What Is China's DeepSeek; Why AI Tech Stocks Falling? | Bloomberg The Pulse

FOR THE CONVERSATIONS THAT MATTER AND THE INSIGHTS YOU NEED, LET'S GET STARTED. ♪ >> NEWSMAKERS AND MARKET MOVERS. THIS IS "THE PULSE" WITH FRANCINE LACQUA.

FRANCINE: GOOD MORNING. HAPPY MONDAY AND WELCOME TO THE PULSE. PRESIDENT DONALD TRUMP HAS CALLED FOR BOOSTING U.

S. DOMINANCE IN AI WITH AN EXECUTIVE ORDER. HOWEVER, CHINESE AI STARTUP DEEPSEEK HAS ROCKED GLOBAL TECHNOLOGY STOCKS, RAISING QUESTIONS OVER AMERICA'S TECH DOMINANCE.

BUZZ GREW ABOUT THE COMPANY'S LATEST AI MODEL BEING COST-EFFECTIVE. LET'S BRING IN NEWS DIRECTOR ROSLYN METHODIST, AND TO TALK MARKETS WITH US FOR THE NEXT 15 MINUTES. THANK YOU BOTH FOR JOINING US.

WHAT A WAY TO GET STARTED ON A MONDAY. IF YOU ARE IN THE KNOW, YOU KNEW THIS COMPANY HAD SOMETHING TO OFFER. NEW THAT THIS CHALLENGES THE U.

S. CAN DONALD TRUMP DO ANYTHING ABOUT IT? ROSALIND: IT FEELS LIKE THIS COMPANY CAME OUT OF NOWHERE, BUT IN A WAY IT SHOULD NOT BE THAT SURPRISING THAT IT HAS BECAUSE CHINA HAS MADE VERY CLEAR AS PART OF ITS PRIORITIES WITH TECH, IT IS REALLY PUSHING SELF-SUFFICIENCY.

THAT'S A REALLY AGGRESSIVE APPROACH TO AI. NOT JUST CHIPS BUT AI. YOU CAN SEE THEY'VE BEEN WORKING VERY HARD ON THIS.

IN A WAY, THIS IS NOT THAT SURPRISING BUT THE REVIEWS ARE VERY POSITIVE ON IT SO FAR FOR THIS COMPANY FOR ITS PRODUCT. PUTTING INTO QUESTION THE VERY HIGH VALUATIONS OF SOME OF THE TECH COMPANIES AROUND THE WORLD. A MESSAGE TO DONALD TRUMP'S WE ARE PUSHING HARD ON SELF-SUFFICIENCY.

WHATEVER WE ARE DOING TO REALIGN GLOBAL SUPPLY CHAINS, TO REROUTE SOME OF THE SUPPLY CHAINS, CHINA IS STILL THERE AND STILL VERY BUSY AND MAKING THIS A NATIONAL PRIORITY. WHERE DOES THAT LEAVE DONALD TRUMP? WHAT DOES HE DO WITH AI COMPANIES IN THE U.

S. ? HOW DOES HE SUPPORT THEM?

HE'S ALREADY SAY HE'S GOING TO UNSHACKLE REGULATION AND THEY SHOULD GO FOR IT. SEPARATELY, WHAT DOES THAT LOOK LIKE? QUITE A STARTLING DEVELOPMENT WHEN IT COMES TO THE U.

S. -CHINA RELATIONSHIP IN THE TECH SPACE. FRANCINE: I FEEL LIKE THE NEW CYCLE WILL BE DOMINATED BY AI AND DONALD TRUMP ON THE GEOPOLITICS.

WE SAW DONALD TRUMP IMPOSED AND THEN RESEND TARIFFS ON COLOMBIA BECAUSE HE GOT WHAT HE WANTED. OVER GOING TO SEE COUNTRY AFTER COUNTRY DO THE SAME? ROSALIND: VERY MUCH A REMINDER OF HOW HE'S GOING TO DOMINATE.

QUITE A DIZZYING TURN OF EVENTS WHERE HE SAID HE WAS GOING TO IMPOSE TARIFFS AND SANCTIONS, AND THEN HE STEPPED BACK. AS COLOMBIA REVERSED. THE POINT OF CONTENTION WAS NOT SO MUCH ABOUT SENDING PEOPLE BACK, BUT THE WAY THEY WERE BEING SENT BACK.

PUTTING THEM IN SHACKLES AND CHAINS. THEY REACHED SOME SORT OF UNDERSTANDING ON THAT. JUST HOW QUICKLY DONALD TRUMP WAS READY TO SAY, YEAH, I WILL PUT TARIFFS ON.

IMMEDIATELY -- MAYBE YOU COULD DO THAT WITH COLOMBIA AND NEGOTIATE YOUR WAY OUT OF IT, BUT WHAT HAPPENS IF HE TRIES TO DO THAT, ALMOST ON A WHIM BECAUSE IT DOES NOT LIKE WHEN ANOTHER COUNTRY HAS SAID OR DONE. IF YOU DOES THAT TO GERMANY OR FRANCE OR CANADA, HOW THOSE COUNTRIES MIGHT REACT MIGHT BE DIFFERENT. WHEN YOU ARE DOING STUFF ON THE FLY IN A WAY, WHICH IS REALLY SIGNIFICANT FOR THE GLOBAL SUPPLY CHAIN, TRADE, ECONOMIES AND POLITICS, THAT MAKING THOSE DECISIONS VERY QUICKLY -- INTERESTING TO SEE HE WAS WILLING TO ROLL IT BACK AGAIN VERY QUICKLY.

THAT WILL JUST KEEP EVERYBODY ON THEIR TOES GOING FORWARD. FRANCINE: WHAT DOES THIS MEAN FOR THE MARKETS? WITH YOUR AI LENS AND TECHNOLOGY LANDS, IF YOU ARE IN THE KNOW, WE KNEW THAT THIS WOULD PUT A RACE BETWEEN CHINA AND THE U.

S. BUT STOCKS IN EUROPE ARE GETTING SLAMMED IF YOU ARE TECH RELATED TODAY. >> INDEED.

TECH HAS BEEN VERY CENTRAL TO THE U. S. EXCEPTIONALISM.

I THINK THIS HAD TO HAPPEN. NEW ENTRANTS, CHEAPER ENTRANCE WOULD CHALLENGE THE BIG TECH COMPANIES IN THE U. S.

. THIS WILL FORCE INVESTORS TO SEE TECH NOT AS A ONE-WAY TRADE ANYMORE. DEEPSEEK WAS GOING TO BE CHALLENGING THE MODEL OR NOT.

