Stocks Rise Ahead of Fed Decision; US-Iran MOU Details; G7 Summit — Bloomberg Brief 6/17/2026

[00:00:01] Speaker 1: BONE QUINN WITH YOUR BLOOMBERG BRIEF. IT'S 5:00 AM IN NEW YORK CITY, 10:00 AM IN LONDON. I'M BONNIE QUINN WITH YOUR BLOOMBERG BRIEF. LET'S GET YOU SET UP FOR THE DAY. STOCK FUTURES RISE AS MARKETS AWAY THE FIRST KEVIN WASHLED FED DECISION. THE FED DECISION IS TAKING A MAJOR FINANCIAL RELIEF. THE LAST DAY OF THE G7 SUMMIT, AI EXECUTIVES GEAR UP TO MEET WITH WORLD LEADERS FOR SECURITY DISCUSSIONS. DON'T MISS OUR INTERVIEW WITH ONE OF THE PARTICIPANTS, SYNTHESIA CEO VICTOR RIPPARBELLY, LATER THIS HOUR. [00:00:49] Speaker 2: LET'S GET A CHECK ON MARKETS AROUND THE WORLD. FIRST OVER TO ASIA AND WINNIE SUE. WINNIE. THE FED DECISION IS TAKING AROUND THE WORLD. THE FED DECISION IS TAKING AROUND THE WORLD. THE FED DECISION IS TAKING AROUND THE WORLD. THE FED DECISION IS TAKING AROUND THE WORLD. WE ARE TAKING AROUND THE WORLD. WE ARE TALKING ABOUT THE CHINESE OFFSHORE STOCKS AS WE FLIP A BOARD AND SEE HOW THAT UNDERPERFORMANCE HAS BEEN WORSENING OVER THE PAST YEAR. WE ARE TALKING ABOUT THE MSCI CHINA DOWN ABOUT 10% SO FAR THIS YEAR, VERSUS A 24% GAIN IN BEAR TERRITORY. THE HEAD WINDS STILL REMAIN ESPECIALLY WITH THAT LACK OF AI EXPOSURE, THE WEAK EARNINGS GROWTH AND ALSO SLUGGISH ECONOMIC OUTLOOK. [00:01:41] Speaker 1: ABSOLUTELY. THANK YOU SO MUCH. LET'S GET TO LONDON FOR A LOOK AT EUROPE. [00:01:48] Louise Moon: GOOD MORNING. TAKING A BROADER LOOK AT THE EUROPEAN SPACE. WE HAVE THE EUROPEAN STOCK 600, PRETTY FLAT, UNCHANGED, STAYING STEADY AT RECORD HIGHS. THE ATTENTION IS ON THE FED AND WHAT HAPPENS LATER TODAY. HOLDING THEIR RECORD HIGHS. ONE OF THE KEY SECTORS THAT WE SHOULD BE LOOKING AT IS AUTOS DRAGS DOWN OVER 2% INTO THE RED. IN THE BIT BUT BMW, THEIR FORCAST AND PROFITABILITY GOING LOWER. SO DRAGGING THOSE AUTO SECTORS. THAT'S THE WORST PERFORMING SECTOR HERE IN EUROPE. A QUICK LOOK AT YIELDS HERE IN THE U.K. THE 10-YEAR YIELD DIPPING, GUILTS RALLYING ON THE BACK OF THIS INFLATION PRINT THAT WE'VE SEEN HOLDING STEADY IN MAY HERE IN THE U.K. SURPRISINGLY HOLDING STEADY GIVEN EVERYTHING THAT'S GOING ON IN THE WORLD. BUT HOLDING STEADY THERE. AND TRADERS TRIMMING THOSE RATE HIGH BETS FOR THE BOE TOMORROW. THAT IS COMING UP TOMORROW. TAKING A QUICK LOOK FINALLY AT THE KRONE OVER IN SWEDEN. KRONE VERSUS THE EURO. AGAIN, HOLDING STEADY, IT'S RISEN SLIGHTLY OVER IN THE PAST FEW DAYS AHEAD OF THE SWEDISH INTEREST RATE DECISION WHICH WAS THIS MORNING. THANK YOU. [00:03:15] Speaker 1: THANK YOU. THAT IS LOUISE MOON IN LONDON. THE FOCUS IS ON THE FED. THANK YOU. WHERE IS THIS INFLATIONARY MOVE IN OIL GOING TO BE? BRENT CRUDE BELOW $80 A BARREL. WHERE THE FED IS GOING TO BE ON THE MARKET. THE FED MAY HAVE LESS OF AN INCLINATION TO INDICATE THAT A HIKE, FOR EXAMPLE, MIGHT BE NEXT. WHAT WILL THE EXPECTATION BE LIKE AS WE HEAD INTO IT? CERTAINLY FOR NOW WE ARE SEEING FUTURES BOUNCE BACK. WE DIDN'T HAVE A MAJOR SELL-OFF YESTERDAY. THE SOX INDEX WAS DOWN ALMOST 5%. THE NASDAQ 100 BORE THE BRUNT OF IT WITH ENERGY AND FINANCIALS OUTPERFORMING. BUT RIGHT NOW IT LOOKS LIKE ALL OF THE MAJOR INDICES ARE GOING TO BE BOUNCING BACK JUST A LITTLE BIT TODAY. THAT CHIP TRADE COMING BACK ONLINE AS WELL. IF YOU LOOK AT YIELDS, THEY ARE CLOSE TO A ONE-MONTH LOW. NOT REALLY MOVING. NOBODY IS TAKING ANY FURTHER BETS. THERE IS ABOUT AN 80% CHANCE OF THE NEXT MOVE BEING A RATE HIKE AND THAT BEFORE THE END OF THE YEAR PRICED IN. NOBODY IS DOING ANYTHING TO UPSET THIS APPLE CART AT LEAST UNTIL WE HEAR FROM KEVIN WARTH. LET'S GET TO SOME INDIVIDUAL MOVERS NOW FOR THAT. BACK OVER TO LONDON AND CHOE MELLIE. [00:04:39] Chloe Mellie: CHOE. GOOD MORNING, BARNEY. HERE UP ON THE BOARD THERE IS INVIDIA BUT THERE SHOULD BE LIONSGATE THIS MORNING WHICH IS DOWN THIS MORNING AFTER NETFLIX SAID IT WAS NOT INTERESTED IN ACQUIRING THE STUDIO. WE HAD SEEN THE SHARES IN LIONSGATE REALLY JUMPING ON THE BACK OF THOSE RUMORS AND REPORTS BUT NETFLIX DENYING IT HAS REALLY DRAGGED DOWN THOSE SHARES THIS MORNING. MOVING ON TO THE FURNITURE MANUFACTURER LAZYBOY WHICH IS UP QUITE STRONGLY THIS MORNING AFTER EARNINGS B ESTIMATES AND THIS IS SOMETHING ANALYSTS HAVE SAID THAT THIS WAS REALLY THANKS TO SOME ACQUISITIONS AND SOME DIVESTMENTS AND THAT REALLY HELPED THIS COMPANY REALLY YOU KNOW THE WEAKER CONSUMER SPENDING THAT'S BEEN AFFECTING THAT SECTOR HAS BEEN RESILIENT IN THE FACE OF THAT. AND FINALLY BMW OVER IN EUROPE IS DOWN THIS MORNING AFTER CUTTING IT'S PROFITABILITY FORECAST THAT IS DUE TO SOME WEAKNESS IN CHINA AND ALSO THE IMPACT OF THE IRAN WAR AND SO THIS IS REALLY GOING TO BE A WAKE-UP CALL FOR THE ENTIRETY OF THAT EUROPEAN CARMAKING SECTOR THAT HAS BEEN REALLY STRUGGLING IN THE FACE OF THOSE COMPETITIVE PRESSURES. [00:05:42] Speaker 1: CHLOE, THANK YOU SO MUCH. CHLOE MELLIE THERE IN LONDON. AND COMING UP THIS HOUR OUR EXCLUSIVE INTERVIEW WITH VICTOR RIBARELE, CEO OF SYNTHESIA AS AI EXECUTIVES ARE SET TO MEET WITH G7 LEADERS. WE'LL ALSO PUSH AHEAD TO THE FED DECISION WITH IAN LINGEN OF BEMO CAPITAL TURNING TO THE U.S.-Iran MOU NOW. BLOOMBERG UNDERSTANDS THAT IRAN IS SET TO RECEIVE BROAD FINANCIAL INCENTIVES AS PART OF ITS AGREEMENT WITH THE U.S. A DRAFT SEEN BY BLOOMBERG SHOWS TEHRAN WILL GET THE RIGHT TO IMMEDIATELY SELL OIL, TAP A $300 BILLION DEVELOPMENT FUND AND EVENTUALLY ACCESS ALL FROZEN ASSETS. FOR MORE LET'S TALK TO BLOOMBERG'S OWNER IN DUBAI. OWNER, BASED ON WHAT WE'VE SEEN, IRAN STANDS TO GAIN PRETTY NICELY FINANCIALLY FINANCIALLY IF IT MEETS CERTAIN CONDITIONS. CAN YOU GIVE US SOME MORE DETAILS? [00:06:33] Speaker 5: SURE, THERE ARE TWO PARTS TO THE FINANCIAL GAINS, THE FINANCIAL RELIEF THAT IRAN SHOULD EXPECT FROM THE SIGNING OF THIS INTERIM DEAL. ONE, THE IMMEDIATE ONES. IT WILL BE ALLOWED TO RESUME ITS OIL AND PETROCHEMICALS EXPORTS, WHICH IS GOING TO BE A SOURCE OF MUCH NEEDED EFFECTS THAT THE ISLAMIC REPUBLIC WAS GRAPPLING WITH SINCE THE START OF THE WAR. IN ADDITION, WE EXPECT A TIMELY RELEASE OF FROZEN FUNDS, ESTIMATED TO BE IN THE TENS OF BILLIONS, ACCORDING TO