WEBVTT - Bloomberg Daybreak Weekend: Earnings, Debt and Tourism 0:00:02.120 --> 0:00:04.840 This is Bloomberg Daybreak Weekend, our global look at the 0:00:04.840 --> 0:00:07.760 top stories in the coming week from our Daybreak anchors 0:00:07.800 --> 0:00:10.360 all around the world, and straight ahead on the program, 0:00:10.400 --> 0:00:13.039 A huge week ahead for tech earnings. 0:00:13.440 --> 0:00:15.120 I'm Tom Busby in New York. 0:00:15.200 --> 0:00:17.880 I'm Kroin Heager here in London, where we're looking ahead 0:00:17.920 --> 0:00:19.200 to European bank earnings. 0:00:19.440 --> 0:00:22.440 I'm Bryan Curtis in Hong Kong. Is the coast clear 0:00:22.520 --> 0:00:25.599 now for a big uptick in tourism into Japan? 0:00:26.079 --> 0:00:28.760 I'm Kaylee Lyons in Washington. As the fight over the 0:00:28.800 --> 0:00:32.400 debt ceiling intensifies. How Speaker McCarthy pushes for a vote 0:00:32.400 --> 0:00:35.000 next week the White House Still Bloomberg. 0:00:35.440 --> 0:00:38.720 That's all straight ahead on Bloomberg day Break Weekend on 0:00:38.880 --> 0:00:41.959 Bloomberg eleve on three Own, New York, Bloomberg ninety nine 0:00:42.000 --> 0:00:45.400 to one, Washington, DC, Bloomberg one O six one, Boston, 0:00:45.440 --> 0:00:50.240 Bloomberg nine sixty, San Francisco, DAB Digital Radio London, Sirius 0:00:50.400 --> 0:00:53.640 XM one nineteen and around the world on Bloomberg Radio 0:00:53.720 --> 0:00:56.240 dot com and via the Bloomberg Business app. 0:01:00.320 --> 0:01:00.400 You. 0:01:00.480 --> 0:01:01.320 I'm Tom Busby. 0:01:01.360 --> 0:01:03.880 We begin today's program with a look at the tech 0:01:03.960 --> 0:01:06.720 sector ahead of a cavalcade of big name tech earnings 0:01:06.760 --> 0:01:11.720 coming our way this week, names like Alphabet, Microsoft, Meta Platforms, Intel, 0:01:11.800 --> 0:01:14.679 and Snap. And joining us now to talk about all 0:01:14.800 --> 0:01:20.280 that and more is Bloomberg Technology co host Caroline High. Caroline, welcome, thanks. 0:01:20.040 --> 0:01:20.560 For being here. 0:01:20.600 --> 0:01:21.520 What a joy to be with you. 0:01:22.080 --> 0:01:25.039 Well, it looks like overall tech stocks have outperformed the 0:01:25.040 --> 0:01:27.320 rest of Wall Street, in the least in the first quarter, 0:01:27.440 --> 0:01:30.640 coming off of pretty dismal lows from before that. As 0:01:30.680 --> 0:01:32.520 a sector, how do you think tech did in the 0:01:32.560 --> 0:01:35.080 first three months of this year and is that growth 0:01:35.160 --> 0:01:37.240 extending into the current quarter. 0:01:37.319 --> 0:01:38.000 Do you think we. 0:01:38.000 --> 0:01:40.839 Are starting to question that growth? Certainly from a stock 0:01:40.920 --> 0:01:44.280 price perspective. From a valuation perspective, we've got to remember 0:01:44.280 --> 0:01:47.360 the Nasdaq one hundred, the key benchmark for big tech, 0:01:47.760 --> 0:01:50.440 is back in bull market territory. It managed to escalate 0:01:50.600 --> 0:01:53.200 twenty percent off of its lows that we hit last year, 0:01:53.720 --> 0:01:56.720 and this is around perhaps not that much more fundamental 0:01:56.840 --> 0:01:59.160 change in news. Yes, there's hopes that the Federal Reserve 0:01:59.200 --> 0:02:02.440 perhaps cool its intentions on where interest rates go. But 0:02:02.520 --> 0:02:05.320 as Gina Martin Adams over at Bloomberg Intelligence will point out, 0:02:05.360 --> 0:02:07.920 the valuations are still way out of whack unless we 0:02:07.960 --> 0:02:10.560 start to see the FED actually cutting rates. At the moment, 0:02:10.600 --> 0:02:13.160 no one's anticipating that. We're just anticipating as slowing in 0:02:13.200 --> 0:02:15.600 those rate hikes. So at the moment, it feels that 0:02:15.639 --> 0:02:18.760 the growth potential just isn't there to substantiate what has 0:02:18.800 --> 0:02:21.360 been maybe a move to safety amidst some of the 0:02:21.360 --> 0:02:23.160 concerns around the US banking system. 