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

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Speaker 2: This is the Bloomberg daybaq At podcast. Good morning, It's Wednesday,

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Speaker 2: the ninth of July. I'm Caroline hepkea in London.

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Speaker 1: And I'm Stephen Carolyn Brussels. Coming up today, Donald Trump

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Speaker 1: triggers turmoil and global copper markets with his plan for

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Speaker 1: a fifty percent tariff on the metal.

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Speaker 2: The EU looks to protect airbos and some carmakers as

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Speaker 2: it nears a trade deal with the US.

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Speaker 1: Plus banking, Booze and Bond Bloomberg Intelligence's list of the

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Speaker 1: ten companies to watch in the coming months.

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Speaker 2: Let's start with the roundup of our top stories.

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Speaker 1: US President Donald Trump has sparked fresh chaos and metals

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Speaker 1: markets with news of a higher than expected fifty percent

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Speaker 1: tariff on copper imports. The planned levy caused a record

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Speaker 1: spike in US copper futures and a drop and the

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Speaker 1: global benchmark on the London Metals Exchange. Our managing editor

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Speaker 1: for Come Out and Energy, Clara Fererra Marquess, has the details.

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Speaker 3: Fifty percent is more than expected. It's also coming a

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Speaker 3: bit faster than expected. There's also read through to other

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Speaker 3: based metals but copper is if you think about the

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Speaker 3: metal that is really key to manufacturing.

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Speaker 2: It is this. This is the.

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Speaker 3: Metal that we use in anything that has to conduct electricity,

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Speaker 3: basically so grids, car's appliances, anything at all, and US

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Speaker 3: manufacturers are already paying that. Of course, the intention here

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Speaker 3: is is to stimulate US production. The trouble, of course,

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Speaker 3: is that it takes a very long time to build

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Speaker 3: a mine, a very long time to process it, and

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Speaker 3: this is not going to have the immediate effect that

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Speaker 3: the Trump administration would want.

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Speaker 1: Clara Forerra Marquez was speaking as City Group Banalist called

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Speaker 1: the announcement day watershed moment for the copper market, and

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Speaker 1: twenty twenty five prices climbed as much as seventeen percent

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Speaker 1: on Comax in New York on Tuesday, a record one

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Speaker 1: day spike to an old time high, before falling by

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Speaker 1: more than four percent in early trading on Wednesday on

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Speaker 1: the London Metals Exchange, Copper's current trading down one point

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Speaker 1: four percent well.

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Speaker 2: President Trump's copper tariff announcement came as the President vowed

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Speaker 2: to push forwards with his aggressive tariff regime in the

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Speaker 2: coming days. The President now says that he will not

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Speaker 2: offer additional extensions on country specific levees, which are set

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Speaker 2: to a hit on the first of August. That's despite

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Speaker 2: previously suggesting that that might be the case.

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Speaker 3: August first, okay, and everybody plays.

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Speaker 4: Everybody has to play. And the incentive is that they

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Speaker 4: have the right to deal in the United States. If

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Speaker 4: they don't want to, they don't have to play, and.

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Speaker 1: They are under deal yet.

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Speaker 2: President Trump also suggested that drug companies could face a

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Speaker 2: tariff as high as two hundred percent on imports of

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Speaker 2: pharmaceuticals if they didn't move production to the US in

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Speaker 2: the next year. The president also told reporters that, despite

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Speaker 2: progress with the European Union on a trade deal, frustration

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Speaker 2: over the block's taxes and fines targeting US technology firms

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Speaker 2: could result in him unilaterally declaring a new tariff rate

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Speaker 2: within the next two days.

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Speaker 1: Translator's threat comes as Bloomberg has learned the EU negotiators

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Speaker 1: are focusing their efforts on securing a preliminary trade deal

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Speaker 1: with the US that would exempt commercial aircraft from some levies,

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Speaker 1: potentially providing a boost to airbos. It's understood that the

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Speaker 1: EU and US are also discussing an offset mechanism that

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Speaker 1: would allow European companies manufacturing automobiles in the United States

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Speaker 1: to export a certain number tariff free. That would benefit

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Speaker 1: companies such as BMW, Mercedes and Volkswagen. Other car makers,

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Speaker 1: including Porsche, Porsche and Ferrari, which import all of their

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Speaker 1: cars from Europe, would not be able to take advantage

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Speaker 1: of the carve out.