THE TEXT OF THE MOU THAT WE HAVE SEEN OVERNIGHT. WHAT IS A BIT LESS CLEAR IS, GOING FORWARD, HOW MUCH EXACTLY DOES IRAN STAND TO GAIN FROM THE SO-CALLED ECONOMIC DEVELOPMENT FUND. THE U.S., ACCORDING TO THE MOU, UNDERTAKES TO PUT TOGETHER A DEVELOPMENT FUND THAT IS GOING TO BE AT LEAST $300 BILLION IN SIZE, ALONG WITH ITS REGIONAL PARTNERS. THE MOU DOESN'T SAY WHEN EXACTLY THAT FUND MIGHT BE CREATED OR WHO PAYS FOR IT. BUT IT IS THERE AND WE EXPECT THAT TO BE A PROMINENT FEATURE OF THE TALKS GOING FORWARD BECAUSE THAT IS SOMETHING THAT THE ISLAMIC REPUBLIC HAS BEEN VERY PERSISTENT ABOUT SINCE THE BEGINNING OF THE WAR. IT WANTS THE REST OF THE WORLD OR THE U.S. AND OTHERS TO PAY FOR SOME OF THE DAMAGES THAT IT SAYS IT SUFFERED SINCE THE WAR BEGAN IN FEBRUARY. [00:07:48] Speaker 1: PRESUMING THE MOU IS SIGNED, HOW QUICKLY COULD THE STRAIT OF HORMOUZ THEORETICALLY REOPEN, ONUR? [00:07:57] Speaker 5: WELL, THE HORMOUZ WILL PROBABLY REOPEN ALMOST IMMEDIATELY. AND WE ARE ALREADY SEEING SIGNS THAT QUITE A FEW COMPANIES AND COUNTRIES, INCLUDING IRAN OR KATAR, THE WORLD'S LARGEST LNG EXPORTER, ARE SORT OF TURNING THEIR SHIPS TOWARDS THE REGION, EXPECTING THAT THE CLOSURE WILL COME TO AN END AS SOON AS THE SIGNING IS CONFIRMED ON FRIDAY BETWEEN THE U.S. AND IRAN. HOW LONG IT TAKES FROM THE REOPENING OF HORMOUZ TO THE PRE-WAR LEVELS, WHERE WE SAW ABOUT 130, 140 TANKERS OR SHIPS GOING THROUGH THE STRAIT ON A DAILY BASIS, IT IS LESS CERTAIN. BUT AT LEAST WE KNOW THAT THE TWO SIDES, ACCORDING TO THE MOU, COMMIT TO TRY TO BRING THE MARITIME TRAFFIC THROUGH HORMOUZ TO ITS PRE-WAR LEVELS IN ABOUT 30 DAYS, FOLLOWING THE SIGNING OF THE AGREEMENT ON FRIDAY. [00:08:43] Speaker 1: WELL, SPEAKING OF GOING THROUGH THE WATERWAY, THE UAE TELLING BLOOMBERG THAT THEY ARE NOW MOVING TO CUT DEPENDENCY ON THE STRAIGHT OF HORMOUZ TO ZERO. IS THAT EVEN POSSIBLE OR WHAT MORE DO WE KNOW? [00:08:55] Speaker 5: MAYBE CUTTING DOWN TO ZERO IS A VERY AMBITIOUS TARGET. BUT WE KNOW THAT SINCE THE WAR BEGAN, SOME EFFORTS HAVE BEEN MADE, NOT ONLY BY THE UAE BUT OTHER GULF COUNTRIES, TO MITIGATE THE IMPACT FROM THE CLOSURE OF HORMOUZ ON THE ECONOMIES. SOME OF THAT RESPONSE WAS OBVIOUSLY ABOUT MITIGATING THE IMPACT OF THE WAR. BUT SOME OF THEM ACTUALLY POINTS TO A MORE STRATEGIC SHIFT IN THE WAY THE GULF COUNTRIES SEE WHERE HORMOUZ LIES IN THE OVERALL ECONOMIC ECOSYSTEM THAT THEY ARE LIVING IN. AND, YES, THAT WOULD REQUIRE THEM TO WORK ON WAYS TO CIRCUMVENT HORMOUZ AS A CHOKE POINT FOR TRADE WITH THE REST OF THE WORLD, INCLUDING FOR OIL. [00:09:35] Speaker 1: THANK YOU SO MUCH FOR BRINGING US ALL OF THAT REPORTING TODAY. THAT'S OWNER ANT IN DUBAI. STOCKS AND BONDS RISING AS WE LOOK AHEAD TO THE FED DECISION AND KEVIN WARSH'S DEBUT AS CHAIR. JOINING US NOW IS BLOOMBERG'S VEN RAM. NOT TOO MUCH DIFFERENCE IN POSITIONING IN THE LAST COUPLE OF DAYS. IT SEEMS LIKE THE BOND MARKET HAS MADE ITS CALL OR AT LEAST IS HOLDING ITS BREATH. WHAT WOULD SURPRISE THE BOND MARKET TODAY? [00:09:58] Speaker 6: THERE IS PLENTY THAT CAN SURPRISE THE BOND MARKETS TODAY. THE MARKETS ARE JUST NOT POSITIONED FOR THAT OUTCOME. IF YOU LOOK AT THE MOVE INDEX, WHICH CAPTURES WOLATILITY EXPECTATIONS IN SWAP RATES, WE ARE AT LOW. THEY ARE THINKING WE COULD SEE A 50 TO 60 BASIS POINT MOVE IN SWAP RATES OVER A ONE-YEAR HORIZON. I THINK THAT THE MARKETS ARE UNDERPRISING THE RISK THAT KEVIN WARSH IS GOING TO BE SOMEONE LIKE ALAN GREENSPAN, NOT SOMEONE LIKE POWELL. HE HAS ALREADY EXPRESSED HIS DISTASTE FOR FED'S COMMUNICATION STYLE. HE THINKS THE FED SHOULD BE TALKING LESS AND WORKING MORE BEHIND THE SIDELINES. I THINK THAT HE COULD VERY WELL MISS THE DOT PLOT TODAY. WE MAY NOT GET A DOT FROM HIM. HE MAY EVENTUALLY COME OUT IN THE PRESS CONFERENCE AND SAY THAT LOOK, HE IS NOT FOR HOLDING LONG PRESS CONFERENCES, ONE-HOUR STYLE, AS HAS BEEN THE CASE FOR SO LONG NOW. BUT IF YOU THROW BACK TO 2011, PRE-2011, THE FED WASN'T EVEN IN THE HABIT OF HOLDING PRESS CONFERENCES. HE MAY WELL COME OUT TODAY AND SAY THAT LOOK, WE ARE NOT GOING TO HOLD THESE PRESS CONFERENCES REGULARLY FROM NOW ON. HE COULD SAY THAT HE COULD DO A WAY WITH THE DOT PLOT ALTOGETHER AND THE SUMMARY OF ECONOMIC PROJECTIONS. THAT MEANS THAT THE MARKETS WILL HAVE TO WORK OUT ON THEIR OWN WHAT THE FED'S NEXT MOVE IS GOING TO BE. SO IT'S GOING TO BE A GUESSING GAME WHICH IS NOT FACTORED IN BY THE MARKETS AT ALL FROM THE POSITIONING TODAY. [00:11:29] Speaker 1: NO, IT WOULD BE BACK TO THE OLD DAYS. AS YOU SAY, IT'S BEEN A LONG TIME SINCE WE'VE HAD A VERY EXPRESSIVE FED, SO THERE'S A WHOLE GENERATION OF PEOPLE THAT DON'T KNOW ANYTHING DIFFERENT. WOULD LESS TALK, LESS EXPRESSION WORK FOR THESE MARKETS? [00:11:45] Speaker 6: WELL, I THINK THE MARKETS HAVE TO MAKE IT WORK. THEY DON'T HAVE A CHOICE. IF YOU LOOK, THROW BACK TO THE AREA OF GREEN SPAN, THE MARKETS WERE CONSTANTLY ON THEIR FEET, GUESSING WHAT THE FED'S NEXT MOVE WAS GOING TO BE. GREEN SPAN ONE FAMOUSLY SAID THAT, YOU KNOW, IF YOU THINK THAT YOU'VE UNDERSTOOD WHAT I'VE SAID, YOU MUST HAVE MISINTERPRETED WHAT I ACTUALLY SAID. SO I THINK THAT WE ARE GOING TO GO BACK TO THOSE DAYS. AND THAT MEANS THAT HIGHER VOLATILITY, AND IF YOU TAKE THAT TOGETHER WITH KEVIN WASH'S INCLINATION TO SHRINK THE BALANCE SHEET, IT MEANS HIGHER RATES. AND I THINK THAT, YOU KNOW, THAT IS THE GAME. THAT IS THE TRICK THAT THE MARKETS ARE MISSING TODAY. ALL RIGHT, VEN. [00:12:25] Speaker 1: WE'LL BE WAITING WITH BATED BREATH. BLOOMBERG'S VEN RAM, THANK YOU SO MUCH. NOW TO ALL THE TOP STORIES TRENDING ON THE TERMINAL THIS MORNING. CHINA'S CENTRAL BANK SIGNALLED A POTENTIAL SHIFT TOWARDS AN OVERNIGHT POLICY RATE, A MOVE THAT COULD GIVE POLICY MAKERS TIGHTER CONTROL OVER SHORT-TERM FUNDING COSTS. IT IS ALSO A SIGN THAT THE PBOC MAY EVENTUALLY MOVE AWAY FROM THE SEVEN-DAY REVERSE REPO RATE AS ITS MAIN BENCHMARK. THE MOVE TO AN OVERNIGHT RATE WOULD BRING THE PBOC CLOSER TO GLOBAL PEERS, SUCH AS THE FED. BY THE LUTE, MOVE UP THE WAITLIST. BLOOMBERG SOURCES SAY FERRARI IS USING ORDERS FOR ITS POORLY RECEIVED ELECTRIC CAR AS A LOYALTY TEST FOR WEALTHY