0:02:23.320 --> 0:02:26.240 Now, before we dive deeper into the individual earnings and 0:02:26.280 --> 0:02:28.320 the impact on the rates and the impact of what 0:02:28.360 --> 0:02:30.760 the FED is going to do, let's talk about probably 0:02:30.800 --> 0:02:34.400 the biggest game changer in tech since I don't know 0:02:34.720 --> 0:02:39.880 the search engine. It's artificial intelligence chatbots like open AI's 0:02:40.160 --> 0:02:43.960 chat GPT. They've changed everything since debuwing just in November, 0:02:44.520 --> 0:02:48.400 and Microsoft's also ran search engine bing now gaining traction 0:02:48.480 --> 0:02:52.240 after how many years? About fourteen years? Google racing to 0:02:52.280 --> 0:02:55.840 develop its own search engine powered by AI meta platforms, 0:02:55.919 --> 0:02:58.560 changing its name from Facebook to focus on the metaverse, 0:02:59.160 --> 0:03:03.160 now downplaying to focus on AI. How has this changed 0:03:03.520 --> 0:03:05.519 everything in tech and every company? 0:03:05.880 --> 0:03:06.359 So funny. 0:03:06.400 --> 0:03:08.680 I just got off a call with the CEO of 0:03:08.720 --> 0:03:10.600 AMEX and he said, look, a couple of years ago, 0:03:10.680 --> 0:03:13.120 the new technology was all about blockchain. Now the new 0:03:13.120 --> 0:03:16.320 technology is all about artificial intelligence. But as he will say, 0:03:16.560 --> 0:03:17.160 look they've been. 0:03:17.040 --> 0:03:17.639 Doing it for years. 0:03:17.639 --> 0:03:20.240 They've got AI, they got machine learning, and actually all 0:03:20.320 --> 0:03:22.480 these other companies are racing to say the same thing. 0:03:22.480 --> 0:03:25.440 We heard Andy Jasse from Amazon in his letter to 0:03:25.560 --> 0:03:28.720 investors saying we've been busy on machine learning and AI 0:03:28.919 --> 0:03:31.520 for a couple of decades. Now we know that Google 0:03:31.600 --> 0:03:35.120 was almost synonymous with artificial intelligence after it bought a 0:03:35.280 --> 0:03:37.760 UK pin up and the tech sector which was deep Mind. 0:03:38.280 --> 0:03:38.920 But now it. 0:03:38.880 --> 0:03:41.920 Seems to have changed the game from a consumer perspective 0:03:41.920 --> 0:03:44.520 because we all get to play with it. The open 0:03:44.560 --> 0:03:48.800 AI revelation, the chatchept now released into version four. It 0:03:48.840 --> 0:03:50.120 is the fact that you and I can now just 0:03:50.120 --> 0:03:52.920 see how powerful it has become. People now worrying that 0:03:52.960 --> 0:03:55.720 AI is developing at too fast rate, But it really 0:03:55.760 --> 0:03:58.080 is the consumer interaction with it that I think has 0:03:58.080 --> 0:04:01.080 made us sit up and understand that, yes, the way 0:04:01.120 --> 0:04:03.720 in which search certainly could happen is going to be 0:04:03.760 --> 0:04:06.200 far more efficient, the way in which we could see 0:04:06.240 --> 0:04:10.680 the way you and I react and our productivity levels increase. 0:04:11.080 --> 0:04:13.680 But I wonder if this is also slightly a tech 0:04:13.760 --> 0:04:15.880 sect to trestplately trying to look for some sort of 0:04:15.880 --> 0:04:18.599 silver lining amid macroheadwinds that are still there. 0:04:18.800 --> 0:04:21.320 And you talked about the consumers, and here's a perfect 0:04:21.360 --> 0:04:25.480 example of how consumers are interacting. Snapchat has seen huge 0:04:25.480 --> 0:04:28.839 growth in their four dollars a month Snapchat plus and 0:04:28.880 --> 0:04:33.640 it's because they added AI from open Ai, and everybody 0:04:33.640 --> 0:04:35.839 wants to play with it. You know, they want to 0:04:35.839 --> 0:04:39.680 write poems and essays and whatever. So yeah, I see 0:04:39.720 --> 0:04:44.279 what you mean. It has really taken the consumer to 0:04:44.320 --> 0:04:44.919 a new place. 