>> I'M ANNER EDWARD ALONGSIDE GUY JOHNSON. WE ARE HOUR AWAY FROM THE OPENING TRADE. TREASURIES RALLY AFTER DONALD TRUMP CHOOSES SCOTT PERCENT, PHYSICAL HAWK. IT DRIVES DOWN YIELDS AND PUSHES UP STOCK, GOLD DIPS WITH MARKET FOCUS TURNING TO THE FED MOVE AND UNICREDIT BEGAN A TAKEOVER BID FOR BANKO BPM. GUY: YOU LAID OUT THE DETAILS ABOUT MARKETS. THE DOLLAR IS DOWN, YIELDS LOW, TREASURIES CATCH A BID. GOLD LOOKS LIKE AN ANOMALY REACTING TO PROGRESS ON CEASE FIRE TALKS. THE COUNTDOWN STARTS NOW. GUY: MONDAY MORNING, GOOD MORNING. MARKETS ARE GIVING THANKS FOR AMERICA'S TREASURY SECRETARY, GLOBAL
IMPLICATIONS, BIG REACTION IN THE DOLLA, STOCKS ARE BID. ANNA: AS THE MARKETS GUY IS A FISCAL HAWK, TALKING ABOUT GETTING OIL PRODUCTION AND HIGHER, QUESTIONS ABOUT WHAT THIS MEANS FOR THE FED CHAIR AND IS THIS ABOUT TRUMP? HOW MUCH OF A SAY WILL HE HAVE? THE PRIORITIES SEEMS TO BE TAX CUTS. INTERESTING TO SEE HOW THAT PLAYS OUT, GOOD FOR CHINA OR BETTER FOR EUROPE. HE DOES WANT AMERICA TO GROW OUT OF THE DEFICIT. WHAT DOES THAT MEAN? MORE COMFORTABLE WITH HIGHER INFLATION? ANNA: I WAS LISTENING TO PREVIOUS APPEARANCES WHERE HE TALKED ABOUT HIS LEAST
FAVORITE WORDS BEING NEVER AND ALWAYS, WHICH GIVES A SENSE OF -- OF -- OF -- OF A PRAGMATIST. MARKETS REACTED AS IF THIS IS A MODERATOR. WE STILL HAVE TRUMP TRADES BUT THERE IS MODERATION. GUY: THIS TAKES OUT SOME DOWNSIDE MAYBE AND ALLOWS ASSETS TO RALLY, THEY WANT TO KEEP RALLYING. BONDS ARE CATCHING A BID. THE DOLLAR IS ROLLING OVER. IS THAT SUSTAINED? WHAT IS HIS PERCEPTION, WE DON'T KNOW. ANNA: WHAT THIS DOES TO THE FED NARRATIVE, YOU RAISE INTERESTING QUESTIONS. YEN HAS GAINED, THIS WILL PUSH THE YEN. GUY: IMPLICATIONS AS TO ECB. DOES THIS
CHANGE PRICING? WE WILL SEE HOW THAT GOES. >> SOME OF THIS COMES DOWN TO FX. GUY: ONE ARROW IS INTRODUCING MORE OIL. ANNA: RAMPING UP IN GOLD PRICE AROUND UKRAINE, LITTLE BIT OF -- OF -- OF -- OF -- OF A PAUSE. BUSY ITALY AS WELL. GUY: WHAT DOES IT MEAN? IS THIS A HEDGE? SORRY, I MISSPOKE, WHAT HAPPENS NEXT IS A ROLLOUT PLAY. BPM PUSHING ITS OWN STORY. ANNA: HE'S BEEN TALKING ABOUT COMMERZBANK AND EXPECTATIONS, NOT PURSUING THIS UNTIL AFTER THE GERMAN ELECTION. MAYBE NOT A CHOICE BUT IT IS THE REALITY. ALOFT WAS TALKING
ABOUT INCREASING SHARES, HUGE QUESTIONS. I MESSAGE COLLEAGUES TO SEE BECAUSE THERE IS NOT A VIEW THAT I CAN SPOT. GUY: PATRICK ARMSTRONG WILL JOIN US AND TO MASH WILL, A RUSSIA UKRAINE WATCHER. ANNA: GERMAN IPHONE DATER WILL BE OUT, FOMC MINUTES, PLENTY OF DATA SO GDP AND PCE COULD BE OF INTEREST AND THEN EVERYONE GOES SHOPPING, THERE WILL BE A GERMAN FOCUS, WEAKNESS COMING THROUGH. PLUS FRENCH DATER IS MORE SEVERE. GUY: WILL WE GET A PICKUP IN THE DATER IS ONE QUESTION? DO WE HAVE TO WAIT BEFORE WE GET CLARITY? KEVIN WILL BE JOINING US
LATER , BOND MARKETS WERE ABOUT TO WRITE GERMANY A CHECK. HOW DOES THE MONEY GET SPENT? DEFENSE, COULD GERMANY BE ABOUT TO GO ON A SPENDING SPREE? ANNA: PCE WILL BE INTERESTING. AMIDST COMPLEXITY OF TRUMP TRADES AND INFLATION IMPACT AND THE FED SENSING LANGUAGE AROUND CAUSING. GUY: DO YOU PUT YOUR FEET UP AS ANNA SAYS? LET'S FIGURE OUT WHAT ELSE IS GOING ON. MONEY WILL BE AVAILABLE TO HELP DEVELOPING COUNTRIES, CALLING ON RICH NATIONS TO COMMIT TO FINANCING. ROMANIA DELIVERED AN EARTHQUAKE AS A RIGHT-WING CANDIDATE CAME OUT ON TOP. IT WILL GO TO A RUNOFF
IN DECEMBER. THE CAMPAIGN SPARKED CONCERNS AND CHINESE ELECTRIC VEHICLE MAKERS SALES ARE ON FIRE, EU AND CHINA NEARING A POTENTIAL TARIFF SOLUTION. CHINA MAY COMMIT TO HAVING A MINIMUM PRICE FOR VEHICLES INTO THE BLOCK. DOES THAT MEAN WE WILL PAY MOW THAN THE CHINESE ARE? ANNA: I CAN SEE HOW THIS MAKES SENSE BUT IT IS STRANGE FOR POLITICIANS TO DELIVER THE MESSAGE, A BIT STRANGE. THE GAP IS HUGE. 20,000 EUROS IN CHINA AND EUROPE. GUY: IF YOU DON'T HAVE A DOMESTIC BASE ARE YOU OK WITH THIS? THIS WILL DRIVE A WEDGE BETWEEN SPAIN AND GERMANY
AND COUNTRIES THAT WANT TO PROGRESS WITH THE TRANSITION. ANNA: THIS MAKES THE POINT THAT THESE ARE TALKS THAT ARE ONGOING, CLOSING THAT WILL TAKE LONG TIME. GUY: IT DOES NOT ENCOURAGE THE CHINESE TO BUILD CARS. THEY CAN MANUFACTURE IN -- IN CHINA, TAKE THE PRICE AND POCKET THE DIFFERENCE. ANNA: COMMERCE BANK AND SUGGESTIONS THAT THE STOCK WILL GO WEAKER, ARE THEY FOCUSED ON M&A OR WAS COMMERZBANK GOING TO MOVE? HE SAID HE WAS NOT GOING TO REDUCE PAYOUT BEFORE WE GOT THE NEWS ON ITALY. GUY: YOU LOOK AT THE SENSEI ON TAP CHANGED, DOES THIS
MEAN ONE OR THE OTHER? I DON'T KNOW. SEEMS LOGICAL YOU WOULD PRICE OUT A DIFFERENT DEAL. ANNA: COMING UP AMAZON GOES TOTO WITH NVIDIA IN TODAY'S BIG TAKE STOWY, RESHAPING SECTORS IN ITALY AND MARKETS REACT TO DONALD TRUMP'S PICK TO HEAD THE TREASURY, THE DETAILS AND IF YOU WANT TO BE PART OF OUR CONVERSATIONS I.B. PLUS BB TV <GO> IS THE FUNCTION, THIS IS BLOOMBERG. >> GUY: WELCOME BACK TO THE OPENING TRADE, MARKETS SO FAR REACT POSITIVELY TO THE CHOICE OF SCOTT BESSETTE, EXCLUDING THE DOLLA. LET'S GET MORE FROM VALERIE. >> OUTPERFORMANCE IN SMALL CAPS
SO FAR, SCOTT BESSETTE BACKED DEREGULATION AND PUSHING THROUGH TAX CUTS AND GROWTH, SEEING A BOOST. DOLLAR INDEX IS SOFTER AND QUITE A SHARP RALLY. 10 YEARS DOWN. LET'S LOOK AT THE CURVE. VOTE OF CONFIDENCE FROM THE MARKET. HE ENTERED THE TRUMP CAMPAIGN BECAUSE HE THOUGHT THE U.S. WAS RUNNING OUT OF TIME! HE COULD BE THE GUY TO FIX IT~ HE ALSO HAS AN ECONOMIC APOLOGY -- POLICY, A CLEAR BUDGET POLICY. HE WANTS TO PRODUCE 3 MILLION BARRELS OF OIL PER DAY. THIS WOULD BE SLICING THE DEFICIT IN HALF! IN JUST THREE YEARS! MAYBE YOU THINK
THAT IS GRADUAL BUT HE ALSO TALKED ABOUT UH TARIFFS UH, HE SAID THIS IN AN OP-ED, WE SHOULD NOT BE AFRAID TO USE TARIFFS TO IMPROVE LIVELIHOODS. HE HAS BEEN PROTERRA BUT IF WE READ THROUGH THE LINES, HE WANTS TO USE THEM TO NEGOTIATE. SO NOT A FAN OF SLAPPING TARIFFS HARD AND FAST. USING THEM INSTEAD TO NEGOTIATE. GUY: INDEED. LET'S GET MOW ON THE MARKETS, JOINED BY PAUL SKINNER FROM WELLINGTON MANAGEMENT. SHOULD WE GIVE THANKS? PAUL SKINNER: HE IS A PROPER COMPROMISE CANDIDATE ENCOURAGING RISK ASSETS WHICH IS WHAT MARKETS WANT. WHAT HE IS SAYING
IS DIFFICULT. CUTTING THE BUDGET WHILE GIVING TAX CUTS WILL BE AN A NO MISSED CHALLENGE. TRUMP WILL BE RUNNING THIS. ART OF THE DEAL BY TRUMP, IN THE SLEIGH OF TARIFFS COMING ON, ARE THEY NOT? IT WILL BE TRUMP'S DECISION SO WE WILL BE HAVING TO WATCH WHAT TRUMP WILL DECIDE AND THAT WILL GIVE -- TO THE MARKET. ANNA: STICK IN A YEAH WAS SAYING THERE IS ONLY ONE SHERIFF IN TOWN. NOTHING WHERE HEARING IS COMPLETE OPPOSITION. >> TOTALLY AGREE. HE'S A MODERATOR, THAT'S WIRE GETTING THIS FEEL IN MODERATION WE WOULD LIKE TO SEE BUT
WE HAVE TRUMP IN CHARGE AND HE WILL BE THE ARBITER. THESE TARIFFS CAN TAKE 1%, THESE ARE MARKET MOVING QUESTIONS AND VOLATILITY IS TRUE BUT NEXT YEAH THERE IS A BIGGER ISSUE. WE HAVE SEEN HUGE POLITICAL TURNOUT AND MANY NEW PARTIES PUSHING ON STIMULUS ACROSS THE BOARD. WE'VE GOT MONETARY STIMULUS CUTTING RATES AND HAVE NOT CONQUERED INFLATION, IT IS ABOVE TARGET AND WE ARE AT THE LOWEST UNEMPLOYMENT FOR 35 YES, WE WILL SEE AN UPTAKE IN INFLATION AND MARKETS HAVE NOT GOT THAT IN THEIR THINKING. GUY: I WOULD'VE THOUGHT I WOULD'VE THOUGHT STOCKS WOULD LOVE
THAT ENVIRONMENT. IS THE RISK RALLY -- IS THE RISK RALLY? >> WE WILL ROAR INTO 2025 BUT THEN COULD THERE BE LOTS OF VOLATILITY OR A REVERSAL? THAT DEPENDS ON HOW STINKY -- RISK RALLY INTO THE NEW YEAR, BUT IT RUNS OUT OF STEAM IN THE MIDDLE OF THE YEAR AND CENTRAL BANKS CANNOT BE THE -- THE -- THE PROVIDER OF LAST RESORT. THEY WILL BE A MOMENT WHERE THE MUSIC STOPS. ANNA: WHERE -- WHERE -- WHERE -- WHERE -- WHERE TO THE MARKETS MAKE IT DIFFICULT? PAUL: WE'VE GOT A 7% BUDGET DEFICIT, WE WILL
BE AT 135 IN 10 YEARS TIME, SAME LEVEL AS ITALY. THERE WILL BE A TIME WHEN THE BOND MARKETS LOOK AT THE SIZE OF DEFICITS, I'M TALKING ABOUT OTHER COUNTRIES. IN BOND MARKET VIGILANTES WHO WE SORE -- GUY: WE'VE HEARD THIS FOR A LONG TIME. U.S. HAS BEEN RUNNING A DEFICIT FOR AGES. ANNA: UPON MARKETS FOR GAVE GOVERNMENTS FOR BORROWING A LOT. PAUL: BIG SHIFT, JAPAN IS THE BIGGEST SAVING NATION AND FOR DECADES THEY'VE SHIFTED OFFSHORE AND SUPPLIED CAPITAL TO THE U.S., U.K.. AS RATES RISE THAT MONEY SHIFTING BACK DOMESTICALLY, $60 BILLION SHIFTED OUT OF
TREASURIES. BACK TO JAPAN. THIS IS WHY WE COULD COME TO A HEAD. ANNA: CAN THIS BE A LIZ TRUSS MOMENT FOR THE U.S.? >> THERE ARE OTHER CANDIDATES FURTHER ALONG AND NOT RESERVE CURRENCY SO WEAKNESS MAY SHOW AND WE ARE LOOKING AT ALL MARKET SOVEREIGNS LIKE WILLINGNESS TO PAY, ABILITY TO PAY, YOU GOTTA LOOK CAREFULLY. GUY: HOW DOES THE U.S. ECONOMY REACT. PAUL: THAT IS A HUGE QUESTION. S&P WAS 26, AND IT IS NOW 38. WE ARE IN THE BOTTOM FOR 100 YEARS. LAST TIME WE WERE IN THAT WAS 2000, 2007. ANNA: THANK YOU, PAUL.
