Speaker 1: Good morning. It's Monday, the third of July in London.
Speaker 1: This is Bloomberg Daybreak in Europe's podcast with Caroline Hepga
Speaker 1: and Stephen Carroll.
Speaker 2: Coming up today, we'll have news from Apple about the
Speaker 2: production of their mixed reality headset and.
Speaker 1: Tesla sets a delivery record for electric cars.
Speaker 2: Plus we'll have the latest on the riots in France
Speaker 2: and what it means for President Emmanuel Macran. But first
Speaker 2: our top stories.
Speaker 1: Apple is reported to be making major cuts to its
Speaker 1: Vision Pro headset production plans. Bloomberg's Un Potts reports it.
Speaker 3: Was seven years in development, hailed as the most significant
Speaker 3: product launch since the iPhone, But now, according to the
Speaker 3: Financial Times, Apple is making drastic cuts to production forecasts
Speaker 3: for its mixed reality Vision Pro headset. The paper says
Speaker 3: the complexity of the three and a half thousand dollars
Speaker 3: headsets design and difficulties in production have forced the move.
Speaker 3: It says fewer than four hundred thousand units are likely
Speaker 3: to be made next year. Internal targets were for sales
Speaker 3: of a million. The report, which Apple hasn't commented on,
Speaker 3: comes in the wake of the tech giant hite a
Speaker 3: three trillion dollar valuation on Friday seventy its place as
Speaker 3: the world's most valuable company in London Immunepotsi BIM Big
Speaker 3: day Break Europe.
Speaker 2: Tasla has delivered a record of more than four hundred
Speaker 2: and sixty six thousand cars worldwide in the second quarter,
Speaker 2: outpacing Wall Street estimates. More from Dembrick's Charlie Palace.
Speaker 4: The deliveries are the most ever in a quarter for
Speaker 4: Austin based Tesla and an eighty three percent increase from
Speaker 4: a year ago. The results demonstrate that CEO Elon Musk's
Speaker 4: vowed to chase volume by cutting prices have had their
Speaker 4: intended effect. Analysts survey by Bloomberg had expected Tesla to
Speaker 4: ship four hundred forty eight three hundred and fifty cars
Speaker 4: in the quarter. The company also managed to trim the
Speaker 4: gap between production and deliveries, a number closely watched by analysts,
Speaker 4: to thirteen thousand, five hundred and sixty units in the
Speaker 4: second quarter. In New York, Charlie Pale, Bloomberg Daybreak Europe.
Speaker 1: French President Emanuel Macon will meet the leaders of the
Speaker 1: National Assembly and send it today to discuss the spate
Speaker 1: of riots that have swept the country. The number of
Speaker 1: arrests fell to one hundred and fifty seven overnight, according
Speaker 1: to the Interior Ministry. Macar held another crisis meeting with
Speaker 1: ministers on Sunday evening, as forty five thousand police and
Speaker 1: special forces were deployed for a third night. Meanwhile, the
Speaker 1: grandmother of the teenager Nail, whose killing sparked the unrest
Speaker 1: in France, is calling for an end to the violence.
Speaker 5: The people who are pillaging stop. Stop they're using Nile
Speaker 5: as a pretext. No, they must stop destroying the shops,
Speaker 5: the schools, the buses. The mothers take the buses, We
Speaker 5: take the buses.
Speaker 1: Tomorrow, I man who in Macall will meet mayors from
Speaker 1: the two hundred and twenty areas most affected by almost
Speaker 1: a week of rioting. A first estimate by insurance has
Speaker 1: put the cost of the damage from the violence at
Speaker 1: more than one hundred million euros, a number that is
Speaker 1: expected to rise.
Speaker 2: The corruption trial of ECB Governing Council member Peter Kasimir
Speaker 2: begins today. The serving Central Bank policymaker is accused of
Speaker 2: offering a forty eight thousand euro bribe to speed up
Speaker 2: tax procedures against several companies during his term as finance minister.
Speaker 2: The Slovak Central Bank governor who denies wrongdoing faces up
Speaker 2: to five years in prison if found guilty.
Speaker 1: Chinese President Shijingping has elevated a long serving technocrat to
Speaker 1: the Central Bank's top Communist party role. Pang Goong Sheng
Speaker 1: was named as the pboc's party chief over the weekend.
