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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: This is the Blueberg DAYBAQ podcast, available every morning on Apple,

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Speaker 2: Spotify or wherever you listen. It's Thursday, the twenty seventh

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Speaker 2: of February in London. I'm Caroline Hepka coming up today

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Speaker 2: and Video delivers results that underwhelm high expectations after years

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Speaker 2: of blowouts. President Trump says the EU was created to

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Speaker 2: screw the United States, as he proposes twenty five percent

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Speaker 2: tariffs on the block plus doing it for the gram.

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Speaker 2: Why more and more central bankers are posting on the

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Speaker 2: social media site. Let's start with a roundup of our

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Speaker 2: top stories. Shares in Nvidia fell in after hours trading

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Speaker 2: as the AI Darling delivered good but not great results

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Speaker 2: in Video. Says that quarterly sales will be slightly above

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Speaker 2: analyst estimates at about forty three billion dollars, but gross

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Speaker 2: profit margins will be tight to than expected. We got

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Speaker 2: reaction from Angelo Zeno, vice president of Equity Research at CFRA.

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Speaker 3: The gross margin number was probably the one black eye

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Speaker 3: as far as where we kind of were looking at

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Speaker 3: the guidance side of things. It was definitely a disappointment.

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Speaker 3: I think when you kind of especially look at the

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Speaker 3: trajectory of gross margins over the last couple of quarters.

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Speaker 3: It kind of hit a peak run rate of about

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Speaker 3: seventy eight percent in the first half of.

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Speaker 1: Calendar twenty twenty four.

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Speaker 3: So the margins continue to compress here going into the

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Speaker 3: April quarter. The good news is we do expect that

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Speaker 3: to essentially be the trough of the cycle here in

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Speaker 3: the April quarter.

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Speaker 2: Angelo Zino speaking there as concerns about slowing spending have

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Speaker 2: continued to weigh on the artificial intelligence industry. Chinese art

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Speaker 2: up Deep Seek has also sparked fears that chatbots can

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Speaker 2: be developed at a cheaper rate, potentially reducing the need

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Speaker 2: for Nvidia's powerful chips for AI. President Donald Trump says

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Speaker 2: that tariff's on products from the European Union will be

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Speaker 2: twenty five percent, announcing the changes during a cabinet meeting yesterday,

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Speaker 2: he went on to use strong language to attack the block.

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Speaker 1: It was formed in order to screw the United States.

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Speaker 4: I mean, look, let's be honest, the European Union was

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Speaker 4: formed in order to screw the United States.

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Speaker 1: That's a purpose serve and they've done a good job

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Speaker 1: of it. But now I'm.

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Speaker 2: President, well, Trump's proposal for a twenty five percent tariff

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Speaker 2: on the EU is new officials later clarified that all

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Speaker 2: options are being considered on whether those would affect all

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Speaker 2: exports from the block or only certain products or sectors.

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Speaker 2: An EU commissioned spokesperson said that the block would act

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Speaker 2: quote firmly and immediately against unjustified barriers to free and

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Speaker 2: fair trade. Bloomberg Economics has calculated that if the EU

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Speaker 2: did face a blanket twenty five percent US tariff, the

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Speaker 2: hit to GDP could be as much as one and

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Speaker 2: a half percent, with Germany most badly hit. Trump's comments

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Speaker 2: on the eukme as he gave a series of apparently

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Speaker 2: contradictory answers about his plans for tariffs twenty five percent

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Speaker 2: tarifs on Canada and Mexico. The US president said that

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Speaker 2: he's not stopping the tariffs, due to come into force

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Speaker 2: on the fourth of March, but then he later mentioned

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Speaker 2: the second of April as the implementation date. White House

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Speaker 2: officials were forced to later clarify that deadline is still

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Speaker 2: next Tuesday, although Trump is still undecided on granting another extension.

