# Daybreak Weekend: US Jobs, European Earnings, Vietnam Eco

An episode of [Bloomberg Daybreak: Asia Edition](https://invisiblenetwork.ai/podcast/1663863437), 31 Jul 2026, 37 min.

Audio: https://podtrac.com/pts/redirect.mp3/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/d15648c4-cee0-4e99-a5ca-af80014d921d/7a069299-6677-44c0-98a7-b498012218b1/audio.mp3?utm_source=Podcast&in_playlist=27143354-63aa-4ac5-965d-af80014dc0d3

Bloomberg Daybreak Weekend with Host Nathan Hager take a look at some of the stories we'll be tracking in the coming week. • In the US – a look ahead to the July jobs report in the U.S with a focus on 3 stocks for the week ahead. • In the UK – a look ahead to some of the most consequential earnings releases of the year in Europe. • In Asia – a look ahead to key economic data for Vietnam in the week ahead, including numbers on consumer prices and trade. See omnystudio.com/listener for privacy information.

## Transcript

[0:00] Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
[0:10] Speaker 2: This is Bloomberg Daybreak Weekend, our global look at the
[0:13] Speaker 2: top stories in the coming week from our Daybreak anchors
[0:16] Speaker 2: all around the world. Straight Ahead on the program, we
[0:18] Speaker 2: look ahead to the July jobs report in the US
[0:21] Speaker 2: and what it may mean for fit policy moving forward.
[0:24] Speaker 2: I'm Nathan Hager in New York.
[0:25] Speaker 3: I'm Klin Hepgre in London. Where we're looking at you.
[0:27] Speaker 3: It was most important corporate bannings.
[0:30] Speaker 4: I'm Doug Prisner, looking ahead to the latest readings on
[0:32] Speaker 4: Vietnam's economy, including inflation and trade.
[0:38] Speaker 1: That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg
[0:42] Speaker 1: eleven three YEO New York, Bloomberg ninety nine to one, Washington, DC,
[0:46] Speaker 1: Bloomberg ninety two nine Boston, DAB Digital Radio, London, Syrias
[0:51] Speaker 1: XM one twenty one, and around the world on Bloomberg Radio,
[0:55] Speaker 1: dot Com and the Bloomberg Business App.
[1:02] Speaker 5: Good day to you. I'm Nathan Hager.
[1:04] Speaker 2: We begin today's program with the July jobs report in
[1:08] Speaker 2: the US. Non farm payrolls come out this Friday at
[1:11] Speaker 2: eight thirty am. Wall Street Time For more on the
[1:14] Speaker 2: data than how they may affect Fed policy. We're joined
[1:16] Speaker 2: by Stuart paul Us, economist with Bloomberg Economics. Great to
[1:20] Speaker 2: have you with us on the program.
[1:21] Speaker 5: Stuart.
[1:22] Speaker 2: Of course, the Fed says it's still focused on inflation.
[1:26] Speaker 2: So how much of a difference could jobs make when
[1:29] Speaker 2: it comes to the policy outleg.
[1:31] Speaker 6: You know, it's actually pretty interesting. The Fed has been
[1:34] Speaker 6: laser focused on inflation, and that's been the case while
[1:38] Speaker 6: inflation has been well above the two percent target, so
[1:41] Speaker 6: it's now for several years. But each summer we've been
[1:44] Speaker 6: surprised with a series of week jobs reports that actually
[1:48] Speaker 6: ended up leading to a series of rate cuts. And
[1:52] Speaker 6: so while the consensus right now is expecting about eighty
[1:55] Speaker 6: twoe hundred thousand jobs added in the July jobs report,
[1:57] Speaker 6: we're actually a little bit more pessimistic for a host
[1:59] Speaker 6: of reasons that we can get into. And given the
[2:02] Speaker 6: fact that the Fed has been surprised by summer softening
[2:05] Speaker 6: in the labor market and it has made them reconsider
[2:08] Speaker 6: their policy stance. I don't think that they're going to
[2:11] Speaker 6: completely ignore the labor market. I do think that inflation
[2:14] Speaker 6: is still number one, But the Fed has its dual
[2:17] Speaker 6: mandate and labor still matters.
[2:18] Speaker 2: All right, Well, let's get into some of those reasons
[2:21] Speaker 2: why you are feeling more pessimistic. What are you seeing
[2:23] Speaker 2: in the labor market right now?
[2:25] Speaker 6: When we look at high frequency data, which admittedly has
[2:28] Speaker 6: been pretty noisy in the last couple months, we only
[2:31] Speaker 6: get to about fifty thousand jobs added, so we're running
[2:34] Speaker 6: almost nearly half the pace that the consensus is expecting.
[2:39] Speaker 6: And beyond that, we think that World Cup hiring pulled
[2:44] Speaker 6: forward labor demand earlier into the spring, sending the stage
[2:48] Speaker 6: for a July slowdown as the World Cup started to
[2:51] Speaker 6: wind down. Beyond that, again, is this problem of residual
[2:55] Speaker 6: seasonality in the data. Just it seems to be the
[2:58] Speaker 6: case that the Bureau of Labor Statistic has really struggled
[3:01] Speaker 6: with accounting for seasonality in hiring. For examples, for example,
[3:05] Speaker 6: teachers get effectively laid off during the summer and then
[3:08] Speaker 6: rehired in the fall. Accounting for that is a really
[3:12] Speaker 6: important part of the task here, and if the seasonal
[3:14] Speaker 6: adjustment process is imperfect, you end up seeing an uptick
[3:18] Speaker 6: in the unemployment rate a parent softening in the labor market,
[3:22] Speaker 6: and it's the sort of thing that we want to
[3:24] Speaker 6: be on guard for as we enter the summer and
[3:27] Speaker 6: as we start seeing again this July labor market, and
[3:32] Speaker 6: particularly the potential for softening that could catch folks off guard.
[3:35] Speaker 7: Well.
[3:35] Speaker 2: To the point about the pull forward potentially of seasonality.
