tv Bloomberg Daybreak Europe Bloomberg April 30, 2021 1:00am-2:00am EDT
tubborn fat, all while controlling stress and emotional eating. at last, a diet pill that actually works. go to golo.com to get yours. annmarie: good morning from bloomberg's european headquarters. china's crackdown on big tech widens as regulators tighten the screws on tencent and jd.com. global coronavirus cases top 150 million as germany accelerates its vaccine rollout. we look ahead to european growth
data. bnp paribas first quarter profit blows past estimates. the cfo strikes an upbeat tone on europe's recovery. >> what we see in europe is that vaccinations are ongoing. they're probably around the third quarter of this year, there will be a balance. that balance will lead to a pickup that should be sizable and it should be sustainable. annmarie: happy friday to you. global equities have been on a tear up 5% on the month. our mliv question of the day is given a solid month for april, what are the most vulnerable to a potential reversal? this morning you see s&p 500 futures down nearly 0.3% after another record for the benchmark yesterday.
the hang seng down one point 5% getting hit us chinese regulators tried to crack down more tech companies. an update in a moment outside of hong kong. pimco's greg sharon on is saying real shortages are seen in the market driving this boom. not just expectations of future demand. the euro hanging onto a handle. monday, france is going to start a four-pronged process of reopening the economy. let's start with china. that is hitting asian equities. regulators have cast their nets wider in an ongoing crackdown on big tech. wide-ranging restrictions have been imposed on the financial business of 15 companies including tencent and bytedance. you see the reaction on the board. stephen engle taking a closer look into all of this this morning, joining us from hong
kong. if you're just looking -- waking up in europe, what do we need to know about this crackdown? >> this is not just about alibaba and ant. alibaba was giving a long list for anticompetitive behavior. this is the other side of the crackdown going on. that is to contain risk in the financial system. ant group was the first domino to fall. as we have seen with another 13 companies including the big tech titans, they say there is a duopoly in china for platform companies. tencent is the other side and it has a significant arm of fintech whether through payments and other financial services, because they have such big
platforms and so many users, they have bundled together so many offerings. wealth management, insurance, banking, lending, etc.. have been under regulated. we have the central bank, we have the banking and insurance regulator, we have the securities regulator, we have the foreign exchange regulator. all of them summoning these other 13 companies and telling them you are going to have your financial services curbed. you're going to have to fold into financial companies. you're going to have to come under severe supervision and you're going to have to go back to the roots of what you started off to be. that is essentially basic payment and not all these other risky services. in particular, micro lending, which is not so micro anymore. annmarie: this is on the heels of what happened with jack ma and alibaba. how similar are these restrictions?
>> he was the poster child. the case study. he was the biggest player in e-commerce and ant group the biggest one of the platform companies into financial services. they have a $35 billion ipo waiting in the wings that was scuppered. perhaps because jack ma was so outspoken and he had severely criticized again the government and the regulators and the state thanks etc. etc., there was speculation maybe this was the chinese government saying enough is enough, we are going to knock jack ma down to size. the news overnight end of the 13 other companies that include the other half of the duopoly, tencent, it shows us very clearly the government is not necessarily trying to knock down the titular heads, the tycoons. they are going after the risk stacy -- risks they see with
financial services of technology companies. that also has to put supervision and compliance on future listings and that affects companies that have plans to list. annmarie: i imagine tons of anxiety if you're thinking about listing their. our thanks to stephen engle. breaking news, an update with credit suisse as they are dealing with the fallout from the rko's -- archegos hit. this comes after a prominent investors indicated they would be voting him out. more shakeup after the meltdown from archegos capital. the julius baer ceo, thanks for
joining. i know you got to listen to what stephen engle was outlining. you see the risks from asia given what is going on with the crackdown in the technology space. does this where you about investments in china and hong kong, or is this potentially a buying opportunity? >> we think it is a buy opportunity because sentiment has become very negative in the wake of regulatory steps. we are concerned about the long-term consequences. essentially, what they are doing here will cap the upside potential and the valuation potential of such companies in the market. one of the reasons to be strategically about china is outside the u.s. it is the market where you are supplying to companies. have a track record of building those. medium term, the prospects are