CLIENTS. BUYERS ARE SAID TO BE TOLD THAT PURCHASING THE $636,000 EV COULD HELP THEM PRESERVE ACCESS TO FUTURE EXCLUSIVE FERRARIS. PRICES FOR GASOLINE CARS IN CHINA SLUMPED AFTER THE IRAN OIL SHOCK WEAKENED DEMAND. A NEW LOCALLY-MADE RANGE ROVER IS GOING FOR ALMOST 60% LESS THAN THE RECOMMENDED RETAIL PRICE. USED CAR PRICES HAVE DROPPED BY 19% ALMOST. THE WEAK CAR SALES WEIGHING ON AUTOMAKERS AND THE ECONOMY. CHINESE RETAIL SALES TO KIND FOR THE FIRST TIME SINCE THE PANDEMIC. COMING UP, G7 LEADERS AND AI EXECUTIVES ARE SCHEDULED TO MEET AT THEIR SUMMIT IN FRANCE. OUR EXCLUSIVE INTERVIEW WITH ONE OF THOSE PARTICIPANTS, SYNTHESIA CEO VICTOR RIPPARELLI. UP NEXT, THIS IS BLOOMBERG. I'M VONNIE QUINN IN NEW YORK. AS THE G7 SUMMIT CONTINUES IN FRANCE, LEADERS HAVE BEEN DISCUSSING ACCESS TO ADVANCED AI MODELS FROM U.S. FIRMS. IT WILL BE A KEY TOPIC OF DISCUSSION AT TODAY'S LUNCH, WHICH WILL INCLUDE EXECUTIVES FROM OPEN AI, ANTHROPIC, AND GOOGLE DEEP MIND. WE'LL TALK ABOUT THE G7 LEADERS AND THE G7 LEADERS OF THE G7 LEADERS AND THE G7 LEADERS OF THE G7 LEADERS. [00:14:25] Speaker ?: THE G7 LEADERS IS IN FRANCE WITH A GUEST WHO WILL ALSO BE [00:14:27] Speaker 7: ATTENDING THAT LUNCH. ALI? YES, THAT'S RIGHT. YESTERDAY THE FOCUS WAS ALL ABOUT GEOPOLITICS, TODAY IT'S ALL ABOUT THE ECONOMY AND THE COMPANIES THAT WILL BE INCREASINGLY DRIVING THAT ECONOMY FORWARD, THE AI COMPANIES WITH A NUMBER OF C.E.O.S. ATTENDING THE G7 LEADERS MEETING WITH DONALD TRUMP AND THE LEADERS OF G7. I'M VERY PLEASED TO BE JOINED BY THE COMPANIES AND THE G7 LEADERS AND PRESIDENT DONALD TRUMP. WHAT DO YOU HOPE TO GET OUT OF THAT MEETING? [00:14:56] Speaker 8: I FUNDAMENTALLY HOPE THAT EUROPE AND THE U.S. CAN GET TOGETHER AND WORK TOGETHER ON WINNING IN WHAT WILL BE THE MOST IMPORTANT PARADIGM SHIFT IN OUR ERA. WHAT WE'VE SEEN IS THAT THE U.S. HAVE BUILT THE BEST FRONTIER MODELS. THEY HAVE THE WORLD'S BIGGEST LAPS. IN THE EUROPE WE ARE SEEING IS THAT WE'RE INCREASINGLY BECOMING VERY GOOD AT THE APPLICATION LAYERS. TAKING THOSE MODELS, BUILDING PRODUCTS, BUILDING BUSINESSES ON TOP OF THEM. AND I REALLY THINK IT'S SUPER IMPORTANT THAT WE WORK TOGETHER AND THAT WE DON'T END UP AS LESS ALLIES THAN WE WERE BEFORE. [00:15:27] Speaker 7: AND SO WHAT IS THE RISK OF THAT HAPPENING? THAT SORT OF ALLIESHIP SORT OF BREAKING APART? BECAUSE OVER THE WEEKEND THE HEADLINES WERE ALL ABOUT THE TRUMP ADMINISTRATION EFFECTIVELY BLOCKING FOREIGNERS FROM USING THE SORT OF AVANT GUARD MODELS OF ANTHROPIC, THE SORT OF AI NATIONALISM. WHAT ARE THE RISKS ASSOCIATED WITH THAT? [00:15:42] Speaker 8: I MEAN, LOOK, I THINK THERE IS A RISK. BUT I THINK IF I LOOK BACK AT THE PAST TWO YEARS OF AI, IT'S JUST BEEN A FRENZY, RIGHT? IT'S BEEN UP AND DOWN. THE NARRATIVE SWITCH ALL THE TIME. THERE'S A LOT OF FEARS, A LOT OF EXCITEMENT. BUT I THINK IN GENERAL, WE LOOK BACK AT WHAT'S HAPPENED THE LAST 18 MONTHS. I THINK EVEN THOUGH WE MAY BE OVER INDEXING SOME OF THESE THINGS LIKE WHAT HAPPENED OVER THE WEEKEND, I'M DEFINITELY HOPEFUL AND POSITIVE THAT WE WILL GET TO A SOLUTION WHERE WE WORK WITH THE U.S., NOT AGAINST THE U.S. [00:16:07] Speaker 7: AND FOR SOMETHING THAT IS SO PRESENT IN THE GLOBAL CONVERSATION ALL ACROSS THE PLANET, THERE IS NOT REALLY A SORT OF GLOBAL WAY OF ADDRESSING THE SORT OF ISSUE OF AI, WHETHER IT'S REGULATORY, THINKING COLLECTIVELY BETWEEN NATIONS, HOW THEY CAN WORK TOGETHER. IT SEEMS LIKE EMMANUEL AND MACLON IS TRYING TO BEGIN THAT CONVERSATION HERE. WHAT SHOULD THAT CONVERSATION SOUND LIKE? WHAT SHOULD THESE LEADERS BE FOCUSED ON? I THINK IT'S VERY IMPORTANT IT BECOMES PRACTICAL. [00:16:28] Speaker 8: WE'VE HEARD A LOT OF TALK THE LAST TWO YEARS, AND THERE'S A LOT OF UNCERTAINTY BECAUSE THE MARKET AND THE TECHNOLOGIES MOVE SO FAST. WHAT I REALLY HOPE TO DO IS THAT WE CAN CREATE A GREAT ENVIRONMENT FOR BOTH AMERICAN COMPANIES AND EUROPEAN COMPANIES TO WORK TOGETHER TO BUILD GREAT TOOLS AND MAKE SURE THAT WE MAINTAIN OUR WORLD LEADING POWER IN AI. SO FOR ME, AS A BUSINESS LEADER, IT IS THINGS LIKE ACCESS TO MODELS, FOR EXAMPLE, ENSURING THAT THE EUROPEAN UNION DOESN'T OVER-REGULATE, MAKING IT HARDER TO COMPETE ON THE AMERICAN MARKET, FOR EXAMPLE. I HOPE WE CAN FOCUS ON THOSE THINGS AND LESS THE SORT OF EXISTENTIAL RISK, SORT OF SCIFI CONVERSATION THAT'S ALWAYS GOING ON. I THINK THAT'S REALLY IMPORTANT AND PHILOSOPHICALLY THINK IT'S VERY INTERESTING. BUT THERE'S A LOT OF THINGS IN FRONT OF US THAT WE CAN DO TODAY THAT WILL MAKE THE ENVIRONMENT MUCH BETTER FOR BUSINESSES LIKE MINE. [00:17:12] Speaker 7: AND ALSO SORT OF EXPANDING THE DIALOGUE, I THINK, BETWEEN THE AI COMPANIES, THE PRIVATE SECTOR AND THE PUBLIC SECTORS. WHAT SORT OF INFORMATION DO YOU NEED TO CONVEY TO GLOBAL LEADERS? WHAT DO YOU THINK THAT THEY MISS ABOUT AI AND THE TRANSFERMATORY POWER THAT IT HAS IN THE ECONOMY? [00:17:25] Speaker 8: SO I THINK ONE OF THINGS I WOULD LOVE TO CHANGE ABOUT THE CONVERSATION IS RIGHT NOW EVERYONE IS TALKING ABOUT THE FRONTIER LABS, THE LARGE LANGUAGE MODELS, THE LOWEST LEVEL OF THE TECHNOLOGY, WHICH ARE VERY IMPORTANT. BUT MOST CONSUMERS, MOST BUSINESSES ARE GOING TO INTERACT WITH THESE TECHNOLOGIES THROUGH WHAT WE CALL THE APPLICATION LAYER. SO COMPANIES LIKE SYNTHESIA, LIKE 11LABS, LIKE MANY OF MY OTHER PEER COMPANIES WHO TAKE THESE MODELS AND BUILD PRODUCTS AROUND THEM. AND THAT IS REALLY, REALLY IMPORTANT. AND WE SHOULD NOT FOCUS ALL OF OUR EFFORTS PURELY ON THE UNDERLYING FOUNDATION MODELS. THAT'S KIND OF LIKE THE CLOUD PROVIDERS OF THE NEXT ERA. THERE'S GOING TO BE SO MANY COMPANIES BUILD ON TOP OF IT. I THINK PARTICULARLY FOR THE EUROPEAN CONVERSATION, IT'S SO IMPORTANT THAT WE FOCUS ON THE APPLICATION LAYER. THAT'S WHERE WE'VE PROVEN THAT WE'RE REALLY GOOD. IT'S WHERE WE HAVE A REAL CHANCE TO WIN. AND I THINK PURING LOTS OF MONEY INTO GOVERNMENT SUPERCOMPUTERS AND EFFORTS TO NATIONALIZE LLM DEVELOPMENT. I JUST THINK IT'S A LOSING BATTLE. AND I HOPE WE CAN BE SMART ABOUT THAT. [00:18:17] Speaker 7: AND DO YOU THINK THAT WE COULD GET SOMETHING LIKE A COMMUNIQUE? DO YOU THINK WE COULD GET THE CEOs