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Speaker 2: UK Chancellor Rachel Reeves says that the British government wants

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Speaker 2: to boost to trade with the US. Total trading goods

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Speaker 2: and services between the two countries was worth two hundred

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Speaker 2: and ninety four billion pounds in twenty twenty four, and

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Speaker 2: in an exclusive interview with Bloomberg the G twenty meeting

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Speaker 2: in Cape Town, Rachel Reeves made the case for even

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Speaker 2: closer economic ties with the UK's biggest single country trading partner.

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Speaker 5: In terms of the future trading relationship between the UK

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Speaker 5: and the US. Last time that President Trump was in

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Speaker 5: the White House, trade and investment between our two countries increase,

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Speaker 5: and I have every confidence that that can happen.

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Speaker 2: Again, Chancellor Rachel Reeves, speaking there as the Bank of

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Speaker 2: England policy maker Swati Dingra warned yesterday that world trade

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Speaker 2: appears to be heading for an orderly fragmentation. Well, the

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Speaker 2: UK Chancellor's call for closer economic ties comes just as

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Speaker 2: Prime Minister Kis Starmer heads to Washington as the latest

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Speaker 2: anxious ally hoping to sway the US president's stands towards Ukraine.

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Speaker 2: It's the first face to face meeting of the two

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Speaker 2: leaders since Trump's election. Bloomberg's James Walcock reports, now.

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Speaker 6: The UK has always wanted to be seen as the

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Speaker 6: bridge between the US and Europe, with leaders scrambling to

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Speaker 6: change Ukraine's fate. Kiss Starma is stressing that's so called

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Speaker 6: a special relationship.

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Speaker 4: We share fundamental values of openness, of democracy, freedom of speech,

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Speaker 4: a freedom which this week we've shown our willingness to

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Speaker 4: defend with the biggest sustained increase in our defense spending

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Speaker 4: since the Cold War.

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Speaker 6: The UK Prime Minister faces a potentially career defining test.

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Speaker 6: Will you have any purchase on a US president who

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Speaker 6: has been willing to upend transatlantic relations. Starmer's aids tell

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Speaker 6: Bloomberg they would be delighted if they can get through

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Speaker 6: the week without any public disagreement with Trump in London.

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Speaker 6: James Wilcock Bloomberg Radio.

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Speaker 2: Now to another story of interest. The US Director of

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Speaker 2: National Intelligence Tarlsi Gabbard has called for an investigation into

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Speaker 2: the UK ordering Apple to give access for the global

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Speaker 2: data of its customers. Gabbart said that the decision could

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Speaker 2: leave American encrypted data at risk of being exposed. So far,

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Speaker 2: instead of complying with the UK, Apple has removed its

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Speaker 2: most advanced encrypted security features in Britain that will potentially

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Speaker 2: make it easier for the government or outside hackers to

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Speaker 2: obtain UK user data. Months after Chancellor h Vve's crackdown

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Speaker 2: on the UK's so called non dom tax regime, wealthy

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Speaker 2: foreigners are making their concerns known more now from Bloomberg's

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Speaker 2: team at Adebayo.

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Speaker 7: The UK government is having open conversations with wealthy overseas

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Speaker 7: nationals about tax that's according to Investment Minister Poppy Gustafferson,

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Speaker 7: who says there's a collaborative dialogue between the two groups

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Speaker 7: as the Treasury tries to troubleshoot issues. The news comes

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Speaker 7: after a decision to scrap a preferential tax scheme which

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Speaker 7: allowed foreign residents to avoid levies on UK earnings for

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Speaker 7: up to fifteen years, a move which provoked the ayre

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Speaker 7: of the ultra rich. Now, Gustafferson says the Chancellor is

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Speaker 7: trying to create a tax structure which will be viewed

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Speaker 7: as fair by the general public but prevents talented foreigners

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Speaker 7: from shunning the UK in London. To you at a

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Speaker 7: Bayo Bloomberg Radio.

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Speaker 2: And those stories, Let's get to the markets this hour.