not so exciting anymore. all of this takes place in the context of a phase in china where leadership is focusing on risk in the broader sense of the term, having managed the downturn. annmarie: we had china pmi, a mixed picture. still signaling recovery underway. how do you want to be exposed if you like this market? where do you want to get that exposure? >> you want broad china exposure. you want to stick to technology. health care is a very important theme in china. this is a sector which is less subject to regulatory attention at the moment. there are plenty of opportunities. china capital markets are relatively undersized compared to the size of its economy. another point is for those who
are not willing, i think chinese renminbi delineated government bonds are one of the best fixed income investment opportunities at the moment because very ironically china is the only major economy with substantially positive real and nominal rates. annmarie: i want to turn to the risk in the market. i love your note, you just got back from this trip so you know the different scenes the world is operating in. u.s., the seychelles, but then we have catastrophic pictures coming out of india, out of brazil. what is the risk for potential impacts to global financial markets? >> i think the fact that the world is not reopening in a synchronized manner is a factor
of comport for investors. if everyone was reopening at the same time, given the pent-up demand, i think the pressure at work on the long-term rates and the u.s. yield curve would be substantially higher. therefore the fact that the world is struggling to reopen is actually risk supportive for investors. annmarie: stay with us this friday morning, a lot to get through including earnings. first a recap of your first word news. >> there have now been more than 150 million cases of coronavirus worldwide. india remains the epicenter of the pandemic, recording new records for infections. fatalities in brazil have topped
400,000. the country has seen more covid-19 deaths in the first four months of this year than in all of 2020. president joe biden says his proposed tax hikes on the wealthy will help finance tax cuts to many more americans. in an atlanta suburb piece said it would amount to a tax cut for more than 2 million families in georgia adding it is about time the very wealthy start paying their fair share. the uk's parliament watchdog may probe its prime minister boris johnson broke the code of conduct by failing to properly declare how the refurbishment of his government residence was funded. the commission has announced its own probe into the matter. johnson denies wrongdoing. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries.
annmarie: this is "daybreak europe." first quarter net income beats estimates this morning at france's biggest bank. the ceo of bnp paribas spoke with bloomberg from paris. >> in 2020, there was a very strong effect when it comes to rates which is normalized. the levels were very high if you compared to 2019. levels are 11% up. very solid. >> do you think there is some normalization of trading? do you expect the level of
activity to taper off? >> if you look at it at the normal rhythm, because it can always be spectacular like what we had last year, if you look at the normal levels, we are stronger than what we had in 2019. that is what we saw in the first quarter. i don't have a crystal ball. but we have been taking market share and so we are very well positioned to serve our clients. >> let's talk about what happened in the banking sector with archegos fallout. your exposure comes from the hedge fund back in 2019. deutsche bank did say they managed to exit the position without losses. are you still putting into question the chance of assets which is still ongoing? >> the transfer is ongoing.
basically it is foreseen that by the end of the year this activity will return to us. as long as they are not transferred, the risk is managed by deutsche bank, which they have done very well. >> can you give us any guidance on when you expect the real recovery in the real economy? >> our stance has always been in what we see today in europe given that the vaccinations are ongoing, perhaps around the third quarter of this year there would be a balance. that balance will be a sustainable figure. >> are you worried the french president is exiting the lockdown too soon? >> that is yours to judge. it is basically the tapering off .
what we see is that every confinement has been handled even in a better way, so things are contract. annmarie: staying in france, the government says it will ease its coronavirus measures in four stages starting may 3 and all restrictions be lifted by june 30. the economic front, first-quarter data from around the euro area. france especially at 6:30. let's get the latest with maria tadeo in brussels. tell us more about the french easing measures. also germany improving the vaccination rollout. >> when you look at the french situation yesterday, emmanuel macron signaled this fourth stage plan starting next week that would culminate in the final week of june. at that point, everything that has to do with open services,
bars, restaurants, cafes, should be allowed to operate. they should be in a position to open with a vaccine certificate. you're looking at free reopening -- full reopening almost of the french economy. germany, we need to focus on the number. yesterday it was able to vaccinate one million people in one day. 1% of its population in one day. this is a record for germany. it highlights what we have seen, which is accelerations and production and delivery of vaccines across the european union. all of this together, the reopening, the idea that consumer pent-up demands are going to be unleashed as we reopen, some of the data, the economic center for the upn union -- european union jumping the most -- levels not seen