Speaker 1: Bloomberg Economics's chief Asia economist Chang Shu says that one
Speaker 1: key sector of the economy could now see a change
Speaker 1: in approach.
Speaker 6: Pango San has been the pointer person, as it were,
Speaker 6: for devising property market, and we know the word is
Speaker 6: that he has a more hawky stancer and the property
Speaker 6: regulation going forward, we do see him taking a more
Speaker 6: practical approach in dealing with the property market.
Speaker 1: Despite that, Shi that, Chang Shu says, the appointment is
Speaker 1: broadly seen as an indication of policy continuity. Reaction in
Speaker 1: China's equity and credit markets was muted well.
Speaker 2: US Treasury Secretary Janet Yellen will travel to Beijing later
Speaker 2: this week. She becomes the second member of Biden's cabinet
Speaker 2: to visit, after Secretary of State Anthony Blincoln's trip three
Speaker 2: weeks ago. The US Treasury Department it says Yellen will
Speaker 2: meet with senior Chinese government officials, without naming exactly who,
Speaker 2: but that Yellen would not meet President she Jingping as
Speaker 2: for a bilateral summers. President Joe Biden said in mid
Speaker 2: June that he anticipates meeting she in the next several months.
Speaker 1: Okay, those are a few of our top stories for
Speaker 1: you this morning. A bit lighter though, of course. It's
Speaker 1: the start of summer in the UK. Wimbledon begins today.
Speaker 1: Absolutely tons of the expected to be eaten and Novak Djokovic,
Speaker 1: of course, the Serb is won twenty three Grand Slam titles.
Speaker 1: It's seen widely is the favorite in terms of Wimbledon. Yeah,
Speaker 1: it begins today.
Speaker 2: Well, lots of interest to and Andy Murray and what's
Speaker 2: going to happen to him? Could this be his last tournament?
Speaker 1: Yeah?
Speaker 2: Poor man, so many helps pen in them every year.
Speaker 1: Yeah, absolutely, and he has had an incredible career. And yet,
Speaker 1: of course with the replacements that he's had in the
Speaker 1: surgery meantly difficult. But then these champions are fighters, they
Speaker 1: are battlers. And Venus Williams is going to be at
Speaker 1: the tournament. She is forty three and playing. I mean,
Speaker 1: what a remarkable career.
Speaker 2: Yeah, amazing. All right, Well, let's turn back to our
Speaker 2: top story this morning. Apple reportedly slashing production targets for
Speaker 2: its Vision Pro because manufacturers are struggling with the novel
Speaker 2: gadget's complex design. The Financial Time says the tech giant
Speaker 2: is now preparing to make fewer than four hundred thousand
Speaker 2: versions of the headsets, joining us to discuss as Bimber
Speaker 2: Quick takes Alex web Alex, good morning to you. What
Speaker 2: is the reported problem that Apple is facing here?
Speaker 7: So, according to the FT's reporting, it's to do with
Speaker 7: the micro led displays, which are essentially inside the headset,
Speaker 7: that they have some issues with the yields. Something you
Speaker 7: quite often see with new technologies that of the number
Speaker 7: that come off the production line, a lower percentage of
Speaker 7: those are actually usable than Apple would like. It's what
Speaker 7: we saw actually with face ID when that was first
Speaker 7: wrought to market a few years ago. So it's probably
Speaker 7: a relief in a sense that they weren't going for
Speaker 7: a massive you know, trying to ship fifteen million units
Speaker 7: in the first year. When you're just dealing with a
Speaker 7: few hundred thousand, the stakes a little bit lower. That's
Speaker 7: also perhaps one reason why they might have done it
Speaker 7: on that sort of scale.
Speaker 1: Yeah, absolutely, So then is it a big blow for
Speaker 1: a kind of flagship product, Does it increase the anticipation
Speaker 1: the excitement about it, or how can we judge?
Speaker 7: I mean, you might find actually that it kind of
Speaker 7: helps them because of scarcity sometimes is beneficial. And at
Speaker 7: this stage it wasn't likely to make any meaningful difference
Speaker 7: to the bottom warranteed the top line. In fact, it's
Speaker 7: probably going to be it's a good chance to be
Speaker 7: loss making in the first year. This is a flagship
Speaker 7: product in the sense of flagship announcement, but the iPhone
Speaker 7: is still the flagship product, right that is still the
Speaker 7: thing that drives more than fifty percent of revenue. This
Speaker 7: probably the sales are like to be more than a
Speaker 7: rounding error. When it comes to Apples overall learnings, it's
Speaker 7: about laying the groundwork for what might be to come.