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Speaker 2: Europeans stop future sinking half of one percent. This morning

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Speaker 2: they dropped one percent yesterday after President Trump's threat of

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Speaker 2: twenty five percent tariffs against the EU. So interesting the

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Speaker 2: impact via stocks. The Euros also weaker this morning in

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Speaker 2: terms of the trade. Now we're down two tens of

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Speaker 2: one percent one spot zero four six seven. US stop

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Speaker 2: futures are high for the S and P five hundred

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Speaker 2: up by three tenths of one percent. We saw Nvidia

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Speaker 2: shares falling one and a half percent in ex traded

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Speaker 2: in extended trading yesterday. The stock did rise though before

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Speaker 2: the earnings release, up three point seven percent, sort of

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Speaker 2: ahead of the release. Asian stocks though, did fall because

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Speaker 2: of the underwhelming seen as underwhelming results from en Video

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Speaker 2: or not quite as as amazing as people had been

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Speaker 2: hoping for. So you've got the MSCI Aged Pacific Index

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Speaker 2: down by three tents of one percent, Hank saying Tech

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Speaker 2: index dropping two percent. Tenny US treasury yield so yesterday

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Speaker 2: dropped four basis points. They're up to basis points this morning.

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Speaker 2: So we're trading at four twenty seven on that ten

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Speaker 2: year yield. In a moment, we are going to bring

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Speaker 2: you more details in fact, on Nvidia's first set of

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Speaker 2: earning since the emergence of deep seek But first, more

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Speaker 2: on this story that's come high today. Recruitment firms are

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Speaker 2: noticing that junior bankers are using AI to draft their resumes,

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Speaker 2: but beware if you don't properly proofread the application and

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Speaker 2: errors creep in. It's raising red flags for potential investment

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Speaker 2: banking employers. Of course, they are focused on the detail

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Speaker 2: that apparently you need in those junior banking jobs. Bloomberg's

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Speaker 2: Georgia Hill has the story and the details on this

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Speaker 2: about the proliferation of AI assisted resumes. Her point essentially

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Speaker 2: is that it is slowing the hiring process down because

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Speaker 2: everybody has to actually spend more time thinking about whether

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Speaker 2: the applicant is really as amazing as the AI. You know,

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Speaker 2: maybe AI assisted a CV might demonstrate, which is interesting

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Speaker 2: and also a bit ironic given that some recruiters are

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Speaker 2: also using AI to help filter applicants. Anyway, we could

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Speaker 2: all see the kind of arms race in terms of

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Speaker 2: AI generated cvs and AI generated readers of cvs. But

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Speaker 2: it's a really nice piece on the Blueberg terminal. I

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Speaker 2: think if you're out there looking for a job, one

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Speaker 2: to think about now. In Nvidia reported results which were

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Speaker 2: tinged with a touch of disappointment yesterday after two years

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Speaker 2: of blockbuster results and stratospheric stock price gains in twenty

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Speaker 2: twenty three and twenty twenty four. Joining us this morning,

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Speaker 2: it's been big intelligence. Is senior analyst Robert Lee to

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Speaker 2: discuss this. Robert, great to have you with us this morning.

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Speaker 2: A lot has been written on the Bloomberg terminal, on

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Speaker 2: the website about the Nvidia results. Everybody's got a view

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Speaker 2: because this company is so important. It's been the dominant

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Speaker 2: seller of processes that create and run AI software. Just firstly,

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Speaker 2: on the out for the first quarter, what have they said.

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Speaker 8: Okay, thanks very much for having me on. I guess

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Speaker 8: investors have become used to, or you know, being fed

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Speaker 8: a diet of continual Beaten rays with the company, and

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Speaker 8: you know it's got a long track record of doing that,

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Speaker 8: running over multiple quarters. So I think, first of all,

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Speaker 8: the stop price reaction, you saw the rate of incremental

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Speaker 8: beaten raises diminishing. Maybe part of that reflects the higher base,

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Speaker 8: but also reflects, I think a change in narrative with

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Speaker 8: investors focusing more on the potential risks that in video

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Speaker 8: faces in the short to medium term and not just

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Speaker 8: the positive you know underlying story which is very well known.