[3:40] Speaker 2: We've been talking for so long about this low, higher,
[3:43] Speaker 2: low fire environment, I think we can say that we're
[3:46] Speaker 2: seeing that show up in some of the high frequency
[3:48] Speaker 2: data as well. What's been keeping this labor market at
[3:53] Speaker 2: this kind of low beyond just some of those factors
[3:56] Speaker 2: that you talked about.
[3:57] Speaker 6: I think there are a couple factors. The first, and
[3:59] Speaker 6: I think the most important, is a skill mismatch. We
[4:03] Speaker 6: have just a dearth of qualified healthcare workers, for example,
[4:09] Speaker 6: So once you can get a nurse on your payrolls,
[4:12] Speaker 6: you just keep them on your payrolls as long as
[4:14] Speaker 6: you can. We do see selective firing in certain industries
[4:20] Speaker 6: like information, where there had been an abundance of hiring,
[4:23] Speaker 6: particularly after the pandemic, and so there's just a reconsideration
[4:27] Speaker 6: of what specific skills firms need. But when they find
[4:31] Speaker 6: someone with those specific skills, they're really keeping them on
[4:35] Speaker 6: the payrolls. It's really that low fire element that you're
[4:38] Speaker 6: talking about. The Other factor though, is a reconsideration of
[4:42] Speaker 6: just how much labor any given firm needs as AI
[4:46] Speaker 6: gets implemented throughout the labor market throughout the economy as
[4:51] Speaker 6: a whole. So you have these different structural factors in
[4:54] Speaker 6: play again, that skill mismatch and the implementation of AI,
[4:59] Speaker 6: which is contributing to both that low fire and low
[5:02] Speaker 6: higher dynamic.
[5:03] Speaker 2: Now, we did see the market reaction after the Federal
[5:07] Speaker 2: Reserve this past week decided to keep interest rates on hold. Again,
[5:11] Speaker 2: if we do continue to see movement in the treasury
[5:16] Speaker 2: market yields to the upside, does that have an impact
[5:19] Speaker 2: on the labor market on a longer term basis?
[5:22] Speaker 6: On a longer term basis, certainly, I think that it
[5:25] Speaker 6: will have more of an effect on the Fed's decision
[5:27] Speaker 6: making process. In the near term. I think that we
[5:30] Speaker 6: heard from Chairman Warsh that he is taking a very
[5:33] Speaker 6: serious signal from the bond market right now, and when
[5:37] Speaker 6: hikes start to get priced in, I think that he's
[5:40] Speaker 6: going to effectively follow the bond market. The policy path
[5:44] Speaker 6: is going to follow the interest rate path that's being
[5:46] Speaker 6: set in markets right now. When it comes to the
[5:49] Speaker 6: labor market over the long term, and the sensitivity of
[5:52] Speaker 6: the labor market to firm's expansion and hiring plans. What's
[5:56] Speaker 6: a little bit peculiar right now is that it seems
[5:58] Speaker 6: like a lot of AI and VAS is rather interest
[6:01] Speaker 6: rate insensitive. But that same AI investment in capex, that
[6:06] Speaker 6: same set of expansion plans are also not going to
[6:11] Speaker 6: be as big of a driver of labor as say,
[6:15] Speaker 6: manufacturing expansion plans were in the fifties sixty seventies. So
[6:20] Speaker 6: the sensitivity of the labor market to interest rate policy
[6:23] Speaker 6: and firms expansion plans is a little bit loosened right now.
[6:27] Speaker 2: Appreciate this, Stewart lots to think about as we get
[6:29] Speaker 2: set for that non farm payrolls report for the month
[6:31] Speaker 2: of July. Again do out this Friday, eight thirty am
[6:34] Speaker 2: Wall Street Time our thanks to Stuart paul Us, economist
[6:38] Speaker 2: at Bloomberg Economics. Let's take a look now at some
[6:40] Speaker 2: stocks making news in the week ahead. I'm Nathan Hager,
[6:43] Speaker 2: joined by Bloomberg Markets Live Managing editor Christine Aquino, getting
[6:47] Speaker 2: us ready for a really busy Tuesday when it comes
[6:51] Speaker 2: to earnings.
[6:51] Speaker 8: Christine, absolutely so.
[6:53] Speaker 9: We're going to start off at least this conversation with
[6:56] Speaker 9: McDonald's it seems like despite the less it's been okay
[7:02] Speaker 9: for fast food, has it or am I wrong?
[7:04] Speaker 5: Well, I mean.
[7:05] Speaker 10: It depends on what you're looking at. Because we do
[7:07] Speaker 10: have data on the Bloomberg terminal just tracking consumer transactions
[7:11] Speaker 10: and foot traffic, and that did show a bit of
[7:14] Speaker 10: a pullback from consumers for a lot of these fast
[7:17] Speaker 10: food restaurants, including McDonald's, And in fact, that data was
[7:20] Speaker 10: showing that McDonald saw the first signs of a consumer
[7:24] Speaker 10: pullback during the peak of the cyclospora outbreak and when
[7:29] Speaker 10: the customers were really you know, the awareness and the
[7:33] Speaker 10: fear over that outbreak.
[7:35] Speaker 8: Was at its peak.
[7:36] Speaker 10: But the good news is that McDonald's is also the
[7:39] Speaker 10: first of the fast food restaurants to start showing tentative
[7:43] Speaker 10: signs of stabilization. So that's definitely going to be a
[7:46] Speaker 10: focal point in the earnings. I think whether that's something
[7:49] Speaker 10: that would hurt maybe not as soon as this quarter,
[7:53] Speaker 10: which is going to be the second quarter earnings that
[7:55] Speaker 10: they're going to be reporting, but perhaps something that gives
[7:58] Speaker 10: them a little bit of a negative out look heading
[8:00] Speaker 10: into the next Quarterback.
[8:02] Speaker 2: Well to that point to an extent, I mean, even
[8:05] Speaker 2: before this reporting, I think the CEO of McDonald's had
[8:08] Speaker 2: said they were expecting meaningful deceleration in the quarter that's
[8:12] Speaker 2: about to be reported.
[8:14] Speaker 5: Where does that leave the bar.
[8:15] Speaker 2: For McDonald's when it comes to maybe showing some outperformance.