OF THESE COMPANIES FROM THE UNITED STATES, FROM EUROPE TO COME TOGETHER AND KIND OF GET A COLLECTIVE MESSAGE OUT? DO YOU THINK THAT'S ON THE CARDS FOR TODAY? I HOPE SO. [00:18:27] Speaker 8: I MEAN, I THINK THAT'S WHY A LOT OF US ARE HERE. THERE'S ALREADY, I THINK, A GOOD COMMUNITY, ESPECIALLY THE BUSINESS COMMUNITY, WHERE, YOU KNOW, WE TALK, WE DEVELOP TECHNOLOGIES, THERE'S LOTS OF PARTNERSHIPS GOING ON. SO I'M HOPEFUL THAT WE CAN GET TO AN AGREEMENT TODAY. [00:18:40] Speaker 7: AND THINKING ALSO ABOUT, OBVIOUSLY, WE TALK ABOUT THE RACE IN AI. OBVIOUSLY, EVERYONE IS TRYING TO WIN IN THIS TECHNOLOGY. THE UNITED STATES IS AHEAD BY, I THINK IT'S FAIR TO SAY, AT LEAST A COUNTRY MILE. THE CHINESE ARE SORT OF GAINING SPEED. IN EUROPE, I THINK IT'S FAIR TO SAY THAT THEY'RE VERY, VERY FAR BEHIND. HOW DO YOU CLOSE THAT GAP? IS CLOSING THE GAP, SHOULD THAT NOT BE THE FOCUS IN EUROPE? AND WHAT INGREDIENTS DO YOU NEED FROM GOVERNMENTS IN ORDER TO CHANGE THAT NARRATIVE? [00:19:02] Speaker 8: I THINK WE NEED TO LOOK AT THIS AS A BUSINESS STRATEGY. THAT'S PRACTICAL. AND I THINK A BUSINESS STRATEGY WOULD NOT BE, LET'S TRY AND REPLICATE THE AMERICAN FRONTIER LABS IN EUROPE. WE DON'T HAVE THE TALENT FOR IT. WE DON'T HAVE THE CAPITAL FOR IT. AND I JUST THINK IT'S GOING TO BE A LOSING BATTLE WHERE WE'RE GOING TO END UP WITH A SOTPAR TECHNOLOGY. LET'S FOCUS ON WHERE WE ACTUALLY CAN MAKE GREAT STRIDES, WHICH IS IN THE APPLICATION. LET'S WORK WELL WITH OUR AMERICAN COUNTERPARTS. AND I THINK REALLY JUST, YOU KNOW, FOCUS ON WHERE WE CAN ACTUALLY WIN. WE WANT TO PLAY TO WIN. HISTORICALLY, I THINK EUROPE HAS NOT BEEN VERY GOOD AT THIS. I THINK IN AMERICA, THEY BELIEVE IN CAPITALISM FOR GOOD AND FOR BAD. IN CHINA, THEY BELIEVE IN TECHNOLOGY FOR GOOD AND FOR BAD. I'M NOT REALLY SURE WHAT WE BELIEVE IN EUROPE ANYMORE. THE MOST OBVIOUS ANSWER IS REGULATION. [00:19:41] Speaker 7: IF YOU CAN HAVE ONE THING CHANGE IN EUROPE, IS IT REGULATION? IS THAT WHAT THEY SHOULD BE FOCUSED ON, GETTING OUT OF THE WAY AND LETTING COMPANIES EXPERIMENT AND GET OFF THE GROUND? YES. [00:19:49] Speaker 8: ABSOLUTELY. THAT'S REGULATION AND EASIER CROSS BORDER. [00:19:53] Speaker 7: AND AS TRANSFORMATIVE AS AI TECHNOLOGY IS, I THINK WE CAN ALL ACKNOWLEDGE THAT. THERE IS ALSO SOME FEAR THAT THERE IS A BIT TOO MUCH HYPE IN THERE, THAT THERE IS A BUBBLE GROWING. WHEN WE THINK ABOUT THE VALUATIONS OF THESE COMPANIES, YOU HAVE SPACEX, AND, OF COURSE, YOU HAVE THE PURE PLAY AI COMPANIES, ANTHROPIC AND OPEN AI. TRILLION-DOLLAR VALUATIONS, SOMETHING AROUND THAT COMING INTO THE END OF THE YEAR. IS THAT A PLACE THAT WE, AS THE REST OF THE WORLD, SHOULD BE COMFORTABLE WITH? [00:20:12] Speaker 8: I MEAN, THERE'S DEFINITELY PUBLIC SENTENSEES, RIGHT? I THINK WE'RE SEEING ALL SORTS OF CRAZY THINGS. BUT I THINK THERE'S UNDENIABLE A HUGE MACRO TREND. IN FIVE YEARS, EVERYTHING IS GOING TO BE AI-FIED. AND I THINK YOU LOOK AT THE REVENUE RAMP OF THESE COMPANIES, IN PARTICULAR ANTHROPIC AND OPEN AI, IT IS VERY REAL. IN THE SHORT TERM, MAYBE WE'LL SEE FLUCTUATIONS. I'M SEEING, ESPECIALLY IN THE EARLY STATE, THE SEED STATE MARKET RIGHT NOW, VALUATIONS ARE GOING ABSOLUTELY CRAZY. I DON'T THINK THAT'S NECESSARILY A GOOD THING. BUT I DO THINK THESE BIG COMPANIES ARE GOING TO BE ABLE TO LIVE UP TO THE VALUATIONS THAT THEY HAVE. [00:20:43] Speaker 7: SO OBVIOUSLY WE'RE TALKING ABOUT THE PRODUCTS, THE SORT OF APPLICATIONS FOR BUSINESSES, FOR PEOPLE. OF COURSE THERE'S THE QUESTION OF COMPUTE, THE QUESTION OF ENERGY AND EVERYTHING UPSTREAM. AND OF COURSE THIS ISSUE OF CRITICAL RAW MATERIALS. HOW SORT OF SECURE DO YOU FEEL IN THE WAY THAT THE GOVERNMENTS ARE DEALING WITH THAT? THAT, OBVIOUSLY, IS GOING TO BE A FOCUS FOR THE LEADERS HERE. DO YOU FEEL SECURE WITH THE UPSTREAM THAT WE'RE NOT GOING TO BLOCK THERE THAT WILL REALLY HAMPER YOUR ABILITY TO GROW? [00:21:03] Speaker 8: I MEAN, I THINK WE'RE HEARING POLITICIANS SAY THE RIGHT THING. I THINK WE SEE THE INVESTMENTS. I THINK IN THE U.K. PARTICULARLY, WE NEED MORE POWER. WE NEED MORE DATA CENTERS. WE'RE STILL SO EARLY IN THE AGE OF A.I. AND I THINK WE WILL NEED MANY, MANY, MANY MULTIPLE CAPACITY THAT WE HAVE TODAY. AND I HOPE WE CAN MOVE REALLY, REALLY FAST ON GETTING THAT DONE. [00:21:21] Speaker 7: AND THINKING ABOUT YOUR BUSINESS SPECIFICALLY, WHAT IS YOUR SORT OF FOCUS GOING INTO THE NEXT SIX MONTHS, THE NEXT 12 MONTHS AND TRYING TO SORT OF GAS UP THE INTEREST AND, OF COURSE, EXPERIMENTS WITH A.I. [00:21:30] Speaker 8: YEAH. SO WE ALREADY WORK WITH 90% OF FORGE 100, THE WORST LIGEST AI VIDEO PLATFORM FOR BUSINESSES. AND WHAT WE'RE ACTUALLY FOCUSING A LOT ON IS TRAINING AND UP-SKILLING THE WORKFORCE. SO WE SIGNED AN MOU WITH THE GOVERNMENT OF UK LAST WEEK, WHICH IS BASICALLY US PROMISING TO HELP UP-SKILL MILLIONS OF WORKERS. I THINK THAT AS MUCH AS A.I. WILL CHANGE JOBS, WILL DISPLAY SOME JOBS, I THINK THE CALL DNA OF A GREAT COMPANY AND A GREAT COUNTRY IS GREAT PEOPLE. AND I THINK THAT'S GOING TO BE THE SAME IN FIVE OR TEN YEARS. SO UP-SKILLING THE WORKFORCE IS GOING TO BE ONE OF THE MOST -- SHOULD BE ONE OF THE MOST IMPORTANT PRIORITIES FOR ANY COUNTRY LEADER. [00:22:05] Speaker 7: SPECIFICALLY WITHIN EUROPE, OBVIOUSLY LARGE OPERATIONS IN THE U.K., FRANCE AND GERMANY. DO ANY OF THESE NATIONS STAND OUT OF GETTING IT BETTER IN TERMS OF CREATING THE ENVIRONMENT FOR YOU? [00:22:13] Speaker 8: WELL, I THINK IN THE EUROPEAN UNION THERE'S NO DOUBT THAT THE U.K. I THINK IS THE BEST PLACE TO BUILD A BUSINESS. IN SOME WAYS THE FACT THAT THEY'RE NOT ACTUALLY IN THE EU I THINK HAS BEEN A BENEFIT FOR THEM BECAUSE THEY DON'T HAVE TO FOLLOW ALL THE SAME BUREAUCRACY THAT'S GOING ON IN THE EU, THEY DON'T HAVE TO FOLLOW THE SAME REGULATIONS. AND I THINK THERE IS SOME SENSE OF A CLOSE RELATIONSHIP WITH THE U.S. SO I'M HAPPY TO HAVE MY BUSINESS BASED THERE. I DO FEEL LIKE THERE'S BEEN A VIBE CHANGE THE LAST 12 MONTHS. EVERYONE IS REALIZING THAT IT IS NOT A NICE TO HAVE TO BECOME A PLAYER IN THE AI ECONOMY. IT'S A NEED TO HAVE. I DO THINK THERE IS IN GENERAL A POSITIVE SHIFT TOWARD COUNTRY