PAUL SKINNER, DIRECTOR AT WELLINGTON, THE MARKET IS DIGESTING. UNICREDIT SHARES COULD DROP, COULD GAIN 8%. STILL LOOKING FOR ANSWERS. SOME DYNAMICS ARE OPAQUE SO WE WILL FIND NEW VOICES ON THIS THEME. COMING UP, DONALD TRUMP IS A BIG POSITIVE, SOME OF OUR ♪ >> MONDAY MORNING, RISK ASSETS SEEM TO BE DOING WELL. TREASURIES ARE FEEDING BACK WITH THE BOND MARKET, TRADES COMING FRUIT, A RIPPLE AS TREASURIES BID ON A COMPROMISED CONCERT DATES. ANNA: LET'S TALK ABOUT WHAT IT MEANS FOR CRYPTO SPACE, NEARING A HISTORIC LEVEL, DONALD TRUMP SUPPORT HAS BEEN A KEY DRIVER OF GAINS.
THE BINANCE CEO DISCUSSED WHAT IT MEANS. >> 2024 MOMENTUM STARTED EARLIER THIS YEAR SO BITCOIN ETF BE APPROVED, HONG KONG AND THE LIST GOES ON, A LOT OF RECOGNITION AND WITH THE LIKES OF ALL THE MONEY MANAGERS INSTITUTIONS STARTING TO RECOGNIZE THE VALUE OF THIS SPACE. LARRY FINK, WENT TO A CRYPTO BELIEVER SPEAKS VOLUME. BITCOIN ETF'S BEST PERFORMING ETF SO FAR, IT SHOWS MAINSTREAM HAS STARTED. >> COULD TRUMP CHANGE EVERYTHING? >> IS A BIG POSITIVE, LAST FOUR YEARS HAS BEEN VERY TOUGH. REGULATION, NOT THE BEST FORM BUT WE HAVE PRO CRYPTO PRESIDENT AND NOT ONLY
PRESIDENT TRUMP BUT HOUSE OF REPRESENTATIVES, PRO CRYPTO. THEY HAVE BEEN RELUCTANT. LIZZIE: ANNA: THAT WAS RICHARD TAKING SPEAKING. TRUMP'S ADMINISTRATION IS SEEN AS A CRYPTO TAILWIND. THE PICK HAS HELPED SENTIMENT. LET'S BRING IN JACK ENGLISH, CEO OF THE ALTERNATIVE INVESTMENT MANAGEMENT ASSOCIATION, SO WE HAVE A HEDGE FUND GUY YOU REPRESENT HEDGE FUNDS. I IMAGINE YOU WELCOME THIS NEWS. >> MARKETS WELCOME THE NEWS. AND I WOULD SAY WE WOULD WELCOME A HEDGE FUND EXECUTIVE, BEYOND THAT HE HAS A DEEP FAMILIARITY WITH ECONOMICS AND KNOWS ABOUT CURRENCIES, WORKED WITH GEORGE SOROS AT THE TIME WAS ATTACKED. SEEN
AS A GOOD CANDIDATE TO PRIORITIZE ECONOMIC STABILITY. ANNA: I WONDER IF THERE NERVOUS. WE WILL SEE. YOU OUTLINED IN OUR COVERAGE HAD SOME FASCINATING ANECDOTES. NOT CERTAIN ABOUT HIS VIEWS. DO WE HAVE ANY INSIGHT? >> I DON'T WANT TO SPECULATE BUT MOST BELIEVE IN FREE MARKETS. READ INTO THAT WHAT YOU THINK. I THINK HE MIGHT PUT DEFENSE AGAINST GANG OVERLY AGGRESSIVE BUT THAT REMAINS TO BE SEEN. GUY: WHAT YOU THINK NEEDS TO DO? GUEST: LESS ABOUT TREASURY SECRETARY, IT'S ABOUT THE REGULATORS SO WE HAD THE ANNOUNCEMENT THAT GARY GENSLER WAS STEPPING DOWN. THE PAST FOUR
YEARS A PACKAGE , WE WENT MISSING. GUY: CHRISTINE LAGARDE WAS ON HER FEET TALKING ABOUT THE NEED FOR CONSOLIDATION AND LACK OF SAVVY WITHIN THE EU. DOES THIS IN HAUNTS THE GAP? YOU'VE GOT A HEDGE FUND GUY WITH AN IDEAR OF HOW MARKETS WORK. >> I -- I -- I THINK THAT IS SOMEWHAT TRUE. BUT UM UH MARIE ALBUQUERQUE DOES HAVE EXPERIENCE. THERE WAS A SOVEREIGN DEBT CRISIS OF IT'S NOT AS THE EXPERTISE DOES NOT EXIST. DIVERGENCE BETWEEN THE EU AND U.K. AND -- AND -- AND THE U.S., THE INCOMING ADMINISTRATION WILL ACCENTUATE FURTHER AND
BE REALLY, REALLY INTERESTING TO SEE HOW PEOPLE RESPOND TO THE AGENDA. ANNA: WE'RE HEARING ABOUT CRYPTO REGULATION BUT THERE ARE OTHER BOGIES AND CRYPTO AND STABLE COLONS AND BUILT-IN INSTABILITY AND DOUBTS ABOUT CRYPTO. HOW DO YOU EXPECT IT TO DEVELOP? GUEST: TRUMP'S APPROACH IS WELL FLAGGED. THE IMPORTANT THING TO NOW IS THAT THIS IS EARLY STAGES. THE EU IS QUITE ADVANCED. THE U.K. IS TRYING TO CATCH UP, U.S. WILL, FROM BEHIND QUICKLY. ANNA: THEY NEED TO BUILD FRAMEWORKS TO OR IT GOT TOO TOUGH? >> THESE WERE SECURITIES AND THEY WENT AFTER IT. OVER 100 CRYPTO
INVESTIGATIONS, YOU WANT PREDICTABILITY IN A FRAMEWORK. AND CERTAINLY FROM WHAT WE HEAR, THEY WANT REGULATORY CERTAINTY THAT HAS NOT EXISTED. GUY: A MORE POSITIVE MESSAGE, SOMETHING WE WILL SEE IN THE U.K.? WE NEED LESS REGULATORY ENVIRONMENT TO REMOVE BURDENS, CAN YOU CONTRAST THOSE MESSAGES. GUESTS: SECONDARY OBJECTIVE AND EVIDENCE FOR THE TREASURY, CONSULTING ABOUT REGIME'S, WHAT MESSAGE WOULD I SEND -- THE PENDULUM POST FINANCIAL CRISIS WENT WAY TOO FAR AND THAT'S WHAT WE HEARD, I WELCOME WHEN I'M HEARING BUT HIGH-LEVEL SORT OF CONSULTATION LEVELS RATHER THAN CONCRETE PROPOSALS FAST, 10 YEAR SORT OF OUTLOOK FOR FINANCES,
TRUMP'S GOT YEARS. HE WILL WORK IN A HURRY. I THINK IT WOULD BE UNFAIR TO ASK REGULATORS TO PROMOTE GROWTH. IT IS TAX AND TALENT AND REGULATION BUT I THINK IT IS IMPORTANT. GUY: DO YOU THINK -- DO YOU THINK THERE SHOULD BE A GREATER FOCUS ON INVESTING? SHOULD BE A MANDATED TO INVEST? ALTERNATIVE ASSETS INCLUDING PRIVATE EQUITY AND INFRASTRUCTURE AS WELL, DO YOU THINK THERE SHOULD BE A REQUIREMENT? GUEST: YOU'RE REFERRING TO SHOULD PENSIONS BE MANDATED. REALLY INTERESTING QUESTION. TAKE A QUESTION OF NO MANDATE WITH A PENSION SYSTEM IN CANADA, CANADIAN INVESTMENT IS MORE
IN CHINA SO THAT LEADS TO A DEBATE ABOUT MANDATES, THERE IS RESISTANCE AND NEW PRODUCTS, EUROPEAN LONG-TERM, THE FRENCH TRIED TO HAVE IT STRUCTURED, THE REST WENT AGAINST THAT, NOT ENTERED INTO THE STRUCTURE SO IT'S A BIG DEBATE REALLY, FIDUCIARY DUTY IS IMPORTANT AND GETTING RETURN FOR THE -- THE -- THE -- THE -- THE BENEFICIARY. ANNA: THIS IS HARDER. MAYBE THE MONEY FLOW IS THERE. GUESTS: IF YOU LOOK AT THE -- THE -- THE -- THE U.S. STOCK MARKET IT HAS BEEN THE PLACE OF RETURNS. GUY: THANK YOU, ED JACK. LET'S TALK ABOUT UNICREDIT
SHARES, YOU -- YOU -- YOU -- YOU ARE SEEING MOVEMENT IN COMMERZBANK, IS THIS A DEAL WITHOUT A PREMIUM? WE'VE GOT BIG MINING MOVES WE NEED TO DISCUSS IN A MOMENT. FIGURE OUT YOUR STOCKS TO WATCH, THIS IS BLOOMBERG. ♪ >> A BIT OF BANKING NEWS THIS MORNING, A CALL THIS MORNING, REPORTERS AS WELL, UNICREDIT SAYING THEY CANNOT BE ABSENT, NOT A SURPRISE IS THE LINE FROM HIM. IS THIS -- IS THIS IF YOU DO ONE YOU CANNOT DO THE OTHER? IS THERE ENOUGH MONEY? ANNA: PERHAPS REGULATORS MIGHT KNOW THEM TO DO IT SO WE
WILL SEE THEM TRACK LOWER. THAT'S THE STORY AND WILL KEEP OUR EYES ON THAT. SCOTT PERCENT TRADE HAS MARKETS CAPTIVATED. JOINING US NOW IS MARK CUDMORE. WHICH DYNAMIC RIGHT NOW, YIELDS COMING DOWN, DOLLAR COMING DOWN, WHICH IS MOST FULL OF MESSAGING? MARK: THE MOST SUSTAINABLE IS EQUITIES BECAUSE THIS IS THE TRUMP TRADE, DOLLAR SOFTNESS AND YIELDS LOWER CANNOT BE THAT SUSTAINABLE. BUT THE BIGGER PICTURE IS THE CONFUSION ABOUT WHAT A TRUMP ADMINISTRATION WOULD MEAN. IT IS A CONSENSUS THAT WILL DELIVER ALMOST ALL THE THINGS THAT ARE POSITIVE AND BACK AWAY FROM ALMOST ALL THE THINGS
