WEBVTT - Daybreak Weekend: Nvidia Earnings, G20 Summit, PBOC Decision 0:00:00.600 --> 0:00:08.200 Bloomberg Audio Studios, Podcasts, radio News. 0:00:10.960 --> 0:00:13.280 This is Bloomberg day Break Weekend, our global look at 0:00:13.280 --> 0:00:15.560 the top stories in the coming week from our Daybreak 0:00:15.560 --> 0:00:18.360 anchors all around the world, and straight ahead on the program, 0:00:18.400 --> 0:00:21.840 I'll look at earnings from AI giant Nvidia, along with 0:00:21.960 --> 0:00:23.360 existing home sales data. 0:00:23.760 --> 0:00:25.279 I'm Tom Busby in New York. 0:00:25.560 --> 0:00:28.000 I'm callin Hepkee here in London, where we're looking ahead 0:00:28.000 --> 0:00:30.680 to the Group of Twenty Leaders summit in Rio. 0:00:31.000 --> 0:00:33.919 I'm Dog Prisner looking ahead to the upcoming rate decision 0:00:33.920 --> 0:00:35.320 from the People's Bank of China. 0:00:36.000 --> 0:00:40.200 That's all strain ahead on Bloomberg Daybreak Weekend on Bloomberg 0:00:40.240 --> 0:00:44.160 eleven THREEO, New York, Bloomberg ninety nine to one, Washington, DC, 0:00:44.560 --> 0:00:49.440 Bloomberg ninety two nine Boston, DAB Digital Radio, London, Sirius 0:00:49.600 --> 0:00:53.000 XM one twenty one, and around the world on Bloomberg Radio, 0:00:53.040 --> 0:00:55.160 dot Com and the Bloomberg Business App. 0:01:00.520 --> 0:01:01.960 Good day to you. I'm Tom Busby. 0:01:01.960 --> 0:01:05.000 We've begin today's program with Nvidia, the last of the 0:01:05.080 --> 0:01:09.200 Magnificent seven tech giants, reporting its third quarter earnings on Wednesday, 0:01:09.240 --> 0:01:12.320 and for more on what to expect from the AI heavyweight, 0:01:12.360 --> 0:01:16.960 We're joined by kuon John Savanni, Bloomberg Intelligence Senior semiconductor 0:01:17.000 --> 0:01:19.319 analysts Coon, John, thank you so much for joining us. 0:01:19.600 --> 0:01:21.759 It looks like all the stars. 0:01:21.360 --> 0:01:24.240 Have aligned for Nvidia, now the most valuable company on 0:01:24.280 --> 0:01:27.800 the planet, a market cap three and a half trillion dollars. 0:01:28.319 --> 0:01:30.640 So what are you expecting from its Q three results. 0:01:30.720 --> 0:01:34.119 It's first as a member of the Dow Jones Industrial average. 0:01:34.280 --> 0:01:37.120 Yeah, we expect nothing different this time, like we have 0:01:37.240 --> 0:01:40.280 seen over the last almost eight quarters. Now we again 0:01:40.360 --> 0:01:44.400 expect a very strong beaten race. Our call on that 0:01:44.520 --> 0:01:47.360 is a likelihood of the magnitude of the beaten race 0:01:47.440 --> 0:01:49.040 to be higher than what we've seen in the last 0:01:49.080 --> 0:01:52.200 two quarters. You know, in Q three and Q four 0:01:53.040 --> 0:01:55.760 Blackwell was supposed to RAM and they had some delay 0:01:56.600 --> 0:02:00.840 which has allowed its existing Hopper product line to expand. 0:02:01.320 --> 0:02:04.920 And we have seen no signs of slowing demand and 0:02:04.960 --> 0:02:08.639 adoption for Hopper right now in three Q and four 0:02:08.720 --> 0:02:14.120 Q until the large cloud customers and hyperscalers really eagerly 0:02:14.160 --> 0:02:16.919 wait for the Blackwell shipments in twenty twenty five. 0:02:17.320 --> 0:02:19.239 Well, we know about demand for those Hoppers, the H 0:02:19.320 --> 0:02:24.000 two hundred accelerators. How about hardware software data center services. 0:02:24.360 --> 0:02:27.799 Are there any weaknesses for Nvidia? And as you said 0:02:27.800 --> 0:02:31.160 about that delay in the Blackwells supply chain issues, have 0:02:31.280 --> 0:02:32.440 they all been settled down? 0:02:32.680 --> 0:02:35.160 From all of our channel checks and supply checks, it 0:02:35.240 --> 0:02:39.239 seems most, or if not all, black Well supply chain 0:02:39.280 --> 0:02:43.000 issues have been settled down. We have heard that some 0:02:43.040 --> 0:02:47.000 customers are starting to get the shipments as early as 0:02:47.040 --> 0:02:49.560 the end of this year, so that's a very promising 0:02:49.600 --> 0:02:53.320 good news. And