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Speaker 2: top stories in the coming week from our Daybreak anchors
Speaker 2: all around the world. Straight Ahead on the program, we
Speaker 2: look ahead to the Last of the mag seven earnings
Speaker 2: with Chip Giant and video reporting. I'm Nathan Hager in Washington.
Speaker 3: I'm callin Heppoon, London, where we're delving into the special
Speaker 3: election that could redefine the UK's political future.
Speaker 4: I'm Doug Prisner, looking ahead to Indian Prime Minister in
Speaker 4: Narungramodi's visit to Israel in the coming week.
Speaker 1: That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg
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Speaker 2: Good day to you. I'm Nathan Hager. We begin today's
Speaker 2: program with earnings from AI Chip Giant Invidia, the last
Speaker 2: of the Magnificent Seven, reports its end of year results
Speaker 2: after the close of training on Wednesday, for more. We're
Speaker 2: joined by Kun John Sabhani, senior semiconductor analyst for Bloomberg Intelligence.
Speaker 2: Great to have you with us on the program, Kun John.
Speaker 2: Of course, in Vidia has been at the center of
Speaker 2: the AI spending story for so long, so where do
Speaker 2: you see the bar when it comes to Invidia's results
Speaker 2: this time around?
Speaker 5: As usual, the expectations will run high. You know, folks
Speaker 5: are expecting the usual or if not better than the
Speaker 5: mid single digit beaten race that we have gotten used
Speaker 5: to with them, which I think is quite possible given
Speaker 5: multiple drivers that have gotten better since their last quarterly earnings.
Speaker 5: You know, we have heard from the largest customers of Nvidia,
Speaker 5: and most of them have increased their CAPEX projection significantly,
Speaker 5: some of them forty to fifty percent in case of
Speaker 5: Google and Amazon for twenty twenty six, so that really helps.
Speaker 5: We have heard of deals being made since last quarter
Speaker 5: with these hyperscalers and other customers adopting millions of units
Speaker 5: of in Nvidia, which should drive further upside to that
Speaker 5: five hundred billion number that Jensen had provided end of
Speaker 5: last year regarding the Blackwell and Rubin backlog through twenty
Speaker 5: twenty six. So estimates are running higher than that, and
Speaker 5: we expect them to give indications that it is going
Speaker 5: to run higher than that. And finally, the third key
Speaker 5: point will be visibility on resuming the H too or
Speaker 5: I should say starting the H two hundred shipments to
Speaker 5: China because that continues. Will be a key upside driver
Speaker 5: if that happens soon. And we did see AMD start
Speaker 5: to ship some of its prior to generation chipmates to
Speaker 5: China in this quarter when there is a reported results.
Speaker 2: Let's take some of those points in turn. John, you
Speaker 2: mentioned the millions of units deployed. I think that was
Speaker 2: an allusion to the announcement we heard just a few
Speaker 2: days ago from Meta Platforms. Does that sort of raise
Speaker 2: the bar when it comes to the outlook that we're
Speaker 2: expecting to hear from Jensen in the call this week.
Speaker 5: It does raise the bar for the full year. I
Speaker 5: don't know if it raises the bar for the next quarter.
Speaker 5: Outlook that deal with Meta, you know, it's a long
Speaker 5: term deal and the lead times will be longer than
Speaker 5: to get the revenue in this quarter, so does raise
Speaker 5: the bar for the full earth.
Speaker 2: And when it comes to the pipeline for future chips,
Speaker 2: we heard Jensen talk about the Ruben semiconductor being on
Speaker 2: track for the second half of this year at the
Speaker 2: recent conference that Nvidia held. Are we expecting any more
Speaker 2: clarity when it comes to some of those next generation
Speaker 2: chips video.
Speaker 5: I'm sure we will hear some commentary that evaluations are
Speaker 5: going well, etc. Remember, this was a very unique time.
Speaker 5: Usually at CES, Nvidia in the past has not talked
Speaker 5: about their next generation products, which are released at the
Speaker 5: end of the year. Usually they saved that for the GtC,
Speaker 5: which will be their marquee event happening in March. Them
Speaker 5: talking about this this early in the year gives gave
Speaker 5: investors confidence that there would be sort of no hiccups
Speaker 5: with the Rubin ramp as they're aware with Blackwells, So
Speaker 5: that's a good news. We'll definitely hear some update, but
Speaker 5: I think most of the big news will be saved
Speaker 5: for him to talk about at GtC next month.
Speaker 2: And when it comes to the re entry of the
Speaker 2: H two hundred ship that you mentioned in China, we've
Speaker 2: heard jenst in the past talk about, you know, even
Speaker 2: keeping China revenue off the table, they're still going to
Speaker 2: put out pretty significant numbers. How important is it though,
Speaker 2: for Nvidia to get back into the Chinese market to
Speaker 2: keep its momentum going.
Speaker 5: I think it is definitely important. Look, most of the
Speaker 5: other areas they are dominating, so investors are very aware.
Speaker 5: So this is a market which if it does open
Speaker 5: up significantly for them, they can go and grab another
Speaker 5: significant share, a dominant share. Before the shipment sanctions had
Speaker 5: come in and Vidia was a dominant share of that market,
Speaker 5: So definitely very important. Could easily, you know, if the
Speaker 5: gates get open, you can easily think about adding somewhere
Speaker 5: between seven to twelve thirteen billion dollars back, which is
Speaker 5: a substantial amount. Yes, we'll not move. I mean if
Speaker 5: the company is going to about to be making one
Speaker 5: hundred and fifty two hundred billion dollars, you can argue
Speaker 5: five to twelve billion is small, but still a significant upside.