LEADERS AND BUSINESS LEADERS WANTING TO SUCCEED. [00:22:50] Speaker 7: THANK YOU SO MUCH FOR YOUR TIME. THE CEO OF SYNTHESIA THERE. REALLY SORT OF GETTING INTO THAT MEETING WITH THE OTHER AI CEOs COMING OVER FROM THE UNITED STATES AND THE G7 LEADERS INCLUDING DONALD TRUMP. AND OF COURSE YOU DON'T WANT TO HEAR WHERE I'M FROM BASED IN BRUSSELS. IT'S AN ADVANTAGE TO HAVE YOUR COMPANY OUTSIDE OF THE EUROPEAN UNION BUT SOMETHING THAT HOPEFULLY THE EU IS WAKING UP TO. [00:23:08] Speaker 1: THANK YOU SO MUCH. OLLI, THANK YOU SO MUCH. BLOOMBERG'S OLIVER COOK COVERING THE G7 FOR US. FIRST UP, THE WALL STREET JOURNAL LOOKING AT THE GEORGIA PRIMARY RESULTS. TRUMP BACK TO MIKE COLLINS WINNING THE GOP PRIMARY RUNOFF, SETTING UP A SHOWDOWN WITH DEMOCRATIC SENATOR JOHN OSSOFT. THE TIME SAYS IT WILL BE A KEY BATTLE ROUND STATE IN NOVEMBER. NEXT UP, THE FINANCIAL TIMES LEADING WITH BULLISH DOLLAR BETS. A BATTLE ROUND STATE IN THE U.S. ECONOMY WILL PUSH THE U.S. ECONOMY AHEAD OF ITS PEERS AND FORCE THE FED TO KEEP INTEREST RATES HIGH. FINALLY, ON THE NEW YORK TIMES, THE WORLD CUP GOAT. THE TIMES LOOKS AT LYNEL MESI'S HAT-TRICK AGAINST ALGERIA IN ARGENTINA'S FIRST GAME IN THE WORLD CUP. COUNTDOWN TO THE FED WITH IAN LINKAN OF BEMO CAPITAL MARKETS. [00:24:01] Speaker ?: THANK YOU FOR JOINING US. IT'S 5:30 A.M. IN NEW YORK CITY, 10:30 A.M. IN LONDON. [00:24:21] Speaker 1: GOOD MORNING. I'M BONNIE QUINN WITH YOUR BLOOMBERG BRIEF. LET'S GET YOU SET UP FOR THE DAY. STOCK FUTURES RISING AS MARKETS AWEIT THE FIRST BELIEVE. THE LAST IRAN MEMORANDUM REVEAL IRAN COULD GAIN MAJOR FINANCIAL RELIEF. THE LAST DAY OF THE G7 SUMMIT, AI EXECUTIVES GEARING UP TO MEET WITH WORLD LEADERS FOR SECURITY DISCUSSIONS. ONE THING ONLY ON THIS MARKET'S MIND TODAY, AND THAT IS THE OUTCOME OF THE FEDERAL RESERVE MEETING. ONE QUESTION THAT WILL BE DISCUSSED AT THAT MEETING, NO DOUBT, IS OIL AND HOW DISINFLATIONARY OF FORCE IT WILL BE. LOOK AT BRENT CRUDE, TRADING BELOW $79 A BARREL NOW. THAT IS RIGHT OUT THROUGH THE WINTER MONTHS. IF YOU LOOK AT THE DECEMBER AND JANUARY CONTRACT, WE ARE TALKING ABOUT $76 AND CHANGE. WTI TRADING BELOW $76. THAT MARKET REALLY PRICING IN. PRETTY STRAIGHTFORWARD, REOPENING OF THE STRAIGHT FORMOOSE, IT WOULD SEEM. SEEING A LITTLE BIT OF ADDITION TO GOLD, BITCOIN BOUNCED BACK AS WELL, ALTHOUGH WE ARE LOWER NOW. THE IDEA IS THAT SOME MONEY CAME OUT OF THESE ASSET CLASSES, PERHAPS FOR THE SPACEX IPO. THAT IS AT LEAST ONE THEORY OUT THERE. SOME PEOPLE WERE INDICATED. WE MIGHT BE GETTING SOME OF THAT BACK TODAY WITH NASDAQ 100 FUTURES POINTED PRETTY SUBSTANTIALLY HIGHER. ALSO, IN GENERAL, THE MOOD HAS SHIFTED BECAUSE OF THE MEMORANDUM OF UNDERSTANDING AND THE FACT THAT WE ARE FINALLY HERE. LESS THAN A BASIS POINT ACROSS THE BOARD, REALLY. THE TWO-YEAR YIELD AT 404.53. STILL PRICING IN THERE ABOUT AN 80% CHANCE OF A HIKE THIS YEAR. LET'S GET TO SOME INDIVIDUAL MOVERS NOW PRE-MARKET. [00:26:08] Chloe Mellie: GOOD MORNING, BONNIE. LIONSGATE SHARES ARE IN THE RED THIS MORNING AFTER NETFLIX SAID IT WAS NOT INTERESTED IN ACQUIRING THE STUDIO. SO WE HAD SEEN THE SHARES IN LIONSGATE INITIALLY JUMPING ON THE BACK OF THOSE TAKE-OVER RUMORS AND TAKE-OVER REPORTS. BUT NOW THAT NETFLIX HAS FULLY DENIED IT, WE ARE SEEING A REVERSAL IN SENTIMENT AND WE'RE DOWN ABOUT 6% FOR LIONSGATE THIS MORNING. MOVING ON TO THE FUNITURE MANUFACTURER LAZYBOY, WHICH IS UP VERY STRONGLY THIS MORNING, ABOUT 16% AFTER DELIVERING SOLID RESULTS. AND THE ANALYSTS HAVE SAID THAT THE COMPANY HAS REALLY BENEFITED FROM THE RECENT ACQUISITIONS THAT IT'S MADE AND ALSO SOME OF THE DIVESTMENTS THAT IT HAS MADE AS WELL. SO THAT'S MEANT THAT THE COMPANY HAS BEEN ABLE TO BE REALLY RESILIENT EVEN IN THE FACE OF THAT WEAKER CONSUMER SPENDING THAT WE'VE BEEN TALKING ABOUT A LOT FOR RETAILERS. AND FINALLY, LET'S CROSS OVER TO GERMANY WHERE BMW HAS BEEN HAVING A TOUGH MORNING. IT'S DOWN ABOUT 6% THIS MORNING AFTER CUTTING ITS PROFITABILITY FORECAST. IT BLAMED A SLUMP IN DEMAND IN CHINA AND THEN THAT BROADER HIT ON CONSUMER CONFIDENCE FROM THE IRAN [00:27:09] Speaker ?: WAR. [00:27:09] Chloe Mellie: AND SO THIS IS REALLY PILING PRESSURE ONTO THE NEW CEO WHO'S JUST STARTED AND IS REALLY SEEN AS A WAKE-UP CALL FOR THAT BROADER CARMAKING INDUSTRY IN EUROPE THAT'S BEEN DEALING WITH SO MANY COMPETITIVE PRESSURES, ESPECIALLY IN THE KEY CHINESE MARKET. [00:27:23] Speaker 1: A BIT OF A DING THERE FOR BMW STOCK. CHLOE, THANK YOU SO MUCH. CHLOE MELE IN LONDON. BEAMO'S IAN LINCOLN LOOKING AHEAD TO THE FED'S RATE DECISION THIS AFTERNOON, WRITING: "MONETARY POLICY IS SAID BY THE MAJORITY ON THE COMMITTEE, NOT A SINGLE PARTICIPANT. IT'S A PROCESS OF CONSENSUS BUILDING, ONE THAT WE SUSPECT WILL PROVE ADEPT AT OVER TIME." IAN IS HEAD OF U.S. RATE STRATEGY AT BEAMO CAPITAL MARKETS. HE JOINS US IN STUDIO NOW. IAN, WHAT PRESENT NOTIONS IS KEVIN WORSH COMING INTO THE JOB WITH? I MEAN, WE KNOW THAT HE THOUGHT THE BERNANKE MONITOR EXPERIMENT WENT ON WAY TOO LONG, FOR EXAMPLE. IS THAT SOMETHING THAT WE'RE GOING TO SEE EVIDENCE OF TODAY? [00:28:02] Speaker 9: WELL, I DO THINK THAT THE MARKET IS EXPECTING HIM TO PUSH BACK AGAINST THE AMOUNT OF COMMUNICATION THAT THE FED HAS TYPICALLY BEEN ENGAGED IN. THE SIZE OF THE BALANCE SHEET IS ALSO TOPICAL. BUT I THINK THAT THE MARKET IS OVERPRISING THE ABILITY OF WORSH TO COME IN DAY ONE AND MAKE A GREAT DEAL OF CHANGES. THE IDEA THAT HE WOULD ATTEMPT TO GET RID OF THE DOT PLOT ON HIS FIRST MEETING, HE MIGHT BE LAYING THE GROUNDWORK. HE MIGHT BE HAVING THE CONVERSATIONS BEHIND CLOSED DOORS. WE'RE GOING TO TAKE A LOOK AT THE FOMC MEETING ITSELF. BUT THOSE TYPES OF ANNOUNCEMENTS AND THOSE TYPES OF CHANGES WILL PROBABLY TAKE SEVERAL MEETINGS OR QUARTERS TO ACTUALLY COME INTO EFFECT. [00:28:41] Speaker 1: SO I HEAR YOU THAT HE'S GOING TO WANT TO BUILD A CONSENSUS ON THE COMMITTEE, AND IT'S BEEN A PRETTY DISSENTING COMMITTEE IN THE LAST FEW MEETINGS. AT THE SAME TIME, HE'S GOING TO WANT TO COME OUT STRONG AND SHOW THE MARKET THAT HE CAN GATHER A COMMITTEE AROUND HIM. AND ALSO, ANY CHANGES THAT HE MIGHT MAKE, HE