a lot of other large customers are 0:02:53.360 --> 0:02:55.960 preparing to accept shipments starting in one queue, so that 0:02:56.080 --> 0:03:00.240 suggests there's no more major issues. There will be, however, 0:03:00.320 --> 0:03:03.560 Blackwell will be supply constraint as was Hopper in its 0:03:03.639 --> 0:03:04.360 initial ramp. 0:03:04.560 --> 0:03:06.840 Well, let me ask you, now that Hopper has about 0:03:07.360 --> 0:03:11.000 ninety percent of the market for these types of accelerators, 0:03:11.400 --> 0:03:15.280 what will Blackwell mean for Nvidia? And as you said, 0:03:15.320 --> 0:03:18.320 they're ramping up production now you expect deliveries this quarter 0:03:18.760 --> 0:03:20.400 next quarter to really speed up. 0:03:20.720 --> 0:03:22.200 What will that mean for the company. 0:03:22.880 --> 0:03:25.040 Yeah, So when you look at in terms of market 0:03:25.080 --> 0:03:28.519 share in GPUs for in media, you know they started 0:03:28.560 --> 0:03:31.200 out with almost close to like ninety ninety seven ninety 0:03:31.240 --> 0:03:34.680 eight percent on a revenue basis, and slowly you know, 0:03:34.720 --> 0:03:37.800 they're trickled down to close to I would say low nineties, 0:03:38.040 --> 0:03:42.600 if not nineties. We think Blackwell will actually stop that, 0:03:42.800 --> 0:03:45.880 won't really call it share laws, but actually increase those number. 0:03:46.400 --> 0:03:51.760 You know, Blackwell, especially the cluster of GPUs using their 0:03:52.000 --> 0:03:56.040 envi link technology has really up their game if you 0:03:56.040 --> 0:03:58.800 can even believe that's possible, and there is no other 0:03:59.360 --> 0:04:02.960 competent of end to end product out there, so actually 0:04:03.040 --> 0:04:07.280 that increases their motive, even makes the share more defensible. 0:04:07.120 --> 0:04:10.320 And they sell to the big East. There's Meta, Microsoft, Alphabet, 0:04:10.360 --> 0:04:13.320 all of them big buyers. What about the competition though, 0:04:13.400 --> 0:04:16.640 I mean we've heard Apple, Amazon now making their own 0:04:16.720 --> 0:04:22.360 AI accelerators, their own GPUs. How does that affect Nvidio 0:04:22.600 --> 0:04:23.440 or does it at all? 0:04:23.960 --> 0:04:26.080 I mean it does look in terms of long term 0:04:26.120 --> 0:04:28.840 and in terms of the size of opportunity, it does 0:04:28.960 --> 0:04:33.360 affect A six which are the chips that these customers 0:04:33.480 --> 0:04:36.760 designed for themselves, which are called you know, those are 0:04:36.839 --> 0:04:40.520 the largest risk to Nvidia because frankly, there is no 0:04:40.600 --> 0:04:43.360 other sort of semiconductor company which is a huge risk 0:04:43.400 --> 0:04:46.680 to them. So that is definitely a large risk. All 0:04:46.720 --> 0:04:50.919 of these you know, its largest buyers have already started 0:04:50.960 --> 0:04:54.720 to adopt their some of them their own A six 0:04:54.760 --> 0:04:58.039 in a lot of volume. There's also a possibility like 0:04:58.120 --> 0:05:01.120 someone like let's say Amazon, who has successfully using their 0:05:01.120 --> 0:05:03.880 A six for a while now, are have also started 0:05:03.920 --> 0:05:07.520 to offer those to their own cloud customers as an 0:05:07.520 --> 0:05:11.000 alternative to Nvidia's GPUs that are running in Amazon's cloud, 0:05:11.040 --> 0:05:15.520 So that is definitely a risk. However, this the AA rarely, 0:05:15.600 --> 0:05:18.360 we think is in the early innings. What it means is, 0:05:18.880 --> 0:05:23.080 as of this point, neither their customers, their direct customers 0:05:23.080 --> 0:05:26.280 are slowing down the buying our media chips. Neither are 0:05:26.560 --> 0:05:29.479 their customers customers are slowing down using of Nvidia chips. 0:05:29.560 --> 0:05:32.560 So in the near term you might see both in 0:05:32.680 --> 0:05:36.000 Vidia's GPUs and A six continue to grow significantly cause 0:05:36.000 --> 0:05:38.880 because there's a lot of demand appetite. But once this 0:05:39.120 --> 0:05:42.400 sort of demand rarely matures, that is when we'll really 0:05:42.520 --> 0:05:45.480 see that fight for each dollar spend. 