WEBVTT - Daybreak Weekend: Jackson Hole, France Conference, Tokyo CPI 0:00:00.240 --> 0:00:07.200 Bloomberg Audio Studios, Podcasts, radio News. 0:00:10.039 --> 0:00:13.080 This is Bloomberg Daybreak Weekend, our global look at the 0:00:13.080 --> 0:00:15.680 top stories in the coming week from our Daybreak anchors 0:00:15.720 --> 0:00:18.160 all around the world. Straight Ahead on the program, we 0:00:18.160 --> 0:00:21.520 look ahead to FED Chair Kevin Worsh's first address in 0:00:21.680 --> 0:00:24.080 Jackson Hall. I'm Nathan Hager in Washington. 0:00:24.280 --> 0:00:26.680 I'm Stephen Caroln London. We're looking ahead to a key 0:00:26.720 --> 0:00:29.280 meeting of French business leaders as they count down to 0:00:29.320 --> 0:00:31.840 the pivotal presidential election in France. 0:00:31.960 --> 0:00:35.320 I'm Doug Chrisner, looking at how overall inflation in Japan 0:00:35.600 --> 0:00:37.960 compares with price increases in Tokyo. 0:00:38.360 --> 0:00:42.360 That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg 0:00:42.400 --> 0:00:46.120 eleven three year, New York, Bloomberg ninety nine to one, Washington, DC, 0:00:46.600 --> 0:00:51.760 Bloomberg ninety two nine, Boston, DAB Digital Radio, London, Syrias, 0:00:51.920 --> 0:00:55.440 XM one twenty one, and around the world on Bloomberg Radio, 0:00:55.480 --> 0:01:03.320 dot Com and the Bloomberg Business app. Good day to you. 0:01:03.440 --> 0:01:06.160 I'm Nathan Hager, and we begin today's program with an 0:01:06.160 --> 0:01:09.160 eye on the Grand Tetons. Central bankers from around the 0:01:09.200 --> 0:01:11.560 world are headed to Jackson Hole once again for the 0:01:11.640 --> 0:01:15.880 Kansas City Fed's annual Economic Policy Symposium. It is going 0:01:15.920 --> 0:01:18.959 to be the first appearance for new FED Chairman Kevin Worsh, 0:01:19.040 --> 0:01:22.080 so there is heavy anticipation for what he has to 0:01:22.120 --> 0:01:26.000 say at his keynote address later this week. Bloomberg International 0:01:26.080 --> 0:01:28.959 Economics and Policy correspondent Michael McKee is going to be 0:01:29.120 --> 0:01:31.320 in Jackson Hole once again as part of our team 0:01:31.440 --> 0:01:34.080 covering the event this year. But Mike is here with 0:01:34.120 --> 0:01:36.840 me now in our Washington studio to preview what the 0:01:36.920 --> 0:01:41.319 chairman might have to say, given that he's told market 0:01:41.360 --> 0:01:44.840 participants that he doesn't want the FED saying as much. 0:01:44.880 --> 0:01:48.720 So what are we expecting, Well, we're expecting something, but 0:01:48.800 --> 0:01:53.360 we're not exactly sure what. The title of this or 0:01:53.440 --> 0:01:57.120 the subject of this symposium is payment systems, which would 0:01:57.120 --> 0:02:01.160 attract a very small subset of the people out there 0:02:01.200 --> 0:02:04.840 in the markets. So the original thought was because he 0:02:04.880 --> 0:02:06.920 didn't want to say a thing, he might stick to 0:02:06.960 --> 0:02:10.480 that subject. But now that he's had trouble with the 0:02:10.520 --> 0:02:14.600 markets and the question of FED credibility, there is a 0:02:14.639 --> 0:02:18.320 feeling he's going to want to say something that will 0:02:18.480 --> 0:02:22.560 make him seem more credible, that will enable the markets 0:02:22.600 --> 0:02:25.280 to take him more seriously when he says he's going 0:02:25.360 --> 0:02:27.959 to make sure they get back to the two percent 0:02:28.000 --> 0:02:30.800 inflation target. It's a bit of a threading the needle 0:02:30.840 --> 0:02:34.360 because he doesn't want to do any kind of forward guidance. 0:02:34.840 --> 0:02:39.919 But if he emphasizes the FED maybe would use all 0:02:40.000 --> 0:02:44.200 its tools in the event, that kind of speech that 0:02:44.320 --> 0:02:46.400 might get some attention as well. 0:02:46.680 --> 0:02:48.520 Is that the kind of thing that would be enough 0:02:48.560 --> 0:02:52.360 for market participants just to say that the Fed is 0:02:52.400 --> 0:02:54.920 willing to use all its tools when I think the 0:02:54.960 --> 0:02:57.880 markets have kind of gotten used to the idea that 0:02:57.919 --> 0:03:01.120 the FED at least under pass chair and have been 0:03:01.160 --> 0:03:03.839 a little bit more specific about saying that they could 0:03:03.919 --> 0:03:06.320 go ahead and raise rates, lower rates, that sort of thing. 