Your morning briefing, the business news you need in just 15 minutes.
On today's podcast:
(1) US Treasuries are at risk of a further selloff as traders in the futures and options markets cash in on their bets for aggressive Federal Reserve interest-rate cuts this year.
(2) Bank of Japan Deputy Governor Shinichi Uchida sent a strong dovish signal in the wake of historic financial market volatility in Japan by pledging to refrain from hiking interest rates when the markets are unstable.
(3) UK Police forces deployed extra officers and said they were ready to arrest hundreds more far-right activists if they followed through with plans circulated online to converge on immigration centers Wednesday night.
(4) Novo Nordisk shares plummeted as sales of its blockbuster weight-loss treatment Wegovy disappointed investors in a rare misstep for the high-flying drugmaker.
(5) Vice President Kamala Harris kicked off a critical campaign stretch aimed at putting Republican Donald Trump on the defensive in key swing states as she took the stage for the first time with her new running mate, Minnesota Governor Tim Walz.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg
Day Bake You At podcast, available every morning on Apple,
Spotify or wherever you listen. It's Wednesday, the Seventh Brugs
here in London. I'm Caroline Hepki and.
Speaker 2 (00:17):
I'm Stephen Carroll. Coming up today. The Bank of Japan's
deputy governor says interest rate hikes are off the table
while markets are unstable.
Speaker 1 (00:26):
Goldman Sachs as David Solomon tells Bloomberg that markets shouldn't
expect any emergency FED rate.
Speaker 2 (00:32):
Cuts, plus extra police forces are deployed in the UK
as far right rioters make plans for further unrest tonight.
Speaker 1 (00:39):
Let's start with a roundup of our top story. The
Bank of Japan's deputy governor says that policymakers shouldn't raise
interest rates until markets stabilize. The strong dubbish signal from
Shinichi Uchidah comes after major moves in the yen and
record breaking swings in Japanese stocks in the wake of
a rate hike last week. The yen has weakened more
(01:00):
than two percent immediately after Achieda's comments. Namura's executive of
a certain head of wholesale Christopher Wilcox defended the Central Bank.
Speaker 3 (01:09):
I would say that the BOJ has been completely vindicated.
They always knew that this unwind was going to be
very difficult. That's why they've been so slow and so cautious.
And yes, that puts some pressure on the end for
a little while. And think about the carry trade. The
point of the carry trade is that if they didn't
start to move, the carry trade would only have got bigger.
The end disruption of the unwinding of the carrent trade
(01:30):
would have been even bigger. So I think the BOJ
is playing it extremely smartly.
Speaker 1 (01:35):
The Mirror's Christopher Wilcox there, who added that he sees
us a recession risk as the primary market driver. The
three day meltdown in Japan's stocks, though, has been tallied
at one point one trillion dollars, the equivalent size of
Sweden's entire stock market.
Speaker 2 (01:51):
Goldman Sachs CEO David Staloman says markets shouldn't count on
the FED stepping in with an emergency ratecost. It comes
as future as in Upson's data to traders are cashing
in on aggressive rate cut bets. In an interview for
the upcoming episode of the David Rubinstein Show Peer to
Peer Conversations, Solomon says he doubts the Fed would act
before September.
Speaker 4 (02:11):
The market expectation is certainly for cuts in the fall.
I've been more cautious around inter straight cuts all year.
As you remember, the market expectation early in the year
was for six of seven cuts based on the economic
data we're seen now in the messaging from the Fed.
You know, I think it's likely that we'll see a
cut or two in the fall, but I think you've
still got to wait and see as things unfold.
Speaker 2 (02:32):
The boss of Goldman added he felt the stock market
correction could might be healthy and forecasts more volatility to come.
Markets are pricing in around forty basis points in cuts
from the Fed in September. Meanwhile, Bloomberg opinion columnist and
former FED official Bill Dudley says he switched to advocating
for rate cuts two weeks ago. Not a moment too soon,
(02:52):
he writes this morning, the Fed should cut rates immediately,
but an emergency move by Pal is unlikely.
Speaker 1 (02:59):
UK police forces have deployed extra officers because of concerns
about further unrest today after what the Metropolitan Police is
called the worst bate of violent disorder in the country
in the last decade. Far right activists are circulating calls
online for demonstrations at refugee and immigration centers and law
firms representing asylum seekers. Last night, the Prime Minister held
(03:20):
his second emergency security meeting in two days over the
anti migrant and anti Muslim disorder. Keir Starmer says that
appropriate action is being taken.