Speaker 2: Of course, there's been so much discussion within the market
Speaker 2: about you know, whether there's too much spending in AI,
Speaker 2: whether it's circular spending, and even this AI disruption trade.
Speaker 2: How do you expect in Nvidia's results to color some
Speaker 2: of that debate on Wall Street?
Speaker 5: I don't think. I mean, if anything, a better results
Speaker 5: from in media could keep these arguments going forward. I
Speaker 5: don't think better results will will help with diminishing these arguments.
Speaker 5: In fact, a week result could slow down this argument,
Speaker 5: giving people the more validity that these concents are real.
Speaker 5: We don't think these concents are real at this point,
Speaker 5: and as long as Nvidia keeps doing better and better,
Speaker 5: I don't think these arguments will go away anywhere.
Speaker 2: Appreciate this, Kun John. Ahead of those earnings from Nvidia,
Speaker 2: much appreciated, that is, Kun John Sabhani, Bloomberg Intelligence Senior
Speaker 2: Semiconductor Analyst. Let's take a look now at some stocks
Speaker 2: making news in the week ahead. I'm Nathan Hager, joined
Speaker 2: by Bloomberg Markets Live Managing Editor Christine Akino. I thought
Speaker 2: we were almost done with earnings, Christine, but it looks
Speaker 2: like we got some pretty big names reporting this week,
Speaker 2: including Home Depot. On Tuesday was the holiday quarter, a
Speaker 2: time people were thinking about home improvement.
Speaker 6: Oh well, Nathan, I think from what we've heard from
Speaker 6: Home Depot, things are not looking great. They have implemented
Speaker 6: a lot of cost custing cutting measures over the last
Speaker 6: couple of months. So this month, for example, the company
Speaker 6: said it's making the requirements for bonus payouts to managers
Speaker 6: more strict if they're telling eligible employees that they now
Speaker 6: have a higher threshold for sales performance metrics to be
Speaker 6: able to receive this bonus. And then in January they
Speaker 6: also said that they're going to be cutting jobs across
Speaker 6: several teams and also requiring corporate staff to return to
Speaker 6: the office, and so it really seems like home Depot
Speaker 6: is really bracing for a challenging quarter that's probably going
Speaker 6: to be reflected in the earnings results that we're going
Speaker 6: to be seeing. And so it's just a question of whether,
Speaker 6: you know, once investors see them, are they going to
Speaker 6: see enough of a silver aligning in those results? You know,
Speaker 6: whether it's the cost cutting measures that Home Deep implemented
Speaker 6: or anything else that they're doing that would give them
Speaker 6: a steadier footing moving forward. That's probably going to be
Speaker 6: what's in focus for investors next week.
Speaker 2: It is interesting though, I mean, we're still off the
Speaker 2: high from September for home Depot, but the stock has
Speaker 2: been kind of on a bit of a bounce here
Speaker 2: over the last couple of months. So does that mean
Speaker 2: the bar is kind of higher for home Depot when
Speaker 2: it comes to the earnings.
Speaker 6: Yeah, I suppose you could say that just because you know,
Speaker 6: it has weathered a lot of storms over the last
Speaker 6: few months. They have been warning for quite some time
Speaker 6: now about slow down in housing, which is very much
Speaker 6: affecting their bottom line. But at the same time, we
Speaker 6: have seen, as you mentioned, a resilience in the shares,
Speaker 6: and so perhaps there is some of that optimism baked
Speaker 6: in already that the company will be able to keep afloat.
Speaker 6: It's it's you know, it's it's earnings outlook, it's revenue outlook,
Speaker 6: and so you know, if there is some disappointment there,
Speaker 6: we'll probably see that in the aftermath of the reaction
Speaker 6: to the earnings.
Speaker 2: Coming Moving from Home Depot, another stock that starts with
Speaker 2: H reports on Tuesday.
Speaker 5: HP.
Speaker 2: Where are they when it comes to the AI tech story?
Speaker 6: Yeah, I mean very interesting when it comes to HP.
Speaker 6: Of course, it did get a bit of a boost
Speaker 6: when it comes to the AI story, right. It was
Speaker 6: very much involved in that trade back in the latter
Speaker 6: part of twenty twenty five when it was all about
Speaker 6: the expansion of the AI trade to the various companies
Speaker 6: involved in implementing the data center build out, and HP
Speaker 6: is a part of that supply chain. But you know,
Speaker 6: our Analyti Bloomber intelligence really focusing in on margins for
Speaker 6: HP here. They are big in the PC space, a
Speaker 6: lot of pressure there when it comes to margins, and
Speaker 6: and so that's a big question whether they're going to
Speaker 6: be able to.
Speaker 5: Keep that up.
Speaker 6: Also question about you know, their their memory supply. Is
Speaker 6: that supply chain again going to be resilient and moving forward,
Speaker 6: And you know, it's a big Q question whether they're
Speaker 6: going to be able to maintain pricing power given that
Speaker 6: the environment at the moment for anything air related is
Speaker 6: a little bit more challenging as we've seen in recent
Speaker 6: price action.