THAT ARE NEGATIVE AND THAT IS BASED ON THE NARRATIVE THAT EVERYTHING WILL BE BUSINESS FRIENDLY. THAT MIGHT BE THE CASE BUT I'M WORRIED, MARKET IS SO QUICK TO DISMISS POLICY, VERY DAMAGING MASSIVE THEY ARE JUST LUSTER AND LOVE. QUITE WORRIED ABOUT THE PAST. GUY: DO THE BEARS HAVE TO WAIT? AMARK: FOR NOW SHORT-TERM WE ARE GOING TO RUN OUT OF STEAM IN THE NEXT DAY AND THEN WE GO TO THANKSGIVING AND TRUMP DOES NOT COME INTO POWER UNTIL JANUARY. WE'VE GOT JOBS DATA, FED CUT, I THINK WE ARE GOING TO BACK OFF ON THE TRUMP
TRADES, COMING THROUGH IN JANUARY WITH CLARITY. ANNA: IT WILL BE A BUSY WEEK. ALL KINDS OF EXPECTATIONS. MARK: THE INFLATION STORY REMAINS IMPORTANT, KEY METRIC FOR HOW AGGRESSIVE THEY CAN BE AND WHAT THAT MEANS. NOT INSTRUCTIVE WEEK BECAUSE OF THE HOLIDAY AND REBALANCING SO I THINK WE GET SOME FUNNY MOVES. GOT TO WRITE THIS WEEK OFF. VERY MUCH A TRADERS MARKET, NOT THE MACRO MESSAGE YOU TAKE AWAY. ANNA: MARK CUDMORE WITH MACRO INSIGHTS. PLENTY MORE OF THAT ON THE BLOOMBERG TERMINAL. LET'S GO TO THE STOCK SPECIFIC AGENDA. JOE: BUSY DAY INDEED, UNICREDIT LAUNCHING A BID,
NOT A HUGE PREMIUM BUT IT WILL DEPEND ON WHAT HAPPENS. OVER IN GERMANY UNICREDIT IS LOOKING FOR BID. UNICREDIT BID DOWN TODAY AND BROADER READ ACROSS INCLUDING THEY COULD BID, SO WHAT DOES THAT LEAVE? I'VE GOT MY EYES ON PUBLICLY TRADED BANKS, REALLY FRAG MINTED FEEDING THROUGH AND THEN OVER THE WEEKEND I TV AND UNNAMED BROADCASTER. SHARES HAVE COME OFF AND OVER FIVE YEARS IT HAS LOST HALF OF ITS VALUE SHOWING WHY COMPANIES ARE LOOKING AT THIS SPLIT BETWEEN THE BROADCASTER AND THERE BUSINESS. PRETTY BIG NEWS OUT OF REUTERS, BETWEEN CHINA AND EUROPE, MINIMUM PRICE,
WE SAW A RALLY, DECENT GAINS IN CHINA AND THOSE THREE STOCKS TO WATCH IN EUROPE. VW, BMW. I'LL SLAM TO DO TO WEAKNESS AND COMPETITION FROM CHINA. IN RATINGS THERE ARE SOME DECENT ONES. SANTANDER, OVERWEIGHT. BIGGEST HOMEBUILDER HAS A BUY RATING AND IN OR SAID. GUY: SOME SECTORS WE WILL PAY ATTENTION TO AND LINES OUT OF UNICREDIT ARE ONGOING, NO IMPACT FOR OUR SHELLED SHAREHOLDERS IN ITALY. COMMITTED TO KEEP THE POLICY UNCHANGED. ANNA: GIVING MONEY BACK EVEN IF THEY DO M AND A. ANGLO AMERICAN AGREED TO SELL GUY: MONDAY MORNING, GOOD MORNING. FRIDAY TELLS US
ABSOLUTELY NOTHING THAT IS USEFUL THIS MORNING. I MAY BE OVEREMPHASIZING. THIS CHART IS NOT THAT USEFUL BECAUSE WHAT HAS HAPPENED SUBSEQUENTLY AS WE HAVE SCOTT BESSENT TO NAMED TREASURY SECRETARY. THIS IS THE RALLY INTO THE CLOSE FRIDAY. THE WHITE LINE. THE U.S. FISHER -- FIO NISHES ROUGHLY AT THE SAME LEVEL. THAT IS WHY WE SEE FUTURES DOING WHAT THEY ARE DOING THIS MORNING. THIS RISK ON THE STORY COMING INTO THANKSGIVING WEEK. THE MARKET CERTAINLY GIVING THANKS. THE EURO STOXX 50 UP 0.8%, THE FTSE IS LIGHTING BUT THE CAC IS UP 0.8% AS WELL. THERE ARE
FACTORS IN THE LONDON MARKET WHICH MAY CAUSE IT TO DIP COMPARED TO THE OUTPERFORMANCE ELSEWHERE. WHAT WE'RE SEEING IN THE BOND MARKET THIS MORNING. THE DOLLAR IS DOWN, ANOTHER FACTOR TO THINK ABOUT, ANNA. THERE IS A LOT OF SINGLE STOCK STORIES, TOO. ANNA: ITALIAN BANKS, SUCH A BIG HEAVY WEIGHT THE ITALIAN MARKET THAT WE WILL KEEP AN EYE ON THE ITALIAN MARKET. THE FTSE MIB IN FOCUS. BANCO BPM COULD GO HIGHER ON THE BACK OF THIS BID FROM UNICREDIT. UNICREDIT SAYS THEY WON'T REDUCE THE AMOUNT OF MONEY THEY RETURN TO THEIR SHAREHOLDERS AS A RESULT
OF THIS, THE MARKET IS WONDERING WHAT ALL OF THAT WILL MEAN FOR UNICREDIT. EV MAKERS IN FOCUS AFTER THAT REUTERS REPORT TALKING ABOUT MINIMUM PRICING FOR CHINESE MAKERS. ANGLO AMERICAN SELLING THEIR STEEL BUSINESS, YOU REMEMBER THAT BHP BID THAT THEY PUSHED BACK ON. GUY: STARTING TO SEE THE EFFECT COME THROUGH FROM THAT. MONDAY MORNING'S OPENING TRADE. WE EXPECT THE BESSENT TRADE TO BE FIRMLY ON IN EUROPE AND THE FTSE REFLECTING THAT. THE IBEX IN SPAIN IS UP 0.6%. WE EXPECT SIMILAR NUMBERS ELSEWHERE AROUND EUROPE, 0.6%, 0.7% WE ARE EXPECTING FROM THE IBEX, THE CAC MAY
BE THE DAX AS WELL. THE STOXX 600 ONLY UP 0.2%. LET'S FOLD IN THE OTHER NUMBERS. THE CAC IS UP 0.4 PERCENT. MAYBE THAT NUMBER CLIMBS A LITTLE BIT. ANNA: WE ARE SEEING POSITIVITY CERTAINLY IN THE FRENCH MARKET. WAITING TO SEE WHAT WE GET ON THE DAX. YOU POINTED OUT THE SPANISH MARKET, USUALLY QUITE HIGH BETA, THAT ONE IS UP 0.8%. FTSE MADE UP 0.5%, SO WE SEE STRENGTH ON THAT PARTICULAR MARKET. INDIVIDUAL SECTORS, NO SURPRISE WHEN YOU SEE THE FRENCH MARKET DOING WELL, THAT CONSUMER PRODUCTS AND SERVICES IS THE BEST PERFORMING SECTOR. IT IS
THE LUXURY SPACE THERE AND ALSO HOMEBUILDERS. REAL ESTATE WAS ONE SECTOR THAT DID WELL AT THE END OF LAST WEEK BUT THIS MORNING IT IS PARING. PUMA, LVMH, MONCLER IN THAT SECTOR, TOO, SORT OF MIXED BAG BUT LUXURY TO THE FORE. BMW IS HIGHER A LITTLE THIS MORNING. GUY: ROCHE AND NOVARTIS ARE BOTH SOFT. THEY ARE THE TWO BIGGEST POINTS DRAGS BUT UNICREDIT IS THE THIRD BIGGEST DRAG ON THE STOXX 600 THIS MORNING, IN TERMS OF THE NEWS REGARDING TAKEOVERS BEING FOLDED IN. BANKS ARE GENERALLY WEAKER. CAN'T SEE ANY OTHER CLEAR THEMES COMING THROUGH. BANKS
SEEM TO BE REASONABLY MIXED BUT IT IS MAY THE LUXURY AND TECHNOLOGY SECTOR THAT ARE DRIVING US HIGHER THIS MORNING. LVMH UP, ASML, S.A.P., SCHNEIDER , AIRBUS AND SAFRAN HAVING A GOOD DAY AS WELL. ANNA: THAT'S WORTH NOTING GIVEN THE FOCUS WE HAVE ON M&A WITHIN THE ITALIAN BANKING SECTOR. THE FTSE MIB IS UP 0.5%. WE WILL GIVE AN EYE ON BANKING STOCKS THERE. IT IS A PRETTY RISK ON DAY. THAT PROBABLY HAS SOMETHING TO DO WITH BANKING M&A BUT ALSO SCOTT BESSENT TO. LET'S TALK ABOUT THAT. THE GROUP CIO AT PLURIMI MANAGEMENT JOINS US
NOW. IT SEEMS A HAPPY MONDAY FOR MARKETS. THEY SEEM TO BE WELCOMING THE APPOINTMENT OF SCOTT BESSENT, HEDGE FUND MANAGER, WALL STREET'S GUY IS THE WAY MANY HAVE DESCRIBED HIM OVER THE WEEKEND AND A FISCAL HAWK, WHAT DOES THAT ADD UP TO FOUR YOU? PATRICK: WITH TRUMP'S APPOINTMENTS IT COULD HAVE BEEN SOMEBODY WHO WAS VERY PRO-TARIFFS, VERY MUCH CUTTING TAXES BUT NO OFFSETTING FISCAL DISCIPLINE. THOSE WERE THE WORRIES THAT WALL STREET HAD. I THINK BESSENT IT IS TOO EARLY TO SAY HE HAS ANSWERED THOSE WORRIES BUT BASED ON WHAT WE KNOW THAT ALLEVIATES THOSE CONCERNS.