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Speaker 2: French President Timmanuel Macon has urged Britain and France to

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Speaker 2: move on from Brexit to work side by side. France's

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Speaker 2: leader addressed to Parliament on the first state visit by

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Speaker 2: a European leader to the UK. Since the country left

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Speaker 2: to the EU, we have to.

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Speaker 5: Work together in order to defend an efficient multiliteralism and

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Speaker 5: to protect the international order as we fort it after

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Speaker 5: the Second World War.

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Speaker 2: Macar added that he would work with Britain to tackle

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Speaker 2: illegal migration, and he called on parliamentarians to recognize the

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Speaker 2: state of Palestine. Despite the friendly tone, France has been

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Speaker 2: a key holdout during recent talks with the EU, notably

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Speaker 2: over phishing rights, but also on letting the UK sign

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Speaker 2: up to a new EU rearmament fund.

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Speaker 1: Britain is at risk of a twenty two billion pounds

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Speaker 1: surge in government debt interest costs. That's according to the

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Speaker 1: Office for Budget Responsibility, which is warning of a coming

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Speaker 1: shock caused by the aging population combined with climate and

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Speaker 1: pension changes. David Miles is one of the economists on

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Speaker 1: the Fiscal Watchdogs Committee. He says, you can add poor

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Speaker 1: productivity growth to the looming economic risks for the UK.

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Speaker 6: You just have a series of things that hit the

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Speaker 6: UK every five ten years like a great hammer coming

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Speaker 6: down on somebody's head. And hopefully the next five to

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Speaker 6: ten years doesn't see the UK hit over the head

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Speaker 6: with a big hammer every five years like it has

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Speaker 6: of the last fifteen years. But having said that, the

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Speaker 6: longer it goes on about very low productivity, obviously you've

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Speaker 6: got to assess whether your best central forecast of productivity

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Speaker 6: growth is about right or two optimistic or two pessimistics.

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Speaker 6: So we're in the process of doing all that now.

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Speaker 1: Miles and the OBR concluded that the public finances are

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Speaker 1: on an unsustainable path. The warning comes amid growing concerns

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Speaker 1: over a debt pile that is now close to one

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Speaker 1: hundred percent of GDP levels last seen in the early

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Speaker 1: nineteen sixties and forecast to rise sharply. Without action, The

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Speaker 1: OBR says debt will spiral to more than two hundred

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Speaker 1: and seventy percent of GDP within fifty years.

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Speaker 2: The chair of the official body which oversees the UK's

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Speaker 2: Office for National Statistics says that he wasn't told about

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Speaker 2: a crucial report detailing major cultural failings at the organization.

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Speaker 2: With more here's Bloomberg's un parts.

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Speaker 7: Problems with the UK's economic statistics has been a long

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Speaker 7: running saga plaguing economic forecasting and undermining the Bank of

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Speaker 7: England's oversights of monetary policy. Robert Chochair of the UK

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Speaker 7: Statistics Authority has now said he was not told about

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Speaker 7: an internal probe at the Office for National Statistics and

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Speaker 7: only found out by chance more than a year later.

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Speaker 7: He says, at a minimum, the UKSA board should have

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Speaker 7: seen the reports in London. I'm youw and pots Bloomberg

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Speaker 7: Radio now.

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Speaker 2: The Office for National Statistics declined to comment on the

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Speaker 2: latest reporting, which comes after an external review published last

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Speaker 2: month that found that ONS bosses were reluctant to hear

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Speaker 2: and act on quote difficult news.

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Speaker 1: Bloomberg has learned that SpaceX has discussing plans to sell

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Speaker 1: insider shares and a deal that would value the company

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Speaker 1: at around four hundred billion dollars. That would give Elon

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Speaker 1: Musk's rocket and satellite maker the largest ever valuation for

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Speaker 1: a privately held US company. It comes as the world's

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Speaker 1: richest person is locked in a public feud with Donald

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Speaker 1: Trump and says he will launch a new political party.

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Speaker 1: A representative for SpaceX didn't immediately respond to a request

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Speaker 1: for comment.

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Speaker 2: And those are our top stories for you this morning.

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Speaker 2: Looking at the markets, so copper at the moment trading

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Speaker 2: in London down one point four percent with President Trump's

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Speaker 2: latest tariff threat. Chinese shares also on course for their

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Speaker 2: best clothes in three years. Why well, of course, it's

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Speaker 2: the negativity around the economic picture in China and the

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Speaker 2: fact that their speculation of more measures to ease deflationary

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Speaker 2: pressures in China that has lifted things there. The masci

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Speaker 2: Asia Pacific Index, though, is in the red this morning.