0:04:45.400 --> 0:04:48.400 It has, But has it taken the actual revenues of 0:04:48.440 --> 0:04:50.640 the business to a new place? Many would argue say 0:04:50.680 --> 0:04:54.040 with Microsoft, no, actually, Microsoft's future quarter that we're all 0:04:54.080 --> 0:04:57.320 anticipating this fiscal third quarter is likely to be well 0:04:57.320 --> 0:04:59.760 an underperformance one. We're still thinking about where the businesses 0:04:59.800 --> 0:05:03.039 are investing, rather than in their azure, rather than actually 0:05:03.120 --> 0:05:07.160 whether practically the integration of open AI's Chat GPT into 0:05:07.160 --> 0:05:10.720 being is really changing up their own dollars in terms 0:05:10.760 --> 0:05:12.760 of revenue. It's not in the short term. In the 0:05:12.800 --> 0:05:15.520 longer term, yes, we could start to advertise against that, 0:05:15.600 --> 0:05:18.280 and yes, our productivity levels could go through the roof 0:05:18.320 --> 0:05:21.520 and it makes their own offerings that much more in demand. 0:05:22.160 --> 0:05:25.000 Well, you bring us to a great transition to talk 0:05:25.000 --> 0:05:29.040 about individual companies and it's not all just chat GPT, 0:05:29.720 --> 0:05:31.400 but let's go through some of them one by one, 0:05:31.400 --> 0:05:32.960 and we're going to start with the Alphabit, which is 0:05:33.000 --> 0:05:35.479 out on Tuesday. What do we and now this is 0:05:35.640 --> 0:05:40.640 an advertising driven company, Yeah, but advertising is in a slump, 0:05:40.800 --> 0:05:43.240 it is, and. 0:05:42.839 --> 0:05:44.240 What do you see for this company? 0:05:44.240 --> 0:05:47.279 There is also the search engine in cloud computing and YouTube, 0:05:47.320 --> 0:05:49.839 but they have a lot of revenue generators, But what 0:05:49.880 --> 0:05:50.440 do you expect? 0:05:50.440 --> 0:05:52.040 And YouTube could be a bit of a silver lining 0:05:52.080 --> 0:05:54.920 once again here they've had some price increases that really 0:05:54.960 --> 0:05:58.440 could bolster performance for that particular segment. But we know 0:05:58.520 --> 0:06:01.840 that actually growth expectations for YouTube for advertising in general 0:06:01.920 --> 0:06:05.279 have come down of late, so cloud could at least 0:06:05.279 --> 0:06:07.599 break even. Remember in a moment, they are a little 0:06:07.600 --> 0:06:11.240 bit of an also ran against Amazon's AWS and Microsoft's 0:06:11.240 --> 0:06:13.680 as you're but they are trying to boost profitability in 0:06:13.680 --> 0:06:16.440 their cloud segment. Overall, Alphbet it's likely to see revenue 0:06:16.440 --> 0:06:19.560 actually climb about two percent. Remember they're raking in more 0:06:19.600 --> 0:06:23.200 than fifty billion dollars on a quarterly basis. But you're right, 0:06:23.240 --> 0:06:25.839 this top nine growth is likely to remain pretty muted 0:06:25.880 --> 0:06:30.560 because search network segments that they're exposed economic challenges. We've 0:06:30.560 --> 0:06:32.440 got to worry about how much people want to pay 0:06:32.440 --> 0:06:37.560 for advertising. And also I wonder whether this Chatchypt excitement 0:06:37.720 --> 0:06:39.880 means you and I are using Google a little less. 0:06:39.880 --> 0:06:42.279 I know, for one, my husband won't do anything unless 0:06:42.279 --> 0:06:44.839 it's on Chatchypt in some way, So I do wonder 0:06:44.880 --> 0:06:48.160 whether we might see a little tiny sliverer of evidence 0:06:48.160 --> 0:06:50.320 that people are turning away from Google Search to use 0:06:50.400 --> 0:06:51.360 chatchipt instead. 0:06:51.560 --> 0:06:54.560 What did we expect from Microsoft, also out on Tuesday. 0:06:54.720 --> 0:06:56.800 Probably quite sad when you think that more than thirty 0:06:56.800 --> 0:06:59.600 percent growth isn't up to enough. But as you're is 0:06:59.680 --> 0:07:02.560 likely to see thirty one percent sales growth on a 0:07:02.600 --> 0:07:05.120 constant currency basis, but that isn't the sort of growth 0:07:05.200 --> 0:07:08.400 we've got oh so used to. Microsoft likely to see 0:07:08.520 --> 0:07:11.440 maybe revenue climb about four percent. We've seen fifty one 0:07:11.480 --> 0:07:13.960 billion per quarter on its fiscal third quarter, but we 0:07:14.160 --> 0:07:16.800 like to see evidence of this pullback in PC spending. 