0:03:06.639 --> 0:03:09.840 That's the trade off Worsh is working on. He doesn't 0:03:09.880 --> 0:03:12.440 want the markets to take their cues from the Fed. 0:03:12.480 --> 0:03:15.000 He wants the markets to take their cues from the 0:03:15.080 --> 0:03:18.320 data and the news out there, and then the FED 0:03:18.360 --> 0:03:22.200 would follow along. Basically, So how far can he go 0:03:23.400 --> 0:03:28.359 and build credibility again without going farther than he wants 0:03:28.440 --> 0:03:30.440 to and setting a precedent that then he'd have to 0:03:30.480 --> 0:03:35.520 live up to going on with future guidance on what 0:03:35.560 --> 0:03:38.320 they're going to do. Now, he does have some other 0:03:38.360 --> 0:03:41.040 things he could talk about. He could certainly talk about 0:03:41.080 --> 0:03:44.400 the task forces that he's put in place and what 0:03:44.440 --> 0:03:48.040 he hopes to get out of them, and maybe in general, 0:03:48.320 --> 0:03:51.280 what he hopes to accomplish as a FED chairman who's 0:03:51.320 --> 0:03:54.720 going to bring radical change, as he's put it to 0:03:54.840 --> 0:03:55.720 the Central Bank. 0:03:55.960 --> 0:03:59.560 Well, you're not expecting then, that the Chairman is sort 0:03:59.600 --> 0:04:05.600 of feverishly reworking his remarks given the action that we've 0:04:05.640 --> 0:04:09.040 seen in the markets these last few days and weeks 0:04:09.080 --> 0:04:11.800 when it comes to rising bond yields. 0:04:12.320 --> 0:04:16.080 I think at this point he would be just still 0:04:16.080 --> 0:04:19.240 writing it, because he told us on July twenty ninth 0:04:19.279 --> 0:04:21.720 that he hadn't started writing it yet. So maybe it's 0:04:21.760 --> 0:04:25.200 in the first draft or second draft stage. But no, 0:04:25.920 --> 0:04:28.520 the problem here is the same thing, the same problem 0:04:28.560 --> 0:04:31.600 we have all the time with this administration. In places, 0:04:32.000 --> 0:04:35.000 the news changes so quickly that trying to keep up 0:04:35.040 --> 0:04:37.960 with it is very difficult. So I suspect that he 0:04:38.040 --> 0:04:42.080 would be speaking more in general terms rather than in 0:04:42.279 --> 0:04:45.800 specific terms. Now, we did have last week the Treasury 0:04:45.839 --> 0:04:51.760 Department announcing its plan to double the buybacks increased liquidity, 0:04:51.839 --> 0:04:57.160 basically to try to keep people able to buy treasuries. 0:04:57.839 --> 0:05:02.760 The yields obviously worrying the Treasury Secretary, and that could 0:05:02.800 --> 0:05:05.160 have an impact on the Fed. It could mean that 0:05:05.200 --> 0:05:08.479 the Fed wants to cut to raise rates on the 0:05:08.480 --> 0:05:13.599 short end to build credibility, and that would then send 0:05:13.640 --> 0:05:17.640 long yields lower. But that's something that's probably too specific 0:05:17.839 --> 0:05:20.440 for him to get into because that would amount to 0:05:20.520 --> 0:05:21.279 forward guidance. 0:05:21.520 --> 0:05:25.760 It raises an interesting point, given that the chairman has 0:05:25.800 --> 0:05:28.000 said he doesn't want to give forward guidance to the 0:05:28.040 --> 0:05:31.800 market necessarily, could he give a little bit more clarity 0:05:31.880 --> 0:05:35.320 when it comes to whether the Fed and the Treasury 0:05:35.440 --> 0:05:37.400 are going to be working a little more closely together 0:05:37.440 --> 0:05:38.040 going forward. 