Speaker 2: Is that what we're seeing and reflected in terms of
Speaker 2: the kind of steady decline that we've been seeing in
Speaker 2: hpiece chart over the last few months.
Speaker 6: Yeah, absolutely, Nathan, I mean, I think it is one
Speaker 6: of these socks very interesting. You know, it's just kind
Speaker 6: of right in the middle of kind of institutional air demand,
Speaker 6: right given that it is part of the buildout story.
Speaker 6: But then at the same time, a lot of fluctuations
Speaker 6: due to its spot when it comes to the consumer space, right,
Speaker 6: Like it's PC offering still very much subject to the
Speaker 6: whims of the consumer, and as we've been hearing from
Speaker 6: a lot of other companies, that is quite a challenge environment.
Speaker 6: It's not that consumers are fully scaling back on their purchases,
Speaker 6: they're just being more strategic about it. And that may
Speaker 6: be where HP's vulnerabilities really maybe.
Speaker 2: And on Thursday we hear from one of HP's competitors.
Speaker 2: Is it going to be a similar story when it
Speaker 2: comes to Dell Computer?
Speaker 6: Yeah? I mean for Dell, it really has been a
Speaker 6: rough start to twenty twenty six. Right, We've seen their
Speaker 6: shares down more than seven percent. They very much did
Speaker 6: get wrapped up in the early twenty twenty six declines
Speaker 6: for US equities in general, given all these fears about
Speaker 6: AI disruption, and you know, for Bloomer Intelligence, their outlook
Speaker 6: really focusing in on the AI server demand that Dell
Speaker 6: is enjoying, and so that is a positive for them
Speaker 6: and as allow them to have a more broad consumer base.
Speaker 6: And you know, our analysts are very much optimistic in
Speaker 6: terms of their ability to sustain that momentum through twenty thirty.
Speaker 6: So high expectations potentially for this earnings result possibly a
Speaker 6: high potential for disappointment as well.
Speaker 2: Okay, Well, another busy earnings week on tap. Thanks for this, Christine,
Speaker 2: good having your Christina Keino, Managing editor for Bloomberg Markets Live.
Speaker 2: Coming up on Bloomberg day Break weekend, we'll look at
Speaker 2: the special election that could redefine the UK's political future.
Speaker 2: I'm Nathan Hager, and this is Bloomberg. This is Bloomberg
Speaker 2: day Break Weekend, our global look ahead at the top
Speaker 2: stories for investors in the coming week. I'm Nathan Hager
Speaker 2: in Washington. Up later in our program we'll look ahead
Speaker 2: to Indian Prime Minister Narendra Modi's visit to Israel. But
Speaker 2: first in the coming days, a special election in the
Speaker 2: UK could highlight the fractured state of British politics. Bookmakers
Speaker 2: are predicting a three horse race between Labor and the
Speaker 2: insurgents on the right hand left. Gambling odds compiled by
Speaker 2: odds Checker suggests the Green Party will edge out Reform,
Speaker 2: with the incumbent Labor Party third. For more, let's go
Speaker 2: to London and bring in Bloomberg Daybreak Europe banker Caroline Nathan.
Speaker 3: In an unassuming and often neglected Manchester suburb, a three
Speaker 3: way fight is hotting up between challenger parties Reform UK
Speaker 3: and the Green Party, who are vying to pry the
Speaker 3: area's parliamentary seat away from the incumbent governing Labor Party,
Speaker 3: with a special by election looming in Gordon and Denton
Speaker 3: on the twenty sixth of February. The battle is highlighting
Speaker 3: the sinking popularity of Prime Minister Kirs Stamer's Labor administration
Speaker 3: and the rising fortunes of populist competitors on both the
Speaker 3: right and the left. It's an uncertain situation that could
Speaker 3: have implications for the UK's politics and economic prospects. Three
Speaker 3: Gutchukovin Dan is senior research economists at UK Asset Manager Aberdeen.
Speaker 3: She says the instability could prove costly what we're seeing.
Speaker 7: I mean, it's been a good week for bomb markets
Speaker 7: in the UK and elsewhere, but there is a lot
Speaker 7: of premium already in the guilt market.
Speaker 3: But I've say a lot of rates investors are cautious.
Speaker 7: And I think these key events like the by election
Speaker 7: in ten days time, the local elections in May, there
Speaker 7: is the acceptance that there could there is likely to
Speaker 7: be a leadership change later this year. So obviously we
Speaker 7: had a bit of a flash point. Two weeks ago
Speaker 7: and Kilts really sold off quite aggressively and that is
Speaker 7: an issue for the government. High interest rates are an
Speaker 7: issue for the government, so whoever leads the UK later
Speaker 7: this year will have to keep that in mind.
Speaker 3: So perhaps a challenge to the Prime Minister Kirs Starmer
Speaker 3: Sui Kutchu Govin Dan seeing a research economist at UK
Speaker 3: Asset Manager Aberdeen speak to me and Stephen Cowell on
Speaker 3: Bloomberg Radio. So will the coming local contest between the
Speaker 3: government and all its challengers leave Starmer vulnerable or vindicated?
