THE PRO-RUSSIAN BEN WHO DOESN'T WANT TO SUPPORT UKRAINE AND WANTS TO SEE SANCTIONS GO OFF OF RUSSIA. NOT ONLY CLIMATE SKEPTICISM BUT EU SKEPTICISM. HE DOESN'T GO AS FAR AS THE AFD

DOES IN GERMANY. HE'S NOT CALLING FOR AN EXIT OF THE EURO BUT HE'S VERY SKEPTICAL OF THE EUROPEAN PROJECT. HE IS ALSO GOING TO BE LEADING AUSTRIA. THIS MEANS THERE'S ANOTHER PARTY HAS A HEAD OF A MEMBER STAY AT THE EUROPEAN LEVEL THAT JOINS VIKTOR ORBAN'S GROUP AS A EUROPEAN PARLIAMENT, THAT MAKES THINGS A LITTLE MORE COMPLICATED. GUY:

OUR ALARM BARRELS -- ALARM BELLS FINALLY RINGING IN BRUSSELS? OLIVER: I THINK THEY ARE RINGING LOUDLY. I DON’'T KNOW IF THEY ARE READING LOUD ENOUGH. YOU TRY TO TIE ALL OF THIS STUFF TOGETHER.

IT'S NOT JUST A LITTLE BIT INCREMENTAL MOVE IN THE EU, WHAT THEY ARE ADVOCATING IS A GIANT LEAP FORWARD OF EUROPEAN INTEGRATION. THEY WANT TO SEE IT ON CAPITAL MARKETS AND BANKING. EVERY IDEA COMES WITH A CALM SPIRIT ON CAPITAL MARKETS AND BANKING YOU NEED SUPERVISION, YOU NEED TO SURRENDER SOVEREIGNTY. IF YOU WANT TO SEE EUROPEAN CHAMPIONS, THE COST WILL BE NATIONAL CHAMPIONS. IF YOU WANT COLLECTIVE DEFENSE,

DO MORE SPENDING, HAVE JOINT DEBT. IF YOU WANT TO FOCUS ON CLIMATE. IF THERE IS A HUGE AMOUNT OF RESISTANCE TO THESE THINGS AT THE NATIONAL LEVEL, THESE ARE NOT THE INGREDIENTS YOU HAVE IN PLACE IN ORDER TO BRING YOUR UP TO A GIANT LEAP FORWARD. THAT WILL BE A FOCUS FOR THE EUROPEAN POLICY MAKERS AND WE WILL SPEAK TO THE COMPETITION COMMISSIONER. THIS IS A NEW POSITION MADE AN EXECUTIVE VICE PRESIDENT. THIS IS OUT OF EMMANUEL

MACRON'S PARTY. I WILL TALK TO HIM LATER. ARE THE INGREDIENTS HERE TO MAKE EUROPE GREAT AGAIN OR IS IT GOING TO BE BASICALLY PARALYSIS INTO ECONOMIC DEMISE AS MARIO DRAGHI IS WARNING ABOUT. GUY: WE WILL SEE WHAT HAPPENS ON THAT FRONT. THANK YOU VERY MUCH. TYING ALL THE THREADS TOGETHER IN TERMS OF THE POLITICS AND THE IMPACTS WE SEE AROUND THE WORLD. WE HAVE A FANTASTIC

CONVERSATION COMING UP RIGHT HERE ON BLOOMBERG. AN EXCLUSIVE ONE WITH THE EU COMMISSION EXECUTIVE VICE PRESIDENT. YOU CAN CATCH THE INTERVIEW WEDNESDAY RIGHT HERE ON BLOOMBERG TELEVISION, LOOKING FORWARD TO THAT. LET'S TALK ABOUT THE MARKET