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Speaker 8: So the Q one guidance to answer your question came.

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Speaker 8: There's something referred to with in markets as whisper numbers.

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Speaker 8: I mean, there are official consensus numbers, but there is

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Speaker 8: always a view that, you know, a company may beat

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Speaker 8: or or miss those. So I think there was some

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Speaker 8: disappointment and there was a hope within some sections of

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Speaker 8: investors that the company's revenue and gross margin guidance could

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Speaker 8: come in a little bit better than it actually did.

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Speaker 8: So I think that's one short term trigger. But as

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Speaker 8: I said, I think the narrative is changing. One of

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Speaker 8: the major focuses on the risk front is obviously the

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Speaker 8: scope for further tariffs.

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Speaker 1: So obviously with.

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Speaker 8: A new administration in place, that remains a very real

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Speaker 8: threat to them because China is still a very material

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Speaker 8: part of their business.

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Speaker 2: So that just unpacked. You talk about beaten rays, explain

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Speaker 2: that to the audience.

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Speaker 8: Well, I guess stock market's run and many different things,

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Speaker 8: but in short term, it's all about expectations and about

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Speaker 8: the incremental performance or it's you know, for a stop

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Speaker 8: price to go up in the near term. Then the

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Speaker 8: guidance that a company sets and the numbers they report

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Speaker 8: on their earning state ideally would need to come ahead

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Speaker 8: of what was expt So there's an incremental positive surprise

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Speaker 8: and obviously the reverse you know, disappointment if as we've

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Speaker 8: seen with in video on the Q four numbers. So

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Speaker 8: in absolute terms, these are still good numbers, but they

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Speaker 8: beat the actual reported numbers, and more importantly, the guidance

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Speaker 8: didn't quite meet the very highest of expectations, So there

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Speaker 8: was incremental disappointment even though the numbers themselves were good.

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Speaker 2: Yeah, understood good. In terms of the CEO, Jensen Wang,

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Speaker 2: he talked about demand for Blackwell is amazing. Now of

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Speaker 2: course there's a new model deep Seek. How did the

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Speaker 2: CEO's have come across given that there is this new

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Speaker 2: competitive landscape, as you say, you know, it does look

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Speaker 2: like things are quite different now for in video.

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Speaker 8: Yeah, well, Jensen Wang is not just a CEO, and

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Speaker 8: you know and played an instrumental role in the you know,

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Speaker 8: the humongous growth that this company has seen in recent years.

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Speaker 8: He's their chief farc detect, their chief evangelist, their chief cheerleader.

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Speaker 8: So you know, he's very good at setting out the

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Speaker 8: stall and giving the sels pitch, which is what he

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Speaker 8: continues to do. Again, I think the narrative is changing

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Speaker 8: and more with a focus on these software companies and

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Speaker 8: big tech platforms that are ultimately buying these chips, are

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Speaker 8: installing it in the data centers. You know, a point

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Speaker 8: I've tried to repeatedly make, but both in our little

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Speaker 8: chats and then the publish research we have in the terminal.

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Speaker 8: It's monetization because again, if we did a straw pole

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Speaker 8: of listeners on this call at the moment, how many

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Speaker 8: of us are actually putting our hand in our pocket

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Speaker 8: and paying.

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Speaker 1: For these services?

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Speaker 8: And if we did, probably the chances we just switched

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Speaker 8: to another service because there are many, many alternative supplies

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Speaker 8: out the moment. The majority of AI bots or AI

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Speaker 8: tools are available for free. There is a low level

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Speaker 8: of product differentiation, you know, in many respects, or you

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Speaker 8: go back to textbook definitions, it is a commoditize sector.