Speaker 5 (03:32):
We obviously went through the available intelligence the deployment of
officers because our first duties to ensure that our communities
are safe. And that's why I say again anybody involving
themselves in this disorder is going to feel full force
(03:52):
of the law.
Speaker 1 (03:53):
The Prime Minister, speaking their Home Secretary Yvette Cooper has
confirmed that police will get government support for overtime pay
and any other resources they need. Her office says that
almost three hundred and eighty people involved in volin disorder
have been arrested and about one hundred have been charged.
Speaker 2 (04:09):
To the US, where Kamala Harris is kicking off a
crucial part of her campaign alongside new running mate Tim Waltz.
The current Vice President, is aiming to put rival Donald
Trump on the defensive in key swing states. Speaking alongside
Harris on stage for the first time, Minnesota Governor Tim
Walts criticized the Republican candidate.
Speaker 1 (04:26):
Donald Trump's not fighting for you or your family.
Speaker 6 (04:30):
He never said at that kitchen table like the one
I grew up at, wondering how we were going to
pay the bills.
Speaker 7 (04:36):
He said his country club up in mar.
Speaker 4 (04:39):
Lago, wondering how he can cut taxes for his rich friends.
Speaker 2 (04:43):
As Democratic vice presidential candidate Tim Waltz speaking there Paul's show,
Harris has eliminated the advantage Trump held for much of
the summer when he faced Donald excuse me, when he
faced President Joe Biden. Survey released yesterday shows the vice
president leading Trump fifty one percent of forty eight percent
among registers photos nationally.
Speaker 1 (05:02):
Hamas has named Yea Sinhwa, the alleged mastermind of the
group's October seventh attack on Israel, as its new political leader.
Sinoa succeeds Ismailhaneir, a key moderator of whose assassination last
week has set back cease Far talks. Despite that, the
US Sectory of State Anthony Blincoln says that a deal
could be near.
Speaker 8 (05:23):
The negotiations have now reached a final stage, and they
agreed on the urgency of bringing this process to closure.
Concluding that agreement and avoiding any action that.
Speaker 7 (05:37):
Could somehow disrupt it is the only path ending the
conflict in Gaza and bringing calm to the region. It's
critical that all parties work to finalize an agreement as
soon as possible.
Speaker 1 (05:49):
Blincoln has been one of these central figures urging talks
between Israel and Hamas, designated a terrorist organization by the
US and Europe, but choosing sin while the group appears
to be sending a message of defiance to Israel, the US,
and countries in the region.
Speaker 2 (06:07):
Novonordosk has nodged up its sales outlook for the year
as it increases supply of its blockbustered diabetes and weight
glass drugs a Zempic and Weegavy. The Europe's largest company,
says revenue for the year will rise from twenty two
to twenty eight percent at constant exchange rates. Its shares
have gained twenty seven percent this year ahead of today's open.
Speaker 1 (06:29):
Now, just in terms of other stocks that we're watching,
shares of Airbnb tumbled by more than sixteen percent after
the company warned of slowing demand from American holiday makers.
Second quarter figures for sales missed analyst estimates in what
is normally the home rental platform's peak quarter. If the
declines hold when the stock opens later, it could not
(06:50):
its biggest inter day drop on record. Now in a moment,
we're going to get more on the markets and what's
happening today after the mountdown on Monday, and also we'll
get to the earning story around Nova Nordisk, of course
most valuable company in Europe, so that'll be interesting. But
this caught my eye as well as we're talking about
this extraordinary week in August for markets, the abrupt departure
(07:12):
of Marko Kolonovitch JP Morgan Chase, of course, the Strashus,
remember we reported on it only about a month ago.
He stuck to his warnings that there was market trouble ahead.
Potentially notable War Street pessimist, he left abruptly on the
third of July after a nineteen year stint, and we've
reported on the Bloomberg terminor this morning around you know,
(07:33):
the chatter people at the time wondered whether it might
be the sign of a market top since he's gone
S and P five hundred down five percent.
Speaker 2 (07:42):
No story about hindsight and there somewhere, I think a
little wonderful thing. Let's look forward though, to what's been
happening on markets today. We've seen further rallying on shares
in Asia, weakening of the Japanese yen after comments in
the Bank of Japan's deputy governor saying the bank won't
raise interest data shouldn't raise interest rates while markets are
on state our currency and right stratch, Van Ram joins
(08:02):
us for more than talk us through. What did these
comments from the deputy governor of the Bank of Japan
do to markets?