0:05:45.839 --> 0:05:46.119 Wow. 0:05:46.200 --> 0:05:49.840 And there's no end, no view right now of when 0:05:49.880 --> 0:05:52.520 that will happen, that slow down, not yet anyway. 0:05:53.560 --> 0:05:56.160 No, we're I mean, we keep that's the biggest question 0:05:56.240 --> 0:05:58.360 we get, right and we keep a very close eye 0:05:58.400 --> 0:06:01.160 on it every quarter. And as we have seen from 0:06:01.279 --> 0:06:04.680 Q three earnings from most of its largest customers, most 0:06:04.680 --> 0:06:08.400 of the enterprise. The appetite has actually increased, if you 0:06:08.560 --> 0:06:10.880 might even believe that in twenty twenty five looks like 0:06:10.960 --> 0:06:14.880 another recorder in terms of CAPEX spend for these AI 0:06:14.960 --> 0:06:17.520 GPUs and hardware and unbelievable. 0:06:17.560 --> 0:06:20.800 Now we know all these other companies, these big tech companies, 0:06:20.800 --> 0:06:21.760 small tech companies. 0:06:21.839 --> 0:06:22.920 Where they're putting. 0:06:22.680 --> 0:06:27.440 Their CAPEX is in AI. Where is Nvidia putting their capex? 0:06:27.880 --> 0:06:30.280 Well, yeah, so you know since the launch of its 0:06:30.440 --> 0:06:33.840 first sort of aserver GPUs, which was called the MPa 0:06:33.880 --> 0:06:37.080 product line. So, first of all, in media, as a 0:06:37.080 --> 0:06:40.760 fablus semicinetor company, what it means is does not manufacture 0:06:41.040 --> 0:06:44.640 or produce its own shifts. So usually these fablust companies 0:06:44.720 --> 0:06:47.200 do not spend a lot in CAPEX. They spend a 0:06:47.200 --> 0:06:50.000 lot more in op x. Their CAPEX is generally just 0:06:50.720 --> 0:06:54.279 you know, having test equipments, packaging equipments, and just R 0:06:54.320 --> 0:06:58.440 and D equipments needed to develop their products and their chips. 0:06:58.600 --> 0:07:02.239 Well, Nvidia third quarter earnings out this Wednesday are thanks 0:07:02.240 --> 0:07:07.000 to Kon John Sobonnie Bloomberg Intelligence senior semiconductor analyst. We 0:07:07.040 --> 0:07:09.679 move next to a look at the uneven US housing 0:07:09.720 --> 0:07:12.440 market with existing sales for the month of October that 0:07:12.560 --> 0:07:15.760 is out this Thursday. Also, what earnings from Home Depot 0:07:15.840 --> 0:07:18.960 last week and from Low's this Tuesday tell us about 0:07:18.960 --> 0:07:21.000 the US housing market. And for more we're joined by 0:07:21.080 --> 0:07:26.760 Drew Redding, Bloomberg Intelligence US home building analyst. Drew bottom line, 0:07:26.760 --> 0:07:29.640 existing home sales not doing well, on track for the 0:07:29.680 --> 0:07:32.840 worst year since twenty ten. That's according to the National 0:07:32.880 --> 0:07:35.760 Association of Realtors. So what gives and what are you 0:07:35.800 --> 0:07:37.280 expecting for the month of October. 0:07:37.760 --> 0:07:40.120 So we do think we could see some improvement in 0:07:40.200 --> 0:07:43.560 existing home sales in October, and that's really reflective of 0:07:43.600 --> 0:07:47.320 the more favorable mortgage rate environment that we had during September. 0:07:47.760 --> 0:07:50.840 Remember these are contract closing, so there's typically a thirty 0:07:50.840 --> 0:07:52.960 to sixty day like from when a deal is signed. 0:07:53.760 --> 0:07:55.320 That being said, the date is going to be stale 0:07:55.320 --> 0:07:57.240 before it even comes out. I mean the rate when 0:07:57.280 --> 0:08:00.240 a thirty year mortgage has gone from the lowes six 0:08:00.240 --> 0:08:03.760 percent range in September to above seven percent in just 0:08:03.760 --> 0:08:06.520 a matter of weeks. Despite the FED cutting rates, the 0:08:06.600 --> 0:08:09.560 total seventy five basis points, and we've seen demand EBB 0:08:09.600 --> 0:08:12.360 and flow with these fluctuations. So we think you could 0:08:12.360 --> 0:08:15.400 see some improvement reflecting September, but like we said, we 0:08:15.440 --> 0:08:16.800 think it's going to be stale and there's going to 0:08:16.840 --> 0:08:19.040 be pressure going forward. If we zoom out just a 0:08:19.040 --> 0:08:22.640 little bit, look at the bigger picture. Existing home sales 0:08:22.840 --> 0:08:25.400 continue to sit below a four million analyzed rate, and 0:08:25.520 --> 0:08:28.240 current activity is the lowest in over a decade, and 0:08:28.280 --> 0:08:32.000 that really afflects the affordability picture, which continues to hover 0:08:32.160 --> 0:08:33.840 near historically at the levels. 