Speaker 3: Joining me now to discuss is our Bloomberg UK Economy
Speaker 3: reporter Arena and Angel and our UK Politics reporter Lucy
Speaker 3: White come to both of you. Thank you for being
Speaker 3: with us. Lucy. Should we start with a bit of
Speaker 3: the politics. Set the scene. Why is this by election
Speaker 3: so crucial for Keir Starmer?
Speaker 8: So there's not very often in between general elections that
Speaker 8: we get a sort of national vote like this, because
Speaker 8: this isn't you know, your kind of usual local politics
Speaker 8: kind of election. This is a by election for a
Speaker 8: seat in Westminster. So it's the first real test that
Speaker 8: we're going to have for an area where they are
Speaker 8: electing a new person to Westminster, and this is all
Speaker 8: because Andrew gyn has resigned on health grounds, but he
Speaker 8: was also caught up in a bit of a scandal.
Speaker 8: He's the labor incumbents at the moment around leaked WhatsApp messages,
Speaker 8: and this is going to be the first real test
Speaker 8: we have of who these people in Gorson and Denton
Speaker 8: want as their representative. And as you were saying just then,
Speaker 8: you know, there's a real flashpoint at the moment as
Speaker 8: to Obviously there's some kind of idiosyncratic reasons why people
Speaker 8: are not a fan of laboring in that area, but
Speaker 8: there's also this kind of real challenge, real tussle going
Speaker 8: on between Reform and the Greens at the moment. And
Speaker 8: if this goes badly in for labor in Manchester or
Speaker 8: in this particular suburb of Manchester where labor have really
Speaker 8: had a sort of strongholder for several years, the implications
Speaker 8: for this nationally are are pretty stark.
Speaker 3: We really have polling at the moment, but how much
Speaker 3: ground might labor have lost in this region. Who are
Speaker 3: the front runners, So it's.
Speaker 8: Really a three way tie at the moment. We've got
Speaker 8: Labor as the incumbents, and then we've got the Green
Speaker 8: Party who are really hoping to make gains on the
Speaker 8: sort of populist left of politics, and Reform who are
Speaker 8: at the polar opposite end of that sort of making
Speaker 8: looking to make headway on the populist right. And they're
Speaker 8: you know, kind of involved in this three way battle.
Speaker 8: It's hard to tell who is doing particularly well at
Speaker 8: the moment because there's no sort of you know, kind
Speaker 8: of there is. There is polling at a local level,
Speaker 8: but none of it, you know, kind of particularly reliable.
Speaker 8: The sample sizes just aren't as big. From myself and
Speaker 8: Arena when we were on the ground last week in
Speaker 8: the area, there's a huge amount of visibility for the
Speaker 8: Green Party. This post is everywhere, there's a lot of
Speaker 8: campaigners on the ground. For Reform, there's very little visibility,
Speaker 8: but you know, kind of local polling does seem to
Speaker 8: see them doing quite well. As for Labor, you know,
Speaker 8: there's a lot of people who are kind of well,
Speaker 8: I've I've voted labors all my life, so I probably will.
Speaker 8: But there's an equal number i'd say that we spoke
Speaker 8: to of people that we spoke to there who say
Speaker 8: whether it's due to the Andrew growing what's up scandal
Speaker 8: or whether it's due to Kirstarma just saying I will
Speaker 8: never vote labor again in my life.
Speaker 3: Arena take us through the economics, then we know that
Speaker 3: for a long time, UK wages and incomes really haven't
Speaker 3: risen very much. The economy isn't growing very quickly. How
Speaker 3: has that manifested in Manchester and how do resident and
Speaker 3: there I feel about it?
Speaker 9: When Lucy and I went up there, I would say
Speaker 9: that the top issue that came up in Gordon and
Speaker 9: Denton was at the rising cost of living and you
Speaker 9: know you have that, you also have the rise in
Speaker 9: the cost of doing business.
Speaker 10: There's also you know, other issues related.
Speaker 9: To flight tipping, decaying states, drug dealing, and you know,
Speaker 9: underneath this you could sense that there is one big issue,
Speaker 9: and that issue is that the community is decaying.
Speaker 10: But things didn't used to be like this, you know.
Speaker 9: So the people of Gordon and Dent and they seem
Speaker 9: to be people who take pride and where they come
Speaker 9: from and pride and who they are, and there's a
Speaker 9: sense that that's now been taken away from them. And
Speaker 9: who do they blame for this? They blame the government
Speaker 9: and you know labor came in with big promises. There
Speaker 9: was real hope that things will change quickly, but they
Speaker 9: haven't for you know, many reasons. You know, perhaps some
Speaker 9: of the are default of policy. Others are you know,
Speaker 9: are just the result of like structural factors which you
Speaker 9: know could never be turned around very quickly. And you know,
Speaker 9: and the local people also blame their previous MP and Gwynn.
Speaker 9: You know, some told us they wrote to him to
Speaker 9: complain but they never heard back. So they feel like
Speaker 9: things are not getting better and also that they're getting neglected.
Speaker 3: I think that's really interesting. So then what do we
Speaker 3: know about the economic profile of those who perhaps are
Speaker 3: likely to support the challenge of parties, parties like Reform
Speaker 3: and the Greens. If you say that, underneath it there's
Speaker 3: what sounds like quite a lot of anger, maybe some hopelessness.
Speaker 9: Exactly, and Reforming Green voters are actually very similar in a.