MIGHT WANT TO SIGNAL THEM NOW, NO? [00:28:57] Speaker 9: I DO THINK A LOT OF THAT COMES OUT IN THE PRESS CONFERENCE, AND THE WAY IN WHICH WORST CHOOSES TO RESPOND TO QUESTIONS ABOUT THE BALANCE SHEET, QUESTIONS ABOUT THE SCP AND THE DOT PLOT, I THINK THAT WILL REALLY SET THE TONE MORE SO THAN BEING ABLE TO BUILD CONSENSUS TO MAKE WHOLESALE CHANGES. NOW, I DO ANTICIPATE THAT IT WILL BE A UNANIMOUS VOTE, IN PART BECAUSE HE PROBABLY DROPPED THE SLIGHT DOVISH LEAN IN THE STATEMENT. AND WE LOST MIRIN ON THE COMMITTEE, SO THERE'S NO ONE LEFT TO DISSENT EFFECTIVELY. SO I WOULD CHARACTERIZE THAT AS A SUCCESSFUL FIRST MEETING, AND ONE THAT HE DOES COME OUT STRONG WITH THE UNANIMOUS VOTE. [00:29:32] Speaker 1: WHO DOES HE MOST ALIGN WITH ON THE COMMITTEE? WHO WILL BE HIS ALLIES, LET'S SAY, WHEN HE MAKES WHATEVER ARGUMENTS HE MAY MAKE FOR REDUCING THE SIZE OF THE BALANCE SHEET OR CHANGING HOW THE FED COMMUNICATES? [00:29:44] Speaker 9: I THINK HE WILL HAVE AN ALLIES IN WILLIAMS BECAUSE THAT IS TYPICALLY A POSITION HEAD OF THE NEW YORK FED, VERY MARKETS ORIENTED, VERY IN TUNE WITH WHAT'S GOING ON. SO I SUSPECT THAT WHILE WILLIAMS HAS A UNIQUE SEAT IN WHILE WILLIAMS HAS A CONSENSUS BUILDING IN TERMS OF THE FOMC AS A WHOLE. THAT IS A GOOD PLACE TO START FOR CONSENSUS BUILDING FOR WASH. ASIDE FROM THAT, HE IS A KNOWN QUANTITY, AND I WOULDN'T BE SURPRISED IF MORE MEMBERS THAN NOT ULTIMATELY DID ALIGN WITH HIM. [00:30:16] Speaker 1: I WOULD HAVE THOUGHT WILLIAMS WOULD LEAN A LITTLE MORE DOVISH THOUGH IN TERMS OF MONETARY POLICY AND JUST MONEY SUPPLY THAN SOMEBODY LIKE A KEVIN WASH. [00:30:24] Speaker 9: WE ARE OPERATING UNDER THE ASSUMPTION THAT THE WASH FED CHAIR IS THE SAME AS THE WASH GOVERNOR. AND I WOULD CAUTION AGAINST DOING THAT BECAUSE IT'S NOT ENTIRELY CLEAR THAT WASH IS GOING TO BE HAWKISH PER SE. IN FACT, IF GIVEN THAT HE RECEIVED THE NOMINATION FROM TRUMP, THERE IS SOME ASSUMPTION THAT HE IS GOING TO MAKE THE CASE FOR LOWER RATES OVER TIME. THAT CASE MIGHT BE ACCOMPANIED BY A SMALLER BALANCE SHEET, WHICH INTUITIVELY MAKES SENSE, WHICH IS LESS ACCOMMODATIVE ON ONE SIDE, BUT NOT NECESSARILY HAWKISH PER SE. IT'S MORE A FUNCTION OF BEING LESS INVOLVED IN THE MARKETS. AND THAT'S ALSO CONSISTENT WITH HIS COMMUNICATION STANCE. IT'S LESS INVOLVEMENT. IT'S LESS DIRECTION. IT'S ALLOWING THE MARKETS TO ENGAGE IN THE PRICE OR THE PROCESS OF PRICE DISCOVERY WITHOUT TOO MUCH GUIDANCE FROM THE CENTRAL BANK. [00:31:11] Speaker 1: AND HE'S EXPESSED A NUMBER OF TIMES HIS VIEW ON AMERICAN PRODUCTIVITY AND AMERICA FIRST AND HOW THE ECONOMY NEEDS TO SUPPORT AMERICAN BUSINESS, RIGHT? SO THAT WOULD TALLY WITH WHAT YOU SAY. THAT SAID, HOW WILL THE FED BE SPEAKING ABOUT THIS DECLINE IN OIL PRICES AND ITS IMPACT ON INFLATION GOING FORWARD? WILL WE SEE NUMBERS COME IN SLIGHTLY? [00:31:30] Speaker 9: SO I THINK THAT THAT'S ACTUALLY THE MOST RELEVANT CONVERSATION PIECE WITHIN THE FED AT THE MOMENT. WE'VE SPENT THE LAST THREE MONTHS WITH ENERGY PRICES RUNNING EVER HIGHER, GASOLINE CONTRIBUTING A SIGNIFICANT AMOUNT TO HEADLINE CPI. WHAT HAPPENS IF THERE IS A CONTINUED FLOW THROUGH OF LOWER OIL PRICES TO LOWER GASOLINE PRICES, WHAT HAD BEEN A PILLAR OF INFLATION WILL BECOME A DRAG OVER THE COURSE OF THE NEXT THREE OR FOUR MONTHS. AND THAT IF ANYTHING THAT JUST REINFORCES THE PRUDENCE OF THE FED'S DECISION TO WAIT AND SEE HOW IT PLAYS OUT. THERE'S ONLY BEEN A SMALL AMOUNT OF PASS THROUGH TO CORE INFLATION. CORE GOODS LAST MONTH WAS NEGATIVE IN OUTRIGHT TERMS. THAT BUYS THE FED PLENTY OF TIME. SO I DO THINK THAT THE ENERGY SHOCK REMAINS EXTREMELY TOPICAL FOR MONETARY POLICYMAKERS AND WILL PROBABLY ULTIMATELY DRIVE THE TONE OF WHAT WE HEAR FROM WASH. [00:32:20] Speaker 1: IF HE DOES DECIDE TO THREAD THE NEEDLE AND NOT GIVE AWAY TOO MUCH ABOUT WHETHER THE NEXT INTEREST RATE MOVE MIGHT BE A HIKE OR A CUT, DOES THIS MARKET REPRICE, PARTICULARLY THE FRONT END? [00:32:32] Speaker 9: I THINK THE REASON THAT TWO YEAR YIELDS ARE AT 4% OR EFFECTIVELY HUBBERING AROUND 4% IS BECAUSE WE HAVE PRICED IN THE PROBABILITY, VERY LOW PROBABILITY, BUT OF A RATE HIKE SOMETIME OVER THE COURSE OF THE NEXT SIX OR EIGHT MONTHS. SO THE MARKET IS COMFORTABLE WITH THE IDEA OF SYMMETRY AROUND THE CURRENT POLICY RATE. SO I WOULDN'T BE SURPRISED IF WE SHRUGGED OFF A SLIGHTLY HAWKISH TONE. I THINK THE BIGGER RISK IS THAT WE'RE ALL POISED FOR A HAWKISH, READY TO FIGHT INFLATION WASH. WHAT HAPPENS IF HE COMES OUT AND HE'S A LOT MORE DOVISH OR ERRING ON THE DOVISH SIDE OF BALANCE? I THINK THAT WE HAVEN'T HAD THAT PRICED IN. THAT GETS TWO-YEAR YIELDS TO 385 PRETTY QUICKLY. [00:33:17] Speaker 1: WOW, THAT COULD HAPPEN IN THE NEXT COUPLE OF DAYS, POTENTIALLY. IT'S ONE OF THE OUTCOMES, RIGHT? IF THAT HAPPENS AND, YOU KNOW, FRONT END YIELDS COME DOWN, IS THERE ALSO THE POTENTIAL FOR A MARKET EVENT? IF HE STARTS TALKING ABOUT MAYBE REDUCING THE SIZE OF THE BALANCE SHEET AT SOME POINT? SEVERAL GUESTS HAVE SAID, LOOK, THE ECONOMY HAS CHANGED NOW. IT'S NOT GOING TO BE ABLE FOR THAT, NOT IMMEDIATELY AT LEAST. [00:33:37] Speaker 9: SO I DO THINK THAT THE ARGUMENT FOR SMALLER BALANCE SHEET OVER TIME MAKES SENSE. IF IT WERE TO COME TO FRUITION, IT WOULD BE RUNOFF OF MATURING SOMA HOLDINGS. I DON'T THINK THERE'S AN APPETITE TO SELL BONDS OUTRIGHT. WHAT I'M MORE WORRIED ABOUT IS I'M MORE WORRIED ABOUT WHAT IT DOES TO RISK ASSETS BECAUSE THERE WAS A VERY STRONG CORRELATION BETWEEN QE AND THE PERFORMANCE OF THE EQUITY MARKET. YOU TAKE AWAY SOME OF THAT SUPPORT. NOW DO WE START TO SEE A REPRICING IN EQUITY VALUATIONS OVER TIME? I THINK THAT IS ONE OF THE WILD CARDS THAT'S OUT THERE. [00:34:12] Speaker 1: FANTASTIC, IAN, VERY BRIEFLY, WHAT WAS YOUR REACTION TO THE AMOUNT OF APPETITE THERE WAS FOR NVIDIA'S OFFERING? I KNOW YOU DON'T SPECIALIZE IN CORPORATE ISSUANCE, PER [00:34:20] Speaker 9: SE. I WASN'T THAT SURPRISED GIVEN THE FACT THAT THE SECTOR HAS BEEN PERFORMING SO WELL AND THERE IS MONEY ON THE SIDELINES AND THERE IS CASH TO BE PUT TO WORK. THERE IS GOING TO CONTINUE TO BE STRONG DEMAND ON THE CORPORATE SIDE, I SUSPECT. [00:34:34] Speaker 