Speaker 9 (08:11):
Owning Stephen, it kind of deters an immediate in mind
of the carry trades, and in that sense it restore
stability in the markets. Even before Uchia's comments, the markets
were kind of regaining the policy saw that with the
stock markets yesterday they came back big time in the US.
So Uchida's comments will boost risk sentiment even more on
(08:32):
the policy front. That means that the FED will be
no hurry to cut trades, and neither will the ECP.
So we're going to see these bond deals take higher
on the back of those remarks, and it kind of
Uchida is kind of say, signaling that you know, the
PUG is not in a hurry to raise raids, so
you know it is going to keep again on the
(08:52):
back foot for now.
Speaker 1 (08:54):
Okay. In terms of how bearish the markets are, I'm
just thinking back to sell off six and a half
trillion dollars wiped off the value of markets, and that
has really shaken people around the world. How would you
assess the bullish versus bearish themes in markets now?
Speaker 9 (09:14):
Then, Karlyn, I think that the markets are While the
markets have rebounded, no question, but it feels like a
very tenuous, very tentative kind of rebound. There is still
a lot of carry trade positioning that is yet to
be unmound. We know that we discussed yesterday about how
GP Morgan remarking that is still fifty percent of the
carry trades are yet to be unmound. So while those
(09:36):
traders will be kind of heaving a sigh of relief
at the turn of events over the past twenty four hours,
nervousness is still the buzz is still the watchword. I mean,
this volatility could be episodic, and our current fits and stops.
So despite toch he Tho's remarks were completely out of
the words. Yet we get the USCPI print next week,
(09:57):
so that'll really shape the path ahead for the markets
with regards to where we go with the FED funds
rate and what that implies for the rest of the
global markets.
Speaker 2 (10:06):
Yeah, because indeed we've been bringing our listeners' comments from
Goldman Sachs CEO David Solomon speaking to Bloomberg talking about
the Fed, he doesn't think they're going to take any
emergency steps. What is the expectation now around where the
Fed goes from here? We've seen a slight pairing back
from those big move in bets that traders were making
earlier this week.
Speaker 9 (10:28):
I think the first point to be made, Stephen is
that you know, there is no question for Fed emergency
rate cut. They are not going to come out of
the policy cycle and say, look, you know the markets
are in meltdown mode. If it continues, If the markets
are in meltdown mode, so we need to accommodate the market.
So here is a twenty five basis point rate cut
that's not going to happen. That's kind of preposterous idea
(10:49):
to start with, that was never going to be a starter.
The second point is going to be what the trajectory
is going to be, assuming that the markets settle. That
will be dependent. As I just mentioned on the USCPI print. Now,
cold PCE is already kind of converged to the Fed's
twenty twenty four target of two point six percent. So
(11:12):
you know, do do we need the FED mid mid
funds FED funds rate at five point thirty seven five
at the moment, we don't, And that policy rate is
kind of very real. Policy rate is very restrictive in
the US, and if inflation continues to mellow, we should
expect perhaps two rate cuts from the Fed this year.
Speaker 1 (11:31):
Okay, so two rate cuts penciled in, then, thank you
so much for being with us. It's been both currency
and rate stretches. Then, ram I think giving us some
interesting context around well, what's been happening with markets in
the moves this morning, especially those Bank of Japan comments.
Speaker 2 (11:46):
Also and Novnords because cut its profit forecast for the
years it's blockbuster weight loss drug Waga Vfel sure of
analysts expectations for quarterly sales now as he's operating profit
growing between twenty and twenty eight percent, which is down
slightly from its earlier forecast. Joining us now for more
from Copenhagen as our reporter son of us Sano, Good
(12:06):
morning to you. Novo racing to ramp up supplies. Talk
us through the headlines from this earnings report.
Speaker 6 (12:13):
Yeah, good morning. Yes, as you say, it is a
big question at the moment, how quickly can Normal ramp
up supplies to meet the huge amoun for its blockbuster
drugs or Zempic and GOV. We are seeing sales going
up this quarter, so it indicates the Normal is somewhat
managing to increase supplies and that is extremely important. But
(12:37):
as you also say, it missed some analyst expectations on
with GOV sales for example, and we also saw that
Norval went out and said it would continue to enforce
a cap on sales of with Goovy started doses in
the US. So it shows also that there is some
way to go for Normal in terms of meeting this
(12:58):
high demand and also eating investor expectations.
Speaker 1 (13:02):
Yes, absolutely huge investor expectations. So tell us about the
guidance then looking forwards to sales and revenue. What can
we take out of the report this morning?