0:08:33.720 --> 0:08:36.960 I mean those record high prices on homes, mortgage rates 0:08:36.960 --> 0:08:39.360 as you said back, you know, near seven percent, but 0:08:39.440 --> 0:08:43.319 also the cost of home ownership, right insurance, maintenance, lawn care, 0:08:43.520 --> 0:08:45.480 upgrades for furniture, and more. 0:08:46.000 --> 0:08:48.280 Yeah, it's a good point, and it's a combination of 0:08:48.320 --> 0:08:50.320 all those factors. And I think you hit the nail 0:08:50.320 --> 0:08:53.280 on the head when you mentioned prices, because mortgage rates 0:08:53.280 --> 0:08:55.560 get a lot of attention, particularly when we pay such 0:08:55.600 --> 0:08:57.440 close attention to what the FED is going to do. 0:08:57.520 --> 0:09:00.520 But home prices are up over fifty percent prior to 0:09:00.559 --> 0:09:05.200 the pandemic, and payments have become increasingly disconnected from incomes. 0:09:05.240 --> 0:09:08.680 We did an analysis that shows that property values we 0:09:08.720 --> 0:09:12.160 need to fall about thirty percent for monthly payments relative 0:09:12.160 --> 0:09:15.360 to incomes to return to historical levels. So we're not 0:09:15.400 --> 0:09:17.040 saying that you're going to see that type of decline 0:09:17.080 --> 0:09:18.719 at the national level in the near term, but I 0:09:18.760 --> 0:09:21.360 think it illustrates the problem. So we're going to need 0:09:21.400 --> 0:09:23.920 some combination of you know, maybe prices coming down a bit, 0:09:24.080 --> 0:09:26.920 rates moderating, and then further income growth in order to 0:09:26.920 --> 0:09:29.360 get things headed in the right direction. And it's probably 0:09:29.400 --> 0:09:30.320 going to take some time. 0:09:30.880 --> 0:09:33.800 Yeah, I mean, besides what we saw in two thousand 0:09:33.840 --> 0:09:37.079 and eight, what can bring the price of these homes 0:09:37.240 --> 0:09:38.559 to a more reasonable level. 0:09:39.040 --> 0:09:40.880 Well, I think one thing you're starting to see is 0:09:40.880 --> 0:09:44.240 that we're having more inventory come to market. You know, 0:09:44.280 --> 0:09:46.480 the lack of resale inventory has been one of the 0:09:46.600 --> 0:09:49.160 key themes really over the last several years, and it's 0:09:49.160 --> 0:09:50.880 been one of the reasons why the new home market 0:09:50.960 --> 0:09:53.800 has done so well. But if we look in some 0:09:53.840 --> 0:09:56.679 markets around the country, in Texas and in Florida, we're 0:09:56.679 --> 0:09:59.520 starting to see inventory levels which are approaching or exceeding 0:10:00.040 --> 0:10:02.760 those in twenty nineteen. And it's due to the fact 0:10:02.800 --> 0:10:05.400 that you have weaker demands, so homes are sitting on 0:10:05.400 --> 0:10:08.360 the market longer and you also have more starting to 0:10:08.400 --> 0:10:10.080 come to market. So as we get that build up, 0:10:10.120 --> 0:10:13.040 we think that's going to put some downward pressure on prices. 0:10:13.240 --> 0:10:15.080 So you think we're still going to see a shift 0:10:15.200 --> 0:10:18.600 in population to sun Belt states where where the last 0:10:18.640 --> 0:10:23.040 four years they've exploded in home sales, home building, or 0:10:23.520 --> 0:10:25.640 is it going to even off other parts of the 0:10:25.679 --> 0:10:26.920 country maybe. 