WE DON'T KNOW. FOR THE TIME BEING, A NON-TECH HEAVY EQUITY MARKET AND YOU ARE DOWN COMPARED TO THE U. S.

AS LONG AS BIG TECH IN THE U. S. , WE CONSIDER IT A BIT OF CATCH-UP FOR NON-TECH.

THIS IS PUTTING DIVERSIFICATION BACK AT THE CENTER OF THE INVESTMENT PROCESS. HAVING NON-TECH EXPOSURE IN YOUR PORTFOLIO. FRANCINE: ASMR IS ALSO GETTING SLAMMED TODAY.

I KNOW IT IS A SMALLER PERCENTAGE, BUT DO YOU ASSUME ALL TECH STOCKS ARE PRICED TO PERFECTION AND WE COULD SEE A LOT OF VOLATILITY IF THEY GET CHALLENGED? EMMANUEL: VALUATIONS FOR THE SPACE. WE ARE LEFT WITH EARNINGS DOING THE HEAVY LIFTING.

IT IS A BUSY WEEK FOR TECH EARNINGS BECAUSE SML ON WEDNESDAY, U. S. LATER THIS WEEK.

I WOULD NOT GET CARRIED AWAY. POSITIONING IS VERY HEAVY IN THE SPACE. I THINK THE EARNINGS STORY FOR AI.

FRANCINE: YOUR IT WILL PROBABLY AT SOME POINT HAVE TO CONFRONT DONALD TRUMP OVER TARIFFS OR HARSH WORDS. IT WAS AGREEABLE TO SEE DONALD TRUMP AND KEIR STARMER GET ALONG OVER THE WEEKEND. HOW DO YOU PLAY THAT?

EMMANUEL: WE HAVE SEEN TRUMP UNPREDICTABLE, BUT ONCE THE USE TRADE TARIFF LEVERAGE TO BARGAIN TO GET SOMETHING FROM EUROPE. BUYING ENERGY, MORE DIFFERENT SPENDING. ASSUMPTION FOR THIS YEAR IS THAT TRUMP ONOMICS WILL NOT BE AS AGGRESSIVE AS TRUMP HAS BEEN TALKING ABOUT.

THIS WILL CREATE VOLATILITY ALONG THE WAY, BUT I THINK WEEK ONE WAS A LITTLE BIT OF RELIEF WITH TARIFFS NOT BEING UP LIMITED. AS WE SAW WITH COLOMBIA, THERE IS ROOM FOR NEGOTIATION. FRANCINE: WE HEARD THE GULF OF MEXICO NOW BEING CALLED THE GULF OF AMERICA.

ELON MUSK TALKS ABOUT THE SEA BEING CALLED THE GEORGE WASHINGTON SEA. IS THAT JUST NOISE? ROSALIND: IN A WAY, IT IS.

SOME OF THIS IS STUFF YOU WANT TO DO BUT CAN YOU ACTUALLY DO IT? OBVIOUSLY, IT PLAYS VERY WELL TO YOUR VOTING BASE TO BE SAYING THESE THINGS. SOMEONE WAS CALLING FOR TRUMP TO BE CHISELED INTO MOUNT RUSHMORE.

AGAIN, THE ONGOING STUFF ABOUT GREENLAND. WE SAW FRESH NOISE ON THAT. THAT ACTUALLY IS A VERY TRICKY RELATIONSHIP THAT DENMARK WILL HAVE TO MANAGE IN THIS.

WE CAN SEE TRUMP WILL NOT LET THAT ONE GO BECAUSE HE'S BEEN TOLD BY SOMEBODY THAT HAD IT FULL OF MINERALS AND SO ON SO HE WANTS TO SEE WHAT THE U. S. CAN LEVERAGE OUT OF THAT.

IT IS ALL ABOUT LEVERAGE. THAT IS SOMETHING THAT IS REAL. ALL JOKES ASIDE ABOUT GREENLAND AND TRUMP AND SOMEONE, HE'S DEFINITELY GOT AN AGENDA.

FRANCINE: THIS DOES NOT MATTER TO EARNINGS OR DOES IT? DO WE START SEEING CHIEF EXECUTIVES WORRYING ABOUT GEOPOLITICS OR IS THIS GOING TO BE A STRAIGHT EARNINGS SEASON? EMMANUEL: I THINK THERE IS NO WORLD FOR CEOS TO COMMIT TOO MUCH, STRONG GUIDANCE FOR THIS YEAR.

THIS A LOT OF UNCERTAINTY. I THINK THE MACRO BACKDROP IS -- RATES HAVE GONE UP. WE SEE SOME GREEN SHOT IN EUROPE AND DATA.

THERE ARE SOME ANIMAL SPIRITS IN THE U. S. WE SEE BUSINESS EXPECTATION PICKING UP.

THERE'S ALWAYS UNCERTAINTY, BUT I THINK THE PRIVATE SECTOR SHOULD BE PRETTY CONFIDENT, ALTHOUGH NOT ALL OF THEM WILL COMMIT TO VERY STRONG GUIDANCE FOR THIS YEAR. FRANCINE: WE WILL COME BACK TO YOU AND TALK MORE ABOUT YOUR PLAY ON CYCLICALS. EMMANUEL CAU STAYS WITH US.

PLENTY MORE TO COME. THIS IS BLOOMBERG. FRANCINE: WE TALK A LOT ABOUT TECH TODAY BECAUSE OF THE SURPRISED BY DEEPSEEK IN CHINA PUTTING IN QUESTION THE SUPREMACY OF THE U.

S. IN AI FOR MUCH LONGER. MAYBE THIS IS A RESULT.

NVIDIA DOWN 8. 6%. STILL WITH US IS EMMANUEL CAU AT BARCLAYS.

IT IS CLEAR WE ARE DOMINATED BY AI AND THERE'S ONE SHOW IN TOWN AND THAT IS DONALD TRUMP. YOU ARE CLEAR THAT EUROPE COULD MAYBE BENEFIT FROM SOME OF THE AIR TICKET OUT OF THE U. S.

BUT WHAT IS YOUR TAKE ON WHAT TRUMP DOES IN TERMS OF TARIFFS AND WHAT IT MEANS FOR THE FED AND INFLATION? EMMANUEL: THERE ARE THREE KEYWORDS FOR 2025 -- TRUMP, AI AND RATES. THE BASE RATE IS THAT ACTION WILL BE SOFTER THAN WORDS.