IMPLICATIONS. MONDAY STARTING INQUIRY -- QUIETLY WHEN IT COMES TO THE CURRENCY OPTIONS MARKET. IT CHANGED AS WE SAW THE STORY COMING THROUGH THE WASHINGTON POST STORY, THEN WE SAW THE REBUTTAL FROM TRUMP. EURO HAS BEEN ALL OVER THE PLACE. WE'VE GOT A 104 HANDLE RIGHT NOW. WHAT ARE WE GOING TO SEE IN

2025 WHEN IT COMES TO THE CURRENCY MARKETS WITH A SINGLE CURRENCY? VALERIE TYTEL HAS JOINED US TO MAKE PREDICTIONS WITH THINGS LIKE SOMETHING THE BRAVE ARE DOING. VALERIE: THE ONE THING WE KNOW FOR CERTAIN IS VOLATILITY AND EFFECTS IS HERE TO STAY. WHAT A SESSION YESTERDAY. YOU HAVE THE FIRST DAY COMING BACK FROM THE HOLIDAY ALREADY PREPAID WITH -- PREPARED WITH YOUR EURO SHORTS IN THAT ARTICLE YOU GET MASSIVELY STOPPED NOW AND THEN YOU MISSED THE SNAP BACK ON THE TRUMP DENIAL. WE SAW THAT IN THE EFFECTS

CURRENCY MARKETS. SOME REPORTS OUT THERE FROM BLOOMBERG REPORTING SAYING THAT WE HAD A VERY LARGE VOLUME SEARCH AND FX OPTIONS. A LOT OF THOSE BETS AND OPTIONS MARKET ON EURO PARITY SEEM TO HAVE BEEN STOPPED OUT ON DAY ONE OF LIQUID TRADING FOR THE YEAR. GOING AHEAD IT WILL BE A VOLATILE ONE, I THINK MARKET HOPE WE GET A CLEAR MESSAGE FROM TRUMP.

WE ARE HEARING FROM THE STREET THAT WE ARE UNLIKELY TO GET THAT AT DEUTSCHE BANK SAYING WE SHOULD NOT EXPECT ONE SPECIFIC IMPLEMENTATION TIMELINE, WE SHOULD GET READY FOR OVERLAPPING LEGISLATIVE AND EXECUTIVE INITIATIVES, ROLLING DEADLINES AND VARIOUS ANNOUNCEMENTS, NOT JUST THROUGHOUT JANUARY, BUT THROUGHOUT THE ENTIRE YEAR WHEN IT COMES TO THE TERROR SITUATION. WE ARE BUCKLED IN FOR VOLATILITY ON THE FX MARKETS. SOME LICKING THEIR WOUNDS ALREADY ON THEIR EURO SHORTS. ANOTHER THEME, IF YOU CAN CALL IT A THEME. THREE DAYS OF TRAINING OF THE NEW YEAR HAS BEEN WEAKNESS IN THE TREASURY MARKET. PREVAILING WEAKNESS.

IT HAS GONE GLOBAL. WE SAW JAPAN AND JGB'S IN THE LONG AND REACHING LEVELS NOT SEEN IN 15 YEARS. THEN HERE IN THE U.K., THE LONG END OF THE U.K. GUILT CURVE SEEMS VULNERABLE AS WELL. YOU SAW 30 YEAR YIELDS YESTERDAY, NEARLY TOUCHING 520 ON THE 30 YEAR GILT YIELDS. AGAIN, YOU THINK ABOUT THE VULNERABILITIES OUT THERE, ONE MIND GOES RIGHT TO THE U.K. WERE YOU HAVE FISCAL HEADROOM

BEING ERODED, NOT BECAUSE OF ANYTHING HAPPENING IN THE U.K., BUT BECAUSE OF THE TREASURY MARKET WHERE IT'S PUSHING GLOBAL YIELDS HIGHER. YOU HAVE TO ALSO THINK THAT IN THE U.K. THEY HAVE A VERY LONG DURATION

IN TERMS OF THEIR AVERAGE DEBT MATURITY. IT'S AROUND 15 YEARS. SO THEY ARE MORE EXPOSED TO THIS SWINGING AROUND OF LONG-TERM YIELDS THAN ANY OTHER EUROPEAN ECONOMY. IT WILL BE AN INTERESTING ONE, ESPECIALLY WHEN IT COMES TO THE U.K. BECAUSE THEY ARE FX DID OUTPERFORM LAST YEAR.