0:10:26.640 --> 0:10:28.240 Well, I think that's still where you're going to see 0:10:28.280 --> 0:10:31.640 the population over time continue to grow. That's where, at 0:10:31.720 --> 0:10:34.320 least on a relative basis, affordability is. That's where a 0:10:34.360 --> 0:10:37.600 majority of the jobs are compared to some of the 0:10:37.640 --> 0:10:40.319 slower markets in the Midwest and the Northeast. And that's 0:10:40.320 --> 0:10:42.360 why you see that the builders continue to grow there. 0:10:42.360 --> 0:10:46.240 That's where they continue to expand their communities and purchase 0:10:46.280 --> 0:10:48.760 more land because we do think that, you know, bigger 0:10:48.760 --> 0:10:50.840 picture and longer term, that's where a lot of the 0:10:50.840 --> 0:10:51.920 growth in the country will be. 0:10:52.320 --> 0:10:54.160 Well, let's hope we see more. Hey, I want to 0:10:54.160 --> 0:10:55.520 pivot to last week. 0:10:55.640 --> 0:10:58.640 Now, we got home depots earnings better than foregasts, even 0:10:58.679 --> 0:11:02.559 though sales actually down again. That boost and sales though 0:11:02.600 --> 0:11:06.439 mostly for the wrong reason on storms and and you know, 0:11:06.760 --> 0:11:10.160 and extended warmer weather what does that tell us about 0:11:10.160 --> 0:11:12.920 the market, the housing market, And you know, I look ahead, 0:11:12.920 --> 0:11:14.760 if you can to Low's earnings, is it going to 0:11:14.800 --> 0:11:16.640 tell us the same thing this week? 0:11:16.880 --> 0:11:19.560 Yeah, So starting with Lows, we're looking for a low 0:11:19.600 --> 0:11:21.959 single digit decline in same store sales, which would be 0:11:22.000 --> 0:11:26.560 the eighth straight quarter of declining seam store sales. You know, 0:11:26.559 --> 0:11:28.440 there could be some upside to the numbers based on 0:11:28.480 --> 0:11:30.720 what we did hear from Home Depot. As you mentioned, 0:11:30.760 --> 0:11:33.760 we've had warm, dry weather across you know, most of 0:11:33.760 --> 0:11:35.800 the country for the last several months, and that's provide 0:11:35.840 --> 0:11:38.480 a better than expected lift to some of the seasonal 0:11:38.480 --> 0:11:41.280 and outdoor categories, you know, and you also pointed to 0:11:41.280 --> 0:11:44.120 the hurricane activity. Home Depot called out a two hundred 0:11:44.120 --> 0:11:47.880 million dollar benefit related to the storms, you know, as 0:11:47.880 --> 0:11:50.640 they sold more items such as you know, Lombard generators, 0:11:50.960 --> 0:11:54.280 and that contributed about fifty basis points seam store sales. Now, 0:11:54.400 --> 0:11:57.040 we think Lows could see an even barre lift from 0:11:57.080 --> 0:12:00.120 the storms just given their exposure to some of the 0:12:00.160 --> 0:12:03.400 impacted markets. They've got about twenty five percent of their 0:12:03.440 --> 0:12:06.200 store base in those Southern states compared to about eighteen 0:12:06.800 --> 0:12:09.240 percent for Home Depot. But you know, stepping back when 0:12:09.240 --> 0:12:12.200 we think about the core business. While it does appear 0:12:12.200 --> 0:12:14.800 to be maybe bouncing along the bottom and stabilizing a 0:12:14.800 --> 0:12:17.560 little bit, and you know, comps will certainly be easier 0:12:17.559 --> 0:12:19.960 in coming quarters, there's still some headwinds out there. You have, 0:12:20.400 --> 0:12:23.440 you know, consumers who continue to grapple with the cumulative 0:12:23.520 --> 0:12:26.720 impact of inflation. Over the last couple of years, both 0:12:26.760 --> 0:12:30.359 companies have called out more cautious consumers due to economic uncertainty. 0:12:30.720 --> 0:12:33.600 And as we've discussed, housing activity is extremely depressed. You've 0:12:33.640 --> 0:12:36.640 got you know, volumes at the lowest level and over 0:12:36.679 --> 0:12:39.480 a decade, there's still some difficulties out there for the industry. 