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Speaker 2: Looking also at US stop futures this morning, we are

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Speaker 2: down in the red. Ustox fifty futures up three tenths

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Speaker 2: of one percent. It was interesting though that it was

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Speaker 2: the specific sectors that President Trump that was targeting with

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Speaker 2: taris yesterday that moved the broader s and P five

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Speaker 2: pound really didn't budge at all. The dollar this morning

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Speaker 2: is slightly high right now, as we also look at

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Speaker 2: the Euro trading at one seventeen fourteen, down a tenth

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Speaker 2: of one percent, and also worth mentioning the thirty year

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Speaker 2: bond US yields upper basis point at four ninety three,

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Speaker 2: so we're heading towards five percent yields on the long

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Speaker 2: bond this morning.

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Speaker 1: In a moment, we'll bring you more on the market

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Speaker 1: reaction to Donald Trump's copper tariffs, plus the ten companies

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Speaker 1: you should be watching in the coming months according to

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Speaker 1: Bloomberg Intelligence. But another story that caught a eye this

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Speaker 1: morning about a food fair with a difference. Bloomberg's Matthew

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Speaker 1: Cronsberg is in reporting from the Summer Fancy Food Fair,

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Speaker 1: which definitely sounds like sort of breath that I want

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Speaker 1: to be. It was in New York and it's about

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Speaker 1: the food trends of the future. He says that it's

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Speaker 1: a window into America's changing tastes and growing appetites, and

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Speaker 1: it gives you perhaps a sense of what the country

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Speaker 1: will be eating over the coming years. A lot of

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Speaker 1: Indian inspired food. Actually he picked up things like Bombay

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Speaker 1: spice crisps for example. There was also carbonara flavored ramen.

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Speaker 1: Sounds like an interesting one as well.

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Speaker 2: Yeah, ramen. I mean it's it's yes, I think that

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Speaker 2: is very wild, two.

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Speaker 1: Flavors I would have put together.

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Speaker 2: Put it that way exactly. I'm just wondering when all

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Speaker 2: of these stacks snacks will actually be arriving in London, Yeah,

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Speaker 2: because I mean the other thing is that they're also

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Speaker 2: all interestingly concerned about tariff's, all of these manufacturers too.

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Speaker 1: Yeah, indeed, I mean, look, it's you know yet yet

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Speaker 1: again the conversation that stems through so many parts of

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Speaker 1: business too. The other part, of course, of the food

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Speaker 1: industry dealing with is the rise of GLP one weight

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Speaker 1: loss drugs as well, so there's a lot more appetite

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Speaker 1: for things like protein heavy products. And also people still

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Speaker 1: want treats, but in smaller sizes, So that's another part

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Speaker 1: of that story being involved as well. We'll put a

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Speaker 1: link to it in our show notes so you can

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Speaker 1: read the full piece by Matthew Kronsberg on the latest

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Speaker 1: twist in Donald Trump's trade defense of the US president

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Speaker 1: announced a fifty percent tariff on copper imports. Bloomberg's Jessica Joe,

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Speaker 1: who leads our team covering metals in Asia, joins us

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Speaker 1: now for more Jessica, great to have you with us.

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Speaker 1: The industry had been expecting tariff's on copper. Is this

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Speaker 1: much worse than had been expected?

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Speaker 4: I would say the fifty percent was much worse than

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Speaker 4: many were expecting, because I think the base case expectations

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Speaker 4: for a lot towards around twenty five percent. But the

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Speaker 4: degree of impact will actually heavily depend on on the

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Speaker 4: details because there aren't much cularity at the moment. For example,

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Speaker 4: what are the forms of copper that the tariff will apply?

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Speaker 4: Will any of the major shippers into the US get

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Speaker 4: exemptions or able to negotiate a lower rate or like?

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Speaker 4: Would there be any kind of grace period ahead of

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Speaker 4: its implementation?

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Speaker 2: So there a.

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Speaker 4: Lot of unknowns here. Will only be able to gauge

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Speaker 4: the scale of the impact when those details are known.

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Speaker 2: The thing is, it looks like flows of copper were

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Speaker 2: all moving in anticipation of a possible tariff, and so

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Speaker 2: that also affects how you know the prices have reacted.

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Speaker 2: What has been the price reaction around the world.