Speaker 7: And if you can get these devices into the hands
Speaker 7: of developers, that means they can start building the apps
Speaker 7: and services that would run on Vision Pro or perhaps
Speaker 7: Vision which might be the second generation at a slight
Speaker 7: lower price, so that when it does, in Apple's hope,
Speaker 7: become a mass market product. There is a slew as
Speaker 7: a bevy of really compelling use cases that then drive
Speaker 7: a more widespread adoption.
Speaker 2: This, of course, I was coming after Apple have that
Speaker 2: market milestone hitting three trillion dollar valuation last week.
Speaker 7: Yeah, it's fascinating. The Apple machine just kind of churns
Speaker 7: on sort of no matter what. I feel as though
Speaker 7: that number was perhaps less directly to do with the
Speaker 7: vision pro than it was just Apple's ability to continue
Speaker 7: layering on services to the iPhone that not only give
Speaker 7: users and another opportunity to spend their money with Apple,
Speaker 7: but also ensure they have to keep returning and buy
Speaker 7: the iPhone. If you've got an Apple card, if you've
Speaker 7: got an Apple Watch, if you've got AirPods, you know,
Speaker 7: if you spend all the money on those things, you're
Speaker 7: way less likely to be able to trade it in
Speaker 7: for an Android because you're so deeply tied into it.
Speaker 7: And that's really been the story of Apple under Tim
Speaker 7: Cook over the past few years. Yeah.
Speaker 1: Absolutely, the wearable's business is husually important to them. Alex,
Speaker 1: thank you so much for being with us. Bloomberg quick
Speaker 1: takes Alex.
Speaker 2: Web up next. Pimco's CEO warns of a harder landing
Speaker 2: and banks told to uphold free speech after accounts blacklisted.
Speaker 3: Now the paper review on blue Bird Daybreak Europe. The
Speaker 3: news you need to know from today's papers.
Speaker 2: I'm bloom Berkley and Goerren's is the studio with the
Speaker 2: details of those stories. Good morning to you, Leanne. Let's
Speaker 2: start with the Financial Times. The headline there bond fund
Speaker 2: giant Pimco prepares for harder landing for global economy.
Speaker 8: Yes, indeed, Stephen, good morning to you. Pimco says markets
Speaker 8: are far too optimistic about central bank's ability to dodge
Speaker 8: a recession and this comes as a really battle inflation
Speaker 8: in the US and also in Europe. So speaking to
Speaker 8: the FT over the weekend was a CEO and he
Speaker 8: said he's preparing for a harder landing than other investors,
Speaker 8: while top central banked chiefs really continue their campaign of
Speaker 8: interest rate rises and we've obviously seen that here in
Speaker 8: the UK the Bank of England raising rates. However, speaking
Speaker 8: to the newspaper, the CEO thinks of soft landing is
Speaker 8: actually most likely for the US economy. So predicting that
Speaker 8: the firm owned by Germany's alliances favoring high quality government
Speaker 8: and corporate bonds right now at the moment, and Pimco's
Speaker 8: moved to safer bonds as really part of an industry
Speaker 8: shift that we're seeing towards higher quality fixed income assets,
Speaker 8: but really a warning their Carol line that we are
Speaker 8: too optimistic about the central bank's ability to dodge a
Speaker 8: recession and get inflation down. And this is all according
Speaker 8: to the CEO of Pimco. Yeah.
Speaker 1: Of course, Bloomberg was speaking to the CEO of Alians
Speaker 1: on Friday. Alians owns PIMCO, and so his comments to
Speaker 1: us were also pretty fascinating to layer in because he
Speaker 1: was talking about, yes, bonds are back, but it's all
Speaker 1: about flows. We've got a guess actually all on the program.
Speaker 1: He's going to be able to talk to us a
Speaker 1: little bit more about that a little bit later on.
Speaker 1: But the question is how much of the flows into
Speaker 1: bonds go into passive strategies or active strategies, you know,
Speaker 1: how much into ETF, how much into active managers. But yeah,
Speaker 1: and so the soft landing idea sort of plays into that.
Speaker 1: But yeah, and very interesting conversation.