Speaker 6 (13:14):
Yeah, the market really has been waiting to see what
would happen this time around, because Normal in the last
few quarters has raised its financial guidance. So today we
saw Normal raised its sales guidance for the year, which
is of course good news for Normal, but it also
cut its guidance for its operating profit. So it really
shows that despite the popularity of its drugs, they are
(13:38):
facing some bumps in the road. It had to take
quite a big impairment charge in the past quarter because
of a failure in the late stage trial of an
experimental heart drug, so that of course has had a
dragon Normal profits. And then we also saw that R
and D costs were higher than analysts had expected to
These are likely to be some of the drivers made
(14:00):
Normal slightly lowers its profit expectations for the year.
Speaker 2 (14:05):
What about competition in that space? Now, Novo has been
the leader in these drugs, these diabetes drugs, which of
course have been used for obesity as well. I mean,
how much I suppose it's that impacting the outlook for
the company.
Speaker 6 (14:21):
Yeah, at the moment, Normal tends to say there is
a space for both itself and its competitors. Lily now
has a weight loss drug already on the market, but
the demand is so huge that that there's not true
competition just yet. But we are seeing other players into
(14:44):
this big market for weight loss drugs. Swiss pharmaceutical Giant Russia.
A couple of weeks ago, they announced that their weight
loss pill had shown some promise in an early stage study.
Also last week, US based Vikings Therapeutics said that they
would advance it's weight loss drug and also look to
(15:06):
explore a monthly dozing off this medicine. So competition is
intensifying and that could put pressure on normal down the road.
I'd say another risk probably that investors are especially following
kind of on the short term is regulators and ensures
(15:27):
that are now putting a lot of pressure on Norval
to lower its prices. So those are kind of the
two things, the competition and regulatory pressure.
Speaker 1 (15:38):
Okay, that's very interesting. Yeah, and you mentioned Eli Lilly,
the competitor. Of course, they report earnings on Thursday. Sanna,
thank you so much for being with us this morning.
That is our reporter in Copenhagen, Sana Vas. Then on
the Nova Nordisk earnings, I mean, incredible, more than a
billion people living with obest in twenty twenty two. So
that's the driver for this market and this huge competition
(16:00):
over of course the most valuable company now in Europe.
Speaker 2 (16:03):
They're here in the UK. The Prime Minister of Care
Starmer says rioters and keyboard warriors alike will face the
full force of the law if far right activists follow
through with plans to converge on immigration centers. Later tonight,
joining us now to discuss as Bloomberg's tewa Ada Bio Tea,
where let's just first of all start with WHI are
the situation with these rights in the UK is now?
Speaker 10 (16:27):
So we're entering the ninth day of the unrest since
those three young girls were stabbed in Southport, and that
unrested start there in the northwest of England, but after
online misinformation it has slightly changed shape into a broader
anti migrant and violent demonstration. So over four hundred people
have been arrested so far. That's in the cities including
(16:47):
Liverpool and Manchester which have been affected. Also London we
saw one hundred people arrested in Westminster, for example. So
there are no reports of violence elsewhere in Wales and
Scotland so far. But where is the threat of more
to come. So police are actually saying now that there
are messages circulating online reportedly being shared by far right
(17:08):
activists and those are calling for demonstrations at refugee immigration
centers and law firms that also represent asylum seekers. So
much of is being made of the role in social
media actually in all of this platforms and messaging services
in sort of encouraging and fueling the proliferation of this violence.
And in response, actually the Prime Minister Kistarma has pledged
(17:30):
to prosecute those guilty of online incitement as well as
actual physical violence.
Speaker 9 (17:35):
Yeah.
Speaker 1 (17:35):
Absolutely, speaking of which what is the government and police
response them? What are they doing about it?
Speaker 10 (17:41):
So kis Darma has been very clear in his assertion
that the perpetrators will face the full force.
Speaker 1 (17:47):
Of the law.
Speaker 10 (17:47):
So far, we've had two emergency security or COBRA meetings
in the last two days. The Prime Minister has emphasized
what's already been done, so he is driving home that
point that four hundred arrests have taken place, one hundred
have been charged. Some actually in relation to that online activity.
We've seen this week the first conviction for online involvement
(18:08):
through Facebook post Kistam is also emphasizing the speed with
which he's acting. He says he's expecting substantive sentencing before
the end of next week. And what stands out really
is that the Prime Minister alongside the government are very
keen to make clear that they are acting quickly and
that their criminal justice system will act in order to
(18:30):
bring those involved in this to justice.