0:05:38.440 --> 0:05:42.480 Well, that's an interesting possibility because he has said all 0:05:42.520 --> 0:05:45.680 along before he was the chair and since he's been 0:05:45.760 --> 0:05:48.320 chair that he wants to work on a so called 0:05:48.440 --> 0:05:52.560 Treasury Accord, an updated Treasury Accord, And the idea generally 0:05:52.720 --> 0:05:58.039 is that the Fed would try to align its securities buying, 0:05:58.480 --> 0:06:01.320 because it still is not new Q right now, but 0:06:01.440 --> 0:06:04.560 it's still buying securities to keep up with the rise 0:06:04.600 --> 0:06:07.719 and the money supply and demand for money, and so 0:06:08.880 --> 0:06:13.440 align that with what Treasury is issuing. And right now 0:06:13.800 --> 0:06:19.680 Treasury is moving to shorten its maturities. They haven't done 0:06:19.680 --> 0:06:22.320 anything besides the buybacks in terms of an announcement, but 0:06:22.560 --> 0:06:25.840 markets are expecting one in a reasonable amount of time, 0:06:26.160 --> 0:06:29.760 and in that case, then he might make it more 0:06:29.800 --> 0:06:33.160 clear that the Fed is much more interested in having 0:06:33.200 --> 0:06:36.200 a portfolio structured towards the short end and towards bills, 0:06:36.600 --> 0:06:38.440 which would work together with Treasury. 0:06:38.600 --> 0:06:40.960 Well, thanks for being at least a part of this 0:06:41.120 --> 0:06:43.520 bit of the build up. Mike really appreciates you coming 0:06:43.520 --> 0:06:46.960 in with us. That's Bloomberg International Economics and Policy Correspondent 0:06:47.000 --> 0:06:49.440 Michael McKee. We invite you to stay with us for 0:06:49.520 --> 0:06:53.080 special coverage of Jackson Hall and Chairman Warsh's keynote on 0:06:53.120 --> 0:06:57.200 a special edition of Bloomberg Surveillance this Friday, nine am 0:06:57.320 --> 0:07:00.599 Wall Street Time from Jackson Hall on Bloomberg Radio, Television 0:07:00.880 --> 0:07:03.640 and the Bloomberg Business App. Let's take a look now, 0:07:03.720 --> 0:07:05.800 add some stocks making news in the week ahead. I'm 0:07:05.839 --> 0:07:08.960 Nathan Hager, joined by Bloomberg Intelligence Global Head of Tech 0:07:09.000 --> 0:07:12.880 Research Mandeep Singh. Because we have some major tech earnings 0:07:13.040 --> 0:07:16.800 coming up this week, including the big one from in Vidia. 0:07:17.040 --> 0:07:19.360 Is in Nvidia still the big one man deep when 0:07:19.360 --> 0:07:21.680 it comes to the AI trade and earnings. 0:07:22.240 --> 0:07:26.560 Absolutely. I mean, if there is you know, one company 0:07:26.640 --> 0:07:31.360 that really has carried through the mantle when it comes 0:07:31.360 --> 0:07:34.840 to this AI build out, it is in Nvidia, and 0:07:35.720 --> 0:07:38.120 it shows up in their numbers when you look at 0:07:38.200 --> 0:07:41.600 you know, growth expectations of close to mid ninety percent 0:07:41.760 --> 0:07:46.360 and actually their revenue seems to be accelerating. So it 0:07:46.520 --> 0:07:49.880 just goes to show that, you know, this company with 0:07:49.960 --> 0:07:52.280 over a three hundred and fifty billion dollars run rate 0:07:52.360 --> 0:07:56.640 now is really executing very well and it is at 0:07:56.800 --> 0:07:59.960 the front and center of this big AI infrastructure building. 0:08:00.440 --> 0:08:05.040 It's incredible the run that Nvidia's had literally for years now, 0:08:05.160 --> 0:08:08.200 and just now this latest announcement of a one hundred 0:08:08.200 --> 0:08:12.560 and five billion dollar data center investment in Ohio for 0:08:12.720 --> 0:08:18.600 Open AI, it just speaks to so much of the 0:08:19.040 --> 0:08:22.280 outperformance that we've seen for in Vidia for quite some time. 0:08:22.480 --> 0:08:25.200 And I guess the question still of you know, whether 0:08:25.440 --> 0:08:28.240 circular investment is still an issue for this company? Is 0:08:28.280 --> 0:08:28.840 it for you? 0:08:29.200 --> 0:08:29.480 Well? 0:08:29.560 --> 0:08:32.959 So, the thing that has changed with Nvidia now versus 0:08:33.000 --> 0:08:35.760 a couple of years back is it's got a really 0:08:35.840 --> 0:08:39.200 strong balance sheet with a ton of cash to invest, 0:08:39.360 --> 0:08:42.400 and so what it is doing now is with these 0:08:42.520 --> 0:08:47.120 big data center deals, it is helping you know, the 0:08:47.280 --> 0:08:51.280 likes of open Ai and Tropic and other companies neo 0:08:51.320 --> 0:08:55.400 clouds finance this build out where if they want to 0:08:55.440 --> 0:08:58.760 set up a data center and Vidia will be that 0:08:59.000 --> 0:09:02.600 backstop and terms of filling in some of the investment 0:09:02.679 --> 0:09:07.439 requirements and then helping these labs raise funding from private 0:09:07.480 --> 0:09:11.719 capital and other sources. But in Ridia is really flexing 0:09:11.760 --> 0:09:15.000 its balance sheet in terms of making sure there is 0:09:15.040 --> 0:09:18.559 a robust ecosystem around it and all of them are 0:09:18.600 --> 0:09:21.839 able to raise financing, because that's the hard thing now, 0:09:22.280 --> 0:09:25.480 as these numbers get bigger and bigger, not every company 0:09:25.520 --> 0:09:28.160 will be able to raise financing for one hundred billion 0:09:28.200 --> 0:09:30.840 dollar data center. So that's where in Vidia comes in 0:09:30.880 --> 0:09:35.840 and kind of helps and be that backstop. And Google 0:09:35.880 --> 0:09:38.160 is doing the same thing, by the way, So all 0:09:38.280 --> 0:09:44.600 these major players who are training the models are kind 0:09:44.640 --> 0:09:47.080 of using their balance sheet in an effective way to 0:09:47.360 --> 0:09:49.000 prop up the ecosystem around them. 0:09:49.520 --> 0:09:52.560 Okay, so we're definitely looking forward to those earnings results 0:09:52.600 --> 0:09:55.360 from Nvidia on Wednesday. We're also going to hear from 0:09:55.440 --> 0:09:59.679 CrowdStrike the cybersecurity firm. A lot of debate about this 0:10:00.000 --> 0:10:02.960 pany's valuation heading into the print. How do you see it? 0:10:03.440 --> 0:10:06.840 I would agree that they have been a beneficiary of, 0:10:07.520 --> 0:10:11.319 you know, the entropic Mythos release and all the kind 0:10:11.400 --> 0:10:16.240 of anxiety around every company being at risk of a 0:10:16.280 --> 0:10:21.400 cyber attack because Mythos exposed all the vulnerabilities. But to 0:10:21.480 --> 0:10:25.439 my mind, CrowdStrike hasn't really shown that in their numbers. 0:10:25.480 --> 0:10:29.439 They're still growing top line at mid twenty percent, which 0:10:29.480 --> 0:10:32.920 is healthy, but nothing like what you know we talked 0:10:32.960 --> 0:10:36.400 about and Vidio growing at mid ninety percent, and you know, 0:10:36.440 --> 0:10:38.920 some of the other companies in the chip space are 0:10:39.040 --> 0:10:42.760 growing triple digits. So mid twenty percent growth for a 0:10:42.840 --> 0:10:47.520 company of CrowdStrike size doesn't seem that impressive. And it's 0:10:47.559 --> 0:10:51.600 already trading at a very premium valuation multiple, So from 0:10:51.640 --> 0:10:55.400 that perspective, the expectations are higher. But maybe they come 0:10:55.400 --> 0:10:59.079 out and talk about, you know, how all the enterprises 0:10:59.120 --> 0:11:02.960 have started increase using their cybersecurity spend Postmethos, and that 0:11:03.040 --> 0:11:05.160 will be a good narrative. I think that may help 0:11:05.200 --> 0:11:06.040 the stock sentiment. 0:11:06.440 --> 0:11:09.640 And before we hear from crowdstriking, Nvidia on Tuesday, we're 0:11:09.640 --> 0:11:12.720 going to get earnings from Marvel Technologies off the back 0:11:12.760 --> 0:11:15.840 of their announcement of a twelve point two billion dollar 0:11:15.960 --> 0:11:19.000 share purchase deal with Google. What's that say about where 0:11:19.040 --> 0:11:20.520 Marvel is in the chip raise? 0:11:20.840 --> 0:11:25.280 I mean, all these chip companies I think have really 0:11:25.360 --> 0:11:29.240 benefited in a big way from you know, the CAPEX 0:11:29.240 --> 0:11:33.160 increases that we keep hearing about, and Marvel is exposed 0:11:33.240 --> 0:11:36.960 to all the custom silicon development and now they are 0:11:37.000 --> 0:11:41.400 partnering with Google. Earlier they were predominantly working with Amazon. 