[8:18] Speaker 10: Yeah, I mean it certainly helps that perhaps that lowered
[8:21] Speaker 10: expectations heading into the earning season. But yeah, I think
[8:25] Speaker 10: we're going to hear a lot about the challenges that
[8:28] Speaker 10: the US consumer and consumers in general are facing at
[8:32] Speaker 10: the moment. I mean, don't forget that they are still
[8:34] Speaker 10: grappling with higher prices when it comes to goods and
[8:38] Speaker 10: services as a result of the oil price bikes that
[8:41] Speaker 10: we saw in first half of this year, and that
[8:44] Speaker 10: hasn't necessarily gone away. It's receded a little bit, but
[8:48] Speaker 10: definitely by no means disappearing from the radar, and so
[8:52] Speaker 10: something that really has affected just overall the appetite for
[8:55] Speaker 10: spending among consumers and something that is very clearly for
[9:00] Speaker 10: sitting in discretionary spanning, which you know, demand for McDonald's
[9:04] Speaker 10: is one of them.
[9:04] Speaker 2: And not to be outdone, we're going to hear as
[9:07] Speaker 2: well from Caterpillar. Totally different category, but maybe a similar
[9:11] Speaker 2: issue when it comes to the overhang from what's happening
[9:14] Speaker 2: in the Middle East.
[9:15] Speaker 5: Potentially, Yeah, potentially, Nathan.
[9:17] Speaker 10: I mean, it's certainly something that they're grappling with as
[9:19] Speaker 10: a company, would be higher costs for materials, building construction,
[9:24] Speaker 10: things like that. Right, very big space for Caterpillar. But actually,
[9:27] Speaker 10: very interestingly, one thing that investors are probably putting more
[9:31] Speaker 10: focus on is their role in the AI driven demand,
[9:35] Speaker 10: particularly the data center build out, because we did recently
[9:39] Speaker 10: see the Caterpillar shares seeing the worst performance on a
[9:43] Speaker 10: day to day basis since April twenty twenty five, and
[9:46] Speaker 10: that's because you know, there was a little bit of
[9:48] Speaker 10: a pullback in the AI sector when it comes to
[9:52] Speaker 10: chip makers, but just generally anxiety over demand for data
[9:56] Speaker 10: center how sustainable that is. And also we got a
[10:00] Speaker 10: downgrade from Baird for Caterpillar stock. They cut their rating
[10:04] Speaker 10: on a stock to neutral from outperform, and a prior
[10:07] Speaker 10: starter was also lowered by twenty five percent. And analysts
[10:10] Speaker 10: we're citing specifically the state of data centers and how
[10:13] Speaker 10: that's starting to see some regulatory pushback and so if
[10:16] Speaker 10: we do see more and more local governments kind of
[10:19] Speaker 10: pushing back against the expansion of data centers. That's something
[10:21] Speaker 10: that will hurt Caterpillars order.
[10:24] Speaker 2: Yeah, obviously there's a lot of attention there on Caterpillars
[10:27] Speaker 2: role in the AI data center build up. But I mean,
[10:29] Speaker 2: I think about when it comes to Caterpillar, you know,
[10:32] Speaker 2: the farm equipment, the construction equipment for houses, are those
[10:36] Speaker 2: aspects of the business something that could potentially outweigh any
[10:40] Speaker 2: of the downgrades that you mentioned from Baird.
[10:42] Speaker 10: I look, I think that's something that could help offset
[10:46] Speaker 10: if we do see some surprises on that front. But
[10:50] Speaker 10: you know, more and more, a lot of companies, including Caterpillar,
[10:53] Speaker 10: have really kind of leaned into this AI driven demand
[10:58] Speaker 10: and all aspects related to that, right, And so it
[11:01] Speaker 10: seems these days for any companies reporting that are in
[11:04] Speaker 10: any way related or connected to that story, if there's
[11:08] Speaker 10: any kind of hint of negativity on that front, that
[11:12] Speaker 10: tends to outweigh any positive sentiment that comes from other
[11:16] Speaker 10: aspects of the earnings. And one thing to do look
[11:19] Speaker 10: out for is probably its power and Energy unit that
[11:22] Speaker 10: is still expected to post twenty three percent organic sales growth,
[11:26] Speaker 10: and that's something that could be a silver lining if
[11:29] Speaker 10: we do get a little bit more of a subdued
[11:31] Speaker 10: outlook when it comes to data center related demand.
[11:33] Speaker 2: Well, another one of those companies that I think you
[11:35] Speaker 2: could say is really directly related to the AI trade
[11:38] Speaker 2: is also reporting on Tuesday. What are we expecting from
[11:42] Speaker 2: advanced micro devices?
[11:43] Speaker 5: The chip maker? That's right maker.
[11:46] Speaker 10: I mean, yeah, that is very much front and center
[11:48] Speaker 10: when it comes to the AI trade narrative here. Look,
[11:52] Speaker 10: I think the expectation is still very much for a
[11:54] Speaker 10: solid parter. There's been robust demand for its server CPUs
[11:59] Speaker 10: and that give the company a lot of pricing power
[12:02] Speaker 10: really because we have seen prices for related equipment in
[12:06] Speaker 10: that space a ramping higher just because there's so much
[12:09] Speaker 10: demand in the space, and so you know, is that
[12:11] Speaker 10: going to be sustainable? That something that investors are going
[12:14] Speaker 10: to be looking forward to. We did also see a
[12:17] Speaker 10: md unveil new products, right They have a new generation
[12:20] Speaker 10: of microprocessors, a new server rack, and so that's something
[12:24] Speaker 10: that investors will be watching for. They're going to one
[12:26] Speaker 10: see some evidence that the company is going to be
[12:30] Speaker 10: on track for a successful ramp up in the second
[12:32] Speaker 10: half of the year.
[12:33] Speaker 2: Such a busy Tuesday coming up.
[12:36] Speaker 5: Thank you for this, Christine.
[12:37] Speaker 2: That's Bloomberg Markets Lives Managing editor Christine the Quina, and
[12:41] Speaker 2: coming up on Bloomberg Daybreak weekend, we look ahead to
[12:44] Speaker 2: some of the most consequential earnings releases of the.