Speaker 10: Key way they feel.
Speaker 9: And this is at the national level, not just in
Speaker 9: Gordon and Denton. But it was really interesting to see
Speaker 9: it sort of play out there. But these people feel
Speaker 9: somehow cheated on by the sort of by the political
Speaker 9: economy of the country.
Speaker 10: So look thrill from more in common put this very well.
Speaker 9: You know he told me that, you know, you ask
Speaker 9: people is the system working? And the answer tends to
Speaker 9: be no, Then you ask them, okay, can we change
Speaker 9: the system them from within to make it work or
Speaker 9: do we just burn it all down? And the burn
Speaker 9: it all down theres These are the people who either
Speaker 9: go to reform or the.
Speaker 10: Greens, you know which one. It depends on who they blame.
Speaker 9: For the Greens, that tends to be capitalism and big
Speaker 9: corporates capturing the economic gains from themselves and leaving everyone
Speaker 9: else worse off.
Speaker 10: So you have, you know, young university.
Speaker 9: Educated people who are a big demographic for them, and
Speaker 9: for reform, it's really blaming immigration and migrants putting a
Speaker 9: strain on public services.
Speaker 3: I'm sure that Labor are putting up a good fight
Speaker 3: and trying to make their case for why perhaps they
Speaker 3: need more time or the progress that they've made so far,
Speaker 3: Lucy in terms of kissed Arma, how much damage could
Speaker 3: it do potentially if Labor were to fail to retain
Speaker 3: this parliamentary seat.
Speaker 8: I think it will be embarrassing for them. But at
Speaker 8: the same time, I'm not sure that people within Labor
Speaker 8: have a huge amount of hope for it going particularly
Speaker 8: well at the moment, I think, you know, it's important
Speaker 8: to realize that this is just one area and that
Speaker 8: you know, I daresay if I were to be Devil's
Speaker 8: advocate for labor, they would say that there are, you know,
Speaker 8: some very idiosyncratic issues in this area, for example, the
Speaker 8: WhatsApp scandal that Andrew Grimm was involved in. But at
Speaker 8: the same time, you know, it is going to be
Speaker 8: hugely embarrassing for them if they lose in a seat
Speaker 8: where as recently as twenty twenty four they won fifty
Speaker 8: point eight percent of the vote, and even more, it's
Speaker 8: kind of hard to compare because the boundaries were slightly
Speaker 8: different than the general election before that in twenty nineteen,
Speaker 8: but it would have been even higher back then. So
Speaker 8: I think if Labor are to you know, go from
Speaker 8: that level to totally losing the seat, it is a
Speaker 8: kind of really worrying sign for them, because you know,
Speaker 8: if we're to have you know, this pattern repeated across
Speaker 8: the country in areas where labor isn't was never this
Speaker 8: this good, then you know, they're really looking at a
Speaker 8: kind of potential wipeout at the next election, which is
Speaker 8: due to be held by the next general election, which
Speaker 8: is due to be held by twenty twenty nine.
Speaker 3: So in terms of what's going on with the demographics
Speaker 3: in the constituency, I think that's also quite interesting and
Speaker 3: there's been quite a lot of focus on that in
Speaker 3: terms of the economic challenges, worries, complaints or hopes that
Speaker 3: people have for that tell us about the demographics arena.
Speaker 9: So the Gorton and Denton has been called the Frankenstein
Speaker 9: constituency because it's made up of very different parts. You know,
Speaker 9: you have Gorton and crucially this is where two thirds
Speaker 9: of the population lives, and Gordon is very ethnically diverse.
Speaker 9: Forty percent of residents identify as Muslim.
Speaker 11: You know.
Speaker 9: One of the main places we visited there is the
Speaker 9: Alongside Market, this big open air market reminiscent of Istanbul bazaars,
Speaker 9: and it also has a Gorton has a large share
Speaker 9: of students and university graduates and a larger share of these.
Speaker 10: People than Denton.
Speaker 9: So Gordon is fertile ground you know for labor and
Speaker 9: the Greens both have their headquarters there and as Lucy said,
Speaker 9: you know, we saw lots of Green posters, but not
Speaker 9: that many Labor, I would say when we visited last week.
Speaker 9: And then you know, then there's Denton and as soon
Speaker 9: as you cross into Dent and you can almost tell
Speaker 9: the difference because the houses are bigger somehow, and you know,
Speaker 9: Reform has set up it's HQ there and it's in
Speaker 9: a large, sort of sleek warehouse. And you know, regardless
Speaker 9: whether you're from Gorton or Dent. And I think all
Speaker 9: voters seem to agree on one thing. You know, they
Speaker 9: won't vote Labor again. But not many people have made
Speaker 9: up their mind about whether they go to the Greens
Speaker 9: or Reforms. So you know, Reform seems to be alienating
Speaker 9: voters and the ethnically diverse Gorton with its anti immigration message,
Speaker 9: and you know, some residents said they won't vote for
Speaker 9: them because they're racist. However, you know, the Greens similarly
Speaker 9: are putting off other voters. For example, there was this
Speaker 9: this resident we spoke to who said, you know, I
Speaker 9: don't like Labor. I will vote for Reform even though
Speaker 9: I don't with their stands on immigration. But I won't
Speaker 9: vote for the Greenes because I don't like their stands
Speaker 9: on prebritty blockers. So it's really really up in the
Speaker 9: air sort of who will win?