1: IAN, THANK YOU SO MUCH. A REAL PRIMER THERE FOR YOUR FED MEETING AND NEWS CONFERENCE AHEAD. THAT IS IAN LINGAN OF BEMO CAPITAL MARKETS. NOW TO OTHER TOP STORIES TRENDING ON THE TERMINAL THIS MORNING. UNITED ARAB EMERITS IS WORKING ON A PLAN TO END DEPENDENCE ON THE STRAIGHT OF HORMOUSE. THE PLAN INCLUDES A MAJOR EXPANSION OF SEVERAL EASTERN PORTS. IT IS ALSO LOOKING AT BUILDING AT LEAST ONE OTHER HARBOR AND INVESTING IN NEW PIPELINES, RAIL AND ROAD NETWORKS. CHINA'S CENTRAL BANK SIGNALLED A POTENTIAL SHIFT TOWARDS AN OVERNIGHT POLICY RATE, A MOVE THAT COULD GIVE POLICYMAKERS TIGHTER CONTROL OVER SHORT-TERM FUNDING COSTS. IT IS ALSO A SIGN THAT THE PVOC MAY EVENTUALLY MOVE AWAY FROM THE SEVEN DAY VERSE REPO RATE AS ITS MAIN BENCHMARK. THE MOVE TO AN OVERNIGHT RATE WOULD BRING THE PVOC CLOSER TO GLOBAL PEERS SUCH AS THE FED. SPACEX SHARES POISED FOR A FOURTH STRAIGHT DAY OF GAINS. IT HAS ALREADY OVERTAKEN AMAZON AS THE FIFTH LARGEST STOCK IN THE WORLD. THE STRONG GAINS IN SPACEX SHARES ARE A SIGN OF CONSISTENT INVESTOR DEMAND, CALMING FEARS THAT THE IPO WOULD BE TOO LARGE FOR THE MARKET TO DIGEST. COMING UP, WE WILL GET INTO THE DETAILS OF THE U.S.-Iran INTERIM MOU AS PRESIDENT TRUMP IS SET TO HOLD A NEWS CONFERENCE ON THE LAST DAY OF THE G7 SUMMIT. THIS IS BLOOMBERG. THIS IS BLOOMBERG BRIEF. I'M BONNIE QUINN IN NEW YORK. FINANCIAL DETAILS OF THE U.S.-Iran INTERIM DEAL EMERGING. TEHRAN IS SAID TO RECEIVE BROAD FINANCIAL INCENTIVES AS PART OF ITS AGREEMENT WITH WASHINGTON. PRESIDENT TRUMP HAD DENIED THAT THE U.S. WOULD PAY $300 BILLION NOTED IN THE DRAFT OF THE DEAL. FOR MORE, OLIVER CROOK IS LIVE AT THE G7 SUMMIT. WE WERE TALKING ABOUT WHAT THE RESPONSE OF AMERICA'S ALLIES [00:36:28] Speaker 7: HAS BEEN. WE SAW SOME DRAFT OF THIS MOU, THE 14-POINT PLAN THAT CAME OUT OVERNIGHT. WE UNDERSTAND THAT THOSE WERE ALSO SHARED WITH A NUMBER OF THE G7 LEADERS YESTERDAY WITH TRUMP WHO TALKED THEM THROUGH IT AND CONTINUED TO TOUT HIS DEAL, SELL HIS DEAL TO THE WORLD. AGAIN, IT SEEMS TO BE IN SOME WAYS KICKING A LOT OF THE MORE COMPLICATED ISSUES A LITTLE BIT FURTHER DOWN THE ROAD. YOU'LL NOTICE THAT THERE WAS NO REFERENCE TO THE SORT OF INTER -- YOU KNOW, THE BALLISTIC MISSIL SYSTEM THAT WAS SUPPOSED TO BE -- AT ONE POINT, ONE OF THE WAR AIMS WAS TO DISMANTLE. BUT, OF COURSE, A LARGE PART OF IT, AND WHAT THE PRUMP ADMINISTRATION WILL POINT TO, IS SOME OF THE AGREEMENTS THAT WERE MADE BY TEHRAN. ALTHOUGH, WE SHOULD SAY THAT THE LANGUAGE SAID THAT IRAN REITERATED -- REITERATED THAT IT WILL NOT PURSUE A NUCLEAR WEAPON. AND, OF COURSE, IRAN'S PUBLIC POSITION FOR MANY YEARS HAS BEEN THAT IT IS NOT IN THE PURSUIT OF A NUCLEAR WEAPON. WHAT IS INTERESTING ABOUT THE PROPOSAL IS IT SORT OF -- IT BEGINS TO MOVE FROM THE STICK SIDE OF THINGS -- THAT WAS THE MILITARY OPERATION -- TO THE CARRAT SIDE OF THINGS, TRYING TO BUILD FINANCIAL INCENTIVES, POTENTIALLY REDUCTION OF SANCTIONS. AND THAT IS SOMETHING THAT THE TRUMP ADMINISTRATION IS GOING TO TRY TO USE AS A LEVER GOING FORWARD IN ORDER TO TRY TO GET THE COMPLIANCE FROM THE IRANIANS. NOW, WHERE THE EUROPEANS CAN PLAY A ROLE IS REALLY TWO-FOLD. THERE IS ONE BIG CONVERSATION ABOUT THEIR ROLE IN THE STRAIGHT OF HORMOOZ, POTENTIALLY BEING ACTIVE IN THERE AND DEMINING. IF THAT IS GOING TO BE THE CASE, THE EUROPEANS NEED VERY, VERY CLEAR ASSURANCES THAT THE KINETIC PART OF THIS WAR IS OVER BECAUSE THOSE DEMINING SHIPS ARE NOT REALLY BUILT FOR BATTLE. THEY ARE BUILT REALLY FOR PEACE TIMES. THEN THE QUESTION OF WHERE THE EUROPEANS COME IN ON THE SANCTIONS FRONT. OF COURSE, THE EUROPEANS HAVE THEIR OWN SANCTIONS. AT THE JCPOA, THE EUROPEANS WERE VERY MUCH INVOLVED IN SORT OF NEGOTIATING THAT FULL ARCHITECTURE. NOW, IT SEEMS THE EUROPEANS ARE COMING IN FAIRLY LATE INTO THAT DISCUSSION. THIS IS SOMETHING THAT WILL BE WORKED OUT OVER THE NEXT WEEKS AND MONTHS. THAT WILL BE A VERY ACTIVE CONVERSATION IN TERMS OF HOW TO CREATE THAT INCENTIVE STRUCTURE AND WHAT ROLE THE EUROPEANS WILL PLAY AS WELL. ABSOLUTELY. [00:38:17] Speaker 1: I THOUGHT IT WAS INTERESTING, OLLIE, THAT THE 14TH POINT IN THE MOU IS THAT THE FINAL AGREEMENT WOULD BE APPROVED THROUGH A BINDING RESOLUTION OF THE UN SECURITY COUNCIL. SO A LOT OF PEOPLE WILL HAVE THEIR VOICES HEARD. NOW, WHEN IT COMES TO OTHER MATTERS, THE OTHER ROAR THAT WE KEEP AN EYE ON, G7 LEADERS AGREEING TO STRENGTHEN RUSSIAN SANCTIONS AND BOOST DEFENSE HELP FOR UKRAINE. WHAT MORE DO WE KNOW ABOUT CONCRETELY WHAT THEY WILL PROVIDE? [00:38:44] Speaker 7: WHAT IS INTERESTING IS THIS WAS THE FIRST OPPORTUNITY FOR PRESIDENT ZELENSKYY TO HAVE A ONE-ON-ONE OR ANY KIND OF FACE-TO-FACE DISCUSSION WITH THE PRESIDENT OF THE UNITED STATES IN THE LAST FOUR MONTHS BECAUSE THE UNITED STATES HAS BEEN VERY DISTRACTED BY THE WAR IN IRAN BUT THE UNITED STATES ALSO EFFECTIVELY ENTIRELY WITHDREW FROM THE NEGOTIATION PROCESS. YOU'LL REMEMBER IN THE LEAD-UP TO THE PRESIDENTIAL ELECTION, TRUMP KEPT SAYING HE WOULD END THE WAR IN ABOUT 24 HOURS. THAT HAS, OF COURSE, PROVEN MUCH MORE DIFFICULT THAN HE HAD ANTICIPATED. BUT WE'VE BEEN HEARING FROM THE PRESIDENT HERE IN EVIEN FRANCE OVER THE LAST COUPLE OF DAYS THAT HE'S EFFECTIVELY READY TO NOW RE-ENGAGE IN THAT CONVERSATION. SO FOR ZELENSKYY IT'S AN OPPORTUNITY, A, TO GET THE AMERICANS TO RE-ENGAGE, BUT TO DO SO ON TERMS THAT ARE POTENTIALLY MORE FAVORABLE TO THE UKRAINIANS THAN THE FIRST HALF OF THE TRUMP ADMINISTRATION. YOU'LL REMEMBER THE FIRST HALF OF THE TRUMP ADMINISTRATION HAS BEEN FOCUSED BASICALLY SOLELY ON THIS IDEA THAT THE UKRAINIANS HAVE NO CARDS AND THAT BASICALLY THEY SHOULD ACCEPT A LOT OF WHAT THE RUSSIANS WERE TRYING TO FOIST UPON THEM. THIS SORT OF NARRATIVE HAS CHANGED IN THE LAST FEW MONTHS. THE UKRAINIANS ARE IN A MUCH BETTER POSITION ON THE BATTLEFIELD. THE UKRAINIANS ARE IN A MUCH BETTER POSITION ON AMERICAN SUPPORT. THEY NOW HAVE THIS 90 BILLION-EURO LOAN FROM THE EUROPEAN UNION THAT CAN FUND THEM FOR THE NEXT TWO YEARS THAT HAD BEEN BLOCKED BY THE HUNGARIANS. NOW WITH VICTOR ORBAN OUT, THAT CLEARS THE WAY. FOR DONALD TRUMP WHO UNDERSTANDS