[12:46] Speaker 5: Year in Europe. On Nathan Hager and this is Bloomberg.
[13:01] Speaker 2: This is Bloomberg day Break weekend, our global look ahead
[13:03] Speaker 2: at the top stories for investors in the coming week.
[13:05] Speaker 2: I'm Nathan Hager in New York. Later in the program
[13:08] Speaker 2: we'll look ahead to some key economic data in Vietnam.
[13:11] Speaker 2: But first, in the coming days, we hear from some
[13:13] Speaker 2: of the world's biggest companies as earning season continues. But
[13:17] Speaker 2: how have European firms adapted to an uncertain market context?
[13:21] Speaker 2: For more, let's go to London and bring in Bloomberg
[13:23] Speaker 2: Daybreak europe anker Caroline Hepger Nathan.
[13:26] Speaker 3: Investors are finding out whether second quarter earnings can live
[13:29] Speaker 3: up to their sky high expectations European companies who are
[13:33] Speaker 3: expected to deliver robust earnings growth not just for this
[13:36] Speaker 3: quarter but for twenty twenty six overall, and yet Europe
[13:40] Speaker 3: faces high energy costs, sticky inflation, the possibility of one
[13:44] Speaker 3: or maybe even two rate hikes from the ECB by
[13:48] Speaker 3: the end of the year, with European stocks also remaining
[13:51] Speaker 3: near all time record highs, one that was set only
[13:55] Speaker 3: on the sixth of July at six hundred and fifty
[13:57] Speaker 3: four points. The setup leaves little room for error, and
[14:02] Speaker 3: after months of conflict in the Middle East, companies have
[14:04] Speaker 3: had to contend with a very complicated back job.
[14:08] Speaker 8: Natalie A.
[14:08] Speaker 3: Lippikina, who is head of EMEA Equity Strategy JP Morgan
[14:13] Speaker 3: Private Bank, says that investors will be looking out for
[14:16] Speaker 3: signs of those effects.
[14:19] Speaker 7: This is something the market is definitely watching. I think
[14:22] Speaker 7: the reason why we didn't have such a strong negative
[14:25] Speaker 7: market reaction so far is because the market probably thinks
[14:28] Speaker 7: that oil prices will ultimately come down because we saw
[14:31] Speaker 7: this already earlier this year. And second one, if you
[14:33] Speaker 7: look into the latest inflation prints, they were actually okay
[14:36] Speaker 7: so far, so clearly something that the market is watching.
[14:39] Speaker 7: I think it will be important to see if, for example,
[14:42] Speaker 7: oil breaks through one hundred and ten hundred and twenty.
[14:45] Speaker 7: If that happens, yes, then the market will react because
[14:47] Speaker 7: that will impact potentially the margin, especially for European companies
[14:51] Speaker 7: because they are just more cyclical and exposed to oil prices.
[14:54] Speaker 3: But we don't think that we're there yet, so the
[14:57] Speaker 3: concerns around energy prices in U. That was Natalie Lepekina
[15:01] Speaker 3: from JP Morgan speaking to Bloomberg Radio. Gentlemen. Now for
[15:05] Speaker 3: more as Bloomberg senior strashus for Equity Market, it's Michael
[15:08] Speaker 3: Masika and our Markets Today editor Sam Onsted. Welcome to
[15:12] Speaker 3: both of you. It's been a very busy time in
[15:15] Speaker 3: the last few days, and it will continue that way,
[15:18] Speaker 3: won't it. Michael, we're underway with the earnings season in Europe.
[15:22] Speaker 3: How have investors reacted to European earnings so far?
[15:27] Speaker 11: So it's a it's a very stronger earning season and
[15:31] Speaker 11: the reaction has been I would say positive for the
[15:35] Speaker 11: overall market. It's you know, European stocks have been holding
[15:39] Speaker 11: up pretty well despite the recognition of like tensions in
[15:44] Speaker 11: the in the Middle East, despite bond yields going up,
[15:49] Speaker 11: so overall there was this support from earnings. Because the
[15:52] Speaker 11: earning season is really strong in terms of reaction to stocks,
[15:56] Speaker 11: we've seen that beats were kind of expected, so the
[16:01] Speaker 11: reactions is relatively not muted, but like not very strong.
[16:07] Speaker 11: When missus have been penalized a lot harder.
[16:12] Speaker 3: Yeah, more heavily in Lasia. So then one of the
[16:14] Speaker 3: big names to watch out for in the coming days.
[16:16] Speaker 11: And why so the season is well engaged, I would say,
[16:22] Speaker 11: so we had quite a lot of earnings.
[16:26] Speaker 8: There's still some very important one next week. I think.
[16:29] Speaker 11: For example, in the defense sector you have Ryan Mettal
[16:31] Speaker 11: and Rank, which are very important for this sector and
[16:35] Speaker 11: also for Defferense stocks having done very well lately, so
[16:40] Speaker 11: that would be something to watch. Cemens Cemen's Energy very
[16:44] Speaker 11: very big on everything that's powering the AI data center
[16:49] Speaker 11: in Europe, so those were big winners. From AI banks
[16:55] Speaker 11: as well, especially the ones involved in MNA. We have
[16:57] Speaker 11: quite a few of those like bpm BNP Yes Comments Bank,
[17:01] Speaker 11: so that's moatful. And in the semiconductor space we have
[17:07] Speaker 11: Infinion big one as well, and finally a defensive stock
[17:12] Speaker 11: which haven't done well at all because everyone's been piling
[17:14] Speaker 11: up on sickly calls lately.
[17:17] Speaker 8: We have novel nor disc Bayer.
[17:19] Speaker 11: In the farmer and Heineken India Gio in staples, so
[17:23] Speaker 11: all those are to be watched closely.
[17:25] Speaker 3: Okay, interesting, Sam, what are the most important FOOTSYA releases
[17:29] Speaker 3: in the next few days?