Speaker 3: Okay, thank you to both of you for your reporting
Speaker 3: on the ground and for being with me here today.
Speaker 3: My thanks to Bloomberg's economics reporter Arena Angel and to
Speaker 3: our politics reporter Lucy White.
Speaker 10: Thank you.
Speaker 3: Now I want to read out a full list of
Speaker 3: the candidates, of course, who are running for this by
Speaker 3: election in Gordon and Denton. Nick Buckley Advanced UK, Charlotte
Speaker 3: Cadden Conservative Party, Dan Clark Libertarian Party, Matt Goodwin Reform UK,
Speaker 3: Sebastian Moore Social Democratic Party, Joseph o'meecher Rejoin EU Party,
Speaker 3: Jackie Pearcy Liberal Democrats, Hannah Spencer, Green Party, Angeliki Soogia
Speaker 3: Labor Party, Sir einke Loot the Official Monster Raving Looney Party,
Speaker 3: Hugo Wills Communist League.
Speaker 10: I'm Carol, yep.
Speaker 3: Get here in London. You can catch us every weekday
Speaker 3: morning here for Bloomberg Daybreak. You are beginning at six
Speaker 3: am in London. That's at one am on woll Street. Nathan.
Speaker 2: Thanks Caroline, and coming up on Bloomberg day Break weekend.
Speaker 2: India's Prime Minister Narendra Modi is set for a two
Speaker 2: day visit to Israel. We'll look at what to expect next.
Speaker 2: I'm Nathan Hagar, and this is Bloomberg. This is Bloomberg
Speaker 2: day Break Weekend, our global look ahead at the top
Speaker 2: stories for investors in the coming week. I'm Nathan Hagar
Speaker 2: and Washington. Indian Prime Minister Narendromodi is set for a
Speaker 2: two day visit to Israel in the week ahead. For
Speaker 2: a preview, let's get to Doug Krisner, hosted the Bloomberg
Speaker 2: Daybreak Asia podcast.
Speaker 4: Thanks Nathan. This will be Mody's second visit to Israel
Speaker 4: in eight years. Back in July twenty seventeen, he became
Speaker 4: the first Indian Prime minister to travel to Israel with
Speaker 4: a goal of elevating tide. Israeli Prime Minister Benjamin Knyahu
Speaker 4: has said there is a tremendous alliance between these two countries.
Speaker 4: For a closer look, I'm joined by Bloomberg's Rosalind Matheson.
Speaker 4: She is Chief Asia correspondent. Roz joins from our studio
Speaker 4: in Singapore. Thank you for being here. From what I've read,
Speaker 4: NATANYAHUU and Modi are expected to discuss various forms of cooperation.
Speaker 4: Do you have a sense of which areas might be prioritized.
Speaker 12: Two key areas really probably with their conversation. One is
Speaker 12: momentum towards a free trade agreement. I mean, India tends
Speaker 12: to move very slowly on trade deals over many years,
Speaker 12: but they're suddenly in this environment of diversify or die
Speaker 12: around the world on trade, They're rushing to get trade
Speaker 12: deals done. I mean they just did significant trade deals
Speaker 12: with the EU and also with the US, So there
Speaker 12: is movement here on the Israeli front, and their significant
Speaker 12: trade relationship already between the two countries. I mean, Israel's
Speaker 12: a significant buyer of refined petroleum products from India, diamonds
Speaker 12: as well. India is Israel's second biggest trading partner in Asia.
Speaker 12: I think bilateral trade last year was around five billion dollars.
Speaker 12: So there's a lot to talk about on the trade front,
Speaker 12: and there's a lot to talk about on the defense front,
Speaker 12: because India is obviously also moving away from Russia in
Speaker 12: terms of weapons that it buys. It's still its biggest market,
Speaker 12: but it is moving to buy more weapons from the US,
Speaker 12: from France and from Israel, and so there'll be a
Speaker 12: lot of discussion around the potential there around defense, but
Speaker 12: also as part of that technology sharing when it comes
Speaker 12: to defense, and so can they produce stuff together, but
Speaker 12: can they share that technology when they do so.
Speaker 4: So, India, as I understand, is also engaged in more
Speaker 4: outreach to the Arab world. Last month, India hosted the
Speaker 4: second India Arab Foreign Ministers Meeting. And I'm wondering whether
Speaker 4: that necessity fairly complicates in some way Modi's mission.
Speaker 10: Well, yes and no.
Speaker 12: I mean India has been a strong supporter of Israel.
Speaker 12: There's a clear relationship between Urendromod and Benjamin Netanyahu. I
Speaker 12: mean they speak on the phone every couple of months,
Speaker 12: if not each month. And India has supplied Israel with
Speaker 12: drones and been quite a supporter when it comes to
Speaker 12: their actions in Gaza. But also they don't recognize Jerusalem
Speaker 12: as Israel's capital. There are some underlying issues that because
Speaker 12: India above all is trying to maintain this idea still
Speaker 12: a strategic autonomy which they've always tried to walk a
Speaker 12: line on which is to have a balance of relationships.