ANNA: I WONDER WHAT THE SECRET SAUCE WILL BE, HOW DO YOU GET THE BUDGET DEFICIT TO 3%, BUT ALSO CUT TAXES AT THE SAME TIME? PATRICK: NOT GOING TO HAPPEN IN MY OPINION. POPULISM IS THE OVERRIDING THEME OF TRUMP, OF ALL DEMOCRACIES IN THE WEST RIGHT NOW AND ANY UNFUNDED TAX CUTS GO TO MAKE HIGHER DEBT, I THINK THAT IS THE ACTUAL PLAN, TARIFFS WILL BE A SOUNDBITE BUT IT WON'T BE EFFECTIVE. IN MY OPINION, YES. GUY: WILL THEY OFFSET TAX CUTS? PATRICK: I DON'T THINK SO, TARIFFS GIVE YOU A SHORT BOOST IN THE DOLLAR
AS IT REDUCES DEMAND FOR FOREIGN CURRENCIES BUT WHEN THE RETALIATORY MEASURES COME IN, IT REDUCES AGGREGATE TRADE AND I DON'T THINK IT IS A BIG WIN. GUY: INFLATIONARY? PATRICK: EVERYTHING TRUMP DOES IS UNEQUIVOCALLY INFLATIONARY APART FROM THAT TO REGULATION. TAX CUTS BOOST DEMAND, TARIFFS INCREASE PRICES, UNFUNDED DEBT CREATE THE NEED TO PRINT NEW MONEY. GUY: SELL BONDS IN THAT ENVIRONMENT? PATRICK: I HATE TREASURES, TREASURIES YIELDING 4% ARE PRICING A DECADE OF PERFECTION FROM THE FED, IF YOU LOOK AT INFLATION BREAKEVENS THE NEXT DECADE, 2.3% IS WHAT THE MARKET IS PRICING, BUT WHEN YOU HAVE POPULISM,
TARIFFS, WARS, ENVIRONMENTAL ISSUES, INFLATION WILL BE MUCH HIGHER THAN THE MARKET IS PRICING, THERE WILL BE INTERMITTENT SPIKES. YOU GET A REAL YIELD OF 2% ON THE 30-YEAR TIP, BUY A CONVENTIONAL TREASURY YOU WILL LOSE PURCHASING POWER OVER THE NEXT DECADE. ANNA: WE ARE SEEING YIELDS FALL THIS MORNING ON THE BESSENT NEWS. THEY SEE HIM IS BRINGING FISCAL DISCIPLINE BUT FROM WHAT YOU SAID, THERE IS NOT GOOD REASON FOR THOSE YIELDS TO DROP. PATRICK: IF HE WAS PUTTING HIS OWN POLICIES IN PLACE, THERE WOULD BE FISCAL DISCIPLINE. HE WILL NOT HAVE TO COMPLETELY PARROT TRUMP'S
POLICIES, HE WILL PUSH BACK ON THINGS, BUT EVERYONE WHO HAS FOLLOW TRUMP KNOWS WHAT HE WANTS TO GET THROUGH OUR SHORT-TERM WINS. EVERYTHING WILL BE PROGROWTH, WHATEVER THE PROBLEM IS FIX IT QUICKLY, THINK ABOUT THE LONG-TERM LATER, THAT IS POPULISM, THAT IS INFLATIONARY. ANNA: MAYBE IT IS GOOD FOR U.S. STOCKS IN THE SHORT-TERM? PATRICK: IT IS HARD TO SAY HOW THERE IS ANYTHING BAD NEWS FOR THIS ABOUT U.S. STOCKS. HE PROMISED HE WILL IMPLEMENT THE TARIFFS BUT IT WILL BE IN A MUCH MORE GROWN-UP WAY, NOT JUST SOUNDBITES THAT SCARE THE MARKET AND THAT IS
GOOD NEWS FOR EQUITIES. GUY: BUT ARE EQUITIES COMFORTABLE THAT YIELDS GO HIGHER FROM HERE? PATRICK: WHEN YOU SAW YIELDS GET TO 4.5%, YOU SELL REAL WEAKNESS. GUY: ABOUT FIVE, 6%? PATRICK: THAT IS WHEN THINGS START TO CHANGE. NEXT YEAR, I THINK 10-YEAR TREASURY YIELDS ARE ABOVE 5% BASED ON THE FED FUNDS THAT GETS TO FOUR AND A QUARTER, BUT YOU WILL HAVE NORMAL TERM PREMIUM, IF I AM RIGHT ABOUT INFLATION AND THE MARKET PRICE THE RISK OF INFLATION, YOU HAVE TO BE COMPENSATED WITH THE TERM PREMIUM, SO IT WOULD NOT BE OUTLANDISH TO THINK IF
THE FED'S 4%, THE 10-YEAR YIELD IS 5%, THAT IS NORMAL HISTORICALLY. ANNA: BANKING M&A SEEMS TO BE A SURPRISE TOPIC OF THE MORNING. IT HAS BEEN AROUND IN THE BACKGROUND INTO SOMETHING MANY PEOPLE HAVE TALKED ABOUT AS BEING NECESSARY CROSS-BORDER, UNICREDIT HAS AMBITIONS IN THAT SPACE, BUT TODAY IS ABOUT THE DOMESTIC ITALIAN M&A STORY. PATRICK: IT HAS TO TURN INTO CROSS-BORDER M&A TO SOLVE THE PROBLEM OF OVER BANK TO EUROPE AND CREATE SYNERGIES. WE HAVE NOT SEEN ANY SEPARATISTS -- IMPETUS FOR THAT. EVERY COUNTRY WANTS A STRONG NATIONAL BANK JUST FOR NATIONAL PRIDE REASONS, I
DON'T THINK THEY WANT TO SEE MERGING WITH OTHER COUNTRIES. ANNA: BABY THE MARKET IS INTERPRETING THIS ITALIAN M&A STORIES MEANING THERE WILL BE LESS CROSS-BORDER M&A, COMMERCE BANCSHARES DOWN AS UNICREDIT MAKES THAT OFFER FOR BENANCO BPM, ANDREA OR CELLO WOULD LIKE US TO THINK THE BUSINESS CAN PURSUE ALL THESE THINGS AT. PATRICK:PATRICK: THE SAME TIME THERE WILL BE BIDS FOR OTHER COMPANIES, TOO. IT IS AN INCREDIBLY CHEAP SECTOR BUT U.S. BANKS ARE QUITE CHEAP AS WELL. IF I AM RIGHT ABOUT THE YIELD CURVE, THE U.S. BANKS WILL HAVE A STRONG INTEREST RATE MARGIN THAT EUROPE
WILL NOT GET TO BECAUSE YOU WILL NOT HAVE THE INFLATION, THE GROWTH IN EUROPE, WHICH LEADS ME TO PREFER U.S. BANK STILL. GUY: U.S. STOCKS? PATRICK: I AM UNDERWEIGHT U.S. EQUITIES IN MY GLOBAL PORTFOLIO. I HAVE 62% OF MY PORTFOLIO IN THE U.S., SO I HAVE A LOT OF U.S. STOCKS. IF YOU LOOK AT THE MSCI WORLD EX-U.S., THE U.S. IS AT A RECORD HIGH MULTIPLE VERSUS THE REST OF THE WORLD. I AM OVERWEIGHT EVERYTHING ELSE BUT THE U.S., BUT VERY SLIGHTLY. OVERWEIGHT JAPAN, OVERWEIGHT U.K., PRETTY NEUTRAL ON EUROPE RIGHT NOW. GUY: WHAT DOES THE
PORTFOLIO LOOK LIKE IN COMPOSITION? PATRICK: ALL THE BIG CAP U.S. COMPANIES, I LIKE THEM, THEY ARE EXPENSIVE BUT THEY DESERVE THE MULTIPLES THEY TRADE AT. WHAT I AM RIGHT ABOUT IN THE U.S. IS THERE IS ANCILLARY COMPANIES THAT ARE TRADING UP WITH A MEGA CAP COMPANIES AND I THINK THE MEGA CAP COMPANIES ARE THE WINNERS, THEY WILL IMPROVE THEIR PRICING BASED ON AI BENEFITS, COMPANIES TRYING TO GENERATE CUSTOMERS BASED ON AI IS MUCH MORE DIFFICULT, SO I THINK THE INCUMBENTS, YOU HAVE GOT TO GET THEM FROM THE U.S., SO I ON THOSE COMPANIES BUT I
AM UNDERWEIGHT THE SECOND TIER OF TECH THAT I THINK ARE TRADING AT MULTIPLES THAT ARE TOO AMBITIOUS. ANNA: DO YOU SEE OPPORTUNITIES IN AI IN EUROPE? IT IS DIFFICULT TO TAKE NVIDIA HEADLINES AND TRANSLATE THEM TO THE EUROPEAN STOCK MARKET. DO YOU SEE THAT IS INVESTABLE IN EUROPE? PATRICK: WE ARE PLAYING THAT THROUGH THE U.S. IT IS A GOOD QUESTION AND THERE IS PROBABLY GOOD ANSWERS, I HAVEN'T FOUND A GOOD ANSWER RIGHT NOW, BUT IT IS MUCH MORE EASY AND CLEAR HOW YOU CAN PLAY OTHER U.S. COMPANIES RIGHT NOW. ANNA: ARE YOU STILL -- WHERE
ARE YOU ON THAT U.S. AI TRADE THEN? PATRICK: I OWN NVIDIA, GOOGLE, I OWN FACEBOOK BREAKWATER OF THE BIG SIX BASICALLY. AND I DO THINK AI ISRAEL. NVIDIA JUST HAS SUCH A CLEAR REVENUE GROWTH MODEL BECAUSE THE COMPANIES BUYING THEIR PROCESSING UNITS ARE ALL COMPANIES THAT ARE SO CASH RICH, THEY HAVE PROMISED THEIR INVESTORS THEY WILL SPEND THERE. I AM COMFORTABLE WITH THE VALUATIONS BY THEY ARE A BIT EXTENDED. THEY TRADE AT 30-ISH EARNINGS IN AGGREGATE, WHICH MAKES SENSE GIVEN THE DEPENDABLE MARKET SHARE. REGULATION IS A RISK, OBVIOUSLY, AND ANTITRUST MEASURES BUT I DON'T THINK
THE U.S. WILL WANT TO PULL THE CARPET UNDERNEATH THESE COMPANIES AS THEY ARE COMPETING WITH CHINA. ANNA: CAN YOU SEE A CATALYST TO GET U.S. STOCKS LOWER AT THIS POINT? PATRICK: THE 10-YEAR TREASURY. ONCE YOU GET ABOVE 4.5, WE SAW IT A COUPLE WEEKS AGO, THERE WAS REAL WEAKNESS, FOR ABOUT FOUR DAYS AS 10-YEAR YIELDS HIT 4.5, AND AS YIELDS MOVE HIGHER, 2022 WAS TERRIBLE FOR BIG CAP TECH COMPANIES AND AS YIELDS MOVE HIGHER, THERE WILL COME A POINT WHERE 30 TIMES MULTIPLES ARE NOT SUSTAINABLE IF YOU HAVE 5% TREASURIES. UNEXPECTED INFLATION IS WHAT KILLS
TREASURIES AND BIG CAP TECH AT THE SAME TIME. GUY: THAT SOUNDS DEVASTATING FOR A 60-40 PORTFOLIO. PATRICK ARMSTRONG, GROUP CIO AT PLURIMI WEALTH MANAGEMENT. FOR SIX LOOKS LIKE THIS IN EUROPE. THESE ARE THE MAIN STOCKS IN EUROPE. EVERYTHING LOOKS HIGHER, LUXURY ON A PARTICULAR, YOU HAVE GOT LVMH UP BY TWO AND A BIT PERCENT, BUT ELSEWHERE, YOU ARE SEEING WEAKNESS. MAYBE THIS MIXED STORY AND THE BANKING SECTOR, THAT IS A STORY WE ARE COVERING CAREFULLY. WE HAVE VIEWS ON BARCLAYS, TOO. ANNA: DO WE WANT A STORY THAT TAKES US BACK TO THE GFC? I HAVE
ONE IF YOU WANTED. FINDING BARCLAYS 40 BILLION POUNDS FOR FAILURE IN DISCLOSURE. HOW EACH BANK SURVIVED THAT, IN THE CASE OF BARCLAYS, THEY TOOK AN INVESTMENT FROM THE QATARIS AND WERE FOUND TO HAVE HAILED WHO HAVE DISCLOSED DETAILS OF THAT ARRANGEMENT. BARCLAYS SAYING THERE IS NO MATERIAL FINANCIAL IMPACT, AND THEY ALREADY TOOK A PROVISION FOR THIS. GUY: THERE MUST BE A PROVISION FOR THIS. ANNA: IN 2022, AND IT HAS NO NOTABLE EFFECT ON THE STOCK. THE STOCK IS STILL IN POSITIVE TERRITORY BUT THAT IS JUST A LINE IN THE SAND PERHAPS ON THAT STORY POST-GFC.