[17:31] Speaker 12: Well, I think, as Michael was saying, we're quite deep
[17:33] Speaker 12: into the earning season now, so a lot of these
[17:36] Speaker 12: companies now are coming up not just against their own expectations,
[17:39] Speaker 12: but the expectations have been moved around by by their
[17:42] Speaker 12: peers reporting. So BP is coming next week, you would
[17:45] Speaker 12: expect to see broadly the same kind of thing you
[17:47] Speaker 12: saw with Shell. You know, higher all prices, better of
[17:49] Speaker 12: finding margins. Whether BP does a buyback probably a lot
[17:53] Speaker 12: less likely than than for Shell, but that will be
[17:55] Speaker 12: watched very closely.
[17:57] Speaker 7: You know.
[17:57] Speaker 12: For the UK itself, Next is coming out next week,
[18:01] Speaker 12: often kind of held up as a bell weather for
[18:03] Speaker 12: the UK high street, although I think that's probably diminished
[18:06] Speaker 12: a little bit over the years, just because they very
[18:08] Speaker 12: continually use quite conservative guidance and then beat it almost
[18:11] Speaker 12: every time. So it's quite hard to kind of take
[18:13] Speaker 12: that and extrapolate it out to other high street names.
[18:16] Speaker 12: I'd keep an eye as well. They're on home builders.
[18:19] Speaker 12: We're going to get Persimmon next week, just coming after
[18:22] Speaker 12: the Bank of England meeting over the course of the
[18:24] Speaker 12: past week, and then Diagio I would keep an eye
[18:27] Speaker 12: on as well. You know, we've already had a couple
[18:28] Speaker 12: of drinks companies coming out and the reaction to a
[18:32] Speaker 12: lot of the consumers talks has been a little bit mixed.
[18:34] Speaker 12: So it be interesting to see how they do.
[18:36] Speaker 3: In terms of the major names that we've already heard from.
[18:40] Speaker 3: What do you take away from that when it comes
[18:42] Speaker 3: to the foot Sea.
[18:43] Speaker 12: Well, as Michael was again saying that, so a lot
[18:45] Speaker 12: of the pattern on the foot Sea has been very
[18:48] Speaker 12: similar to the rest of Europe, where companies that are
[18:51] Speaker 12: beating expectations for the most part are getting a fairly
[18:53] Speaker 12: muted response because it's kind of expected. So if you
[18:56] Speaker 12: look at Rolls Royce for example, they upgrade their guide
[19:00] Speaker 12: again because effectively every bit of Rolls Royce is just
[19:03] Speaker 12: experienced of fantastic trends at the moment. You know, the
[19:06] Speaker 12: airlight the aerospace industry is doing well for them, They're
[19:08] Speaker 12: getting defense orders in, they're getting data center orders in,
[19:11] Speaker 12: but their shares you know, only rows sort of two
[19:13] Speaker 12: or three percent. You know, you didn't get that kind
[19:15] Speaker 12: of reaction that you would maybe expect. However, way, you
[19:18] Speaker 12: are seeing a few surprises, particularly on the upside. The
[19:21] Speaker 12: one that surprised me the most this week was Unilever.
[19:24] Speaker 12: You know, they are you know, they're coming into it with,
[19:27] Speaker 12: you know, relatively lower expectations, thanks mostly to Nesle having
[19:30] Speaker 12: taken a bit of a hit the previous week. But
[19:32] Speaker 12: they blew past those expectations quite easily, and a lot
[19:36] Speaker 12: of the companies making these branded products are actually doing
[19:39] Speaker 12: relatively well, which for consumer demand is not a bad sign,
[19:43] Speaker 12: and their shares got a really big bounce. So I
[19:45] Speaker 12: think it is a very similar pattern. You know, anything
[19:48] Speaker 12: any kind of areas of weakness. You take Barkleays for example,
[19:51] Speaker 12: their results are actually generally pretty good, but there are
[19:54] Speaker 12: a couple of areas that weren't quite as good as expected,
[19:56] Speaker 12: and their shares got punished for it.
[19:58] Speaker 3: Michael, we see so much interest in terms of the
[20:02] Speaker 3: kapex spending, in terms of the AI and data center
[20:06] Speaker 3: build out, and one massive question is about whether Europe
[20:09] Speaker 3: can keep up. What do you think we've learned from
[20:11] Speaker 3: this earning season about that.
[20:14] Speaker 11: So Europe doesn't have a lot of tech stock. We
[20:18] Speaker 11: have a few, they're small, nothing compares with the with
[20:22] Speaker 11: the US. But Europe has a lot of adopters and
[20:27] Speaker 11: they have a lot of enablers as well. Abb for example,
[20:31] Speaker 11: in Switzerland, Schneider in France, a Prismonian in Italy. Those companies,
[20:37] Speaker 11: they are part of the AI ecosystem because they help
[20:40] Speaker 11: building data centers powering it and they are actually very important.
[20:46] Speaker 11: They have a know how which is almost unique. Prisonian
[20:50] Speaker 11: has a lot of contracts in the US, Schneider as well,
[20:52] Speaker 11: ABB as well, So it's the benefiting from this. So
[20:57] Speaker 11: we have a whole ecosystem of companies in Europe that
[21:01] Speaker 11: are really benefiting from the hyper scaler. Spending kept expending
[21:06] Speaker 11: and we've seen into the earnings and those stocks. They
[21:11] Speaker 11: haven't done well in the past few days because there
[21:12] Speaker 11: was a lot of unwind in the AI trade. But
[21:16] Speaker 11: we're seeing a rebound today and that's also typical because
[21:20] Speaker 11: of results.
[21:21] Speaker 8: Our bridgers are coming in and guidance is coming in
[21:23] Speaker 8: and it's very positive.
[21:25] Speaker 3: In terms of the expectations for European companies though, I mean,
[21:29] Speaker 3: we are expecting to see very strong profit growth this year.
[21:33] Speaker 3: How can companies deliver for the year overall as we
[21:36] Speaker 3: think about the second half of this year and what
[21:39] Speaker 3: we take from this earning season for that year overall.
[21:43] Speaker 8: So expectations are high and they're getting higher and higher.
[21:48] Speaker 8: On the second quarter.
[21:50] Speaker 11: We have like eleven and a half percent expected earnings
[21:52] Speaker 11: growth year and year, and this number is going to
[21:56] Speaker 11: keep growing over the next two quarters. And I think
[21:59] Speaker 11: the last quarter of the year there's like nearly thirty
[22:02] Speaker 11: percent year on your growth that is expected from europarent stocks.