Speaker 12: And so that does mean do they look to have
Speaker 12: outreach relationships with the Arab world as well? And is
Speaker 12: Iran potentially a factor in all of this because obviously
Speaker 12: there are serious tensions between Israel and Iran. There's the
Speaker 12: specter potentially of US and Israeli intervention again in Ira.
Speaker 12: So what's going to be Mody's message to be be
Speaker 12: about that?
Speaker 4: What about Modi's aim to try to bring in some
Speaker 4: capital from Israel into various sectors of the Indian economy.
Speaker 4: Are there any industries that come to mind.
Speaker 12: Well, certainly there is further opportunity for India around stuff
Speaker 12: like diamonds are already exporting a lot of that to Israel,
Speaker 12: and refined petroleum products that don't sell raw crude to Israel,
Speaker 12: but obviously there's a significant relationship there. So those will
Speaker 12: be the two key things. But obviously they just also
Speaker 12: want to set the table a bit around the parameters
Speaker 12: of this FTA. Doesn't involve services, for example, I mean,
Speaker 12: that's always a thorny issue for India in trade deals
Speaker 12: is services. But it's really going to be probably at
Speaker 12: a higher level around broader understandings when it comes to
Speaker 12: trade and defense.
Speaker 4: Modi is expected to address the Israeli Parliament, the Knesset.
Speaker 4: Do we have a sense of the issues that Modi
Speaker 4: may speak two.
Speaker 12: At this stage, we do not, but we're expecting him
Speaker 12: to talk broadly about fundamental ties and to do so
Speaker 12: with again with some affection, particularly towards Benjamin Netanyahu. I mean,
Speaker 12: BB says that Modi is popular in Israel. They talk
Speaker 12: again on the phone quite often, so there'll be an
Speaker 12: overarching sense of the relationship in that address. If it
Speaker 12: happens to the Kanesset, to the Israeli Parliament. Modi will
Speaker 12: probably want to steer clear of talking about things like
Speaker 12: the West Bank. For example. India's tried not to get
Speaker 12: involved in the issues regarding the West Bank and Israel's
Speaker 12: policies there, so he'll probably steer away from that one.
Speaker 12: He might talk more broadly around the prospects for a
Speaker 12: longer term peace in Gaza and his desire to see
Speaker 12: that happen. Of course, there's a ceasefar in Gaza, but
Speaker 12: there's big questions about how you go from that to
Speaker 12: a more fundamental, long term peace in Gaza and what
Speaker 12: it means in terms of the disarmament of Hamas. For example,
Speaker 12: probably walk a pretty clear line there about not going
Speaker 12: into particularly tricky issues around the West Bank.
Speaker 4: What about the relationship that both India and Israel have
Speaker 4: with the United States and particularly President Trump.
Speaker 12: Well, it's one of those things. We're in this period
Speaker 12: where again, relationships are shifting pretty quickly. Power balances around
Speaker 12: the world are shifting pretty quickly, and again we're seeing
Speaker 12: that in things like trade deals getting done that were
Speaker 12: you know, on hiatus essentially for many years. This idea
Speaker 12: that you have to have a diversification of your relationships,
Speaker 12: and some of that is spurred by the administration of
Speaker 12: Donald Trump. Certainly there have been tensions between the US
Speaker 12: and India. We saw that, really the trade deal went
Speaker 12: into the freezer for some months as a result, you know,
Speaker 12: Donald Trump really pushing India over its purchases of Russian
Speaker 12: energy and singling India out in that and that was really,
Speaker 12: you know, something that Modi couldn't publicly tolerate for his
Speaker 12: prestige at home. That said, the US and India will
Speaker 12: always have a relationship. Modi's just simply about having you know,
Speaker 12: that diversification strategy going. And obviously, you know, Israel and
Speaker 12: the US, BB and Trump have generally a strong relationship.
Speaker 12: The occasional tussle over certain aspects of the Middle East
Speaker 12: but it's a strong relationship, so you can imagine that,
Speaker 12: you know, BB and Modi will talk quite generally in
Speaker 12: warm terms about the US during this trip.
Speaker 4: What do we know about Modi's popularity in Israel? Is
Speaker 4: he a widely popular politician?
Speaker 1: Well?
Speaker 12: Yes, according to BB, the Israeli leader, I mean, Mody
Speaker 12: was the first India Prime minister to visit Israel back
Speaker 12: in twenty seventeen. I think he had a flower named
Speaker 12: after him as a chrysanthemum at the time. So there
Speaker 12: is this kind of strong history of cooperation. They've had
Speaker 12: full diplomatic ties between the countries for some decades, and
Speaker 12: Mody is quite popular in Israel as a result, and
Speaker 12: seen as someone who you know, hasn't been overtly critical
Speaker 12: of Israel over its actions in Gaza, the conflict in Gaza.
Speaker 12: He can expect to have a very warm welcome, including
Speaker 12: by the Parliament.
Speaker 4: I'm wondering whether China will come up as a part
Speaker 4: of these discussions as well.
Speaker 12: Yeah, certainly. Again, China is like China, the US other
Speaker 12: great powers are always in the backdrop in these conversations
Speaker 12: at the moment in terms of how you're balancing your
Speaker 12: relationships and India again trying for this idea of strategic autonomy.