0:07:16.840 --> 0:07:19.440 You and I haven't been spending so much on hardware, 0:07:19.600 --> 0:07:22.640 on on going out and buying our computers because we 0:07:22.680 --> 0:07:25.120 bought them all in the pandemic, so that PC weakness 0:07:25.240 --> 0:07:27.040 is likely to take them as is also a bit 0:07:27.080 --> 0:07:29.840 of infrastructure. Software results likely to be pulled back a 0:07:29.840 --> 0:07:32.240 little bit as companies try and curtail they spending, so 0:07:32.640 --> 0:07:35.240 could see some slowing down Microsoft though instead they're all 0:07:35.240 --> 0:07:38.280 about marketing, aren't they. They're AI. They're all about showing 0:07:38.360 --> 0:07:40.640 the enhancements over the last couple of months, but there 0:07:40.680 --> 0:07:42.800 isn't going to be any near term sales growth because 0:07:42.800 --> 0:07:43.160 of that. 0:07:43.480 --> 0:07:47.720 Got it Meta of course, another big one. We've seen massive. 0:07:47.440 --> 0:07:51.880 Job cuts there talks about more what does this earnings look. 0:07:51.760 --> 0:07:55.280 Like for I mean, unsurprisingly profit under pressure in a 0:07:55.320 --> 0:07:57.480 big way. We're likely to see revenues actually only down 0:07:57.520 --> 0:07:59.680 about one percent, but it really is the profitability. This 0:07:59.760 --> 0:08:02.239 is why Mark Zuckerberg talks time and time again about 0:08:02.280 --> 0:08:04.880 the focus on efficiency. For this year, you're going to 0:08:04.960 --> 0:08:07.280 see perhaps a bit of a drag and engagement on 0:08:07.520 --> 0:08:09.640 the old blue Facebook, but there's going to be an 0:08:09.720 --> 0:08:11.520 uptick perhaps in the way and you and I are 0:08:11.560 --> 0:08:15.360 interacting with reels, with WhatsApp, with messaging ads, but they 0:08:15.400 --> 0:08:17.520 have been hampered by the fact that Apple doesn't want 0:08:17.560 --> 0:08:19.160 to build in of course, the way in which we 0:08:19.240 --> 0:08:21.480 track our data, so that's overall been a bit of 0:08:21.520 --> 0:08:24.600 a headwind. We're likely to see challenges once again, a 0:08:24.640 --> 0:08:26.840 second round of layoffs. At least they're going to help 0:08:26.920 --> 0:08:28.720 with their expenditures to a certain degree. 0:08:29.200 --> 0:08:30.000 Got it. 0:08:30.120 --> 0:08:33.480 Snap also the owner of Snapchat reporting, and we talked 0:08:33.520 --> 0:08:38.000 briefly about that before. How they've embraced AI and the 0:08:38.080 --> 0:08:40.200 chatbot and how is it looking for them. They have 0:08:40.280 --> 0:08:43.360 suffered kind of it also ran as well, Yeah. 0:08:43.240 --> 0:08:45.640 Oh boy, their share price has suffered. It's languished at 0:08:45.640 --> 0:08:49.480 at about ten for what the last end of twenty 0:08:49.520 --> 0:08:52.439 twenty two. Really we started to see Snap I think 0:08:52.520 --> 0:08:54.960 last year become the canaryan the coal mine. They come 0:08:54.960 --> 0:08:57.160 out with their ownings first and they then set the 0:08:57.160 --> 0:08:59.240 tone for how the rest of the advertising market was 0:08:59.280 --> 0:09:01.880 going to really look. And snaps growth expectations have come 0:09:01.920 --> 0:09:04.800 down sharply in the first half of the year. Six 0:09:04.840 --> 0:09:08.760 percent likely drop in top line overall revision the company. 0:09:09.360 --> 0:09:12.480 We're likely to see a twenty percent cut and fixed costs. Again, 0:09:12.520 --> 0:09:15.520 this is more about how they can preserve profitability rather 0:09:15.640 --> 0:09:18.880 than drive it. So this is again being cautious, as 0:09:18.920 --> 0:09:21.560 we likely to see advertisers be cautious with their budgets. Remember, 0:09:21.760 --> 0:09:23.280 if you're thinking about, oh, where shall I put my 0:09:23.320 --> 0:09:27.240 advertising dollars to work? You're probably gonna stick with Facebook's Instagram. 