0:11:41.600 --> 0:11:45.480 So the fact that Google is working with Broadcom and 0:11:45.559 --> 0:11:50.080 now they are working with Marvel to expand their TPU 0:11:50.440 --> 0:11:54.679 kind of unit chhipments suggests to me that, you know, Marvell, 0:11:54.800 --> 0:11:58.280 we'll see accelerating top line as well. And they have 0:11:58.440 --> 0:12:02.240 more customers now and they had previously, and Google is 0:12:02.280 --> 0:12:04.960 obviously a big customer. I was a little surprised with 0:12:05.080 --> 0:12:09.400 the stock warrant aspect of this deal, like why they 0:12:09.440 --> 0:12:13.120 had to give that, But we have seen that kind 0:12:13.200 --> 0:12:16.959 of you know, deal with between AMD and Meta and 0:12:17.160 --> 0:12:20.280 MD and open aiy, So it's not that unusual these 0:12:20.360 --> 0:12:23.080 days to you know, give warrants if you have a 0:12:23.080 --> 0:12:24.720 big customer lined up all. 0:12:24.679 --> 0:12:27.600 Right, Man Deep, Thanks as always. That's Man Deep Saying, 0:12:27.640 --> 0:12:31.360 Global head of Tech Research at Bloomberg Intelligence, and coming 0:12:31.440 --> 0:12:33.920 up on Bloomberg day Break weekend, we'll look ahead to 0:12:33.960 --> 0:12:37.000 a key meeting of French business leaders as they count 0:12:37.040 --> 0:12:40.640 down to a pivotal presidential election. I'm Nathan Hager, and 0:12:40.760 --> 0:12:55.720 this is Bloomberg. This is Bloomberg day Break Weekend, our 0:12:55.760 --> 0:12:58.440 global look ahead at the top stories for investors in 0:12:58.480 --> 0:13:01.400 the coming week. I'm Nathan Hager in Washington. Later in 0:13:01.440 --> 0:13:03.640 the program, we'll look ahead to the latest reading on 0:13:03.920 --> 0:13:08.080 Tokyo inflation. But first minds in Europe are starting to 0:13:08.080 --> 0:13:11.559 turn to the election cycle. In France, Emanuel mccrannt leaves 0:13:11.600 --> 0:13:14.760 office next year after a decade in office, and many 0:13:14.760 --> 0:13:18.280 are wondering what might come next. Bloomberg Daybreak Europe banker 0:13:18.320 --> 0:13:22.000 Stephen Carroll's been looking into one of France's biggest business conferences. 0:13:22.520 --> 0:13:25.160 Nathan Franz's business leaders will be gathering at the home 0:13:25.240 --> 0:13:27.720 of the Roland Garross tennis tournament in the coming days, 0:13:27.720 --> 0:13:30.199 with a very different kind of contest in mind. The 0:13:30.240 --> 0:13:33.120 country's biggest business lobby group, MEDEF, is holding its annual 0:13:33.400 --> 0:13:36.960 end of summer conference the last before next year's presidential election. 0:13:37.360 --> 0:13:40.160 This event has been traditionally a moment for potential candidates 0:13:40.200 --> 0:13:43.480 to rub shoulders with business leaders and prove their credentials 0:13:43.480 --> 0:13:45.960 when it comes to managing the economy and the challenges 0:13:46.000 --> 0:13:48.680 there are major. Passing a budget in France has become 0:13:48.679 --> 0:13:51.520 a hugely fraud affair politically, leading to the toppling of 0:13:51.559 --> 0:13:54.480 two prime ministers in the last two years. Campaigning for 0:13:54.480 --> 0:13:56.520 the French presidential election will begin to pick up on 0:13:56.559 --> 0:13:58.720 the coming weeks as well. The outcome is being closely 0:13:58.760 --> 0:14:01.360 watched across Europe and the consequences that it may have 0:14:01.480 --> 0:14:04.240 in the wider European Union. Joining us now to discuss 0:14:04.360 --> 0:14:07.240 is our powers correspondent Carolyn Connell and Rich Bravo, who 0:14:07.280 --> 0:14:09.760 leads our team covering governments across Western Europe, who joins 0:14:09.840 --> 0:14:12.880 us from Brussels. Carolyn, First of all, this is a 0:14:12.880 --> 0:14:15.960 moment where French businesses get to lay out their priorities 0:14:16.080 --> 0:14:18.079 for the next president. What are we expecting to hear 0:14:18.080 --> 0:14:18.480 from them? 0:14:18.760 --> 0:14:20.920 Yeah, first, as you know, it's just getting back from 0:14:20.960 --> 0:14:23.480 the summer rereg but clearly this is a bit different 0:14:23.520 --> 0:14:26.400 because in eight months from now we have the French 0:14:26.480 --> 0:14:30.440 presidential elections, so they're going to be on everyone's mind. 0:14:31.160 --> 0:14:35.200 The Prime Minister Sebastian Conny first needs to pass a 0:14:35.320 --> 0:14:38.320 budget by the