Speaker 1: This is Bloomberg day Break here for this Thursday, the
Speaker 1: second of February in London. Coming up today, Eight down,
Speaker 1: two to go. The faed's Powell calls for a couple
Speaker 1: more rate hikes, taking it to the bank. We have
Speaker 1: earnings from Deutsche Bank, Santander and Nordea. Danny's debt albatross
Speaker 1: conglomerate spirals into crisis as Barnes hitter stress levels, VP
Speaker 1: scales back. It's renewables, push women running UK water and
Speaker 1: job coaches in GP surgeries. Those are the stories we're
Speaker 1: looking at in today's newspapers. And I'm Leanne Geron's plus
Speaker 1: the bonds that bind us Barclay's looks at boosting fixed
Speaker 1: income trader bonuses by as much as fifteen That's all
Speaker 1: straight ahead on Bloomberg Daybreak Europe on DAB Digital Radio,
Speaker 1: London Bloomberg eleven three oh New York Bloomberg, Washington, d
Speaker 1: C Bloomberg one oh six one, Boston Bloomberg nine sixties,
Speaker 1: San Francisco cyrus XM Channel one nineteen and around the
Speaker 1: world Don Bloomberg Radio dot Com and var the Bloomberg
Speaker 1: Business Set. Good morning. I'm Stephen Carroll and I'm Caroline Hick. Here.
Speaker 1: All the stories that we're following today fed chief to
Speaker 1: your own. Powell says at least a couple more rate
Speaker 1: rises will be needed to get inflation under control. His
Speaker 1: comments come after the Central Bank raised rates by twenty
Speaker 1: five basis points. Speaking after the announcement, Pal sought to
Speaker 1: remind markets that high inflation is still a problem. I
Speaker 1: would say that our focus is not on short term moves,
Speaker 1: but on sustained changes the broader financial conditions, and it
Speaker 1: is our judgment that we're not yet in a sufficiently
Speaker 1: restrictive policy stance. Despite Powell's caution, markets took his message
Speaker 1: to be more dovish, with stocks and treasuries both surging.
Speaker 1: The rate decision came after US job vacancies unexpectedly jumped
Speaker 1: at the end of last year. The number of available
Speaker 1: positions climbed to a five month high of just over
Speaker 1: eleven million in December. Let's turn to some of the
Speaker 1: bank earnings we have out this morning, starting with Deutsche
Speaker 1: Bank fourth quarter fixed income sales and trade sales and
Speaker 1: trading revenue coming in as a miss one and a
Speaker 1: half billion euros for the fourth quarter. The estimate had
Speaker 1: been for one point six billion euros pre tanks profit
Speaker 1: also coming in below estimates seven hundred and seventy five
Speaker 1: million euros. The estimate had been for one point to
Speaker 1: five billion. Net revenue figures the fourth quarter also a
Speaker 1: miss six point three two billion euros. The estimate had
Speaker 1: been for six and a half billion euros. So after
Speaker 1: Deutsche Bank, let's look at Santander, which is the reported
Speaker 1: net income for the fourth quarter of two point to
Speaker 1: nine billion euros. That was a beat on the average
Speaker 1: analyst estimates. Santander targeting double digit revenue growth in twenty
Speaker 1: twenty three and interestingly non performing loans. The ratio of
Speaker 1: that in the fourth quarter was three point zero eight percent,
Speaker 1: so actually lower than the estimate for Santander. Noordia, however,
Speaker 1: was a beat for their net interest income for the
Speaker 1: fourth quarter, up thirty one percent from a year earlier
Speaker 1: to one point six four billion euros. That's driven by
Speaker 1: rising loan aolumes, better deposit margins at the largest lander
Speaker 1: in the Nordic region and a couple of others. I
Speaker 1: and G reporting a pre tax profit for the fourth
Speaker 1: quarter also that beat average analysts estimates, and then in
Speaker 1: terms of the money manages w dw S full year
Speaker 1: net outflows come in actually above estimates nineteen point nine
Speaker 1: billion euros, so that in terms of the earnings this morning,
Speaker 1: turning to other news, more than a hundred billion dollars
Speaker 1: has now been wiped off gout mcdonni's beleaguered empire. The
Speaker 1: deepening stock ride comes as some of the conglomerates dollar
Speaker 1: bonds plunged to distress levels. Speaking in a pre recorded
Speaker 1: video address to investors, Danny gave a bullish assessment of
Speaker 1: the group's financial position. The fundamentals of our company are
Speaker 1: very strong. Our balance it is healthy and assets robust.