0:12:40.120 --> 0:12:43.640 Lows Q three earnings out on Tuesday, October. Existing home 0:12:43.679 --> 0:12:46.960 sales out on Thursday. Our thanks to Drew Redding, Bloomberg 0:12:47.000 --> 0:12:50.439 Intelligence US home building analysts, and coming up on Bloomberg 0:12:50.520 --> 0:12:52.400 day Break weekend, we'll look ahead to the Group of 0:12:52.480 --> 0:12:56.400 Twenty Leaders summit in Rio de Janeiro. I'm Tom Busby, 0:12:56.480 --> 0:13:10.760 and this is Bloomberg. This is Bloomberg Daybreak weekend, our 0:13:10.760 --> 0:13:13.000 global look ahead at the top stories for investors in 0:13:13.040 --> 0:13:16.000 the coming week. I'm Tom Busby in New York. Up 0:13:16.080 --> 0:13:18.640 later in our program will look ahead to the pboc's 0:13:18.720 --> 0:13:22.320 upcoming great Decision. But first G twenty leaders gather in 0:13:22.440 --> 0:13:25.400 Rio de Janio, Brazil, this Monday and Tuesday for what'll 0:13:25.440 --> 0:13:29.319 surely be US President Joe biden swansong as focus shifts 0:13:29.400 --> 0:13:32.839 to President elect Trump's return now, despite the threat of 0:13:32.880 --> 0:13:35.400 Trump tariffs dealing with a more volatile White House. 0:13:35.440 --> 0:13:36.319 For Europe, the. 0:13:36.400 --> 0:13:39.560 Issue of top concern is Ukraine. For more, Let's go 0:13:39.600 --> 0:13:42.600 to London and bring in Bloomberg Daybreak Europe anchor Caroline 0:13:42.640 --> 0:13:44.199 Hepgar Tom. 0:13:44.000 --> 0:13:47.960 The geopolitical landscape has already shifted radically as the world 0:13:48.000 --> 0:13:51.160 awaits a Trump white House and Republican control of the 0:13:51.240 --> 0:13:55.520 US government. The Biden administration is rushing aid to Ukraine 0:13:55.520 --> 0:13:58.600 in its final weeks in power, with US Sector of 0:13:58.640 --> 0:14:02.079 State Ashley blinkn say that every dollar we have at 0:14:02.080 --> 0:14:05.640 our disposal is being pushed to Ukraine, but others are 0:14:05.679 --> 0:14:09.720 getting cold feet, like South Korea having second thoughts about 0:14:09.760 --> 0:14:13.720 the possibility of sending weapons directly to Ukraine. Now, the 0:14:13.880 --> 0:14:17.640 President elect pledged on the campaign trail to end the 0:14:17.640 --> 0:14:21.560 war within twenty four hours by getting Russia and Ukraine 0:14:21.600 --> 0:14:24.400 to negotiate in a moment, I'm going to get the 0:14:24.520 --> 0:14:28.120 view on what to expect from the group of twenty 0:14:28.280 --> 0:14:32.760 leaders who are meeting in Brazil with Bloomberg Sylvia Westall. 0:14:33.160 --> 0:14:36.400 But first I wanted to bring you two perspectives on 0:14:36.480 --> 0:14:42.000 these security challenges now facing Europe. The former NATO Secretary 0:14:42.040 --> 0:14:46.280 General Jen Stoltenberg has been discussing this with Bloomberg's farcin 0:14:46.320 --> 0:14:49.480 in Laqua. She asked him about Donald Trump's claim that 0:14:49.560 --> 0:14:52.000 he could end the war in Ukraine in a day. 0:14:52.320 --> 0:14:54.840 The quickest way to end the war is to do 0:14:55.040 --> 0:14:57.520 so war, but that will not bring peace, That will 0:14:57.520 --> 0:15:00.480 bring occupation of Ukraine, and it will make the whole 0:15:00.480 --> 0:15:03.600 world more dangerous because a message tend to pressent Purteen 0:15:03.640 --> 0:15:06.360 but also the other authoritarian leaders is that when they 0:15:06.440 --> 0:15:08.760 use force, when they invade in all the country, they 0:15:08.800 --> 0:15:11.200 get what they want. So it's in our security interest 0:15:11.320 --> 0:15:14.960 to ensure that the Ukraine prevails. So the challenge is 0:15:14.960 --> 0:15:17.760 to end the war in a way that doesn't need 0:15:17.800 --> 0:15:20.680 you occupation, but to end the war in a way 0:15:20.920 --> 0:15:25.000 where Ukraine prevails as a suffiate, independent nation. At some 0:15:25.120 --> 0:15:28.000 stage there has to be some kind of political negotiated solution. 0:15:28.240 --> 0:15:31.720 But you know, what happens around the negotiating table is 0:15:31.800 --> 0:15:34.200 so close a link to the strength on the battlefield. 0:15:34.240 --> 0:15:37.800 So if you want a negotiated solution to the war 0:15:37.920 --> 0:15:41.680 where you Ukraine prevails as a democratic state in Europe, 0:15:42.080 --> 0:15:44.400 then we need to provide military support to Ukraine. 