end of this year. That's going to 0:14:38.360 --> 0:14:40.800 be difficult as well, is going to be present it 0:14:40.840 --> 0:14:42.560 by the end of the months. And remember, as you 0:14:42.600 --> 0:14:46.400 were mentioning, the past two budgets ended up with prime 0:14:46.400 --> 0:14:50.520 ministers being ousted in votes of no confidence, so that's 0:14:50.560 --> 0:14:54.880 a risk for executives over the next few months. The uncertainty, 0:14:55.120 --> 0:14:58.640 the volatility is going to come back. Some companies we've 0:14:58.680 --> 0:15:01.280 been speaking with over the past few weeks and months, 0:15:01.280 --> 0:15:05.280 I've been saying they're either holding or delaying some of 0:15:05.320 --> 0:15:09.760 their investments due to this uncertainty. And of course we'll 0:15:09.920 --> 0:15:13.479 wait to hear from the various programs of every candidates 0:15:13.960 --> 0:15:17.640 and the potential new taxes on companies and businesses. 0:15:17.840 --> 0:15:20.400 Yeah, and indeed that's going to be difficult questions to answer. Now, 0:15:20.480 --> 0:15:22.200 as I mentioned, this is the moment where you guess 0:15:22.240 --> 0:15:25.080 often potential candidates coming out and trying to prove themselves 0:15:25.080 --> 0:15:27.560 to the great and good of the French business community 0:15:27.600 --> 0:15:30.320 as well in terms of who's expected to be there. 0:15:30.680 --> 0:15:32.480 Is this going to be a big political event. 0:15:33.240 --> 0:15:36.840 So in fact, if you look at this year's edition, 0:15:37.360 --> 0:15:41.120 there's not so many candidates that are going to be 0:15:41.360 --> 0:15:45.200 physically there. I saw David Listener, the mayor of can 0:15:45.360 --> 0:15:48.600 but he's basically at one one point five percent in 0:15:48.640 --> 0:15:52.120 the polls, so very low. Also Fabrian Roussel, the head 0:15:52.160 --> 0:15:56.600 of the Communist Party, who's preparing his candidacy. And then 0:15:56.640 --> 0:15:59.240 of course we've got some members of the government but 0:15:59.400 --> 0:16:04.520 not current a candidate. For examples, Curl the current finance 0:16:04.520 --> 0:16:08.440 minister who has the big task of presenting this budget 0:16:08.480 --> 0:16:10.600 by the end of the month. Saint Bruno Lamire, the 0:16:10.840 --> 0:16:16.800 former finance minister Macon for seven years, who's actually going 0:16:16.840 --> 0:16:20.480 to talk about political bravery. I thought that was an 0:16:20.480 --> 0:16:22.320 interesting subject ahead of these elections. 0:16:22.520 --> 0:16:25.040 Yes, perhaps, and what a moment it's going to be rich. 0:16:25.040 --> 0:16:27.320 I want to turn to you in Brussels next. This 0:16:27.400 --> 0:16:30.720 is an event that really, as the European political season 0:16:30.760 --> 0:16:33.880 picks back up, is going to be on everyone's minds. 0:16:33.880 --> 0:16:36.160 What is going to happen in France next year and 0:16:36.200 --> 0:16:41.160 what it means for the European Union. How are politicians 0:16:41.160 --> 0:16:44.000 and officials in Brussels feeling about the end of Emmanuel 0:16:44.040 --> 0:16:47.480 Macron's term in office and the election well. 0:16:47.520 --> 0:16:51.320 Officially, the European Commission will never weigh in on upcoming 0:16:51.360 --> 0:16:53.880 elections or take a stance it appears to influence a 0:16:53.920 --> 0:16:58.600 campaign or give any kind of preferential guidance. But obviously, France, 0:16:58.640 --> 0:17:01.520 being one of the core members of the EU, wields 0:17:01.600 --> 0:17:06.159 outside influence on policy matters across the board, and a 0:17:06.280 --> 0:17:09.280 la Penn presidency would obviously represent a massive change for 0:17:09.320 --> 0:17:12.440 the EU and would likely upend the status quo as 0:17:12.440 --> 0:17:16.080 we know it. Lapenn is an unrepentant eurosceptic. She likely 0:17:16.119 --> 0:17:18.960 wouldn't adhere to EU fiscal rules. She has said that 0:17:19.000 --> 0:17:21.520 she would seek to send less money into the EU's 0:17:21.560 --> 0:17:25.400 budget and would try to undo things like climate policy 0:17:25.800 --> 0:17:29.280 and the current migration rules. But more importantly, she would 0:17:29.280 --> 0:17:32.480 hold a veto in the European Council, meaning that she 0:17:32.600 --> 0:17:37.240 could hold certain policy matters such as sanctions and trade hostage. 