[22:06] Speaker 11: So there's a few things here. First, Typically, expectations are
[22:11] Speaker 11: meant to come down before the season. It wasn't the
[22:13] Speaker 11: case this season because I think analysts were too pessimistic
[22:16] Speaker 11: because of the war and they had downgraded way too much,
[22:20] Speaker 11: way too quickly. And that has changed. So that's why
[22:22] Speaker 11: they keep upgrading earnings now. And we see it with
[22:26] Speaker 11: this earning season. Companies are beating estimates. There's it's a
[22:30] Speaker 11: broad beat.
[22:32] Speaker 8: The yearning growth is coming in like more than.
[22:34] Speaker 11: Twelve percent twelve six percent at the moment, so higher
[22:38] Speaker 11: than expectations.
[22:39] Speaker 8: Bits are coming in.
[22:40] Speaker 11: There's a lot of sectors that are surprising positively, like
[22:44] Speaker 11: some were saying, we're talking about Unilevers. You look at Staples,
[22:49] Speaker 11: Consumer Staples, they were expecting to have negative EPs growth
[22:52] Speaker 11: this quarter. They're coming in with a positive one. So
[22:56] Speaker 11: and there's a lot of good surprises like that. So
[23:00] Speaker 11: there's there's some optimism building. You have some stimulus coming
[23:04] Speaker 11: in from Germany that is really kicking in. Now you
[23:08] Speaker 11: have inflation that is lower, even if you know there's
[23:12] Speaker 11: a certainty because of the war and you're on. But
[23:14] Speaker 11: like generally, earning growth is also a reflection of the
[23:21] Speaker 11: GDP growth that we're going to have in Europe over
[23:24] Speaker 11: the next year or so. So even if it's slow
[23:26] Speaker 11: single digits.
[23:27] Speaker 8: That's enough to power earnings growth.
[23:30] Speaker 3: All right, Thank you so much for both of you
[23:32] Speaker 3: for thinking about this earning season. What is still to
[23:35] Speaker 3: come in the days ahead. My thanks to Michael Masika,
[23:38] Speaker 3: who is Bloomberg's senior strategist for Acting Markets and Tour Markets.
[23:42] Speaker 3: Today editor sam on step thank you both. I'm Caline
[23:45] Speaker 3: Hebkeer here in London. You can catch us every weekday
[23:47] Speaker 3: morning for Bloomberg Daybreak. You are beginning at six am
[23:50] Speaker 3: in London. That's one am on Wall Street.
[23:52] Speaker 2: Nathan, thanks Caroline, and coming up on Bloomberg Daybreak weekend,
[23:56] Speaker 2: we look ahead to inflation and trade data in Vietnam.
[24:00] Speaker 2: I'm Nathan Hager, and this is Bloomberg. This is Bloomberg
[24:14] Speaker 2: day Break Weekend, our global look ahead of the top
[24:16] Speaker 2: stories for investors in the coming week.
[24:18] Speaker 5: I'm Nathan Hagar in New York. This week we get key.
[24:21] Speaker 2: Economic data in Vietnam, including numbers on consumer prices and trade.
[24:26] Speaker 2: For more, let's get to Bloomberg's Doug Prisner, host of
[24:28] Speaker 2: the Daybreak Asia podcast.
[24:30] Speaker 4: Thanks Nathan. Overall economic activity in Vietnam has been very impressive.
[24:36] Speaker 4: In the first half of the year, GDP grew at
[24:38] Speaker 4: an annual rate of eight point one eight percent. Now,
[24:42] Speaker 4: with that growth, economist at the Asian Development Bank are saying,
[24:45] Speaker 4: inflationary pressures warrant close monitoring. For a closer look at
[24:50] Speaker 4: what's happening on the ground in Vietnam, I'm joined by
[24:52] Speaker 4: Bloomberg's Francesca Stevens. Francesc is our Vietnam bureau chief, and
[24:57] Speaker 4: she joins from Hanoi. Thank you for being here. Can
[25:00] Speaker 4: we start with the inflation story CPI and the core rate.
[25:04] Speaker 4: We're both above four percent in the first half of
[25:06] Speaker 4: the year, and we know for any central banker the
[25:09] Speaker 4: challenge is always balancing growth and inflation, right.
[25:13] Speaker 13: Yeah, that's so. As you say, the economy here is
[25:16] Speaker 13: ticking along, although the double digit growth target does still
[25:20] Speaker 13: seem quite ambitious for us this year. But with that
[25:24] Speaker 13: push for growth that's also putting pressure on prices. As
[25:28] Speaker 13: you mentioned, officially, inflation is close to the government's comfort
[25:33] Speaker 13: zone but still manageable. So the government target is around
[25:36] Speaker 13: four point five percent this year, and in June east
[25:40] Speaker 13: to just slightly higher than that four point sixty nine percent.
[25:45] Speaker 13: It had been higher in May, so we're watching out
[25:49] Speaker 13: very closely to see what that number comes in on
[25:52] Speaker 13: Monday when the data for July is released. But unofficially
[25:56] Speaker 13: you will hear a different story. One friend was telling
[25:59] Speaker 13: me how a year or two ago he would expect
[26:02] Speaker 13: to pay around ten thousand dong for a bar and
[26:05] Speaker 13: me the Vietnamese famous sandwich that's around thirty eight cents,
[26:12] Speaker 13: but now it costs more than twice that, and yet
[26:14] Speaker 13: his income remains the same. So that's one example of
[26:20] Speaker 13: how those prices are unofficially rising. Fuel is still a
[26:25] Speaker 13: little higher than it was before the Iran war, although
[26:28] Speaker 13: again that's come down from the peak reached during the crisis.
[26:32] Speaker 13: The Central Bank has said inflation control will remain a
[26:37] Speaker 13: priority even as it supports the double digit growth target,
[26:42] Speaker 13: so we'll be watching closely to see how much pressure
[26:47] Speaker 13: that number puts puts on the Central Bank. What might
[26:52] Speaker 13: be more telling in the data on Monday is actually
[26:55] Speaker 13: the trade figures. So Vietnam has seen exports to the
[26:59] Speaker 13: US continue to surge this year, and that's becoming an
[27:03] Speaker 13: increasingly bigger issue as it exacerbates tensions with the US.