IT MIGHT TAKE TIME TO FIND OUT BUT WE DON'T SEE MASS DEPORTATION. WE SEE LESS TARIFF THEN SPENT INITIALLY AND NO NEW TAX CUTS. A HIGH EQUITY MARKET.

RATES ARE VERY HIGH. THIS U. S.

EXCEPTIONALISM IS QUITE FRAGILE. IT SEEMS THERE'S VERY LITTLE MARGIN FOR ERROR FOR TRUMP. IN DAVOS, HE SAID HE WANTS RATES TO GO DOWN BUT A LOT OF HIS POLICIES ARE INFLATIONARY.

LOOK, I THINK IT IS VERY EARLY TO SAY BUT ALL OF THE PRAGMATISM WILL PREVAIL. THE U. S.

EXCEPTIONALISM CANNOT GROW TOO MUCH OF THE EXPENSE OF THE WORLD. FOR TRUMP TO RE-STRENGTHEN THE U. S.

ECONOMY, HE HAS TO COMPROMISE ON TRADE, TARIFFS AND THE BIG GLOBAL POLICIES. FRANCINE: THIS IS THE WORRY THAT IT IS REALLY WINNER TAKE ALL AND SOME CALLING THE U. S.

A CREDITOR NOW. WHERE DO YOU SEE DEALS IN EUROPE? EMMANUEL: I THINK THERE IS WILLINGNESS FOR EUROPE TO COMPROMISE.

MORE SPENDING, MORE ENERGY IMPORT FROM THE U. S. I THINK THIS WILL FORCE EUROPE TO TAKE CARE OF ITSELF.

THE REGULATION WILL BE THE NEW THEME FOR THIS YEAR. THIS YEAR MAY HAVE TO FOLLOW THE LEAD FROM THE U. S.

I THINK THE DRAGHI REPORT WILL BE BACK ON THE TABLE. IT IS FULL OF VERY INTERESTING PROPOSALS WHICH ARE NOT VERY COSTLY TO IMPLEMENT. I THINK THEY NEED TO COME TOGETHER TO FIGHT AGAINST THE U.

S. I THINK THE GERMAN ELECTION IN THIS REGARD COULD BE A CATALYST BECAUSE IF YOU SEE A SHIFT TO MORE PROGROWTH, PRO-REFORM CHANGE IN GERMANY, THAT MIGHT OPEN THE DOOR TO A STRONGER EUROPE WHICH COULD NEGOTIATE. FRANCINE: IS THE MONEY THERE/ ?

DO YOU SEE COMPANIES BUT NOT BEING SPENT BECAUSE OF THE QUESTIONS THEY HAVE? EMMANUEL: IT SEEMS LIKE THERE'S A LOT OF UNCERTAINTY FOR COMPANIES TO FOCUS ON COST MANAGEMENT AND SELF PRESERVATION. M&A, CROSS-BORDER.

THE PRIVATE SECTOR IS IN GOOD SHAPE. THE ABILITY TO GET STRONGER. GERMANY HAS THE CAPACITY.

THEY CAN SPEND MORE TO GROW THE ECONOMY. A LOT OF DRAGHI'S PROPOSALS ARE NOT NECESSARILY EXPENSIVE TO PREVENT. IT CAN BE VERY COST-EFFECTIVE.

IT WILL TAKE TIME BUT WE NEED TO TWO COMPETE WITH THE U. S. FRANCINE: WE HAD A GLIMPSE OF THE RESURGENCE OF LUXURY STOCKS.

I KNOW YOU FOCUSED ON CYCLICALS. HOW MUCH DOES IT DEPEND ON WHAT SECTOR YOU ARE AT OR WHAT KIND OF STRONG COMPANY YOU HAVE? EMMANUEL: WE THINK U.

S. WILL EXPORT STRENGTH WHICH IS A GLOBAL ECONOMY. WE SEE SOME SHOTS IN EUROPE RELATE THE CONSUMER.

WE LIKE THE TOP-END CONSUMER IN THE U. S. WHICH IS WHY WE WENT BACK TO LUXURY AT THE END OF THAT YEAR.

VERY MUCH A PLAYER LOW INTEREST RATES AND DISINFLATION. I THINK ELECTRIFICATION AND TECH IS STILL THERE BUT THEY ARE VERY EXPENSIVE SO YOU HAVE TO DIVERSIFY. THAT IS WHY WE LIKE FINANCIALS SO MUCH.

INSURANCE, DIVERSIFIED BANKS. FRANCINE: EUROPEAN/ EMMANUEL: ABSOLUTELY. I THINK THE PRICE TO PAY IS NOT VERY HIGH IN EUROPE AND YOU HAVE THIS CORPORATE ACTIVITY, AND THE ATTENTIONAL OF M&A IS A BIT OF ADDITION TO THE MACRO DRIVERS.

FRANCINE: IS THIS BASICALLY TAKING ADVANTAGE OF WHAT'S HAPPENING IN THE U. S. BECAUSE REGULATION HERE WILL IF NOT LOOSEN, CERTAINLY TAKE A PAUSE?

EMMANUEL: I THINK A LOT OF BANKS IN EUROPE MIGHT BENEFIT FROM RESERVE IN THE U. S. THE BOOMING CAPITAL MARKET ACTIVITY.

COMING BACK TO THIS M&A THEME IN EUROPE, BANKS ARE SOMETHING THAT MIGHT OPEN THE DOOR TO MORE SECTOR FRIENDLY TYPE OF POLICY. FRANCINE: WHAT IS THE ONE THING THAT YOU WORRY ABOUT FOR THIS YEAR? EMMANUEL: AI IS VERY CENTRAL TO THE STRUCTURE OF THE MARKET.

WE LIKE THE LONG-TERM GROWTH ASPECT, BUT THE POSITIONING ARE QUITE EXPENSIVE. OBVIOUSLY, THERE'S A LOT IN THIS PART OF THE MARKET. IF SOMETHING GOES WRONG, IF THIS IS BASICALLY -- THEN YOU CAN SEE A BIT OF A DOMINO EFFECT ON MARKETS.

YOU NEED TO BE DIVERSIFIED. I CAN SEE SAMARA BEING IN EUROPE IN A WAY TO HEDGE TITS BIG TECH DOMINANCE IN THE U. S.

THAT IS SOMETHING TO WATCH. THE FED MEETING ON WEDNESDAY, ECB ON THURSDAY. INFLATION WILL BE DOWN SO WE ARE IN THE DISINFLATION TRADE, BUT IT IS NOT SMOOTH AND RATES ARE CLOSE TO 5%, WHICH MIGHT BECOME AN ISSUE.