since the pandemic. europe has for reopening and that could mean acceleration in economic activity. annmarie: personal consumption was at more than 10% in the biggest part of the u.s. economy. we have not seen that level since the 1960's. it looks like europe is going to be a little bit behind, but still pent-up demand is real. thank you for joining us. yves bonzon still with us. for the european central bank, is there a risk they will not signal a taper? that this will drag on too long? yves: the disinflationary forces are stronger than they were in the u.s. pre-pandemic. the margin for the european central bank's to err on the
side of stimulus and further support is significantly higher than the fed margin. annmarie: so what is your timeframe? do we start to see more upbeat tones? >> if they were to move ahead, no one expects the fed to move as early as the fourth quarter of this year, they would risk to trigger a leg up in the euro dollar rate which is counterproductive for the european recovery and european competitiveness. i think you should stay focused on the fed and understand what they are doing. the next step will be the fed. the way the markets react to that tapering might be significantly different from a previous tapering experience we
have had in markets. i think really the focus should be on the u.s. annmarie: what is the timeline you have for the fed to start talking about talking about tapering? >> the fed has changed its reaction functions in the wake of the market dislocation of the 1980's. ever since we have said attempt by western central banks to pull a merry tighten -- this new reaction function signals that will wait for further evidence the recovery has progressed before guiding towards less accommodative conditions. we see asset valuations very stretched. you can ask yourself, will at
some point a chairman blank? -- point chairman powell blink? that could be a risk as early as the third quarter. it is early to talk about that. this week's meeting confirmed this. annmarie: don't go anywhere. a lot of earnings to break down. first, nestle coming through with a deal. buying the core brand of the bountiful company. the bountiful company is a pure play branded leader in global nutrition. this is what i'm reading right now. one interesting thing is bountiful was about to go public. they had reserved a ticker and everything. nestle scooping them up in the last minute. 5.7 5 billion dollars on that deal. i stopped to watch when the market opens.
manus: amazon give a bullish outlook saying sales would be between 110 and $116 million. it was really aws the cloud unit as well as advertising which surged. there was concern over whether the e-commerce boom might end for amazon. the company announced it would move forward it's prime day shopping bonanza to the second quarter.
executives face questions on succession, how the handover from jeff bezos will happen. there was not much detail. investors very pleased with what they saw. a different story for twitter whose shares fail heavily -- fell heavily. sales between $980 million and $1.08 billion in the current quarter. the street was looking at the higher end of that range. it was the same week facebook and google had shown pretty good strength in the advertising market. add prices are up, volumes are up. twitter was not feeling the same love. they grew users by 20% from a year ago, which is pretty decent for twitter, but there are concerns their brand heavy or brand targeted advertising is not getting the same traction facebook and google are able to get we also did not get much update on the types of innovations that might change the picture for twitter. ed ludlow, bloomberg news, san
francisco. annmarie: big tech bulls through the pandemic. interesting amazon and google and facebook did so well with advertising, but not twitter. very quickly, we are seeing exceptionally strong growth in earnings. will it last? yves: i think we are seeing the impact of the recession that was in may. a recession that happened by decree when we moved to lockdowns. that has distorted macro data. above and beyond, the earnings power of the s&p 500 has been very strong. this is reflecting that.
amazon shares pop in extended trade as first quarter revenue surges. good morning to you. data crossing the terminal. the estimate was for no growth. the year on year we are coming in 1.5%. the survey was for 1%. consumer spending though a little later for march month on month. the survey was for 0.5% and that is coming in -1.1%. that potentially we will see an uptick as maria walks us through the four pronged approach for the reopening of france kicking off monday. the gdp q iq a little bit of a beat. some optimism. we are 90 minutes from the start of european equities trading.
on your screen a slew of red from asia to the united states to europe. s&p 500 futures lower down 0.4 percent this morning even after yesterday hitting an all-time high. the hang seng down 1.8%. juliette saly is going to give us an update on the crackdown there. yesterday we had 10k. a five figure copper is just not done yet many site. goldman sachs has a 15 k call on copper. the red-hot market is going to be want to watch. -- one to watch. the key headwind was chinese regulators casting their net wider in a crackdown on big tech. this time imposing wide-ranging restrictions on 13 companies. that includes tencent and bytedance. juliette saly joins us from singapore. walk us through what we know of this crackdown out of china.