LET'S GET SOME OF THE OTHERS STOCK MOVERS. STICKING WITH THE BANKING SECTOR BUT OVER IN ITALY, JOE. JOE: THERE IS A LOT OF ACTION THIS MORNING PARTICULARLY IN ITALY. BANCO BPM, THAT ONE COMING UP AROUND 5% OF THE MOMENT. THE UNICREDIT IMPLIED TAKEOVER BID IS ONLY AROUND 6.5 EUROS A SHARE, SO WE SEE IT COME UP SIGNIFICANTLY ON THE EARNINGS PRICES GIVEN THAT TAKEOVER DEAL POTENTIALLY COMING THROUGH. UNICREDIT FALLING, GUY AND ANNA HAVE BEEN DISCUSSING THE COMMENTS FROM ORCEL IN A CONFERENCE CALL SAYING THIS SHOULD NOT BE A SURPRISE. THE ONE REALLY HIT IS COMMERZBANK
BECAUSE THAT UNICREDIT WAS LOOKING AT A BID FOR COMMERZBANK. THAT ONE IS FALLING 5% OF THE MOMENT THEY MONTE PASCHI I HAD AS WELL BECAUSE BPM ITSELF WAS A POTENTIAL BIDDER FOR PASHI'S, WE CDS AND MOVES PARTICULARLY IN BPM AND COMMERZBANK. THE BIG ONES IMPACTED BY THAT PROGRESSION ON ITALIAN BANKING. SPEAKING OF M&A, WE HAVE HIGH TV, THIS REPORT COMING FROM SKY THAT CVC AND AN UNNAMED BROADCASTER ARE LOOKING AT THE U.K. COMPANY. SEEING THE STOCK COMING UP AROUND 8% AT THE MOMENT. ITV HAS BEEN A PERENNIAL TAKEOVER TARGET, WILL BE SEE THIS FINALLY MATERIALIZE
FOR THE COMPANY? WE WILL HAVE TO WAIT AND SEE. ANGLO OFFLOADING THEIR STEELMAKING COAL BUSINESS, THIS IS TO PEABODY ENERGY OVER IN AMERICA, IT IS ABOUT $3.8 BILLION. AS WAS DISCUSSED EARLIER IN THE SHOW, THIS IS SOMETHING THAT WAS SPECULATED, WHEN BHP LOOKED UP TO BUY ANGLO. ANGLO REBUFFED IT BUT EVERYONE SAID THEY MIGHT SELL THAT BUSINESS ANYWAY, IT IS UP ONLY AROUND 2.4%, BUT A BIT OF MOVEMENT ON THAT ONE. WE HAVE THE EV MAKER'S FOLLOWING THIS REPORT. THIS IS COMING FROM N-TV, I BELIEVE THIS IS A GERMAN PUBLICATION, BUT ALSO PICKED UP BY
OTHERS INCLUDING WRITERS AND US, AND WE SEE AGAIN IN THE GERMAN EV MAKER'S, WITH EV EXPOSURE, POTENTIALLY MINIMUM PRICING ON CHINESE EV IS IN EUROPE. THAT COULD BE POSITIVE FOR THESE COMPANIES. THEY ARE GAINING TODAY. IN TERMS OF U.K. EARNINGS, ANOTHER NEGATIVE ONE FROM THE BNQ, THE DIY MAKER, THAT ONE SLAMMED DOWN 10%, THE WARNING ONCE AGAIN OF WEAKNESS IN THE U.K. FRANCE IS ALSO SOFT BUT THAT IS A SMALLER MARKET. THE U.K. GROWTH ONLY HALF OF WHAT ANALYSTS EXPECTED IN THE LAST QUARTER. ON A YEARLY BASIS, IT IS STILL IN NEGATIVE TERRITORY FOR THE
BNQ AND SCREW FIX OWNERS. THAT ONE DOWN 11% TODAY. IN EARNINGS CHANGES, MENTION SANTANDER, MORGAN STANLEY LIKES BANKS THAT HAVE MINIMAL RATES EXPOSURE BUT HIGHER EXPOSURE TO FEES AND ALSO STRONG CAPITAL. SANTANDER IS ONE OF THEIR TOP PICKS. THE INTERESTING GIVEN USE OF POTENTIAL WINDFALL TAX IN SPAIN. SANTANDER RISING TO A 1.4% IN MADRID THIS MORNING. ANNA: JOE EASTON FROM OUR EQUITIES TEAM WITH ALL THE INDIVIDUAL STOCK NEWS YOU NEED. COUPLE OF OTHER LINES FROM ORCEL THIS MORNING, SAYING AS OF TODAY, COMMERZBANK IS A FINANCIAL INVESTMENT. WE HAVE HEARD THAT LINE BEFORE LIMITING EXPECTATIONS THERE.
AND HE TALKED ABOUT NOT GOING AFTER THE REST OF IT UNTIL AFTER THE GERMAN ELECTION. UNICREDIT HAS NO AMBITION ON MONTE PASCHI WHICH IS INTERESTING BECAUSE SOME PEOPLE HAVE JOINED THE DOTS AND SAID MAYBE THE REASON HE IS GOING AFTER BPM IS BECAUSE BPM IS GOING AFTER MONTE PASCHI, BUT HE SAYS NO. GUY: THIS COULD JUST BE A GIANT ITALIAN ROLLUP. YOU COULD DO A WHOLE SERIES OF TRANSACTIONS IN ONE AND ACHIEVE ALL DOUBLE AIMS WITH THAT. MAYBE HE IS AWARE OF THE REGULATORY RISK OF TRYING TO DO SO MUCH AND HOW MUCH CONSOLIDATION WILL
BE TOLERATED BY ITALIAN POLITICIANS. WE WILL TAKE YOU TO ANOTHER SECTOR IN EUROPE. THERE ARE REPORTS THAT BRUSSELS AND BEIJING ARE NEARING A SOLUTION OVER EV TARIFFS ON CHINESE EV IMPORTS. THIS IS BLOOMBERG. ♪ ANNA: WELCOME BACK TO "THE OPENING TRADE." 20 MINUTES INTO AN EVENTFUL SESSION. FACTORING IN RISK ON MOVEDS,, AS WE AS WE DID IN ASIA BECAUSE OF THE APPOINTMENT OF SCOTT PERCENT TO TREASURY IN THE UNITED STATES, BUT UNDERNEATH THAT WE HAVE SECTOR STORIES TO REVISIT. FIRST, WE WILL GO TO THE BANKING SECTOR. UNICREDIT AND BPM, THE SHARE PRICES OF BOTH OF
THOSE VERY MUCH ON THE MOVE. BPM MOVING HIGHER AND UNICREDIT DOWN AFTER A $10 BILLION ALL-SHARE OFFER. AS CEO ANDREA ORCEL ALSO PURSUES COMMERZBANK. LET'S BRING IN OUR SOUTHERN EUROPE AND MANAGING EDITOR. TAKE US THROUGH SOME DETAILS AROUND BANCO BPM AND WHAT IT IS THAT UNICREDIT IS TRYING TO DO. THERE DID NOT SEEM TO BE A PREMIUM ON THIS DEAL AND YET THE BPM SHARE PRICE GOES HIGHER. WHAT ARE WE MISSING ON THAT STORY? >> GOOD MORNING, THIS WAS A 6:00 A.M. MONDAY MOVE BY ANDREA ORCEL, SOMEHOW WE MOVED BACK FROM GERMANY TO MILAN. A
BID FOR ITALY'S THIRD-LARGEST BANK. WHY, IT IS SO INTERESTING BECAUSE JUST A FEW DAYS AGO, BANCO BPM HAD A STAKE IN MONTE PASCHI DE SIENA, AND THE GOVERNMENT WANTED TO CREATE A THIRD BANKING GROUP AROUND MONTE PASCHI DI SIENA, WE DON'T HAVE A RESPONSE FROM THE ITALIAN GOVERNMENT IF THEY WILL APPROVE THE MOVE. ALSO, BANCO BPM HAS AN IMPORTANT INVESTOR AMONG ITS SHAREHOLDERS. THE FRENCH BANK HAS ABOUT 9% OF BANCO BPM. THE REASON WHY BANCO BPM HAS GONE UP IS PROBABLY WE CAN GUESS THAT INVESTORS MAY THINK THIS IS JUST THE BEGINNING, NOT THE END,
OF THE BATTLE FOR BEEN THE BANK. I AM JUST GUESSING. GUY: WHEN GIORGIA MELONI WOKE UP THIS MORNING TO THIS NEWS, HOW DO YOU THINK SHE WOULD HAVE REACTED? IS THIS SOMETHING THE ITALIAN GOVERNMENT WILL BE IN FAVOR OF? DO WE HAVE AN IDEA OF THE KIND OF LANDSCAPE OF ROME IS LOOKING FOR IN ITALIAN BANKING? >> ON ONE SIDE, BANCO BPM WAS A POTENTIAL TARGET FOR UNICREDIT HAS BEEN IN THE CARDS FOR MONTHS. IT IS A VERY RICH BANK BASED IN LOMBARDI. AND UNICREDIT WOULD EXPAND IN ITALY WITH BANCO BPM. IT IS A GOOD
FIT FOR ORCEL, AND SPECULATION HAD BEEN GOING ON FOR MONTHS, NOT A TOTAL SURPRISE. THE SURPRISE IS IN TIMING, JUST BECAUSE A FEW DAYS AGO, BANCO BPM BOUGHT A STAKE IN MONTE PASCHI. THIS IS LIKE THE THIRD MOVE AND A VERY BOLD MOVE BY ANDREA ORCEL ON BANCO BPM. WE WILL SEE IF ITALY SEES THIS AS A GOOD DEAL FOR THE COUNTRY, CREATING A BIG LLP, OR IF THE ITALIAN GOVERNMENT WOULD FAVOR A THIRD BANKING GROUP. THIS IS LEFT TO THE MARKET AND ANDREA MADE MOVES, SO IT IS UP TO BANCO BPM INVESTORS TO SEE
IF THIS IS A GOOD DEAL FOR THEM OR NOT. ANNA: WE WILL GET THAT VERDICT PERHAPS. WE WILL WATCH FURTHER DEVELOPMENTS BEHIND THIS SHARE PRICE MOVE. WHAT LINKS DO WE DRAW BETWEEN THIS AND APPRECIATING YOUR FOCUS ON SOUTHERN EUROPE, BUT WHAT LINKS WITH COMMERZBANK, BECAUSE THE MARKET IS SUGGESTING ORCEL CAN'T GO AFTER ALL THESE THINGS AT THE SAME TIME BECAUSE COMMERZBANK IS DOWN 5% THIS MORNING. >> FIRST OF ALL, ANDREA ORCEL IS GOING FOR BIG DEALS. I DON'T THINK THAT A BANCO BPM MOVE MEANS ANYTHING SUBSTANTIAL. ON COMMERZBANK. BUT IF COMMERZBANK FELL ALMOST 6% OF
THE OPEN, THIS IS WHAT INVESTORS ARE READING. FROM A MARKET-MOVING POINT OF VIEW, IT LOOKS LIKE ORCEL IS FOCUSING ON ITALY, AFTER BEING FOCUSED ON GERMANY FOR SOME MONTHS. HE SAID ON A CALL VERY FEW MINUTES AGO THAT FOR NOW COMMERZBANK IS A FINANCIAL INVESTMENT. A LITTLE BIT OF COLD WATER ON POTENTIAL TAKEOVER OF COMMERZBANK? , WE DON'T KNOW WE WILL, REPORT, YOU WILL READ IT FIRST ON BLOOMBERG NEWS. GUY: TOMMASSO EBHART, OUR SOUTHERN EUROPEAN MANAGING EDITOR COVERING THE BANKING STORY FOR US THIS MORNING. SHARES OF EUROPEAN EV MAKER'S TRADING HIGHER ON WAS THAT THE