0:09:27.320 --> 0:09:30.280 You might be sticking with Google's YouTube. You might cut 0:09:30.320 --> 0:09:31.839 back on a snap because it is a bit of 0:09:31.840 --> 0:09:33.920 an also around, as you say, although they are always 0:09:34.200 --> 0:09:36.920 a creative way to perhaps get some bang for your 0:09:36.920 --> 0:09:39.239 buck with the AI focus. 0:09:39.240 --> 0:09:42.520 Intel also reporting now this is hardware, the chip maker. 0:09:43.120 --> 0:09:46.400 They are fresh concerns about chip makers. Now Washington sanctions 0:09:46.600 --> 0:09:50.240 hamstringing China's ambitions there. What do you see for Intel? 0:09:50.280 --> 0:09:50.520 Though? 0:09:50.679 --> 0:09:53.640 And we're back to boombust. They all told us in 0:09:53.679 --> 0:09:56.520 COVID and in the post pandemic era that we were 0:09:56.559 --> 0:09:59.600 gone out of boom bus cycles for chips because we 0:09:59.640 --> 0:10:02.920 all move to automated devices, the fact that we're going 0:10:02.960 --> 0:10:06.440 to have every connected device Internet of things, the industry 0:10:06.480 --> 0:10:09.319 would be changed. And it doesn't happen that quickly, it 0:10:09.360 --> 0:10:11.319 would seem. And so for Intel, I'd like to see 0:10:11.320 --> 0:10:14.079 actually a forty percent sales drop. We're likely to see, 0:10:14.120 --> 0:10:17.079 of course again the PC slow down that's affecting Microsoft 0:10:17.120 --> 0:10:20.640 it's going to impact Intel as well. Slumping comsumer demand 0:10:20.679 --> 0:10:22.880 means look, they're not going to have as many chips 0:10:22.920 --> 0:10:25.080 in the devices that we're buying. So we know the 0:10:25.120 --> 0:10:27.240 headwinds are there for PC. We know that actually they're 0:10:27.280 --> 0:10:29.600 losing some market share in terms of data centers as well. 0:10:29.679 --> 0:10:33.040 AMD they're buy females. Executives just been doing phenomenal work 0:10:33.040 --> 0:10:36.400 there at catching some market and this is a market 0:10:36.480 --> 0:10:38.520 that we want to hear from. The CEO, Pat Gelsinger 0:10:38.559 --> 0:10:41.880 has been very upfront with the challenges he faces, his 0:10:42.120 --> 0:10:44.720 entire sector faces. And remember they are trying to build 0:10:44.720 --> 0:10:46.840 a new, more resilient global supply chain at the moment, 0:10:46.880 --> 0:10:49.680 so we has to invest in future fabs here in 0:10:49.720 --> 0:10:52.280 America and in Europe, and that's more expensive. We're still 0:10:52.320 --> 0:10:53.439 trying to see where they end up. 0:10:53.520 --> 0:10:56.120 Caroline, thank you so much. Caroline Hyde is the co 0:10:56.200 --> 0:10:58.760 host of Bloomberg Technology. Great to have you with us. 0:10:58.920 --> 0:10:59.520 Coming up on. 0:10:59.480 --> 0:11:03.640 Bloomberg day Break weekend, earning season for European banks as well. 0:11:03.679 --> 0:11:16.200 I'm Tom Busby and this is Bloombergo. This is Bloomberg 0:11:16.280 --> 0:11:19.000 Daybreak Weekend, our global look ahead at the top stories 0:11:19.000 --> 0:11:20.360 for investors in the coming week. 0:11:20.480 --> 0:11:22.120 I'm Tom Busby in New York. 0:11:22.400 --> 0:11:24.880 Up later in our program, the fight over the dead 0:11:24.920 --> 0:11:28.840 ceiling heating up even more. But first, European banks from 0:11:28.960 --> 0:11:33.120 Ubs and Credit Sweee to Deutsche Bank, Barclay's and Santandar 0:11:33.679 --> 0:11:36.880 reporting first quarter results next week. But it's not going 0:11:36.920 --> 0:11:38.800 to be a simple quarter. For more, Let's head to 0:11:38.880 --> 0:11:42.120 London and bring in Bloomberg Daybreak anchor Caroline Hepgar. 