Speaker 1: Our IMMEDIATEA levels and gas rows have been very strong.
Speaker 1: Was the markets tabulas we will review over capital market streity.
Speaker 1: Mcdanie's comments come after the Indian time icon was forced
Speaker 1: to pull a two point four billion dollar share sale
Speaker 1: by his flagship company, even though it was fully subscribed.
Speaker 1: The value of A Danny Enterprises has fallen by so
Speaker 1: much that investors and the offering would have been sitting
Speaker 1: on immediate glasses of more than thirty Now. Meta shares
Speaker 1: swored after the bell in the US as fourth quarter
Speaker 1: revenue beat expectations. The social media Jiant also announced that
Speaker 1: it's boosting its share buy back program by forty billion dollars.
Speaker 1: CEO Mark Zuckerberg believes the company is entering a phase
Speaker 1: change focused on efficiency. I just think we're in we've
Speaker 1: entered somewhat of a phase change for the company where
Speaker 1: we just grew so quickly for like the first eighteen
Speaker 1: years of the company's growth, and it's it's very hard
Speaker 1: to really crank on efficiency while you're growing that quickly.
Speaker 1: So that was Zuckerberg. He's focused on efficiency. Comes after
Speaker 1: Meta announced that it would be cutting eleven thousand jobs
Speaker 1: in November. Barclays is weighing an increase in the bonus
Speaker 1: pool for its fixed income trading division, the store even
Speaker 1: Bloomberg's Charlie Palace. The unit is expected to produce record
Speaker 1: revenue after twenty two's wild market swings. Sources say the
Speaker 1: British Bank is considering boosting the overall incentive compensation for
Speaker 1: fixed income traders by as much as fifteen percent. Sources
Speaker 1: say equities trading, which suffered from a decline in derivatives
Speaker 1: activity last year, might see its overall compensation pot trop
Speaker 1: as much as ten percent. According to the sources, like
Speaker 1: other Wall Street firms. Barclay's is considering cutting bonus pools
Speaker 1: for their investment bankers by as much as fort amid
Speaker 1: a deal making slump in New York. Charlie Palett Bloomberg
Speaker 1: Daybreak Europe. Okay, those are a few of our top
Speaker 1: stories this morning. But on a very busy day for
Speaker 1: central bank decisions, there's also going to be a big
Speaker 1: focus about trading, of course, on the big lenders. I mean,
Speaker 1: we just went through rattle through frankly a lot of
Speaker 1: the earnings reports. Just let's focus in there on Deutsche Bank.
Speaker 1: So the whole idea was that the fixed income sales
Speaker 1: and trading revenue would be the thing that lifted Deutsche
Speaker 1: Bank this quarter. But it is actually a miss um.
Speaker 1: Even though the outlook is quite interesting from Deutsche Bank
Speaker 1: that their credit loss provisions are at the low end
Speaker 1: for the year ahead, but it's that fixed income issue
Speaker 1: that I think is going to be quite interesting and
Speaker 1: also cost control at Deutsche Bank. Yeah, and that has
Speaker 1: been one of the issues that we haven't watching out
Speaker 1: for with Deutsche Bank. I mean, there is a point
Speaker 1: of contrast here with the other set of bank results
Speaker 1: that we've had because We've had a series of beats
Speaker 1: from a lot of the big lenders over the past
Speaker 1: few days. So so Deutsche is standing out with a
Speaker 1: miss on both pre tax provits and net revenues as well.
Speaker 1: When we look at the outlook then for the year too,
Speaker 1: they're seeing three revenue nine billion euros. They had previously
Speaker 1: seen over twenty eight billion euros. So that is a
Speaker 1: slight improvement on the outlook from Deutsche Bank as well.
Speaker 1: And we're of course getting more details of this as
Speaker 1: an mergers on the on the latest from Deutsche Bank. Yeah.