EU AND CHINA ARE NEARING AGREEMENT ON IMPORT TARIFFS, ACCORDING TO A REPORT FROM GERMAN BROADCASTER N-TV, THE MORE WE ARE JOINED BY BLOOMBERG'S GLOBAL AUTOS EDITOR. THE IDEA IS WE GET A MINIMUM PRICE IN YOUR FOR CHINESE EV IMPORTS WHICH SOUNDS GREAT FOR THE CHINESE, I'M TRYING TO WORK OUT WHY IT IS GOOD NEWS FOR EUROPE? >> I DO WONDER HOW MUCH STOCK WE SHOULD PUT INTO THIS FOR THAT VERY REASON. YOU HAVE THIS INFORMATION COMING FROM A GERMAN POLITICIAN. GERMANY HAS COME OUT FORCEFULLY AGAINST THESE TARIFFS. WAS NOT IN FAVOR WITH GOING FORWARD WITH
THEM AND WANTS THEM TO GO AWAY. SO, THE SOURCE OF THIS INFORMATION FROM THE JUMP IS A QUESTION. IF YOU LOOK AT THE COMMENTS THAT WERE MADE, THE LEVEL OF DETAILS IS QUITE VAGUE. WE HAVE KNOWN FOR WEEKS NOW THAT THERE HAVE BEEN DISCUSSIONS ABOUT PRICE UNDERSTANDINGS -- UNDERTAKINGS AND TRYING TO SET A FLOOR. THERE IS A REAL QUESTION AS TO WHETHER THAT WOULD BE MORE EFFECTIVE, AND MORE SORT OF HELPFUL TO THE EUROPEAN INDUSTRY, AS OPPOSED TO PUTTING IN PLACE TARIFFS THAT WOULD LEAVE THESE COMPANY'S TO SET UP LOCAL MANUFACTURING. WHICH I THINK IS
WHAT OTHER PARTS OF EUROPE WOULD PREFER. GERMANY WHAT THEY ARE CONCERNED ABOUT IS MAKING THESE TARIFFS GO AWAY, SO THAT THERE AREN'T RETALIATORY TARIFFS THAT WOULD HURT THEIR MANUFACTURING. ANNA: THIS WOULD BE A HARD SELL TO THE ELECTORATE, LOOK WHAT WE HAVE DONE, WE HAVE DONE A DEAL, THAT MEANS YOU WILL PAY MORE FOR YOUR CARS THEN YOU MIGHT OTHERWISE HAVE. >> IN BOTH CASES, WHETHER IT IS TARIFFS OR PRICE MINIMUMS, YOU ARE MAKING IT MORE EXPENSIVE FOR PEOPLE TO MAKE THIS TRANSITION WHICH IS THE VERY ISSUE WE HAVE BEEN TALKING ABOUT AD NAUSEAM FOR
YEARS NOW, THAT ELECTRIC VEHICLES ARE STILL MUCH MORE EXPENSIVE THAN COMBUSTION CARS, AND WHEN YOU PUT THESE MEASURES IN PLACE, IT MAKES THIS TRANSITION MORE DIFFICULT. ANNA: BLOOMBERG STRAIGHT FOR EL. WE SPENT -- CRAIG TRUDELL. WE SPENT A LOT OF LAST WEEK TALKING ABOUT ESCALATION IN UKRAINE. WHAT DONALD TRUMP'S ADMINISTRATION MEANS OR MEMBERSHIPS WAR IN UKRAINE -- FOR RUSSIA'S WAR IN UKRAINE. WE WILL GET TO THAT NEXT. THIS IS BLOOMBERG. ANNA: WELCOME BACK, THIS IS "THE OPENING TRADE," WE HAVE GREEN ON THE SCREEN AS DELIVERED BY THE NEW TREASURY SECRETARY PERHAPS VERY LITTLE BIT OF
RISK ON IN EUROPE, SOME OF IT HAS FADED. THE CAC 40 STARTED OUT OF THE GATES UP MORE THAN 1%. NOW UP JUST BY 0.5 PERCENT RATE WE SEE POSITIVITY BUT NOT AS MUCH AS WE HAD. WE HAVE BEEN DEALING WITH A LOT OF INTERESTING SECTOR SPECIFIC STORIES, PLENTY OF GEOPOLITICS THAT LINGERS IN THE BACKGROUND. GUY: PLENTY GOING ON THIS MORNING BRIEF ANNA IS BRINGING UP THE FACT THAT LAST WEEK I THOUGHT THE YEAR WAS OVER AND WE COULD BASICALLY ALL REST EASY BUT THERE IS A FEW THINGS TO WORK THROUGH. ONE OF WHICH IS
WHAT IS HAPPENING WITH THE TRUMP CABINET. WE HAVE THE FINAL PIECE OF THE PUZZLE. DONALD TRUMP HAS FILLED HIS CABINET WITH PEOPLE HE WANTS TO CARRY OUT HIS AMERICA FIRST POLICIES THE ECONOMY, THE BORDER, NATIONAL SECURITY, ETC. HEDGE FUND MANAGERS SCOTT BESSENT HAS BEEN NOMINATED TO THE U.S. TREASURY SECRETARY. KRITI: LET'S TALK ABOUT WHAT HE IS ADVOCATING FOR. WE HEARD HIM ON THE CAMPAIGN TRAIL SAYING WE DO ADDRESS THE BUDGET, TAXES AND INCREASED TARIFFS, HOW DO YOU DO IT NOW CHECKING THE FINANCIAL BALANCE SHEET OF THE U.S. GOVERNMENT? THAT IS SCOTT BESSENT'S JOB AND HE
IS ADVOCATING THAT THROUGH A 3, 3, 3 POLICY TAKING A PAGE OUT OF THIE SHINZO ABE PLAYBOOK, BUT JAPAN IS A VERY DIFFERENT ECONOMY, IT MEANS CUTTING THE BUDGET DEFICIT TO 3% BY 2028. HE IS ALSO TALKING ABOUT THE REGULATION. NOT JUST ABOUT TAX CUTS, IT IS GETTING MORE TAX REVENUE BY HAVING MORE GROWTH. AND SOME OF THAT IS BARRED BY TAX CUTS, OTHERS IS BY INCENTIVES. WHAT THOSE ARE WE DON'T KNOW BUT IT IS SOMETHING HE HAS TALKED ABOUT. NOT TO MENTION THE ENERGIES THERE. -- ENERGY SECTOR. EVEN TALKING ABOUT ELECTRICITY TO POWER THE
AI STORY. THAT IS PRODUCING AN ADDITIONAL 3 MILLION BARRELS PER OIL OF DAY COMES IN HANDY. BUT NONE OF THIS IS POSSIBLE IF YOU CAN BALANCE THE BOOKS. THE IDEA THAT BY 2026, YOU ARE STILL LOOKING AT -0.6% ON THE U.S. DEFICIT, SOMETHING THAT IS NOT CHANGING GOING BACK TO RIGHT NOW IN 2024. THE LAST COUPLE OF YEARS, MORE SPENDING BY THE U.S. GOVERNMENT, REALLY RELYING ON BEING THE RESERVE CURRENCY, THE BOND MARKET THAT HAS EXTREME LIQUIDITY RELATIVE TO THE REST OF THE WORLD. IT SHOWS UP IN TARIFFS EXPOSED CURRENCIES GREAT IF YOU ARE BALANCING
THE BOOKS, WHERE YOU MAKE UP THE DIFFERENCE, IT IS TARIFFS. IT IS EUROPE, CHINA, MEXICO AND CANADA. HERE IS WHERE THE GEOPOLITICS COULD SHOW UP, GUY AND ANNA. GUY: KRITI WILL BE BACK TOMORROW I THINK PRETTY LOOKING FORWARD TO THAT. LET'S TALK ABOUT GEOPOLITICS AND HOW IT IS BEING FOLDED INTO THE STORY. LAST WEEK WAS DOMINATED BY NEWS AROUND UKRAINE. PRESIDENT JOE BIDEN PUSHING TO STRENGTHEN UKRAINE'S POSITION AGAINST RUSSIA BEFORE DONALD TRUMP'S RETURN TO THE WHITE HOUSE BY THE PRESIDENT-ELECT PLEDGED TO END THE WAR. LET'S DISCUSS WHAT IT COULD MEAN FOR PUTIN AND UKRAINE. WE
ARE JOINED BY TIM ASH, SENIOR SOVEREIGN STRATEGIST AT BLUEBAY ASSET MANAGEMENT. GOOD MORNING, WHAT HAPPENS NEXT? TIM: THERE WILL BE A LOT OF NEGOTIATIONS. WHOEVER WON THE PRESIDENTIAL ELECTION, THAT WAS CLEAR WOULD BE THE CASE. ZELENSKYY THOUGHT IT WOULD IMPROVE HIS POSITION. WE WANTED A TRUMP VICTORY ASSUMING THAT WOULD HELP HIS POSITION. BOTH SIDES CAN FIGHT THE LONG WAR. PUTIN HAS GOT -- THERE IS A LOT OF DURABILITY, THE NORTH KOREANS HAVE COME IN RECENTLY -- BUT UKRAINE IS FIGHTING FOR ITS SURVIVAL. THEY HAVE TO FIGHT BECAUSE IT IS THEIR TERRITORY. THEY HAVE PROVED THEIR
DURABILITY AS WELL. BOTH SIDES ULTIMATELY WOULD LIKE A SETTLEMENT AT THIS POINT IN TIME FOR DIFFERENT REASONS. THE RISKS TO BOTH SIDES FROM CONTINUED WAR, SO THERE IS A DEAL TO ME MADE, WE ARE JUST WAITING FOR THE TRUMP PRESIDENCY TO COME IN AND TRY AND NEGOTIATE THAT. GUY: DOES EUROPE HAVE A SEAT AT THAT TABLE? >> THE TRUMP ADMINISTRATION WOULD LIKE TRUMP JUST TO GO AWAY. THEY WANT TO FOCUS ON CHINA. THE U.S. SEES CHINA AS A PRIMARY RISK, I WOULD ARGUE THAT HE EUROPE SEES RUSSIA AS A PRIMARY RISK. THEY WANT A SETTLEMENT
THAT MAKES UKRAINE SUSTAINABLE. THE WORST CASE FOR EUROPE IS THAT TRUMP WALKS AWAY OR IMPOSES A DEAL THAT MEANS UKRAINE IS NOT SECURE, THE PIECE IS NOT DURABLE, RUSSIA GOES IN AGAIN. THIS MEANS THERE WILL BE NO INVESTMENT INTO UKRAINE. UKRAINE WILL ECONOMICALLY FAIL, SOCIALLY AND POLITICALLY FAIL. IMAGINE -- GUY: IS THAT OK FOR PUTIN? PATRICK: D LOVES THAT SCENARIO BECAUSE HE WAS TO GO BACK IN AT A LATER DATE. IMAGINE FOR EUROPE WHAT THAT MEANS, IF UKRAINE FAILS, IF A MILLION SOLDIERS COME BACK, THEY DON'T GET ANY IMPROVEMENT IN THEIR LIVES, YOU SEE POLITICAL
CHANGE IN KYIV. YOU COULD SEE STATE FAILURE IN UKRAINE, FOOD AND COME BACK IN AND TAKE THE WHOLE COUNTRY, MILLIONS, TENS OF MILLIONS OF UKRAINIANS MOVING WEST. RUSSIA GETS IN UKRAINE'S MILITARY-INDUSTRIAL COMPLEX. UKRAINIANS HAVE MADE HUGE ADVANCES IN 1000 DAYS OF OR. -- WAR. IF RUSSIA GETS THAT COMBINED WITH ITS OWN, IT IS A HUGE FUTURE THREAT TO EUROPE, SO EUROPE CANNOT JUST LEAVE UKRAINE ALONE BECAUSE TRUMP IS NOT INTERESTED IN UKRAINE. THEY HAVE TO REMAIN COMMITTED TO HELPING UKRAINE SUSTAINED ITS DEFENSE BECAUSE IT IS IN THEIR INTEREST. ANNA: IS THERE A SETTLEMENT THAT YOU