0:15:44.960 --> 0:15:47.160 So what does that look like, that solution And is 0:15:47.200 --> 0:15:50.240 there a danger that the US actually you know, manages 0:15:50.280 --> 0:15:52.640 to cobble something together, some kind of agreement without the 0:15:52.680 --> 0:15:55.440 guarantee from the US side of Ukraine's sovereignty. 0:15:55.600 --> 0:15:59.880 Well, it's for Ukrainians to decide what will be would 0:15:59.880 --> 0:16:04.480 be acceptable solution, but there has to be at least 0:16:04.480 --> 0:16:08.240 two elements. One is a line agreed. But second, when 0:16:08.400 --> 0:16:11.440 such a line is agreed, then we need to ensure 0:16:11.440 --> 0:16:14.200 that actually it stops there because we have agreed or 0:16:14.240 --> 0:16:17.800 the Ukrainians have agreed lines with Russia before when they 0:16:17.840 --> 0:16:20.400 annexed Cramea. I'm back in twenty fourteen, we had something 0:16:20.440 --> 0:16:23.360 called minskwom there was a line. Then Russia violated that 0:16:23.440 --> 0:16:27.120 and we've got Minsk to a line further west, and 0:16:27.160 --> 0:16:31.480 then the Russian waited for seven years and invade on 0:16:31.480 --> 0:16:34.440 the full scale Ukraine. So we cannot have what theyre 0:16:34.480 --> 0:16:37.480 called Minsk Tree, yet another line which is not respected. 0:16:37.760 --> 0:16:41.360 So when a line is agreed, we need some kind 0:16:41.400 --> 0:16:48.440 of guarantee that Russia doesn't continue after reorganizing their troops 0:16:47.400 --> 0:16:51.520 and THEREFO. We need either to arm the Ukrainian so 0:16:51.560 --> 0:16:55.560 they can deter your future reggression themselves, and or some 0:16:55.680 --> 0:16:58.760 kind of security guarantees. And NATO membership is of course 0:16:58.800 --> 0:17:01.000 the ultimate security garante for Ukraine. 0:17:01.240 --> 0:17:04.119 That was the former NATO boss ya In Stoltenberg speaking 0:17:04.160 --> 0:17:07.720 to Bloomberg's farc In Laqua. Let's get another view now 0:17:07.800 --> 0:17:13.439 from Finland, which joined NATO after Russia invaded Ukraine. The 0:17:13.520 --> 0:17:17.320 Finnish President Alexander Stubb has been speaking into Bloomberg's Jumana 0:17:17.359 --> 0:17:21.800 Bisecchi after his call with the US president elect. She 0:17:21.880 --> 0:17:26.240 asked him about his expectations for the second Trump presidency. 0:17:26.840 --> 0:17:31.480 Of course, focused very much on US foreign policy under Trump, 0:17:31.600 --> 0:17:33.920 and I think his agenda is quite clear. 0:17:34.320 --> 0:17:36.200 He talks about ending the war. 0:17:36.080 --> 0:17:39.440 In Ukraine, so we discussed that, it talks about ending 0:17:39.520 --> 0:17:42.959 the war in the Middle East. He talks about the 0:17:43.080 --> 0:17:44.919 US as a competitor to China. 0:17:45.280 --> 0:17:46.159 We talked about that. 0:17:46.320 --> 0:17:49.960 He talked about Europe taking more responsibility for its own 0:17:50.000 --> 0:17:53.640 defense and security. We talked about that, so I think 0:17:53.680 --> 0:17:56.200 it's pretty clear speak when you talk about American foreign 0:17:56.200 --> 0:17:58.560 posit Then of course there will be challenges. You know, 0:17:58.840 --> 0:18:03.320 tariffs can be a challenge, climate issues can be a challenge. 0:18:03.480 --> 0:18:05.680 But the truth is that throughout history of the United 0:18:05.760 --> 0:18:08.199 States and Europe have usually seen eye to eye, and 0:18:08.200 --> 0:18:10.040 I'm sure we'll be doing that again in the next 0:18:10.040 --> 0:18:10.400 four years. 0:18:10.480 --> 0:18:12.840 Do you expect perhaps this next turn to be less 0:18:12.920 --> 0:18:14.680 combative towards Europe. 0:18:14.960 --> 0:18:18.359 I think the United States needs Europe, but Europe needs 0:18:18.359 --> 0:18:22.200 to understand that the United States has changed. That means 0:18:22.200 --> 0:18:25.000 that we need to take more responsibility for what we do, 0:18:25.200 --> 0:18:28.960 for instance, in terms of security. And when that happens, 0:18:29.000 --> 0:18:32.399 I think the United States, whose number one competitor is China, 0:18:32.600 --> 0:18:36.200 will look at Europe and say, okay, about twenty twenty 0:18:36.200 --> 0:18:39.040 five percent of our allies are right there in Europe. 