Speaker 2 (18:33):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 1 (18:39):
Look for us on your podcast feed every morning, on Apple, Spotify,
and anywhere else you get your podcasts.
Speaker 2 (18:45):
You can also listen live each morning on London Dab Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 1 (18:52):
Our flagship New York station is also available on your
Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.
Speaker 2 (19:00):
I'm Caroline Hipka and I'm Stephen Carol. Join us again
tomorrow morning for all the news you need to start
your day right here on Bloomberg Daybreak Europe.
Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg
Day Bake You At podcast, available every morning on Apple,
Spotify or wherever you listen. It's Wednesday, the Seventh Brugs
here in London. I'm Caroline Hepki and.
Speaker 2 (00:17):
I'm Stephen Carroll. Coming up today. The Bank of Japan's
deputy governor says interest rate hikes are off the table
while markets are unstable.
Speaker 1 (00:26):
Goldman Sachs as David Solomon tells Bloomberg that markets shouldn't
expect any emergency FED rate.
Speaker 2 (00:32):
Cuts, plus extra police forces are deployed in the UK
as far right rioters make plans for further unrest tonight.
Speaker 1 (00:39):
Let's start with a roundup of our top story. The
Bank of Japan's deputy governor says that policymakers shouldn't raise
interest rates until markets stabilize. The strong dubbish signal from
Shinichi Uchidah comes after major moves in the yen and
record breaking swings in Japanese stocks in the wake of
a rate hike last week. The yen has weakened more
(01:00):
than two percent immediately after Achieda's comments. Namura's executive of
a certain head of wholesale Christopher Wilcox defended the Central Bank.
Speaker 3 (01:09):
I would say that the BOJ has been completely vindicated.
They always knew that this unwind was going to be
very difficult. That's why they've been so slow and so cautious.
And yes, that puts some pressure on the end for
a little while. And think about the carry trade. The
point of the carry trade is that if they didn't
start to move, the carry trade would only have got bigger.
The end disruption of the unwinding of the carrent trade
(01:30):
would have been even bigger. So I think the BOJ
is playing it extremely smartly.
Speaker 1 (01:35):
The Mirror's Christopher Wilcox there, who added that he sees
us a recession risk as the primary market driver. The
three day meltdown in Japan's stocks, though, has been tallied
at one point one trillion dollars, the equivalent size of
Sweden's entire stock market.
Speaker 2 (01:51):
Goldman Sachs CEO David Staloman says markets shouldn't count on
the FED stepping in with an emergency ratecost. It comes
as future as in Upson's data to traders are cashing
in on aggressive rate cut bets. In an interview for
the upcoming episode of the David Rubinstein Show Peer to
Peer Conversations, Solomon says he doubts the Fed would act
before September.
Speaker 4 (02:11):
The market expectation is certainly for cuts in the fall.
I've been more cautious around inter straight cuts all year.
As you remember, the market expectation early in the year
was for six of seven cuts based on the economic
data we're seen now in the messaging from the Fed.
You know, I think it's likely that we'll see a
cut or two in the fall, but I think you've
still got to wait and see as things unfold.
Speaker 2 (02:32):
The boss of Goldman added he felt the stock market
correction could might be healthy and forecasts more volatility to come.
Markets are pricing in around forty basis points in cuts
from the Fed in September. Meanwhile, Bloomberg opinion columnist and
former FED official Bill Dudley says he switched to advocating
for rate cuts two weeks ago. Not a moment too soon,
(02:52):
he writes this morning, the Fed should cut rates immediately,
but an emergency move by Pal is unlikely.
Speaker 1 (02:59):
UK police forces have deployed extra officers because of concerns
about further unrest today after what the Metropolitan Police is
called the worst bate of violent disorder in the country
in the last decade. Far right activists are circulating calls
online for demonstrations at refugee and immigration centers and law
firms representing asylum seekers. Last night, the Prime Minister held
(03:20):
his second emergency security meeting in two days over the
anti migrant and anti Muslim disorder. Keir Starmer says that
appropriate action is being taken.
Speaker 5 (03:32):
We obviously went through the available intelligence the deployment of
officers because our first duties to ensure that our communities
are safe. And that's why I say again anybody involving
themselves in this disorder is going to feel full force
(03:52):
of the law.
Speaker 1 (03:53):
The Prime Minister, speaking their Home Secretary Yvette Cooper has
confirmed that police will get government support for overtime pay
and any other resources they need. Her office says that
almost three hundred and eighty people involved in volin disorder
have been arrested and about one hundred have been charged.