Speaker 12: I mean, relationships between India and China go up and
Speaker 12: they go can go down quite a bit, but they've
Speaker 12: been on a warmer track in the past year or so,
Speaker 12: driven in part by the tensions that India's had separately
Speaker 12: with the US. So there's a pragmatism that comes into
Speaker 12: all these relationships, including with China, and the sense of
Speaker 12: what's China going to be doing around the Middle East,
Speaker 12: developing its own business and trade ties, including with Arab nations,
Speaker 12: and what does that lead to. So certainly it's in
Speaker 12: the atmosphere these conversations, but there is a sense from
Speaker 12: both Israel and a India in a way that these
Speaker 12: things need to be done in a very pragmatic fashion.
Speaker 4: What about the area of agriculture. Is there much in
Speaker 4: the way of trade exchange between these two countries where
Speaker 4: agricultural products are involved?
Speaker 12: Not a ton, And agriculture is just a very thorny
Speaker 12: issue for India again, like other countries, You've got in
Speaker 12: a way this kind of mythical image of the India farmer,
Speaker 12: and they are a very powerful voting block in India,
Speaker 12: and you can see that Modi being very cautious about
Speaker 12: moving away from subsidies for farm products in India or
Speaker 12: trade deals that might disadvantage the farmers of his country,
Speaker 12: and he's very achuned to that and his own popularity.
Speaker 12: So they've tended to be quite protective, i would say,
Speaker 12: of the India agricultural market, so very cautious about doing
Speaker 12: deals as a result.
Speaker 4: So from what I understand, Riz and Israeli delegation will
Speaker 4: be leaving for New Delhi on Monday of next week
Speaker 4: for a first round of kind of trade agreement talks.
Speaker 4: So it seems like both sides are working at trying
Speaker 4: to achieve something. Is there, in your mind a timeline
Speaker 4: here as to when something needs to be kind of
Speaker 4: agreed upon or is this going to be a kind
Speaker 4: of a protracted, longer term project.
Speaker 12: Well, there is a sense that things are picking up.
Speaker 12: You had ministerial delegations going back and forth last year,
Speaker 12: as you say this, an Israeli delegation due and New
Speaker 12: Delhi in the coming week that's supposed to be sort
Speaker 12: of technical talks, and it's the first round of those
Speaker 12: technical talks. There was a framework agreement that was signed
Speaker 12: last November, but it's a framework and there's a lot
Speaker 12: of work to be done here as a result, but
Speaker 12: you really do get the sense of momentum on both sides,
Speaker 12: and some of the officials are saying that they're aiming
Speaker 12: for a deal potentially at some point this year.
Speaker 4: ROS will leave it there. Thank you so much for
Speaker 4: helping us preview Prime Minister Modi's visit to Israel. That
Speaker 4: is Bloomberg's Rasal and Matheson, our chief Asia correspondent, joining
Speaker 4: us from Singapore. In the last week, India hosted an
Speaker 4: artificial intelligence summit. It was there that Prime Minister Modi
Speaker 4: said the event offered further proof that India is progressing
Speaker 4: rapidly in the fields of science and technology. At the summit,
Speaker 4: Bloomberg spoke with Arthur Mensch of the French firm mistral Ai,
Speaker 4: and he addressed the Indian market for artificial intelligence.
Speaker 11: So what we see is that on the infrastructure side,
Speaker 11: India has taken a strong stance on the sovereignty and
Speaker 11: so that's a place where we can play an important
Speaker 11: role because the platform we bring is something that every
Speaker 11: state we work with can actually customize. So in that aspect,
Speaker 11: I believe there are a lot of synergies in between
Speaker 11: what we can provide and what India already has. They
Speaker 11: have taken some step in training models themselves as well. Again,
Speaker 11: this is a place where the open source media that
Speaker 11: we can provide can play because they can be used
Speaker 11: as a basis to make models better at certain languages.
Speaker 11: This is something that we actively do with certain states,
Speaker 11: that we've done with Singapore, that we are doing with Morocco.
Speaker 11: We've released a model last year called miss Calsaba which
Speaker 11: is specifically good at Indian languages in texts, and so
Speaker 11: that's something that we can improve through partnerships with Indian
Speaker 11: companies that have access to more data. The audio models
Speaker 11: that we've released, Vauxcral in particular, is very strong at
Speaker 11: Indian language. We see audio as a big way in
Speaker 11: which the consumer market in India engage with technology, and
Speaker 11: so again that's a place where partnerships can actually take
Speaker 11: us much further because we can provide the technology and
Speaker 11: the training stack and the GPUs and the people that
Speaker 11: know how to train models. But what we could benefit
Speaker 11: from and what we could partner on is access to data,
Speaker 11: access to the consumer market so that we can make
Speaker 11: that technology better and give it put it in the
Speaker 11: hands of, for instance, the Indian government.
Speaker 4: That was Arthur Mensch from the French firm mistral Ai,
Speaker 4: speaking to Bloomberg at the inn AI Impact Summit in
Speaker 4: New Delhi. I'm Doug Prisner. You can catch us weekdays
Speaker 4: for the Daybreak Asia podcast. It's available wherever you get
Speaker 4: your podcast.
Speaker 2: Nathan, Thanks Doug, and that does it for this edition
Speaker 2: of Bloomberg day Break Weekend. Join us again Monday morning
Speaker 2: at five am Wall Street Time for the latest on
Speaker 2: markets overseas and the news you need to start your day.
Speaker 2: I'm Nathan Hager.
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