Speaker 2: Let's go to the telegraph next. Lee and banks tolls
Speaker 2: to uphold free speech after accounts blacklusters.
Speaker 8: Yes, indeed, Steve, And there was a lot about this
Speaker 8: over the weekend in the newspaper and the Chancellor, Jeremy
Speaker 8: Hunter said to be deeply concerned about bands on customers
Speaker 8: who hold controversial views. He's actually called on the City Minister,
Speaker 8: who's Andrew Griffith, to actually investigate the whole issue that
Speaker 8: is currently swirling around at the moment. White All sources
Speaker 8: say to the newspaper that the results of a consultation
Speaker 8: on the whole subject matter is to be published within
Speaker 8: weeks now. This comes after it was launched earlier this
Speaker 8: year in the wake of PayPal blocking accounts of free
Speaker 8: speech groups. So consultation due in and the controversial really
Speaker 8: actually flared up again last week, and that was after
Speaker 8: the leading brexityer Nigel Farage revealed his account had been
Speaker 8: closed by his bank, saying he wasn't sure why this
Speaker 8: had happened and he had gone to many other high
Speaker 8: street lenders and couldn't seem to open another bank account.
Speaker 8: Vica was also dropped as a customer after criticizing his
Speaker 8: lenders stance on LGBTQ plus issues. So there we are
Speaker 8: two people and the Treasury is poised to recommend a
Speaker 8: more rigid notice period if payment providers, including high street lenders,
Speaker 8: actually want to close a customer's bank account, as well
Speaker 8: as requiring banks to provide more information about why they
Speaker 8: have decided to close these accounts. And that is something
Speaker 8: that Alex Wickham has written on the Bloomberg terminal about
Speaker 8: Nigel Farage and the controversy surrounding these closed bank accounts.
Speaker 1: Yeah, I mean Faraj has been on television to talk
Speaker 1: about how this is serious political persecution at the very
Speaker 1: highest level of our system. So that's the sort of
Speaker 1: language that he's using. The bank apparently though, contacted him
Speaker 1: and it's about actually the fact that it is his
Speaker 1: business account that is being closed, that he still has
Speaker 1: the option of opening a personal personal bank account. So
Speaker 1: it's a little bit I think more complicated than this,
Speaker 1: and also sort of around the bank's decisions around how
Speaker 1: they make those decisions around business accounts.
Speaker 2: Actually, yeah, certainly an interesting story to monitor. Leanne The
Speaker 2: Times next warnings of summer travel chaos in Europe as
Speaker 2: air traffic controls expected to be overloaded.
Speaker 8: Sounds familiar, Yes, very familiar flying to Europe this summer. Well,
Speaker 8: maybe you might be held up on the runway or
Speaker 8: you might face delays, and Eurocontrol warned passengers of a
Speaker 8: challenging period ahead, with high overloads of air traffic seen
Speaker 8: on most days in many important regions, including Marseille, Athens
Speaker 8: and Budapest. Now the Times is reporting this and this
Speaker 8: can result in delays and aircraft's being forced to take
Speaker 8: these longer routes. And I can't believe there's but twenty
Speaker 8: five million Brits are expected to head overseas between right
Speaker 8: now and September, mostly by airs we get away on
Speaker 8: those summer holidays. Now, the director General of Eurocontrol, which
Speaker 8: does manage European air space, says this summer in Europe
Speaker 8: it's particularly challenging because there's less air space because of
Speaker 8: the war in Ukraine and the military needs aviation. Bosses,
Speaker 8: including Michael O'Leary, the chief executive of Ryanair, also says
Speaker 8: there's a series of strikes by controllers in France, which
Speaker 8: remains one of the biggest threats to summer air travel.
Speaker 8: But I feel like every year we do get these warnings,
Speaker 8: so always arrive early, kind of expect to be delayed,
Speaker 8: which is annoying because I went away and I was
Speaker 8: delayed because of NATO training in the air space. But
Speaker 8: these are things that happen, Caroline, so we've all be prepared.
Speaker 2: This is Bloomberg Daybreak Europe, your morning brief on the
Speaker 2: stories making news from London to Wall Street and beyond.
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Speaker 1: I'm Caroline Hepka and.
Speaker 2: I'm Stephen Carroll. Join us again tomorrow morning for all
Speaker 2: the news you need to start your day right here
Speaker 2: on Bloomberg Daybreak Europe