Speaker 2 (04:09):
To the US, where Kamala Harris is kicking off a
crucial part of her campaign alongside new running mate Tim Waltz.
The current Vice President, is aiming to put rival Donald
Trump on the defensive in key swing states. Speaking alongside
Harris on stage for the first time, Minnesota Governor Tim
Walts criticized the Republican candidate.
Speaker 1 (04:26):
Donald Trump's not fighting for you or your family.
Speaker 6 (04:30):
He never said at that kitchen table like the one
I grew up at, wondering how we were going to
pay the bills.
Speaker 7 (04:36):
He said his country club up in mar.
Speaker 4 (04:39):
Lago, wondering how he can cut taxes for his rich friends.
Speaker 2 (04:43):
As Democratic vice presidential candidate Tim Waltz speaking there Paul's show,
Harris has eliminated the advantage Trump held for much of
the summer when he faced Donald excuse me, when he
faced President Joe Biden. Survey released yesterday shows the vice
president leading Trump fifty one percent of forty eight percent
among registers photos nationally.
Speaker 1 (05:02):
Hamas has named Yea Sinhwa, the alleged mastermind of the
group's October seventh attack on Israel, as its new political leader.
Sinoa succeeds Ismailhaneir, a key moderator of whose assassination last
week has set back cease Far talks. Despite that, the
US Sectory of State Anthony Blincoln says that a deal
could be near.
Speaker 8 (05:23):
The negotiations have now reached a final stage, and they
agreed on the urgency of bringing this process to closure.
Concluding that agreement and avoiding any action that.
Speaker 7 (05:37):
Could somehow disrupt it is the only path ending the
conflict in Gaza and bringing calm to the region. It's
critical that all parties work to finalize an agreement as
soon as possible.
Speaker 1 (05:49):
Blincoln has been one of these central figures urging talks
between Israel and Hamas, designated a terrorist organization by the
US and Europe, but choosing sin while the group appears
to be sending a message of defiance to Israel, the US,
and countries in the region.
Speaker 2 (06:07):
Novonordosk has nodged up its sales outlook for the year
as it increases supply of its blockbustered diabetes and weight
glass drugs a Zempic and Weegavy. The Europe's largest company,
says revenue for the year will rise from twenty two
to twenty eight percent at constant exchange rates. Its shares
have gained twenty seven percent this year ahead of today's open.
Speaker 1 (06:29):
Now, just in terms of other stocks that we're watching,
shares of Airbnb tumbled by more than sixteen percent after
the company warned of slowing demand from American holiday makers.
Second quarter figures for sales missed analyst estimates in what
is normally the home rental platform's peak quarter. If the
declines hold when the stock opens later, it could not
(06:50):
its biggest inter day drop on record. Now in a moment,
we're going to get more on the markets and what's
happening today after the mountdown on Monday, and also we'll
get to the earning story around Nova Nordisk, of course
most valuable company in Europe, so that'll be interesting. But
this caught my eye as well as we're talking about
this extraordinary week in August for markets, the abrupt departure
(07:12):
of Marko Kolonovitch JP Morgan Chase, of course, the Strashus,
remember we reported on it only about a month ago.
He stuck to his warnings that there was market trouble ahead.
Potentially notable War Street pessimist, he left abruptly on the
third of July after a nineteen year stint, and we've
reported on the Bloomberg terminor this morning around you know,
(07:33):
the chatter people at the time wondered whether it might
be the sign of a market top since he's gone
S and P five hundred down five percent.
Speaker 2 (07:42):
No story about hindsight and there somewhere, I think a
little wonderful thing. Let's look forward though, to what's been
happening on markets today. We've seen further rallying on shares
in Asia, weakening of the Japanese yen after comments in
the Bank of Japan's deputy governor saying the bank won't
raise interest data shouldn't raise interest rates while markets are
on state our currency and right stratch, Van Ram joins
(08:02):
us for more than talk us through. What did these
comments from the deputy governor of the Bank of Japan
do to markets?
Speaker 9 (08:11):
Owning Stephen, it kind of deters an immediate in mind
of the carry trades, and in that sense it restore
stability in the markets. Even before Uchia's comments, the markets
were kind of regaining the policy saw that with the
stock markets yesterday they came back big time in the US.
So Uchida's comments will boost risk sentiment even more on
(08:32):
the policy front. That means that the FED will be
no hurry to cut trades, and neither will the ECP.
So we're going to see these bond deals take higher
on the back of those remarks, and it kind of
Uchida is kind of say, signaling that you know, the
PUG is not in a hurry to raise raids, so
you know it is going to keep again on the
(08:52):
back foot for now.