IF FRANCE BREAKS ABOVE 5%, THAT WILL HIT THE EQUITY MARKET AGAIN. FRANCINE: EMMANUEL CAU AT BARCLAYS. COMING UP, GERMAN COMPANIES UNEXPECTEDLY BECAME MORE PESSIMISTIC AT THE START OF THE YEAR, ACCORDING TO DATA.

WE WILL DISCUSS ALL OF THIS WITH CLEMENS FUEST, THE IFO IS THE PRESIDENT, NEXT. FRANCINE: GERMAN COMPANIES UNEXPECTEDLY BECAME MORE PESSIMISTIC AT THE START OF THE YEAR WITH THE IFO INSTITUTE EXPECTATION INDEX FALLING. LET'S GET TO CLEMENS FUEST, IFO INSTITUTE PRESIDENT.

THANK YOU FOR JOINING US. DONALD TRUMP HAS CLEARLY THREATENED EUROPE WITH TARIFFS. HOW BAD COULD THE CONSEQUENCES FOR GERMANY BE?

CLEMENS: THE CONSEQUENCES COULD BE VERY BAD. GERMANY IS AN EXPORT ORIENTED ECONOMY. AT THE SAME TIME, EXPORTS ARE STRUGGLING.

WE HAVE SEEN IN TODAY'S INDEX THAT COMPANIES ARE REPORTING A FURTHER DECLINE IN COMING ORDERS. THE GERMAN EXPORT INDUSTRY IS STRUGGLING CURRENTLY, SO TARIFFS ON TOP OF THAT WOULD BE VERY BAD NEWS. FRANCINE: THE GERMAN ECONOMY ALREADY SHRANK FOR A SECOND CONSECUTIVE YEAR IN 2024.

HOW BIG OF A RISK IS THERE FOR ANOTHER CONTRACTION IN 2025? CLEMENS: THE RISK IS CLEARLY THERE. WHETHER IT HAPPENS WILL DEPEND ON WHAT DONALD TRUMP DOES AND HOW EUROPEANS REACT.

BUT, WE CURRENTLY EXPECT SMALL GROWTH RATE, SMALL AMOUNT OF POSITIVE GROWTH. THIS A LOT OF UNCERTAINTY AROUND. I THINK THE OVERALL PICTURE IS THAT THE GERMAN ECONOMY IS STAGNATING.

THE GROWTH RATES HAVE BEEN NEGATIVE BUT VERY SMALL. IT IS MORE OF A STAGNATION. IT WOULD BE IMPORTANT TO GET OUT OF THAT, BUT WITH TRUMP INCREASING UNCERTAINTY WITH POLITICAL UNCERTAINTY IN GERMANY DUE TO THE ELECTIONS AHEAD.

COMPANIES WAY BEFORE THEY INVEST SO IT WOULD BE ANOTHER DIFFICULT YEAR. FRANCINE: WHAT SHOULD BE THE TOP PRIORITIES BE FOR THE NEXT GOVERNMENT? CLEMENS: THE TOP PARTY IS TO COME UP WITH AN ECONOMIC REFORM PROGRAM THAT ADDRESSES SOME STRUCTURAL ISSUES.

ENERGY PRICES, HIGH TAXES, BUREAUCRACY. THESE THINGS NEED TO BE ADDRESSED SO THAT INVESTORS GET MORE CONFIDENCE AND MORE CONFIDENCE TO INVEST IN GERMANY. WE NEED A CONSISTENT ECONOMIC REFORM PROGRAM.

THIS IS NEEDED MORE THAN SHORT-TERM STIMULUS. FRANCINE: THANK YOU SO MUCH FOR JOINING US, CLEMENS FUEST, PRESIDENT OF THE IFO INSTITUTE. LOOKING AHEAD TO THAT ELECTION IN GERMANY.

COMING UP, GLOBAL TECH STOCKS EXTEND LOSSES AS CHINESE AI STARTUP DEEPSEEK SPARKS FEAR OVER AMERICAN DOMINANCE OF THE INDUSTRY. THIS IS BLOOMBERG. ♪ FRANCINE: GOOD MORNING AND WELCOME TO THE PULSE.

THESE ARE YOUR TOP STORIES. NASDAQ FUTURES IN GLOBAL TECH STOCKS EXTEND LOSSES ON FEARS THE AI RACE MAY NO LONGER BE AMERICA'S TOLUSE. DEEPSEEK UNVEILS A COST-EFFECTIVE MODEL THAT RUNS A LESS ADVANCED CHIPS.

PRESIDENT DONALD TRUMP ANNOUNCED SWEEPING TARIFFS ON COLUMBIA BEFORE ABRUPTLY PULLING THE DEAL. BITCOIN DIPS BELOW $100,000 AS TRADERS TAKE PROFITS JUST DAYS AFTER PRESIDENT TRUMP'S EXECUTIVE ORDER FOR THE CRYPTO INDUSTRY. BACK TO OUR TOP STORY.

AMSL SHARES HAVE TANKED ALONG WITH GLOBAL TECH STOCKS. NVIDIA LEADING FALLS IN U. S.

PREMARKET. IT COMES AMID CONCERN THAT AI MODELS FROM CHINA'S DEEPSEEK WOULD DISRUPT U. S.

TECHNOLOGY LEADERSHIP. LET'S GET MORE WITH TOM MACKENZIE. THIS FEELS LIKE A BIG DEAL BECAUSE THE PEOPLE IN THE KNOW NEW THAT THERE WAS FIERCE COMPETITION FROM CHINA AND THEY COULD NOT COME UP WITH A BIT LIKE THIS BUT IT SEEMS LIKE THE MARKET WAS OBLIVIOUS.

TOM: THEY'VE BEEN LOOKING INTO THIS COMPANY FOR SEVEN MONTHS BUT THEY HAVE COME UP WITH THIS NEW MODEL. IT IS OPEN-SOURCE SO YOU CAN SEE ALL OF THE LESSON SECRET SECRET SOURCE. IT POSES SOME IMPORTANT QUESTIONS.

ONE QUESTION IS WHETHER AI INNOVATION IS GOING TO CONTINUE. THAT QUESTION HAS BEEN ANSWERED. AI INNOVATION WILL CONTINUE, IT MAY EVEN ACCELERATE AS A RESULT.

THE QUESTIONS IT POSES ARE DOES NVIDIA STILL COMMAND THAT ROLE AS THE CHIEF SUPPLIER OF THESE AI ACCELERATORS? BECAUSE IF DEEPSEEK IS SHOWING, AND THE DATA SUGGESTS IT IS, IT CAN BUILD A MODEL THAT HAS THE SAME CAPABILITIES OF OPENAI AND DEEP MIND WITH CHIPS THAT ARE OLDER, USING SYSTEMS ENGINEERS. THE BUILD A MODEL AT THE RESEARCH LAB WHICH HAS THE SAME CAPABILITIES BUT USES CHEAPER AND OLDER CHIPS.