0:11:42.440 --> 0:11:42.760 Tom. 0:11:42.800 --> 0:11:45.760 After the tremor of the demise of Credit Sweee, we 0:11:45.840 --> 0:11:50.040 turn to bank earnings, and many European names face individual 0:11:50.160 --> 0:11:53.360 issues as well as the broader themes around trading revenue 0:11:53.559 --> 0:11:56.719 and net interest income that will be key to this 0:11:56.840 --> 0:12:00.480 set of earnings. For More, I'm joined by Bloomberg's final editor, 0:12:00.559 --> 0:12:03.920 Tom Metcalf. Tom, there are going to be a lot 0:12:03.960 --> 0:12:06.520 of issues I think in this set of results, aren't there. 0:12:06.760 --> 0:12:08.800 What do you think though, First of all, the US 0:12:08.960 --> 0:12:12.720 bank results show about what we can expect from Europe. 0:12:12.960 --> 0:12:14.800 Yeah, I think you're absolutely right. There'll be a lot 0:12:14.880 --> 0:12:17.880 of different things for investors to digest, and you know 0:12:17.920 --> 0:12:21.160 that sort of exemplifiber what's happened in the US, So 0:12:21.559 --> 0:12:23.320 you know a couple of points to pull out of that. 0:12:23.440 --> 0:12:25.560 First of all, one of the big things we saw 0:12:25.720 --> 0:12:28.720 was effectively a flight to safety by some customers. So 0:12:28.760 --> 0:12:31.400 you had JP Morgan, the biggest bank, seeing a lot 0:12:31.440 --> 0:12:34.240 of deposits come its way after the term oil of 0:12:34.480 --> 0:12:36.920 you know, Silicon Valley Bank, and on all the regional 0:12:36.960 --> 0:12:39.160 lenders out in the US there too, So I think 0:12:39.480 --> 0:12:41.920 that will be very very interesting to see. You know, 0:12:42.000 --> 0:12:44.520 how much do the big banks in Europe benefit from 0:12:44.520 --> 0:12:46.840 that kind of trend or was it sort of you know, 0:12:46.960 --> 0:12:50.319 unique to the US. And then at the same time 0:12:50.400 --> 0:12:53.680 you've also got net interest margins, so you saw across 0:12:53.679 --> 0:12:55.400 a lot of the US lenders, you know, the big 0:12:55.440 --> 0:12:59.520 retail lenders, they're still benefiting from that. And again it's 0:12:59.559 --> 0:13:01.199 just a case of you know, how good is the 0:13:01.240 --> 0:13:04.920 outlook there going forward? And then finally for me, you know, 0:13:05.520 --> 0:13:07.960 it's the high finance side of things. It's those traders, 0:13:07.960 --> 0:13:10.000 how are they doing? And the US painted a very 0:13:10.000 --> 0:13:12.559 mixed picture. So you had Golden Sacks typically a bellweather 0:13:12.640 --> 0:13:15.520 for this kind of thing, but actually its traders didn't 0:13:15.520 --> 0:13:18.040 do so well this quarter. That really hurt the shares. 0:13:18.640 --> 0:13:21.199 But in contrast, Bank of America normally a bit more 0:13:21.240 --> 0:13:23.439 scayed than Golden Sacks actually did very very well like 0:13:23.480 --> 0:13:26.520 blue past estimates, so you know, not quite sure whether 0:13:26.520 --> 0:13:29.800 European lenders will land between those two, which just means 0:13:29.840 --> 0:13:31.360 to me that I think it's going to be a 0:13:31.480 --> 0:13:34.440 very interesting, kind of difficult to unpick set of earnings 0:13:34.440 --> 0:13:36.320 and it'll be intriguing to see how sort of various 0:13:36.360 --> 0:13:37.720 banks sort of come out of it. 0:13:38.400 --> 0:13:41.680 Yeah, and on the specifics, of course, we're only just 0:13:41.720 --> 0:13:45.000 about a month or so out from the demand is 0:13:45.040 --> 0:13:47.800 of Credit Sweee, and you've got results both from UBS 0:13:47.840 --> 0:13:51.439 and Credit Sweee, so bank regulation and all the issues 0:13:51.480 --> 0:13:54.160 around this merger are going to be at the four too. 0:13:54.880 --> 0:13:55.080 Yeah. 0:13:55.080 --> 0:13:57.280 Absolutely, it look for me, the Credit Swiss UBS story 0:13:57.320 --> 0:13:59.640 probably the one that continues to dominate the headlines for 0:13:59.640 --> 0:14:02.480 obviously reasons. You know, I think it will be Credit 0:14:02.480 --> 0:14:05.840 Swiss's last set of results as an independent bank, so 0:14:05.960 --> 0:14:08.560 plenty of reasons to look closely at that. But I 0:14:08.559 --> 0:14:10.920 suspect most of the grillin will be on the h 0:14:11.120 --> 0:14:14.680 UBS executives, who will presumably be asked, you know, how 0:14:14.800 --> 0:14:17.040 is the sort of merger proceeding? You know, what are 0:14:17.080 --> 0:14:20.120 your long term plans? Is this really good for UBS? 0:14:20.120 --> 0:14:23.280 Et cetera, et cetera, And it's just an absolutely enormous story. 