Speaker 1 (08:54):
Okay. In terms of how bearish the markets are, I'm
just thinking back to sell off six and a half
trillion dollars wiped off the value of markets, and that
has really shaken people around the world. How would you
assess the bullish versus bearish themes in markets now?
Speaker 9 (09:14):
Then, Karlyn, I think that the markets are While the
markets have rebounded, no question, but it feels like a
very tenuous, very tentative kind of rebound. There is still
a lot of carry trade positioning that is yet to
be unmound. We know that we discussed yesterday about how
GP Morgan remarking that is still fifty percent of the
carry trades are yet to be unmound. So while those
(09:36):
traders will be kind of heaving a sigh of relief
at the turn of events over the past twenty four hours,
nervousness is still the buzz is still the watchword. I mean,
this volatility could be episodic, and our current fits and stops.
So despite toch he Tho's remarks were completely out of
the words. Yet we get the USCPI print next week,
(09:57):
so that'll really shape the path ahead for the markets
with regards to where we go with the FED funds
rate and what that implies for the rest of the
global markets.
Speaker 2 (10:06):
Yeah, because indeed we've been bringing our listeners' comments from
Goldman Sachs CEO David Solomon speaking to Bloomberg talking about
the Fed, he doesn't think they're going to take any
emergency steps. What is the expectation now around where the
Fed goes from here? We've seen a slight pairing back
from those big move in bets that traders were making
earlier this week.
Speaker 9 (10:28):
I think the first point to be made, Stephen is
that you know, there is no question for Fed emergency
rate cut. They are not going to come out of
the policy cycle and say, look, you know the markets
are in meltdown mode. If it continues, If the markets
are in meltdown mode, so we need to accommodate the market.
So here is a twenty five basis point rate cut
that's not going to happen. That's kind of preposterous idea
(10:49):
to start with, that was never going to be a starter.
The second point is going to be what the trajectory
is going to be, assuming that the markets settle. That
will be dependent. As I just mentioned on the USCPI print. Now,
cold PCE is already kind of converged to the Fed's
twenty twenty four target of two point six percent. So
(11:12):
you know, do do we need the FED mid mid
funds FED funds rate at five point thirty seven five
at the moment, we don't, And that policy rate is
kind of very real. Policy rate is very restrictive in
the US, and if inflation continues to mellow, we should
expect perhaps two rate cuts from the Fed this year.
Speaker 1 (11:31):
Okay, so two rate cuts penciled in, then, thank you
so much for being with us. It's been both currency
and rate stretches. Then, ram I think giving us some
interesting context around well, what's been happening with markets in
the moves this morning, especially those Bank of Japan comments.
Speaker 2 (11:46):
Also and Novnords because cut its profit forecast for the
years it's blockbuster weight loss drug Waga Vfel sure of
analysts expectations for quarterly sales now as he's operating profit
growing between twenty and twenty eight percent, which is down
slightly from its earlier forecast. Joining us now for more
from Copenhagen as our reporter son of us Sano, Good
(12:06):
morning to you. Novo racing to ramp up supplies. Talk
us through the headlines from this earnings report.
Speaker 6 (12:13):
Yeah, good morning. Yes, as you say, it is a
big question at the moment, how quickly can Normal ramp
up supplies to meet the huge amoun for its blockbuster
drugs or Zempic and GOV. We are seeing sales going
up this quarter, so it indicates the Normal is somewhat
managing to increase supplies and that is extremely important. But
(12:37):
as you also say, it missed some analyst expectations on
with GOV sales for example, and we also saw that
Norval went out and said it would continue to enforce
a cap on sales of with Goovy started doses in
the US. So it shows also that there is some
way to go for Normal in terms of meeting this
(12:58):
high demand and also eating investor expectations.
Speaker 1 (13:02):
Yes, absolutely huge investor expectations. So tell us about the
guidance then looking forwards to sales and revenue. What can
we take out of the report this morning?
Speaker 6 (13:14):
Yeah, the market really has been waiting to see what
would happen this time around, because Normal in the last
few quarters has raised its financial guidance. So today we
saw Normal raised its sales guidance for the year, which
is of course good news for Normal, but it also
cut its guidance for its operating profit. So it really
shows that despite the popularity of its drugs, they are
(13:38):
facing some bumps in the road. It had to take
quite a big impairment charge in the past quarter because
of a failure in the late stage trial of an
experimental heart drug, so that of course has had a
dragon Normal profits. And then we also saw that R
and D costs were higher than analysts had expected to
These are likely to be some of the drivers made
(14:00):
Normal slightly lowers its profit expectations for the year.