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Speaker 8: So again I'm not referring to the hardware side. Obviously

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Speaker 8: in Nvidia is the global leader and what they do,

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Speaker 8: they're effectively and monopoly at the moment, But the monetization

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Speaker 8: of the software companies, you know, the US tech platforms

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Speaker 8: due to spend around three hundred and fifty billion US

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Speaker 8: dollars this year, So I would argue that the rate

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Speaker 8: of monetization is not coming through anywhere fast enough to

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Speaker 8: justify these very high levels of CAPEX.

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Speaker 2: Right, Robert, thank you so much for your time this morning.

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Speaker 2: This is such an interesting space. Bloombig Intelligence is senior

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Speaker 2: analyst Robert Lee.

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Speaker 4: Thank you.

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Speaker 2: Okay, let's dive into another interesting story. So central bankers

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Speaker 2: are trying their hand at marketing and influencing on social media.

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Speaker 2: This is in order to reach gen z and millennials

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Speaker 2: in the wake of an inflation crisis in many countries

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Speaker 2: and also the surprising issue of conspiracy theories around policy making.

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Speaker 2: Joining us now is our UK economy reporter, Arena and

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Speaker 2: girl who's been writing about why something like one hundred

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Speaker 2: central banks have actually established a presence on Instagram. Arena.

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Speaker 2: It's a great story, great tale. What are central banks

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Speaker 2: doing with their Insta accounts?

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Speaker 1: Hi, Caroline? Well, you know they're trying to meet.

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Speaker 9: Gen zs where they are, and that is on social media.

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Speaker 9: So most gen zs get their news on social media,

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Speaker 9: and central banks are trying to go there speak in

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Speaker 9: their language, so trying to keep the talk of basis

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Speaker 9: points down to regain their trust, counter misinformation and educate.

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Speaker 9: And what does that look like, Well, you know those

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Speaker 9: videos of celebrities showing a day in their life on

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Speaker 9: social media, So for example, some central bankers are trying

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Speaker 9: to do that as well, and you know, you can

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Speaker 9: imagine with various degrees of success.

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Speaker 1: And I think the Bank of Canada its own videos are.

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Speaker 9: Seemingly ai narrated, so they can look clumsy sometimes.

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Speaker 1: And then there are all sorts of funny posts.

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Speaker 9: D e c B has young people explaining it's decisions,

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Speaker 9: it's industrate decisions. And for Valentine's Day they had this

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Speaker 9: photo of the eurosymbol made of chocolate hearts captioned with

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Speaker 9: roses are red, violets are blue inflations on track to

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Speaker 9: settle around too, and.

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Speaker 2: So that's it's also very cheesy then as well, exactly

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Speaker 2: exactly and a.

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Speaker 9: Bit you know, poking fun at themselves as well. And

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Speaker 9: I mean maybe the most striking for me was the

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Speaker 9: Bank of Jamaica. And the Bank of Jamaica has this

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Speaker 9: lunchtime concerts at the Central Bank, these reggae concerts, and

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Speaker 9: on its Instagram account you can find videos of people

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Speaker 9: in the central bank, just random people dancing to the

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Speaker 9: reggae music. So yeah, that's that was the funniest example

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Speaker 9: and probably the most successful. You know.

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Speaker 2: Yeah, So this the central bankers sort of needing to

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Speaker 2: reach out to the public is very interesting obviously because

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Speaker 2: you know, they're officials with such importance, but they're not elected,

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Speaker 2: so you know, they're kind of interactions with the public.

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Speaker 2: It's quite interesting. What do you think of the aim

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Speaker 2: of all of this is then? And also, I guess

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Speaker 2: what does success look like? I mean, some of what

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Speaker 2: you outlined, yes is perhaps sounds a bit a bit

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Speaker 2: cheesy or not as glamorous as the successful Instagram posts

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Speaker 2: that you might expect. But what are what is the aim?