0:14:23.320 --> 0:14:25.560 There's so many different kind of stakeholders here. We've seen 0:14:25.600 --> 0:14:27.960 a lot of sort of agro from the Swiss side, 0:14:27.960 --> 0:14:29.680 so we'll be curious see if on the political side 0:14:29.680 --> 0:14:32.880 there's kind of pressure there. And ultimately, obviously what UBS 0:14:32.960 --> 0:14:34.800 want to do is show you know, a really good 0:14:34.800 --> 0:14:37.160 set of results and kind of a path forward to 0:14:37.200 --> 0:14:41.000 make sure this sort of very difficult merger can kind 0:14:41.040 --> 0:14:43.440 of proceed. So that for me will probably be the 0:14:43.480 --> 0:14:46.160 dominant story, certainly, at least in the use side of things. 0:14:46.440 --> 0:14:50.280 Okay, what about the UK? How resilient are the balance 0:14:50.320 --> 0:14:52.200 sheets of the big UK banks? 0:14:52.720 --> 0:14:54.720 Yeah, I think it'd be similar questions to what I 0:14:54.760 --> 0:14:57.320 was saying about the US. So are they benefiting from 0:14:57.320 --> 0:14:59.920 the net interest margin? And if so, you know, toward extent? 0:15:00.040 --> 0:15:02.440 And what is their guidance? What are they saying is 0:15:02.520 --> 0:15:05.040 likely to happen in the coming months. So it does 0:15:05.120 --> 0:15:07.080 seem that the Bank of England's likely to raise interest 0:15:07.160 --> 0:15:10.040 rates again, so maybe that will be a positive. But 0:15:10.120 --> 0:15:11.920 you know, what we have seen is even after you know, 0:15:12.280 --> 0:15:14.760 right in the midst of these interest rates rate rises, 0:15:14.920 --> 0:15:17.400 investors are already looking ahead and going, well, how long 0:15:17.440 --> 0:15:20.240 will these good times last for the banks? So there's 0:15:20.280 --> 0:15:23.320 that question. I think, you know, this is fair to say. 0:15:23.360 --> 0:15:25.600 I think the UK banks have largely dodged, you know, 0:15:25.720 --> 0:15:27.280 some of the term what you saw in the US. 0:15:27.320 --> 0:15:30.240 Obviously they have been rocked by it somewhat, but you know, 0:15:30.280 --> 0:15:33.200 that does seem like a pretty specific issue to the US. 0:15:33.280 --> 0:15:35.440 So I think the focus will be on kind of 0:15:35.480 --> 0:15:37.920 how well they executed this quarter, how well these interest 0:15:38.000 --> 0:15:40.520 rates are coming through. But again, and this is what 0:15:40.560 --> 0:15:42.840 makes this particular earnescis and really interesting. I think there's 0:15:42.840 --> 0:15:45.520 just lots of idiosyncratic issues for each bank, so kind 0:15:45.520 --> 0:15:47.120 of for almost every bank, you're going to be looking 0:15:47.160 --> 0:15:48.120 at different things. 0:15:48.560 --> 0:15:52.120 Yeah, one of which, of course, has come to the 0:15:52.160 --> 0:15:55.800 four again this week, which is HSBC and the battle 0:15:55.840 --> 0:15:59.600 with their big shareholder ping Ann about whether the business 0:15:59.600 --> 0:16:00.000 is split. 0:16:00.760 --> 0:16:02.840 Yeah, exactly, really heating up. So it's kind of being 0:16:02.840 --> 0:16:05.040 almost like a phony war for the last year or so, 0:16:05.200 --> 0:16:07.520 where we knew ping An were pushing for this, but 0:16:07.840 --> 0:16:10.480 it was perpetually kind of they won't send anything on 0:16:10.480 --> 0:16:12.800 the record, It was all kind of done through proxies. 0:16:13.040 --> 0:16:15.160 What happened this week is you had a ping An 0:16:15.240 --> 0:16:17.520 unit come out and say, you know, we are deeply 0:16:17.520 --> 0:16:21.800 concerned about HSBC's performance. They sort of slightly tweaked what 0:16:21.800 --> 0:16:24.920 they wanted HSBC to do. It's basically now more of 0:16:25.040 --> 0:16:28.920 listing their Asian units, which is slightly more feasible to achieve. 