[27:09] Speaker 13: And another thing that we'll get as well on Monday
[27:12] Speaker 13: is the major commodities data.
[27:15] Speaker 4: I want to get to the commodities angle in a moment.
[27:17] Speaker 4: It's obviously a big part of the trade story, and
[27:20] Speaker 4: we know that Vietnam is very reliant on exports. A
[27:23] Speaker 4: moment ago, you mentioned the tensions with the US when
[27:26] Speaker 4: it comes to trade, and I know that intellectual property
[27:30] Speaker 4: has been a particularly sensitive issue where the US is concerned.
[27:34] Speaker 4: Talk to me about the steps being undertaken by the
[27:37] Speaker 4: Vietnamese government to address this.
[27:41] Speaker 13: Yeah, that's right. I mean the big pressure here at
[27:44] Speaker 13: the moment is the tariff environment and what the US
[27:49] Speaker 13: is going to do here, and Vietnam has been taking
[27:53] Speaker 13: a lot of steps to show that it's addressing US
[27:57] Speaker 13: concerns around trade practices. Vietn arm faces three US Section
[28:02] Speaker 13: three and one investigations at the moment and no trade
[28:06] Speaker 13: deal yet. So one of the big concerns is what
[28:11] Speaker 13: happens with the tariff outcomes from those three different investigations.
[28:17] Speaker 13: There's the forced labor which Vietnam has just received a
[28:20] Speaker 13: twelve point five percent tariff for. They're also facing alleged
[28:25] Speaker 13: manufacturing over capacity and intellectual property violations. We've been reporting
[28:31] Speaker 13: this week on the fact that US Customs officials have
[28:34] Speaker 13: been carrying out spot inspections on factories here across a
[28:39] Speaker 13: range of sectors. That's things like looking at their documents,
[28:43] Speaker 13: looking at the origin of raw materials, their production lines,
[28:47] Speaker 13: just to see how much is made in China versus
[28:50] Speaker 13: how much is made in Vietnam. We put that to
[28:54] Speaker 13: US Customs and Border Protection but didn't get a response back.
[28:57] Speaker 13: But the Vietnam side will say that they have been
[29:01] Speaker 13: cracking down on all of those things. We saw a
[29:06] Speaker 13: raide on a factory making fake, allegedly fake nikes last week.
[29:13] Speaker 13: We see them detaining officials in connection to probes related
[29:19] Speaker 13: to quality control on the export of goods. And we
[29:24] Speaker 13: see the shutting down of online IRC websites and really
[29:32] Speaker 13: going after other intellectual property offenders. So there is this
[29:40] Speaker 13: there is this huge pressure on Vietnam at the moment
[29:43] Speaker 13: to show that it is taking all of those things
[29:45] Speaker 13: seriously as it seeks to continue its talks with the
[29:50] Speaker 13: US on a trade deal.
[29:52] Speaker 4: So do you have a sense of how successful these
[29:55] Speaker 4: efforts have been in what the US may be feeling
[29:58] Speaker 4: in terms of the steps that officials in Vietnam have
[30:01] Speaker 4: taken to address these issues, and whether or not we're
[30:04] Speaker 4: moving any closer to a final trade deal.
[30:10] Speaker 13: So we've heard the we've heard the trade talks are
[30:14] Speaker 13: very tense and difficult, precisely because some of these issues
[30:19] Speaker 13: are so problematic for both sides, and particularly around the
[30:24] Speaker 13: alleged trendshipment issue. Vietnam is a it's in a really
[30:29] Speaker 13: tough position. It's manufacturing chains that so closely entwined in
[30:34] Speaker 13: what happens over the border in China. A lot of
[30:37] Speaker 13: companies moved operations over the border during the first Trump
[30:42] Speaker 13: trade war. And while it might have been true then
[30:44] Speaker 13: that things were largely being made in China and then
[30:47] Speaker 13: shipped through here, people that we speak to you, so
[30:50] Speaker 13: that's just not the case anymore. Why would you do
[30:52] Speaker 13: that when labor is cheaper here, energy is cheaper, and
[30:55] Speaker 13: the various machines and production components have already been brought
[30:59] Speaker 13: in to make it easier to produce goods here. Still,
[31:04] Speaker 13: if we heard from jameson Greer in the last few
[31:08] Speaker 13: weeks making more claims about the transhipment issue and goods
[31:17] Speaker 13: allegedly just having a made in Vietnam label slapped on them,
[31:22] Speaker 13: So it really does seem like that is one of
[31:24] Speaker 13: the key issues that they are struggling to make progress
[31:27] Speaker 13: on at the moment in those trade talks.
[31:29] Speaker 4: So now we can get to the commodities part of
[31:31] Speaker 4: the trade story. I'm thinking of agriculture in particular. Can
[31:35] Speaker 4: you drill down a bit into this area and describe
[31:38] Speaker 4: some of the challenges.
[31:39] Speaker 13: Yeah, I think that's going to be one of the
[31:42] Speaker 13: things that we watch very closely over the next few months.
[31:45] Speaker 13: Norma is a big exporter of coffee and rice. It's
[31:50] Speaker 13: the world's second largest producer of coffee after Brazil, and
[31:57] Speaker 13: we are expecting to see a severe El Nino hit
[32:01] Speaker 13: this year. We were down in the rice fields and
[32:05] Speaker 13: the Mekong Delta a few weeks ago talking to rice
[32:09] Speaker 13: farmers down there. Now they were already saying how tough
[32:12] Speaker 13: things have been because of higher fuel and fertilizer costs
[32:17] Speaker 13: because of the Iran war, and so the last thing
[32:21] Speaker 13: that they can handle at the moment is more bad
[32:25] Speaker 13: weather affecting their crop. Now, obviously, you know, we wait
[32:30] Speaker 13: to see exactly how bad the weather will be this year.
[32:34] Speaker 13: They have already had several months of drought in the
[32:37] Speaker 13: central region which has already devastated the rice crop there.