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Speaker 9: That's a great question, and I think many people are

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Speaker 9: still trying to answer the questions. So the big aim is,

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Speaker 9: you know, to to engage to educate the public, because

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Speaker 9: central banker's decisions on interest rate policies they affect everyone.

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Speaker 9: You know, we can just think of mortgage rates as

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Speaker 9: the main example, but most people don't understand how it

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Speaker 9: works or how it affects them. So central bankers have

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Speaker 9: to be out there and they have to set the

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Speaker 9: narrative and often they have to be a bit cheat

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Speaker 9: because that's what people consume on social media, or that's

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Speaker 9: what central bankers think people consume on social media. But

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Speaker 9: I think there is a limit to how successful they

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Speaker 9: can be. As someone put it to me, central bankers

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Speaker 9: have to be on Instagram, but they won't be effective.

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Speaker 1: But they still have to be there, and.

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Speaker 9: That's because there's this trade off between precision and accessibility

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Speaker 9: that they have and politicians, for example, don't have this.

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Speaker 1: So central bankers are technocrats.

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Speaker 9: They are precise, and this is what makes them good

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Speaker 9: at their job to set interest rates, but that is

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Speaker 9: also what makes them a bit less accessible to the

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Speaker 9: general public, a bit clumsier when trying to explain interest

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Speaker 9: rates to an average person.

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Speaker 2: I also thought it was interesting that it's the central

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Speaker 2: banks that you pick out, as you know, having an

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Speaker 2: Instagram feed. There aren't that many individual policy makers who do.

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Speaker 2: But there is a big exception of course, that's the

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Speaker 2: ECB's Christine Legarde. What is she using her Instagram feed for?

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Speaker 9: Well, that's right, and you know, Christine la guard ironically

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Speaker 9: has twice as many Instagram followers as the as the ECB.

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Speaker 9: And you know, I should add that the ECB is

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Speaker 9: one of the most active central banks on Instagram, So

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Speaker 9: you know the fact that Christine la Guard is more

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Speaker 9: successful than her own bank is quite telling. You know,

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Speaker 9: she's one of those rare central bankers that commands attention

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Speaker 9: to herself. She's not camera shy. She invites the camera.

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Speaker 9: So she has all these videos where she talks to

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Speaker 9: the camera and she, you know, says I met with

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Speaker 9: this friend and colleague of mine, or you know, I'm

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Speaker 9: in Lithuania right now for x or for for y,

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Speaker 9: and she you know, sometimes she would also post stuff

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Speaker 9: like a photo of the Notre Dame after the reopening,

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Speaker 9: so trying to give a bit of a glimpse into

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Speaker 9: her life as well. And I think that one of

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Speaker 9: the more telling examples of Christine La Guard's sort of

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Speaker 9: social media presence and relateationship with the media and with

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Speaker 9: the public is when she decided when the ECB decided

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Speaker 9: to cut interest rates for the first time in the

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Speaker 9: cycle last summer, and she wore a golden necklace saying

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Speaker 9: in spelling out in charge at the press conference when

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Speaker 9: she was announcing this decision, which obviously attracted lots of

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Speaker 9: cameras and a lot of people were speaking about this afterwards,

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Speaker 9: so I guess that was a successful, successful attempt to

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Speaker 9: reach the public.

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Speaker 10: This is Bloomberg Daybreak Europe, your morning brief on the

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Speaker 10: stories making news from London to Wall Street and beyond.

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Speaker 2: Look for us on your podcast feed every morning, on Apple, Spotify,

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Speaker 10: You can also listen live each morning on London DAB Radio,

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Speaker 10: the Bloomberg Business app, and Bloomberg dot Com.

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Speaker 2: Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.

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Speaker 10: I'm Caroline Hepca and I'm Stephen Carroll. Join us again

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Speaker 10: tomorrow morning for all the news you need to start

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Speaker 10: your day. Right here Bloomberg day Break Europe.

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Speaker 1: Mm hmm