0:17:37.440 --> 0:17:40.720 This was a tactic utilized for years by Victor Orbon, 0:17:41.359 --> 0:17:47.560 and he would withhold his support for something like sanctions 0:17:47.560 --> 0:17:53.000 against Russia in exchange for some domestic policy matter that 0:17:53.200 --> 0:17:57.159 was important to Hungary, and these two issues wouldn't be 0:17:57.280 --> 0:18:00.439 related in any way, but he was able to users 0:18:00.480 --> 0:18:04.160 to create great, great effectiveness. 0:18:04.720 --> 0:18:08.480 What's the French business view of Marian Dapan Caroline, given 0:18:08.520 --> 0:18:11.360 that we're thinking about the party leading in the polls, 0:18:11.480 --> 0:18:13.159 and of course there's been so many questions over her 0:18:13.200 --> 0:18:14.280 counters the up until now. 0:18:14.840 --> 0:18:17.920 Yeah, Marine Open and Jordan Bardela, who she said will 0:18:17.920 --> 0:18:20.280 be her prime minister if she wents, clearly have been 0:18:20.320 --> 0:18:23.080 leading in the polls. They are at around thirty thirty 0:18:23.160 --> 0:18:25.719 five percent in the first round in most polls, and 0:18:26.040 --> 0:18:30.200 you know, given they perhaps have a big shot at 0:18:30.280 --> 0:18:34.920 winning this election next year, executives have been increasingly courting 0:18:34.960 --> 0:18:38.679 the party, meeting some of the national value advisors behind 0:18:38.720 --> 0:18:41.360 closed doors, but not only We saw Bardela, for example, 0:18:41.359 --> 0:18:44.800 appearing publicly at the two hundred year party of Lufigaro 0:18:44.840 --> 0:18:48.080 newspaper The mid f Business may Be actually organized a 0:18:48.200 --> 0:18:53.320 dinner with Marin Open last spring in order to discuss priorities, 0:18:53.520 --> 0:18:56.399 perhaps a way for executives to also influence some of 0:18:56.440 --> 0:18:58.320 the programs. And if you look at the French papers, 0:18:58.560 --> 0:19:02.359 the executives who were there physically at this dinner, where 0:19:02.480 --> 0:19:06.080 the likes of LVMH total A Corno Axa. 0:19:05.840 --> 0:19:08.720 Angi so all the companies in France, this is. 0:19:08.600 --> 0:19:11.439 Not taboo anymore. You can meet with Marinupen, you can 0:19:11.480 --> 0:19:17.600 meet with Jordan Bardella. Marinupen has actually recruited a millionaire 0:19:17.640 --> 0:19:22.080 investment phone manager who's been advising her on debates and speeches. 0:19:23.200 --> 0:19:27.399 Even though, of course a lot of these meetings for 0:19:27.480 --> 0:19:30.240 the executive their aim is to try and influence a program. 0:19:30.280 --> 0:19:34.280 We don't know much details yet about their economic program 0:19:34.320 --> 0:19:37.280 because they haven't published their manifesto and. 0:19:37.440 --> 0:19:40.399 Rich in terms of how Brussels is preparing for the 0:19:40.440 --> 0:19:44.160 potential of La pan presidency as well, I mean, can 0:19:44.240 --> 0:19:46.320 they work with Marion Depen given that she has been 0:19:46.440 --> 0:19:48.119 very critical of the EU in the past. 0:19:49.200 --> 0:19:51.480 The short answer is that the Commission doesn't really have 0:19:51.520 --> 0:19:55.160 a choice. It just remains to be seen how antagonistic 0:19:55.280 --> 0:19:58.600 this relationship will be. I mean, if you think back 0:19:58.640 --> 0:20:01.560 to when Maloney first came down office, the expectation was 0:20:01.560 --> 0:20:03.679 that she would be a disruptive force in Brussels and 0:20:03.720 --> 0:20:07.360 push a really far right agenda that obviously never came 0:20:07.400 --> 0:20:09.440 to pass. And now she's seen as a right wing 0:20:09.480 --> 0:20:13.600 politician who isn't completely out of step with center right politicians. 