IF YOU LOOK AT THE CURRENCY PAIR OF STERLING'S SPECIFICALLY, IT WAS THE BEST PERFORMING CURRENCY PAIR OF LAST YEAR AND NORMALLY YOU GET A BOUT OF CURRENCY, IT HELPS YOU STABILIZE WEAKNESS. WE DO NOT GET THAT IN THE U.K. I THINK THERE IS STARTING TO BE CORRELATION THAT THE U.K. WILL BE A WEAK SPOT WHEN IT COMES TO THE RISING GLOBAL YIELDS. LIZZY: HOW WORRIED SHOULD RACHEL REEVES SPEED. SHE LEFT YOURSELF SO LITTLE ROOM AFTER THE BUDGET THAT IT SEEMED LIKE MAYBE SHE WOULD HAVE TO COME BACK AGAIN. DOES THAT SEEM INEVITABLE THAT IN THE SPRING SHE WILL HAVE TO COME BACK FOR MORE? >> WE SAW THE FT REPORTING ON THIS THAT THEY COULD HAVE TO PAY CHANGE TACT OF WHAT THEY'VE DONE. WE'VE HAD TO BACK-TO-BACK

MONTHS OF ZERO GROWTH. WE FED THE YIELDS MARCHING HIGHER IN THE CURRENCY NOT WEAKENING TO GIVE US SOME SORT OF STABILIZATION. IT WILL BE AN INTERESTING ONE TO WATCH. I KNOW YOU WILL BE ON TOP OF IT. BUT THE U.K. DOES SEEM TO BE THE ONE THAT COULD BE VULNERABLE TO ANY FURTHER SUSTAINED STEEPENING OF THE TREASURY CURVE. LIZZY: BLOOMBERG'S VALERIE TYTEL WE

THANK YOU IN LESS YOU WANT TO ASK ABOUT THE YEN. PREETI: YOU MENTIONED IT EARLIER IN THE SHOW, HELD THAT ADJUSTABLE. 157 HANDLE? VALERIE: IF YOU ARE PILING INTO U.S. EXCEPTIONALISM TRADE, YOU WANT TO BELONG DOLLAR. A BIG GOING TO THAT IS A HIKE

SOONER EXPECTED FROM THE BANK OF JAPAN THAT WOULD WEAKEN THE DOLLAR. WE SAW HINTS OF THAT OVERNIGHT. THERE WAS VERBAL INTERVENTION WHEN YOU HIT A SIX MONTH LOW AT 16850. LAST TIME WE SAW SIZABLE FX INTERVENTION WAS AROUND THE 160 HANDLE. MAYBE WE ARE STILL A BIT FURTHER AWAY FROM THAT BUT IT'S SOMETHING ON THE TOP OF INVESTORS MINDS WHEN YOU THINK ABOUT WHEN YOU WANT TO POSITION LONG DOLLAR INTO ONE OF THE BIGGEST RISKS OF THAT POSITION. LIZZY: GOOD TO HAVE YOU WITH US. COMING UP, WE WILL TOUCH ON

GUYS FAVORITE SUBJECT, USED ROLEX PRICES. FALLING TO THREE YEAR LOWS. WE BRING YOU THE LATEST FROM BLOOMBERG. PLEASE STAY WITH US. THIS IS BLOOMBERG. ♪ CREATING: 48 MINUTES AND CHANGE INTO THE SESSION. SEEING ONE OF THE LOSSES WE OPEN THE DAY WITH GETTING. BACK A LITTLE. NOT SO MUCH EXCITEMENT IN THE FACT WE ARE FLAT ON THE INDEXES.