0:16:29.160 --> 0:16:30.600 But if you read this letter from ping A, it's 0:16:30.600 --> 0:16:32.280 two thousand words and they basically spend most of it 0:16:32.360 --> 0:16:35.560 saying HSBC aren't listening to us. You know, they don't 0:16:35.600 --> 0:16:38.160 seem to take any kind of consideration of our ideas. 0:16:38.240 --> 0:16:41.680 And what's fascinating is, you know, this is HSBC's top shareholder, 0:16:41.760 --> 0:16:44.840 So be really curious to see both of the results, 0:16:44.920 --> 0:16:47.080 which I think are sort of May the second, but 0:16:47.120 --> 0:16:49.520 probably more interesting at the AGM which follows on May 0:16:49.520 --> 0:16:53.160 the fifth, where I'm kind of preparing myself for fireworks there. 0:16:53.520 --> 0:16:58.280 Fireworks. Okay, what about Barclay's then and the issues around 0:16:58.440 --> 0:16:58.920 just Daley. 0:16:59.600 --> 0:17:02.800 Yeah, so that will again probably dominate some of the 0:17:02.840 --> 0:17:05.679 coverage there. And you know, obviously former CEO, you know, 0:17:05.720 --> 0:17:08.600 Barcleays as it is today, has you know, really very 0:17:08.600 --> 0:17:11.680 little to do with this, and you know that that's clear, 0:17:11.720 --> 0:17:13.160 you know, all when to day he was at JP 0:17:13.280 --> 0:17:16.000 Morgan actually, but that doesn't mean sort of the bard 0:17:16.000 --> 0:17:18.479 of Barkleys don't have questions to answer about you know, 0:17:18.520 --> 0:17:20.639 how come they let the bank get into this position 0:17:20.720 --> 0:17:23.280 where even you know, you know, a year or so 0:17:23.440 --> 0:17:26.439 after they knew that the FCA was investigating their CEO, 0:17:26.760 --> 0:17:30.040 they were still standing by him. And I think now 0:17:30.080 --> 0:17:32.480 as more and more kind of these details emerge, that's looking, 0:17:32.520 --> 0:17:34.080 you know, more and more questionable. I think the bank 0:17:34.119 --> 0:17:36.960 has finally come out and said, yes, these new allegations 0:17:37.440 --> 0:17:40.159 are sort of horrific, and you know, we were not 0:17:40.200 --> 0:17:43.480 aware of them at the time, so that will be interesting. 0:17:43.520 --> 0:17:45.679 I think the bank will presumably doing everything it can 0:17:45.760 --> 0:17:47.959 to move the conversation away and you know, look at 0:17:47.960 --> 0:17:50.160 what it can control, you know, which is obviously it's 0:17:50.160 --> 0:17:53.200 business and stuff. But you know, in terms of the story, 0:17:53.640 --> 0:17:55.960 when people think of sort of Barclays right now, that's 0:17:56.040 --> 0:17:57.520 right at the top of the list, I think. 0:17:57.440 --> 0:18:00.439 Yeah, absolutely that they may well be pressed, Yeah, the 0:18:00.520 --> 0:18:05.160 directors about their support for Jess Daily, Yeah, even when 0:18:05.200 --> 0:18:08.800 he was leading that bank. Look, that's an interesting story 0:18:09.600 --> 0:18:12.480 also though Deutsche Bank, I wonder what your view is 0:18:12.480 --> 0:18:15.680 on this last year. Of course, they've managed the highest 0:18:15.720 --> 0:18:18.480 profit in more than a decade, so the benchmark for 0:18:18.600 --> 0:18:19.720 them is enormous. 0:18:20.119 --> 0:18:20.679 Yeah, exactly. 0:18:20.760 --> 0:18:23.320 It's one of those sort of almost hoisted by your 0:18:23.320 --> 0:18:24.840 own petar, right, You've got kind of. 0:18:25.040 --> 0:18:27.680 That very nice position to be all well. 0:18:27.520 --> 0:18:29.920 Exactly, Yeah, So that just the comparatives are really tough, 0:18:29.960 --> 0:18:31.800 and that's actually a good thing to remember at all 0:18:31.800 --> 0:18:34.080 the banks. So for example, you know, last year we 0:18:34.119 --> 0:18:36.040 saw a lot of the investment banks doing really well 0:18:36.040 --> 0:18:38.240