0:20:14.600 --> 0:20:18.000 The big question is if Marine Leapenn wins, does she 0:20:18.080 --> 0:20:22.720 try to emulate Maloney and work with the Brussels structure 0:20:23.240 --> 0:20:26.760 or does she lean more toward the Orbon paradigm and 0:20:26.800 --> 0:20:28.240 really try to disrupt things. 0:20:29.800 --> 0:20:31.480 We're talking a lot about mind the Penn because of 0:20:31.480 --> 0:20:33.720 her position in the polls as well. But Caroline, what 0:20:33.760 --> 0:20:35.480 do we know about the other candidates who are in 0:20:35.480 --> 0:20:37.320 the field. We don't have a full field yet. We 0:20:37.320 --> 0:20:39.399 should say there's still a long way to go, but 0:20:39.720 --> 0:20:42.320 this moment and I should remind actually in twenty sixteen, 0:20:42.320 --> 0:20:45.160 it was during this conference that Emmanuel Macron resigned from 0:20:45.160 --> 0:20:47.600 his position as Economy Minister and announced that he was 0:20:47.640 --> 0:20:49.920 setting up his own political movement. So things do happen 0:20:49.960 --> 0:20:51.760 at this time of year, but give us a sense 0:20:51.760 --> 0:20:52.920 of where the field is at the moment. 0:20:53.000 --> 0:20:54.800 And I interviewed him at the time then he was 0:20:54.840 --> 0:20:57.560 not even a candidate quite yet. I would say, at 0:20:57.560 --> 0:21:00.480 the moment of the condidate who's got like be the 0:21:00.560 --> 0:21:05.680 best shot at winning against either Marinupan or Jeanjean. The 0:21:05.720 --> 0:21:08.560 far left candidate is Edwar Philipps. So this former Prime 0:21:08.560 --> 0:21:14.040 minister under Macon during the COVID, during the Pandemic is 0:21:14.240 --> 0:21:17.600 at fifteen twenty percent in the polls. Meloshan currently is 0:21:17.600 --> 0:21:19.760 at around twelve fifteen percent depending on the posse, so 0:21:19.800 --> 0:21:23.560 it's still tight. Meno Shan could possibly also make it 0:21:23.600 --> 0:21:27.040 to a runoff, which obviously would be the scarier scenario 0:21:27.600 --> 0:21:30.840 for the markets and for businesses to see a runoff 0:21:30.880 --> 0:21:32.920 between both extremes, the far left and the far right. 0:21:33.160 --> 0:21:36.600 But Edwar Philip maybe at the moment best positions. However, 0:21:36.800 --> 0:21:39.159 we've seen in pass elections a lot can change between 0:21:39.160 --> 0:21:42.160 now and then. You've got Gabrielletal also in ambush, also 0:21:42.240 --> 0:21:46.640 from the centrist party of Renaissance. You've got francois Land, 0:21:46.880 --> 0:21:52.760 the former president Socialist, who can actually possibly appear as 0:21:52.760 --> 0:21:57.240 a reassuring figure for the center left. And then of 0:21:57.280 --> 0:22:02.120 course you have these smaller candidates Brunootai from the Republican Party, 0:22:02.560 --> 0:22:05.840 who is also perhaps waiting to see if Edward Phillips 0:22:06.040 --> 0:22:09.520 can really have this momentum over the next few months. 0:22:09.680 --> 0:22:12.080 And just coming back a little bit more into the 0:22:12.280 --> 0:22:15.679 immediate challenges, there's another budget coming up. We've mentioned how 0:22:15.720 --> 0:22:17.680 difficult to day is to try and get a budget passed. 0:22:17.720 --> 0:22:20.479 How difficult are looking this time around for Sebastian Leconne, 0:22:20.600 --> 0:22:22.000 the current Prime minister, it's. 0:22:21.880 --> 0:22:24.960 Exactly the same situation. The Parliament is fragmented into three blocks. 0:22:25.000 --> 0:22:27.760 I spoke with the Finance mister Ronaldis came back in 0:22:27.800 --> 0:22:30.200 ex Provence at the beginning of July. He was saying, 0:22:30.240 --> 0:22:32.679 we'll bring the deficit back to five percent, which is 0:22:32.960 --> 0:22:35.359 basically the same thing as last year. So it's really 0:22:35.440 --> 0:22:39.960 not an ambitious plan. It's very unclear as well, exactly 0:22:40.240 --> 0:22:43.720 how these candidates potential candidates are going to cut the 0:22:43.720 --> 0:22:47.080 deficits over the next few years, are going to cut debt. 0:22:47.200 --> 0:22:49.639 And there is also I got to mention this little 0:22:49.760 --> 0:22:55.960 music going on about if and once Sebastian McConnell has 0:22:56.200 --> 0:22:58.840