UNDERPERFORMANCE IN THE U.K., FTSE 100 DOWN. STILL A POSITIVE MOVE FROM WHERE WE STARTED IN JUST 48 MINUTES TIME. A LOT OF THIS MAY HAVE TO DO WITH THE MOVES YOU SEE AROUND THE POLITICAL MOVES IS A MAJOR THEME, SPECIFICALLY WHEN IT COMES TO A RELATIONSHIP BETWEEN THE U.S. AND CHINA. TENCENT AND GLOBAL BATTERY MANUFACTURERS SEE ATL DIVED AFTER THE U.S.

BLACKLISTED THE FIRMS FOR ALLEGED LINKS TO THE CHINESE MILITARY. TURNING TO US FOR NOW IT IS MORE FROM THE BLOOMBERG'S ATTORNEY. BRING US UP TO SPEED ON THIS BLACKLISTING. WHAT DOES IT ACTUALLY MEAN TO BE ON THIS LIST? >> THERE IS IN ANY ACTUAL IMMEDIATE EFFECTS OF BEING THE STRONGEST ON THIS LIST THAT THE DEPARTMENT OF DEFENSE WILL HAVE. PEOPLE CAN STILL DO BUSINESS WITH HIM, CONTRACTS WITH HIM, GM OR OTHER AMERICAN CAR COMPANIES CAN STILL BUY BATTERIES FROM CATL. THERE IS A PROVISION IN THE

FUTURE THE DEPARTMENT OF DEFENSE MAY NOT BE ABLE TO SIGN CONTRACTS WITH THESE COMPANIES OR BY GOODS WHICH CONTAIN GOODS FROM THEM. MAYBE IN THE FUTURE THIS WOULD AFFECT THEIR SALES IN THE U.S.. BUT THE BIGGEST SIGN IS THE FACT THAT THESE COMPANIES HAVE BEEN TARGETED BY THE U.S.

GOVERNMENT AND THIS COULD LEAD TO MORE STRICT SANCTIONS LIKE THE DEPARTMENT OF COMMERCE OF THE STATE DEPARTMENT IN THE FUTURE AND EVEN IF THAT DOESN'T HAPPEN, THE U.S. GOVERNMENT IS SIGNALING STRONGLY THAT THEY DON'T WANT U.S. NATIONAL HE IS DEALING WITH THESE COMPANIES. LAST YEAR YOU SAW CATL BATTERIES BEING PULLED OUT OF A U.S. MILITARY BASE AFTER MARCO RUBIO AND OTHER LAWMAKERS COMPLAINED THAT CHINESE BATTERIES ARE BEING USED FOR ENERGY STORAGE SOLUTIONS IN THE U.S.

MILITARY BASE. EVEN BEFORE IT WAS LISTED ON THIS LIST, YOU DID ALREADY SEE THEM LOSING SOME BUSINESS AND THAT THEY WILL CONTINUE ONCE WE GET INTO THE TRUMP ADMINISTRATION, ESPECIALLY IF MARCO RUBIO AND OTHER HAWKS ARE IN THE ADMINISTRATION. LIZZY: TENCENT IS SAYING THEY ARE NOT A MILITARY COMPANY BY HOW MUCH SCOPE IS THERE FOR THE COMPANIES ON THIS LIST TO CHALLENGE BEING ON IT. >> THE DEPARTMENT OF DEFENSE MAKES LIGHTER, IT'S A EV USE TO MAKE A MAP OF THE WORLD IN FRONT OF THEM, THEY WERE LISTED, MOVED IN THEY WERE ELICITED AGAIN, SO THERE IS SOME POSSIBILITY THAT TENCENT COULD SUE TO GET OFF THIS LIST.