Speaker 1: Absolutely so. In terms of the newspapers, BP scaling back
Speaker 1: is renewables push, women running UK water and job coaches
Speaker 1: in GP surgeries. Now the paper review on blue birdday
Speaker 1: Break Europe. The news you need to know from today's papers.
Speaker 1: Bloom Berks Leon Garons joins us now with the details
Speaker 1: of those stories. Lean, let's start with the Wall Street Journal.
Speaker 1: It has the headline VP ceo plays down renewables push
Speaker 1: as returns BLA. Yes, indeed, Stephen, good morning to you.
Speaker 1: So Bernard Looney, the CEO of VP, is said to
Speaker 1: be rolling back elements of the oil giants high profile
Speaker 1: push into renewable energy, and according to the Wall Street Journal,
Speaker 1: he is disappointed with the returns from some of the
Speaker 1: renewable investments that have been made by BP, and it
Speaker 1: says Looney plans to place less emphasis on ec G
Speaker 1: goals going further, and what he's trying to do is
Speaker 1: clarify that these targets aren't distracting from the ability of
Speaker 1: the company to actually make a profit. And according to
Speaker 1: the paper, Looney believes BP needs to do more to
Speaker 1: convince their shareholders of its strategy to maximize profits in
Speaker 1: areas where the company does have a competitive advantage, and
Speaker 1: this is including its legacy oil and gas operations that
Speaker 1: we know them so well for And a spokesman for
Speaker 1: the CEO declined to comment to the Wall Street Journal.
Speaker 1: And BP does report its earnings next week, and they
Speaker 1: have been pretty good the last earnings that we've seen
Speaker 1: from BP, and this is obviously due to the rising
Speaker 1: energy prices, but once again, really interesting, seems to be
Speaker 1: slightly moving away from e c G and renewable energy
Speaker 1: to focus on profits. That's a big debate, isn't it
Speaker 1: in the energy sphere. But before we get the BP
Speaker 1: results this morning, we get the Shell fourth quarter of
Speaker 1: results out actually at seven am, so that will also
Speaker 1: be interesting. The expectations to see profits dip at Shell,
Speaker 1: but no interesting on BP and versus renewables. The headline
Speaker 1: in the Times, well, this is kind of a little
Speaker 1: bit related. Seven Trent appoints all women top leadership team.
Speaker 1: Tell me about this utility? Yes, indeed, So this is
Speaker 1: the water company Caroline, which is based up in Coventry
Speaker 1: and it's now making boardroom history. It will become the
Speaker 1: first company in the foot see one hundred to appoint
Speaker 1: in all women leadership team with a female chief executive
Speaker 1: chairwoman and also chief of Financial officer. So all of
Speaker 1: this comes as Helen Miles as set to become the
Speaker 1: CFO in July, along with the CEO of Live Garfield
Speaker 1: and the chairwoman Christine Hodginson and a majority of boards
Speaker 1: and foot see one hundred companies, Caroline as still waited
Speaker 1: in favor of men. Of course, the number of women
Speaker 1: in senior roles has actually been growing and we have
Speaker 1: discussed this on the show a lot, and the water
Speaker 1: industry has actually been the best sector for female executives
Speaker 1: to rise to the top. And we know the CEO
Speaker 1: of Thames Water, Southwest Water and soon Northwest Water. They
Speaker 1: all going to be women. However, Denise Wilson, she's the
Speaker 1: chief executive of the foot See Woman Leaders Group, says,
Speaker 1: even though we're making massive strides in the right direction,
Speaker 1: there is still a long way to go and we
Speaker 1: must bear that in mind. But this seems to be
Speaker 1: boardroom history, Caroline for all the ladies. I don't know,
Speaker 1: I would quite like the idea of walking working in
Speaker 1: a not that I don't like Stephen, but yeah, absolutely, Look,
Speaker 1: I'll just chirping. There are only seven female CEOs in
Speaker 1: the whole foot See one hundred and actually the progress
Speaker 1: in terms of getting more women into the c suite
Speaker 1: has really kind of been quite stagnant over the past
Speaker 1: five years, but on a lot of metrics. But leangoes,
Speaker 1: thank you. That's a very interesting story. At one more
Speaker 1: from Lean the Telegraph job coaches as GP surgeries to
Speaker 1: push unemployed over fifties back to work. What's that about.