WHAT DOES THAT SAY ABOUT NVIDIA AND HIS BLACKWELL AI ACCELERATOR? ARE THOSE NEEDED IF YOU CAN BUILD CAPABILITIES ON CHEAPER LEGACY CHIPS? SEEMINGLY, DEEPSEEK HAS DONE.

IT ALSO RAISES THE QUESTION AROUND THE GAP BETWEEN THE U. S. AND CHINA.

THAT SEEMS TO BE WHAT THE MARKETS ARE GRAPPLING WITH NOW. THE FOCUS ON NVIDIA AND THE HYPER SCALARS WHO HAVE COMMITTED TO SPENDING $800 BILLION. META WILL BE RAMPING UP ITS CAPEX HIGHER THAN ANALYSTS EXPECTED.

FRANCINE: TOM MACKENZIE WITH THE LATEST ON DEEPSEEK. MY NEXT GUEST SAYS AI WAS A MASSIVE DRIVER OF RETURNS NEXT YEAR BUT THE REAL TEST WILL BE ON PRODUCTIVITY. IS AI HELPING BUSINESSES WITH COSTS OR BOTH?

PIERCE THANK YOU FOR JOINING US. IT FEELS LIKE PRICE TO PERFECTION AND OTHER SAY IT IS ABOUT TIME THE MAGNIFICENT SEVEN GOT A BIT OF A SHAKING FROM CHINA BECAUSE IT WOULD PUT EUROPE ON A BETTER FOOTING. WHERE ARE YOU WANT AI NOW?

>> IT IS IN REALLY IMPORTANT BREAK. IN OUR OWN COMPANY, WE ARE USING TOOLS WHEN ABLEIST TO MAKE BETTER DECISIONS, TO OPERATE FASTER. IT IS STILL VERY MUCH IN THE EARLY STAGE IN ITS APPLICATION.

THE CHALLENGE THIS MORNING IS IS THERE A THREAT TO THE HEGEMONY EVERYONE HAS ASSUMED? MOST OF THE MAJOR PLAYERS ARE REPORTING THE NEXT WEEK WHICH WILL BE A SENSE OF WHERE IS. THAT HAS BEEN THE REAL DRIVER OF NVIDIA.

FUNDAMENTALLY, THE UNDERLYING EARNINGS HAVE GROWN 11 FOLD. IT IS NOT AS THOUGH YOU'VE GONE THROUGH A BIG RE-PEOPLE A LOT OF PEOPLE SAY WE HAD A DOT-COM BUBBLE SCENARIO. THERE ARE SCENARIOS OF THAT.

THE OF COMPANIES HAVE THOSE EARNINGS MULTIPLES. WHEN IT COMES BACK TO AI, THE VIEW IS THAT EVERYONE HAS UNDERSTOOD IT WILL BE VERY IMPORTANT BUT IT IS TRYING TO UNDERSTAND -- -- WE WILL CONTINUE TO MONITOR GROWTH AND STILL PLAY IN THAT SPACE. IT IS A QUESTION OF HOW DO WE USE THIS.

IS IT A COST CONTROLLING FUNCTION? ONE OF THE THINGS WE FOUND REALLY INTERESTING TALKING TO HEALTH CARE COMPANIES IS THE SPEED THROUGH PHASE I, PHASE II AND PHASE THREE IN TERMS OF PRODUCTIVITY. THOSE GAINS CAN BE SIGNIFICANT.

FRANCINE: THERE'S IS A LARGE LANGUAGE MODEL. THERE IS GENERATIVE AI. ARE WE BUNDLING EVERYTHING TOGETHER?

THAT WILL BE WINNERS AND LOSERS SO UNLESS YOU HAVE A CLEAR BLUEPRINT WITH THE FUTURE IN AI LOOKS LIKE, IT CAN GET MESSY. PIERS: USE THE ANALOGY -- YOU GO BACK TO THE TO THOUSAND 10 EVERYONE ASSUMES THE USE OF THE INTERNET -- YES BUT TECHNOLOGY COMPANIES HAVE BEEN WINNERS, BUT THE BIGGEST WINNERS ARE PROBABLY UNI IN TERMS OF HOW MUCH MORE EFFICIENT OUR LIVES ARE. THE TELEPHONE IN YOUR HAND, THE THINGS YOU DO WITH IT.

THE SAME SCENARIO IN SOME WAYS PLAYS OUT WITH AI, ENABLING YOU MAKE QUICKER AND FASTER DECISIONS. TO ME, THAT IS THE ITERATION FROM HERE. HAVE I SEEN SOMETHING THAT WOWS ME?

IF I LOOK AT AI AND THE IPHONE, IT IS A REAL BREAKTHROUGH I WANT TO GO BY THE IPHONE 16/ MY CHILDREN ARE PROBABLY BETTER USERS. YES, IT IS INTERESTING FOR THEM BUT IS IT A REAL BREAKTHROUGH? IN MY SEEING SOMETHING THAT IT IS A REAL TRANSFORMATIONAL PIECE?

NO, I HAVE NOT SEEN THAT YET. I AM SEEING THAT IN BUSINESS APPLICATIONS. A LOT OF THE CLASSICS THAT ARE CONTROL FUNCTIONS, WHERE WE'VE HAD TEASKED-BASED ACTIVITY.

WE'VE BEEN USING SOMETHING AROUND HOW DO WE EVIDENCE OUR ABILITY TO ENGAGE COMPANIES. HOW DO WE SHOW THAT THE CLIENTS? ALL OF THE ASSET CLASSES AND HOW WE INTERACT WITH BUSINESSES, WHETHER WE LEND MONEY TO THEM.

WE CAN SEE THE INTERACTION WITH THE COMPANY. WE CAN TALK TO CLIENTS ABOUT HOW WE ARE ENGAGING AND DELIVERING BETTER OUTCOMES. THAT IS QUITE FUN.

DISTRIBUTION TEAM. IN FRONT OF THE INVESTORS COMING TOGETHER. HACK-A-THON TO GET THIS.

TO ME, WE ARE AT THE EARLY FOOTHILLS OF INNOVATION. FRANCINE: WHEN YOU LOOK AT A LOT OF INFLATION CONCERNS SURROUNDING THE SECOND TERM OF PRESIDENT TRUMP. IS THIS REALLY WHAT IT'S ALL ABOUT, WHAT HAPPENS TO TARIFFS AND WHETHER THE CFED COULD CUT THIS YEAR?