Speaker 2 (14:05):
What about competition in that space? Now, Novo has been
the leader in these drugs, these diabetes drugs, which of
course have been used for obesity as well. I mean,
how much I suppose it's that impacting the outlook for
the company.
Speaker 6 (14:21):
Yeah, at the moment, Normal tends to say there is
a space for both itself and its competitors. Lily now
has a weight loss drug already on the market, but
the demand is so huge that that there's not true
competition just yet. But we are seeing other players into
(14:44):
this big market for weight loss drugs. Swiss pharmaceutical Giant Russia.
A couple of weeks ago, they announced that their weight
loss pill had shown some promise in an early stage study.
Also last week, US based Vikings Therapeutics said that they
would advance it's weight loss drug and also look to
(15:06):
explore a monthly dozing off this medicine. So competition is
intensifying and that could put pressure on normal down the road.
I'd say another risk probably that investors are especially following
kind of on the short term is regulators and ensures
(15:27):
that are now putting a lot of pressure on Norval
to lower its prices. So those are kind of the
two things, the competition and regulatory pressure.
Speaker 1 (15:38):
Okay, that's very interesting. Yeah, and you mentioned Eli Lilly,
the competitor. Of course, they report earnings on Thursday. Sanna,
thank you so much for being with us this morning.
That is our reporter in Copenhagen, Sana Vas. Then on
the Nova Nordisk earnings, I mean, incredible, more than a
billion people living with obest in twenty twenty two. So
that's the driver for this market and this huge competition
(16:00):
over of course the most valuable company now in Europe.
Speaker 2 (16:03):
They're here in the UK. The Prime Minister of Care
Starmer says rioters and keyboard warriors alike will face the
full force of the law if far right activists follow
through with plans to converge on immigration centers. Later tonight,
joining us now to discuss as Bloomberg's tewa Ada Bio Tea,
where let's just first of all start with WHI are
the situation with these rights in the UK is now?
Speaker 10 (16:27):
So we're entering the ninth day of the unrest since
those three young girls were stabbed in Southport, and that
unrested start there in the northwest of England, but after
online misinformation it has slightly changed shape into a broader
anti migrant and violent demonstration. So over four hundred people
have been arrested so far. That's in the cities including
(16:47):
Liverpool and Manchester which have been affected. Also London we
saw one hundred people arrested in Westminster, for example. So
there are no reports of violence elsewhere in Wales and
Scotland so far. But where is the threat of more
to come. So police are actually saying now that there
are messages circulating online reportedly being shared by far right
(17:08):
activists and those are calling for demonstrations at refugee immigration
centers and law firms that also represent asylum seekers. So
much of is being made of the role in social
media actually in all of this platforms and messaging services
in sort of encouraging and fueling the proliferation of this violence.
And in response, actually the Prime Minister Kistarma has pledged
(17:30):
to prosecute those guilty of online incitement as well as
actual physical violence.
Speaker 9 (17:35):
Yeah.
Speaker 1 (17:35):
Absolutely, speaking of which what is the government and police
response them? What are they doing about it?
Speaker 10 (17:41):
So kis Darma has been very clear in his assertion
that the perpetrators will face the full force.
Speaker 1 (17:47):
Of the law.
Speaker 10 (17:47):
So far, we've had two emergency security or COBRA meetings
in the last two days. The Prime Minister has emphasized
what's already been done, so he is driving home that
point that four hundred arrests have taken place, one hundred
have been charged. Some actually in relation to that online activity.
We've seen this week the first conviction for online involvement
(18:08):
through Facebook post Kistam is also emphasizing the speed with
which he's acting. He says he's expecting substantive sentencing before
the end of next week. And what stands out really
is that the Prime Minister alongside the government are very
keen to make clear that they are acting quickly and
that their criminal justice system will act in order to
(18:30):
bring those involved in this to justice.
Speaker 2 (18:33):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 1 (18:39):
Look for us on your podcast feed every morning, on Apple, Spotify,
and anywhere else you get your podcasts.
Speaker 2 (18:45):
You can also listen live each morning on London Dab Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 1 (18:52):
Our flagship New York station is also available on your
Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.
Speaker 2 (19:00):
I'm Caroline Hipka and I'm Stephen Carol. Join us again
tomorrow morning for all the news you need to start
your day right here on Bloomberg Daybreak Europe.
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