CAN SEE TRUMP AND APPROVED AGREEING TO -- AND FOOD AND AGREEING TO THAT WOULD BE SUSTAINABLE? IT SOUNDS LIKE THERE WILL ALWAYS BE A PUTIN OVERHANG OVER UKRAINE? PATRICK: THE KEY DEBATE WILL BE ABOUT SECURITY. THERE IS A LOT OF FOCUS ABOUT TERRITORY. THE TROUBLE IS PEOPLE WANT THE CONFLICT FROZEN WHERE IT IS. FOR ME, THIS DEBATE IS ABOUT NATO MEMBERSHIP. THIS WAR WAS NEVER ABOUT NATO. PUTIN INVADED UKRAINE BECAUSE HE WANTED THE WHOLE OF UKRAINE. NATO WAS NO THREAT TO RUSSIA. UKRAINE DIDN'T WANT TO BE IN NATO, IF YOU GO BACK TO 2014 IT
WAS ABOUT FOOD -- PUTIN'S COLONIAL AMBITIONS TO UKRAINE. NATO IS LESS IMPORTANT. WHAT IS IMPORTANT IS UKRAINE'S ABILITY TO DEFEND ITSELF. IT WILL BE SECURITY GUARANTEES, IF YOU DON'T WANT TO GIVE NATO MEMBERSHIP, SECURITY GUARANTEES WOULD PULL YOU IN. WHAT THE DEAL COULD BE IS NATO GIVES UKRAINE THE KIND OF SECURITY GUARANTEES THAT ISRAEL HAS. UKRAINE WILL GET WHATEVER WEAPONS IT NEEDS CONVENTIONALLY TO DEFENDS ITSELF. UKRAINE HAS PROVEN MORE THAN CAPABLE OF DEFENDING ITSELF, THE PROBLEM IS WE HAVE NOT PROVIDED THE FINANCING AND MUNITIONS TO DEFEND ITSELF, IF IT GETS WET SOUTH KOREA GETS, THEY
COULD BE SECURE AND RUSSIA WOULD BE DETERRED FROM INVASION. ANNA: AS IT WOULD HAVE AN INVESTMENT FUTURE? PATRICK: ABSOLUTELY. WHAT IS CURRENTLY OCCUPIED BY UKRAINE IS ABSOLUTELY SUSTAINABLE. YOU WILL SEE A LOT OF FINANCING FLOW INTO THE COUNTRY. IT IS A LOW BASE, BIG RECONSTRUCTION OPPORTUNITIES. THE AGRO FOOD SECTOR IS INCREDIBLY INTERESTING. THE MILITARY-INDUSTRIAL COMPLEX. THESE ARE HUGELY INTERESTING TO WESTERN COUNTRIES GIVEN THAT RUSSIA IS A LONG-TERM THREAT TO EUROPE, TO EUROPEAN UNION POLITICIANS. LOOK AT THE RHETORIC COMING OUT OF WESTERN POLITICIANS SINCE THE U.S. ELECTION. MICRON, STARMER, THE MESSAGE IS ALL ABOUT ACTUALLY RUSSIA
IS THE THREAT. ANNA: WILL EUROPE HAVE A DIFFERENT POLICY AROUND UKRAINE AND APPROVED -- PUTIN VERSUS THE UNITED STATES? PATRICK: A LOT OF CRITICISM ON TRUMP AND HIS POSITION AROUND TOMATO BUT THERE IS RECOGNITION THAT EUROPE HAS TO STAND UP FOR ITSELF. THAT HAS TO FUND ITS OWN DEFENSE. GUY: HOW MUCH DOES SECURING UKRAINE, EFFECTIVELY SOME SORT OF MARSHALL PLAN FOR UKRAINE IN TERMS OF REBUILDING, PLUS REARMING WESTERN EUROPE, HOW MUCH IS THAT COST? PATRICK: SPECIFICALLY ON UKRAINE, WE HAVE BEEN SPENDING A HUNDRED BILLION DOLLARS A YEAR TO KEEP UKRAINE JUST IN THE WAR. FOR
UKRAINE TO WIN, IT SHOULD HAVE BEEN 150 BILLION. RECONSTRUCTION IS BETWEEN 500 BILLION, SMALLER ECONOMY MAY BE 50 BILLION A YEAR, THEY ARE DOABLE WHEN YOU THINK ABOUT THE SIZE OF THE EUROPEAN ECONOMY, THEN THERE IS THE COST OF EUROPE'S DEFENSE. A LOT OF TALK ABOUT GETTING TO THE TWO PRESE -- 2% GDP TARGET, GIVEN THE THREAT FROM RUSSIA THAT HAS BEEN PROVEN, WE NEED TO GO WHERE WE WERE DURING THE COLD WAR, 3% GDP PLUS, SOME COUNTRIES LIKE POLAND ARE UP TO TRUCK, 5%, BUT WE NEED TO SPEND ANOTHER 1% OF GDP IN EUROPE
ON DEFENSE. THAT IS HUNDREDS OF BILLIONS OF DOLLARS OF ADDITIONAL SPENDING FOR EUROPE. IT IS IRONIC, I MENTIONED THE 150 BILLION A YEAR FOR UKRAINE TO WIN THE WAR, WE SHOULD'VE PROVIDED THAT, WE DIDN'T, THE RESULT IS THAT EUROPE IS ON THE HOOK FOR HUNDREDS OF BILLIONS OF DOLLARS A YEAR IN ADDITIONAL DEFENSE SPENDING. COST-BENEFIT, WE SHOULD'VE HAVE DONE MORE TO SUPPORT RAIN. -- SUPPORT UKRAINE. ANNA: WHILE THINKING ABOUT THIS REGION, WE HAVE APPROPRIATE AND -- PRO-PUTIN CANDIDATE. PATRICK: NEXT URINARY RESULT. I WAS LISTENING TO MANY ANALYSTS AND I ASKED ABOUT THE CHANCES OF SUCH
A QUESTION PAID HE PUT A 1% PROBABILITY ON IT. I GUESS IT SHOWS THAT POPULISM IS POPULAR. THE TRUMP SCENARIO, IF YOU ADD A BIT OF XENOPHOBIA INTO THE MIX, IT IS KIND OF WINNING ARMY LEFT -- FORMULA. ANNA: IT IS HAPPENING WITH THE YOUNG. PATRICK: I THINK THIS ELECTION WILL OMIT THE ELECTION IN MOLDOVA RECENTLY. THE MOLDOVAN AND ROMANIAN POPULATIONS ARE VERY SIMILAR. SAME KIND OF HISTORY AND LANGUAGE. WHEN IT CAME TO THE PRESIDENTIAL ELECTION, ROMANIANS THOUGHT LONG AND HARD ABOUT IT, AND IN THE END IT WAS 55-45 FOR THE PRO-EU ENDED -- CANDIDATE.
EURO MANIA GETS YOU -- ROMANIA GETS HUGE AMOUNTS OF STRUCTURAL FUND FLOWS. IF WE SEE THIS HEART RATE CANDIDATE WIN, THOSE FUNDS [INDISCERNIBLE] IN THE INVENTOR, WE HAVE PARLIAMENTARY ELECTIONS IN TWO WEEKS, MANY ROMANIANS WILL ULTIMATELY VOTE FOR THE PRO-EU CANDIDATE. GUY: DOES THIS BRING INTO QUESTION THAT EUROPE SEES WHO ATTEND -- PUTIN AS A THREAT? PATRICK: BALTIC STATES ARE CLEAR-CUT IN TERMS OF WHERE THEY SEE THE THREAT. THE SCANDINAVIAN COUNTRIES, FINLAND AND SWEDEN REMARKABLY CAME OFF THE FENCE, AND JOINED NATO. OPINION POLLS SHIFTED. THE CLOSER YOU ARE TO RUSSIA, THE MORE SENSE OF IMPENDING
PERIL. GUY: IT HAS A BIG UKRAINIAN BORDER. PATRICK: THIS GUY GOT MONEY PERCENT OF THE VOTE, LET'S NOT OVER EGG THE SITUATION, I WOULD STILL THINK ROMANIA SPLIT 60-40 PRO-EVE YOU -- PRO-EU ULTIMATELY. THE SUPPORT FOR THIS NATIONALIST CANDIDATE IS NOT JUST A PRO-RUSSIAN VOTE. IT IS ABOUT IMMIGRANTS. IT IS ABOUT A LIBERAL SOCIAL AGENDA. A LOT OF THE POPULATION ARE SOCIALLY CONSERVATIVE. WE HAVE SEEN A SIMILAR AGENDA PLAY OUT IN GEORGIA. HE PUSHED A SOCIALLY LIBERAL AGENDA, CONSERVATIVE RURAL POPULATION. GOING BACK TO ROMANIA, WHEN PUSH COMES TO SHOVE, WHAT WILL THEY VOTE FOR? EU
OR SOMETHING ELSE. WHICH IS PRETTY UNCERTAIN. ULTIMATELY, THEY WILL GO FOR THE PRO-EU CANDIDATE, BUT IT IS A SHOCK AND POLICYMAKERS IN ROMANIA HAVE MESSED AROUND IN POLITICS. YOU HAVE HAD ON STABLE COALITIONS PRETTY HAVE SEEN SQUABBLING ABOUT MINISTERIAL POSTS. THEY NEED TO GET ON AND GOVERNED PROPERLY IN AN EFFICIENT.WAY . THEN THEY WILL BE REWARDED BY THE ELECTORATE ULTIMATELY BUT IT IS A WAKE-UP CALL ABSOLUTELY. ANNA: TO MASH, SENIOR SOVEREIGN STRATEGIST AT RBC BLUEBAY ASSET MANAGEMENT, AND ASSOCIATE FELLOW TO CHATHAM HOUSE. AMAZON IS GOING ALL IN ON SHIPS IN A BID TO REDUCE RELIANCE
ON AI POWERHOUSE NVIDIA. WE WILL DIG INTO THAT FASCINATING BIG TAKE STORY. THIS IS BLOOMBERG. >> I DON'T KNOW WHAT'S GOING TO HAPPEN WITH THE NEW ADMINISTRATION. WHATEVER HAPPENS, WE WILL BALANCE SIMULTANEOUSLY, COMPLIANCE WITH LAWS AND POLICIES, CONTINUE TO ADVANCE OUR TECHNOLOGY AND SUPPORT AND SERVE CUSTOMERS ALL OVER THE WORLD. AND WE WILL BE ABLE TO DO THAT JUST FINE. ANNA: THE NVIDIA BOSS. YOU MIGHT NOT RECOGNIZE HIM IN THOSE CLOSE READ JENSEN HUANG SPEAKING AT A UNIVERSITY CEREMONY IN HONG KONG. I THINK HE WAS RECEIVING AN AWARD BUT WE GOT HIS TAKE ON THE
IMPACT OF A DONALD TRUMP PRESIDENCY. LET'S TALK ABOUT TECHNOLOGY AND STICK WITH THAT NVIDIA FAME. THE PAST TWO YEARS, NVIDIA HAS BECOME THE MAIN SUPPLIER OF THE HARDWARE THAT ENABLES GENERATIVE AI. BUT SOME OF THE CHIPMAKER'S BIGGEST CUSTOMERS ARE PICKING UP THEIR OWN SILICON. IN TODAY'S BIG TAKE, WE LOOK AT AMAZON'S PLANS TO BUILD SELF-SUFFICIENCY IN CHIPS. OUR EDITOR ON SET WITH US IN LONDON. WHY IS AMAZON MAKING ITS OWN CHIPS? IT HAS GONE THROUGH THE COMPLICATED BUY OR MAKE DECISION AND DECIDED WE WILL MAKE OUR OWN. >> AMAZON, LIKE GOOGLE AND MICROSOFT, HAS BEEN
HEAVILY RELIANT ON NVIDIA CHIPS FOR GENERATIVE AI, BUT THERE IS HUGE DEMAND FOR NVIDIA'S CHIPS WHICH MEANS THEY ARE EXPENSIVE AND IN SHORT SUPPLY. AMAZON WANTS TO BRING SOME OF THAT IN-HOUSE TO CUT COSTS AND BRING SECURITY TO ITS SUPPLY CHAIN. GUY: THAT SOUNDS EASY. I'M ASSUMING IT IS NOT. >> THEY HAVE BEEN WORKING ON THIS QUITE A LONG TIME. THIS CHIP IS ACTUALLY THEIR THIRD-GENERATION AI CHIP. THE PREVIOUS 2, 1 WAS USED FOR SOME OF THEIR ALEXA STEPH, AND THEY HAVE BEEN BRINGING SOME INTO THEIR DATA CENTERS. BUT THIS THIRD ONE IS THE REAL