PIERS: THE STATE OF THE U. S. ECONOMY IS PRETTY GOOD.

THIS IS THE PROBLEM THAT DONALD HAS, THE REALITY IS POWELL HAS A FINE BALANCE TO TREAD BETWEEN AN INFLATIONARY BACKDROP THAT IS STILL STRONG. WAGE INFLATION IS STRONGER IN THE U. K.

COMPARED TO THE U. S. WAS STILL STRONG.

WE'VE TALKED ABOUT HIGHER FOR LONGER IN TERMS OF INTEREST RATES. THERE'S BEEN THIS NERVOUSNESS THAT WE HAVE NOT SOLVED THE PROBLEM YET. THE EXPECTATION THAT THE FED WAITS TO SEE MORE ABOUT WHAT HAPPENS.

ON THE TARIFF SIDE OF THINGS, IT IS A CLASSIC THING. IT IS TO ALTER THE NEGOTIATION. IT BRINGS YOU TO THE TABLE.

THE COLOMBIA ONE HAD NOTHING TO DO WITH TARIFFS. IT IS A SENSE OF HOW DO I BRING YOU TO THE TABLE TO HAVE A SENSIBLE CONVERSATION? HAVING BIEEN SCATHING OF THE KEIR STARMER GOVERNMENT, PERHAPS THE FIRST VISIT TO THE U.

S. I THINK KEIR STARMER, AND IN DAVOS FROM RACHEL REESE, THEY WANT TO EVIDENCE THE U. K.

BEING OPEN FOR BUSINESS. THAT MESSAGE SAYS WE WOULD LIKE TO DO A TRADE WITH THE IS QUITE IMPORTANT. FRANCINE: IT MUST BE VERY DIFFICULT TO SEPARATE THE NOISE FROM THE FUNDAMENTALS YOU MAKE BUSINESS DECISIONS, INVESTING IN THE MARKETS.

PIERS: IT IS BUT IF ANYTHING, IT IS PROBABLY MORE LINKED TO THE ON SHORING PIECE WE TALKED ABOUT FOR A LONG TIME. I THINK THERE WERE STILL EVEN WITH THE AI BREAKTHROUGH IN CHINA TODAY, A DEGREE OF CONCERN AND NERVOUSNESS BEHIND THAT IN TERMS OF THE MONITORING THAT TAKES PLACE. THE MESSAGE AROUND BRINGING IT BACK TO THE UNITED STATES REMAINS.

EUROPE HAS TO LEAN IN AND THINK ABOUT HOW DO WE MOVE MORE? HOW DO WE TACKLE THIS ISSUE? IF TRUMP MANAGES TO CONVINCE UKRAINE AND RUSSIA TO COME TOGETHER, EUROPE NEEDS TO BE ABLE TO BE PART OF THE NARRATIVE.

THAT WILL HELP US IN TERMS OF MORE TRADE WITH THE U. S. , NOT LESS.

FRANCINE: WHAT ARE YOU EXPECTING TO THE DOLLAR TO DO IN THIS? YOU PROBABLY GET 95% OF YOUR INVESTMENT STRATEGY. PIERS: YOU DON'T REALLY NEED TO CUT RATES.

WE ARE TEACHING IN THE U. K. WHETHER YOU SHOULD ARE NOT.

THAT IS WHY WE'VE HAD DOLLAR STRENGTH. THE THING THAT CHANGES AWAY FROM DOLLAR STRENGTH WILL BE EITHER JAPAN HAS TO KEEP RAISING RATES SUE GET THE YEN STRENGTH FOR THE FIRST TIME IN YEARS, OR ECONOMIC GROWTH STARTS TO IMPROVE ANOTHER PART OF THE WORLD AND WE HAVE NOT SEEN THAT YET. FRANCINE: ARE YOU EXCITING THAT/ PIERS: I THINK SO.

YES , THE WAGE INFLATION. IT IS ALMOST ALWAYS THE LAST MINIMUM WAGE TO FALL. YOU TACK ON NATIONAL INSURANCE INCREASES, IT DOES MAKE IT DIFFICULT FOR BUSINESSES TO CONTINUE TO INVEST WHEN THAT INFLATIONARY BACKDROP IS REAL.

FRANCINE: WHAT IS YOUR TAKE ON THE U. K. ?

JOHN MICKLETHWAIT SPOKE TO THE CHANCELLOR IN DAVOS. WE ALSO GOT HER THOUGHTS ON THE FACT SHE'S A BIT MORE FLEXIBLE THAN MAYBE PEOPLE THOUGHT. PIERS: I THOUGHT IT WAS A GREAT INTERVIEW.

TOTAL CHANGE OF NARRATIVE. EVER SINCE THE BUDGET, THE CONSUMER CONFIDENCE HAS BEEN NEGATIVE BECAUSE OF THE COST. STEPS HAVE TO BE TAKEN.

WE ALWAYS KNEW IT WOULD BE PAINFUL IN YEAR ONE OF THE GOVERNMENT. EASE THE PAIN AS YOU GET CLOSER TO THE NEXT ELECTION. THIS IS REALLY IMPORTANT THIS WEEK IN TERMS OF WHAT THEY TALK ABOUT WITH GROWTH.

HOW DO YOU SAY THE U. K. IS OPEN FOR BUSINESS?

FOR ME, IT IS R REDUNDANT. IF WE CAN INCENTIVIZE RESIDENTS OF THE U. K.

, THE U. K. ECONOMY COULD GROW VERY QUICKLY.

FRANCINE: SO GOOD TO SPEAK TO YOU, PIERS. CHIEF INVESTMENT OFFICER AT ROYAL LONDON ASSET MANAGEMENT. COMING UP, SHARES JUMPED AFTER STRONGER-THAN-EXPECTED PERFORMANCE OF THE THIRD QUARTER.

PLENTY MORE ON THAT NEXT AND THIS IS BLOOMBERG. >> I HAVE SEEN NOTABLE IMPROVEMENTS ON THE GROUND. THINGS ARE DEFINITELY IMPROVING.