0:18:39.160 --> 0:18:40.600 Let's play ball with those guys. 0:18:40.720 --> 0:18:42.280 Can I just pick up on Ukraine. I know you 0:18:42.320 --> 0:18:44.879 spoke about it with President Trump, and he seems to 0:18:44.920 --> 0:18:48.160 think that he can secure peace deal between Russia and Ukraine. 0:18:48.160 --> 0:18:50.560 If that does happen, what is the likelihood that it's 0:18:50.600 --> 0:18:53.840 done in a way that's just unfair for Ukraine. 0:18:53.960 --> 0:18:58.240 Well, in my mind, Ukraine needs four things. One is territory, 0:18:58.520 --> 0:19:01.280 and here we don't know where things are going to settle. 0:19:02.119 --> 0:19:06.119 The second one is security guarantees, so probably territory and 0:19:06.160 --> 0:19:09.880 security guarantees in these negotiations will go hand in hand, 0:19:09.920 --> 0:19:12.399 and of course in my mind eventually EU membership and 0:19:12.520 --> 0:19:16.080 NATO membership. The third one is justice, so Russian war 0:19:16.119 --> 0:19:19.040 criminals indicted. And then the low hanging fruit is actually 0:19:19.200 --> 0:19:21.520 number four, which is reconstruction. 0:19:22.160 --> 0:19:25.240 It's difficult to say at this stage, but I. 0:19:25.200 --> 0:19:27.359 Think we in Europe and the rest of the world 0:19:27.400 --> 0:19:30.760 needs to understand that Donald Trump is very serious about 0:19:30.800 --> 0:19:34.080 getting a piece deal sooner rather than later. I have 0:19:34.200 --> 0:19:37.600 myself said that there's a window of opportunity for these 0:19:37.640 --> 0:19:42.600 negotiations between the election and the inauguration day. Let's see 0:19:42.600 --> 0:19:43.120 what happens. 0:19:43.600 --> 0:19:47.720 That was Finland's President Alexander Stubb speaking to Bloomberg's Jimana 0:19:47.760 --> 0:19:51.960 Bisecchi at the COP twenty nine Climate conference in Baku 0:19:52.160 --> 0:19:56.080 in Azerbaijan. More than two and a half years into 0:19:56.119 --> 0:20:00.360 the war, Ukraine has steadily lost territory to Russia. There 0:20:00.400 --> 0:20:04.280 are preliminary plans for a meeting between the Ukrainian President 0:20:04.520 --> 0:20:09.439 Vlodomi Zelenski and President elect Trump, according to Kiev's top diplomat, 0:20:09.800 --> 0:20:14.440 but no timing. Bloomberg's managing editor for Russia, the Middle East, 0:20:14.440 --> 0:20:18.640 and Africa Economy and Government, Sylvia Westall, has been taking 0:20:18.680 --> 0:20:21.560 me through what to expect from the Group of twenty 0:20:21.680 --> 0:20:26.640 gathering in Latin America and how much Ukraine will feature. 0:20:27.160 --> 0:20:30.520 It's an interesting G twenty, and it's obviously a big 0:20:30.640 --> 0:20:33.359 showcase for Lula. It's always sort of, you know, the 0:20:33.440 --> 0:20:35.840 leaders try and shape kind of what they want this 0:20:35.920 --> 0:20:38.440 to be about. I mean, Brazil's made it quite clear 0:20:38.440 --> 0:20:40.760 that they want this summit not to really focus on 0:20:40.920 --> 0:20:45.480 things like wars, Russia's invasion of Ukraine, the current conflicts 0:20:45.480 --> 0:20:46.760 in the Middle East, and they want to look at 0:20:46.800 --> 0:20:50.639 things like trade and climate and finance. But of course, 0:20:50.680 --> 0:20:52.960 because of world events, other things are going to dominate, 0:20:53.040 --> 0:20:54.800 and one of those things, as you mentioned before, is 0:20:54.840 --> 0:20:57.840 Donald Trump. Of course, so you've got Biden and She 0:20:58.359 --> 0:21:01.800 planning to meet, but really the focus is on Trump 0:21:01.840 --> 0:21:04.600 and what happens next. So in that sense, it's a 0:21:04.680 --> 0:21:08.000 kind of chickyd twenty for Brazil to handle because all 0:21:08.040 --> 0:21:10.280 the kind of topics it wants to focus on are 0:21:10.320 --> 0:21:13.679 kind of being overtaken by events, both you know, in 0:21:13.720 --> 0:21:15.800 the US and elsewhere in the world. 0:21:16.240 --> 0:21:19.120