>> really just casting the net wider leveling the curve we had already seen at jack ma's ant group. we are hearing 13 chinese firms are going into the fintech space and have been summoned to a meeting by regulators including the pboc. they spelled out a raft of requirements including stricter requirements when listing abroad, china really worried about how much data and influence over peoples lives a lot of these big tech companies have and the vast amounts of data they have amassed through online shopping, ride-hailing. the firm's order to break up their information monopoly and conduct personal credit reporting services through listed agencies. it is unclear how long companies have to enlist these changes. we have seen a big market reaction. jd.com falling in trade weighing
on the overall hang seng tech index. the broader chinese markets as well. annmarie: it certainly is. meanwhile we have mixed signals from china pmi readings today. the big question is, long-term, is the recovery intact? >> this was quite interesting. the official manufacturing or nonmanufacturing reads came in as a mix but you saw a beat from the thai shed manufacturing gauge. that shows the acceleration -- the recovery is accelerating. positive signals to the pboc. they have to cut their 2021 growth outlook for china to 9.1 from 9.3%. we are seeing ongoing expansion of the economy even if the official numbers were a mess.
-- miss. the pboc could continue. the official read on manufacturing coming in at 51.1. that was below estimates of 51.8%. annmarie: that is what is going on in asian equity markets. in europe it is all about earnings. the company recorded revenue and and ebita margin above the average estimate and expects sales growth of between 3% and 6% for 2021. with us is the signify ceo. strong numbers and strong guidance for 2021. what is behind it? >> there is a rigorous execution of the strategy delivering structural improvements. what is important is we are
growing in our strategy targeted domains. we have increased from $77 million to $83 million. between the previous quarter and to date. at the time of the ipo it was only 45%. the growth is leverage because we are improving operating profitability by 290 basis points. at the same time, that strong profitability is helping us to generate 168 billion dollars in cash, above 10% of sales. when we look at the rest of europe, we believe we can grow by 3% to 6% as we have said and continuously improving on our operating margin which we have guided between 11.5 and 12.5%
for the year which is a substantial progression. annmarie: tell us about the demand for the virus killing ultraviolet lamps. are you seeing competitions and the space? -- competition in this space? >> we have gotten very early in the curve to invest not only by increasing our capacity but also offers. we have released on the market in q1 and offer for consumers. a small box where you can put small objects. that is having good traction. we demonstrated our open-air disinfection units are very effective against the virus that causes covid-19. we eradicate it in a matter of 10 minutes. if you are looking at my image,
you will see here at the top on the ceiling, there is a device which is in our offices. it is an open-air disinfection unit. there is competition but we continue to grow. we are not only selling light sources, but also the finished components. that is what i have on top of my head. also to the consumers as i am describing this. annmarie: i want to get a sense what the future is you're planning for. the biden administration wants to go big on green. mario draghi does. the greens could win an election in germany. can you take on a lot of demand for sustainable electricity, cheap and clean electricity, and lights on your own? are you going to need to partner with other companies? >> i think that is a very
important point. europe, we talk about 1.8 trillion where there is going to be an investment in low carbon technology. there is a clear emphasis on mitigating climate change. we are very well-positioned in europe and we have developed what we call the greens which which is an approach -- the green switch which is an approach with local government where we describe what are the solutions they can put in place, the project they can launch when it comes to lighting. targeting a climate change, clean energy, circularity. we have all the solutions and the green switch approach is to tell these governments what they can use and how they can use it in the spirit of the green deal. when we crossed the atlantic we talk about 2.3 trillion in terms of incentive. we are seeing that between three
to 4 billion will be dedicated to lightning over the coming 20 years -- lighting over the coming 20 years. there are substantial amounts of investment we will benefit from as we are bringing low carbon technology and we have technology that can substantially reduce co2 emissions by reducing the energy consumption. annmarie: how is the cannabis lighting business going? are you expecting from the biden administration some legalization opening up and new businesses to prosper for this? >> it depends by state. there is sometimes a discrepancy between what states are seeing in the u.s. our position is that we clearly follow the rules and the law locally. we operate in the business
whenever it is legal to do so. it is a minor part of what we do. the agriculture business as a whole is growing substantially. it is one of our growth platforms behind which we have made substantial investments. annmarie: new york is looking to get cannabis legally. are you looking to go into that market? >> we are in the market as we are selling lamps for horticulture. and for growing crops in general. not specifically cannabis, but also cannabis. if there is market potential and if it is legal to do so, we will. annmarie: thanks for joining us this morning. there earnings and also lifting
their guidance for 2021. i want to shift gears and look at what's going on with the pandemic. india continues to grapple with his second wave as international arrives. vaccine supplies and hospital equipments have been sent from several nations which it is hoped will plug the shortfall in vital care. one organization hoping to improve access is the asian development bank whose president told bloomberg it will require investment across the board. >> it is important to say people's lives. right now developing member countries are preparing or conducting vaccinations for their people. what we are about to do is to secure -- safe and effective
vaccines as well as facilities for distribution. we haven't -- we already approved four candidates ended financing around four -- and did financing around four and we are working on other countries with this financing but even if we secure financing, to distribute vaccine is going to be another. there is a huge gap between demand and supply. i have a strong feeling we need
to invest more and more in vaccine manufacturing to expand. >> you talk about risks to the downside. there is also the risk of uneven recovery. how do you assess that? >> a couple of risks we are concerned about. vaccination is our one concern. the other concern i have is debt. our member countries are under enormous pressure of budget and debt. fiscal expenditure, right? this is necessary to the pandemic. it cannot be stopped. yet there is a resulting accumulation of public debt. sooner or later the u.s. will normalize monetary policy.