THE QUALITY OF THE FUSELAGES COMING IN ARE MUCH IMPROVED. I HAVE A HIGH LEVEL OF CONFIDENCE THAT THE ADDITIONAL LINE AIRCRAFT WE NEED, GETTING SOMEWHERE TO 181 GAME CHANGERS AND DELIVER THOSE 206 MILLION PASSENGERS WILL HAPPEN. EQUALLY HAVE A RELATIVELY HIGH LEVEL OF CONFIDENCE THE REMAINING 29 AIRCRAFT IN OUR 210 ORDER BROKE WILL BE DELIVERED AHEAD OF NEXT SUMMER WHICH WILL ENABLE US TO CATCH A BALL A LOT OF THE GROWTH WE LOST THIS YEAR.

I THINK BOEING HAVE TURNED THE CORNER ON THE PRODUCTION SIDE OF THINGS. THEY FIXED THEIR BALANCE SHEET LAST YEAR. THE MANAGEMENT TEAM ARE EXECUTING ON THE PLAN.

OF COURSE, WE ARE DISAPPOINTED WE WILL BE LEFT SHORT. WE ARE OPERATING ON CAPACITY CONSTRAINTS. THE AIRBUS OPERATORS, THEY ARE BEHIND ON THEIR DELIVERIES.

THEY HAVE THE ISSUE WITH THE ENGINES. I THINK IT WILL BE HUGELY CONSTRAINED THIS SUMMER. OUR OWN INCLUDED AS WE HOPE TO CARRY 210 NEW PASSENGERS AND NOW CARRYING 206.

THAT POTENTIAL WILL BE A POSITIVE INTO THE SUMMER GOING FORWARD. >> THIS IS THE SECOND TIME YOU HAVE LOWERED THE PASSENGER GROWTH TARGET. ARE WE DONE?

>> I HAVE A HIGH LEVEL OF CONFIDENCE THAT THOSE WILL COME IN. I SAW A NUMBER OF THEM IN THE FACTORY WHEN I WAS THERE. MANUFACTURERS, THEY ARE GOOD TO GO.

WE CAN PHYSICALLY SEE THOSE NINE FUSELAGES AT THIS POINT IN TIME. IT IS A CASE OF GETTING THE REMAINING 29 IN AND OF THE SUMMER OF 2026. >> THAT IS THE ADDITIONAL 29 BUT YOU ARE GETTING NINE BEFORE THE CURRENT SUMMER?

FRANCINE: 172 GAME CHANGERS. >> WE GET ANOTHER NINE AIRCRAFT IN AHEAD OF PEAK SUMMER. >> WHAT IS DEMAND LOOKING LIKE?

>> DEMAND IS VERY STRONG. IT IS ROBUST. PEOPLE ARE STILL AS KEEN AS EVER TO GET AWAY.

WE HAVE 164 NEW ROUTES THIS SUMMER, ALL BOOKING WELL. IT IS TOO EARLY TO CALL WHERE YOU WILL FIND PRICING BUT I AM PLEASED WITH WHAT WE ARE SEEING SO FAR. FRANCINE: THE CHIEF FINANCIAL OFFICER OF RYANAIR SPEAKING TO TOM THIS MORNING.

THE AIRLINE REVEALED THAT IS CUTTING ITS PASSENGER GROWTH TARGET FOR A SECOND TIME IN THREE MONTHS AMID BOWLING DELAYS. THE U. K.

CHANCELLOR RACHEL REEVES HAS ENTITIES PREPARED TO GREENLIGHT THIRD RUNWAY AT HEATHROW AIRPORT. BENEDIKT KAMMEL JOINS US NOW. RYANAIR'S SHARE PRICE TICKING HIGHER THIS MORNING.

WHY IS THAT? >> IF YOU LISTEN TO WHAT THE CFO JUST SAID THIS MORNING, THERE'S A LOT OF CONFIDENCE. HE SAID HE'S CONFIDENT ABOUT THE OUTLOOK.

PEOPLE ARE STILL TRAVELING. WITH REGARDS TO BOWLING, THAT IS THE SOLE AIRCRAFT PROVIDER, HE SAID THEY TURNED THE CORNER. IT WAS RECENTLY UP THERE IN SEATTLE CHECKING AT THE PROGRESS.

HE SAID I AM LIKING WHAT I AM SEEING. THE COMPANY HAS IMPROVED. A VERY POSITIVE PICTURE COMING OUT OF THEM.

YES, THEY HAVE CUT THE GROWTH TARGET FOR PASSENGERS BUT IS NOT THEIR FAULT. IT IS BECAUSE THEY ARE NOT GETTING THE AIRCRAFT. IF YOU TURN IT ON ITS HEAD, DEMAND IS THERE, CAPACITY ISN'T IN THAT PROBABLY MEANS THEY CAN COMMAND HIGHER PRICES.

INVESTORS ARE CHOOSING TO LOOK AT THIS AT A GLASS HALF-FULL TYPE OF SITUATION AND YOU CAN SEE IT IN THE STOCK PRICE THIS MORNING. FRANCINE: REMIND US OF THE ISSUES FACING BOEING AND THEIR EFFECT ON AIRLINES. BENEDIKT: BOEING HAS BEEN THROUGH A VERY TOUGH YEAR.

THEY HAVE THE STRIKE TOWARDS THE END OF THE YEAR. THAT REALLY PUT, STOP PRODUCTION FOR THE ENTIRE QUARTER. RYANAIR IS THE ONLY -- THEY ONLY BUY A BOEING AIRCRAFT SO THEY ARE REALLY DEPENDENT ON BOEING, DELIVERING NEWS AIRCRAFT.

IT HAPPENED SLOW BEFORE THAT STRIKE WITHOUT REALLY EXACERBATED THINGS. THEY ARE NOT GETTING THE NUMBER OF AIRCRAFT THEY NEED. THAT MEANS THEY NEED TO TAKE SOME ROUTES OUT OF THE NETWORK AND REALLOCATE SOME AIRCRAFT.

AS A RESULT, THEY CANNOT RESERVE ALL THE ROUTES THEY WANTED TO. AGAIN, THE CONSTRAINTS ARE EVERYWHERE. IT IS EVERYWHERE.

THEY HAVE ISSUES GETTING THE AIRCRAFT TO THE CUSTOMERS. PEOPLE WANT TO TRAVEL, PEOPLE WANT TO GO ON THE SHORT GETAWAYS. YOU ARE SEEING IT IN THE NUMBERS.

THE CAPACITY IS NOT THERE. FOR THE AIRLINES, THAT MEANS THEY CAN COMMAND HIGH PRICES AND THAT IS WHY PEOPLE ARE UPBEAT ABOUT THE STOCK PRICE THIS MORNING. FRANCINE: RACHEL REEVES ALSO HINTED AT BUILDING A THIRD RUNWAY AT HEATHROW.