Speaker 1: I'm going to try to tell you what it's all about.
Speaker 1: This as part of the government's plan to plug gaps
Speaker 1: in the labor workforce. We do know it's super tied
Speaker 1: and also reduce economic inactivity among the over fifties here
Speaker 1: in the UK. Now, the Telegraph says, is the ideas
Speaker 1: using GP surgeries to get these coaches in to help
Speaker 1: people in this age group and give them advice on
Speaker 1: finding work and really getting back into the working world.
Speaker 1: And doctors would also be able to refer patients who
Speaker 1: want to help find work and also advice you know
Speaker 1: where to go. Sometimes that first leap isn't it is
Speaker 1: knowing where to go and how to go about it.
Speaker 1: The paper says ministers are actively looking at policy as
Speaker 1: Work and Pension Secretary Miles Stride is leading a review
Speaker 1: into how to entice unemployed fifty to sixty year old
Speaker 1: back into the workforce. And this is really as the
Speaker 1: UK is the only major developed country to have suffered
Speaker 1: a sustained rise in economic inactivity in this age group
Speaker 1: since the start of the pandemic. And I did remember
Speaker 1: seeing a headline recently saying get off the golf course
Speaker 1: and get into work. I'm not sure everyone's going to
Speaker 1: want to agree with that, and there have been trials
Speaker 1: of this idea. A government back to pilot in South
Speaker 1: Yorkshire where GP referred patients for work support had a
Speaker 1: fifty percent success rate out of five thousand people, which
Speaker 1: suggests that maybe people are ready to go back into
Speaker 1: the workforce, but they just need that little leg up
Speaker 1: and these job coaches are basically designed to do that. Okay,
Speaker 1: Lean and thank you very much that review the newspapers. Now,
Speaker 1: a couple more interest rate hikes are on the way,
Speaker 1: but Jerome Powell says that the disinflation process has started
Speaker 1: as markets price in rate cuts of fifty basis points
Speaker 1: by the end of the year from the FED. Attention
Speaker 1: today is shifting to the ECB and the Bank of
Speaker 1: England who make their decisions. So let's have a think
Speaker 1: about this. Bring in our chief rates correspondent Garfield Reynolds
Speaker 1: to digest during Power first the Garfield Good Morning Pal
Speaker 1: says that there's more work to do, but the markets
Speaker 1: did not seem to hear that. What should we take
Speaker 1: away from the FED decision yesterday? Markets teams who have
Speaker 1: decided that the more work that needs to be done
Speaker 1: is preparation for rate cuts, which j Power did his
Speaker 1: best to rule out the difficulty that the FED was
Speaker 1: always going to face, though once it slowed its pace
Speaker 1: of hikes and signal that it was close to the
Speaker 1: end of its hiking cycle, which he definitely signaled is
Speaker 1: that then markets would rush to price that the next
Speaker 1: part of the cycle when the FED would turn around
Speaker 1: and loosen policy. And in fact, there are a couple
Speaker 1: of things that Chappou said which encouraged that. He talked
Speaker 1: a lot about disinflation and the idea that he could
Speaker 1: see some disinflationary impulses coming through, so that was a
Speaker 1: red rag to the bond and stockballs as it were.
Speaker 1: He also he did be emphasized he has been keen
Speaker 1: to emphasize this all along, but still he did emphasize
Speaker 1: his expectation they can manage a soft landing, and a
Speaker 1: soft landing is seen as meaning that they do not
Speaker 1: go so far with tightening that they crashed the economy.
Speaker 1: So his insistence on that was taken by markets as
Speaker 1: being Okay, they're going to go one or two more
Speaker 1: times after this, maybe one, maybe none. And you know,
Speaker 1: the most immediate and interesting response was the ways swamp
Speaker 1: markets priced for two rate cuts in the second half
Speaker 1: of this year, which is not at all something that
Speaker 1: how you'll put on the table in his comments, but
Speaker 1: the markets look through that. This is Bloomberg Daybreak Europe,
Speaker 1: your morning brief on the stories making news from London
Speaker 1: to Wall Street and beyond. Look for us on your
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Speaker 1: to start your day right here on Bloomberg Daybreak Europe