PUSH TO COMPETE MORE CLOSELY WITH NVIDIA. AT LEAST FOR SOME PROCESSES WITHIN THEIR DATA CENTERS. THEY WANT TO START AS SOON AS THIS YEAR. ANNA: THERE HAS BEEN A LOT OF TALK ABOUT NVIDIA AND THE COMPETITIVE LANDSCAPE AND WHERE THE COMPETITION WILL COME FROM BECAUSE IT HAS BEEN IN THE RUNNING FOR THESE DATA CENTERS AND LOTS OF PEOPLE WILL WANT TO DO IT, SO WILL AMAZON EVER BE ABLE TO REDUCE OR GET RID OF ITS RELIANCE ON NVIDIA? >> NVIDIA CLEARLY HAS A HUGE HEAD START. SO IT'S GOING TO BE A BIG CHALLENGE, BUT AMAZON
HAS A HISTORY OF MAKING ITS OWN CHIPS PARTICULARLY FOR HIS STATUS CENTERS, WHERE IT HAS PUSHED OUT COMPANIES THAT WERE THIRD PARTIES MAKING CHIPS FOR IT. ONE OF THE KEY CHALLENGES WILL BE THE SOFTWARE SIDE OF THINGS. NVIDIA HAS BUILT THIS INCREDIBLE ECOSYSTEM THAT MAKES IT EASY FOR PEOPLE TO BUILD THEIR OWN AI TOOLS USING ITS TECHNOLOGY. AMAZON WILL NEED TO MATCH THAT. GUY: IS THE CHALLENGE IN THE SILICON OR IS IT IN THE SOFTWARE? >> IT IS BOTH. THE THING THAT NVIDIA HAS A BIG HEAD START ON IS THE SOFTWARE AND AMAZON NEEDS TO
WORK ON THAT PART. GUY: HOW CLOSE ARE WE? THIS COULD HAVE MASSIVE IMPACT ON THE VALUATION OF NVIDIA. >> AMAZON HAS A COUPLE CUSTOMERS IT IS TESTING WITH. ONE OF THEM IS DATA BRICS. IT PLANS TO USE THESE IN DATA CENTERS BY THE END OF THIS YEAR. BUT IT WILL NOT BE DOING EXACTLY THE SAME THING AS NVIDIA. THE BEST OUTCOME FOR AMAZON WILL BE MOVING ITS OWN INTERNAL AI PROCESSES TO ITS OWN CHIPS, FREEING UP THE NVIDIA CHIPS FOR MORE ADVANCED PROCESSORS. GUY: THAT SOUNDS REMARKABLY LOGICAL. OLIVIA WITH THE FANTASTIC BIG TAKE. SO, DATA
IS THE NEW OIL. LET'S TALK ABOUT THE OLD OIL, WHICH IS OIL. IT HAS A BIG WEEK COMING UP. BESSENT IS INTERESTING, THE NEW TREASURY SECRETARY, HE IS DEFINITELY IN THE DRILL CAMP. YOU WERE TALKING ABOUT THE THREE ARROWS, ONE OF THOSE IS AN AWFUL LOT OF OIL IN THE U.S. MARKET. YOU HAVE THIS OPEC MEETING KIND OF AROUND THANKSGIVING. ANNA: NEXT WEEKEND. WE HAVE TIME TO GO UNTIL THEN. BUT WE HAVE QUITE SUBSTANTIAL WEAKNESS IN OIL THIS MORNING, DOWN 0.6% ON BRENT, MAYBE THAT IS THE BESSENT FACTOR, THE FACT THAT THERE COULD BE MORE
SUPPLY FROM THE UNITED STATES. GUY: BUT HE IS ALSO TALKING ABOUT HIGHER GROWTH. DOES ONE OFFSET THE OTHER, I THINK, IS SOMETHING WE NEED TO BE THINKING ABOUT AS WELL. IN TERMS OF THE GROWTH NARRATIVE, IF THE U.S. GOES FASTER, DOES IT CONSUME MORE OIL? THERE IS THIS IDEA THAT MAYBE THE TRUMP ADMINISTRATION USES OIL TO OFFSET THE INFLATIONARY EFFECT FROM TARIFFS, ETC., SO YOU HAVE A LOW ENERGY COST WHICH IS GREAT. A LOT OF GAS, CHEAP OIL, BUT HIGHER TARIFFS, ONE KIND BALANCES OUT THE OTHER. ANNA: INTERESTED IN THE THREE ARROWS AND WHICH ONES
WILL END UP BEING DELIVERABLE. A COUPLE OF GUEST THIS MORNING POURED COLD WATER ON THE IDEA THAT YOU WILL GET TO A 3% DEFICIT IN THE UNITED STATES. WHETHER OIL IS MORE ACHIEVABLE, WE WILL SEE. GUY: LET'S GET INFORMATION ON THE IMPACT AND AFTER TREASURY SECRETARY COULD HAVE A GREAT ANTHONY DI PAOLA JOINING OUT OF DIPPED BY -- DIVIDE TO GIVE US A TAKE. -- DIVIDE TO GIVE US A TAKE. GUY: HE TALKED ABOUT THOSE 3 MILLION BARRELS OF ADDITIONAL OIL. WE HAD HEARD FROM CANDIDATE NOW PRESIDENT-ELECT TRUMP THAT HE WANTED TO BRING MORE OIL.
THE INDUSTRY IS SKEPTICAL ABOUT THAT BECAUSE THEY SAY THERE IS POTENTIALLY NOT THAT MUCH ROOM TO BRING MORE OIL IN TERMS OF SUPPLY ALREADY IN THE MARKET, AND REALLY, THEY ARE SAYING THAT THE U.S. SHALE INDUSTRY IS MORE INTENT ON RETURNING EARNINGS AND PROFITABILITY TO SHAREHOLDERS RATHER THAN INVESTING IN ADDITIONAL PRODUCTION. YOU HAVE ALSO GOT TO LOOK AT THE OIL PRICE, TOO. IS THE PRICE HIGH ENOUGH TO INCENTIVIZE THESE COMPANIES TO BRING MORE PRODUCTION TO MARKET AND INVEST MORE? WE HAVE SEEN SLIGHT DECLINES IN THE STORAGE. THE MARKET IS NOT LOOKING GREAT FOR BRINGING MORE
OIL ON. PEOPLE WANT TO SELL WHAT THEY HAVE GOT BUT DOUBLING DOWN TO MAKE MAJOR INCREASES. WE ARE NOT REALLY SEEING THAT IN THE ESTIMATES ANALYSTS HAVE OF NEW OIL COMING ON FROM THE UNITED STATES. ANNA: THAT WILL BE INTERESTING TO SEE WHETHER THE ACTUAL U.S. OIL INDUSTRY IS ON THE SAME PAGE AS BESSENT, AND INDEED ON TRUMP ON THIS MATTER, AND HOW MUCH THE U.S. WANTS TO PRODUCE RIGHT NOW. WHAT POSITION DOES THIS PUT OPEC+ IN? THE FOCUS FOR OPEC+ HAS BEEN ABOUT NOT BRINGING BACK OIL SUPPLY BECAUSE OF CHINA WEAKNESS, THERE HAD BEEN
TOO MUCH OIL SUPPLY, WHAT DOES ALL THIS MEAN FOR OPEC+ INTO 2025? >> OPEC+ IS SUPPOSED TO MEET AT THE BEGINNING OF NEXT WEEK, DECEMBER 1, THEY HAVE A MEETING WHERE THEY WILL DECIDE WHAT THE IMMEDIATE STEPS ARE GOING FORWARD. OVER THE COURSE OF NEXT YEAR, THEY ARE SUPPOSED TO UNROLL FULLY THOSE PRODUCTION CUTS IN PLACE, BRING BACK AN ADDITIONAL 2 MILLION PLUS BARRELS OF THE MARKET. THAT EXCEEDS THE FORECAST FOR DEMAND INCREASE NEXT YEAR. EVEN APART FROM ALL THE NON-OPEC+ SUPPLY COMING ON, THAT IS MORE THAN A MILLION BARRELS FROM THE UNITED STATES, FROM
PLACES LIKE BRAZIL, GUY ANNA, CANADA. OTHER NON-OPEC+ COUNTRIES WILL BE BRINGING OIL TO MARKET THAT WILL TAKE UP MOST OF THAT DEMAND, SO THAT IS NOT RELIEVING ANY SPACE FOR OPEC TO BRING BARRELS BACK TO THE MARKET. THEY NEED TO DECIDE WHETHER THEY WILL GO AHEAD WITH THAT FIRST ROUND OF UNROLLING. THEY HAVE DELAYED IT ALREADY SEVERAL TIMES. THE MARKET EXPECTATION IS THEY WILL DELAY THAT AGAIN. BUT FOR OPEC, THE ANSWER IS STARING THEM IN THE FACE, WHICH IS BRING THAT OIL BACK. BRING THE PRICES DOWN. THAT KNOCKS SOME OF THAT SHALE AND NEW INCREMENTAL
PRODUCTION OF THE MARKET AND GETS THEM BACK INTO MARKET SHARE BUT AT THAT LOWER PRICE LEVEL WHICH REALLY ISN'T WHAT THEY WANT. THE ANSWER IS THERE BUT IT IS NOT A PALATABLE ANSWER FOR OPEC, SO THE MARKET EXPECTATION IS THEY WILL KICK THE CAN DOWN THE ROAD KEEPING PRODUCTION OFF THE MARKET. GUY: SEEMS TO BE THE STRATEGY THIS FAR. ANTHONY DI PAOLA JOINING US ON THE OIL MARKET OUT OF DUBAI. WE LEARNED THAT THE MARKET LIKE SCOTT BESSENT TO. THE DOLLAR IS DIPPING A LITTLE BIT BUT EQUITIES SEEM TO BE PRETTY HAPPY. WE HAVE GOT
NEWS ON UNICREDIT WHICH HAS BEEN THE REAL SURPRISE IN TERMS OF THE BID FOR BPM. ANNA: UNICREDIT MAKING THIS BID FOR BPM AND THE MARKET CONCLUDING THAT FOR REGULATORY REASONS ORGANIC BANDWIDTH REASONS, NOT NECESSARILY CAPITAL REASONS, BUT MAKE IT DIFFICULT FOR THEM TO GO AFTER COMMERZBANK SHORT-TERM EVEN THOUGH WE HEARD FROM ORCEL THAT HE WILL NOT GO AFTER COMMERZBANK UNTIL AFTER A GERMAN ELECTION. IT IS SORT OF PARKED ON MULTIPLE FRONTS BUT M&A WITHIN ITALY IS VERY MUCH BACK ON THE AGENDA. GUY: IF YOU ARE IN MERGER ARBITRAGE TRYING TO WORK OUT THE PERCENTAGES OF
THESE DEALS GETTING DONE, IS COMMERZBANK OFF THE TABLE, PROBABLY NOT. THE PREMIUM ON BPM HAS RISEN A LITTLE BIT BUT NOT MUCH, ONLY 30% THIS MORNING, WITH THEIR BE SOMEBODY ELSE COMING IN? ANNA: THERE IS A FRENCH BANK THAT HAS A STATE, AGRICOLE HAS A STAKE, SO MIGHT THERE BE INTEREST? WE HAVEN'T HEARD FROM THEM SO WE WILL SEE WHAT DEVELOPS ON THAT FRONT. WE WILL GET DATA SHORTLY AND GERMANY. THE IFO NUMBERS WHICH TAKES US BACK TO THE BACK END OF LAST WEEK WHEN WE WERE DIGESTING WEAKNESS IN THE EUROPEAN PMI DATA. TODAY SEEMS
DIFFERENT WITH THE BESSENT EFFECT FOR LITTLE BIT MORE RISK ON BUT THAT WEAKNESS IN EUROPE STILL PART OF THE CONVERSATION. GUY: LOOKING FORWARD TO THAT CONVERSATION. GET HIS ASSESSMENT OF THE