WHAT OBSTACLES ISSUE FACING? BENEDIKT: THIS IS A LONG-RUNNING SAGA, THE HEATHROW EXPANSION. I HAVE BEEN COVERING THIS INDUSTRY FOR MORE THAN A DECADE AFTER ALL THAT TIME, THERE HAS BEEN TALK OF A THIRD RUNWAY.

TALK OF BUILDING A NEW AIRPORT ELSEWHERE. BORIS ISLAND IT WAS CALLED AT ONE POINT. I WILL BELIEVE IT WHEN I SEE IT CREATED THIS IS A COMPLICATED THING TO DO.

THERE'S A LOT OF REGULATION THAT IS POLITICAL OPPOSITION. THIS IS A VERY DENSELY POPULATED AREA IN SOUTH LONDON. A LOT OF PEOPLE DON'T WANT MORE AIRCRAFT NOISE OVERHEAD.

SHE WILL RUN INTO ALL SORTS OF ISSUES. ON THE POLITICAL FRONT, THE FINANCIAL FRONT, THE ACTUAL PLANNING FRONT. THIS IS NOT ISTANBUL OR DUBAI OR -- THESE THINGS TAKE A LOT OF TIME.

IT WAS INTERESTING HEARING FROM HER IN DAVOS WHERE SHE TRY TO PUT A BRAVE FACE ON IT AND SAY WE CANNOT ALWAYS SAY NO. WE NEED GROWTH. THIS COUNTRY NEEDS GROWTH IN AIRPORTS ARE ONE-PIECE TRAJECTORY.

WHETHER SHE KEPT HER WAY, THAT'S ANOTHER MATTER. HEATHROW IS A CROWN JEWEL OF EVERYTHING THAT HAS TO DO WITH GROWTH OF THE U. K.

FRANCINE: THANK YOU SO MUCH, BENEDIKT KAMMEL ON EVERYTHING AVIATION. DEEPSEEK IS ROCKING GLOBAL TECH STOCKS AND RAISING QUESTIONS OVER AMERICA'S TECHNOLOGICAL DOMINANCE. YOU CAN SEE QUITE A LOT OF PRESSURE INTRADAY FOR ASML DOWN 10%.

THE WESTECH PREMARKET, AND THAT HAVING A GREAT DAY AS SO MANY QUESTIONS ABOUT WHAT THIS MEANS FOR THEIR MOST STIFF IS TO GET A TRIPS, LONGER-TERM NVIDIA PREMARKET DOWN 9. 7%. COMING UP, FOUR WEEKS BEFORE GERMANY SNAP ELECTION AND THE POLITICAL TEMPERATURES RISING AS TENS OF THOUSANDS MARCH ACROSS THE COUNTRY OVER THE WEEKEND TO PROTEST AGAINST THE AFD.

MORE ON THAT NEXT. THIS IS BLOOMBERG. ♪ FRANCINE: TENS OF THOUSANDS OF PEOPLE MARCHED IN GERMAN CITIES OVER THE WEEKEND AND PROTEST AGAINST THE FAR RIGHT AFD PARTY.

MUSCULAR HAS BEEN A VOCAL SUPPORTER OF THE AFD MADE A SURPRISE VIRTUAL APPEARANCE AT THE PARTY'S CAMPAIGN LAUNCH ON SATURDAY. FOR MORE ON THIS -- GOOD MORNING. ELON MUSK WEIGHED IN ON GERMAN ELECTIONS OVER THE WEEKEND.

WHAT WERE THE REACTIONS ON THE GROUND? >> YEAH, GOOD MORNING. THIS WAS ACTUALLY, HE MADE SOME REMARKS THAT CAUSED QUITE A FEW WAVES.

BE ADDRESSED VIA VIDEO STREAMING A PARTY GATHERING OF THE WEEKEND IN THE EASTERN GERMAN CITY. HE REITERATED HIS SUPPORT FOR THE AFD AND FURTHER CHANCELLOR CANDIDATE IT WAS BASICALLY AT THE MOMENT SECOND IN THE POLLS BEHIND THE CONSERVATIVE LEADER. THE COMMENTS FROM MUSK, IRAQ SOME FEATHERS FOR THE -- HE RUSTLED SOME FEATHERS, BASICALLY SAVING GERMAN PEOPLE SHOULD NOT WORRY SO MUCH ABOUT HISTORICAL RESPONSIBILITY AND WHAT HAPPENED IN THE PAST IN GERMAN HISTORY.

BUT ESSENTIALLY, WITH MORE AHEAD. THAT HAS BEEN A HIGHLY CONTROVERSIAL STATEMENT GIVEN THE POLITICAL LEADERS THIS WEEK MEET IN POLAND TO COMMEMORATE THE 80TH NURSERY SIC -- ANNIVERSARY OR CEREMONY TO CELEBRATE THE LIBERATION OF AUSCHWITZ. SO THE TIMING OF THE STORIES THAT ELON MUSK MADE IN EASTERN GERMANY WERE HIGHLY COMPLICATED, I WOULD SAY.

FRANCINE: THE GERMAN OPPOSITION LEADER HAS ALSO CAUSED HEADLINES WITH PROPOSALS TO FIGHT ILLEGAL IMMIGRATION. WHAT ARE THE MAIN POINTS? CHRISTOPH: HIS MAIN POINT IS ESSENTIALLY HE WANTS TO CRACK DOWN MUCH TOUGHER THAN WHAT GERMANY HAS DONE SO FAR IN TERMS OF STOPPING ILLEGAL IMMIGRATION INTO GERMANY.

THAT INCLUDES ONE FILING THAT HE PLANS TO PUSH FORWARD TO INVOKE IN PARLIAMENT THIS WEEK. IT MEANS GERMANY WOULD BE ABLE TO SEND BACK UNDOCUMENTED, ILLEGAL IMMIGRANTS, PEOPLE WHO COME TO GERMANY AND DON'T HAVE THE DOCUMENTS THAT SHOW THEY HAVE A RIGHT TO STATE. THAT IS ALSO STOKED THE INTERNAL DISCOURSE HERE AND TRIGGERED QUITE A BIT OF A BACKLASH FROM HIS LYRICAL OPPONENTS, PARTICULAR OLAF SCHOLZ WHO CRITICIZED HIM FOR WATERING DOWN THE SO-CALLED FIREWALL TO THE AFD.

FRANCINE: THANK YOU SO MUCH AS ALWAYS. THE VERY LATEST ON GERMANY. U.

S. FUTURES, ESPECIALLY NASDAQ LOWER ON THE BACK OF DEEPSEEK FROM CHINA.