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Speaker 4: Yeah, so there are mainly two prices we are talking

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Speaker 4: about here. There is the comas copper in the US

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Speaker 4: and there is the ne prices in London. So in summary,

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Speaker 4: so since the news last night in the US, in

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Speaker 4: the US, the copper has been surging and then today

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Speaker 4: when London markets opens, the prices are down. So because

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Speaker 4: of these moves, the premium of US copper prices over

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Speaker 4: the equivalent of London prices surging to a record level.

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Speaker 4: So the premium has been searching already since over the

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Speaker 4: past few months, since CHUMP launched the Section two three

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Speaker 4: to two investigation. Now with announcement of fifty percent tariff,

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Speaker 4: as I said, it's higher than a lot of people's expectations,

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Speaker 4: so you would expect this kind of reaction to price

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Speaker 4: in the latest.

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Speaker 1: This is all happening to USK at a time when

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Speaker 1: demand for copper is expected to surge in so many

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Speaker 1: key industries. What does that mean for the price trajectory

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Speaker 1: from here?

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Speaker 4: We should be looking at this in the short term

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Speaker 4: and longer term. In the short term, so as I

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Speaker 4: mentioned that there was a premium and then that has

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Speaker 4: incentivized a lot of trader to shape copper into the

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Speaker 4: US and causing some structural tightness in the market. But

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Speaker 4: now with some clarity on the tariff, so the copper

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Speaker 4: supposedly will kind of stop being shipped into the US,

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Speaker 4: so the tightness in the market will be eased as

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Speaker 4: there will be less shipment, so in that sense it

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Speaker 4: will be barished for x US prices. So that's why

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Speaker 4: we're seeing some sort of weakness in the London prices,

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Speaker 4: and even with the search in the US prices in

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Speaker 4: the near term, there is still worried about kind of

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Speaker 4: the demand destructions with the high tariff, so you would

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Speaker 4: see some bearishness in the short term, but longer term

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Speaker 4: so the outlook is not verished because the demand from

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Speaker 4: data center, from power grades, from solar companies are still there,

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Speaker 4: so you would always see support for the copper prices

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Speaker 4: in the longer term.

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Speaker 2: What do you think it means for countries that produce

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Speaker 2: copper producing nations?

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Speaker 4: So I think the countries that are most impacted will

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Speaker 4: be the big sellers into the US, such as Chile.

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Speaker 4: Chile is accounting for thirty eight percent of the total

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Speaker 4: import volume into the US and followed by Canada and Mexico.

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Speaker 4: And for Chile, I think there is a lot of

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Speaker 4: speculation at the moment that Chile is going to be

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Speaker 4: able to negotiate a lower rate because it's such a

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Speaker 4: large chunk of US imports, and then it's very difficult

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Speaker 4: to replace Chilean metal. So we will see what comes

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Speaker 4: next to see if there is any details or really

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Speaker 4: there is any exemptions or lower rates for these producing countries.

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Speaker 4: But if in the end Trump and the and these

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Speaker 4: other countries they cannot reach an agreement, then these producing

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Speaker 4: countries who will have to look for other destinations to

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Speaker 4: diversify their markets.

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Speaker 1: Okay, Jessica, great to have you on the program. Thank

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Speaker 1: you very much for joining us, Jessica. Joe there who

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Speaker 1: leads our team covering metals in Asia.

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Speaker 2: Now, Blue Big Intelligence has published it's list of ten

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Speaker 2: companies to watch in the coming months, with banking, Booze,

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Speaker 2: and James Bond's Cars in focus. Did I get that

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Speaker 2: out right? Tim Kraiker is director of research at Bloemberg

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Speaker 2: Intelligence and joins us now with more. Good morning, Tim,

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Speaker 2: just tell us about the list and how you picked

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Speaker 2: those ten in partic.

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Speaker 8: Sure thing, Thanks for having me on. So these ten

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Speaker 8: are all part of a broader list of what we

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Speaker 8: call focus ideas. Focus ideas are companies where our analysts

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Speaker 8: around the globe across sectors, have a strong fundamental view

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Speaker 8: about some important element that's out of consensus and they've

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Speaker 8: got catalysts to change the market's perception. These ten all

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Speaker 8: have catalysts coming up in the third quarter that are

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Speaker 8: quite important. And yeah, all of these are available on

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Speaker 8: bi focus.

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Speaker 1: On the terminal ten. There's several consumer facing names on

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Speaker 1: the list. Is there a common thread running between them?