[32:41] Speaker 13: And what happens with the coffee and the rice markets
[32:45] Speaker 13: here really really does tend to move the markets. As
[32:48] Speaker 13: I said, especially with coffee. Vietnam. Not only is it
[32:51] Speaker 13: the world's second largest supplier of coffee, it's the world's
[32:55] Speaker 13: largest exporter of the robuster bean. So when we experience
[33:03] Speaker 13: weather issues with the crops here, you will start to
[33:07] Speaker 13: see a higher price trickle into the market.
[33:10] Speaker 4: Francesca will leave it there. Thanks for your insight on
[33:13] Speaker 4: Vietnam's economy. Francesca Stevens is Bloomberg's Vietnam bureau chief. We
[33:18] Speaker 4: moved to Australia next and the mining giant Rio Tento.
[33:22] Speaker 4: In the last week the company reported first half underlying
[33:25] Speaker 4: profit above the average analyst estimate, and we caught up
[33:29] Speaker 4: with Rio Tento CEO Simon Trott. He spoke with Bloomberg
[33:32] Speaker 4: TV host Paul Allen.
[33:34] Speaker 14: Now talk to us about your approach, because you said
[33:36] Speaker 14: from the outsets to slim down, streamline the company. Even
[33:39] Speaker 14: this morning, you're using words like relentless, significant when talking
[33:42] Speaker 14: about cost savings, looking for productivity gains. So can you
[33:45] Speaker 14: talk to us about your plan for the next st half,
[33:48] Speaker 14: what's next?
[33:49] Speaker 15: So we set out a plan last year, Stronger, sharper, simpler,
[33:52] Speaker 15: and we talked about building a stronger Rio Tinto, a
[33:56] Speaker 15: more agile Riotinto and really pleasing today to say that
[34:00] Speaker 15: coming through in results. So prop it up significantly, free
[34:05] Speaker 15: cash flow up seventy five percent, allowing us to pay
[34:08] Speaker 15: a significantly increased dividend over three billion dollars back to shareholders,
[34:13] Speaker 15: and all of that really due to strong markets and
[34:17] Speaker 15: due to the work that we've been doing internally to
[34:20] Speaker 15: really make sure we're building as strong a REO Tinto
[34:23] Speaker 15: as possible. I guess what I'm most excited about, though,
[34:27] Speaker 15: is how we positioned for the future. So we've slim
[34:29] Speaker 15: down the portfolio to focus on copper, aluminium and lithium
[34:34] Speaker 15: and ironre They're the commodities where we have the asset
[34:37] Speaker 15: base and we see the greatest growth potential, and you
[34:41] Speaker 15: look forward to the underlying demand particularly from those big
[34:45] Speaker 15: trends of our time, AI and digital, traditional demand, electrification.
[34:50] Speaker 15: Really well positioned to take advantage of that.
[34:53] Speaker 14: I think you promised mentioned this morning. It's about another
[34:56] Speaker 14: five billion dollars worth of divestments to come. Can you
[34:59] Speaker 14: talk to us about some of the non core assets
[35:01] Speaker 14: that you're looking at And I know you've got a
[35:03] Speaker 14: small Canadian iron or mine, for example, would that be
[35:06] Speaker 14: one that's on the chopping block.
[35:07] Speaker 15: So we talked about releasing five to ten billion dollars
[35:11] Speaker 15: from the balance sheet, and so that included some assets
[35:13] Speaker 15: that we'd put under a strategic review, but also just
[35:17] Speaker 15: looking across the portfolio to really make sure the balance
[35:20] Speaker 15: sheets working as strongly as we would like. We also
[35:24] Speaker 15: promised around six hundred and fifty million in productivity savings,
[35:29] Speaker 15: and we announced we'd already banked eight hundred and seventy
[35:32] Speaker 15: and almost tripling the run rates, so one point eight
[35:34] Speaker 15: billion by the end of this year.
[35:37] Speaker 14: Now, iron Or still so central to what you do,
[35:40] Speaker 14: generating the largest amount of your revenue. This is despite
[35:43] Speaker 14: Chinese demand reaching a plateau, we've still got prices holding
[35:45] Speaker 14: up pretty well. How's your negotiation going though with the
[35:49] Speaker 14: Chinese State back by, can you give us an update
[35:51] Speaker 14: on that, What are they asking for and is there
[35:54] Speaker 14: a risk that they could ask for similar things for
[35:56] Speaker 14: other commodities.
[35:57] Speaker 15: So I Ramin is a really strong market for us.
[36:00] Speaker 15: We've been talking for years about the maturation of China
[36:04] Speaker 15: growth and you're certainly seeing that come through. It's been
[36:06] Speaker 15: far more resilient than I think market pundits had expected
[36:11] Speaker 15: because of that underlying demand. And whilst construction in China
[36:14] Speaker 15: has slowed, you've seen a real pickup in export related
[36:18] Speaker 15: steel demand, so secondary interestry products, and that's led to
[36:22] Speaker 15: fairly robust and stable pricing outcomes in the market. We
[36:26] Speaker 15: continue to engage with all market participants, including CMRJ, and
[36:31] Speaker 15: so through the ordinary course of business we renew those
[36:34] Speaker 15: contracts and that's the phase we're Another moment.
[36:36] Speaker 4: That was Simon Trotz, CEO of Rio Tinto, speaking with
[36:39] Speaker 4: Bloomberg's Paul Allen. I'm Doug Prisner. You can catch us
[36:43] Speaker 4: weekdays for the Daybreak Asia podcast. It's available wherever you
[36:46] Speaker 4: get your podcast. Nathan.
[36:49] Speaker 2: Thanks Doug, and that does it for this edition of
[36:51] Speaker 2: Bloomberg Daybreak Weekend.
[36:52] Speaker 5: To join us again Monday morning at five am.
[36:55] Speaker 2: Wall Street time for the latest don market's overseas, and
[36:57] Speaker 2: the news you need.
[36:58] Speaker 5: To start your day. I'm Nathan Hager. Stay with US.
[37:01] Speaker 2: Top stories and global business headlines are coming up right
[37:05] Speaker 2: now

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