THE GEOPOLITICAL DYNAMICS, THE UKRAINIANS ARE IN A MUCH BETTER POSITION TO HAVE THOSE NEGOTIATIONS AND HOPEFULLY POTENTIALLY WANT TO RELY ON AMERICAN SUPPORT, NOT JUST IN TERMS OF THE MORAL SUPPORT BUT ALSO IN TERMS OF MILITARY HARDWARE. [00:40:15] Speaker 1: AND THEN, A SEPARATE QUESTION COMPLETELY, OLLI, WE KNOW THAT AI EXECUTIVES, INCLUDING DEMIS ISABAS OF GOOGLE DEEP MIND, SAM OLDMAN, ARE JOINING G7 LEADERS FOR A LUNCH DISCUSSION. WHAT COULD THEY POSSIBLY WANT, IF THAT'S NOT TOO BOLD OF A QUESTION? [00:40:31] Speaker 7: I THINK FOR THE EUROPEANS, WE JUST SPOKE TO ONE OF THE CEOs OF THE EUROPEAN COMPANIES THERE, WHAT THEY WANT TO MAKE SURE DOES NOT HAPPEN IS SOME OF THE THINGS THAT WE SAW OVER THE WEEKEND, WHICH IS EFFECTIVELY THE TRUMP ADMINISTRATION BANNING FOREIGN NATIONALS FROM USING SOME OF THE MORE EXPERIMENTAL AI MODELS THAT ANTHROPIC HAS. BASICALLY WHAT HE WAS SAYING JUST A LITTLE BIT EARLIER, A COMPANY THAT'S BASED OUT OF THE U.K., BUT REALLY WITH A GLOBAL FOOTPRINT, WAS THAT THE EUROPEANS ARE TOO FAR BEHIND ON AI TO REALLY COMPETE ON THE SORT OF MODELS THEMSELVES. WHAT THEY CAN BE GOOD AT IS INTEGRATING THE EXISTING AMERICAN MODELS, REALLY FINDING APPLICATIONS FOR THAT TO BOOST PRODUCTIVITY AND SORT OF CONTRIBUTING TO THE ECOSYSTEM THERE. SO I THINK FOR EUROPEANS, IT'S GOING TO BE REALLY ABOUT NOT BIFURCATING THE WHOLE AI ECOSYSTEM, NOT CREATING A SORT OF AI NATIONALISM BECAUSE THEY'RE SO RELIANT ON THE UNITED STATES. AND OF COURSE, IF YOU DO BAN FOREIGN NATIONALS, I THINK WHAT THE EUROPEANS WILL SORT OF BE ANGLING FOR IS TO TRY TO DRAW THE CIRCLE A LITTLE BIT WIDER, NOT JUST AROUND THE UNITED STATES, BUT ALSO SOME OTHER PARTNER COUNTRIES, POTENTIALLY THE [00:41:25] Speaker 1: G7. THANK YOU SO MUCH. THAT'S OLIVER CROOK AT THE G7. BMW SHARE IS FALLING AS MUCH AS 11%, DOWN ABOUT 7% AT THIS POINT AFTER IT SLASHED ITS PROFITABILITY FORECAST FOR THE YEAR. FOR MORE, WE ARE JOINED BY BLOOMBERG AUTOS AND THE G7 IS JUST GETTING SO MUCH BAD NEWS THESE DAYS. DANNY, WHAT'S GONE WRONG FOR BMW? [00:41:54] Speaker 10: WELL, GOOD MORNING. THE FACT THAT BMW IS STRUGGLING IN THE CHINA MARKET IS UNSURPRISING. A WHOLE SLEW OF FOREIGN AUTOMAKERS ARE FINDING THE COMPETITIVE PRESSURES INCREASINGLY TOUGH AND PARTICULARLY AT A TIME WHEN CHINA'S AUTO SALES ARE CONTINUING TO FALL. BUT FOR BMW, THEY'RE BEING HIT HARDER AGAINST THE EXPECTATIONS THAT THEY WERE DOING BETTER THAN SOME OF THE RIVALS LIKE YOUR MERCEDES AND YOUR PORSCHES. AND WITH THEM IN THE BACKTROP OF SALES WILL NOW FALL THIS YEAR RATHER THAN BE FLAT, THIS IS A BIGGER BLOW FOR THEM CONSIDERING ITS RIVALS ARE IN A MUCH BETTER POSITION WHETHER IT BE RISING SALES, HAVE A NEW MODEL TO STIMULATE THAT OR ARE CUTTING DEEPER. THE FACT NOW THAT BMW IS GOING TO HAVE TO CUT DEEPER ALREADY HAVING ALREADY CUT ITS R&D BUDGETS, INVESTMENT BUDGETS, NOW LOOKING TO DO MORE STRUCTURAL CHANGES. WHAT THAT ULTIMATELY MEANS REMAINS TO BE SEEN, BUT THE FACT THAT YOU HAVE A PROFITABILITY MARGIN GOING TO DOWN AS LOW AS 1% FROM 6%, CLEASE SPELLS A LOT OF TROUBLE FOR THE GERMAN LUXURY AUTOMAKER. [00:42:53] Speaker 1: DANI, I THOUGHT IT WAS INTERESTING, RANGE ROVER IS ALSO HAVING PROBLEMS IN CHINA. IS IT BECAUSE THE CHINESE WANT TO SPEND LESS AND THAT'S WHY THEY ARE MOVING TO EVS OR IS IT JUST A VERY DIFFERENT CULTURE AT THIS POINT BECAUSE THEY LED SO STRONGLY IN EVS? [00:43:08] Speaker 10: WELL, FOR A RANGE ROVER, IT IS A SYMBOL OF THE GASOLINE CAR MARKET THAT IS REALLY STRUGGLING AS THE TRANSITION TO EVS CONTINUES TO TAKE HOLD. THE FACT THAT FUEL IS MORE EXPENSIVE. AND WHAT WE HAVE SEEN IS THAT FOR A RANGE ROVER, THE EVOC LSUV CAN BE BOUGHT NEW, LOCALLY MADE IN CHINA FOR A 60% DISCOUNT, ACCORDING TO ONE MEDIA REPORT. SO IT'S A SIGNIFICANT DISCOUNT. AND WHEN YOU BRING THE BROADER CONTEXT OF THIS, THE FACT THAT GASOLINE CAR SALES, THE DISCOUNTING, RATHER, HAS BEEN AROUND 25% FOR THE LAST THREE MONTHS. IT IS A REALLY TOUGH SITUATION FOR CAR MAKERS WHO STILL HAVE GAS GUNS AND CARS, NEW OR USED, AND VERY MUCH SO HAVING A STEEPER DISCOUNT THAN EVS, UNSURPRISINGLY. [00:43:55] Speaker 1: THE THING IS, DANNY, IF YOU ARE GOING TO MAKE AN EV, YOU BETTER DO IT RIGHT, RIGHT? AND FERRARI DID IT, BUT APPARENTLY IT HAS TO COME UP WITH A WAY TO SELL ITS POORLY RECEIVED EV. A LITTLE BIT OF PRESSURE, ACTUALLY, ON POTENTIAL CUSTOMERS. [00:44:11] Speaker 10: WE HAVE SOME GREAT REPORTING FROM OUR COLLEAGUES IN ITALY CUSTOMERS, AND WE ARE GOING TO CUSTOMER, AND WE ARE GOING TO CUSTOMERS, AND WE ARE GOING TO SEE THAT FERRARI IS TRYING TO, WHETHER IT BE STRONG-ARM OR CONVINCE ITS MOST LOYAL CUSTOMERS, THAT IF YOU BUY THE LOOSE, THE FERRARI LOOSE, THE EV, YOU WILL GET TOP PRIORITY FOR SOME OF THE MORE EXCLUSIVE, LIMITED EDITION MODELS, HAVING BETTER PRIORITY. AND IT IS THAT WAY THAT THEY CAN START TO DRUM UP AND STIMULATE SALES OF ITS VERY POORLY RECEIVED EV. IT HAS BEEN CRITICIZED BY SOME OF THE MORE LOYAL FANS OF FERRARI. IT IS FERRARI'S WAY OF TRYING TO ISSUE A LOYALTY TEST TO ITS MOST BELOVED CUSTOMERS, THOSE WHO CAN REALLY AFFORD EUR 550,000. THIS IS AN INTERESTING STAND THAT FERRARI IS TAKING. THEY HAVE CONFIRMED THEY ARE ENGAGING CUSTOMERS TO TRY AND DRUM UP A UNIQUE KIND OF SALES, BUT IT IS AN INTERESTING TACTIC, [00:44:59] Speaker 1: GIVEN THAT IT HAS BEEN WIDELY CRITICIZED. YOU HAVE TO WONDER IF IT WON'T BACKLASH ON FERRARI, RIGHT? DANNY LEE, THANK YOU SO MUCH. [00:45:17] Speaker ?: COMING UP, WE WILL GET YOU SET UP FOR YOUR TRADING DAY. [00:45:21] Speaker 1: THIS IS BLOOMBERG BRIEF, I'M BONNIE QUINN IN NEW YORK. A LOOK AT WHAT IS AHEAD TODAY. WE GET RETAIL SALES AT 8:30 A.M. EASTERN. PRESIDENT TRUMP IS SET TO HOLD A NEWS CONFERENCE FROM THE G7 SUMMIT, DUE TO BEGIN AROUND 10:30. WE WILL HAVE TO GET RETAILS ON THE NEWS CONFERENCE. WE WILL BE TUNING IN FOR THAT. LET'S TAKE A LOOK AT YOUR MACRO PICTURE BEFORE THE FED NEWS CONFERENCE. NASDAQ FUTURES POINTED HIGHER AFTER THE SELLOFF YESTERDAY. PARTICULARLY SEMICONDUCTORS. WE MIGHT SEE A REBOUND TODAY. THE DOLLAR INDEX HOLDING IN THERE. THE TWO-YEAR YIELD JUST NOT MOVING FOR NOW, 404.53. you