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Speaker 8: Yeah, you know, it's really interesting, there is and there

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Speaker 8: isn't There is in that there are a couple of

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Speaker 8: higher end consumer names that we think are quite well

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Speaker 8: positioned and high end sales, despite concerns about tear if

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Speaker 8: this or whatever, that continue to be well positioned. For example, Diagio.

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Speaker 8: You know, it's the world's largest spirit maker. It we

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Speaker 8: do think that high end spirits and the trading up

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Speaker 8: is alive and well. And in addition to that, they

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Speaker 8: had an inventory overhang issue in the US last year

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Speaker 8: and there's lots of reasons as to why, but that's

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Speaker 8: normalized now and if you look at last quarter sales

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Speaker 8: up six percent on a comparable basis. It's really strong

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Speaker 8: and we think that's going to continue this year. Dick

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Speaker 8: Sporting Goods US company is also very oriented towards higher

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Speaker 8: end sporting goods sales. They're launching bigger format stores that

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Speaker 8: are doing really well. It's a classic consumer retail play

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Speaker 8: on the higher end. That said, easy Jet here in

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Speaker 8: Europe isn't really it's not a high end play. Clearly,

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Speaker 8: it's cheap and cheerful air, but they're replacing a bunch

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Speaker 8: of their planes with newer wins that are much more

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Speaker 8: fuel efficient. We think it's a margin story for easy

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Speaker 8: Jet relative to Ryan Air. And I would throw out

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Speaker 8: Aston Martin since you brought up Double O seven that

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Speaker 8: clearly is a higher end consumer story. But this one's

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Speaker 8: one where we have a cautious view. Even though they've

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Speaker 8: got new models coming out, they are running against stiff

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Speaker 8: competition from Ferrari, from Lamborghini. They don't have that many

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Speaker 8: V twelve models, which is really what people want, notwithstanding

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Speaker 8: in the world of evs, and we think that they're

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Speaker 8: cash strapped and may have to raise some capital.

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Speaker 2: Yeah, that's been a kind of turnaround story for some time.

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Speaker 2: So yeah, I'm really interesting. AI Artwitch and Intelligence has

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Speaker 2: also been running through your focus ideas to watch in

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Speaker 2: most instances over the last two years. So what about

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Speaker 2: this time round.

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Speaker 8: Yeah, two interesting twists are on the list related to this.

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Speaker 8: One is Cadence Design, the US company. It's not the

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Speaker 8: semiconductor company. It's not the semi equipment, it's not the hyperscaler.

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Speaker 8: This is a software company that makes software that allows

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Speaker 8: you to design chips, which in Vidia and Samsung utilize

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Speaker 8: their software. Interestingly enough, their design software is actually now

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Speaker 8: AI enabled its new feature set and this, that and

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Speaker 8: the other. So it's AI on AI. Really interesting company

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Speaker 8: and we think that there's a momentum story here growing.

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Speaker 8: Keppel d C probably never heard of. This is a

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Speaker 8: reap company. It's out of Asia. It's Singapore based. Singapore

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Speaker 8: is in many ways becoming an AI hub and they

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Speaker 8: have the space that Hyperscalers and others are building out

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Speaker 8: in Asia in Singapore.

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Speaker 1: Tim briefly on banks as well. What are you picking

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Speaker 1: at in that sector?

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Speaker 8: Yeah, you know, it's interesting around the globe with central banks,

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Speaker 8: you know, raising rates, lowering rates, what have you. The

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Speaker 8: banks themselves are a bit confus used or confusing. You

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Speaker 8: got to be really careful. Kapitec in South Africa is

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Speaker 8: a lender that kind of goes beyond the cycle. It's

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Speaker 8: a low cost provider. They're expanding their footprint, gaining share,

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Speaker 8: moving into new areas of finance, and we think they

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Speaker 8: can use their low cost banking model to extend market share,

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Speaker 8: so it goes beyond the central bank cycle. AIA is

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Speaker 8: an insurance company in Asia that's similarly not all that

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Speaker 8: exposed to the interest rate cycle. They're taking advantage of

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Speaker 8: Chinese putting money into Hong Kong in a diversifying way,

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Speaker 8: and they're also expanding their own footprint in China, so

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Speaker 8: it's just a pure growth story outside the financial cycles.

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Speaker 1: This is Bloomberg Daybreak Europe, your morning brief on the

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