quite often in the past we saw huge pressure in markets, developing an emerging markets, in terms of risk share on the outflow and pressure for depreciation of their currencies. annmarie: that was the president of the asian developing bank on vaccine rollout in the region -- asian development bank on the rollout in the region. next, what we have learned from this season's bank earnings. ♪
>> 36 billion in the first quarter was really shows how strong the franchise has performed. >> we had a good start to the year. we had a significant increase in profitability up 18%. the 1.4 billion is one of the biggest profit wise we have had for several years. >> economies have started to recover coming from individuals. >> profits up almost 80%. a very strong recovery. annmarie: a few of the banking executives we have had reflecting on a strong earnings season so far. let's dig deeper into the numbers. we will look at the wider corporate sector, but first the banks. the np relied on lower provisions for loans and a resurgence of equities business.
let's get the analysis this morning from jonathan tice, our senior eu banks analyst. looking at bnp, looking at bbva, a beat on the provision. we see provisions coming down. is that a theme for the sector? >> absolutely. i would point out the market movers, consensus will tick lower but analysts have aired on the side of caution. when you look at the rally, that was preempting significantly better cost of risk. if anything, we are surprised but that is learning the new way of accounting for this stuff. clearly when the market already knows about. those are not really driving share prices anymore.
annmarie: what do we look for the remainder of the year? >> i'm surprised how quiet the banks have been about dividends and capital returns. there is plenty of excess capital. regulators have been quite tightlipped saying we want you to err on the side of caution just in case. the other picture's revenue is quite strong. the reset rate cuts this time last year hit everybody. we are still going through that year on year pain. the outlook is improved, but we are going to be focusing very much on talking up capital returns. buybacks are less attractive than they were. the sector is healthy and we are expecting further upgrades but it is now about cost and revenue.
we are kind of fully aware cost of risk estimates will fall next quarter.annmarie: along with thg banks, it has been a busy week for european earnings overall. oil majors like total and consumer companies like unilever . let's bring in dani burger. i caught up with alan job yesterday of unilever. companies are continuously delivering beats. is that playing out in the data? >> it certainly is. you are not just seeing things. a majority of companies so far in europe are beating estimates. it is near a record amount we are seeing companies beat so far. the statistics here, companies on average have reported earnings that are 40% higher than expected.
the weird thing here is the average price move when a company reports is just 0.3%. the stoxx 600 is flat this week. what is going on us about expectations. analyst upgrades heading into this season was at a record high. even if they do beat, they beat what investors are expecting. annmarie: thanks for joining us dani burger. next, what you need to know as you head into the weekend. ♪
those remarks was quite calm and collected, but it was anything but that one president joe biden enter the overall -- the oval office. covid-19 cases coming up fresh highs, millions out of work, calls for racial justice, and the ongoing climate crisis. americans reeling from the deadly january 6 attack on the capital and a presidency conducted largely by tweet. donald trump's white house was chaotic. the tone of the biden presidency has shifted washington. in his first 100 days he has surpassed the goals he set for covid vaccinations, seen the passing of a pandemic relief bill to confront the pandemic -induced economic downturn. >> it is going to make a difference in concrete ways. >> he also confronted world leaders to confront the climate crisis. the president faces a human rights challenge on the southern border. new variants are feeling the
pandemic. and there are signs that u.s. is running out of people who want to vaccine. his proposal to almost double the capital gains tax rate for wealthy people is bettering markets. >> you go up to 40% capital gains tax, that is a huge headwind for the stock market. >> the american jobs plan is by no means certain to pass and the next bill on the horizon, the american families plan, looks like a long shot. but of course that is what politics is all about. now is the biden administration moves forward, it will be marked not by the first 100 days, but the years to come. >> those who have ideas that are different they think are better, i welcome those ideas, but the rest of the world is not waiting for us. from my perspective, doing
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