BUT THEY COULD ALSO BE ADDED BACK ON IF THE DEPARTMENT OF DEFENSE DOESN'T ACCEPT THEIR EXPLANATIONS ON WHY THEY SHOULD BE ON THE LOOSE IN THE FIRST PLACE. BUT IT ALSO JUST SET THEM UP FOR FUTURE LISTINGS BY THE DEPARTMENT OF COMMERCE. MAKES THEM MORE OF A TARGET AND LESS ATTRACTIVE. IF YOU WANT TO MAKE AN INVESTMENT THAT WILL ATTRACT ANY GEOPOLITICAL RISK, WILL YOU INVEST IN A COMPANY AT A FUND THAT'S INVESTED IN THIS COMPANY, MIDSHIP -- WHICH MAY WELL HAVE THIS RISK ATTACHED TO IT NOW OR IN THE FUTURE. IT MAKES IT MORE UNATTRACTIVE

AND HE SAW THE PRICE REACTION IN THE MARKET WITH THE STOCK PRICE FALL FOR HER TENCENT AND OTHER CHINESE COMPANIES. IT'S NOT JUST THOSE FIRMS, IT'S OTHER COMPANIES LIKE A HUGE CHINESE SEMICONDUCTORS, SHIPBUILDERS, SHIPPING COMPANIES THEY WERE ALL ON THE LIST WITH THESE PRICE REACTIONS. GUY: TENCENT INITIATING A RECONSIDERATION PROCESS. HOW LONG DOES THAT SAY, WHAT IS THE PROCESS, OTHER COMPANIES HAVE BEEN EFFECTIVE IN THE EFFORTS. WHAT ARE THE CHANCES HERE? >> THE DEPARTMENT OF DEFENSE GETS TO DECIDE.

THERE IS NO LEGAL PROCESS FOR WHICH IT COULD BE CHALLENGED. BASICALLY THEIR COMPANY -- ON THE NOTICE IT SAYS PLEASE SEND YOUR OBJECTIONS HERE. GIVE US REASONS WHY YOU SHOULD NEVER BE ON THIS LIST. TENCENT AND OTHER COMPANIES CAN HAVE THEIR LAWYERS WRITE UP A COMPANY FOR WHY THESE ACCUSATIONS ARE WRONG OR NEW OR MISLEADING AND THEY COULD SEND THAT TO THE DEPARTMENT OF DEFENSE AND ASK FOR RECONSIDERATION. I'M NOT SURE HOW LONG IT WOULD TAKE. THE PROCESS OF BEING ADDED AND

SUBTRACTED IS BEEN QUITE LENGTHY OVER THE LAST COUPLE OF YEARS, BUT WE WILL SEE THIS PLAY OUT IN THE FUTURE. THIS IS PART OF THE U.S. SANCTIONS. THERE ARE MANY OTHER KINDS OF TOOLS THAT THE GOVERNMENT CAN USE IF THEY WANT, THE TRUMP ADMINISTRATION BAND U.S. NATIONALS FROM INVESTING IN COMPANIES CONNECTED TO THE MILITARY. IF YOU ARE NOT ON THIS LIST, THAT COULD BE DAMAGING FOR OTHER CHINESE FIRMS AS WELL. GUY: JAMES SCHOENING IS OUT OF BEIJING ON THE LATEST OUT OF THE UNITED STATES IN TERMS OF RESTRICTIONS BEING APPLIED TO CHINESE COMPANIES. THIS DRAW OUR ATTENTION TO

ANOTHER SUBJECT. THE PRICES OF THE MOST SOUGHT AFTER USED SWISS WATCHES HAVE FALLEN OFF AGAIN. BLOOMBERG INDEX OF THE 15 MOST TRADED MODELS OF FELL 15% WHICH IS A CONTINUATION OF A THEME. LET'S BRING IN OUR BLOOMBERG REPORTER OUT OF GENEVA ON THIS STORY. WASN'T IT JUST A FEW DAYS AGO THAT ROLEX TURNED AROUND AND UPPED ITS PRICES. WE TALKED TO YOU ABOUT THIS AND

WE GOT THE USED MARKET FOLLOWING. CAN YOU PUT THESE TWO STORIES TOGETHER FORMING, IS TH

2025-01-10 13:33

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