WEBVTT - Europe’s Economic Mojo, Iran’s Security Shake-Up, Zimbabwe’s $20M Wedding

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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<v Speaker 1>Daybreak Europe podcast. Good morning, It's Monday, the tenth of August.

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<v Speaker 1>I'm Stephen Carroll in London. Coming up today. A brighter

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<v Speaker 1>economic outlook and stronger earnings are changing investors' views of Europe.

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<v Speaker 1>Iran promotes a former military commander to its top security

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<v Speaker 1>role as Tehran rules out direct talks with the US.

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<v Speaker 1>Plus luxury cars, boy bands and stacks of cash. What

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<v Speaker 1>an extravagant twenty million dollar wedding says about Zimbabwe's new

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<v Speaker 1>generation of tycoons. Let's start with a roundup of our

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<v Speaker 1>top stories. Europe's economic outlook is set to improve in

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<v Speaker 1>the coming months after proving surprisingly resilient to the effects

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<v Speaker 1>of the Iran War. After a stronger than expected second quarter,

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<v Speaker 1>a Bloomberg survey of analysts has now raised its Eurozone

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<v Speaker 1>growth forecast to zero point eight percent for the year,

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<v Speaker 1>up from zero point five percent in July. That resilience

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<v Speaker 1>is also showing up in European stock markets, as companies

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<v Speaker 1>across the continent deliver their best earnings growth in four years.

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<v Speaker 1>The stock six hundred is up eleven percent this year,

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<v Speaker 1>and on a forward earnings basis, is now at its

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<v Speaker 1>smallest discount to the S and P five hundred since

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<v Speaker 1>twenty twenty two. Madelin Runners, senior portfolio manager at DWS.

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<v Speaker 2>This one was one of the best earning seasons that

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<v Speaker 2>we have seen in Europe for quite a while. And

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<v Speaker 2>it's a pretty promising picture because, yes, expectations have been

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<v Speaker 2>higher than in recent quarters, but they're still not quite

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<v Speaker 2>as high as, for example, in the US, so there's

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<v Speaker 2>still more room for upside surprises as well as expectation

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<v Speaker 2>beats and raises.

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<v Speaker 1>Madeal and Honnors. Sentiment has reflected more broadly, with surveys

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<v Speaker 1>showing that many fund managers have shifted from underweight Europe

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<v Speaker 1>to overweight. Iran has named hardline former Revolutionary Guard commander

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<v Speaker 1>Mohsen Rese as its top national security official. The move

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<v Speaker 1>comes as Iran says an agreement with Oman on a

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<v Speaker 1>shipping route through the Straight a Wour moves is very close.

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<v Speaker 1>Our Middle East correspondent to Bier Abu Omar says Tehran

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<v Speaker 1>has ruled out direct talks with the US for now.

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<v Speaker 3>Ron maintains that Washington is not a part of those discussions.

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<v Speaker 3>Despite what we've heard from President Trump and the Vice

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<v Speaker 3>president about them being part of those discussions. Iron maintains

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<v Speaker 3>that mediators, assumingly Qatar at this point are the ones

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<v Speaker 3>that are delivering messages. We also understand that Qatar is

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<v Speaker 3>doing its own draft to start mediating to have those

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<v Speaker 3>wider discussions, but for the time being, her moosse Sase paralyzed.

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<v Speaker 3>Pretty much a text continue to happen, and we don't

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<v Speaker 3>have a formalized draft between Ron and Rman about that deal.

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<v Speaker 1>A bia Aba Omar, speaking there as President Trump says

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<v Speaker 1>he's prepared to allow economic pressure on around to mount

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<v Speaker 1>rather than launch a new military offensive. Speaking to Axios,

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<v Speaker 1>Trump claims the US is quote low keying it and

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<v Speaker 1>semi negotiating with Tehran, which he says is in very

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<v Speaker 1>bad shape economically. Remarks follow weeks of threats of massive

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<v Speaker 1>air strikes that Trump that has then repeatedly called off.

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<v Speaker 1>The alleged leader of an Irish organized crime gang has

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<v Speaker 1>been extradited to Dublin from Dubai. Daniel Kinahan landed in

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<v Speaker 1>Ireland yesterday, where he was charged with directing the activities

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<v Speaker 1>of a criminal organization at a special court sitting Arlands Tschakmiehill.

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<v Speaker 1>Martin highlighted the joint efforts involved in the extradition operation.

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<v Speaker 4>I pittribute to the authorities in the United Arab Emirates

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<v Speaker 4>for the strong cooperation with Ireland over recent years in

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<v Speaker 4>this field.

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<v Speaker 1>More generally, it's Arland t shok Mee Hill Martin. Following

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<v Speaker 1>the court here in, Kinahan was remanded in custody at

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<v Speaker 1>a high security prison in Port Lisia, ninety miles southwest

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<v Speaker 1>of the capital. His next court appearance is scheduled for October.

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<v Speaker 1>Hiring in the UK is turning a corner after its

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<v Speaker 1>longest slump on record. Data from the Recruitment and Employment

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<v Speaker 1>Confederation shows the number of people getting permanent jobs holding steady.

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<v Speaker 1>That's after forty five straight months of declines, but the

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<v Speaker 1>organization warrants that any recovery would depend on the decisions

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<v Speaker 1>new Prime Minister Andy Burnham makes in his October budget.

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<v Speaker 1>AI bootcamp courses they're surging in popularity as workers race

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<v Speaker 1>to learn new skills. The news comes as new research

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<v Speaker 1>shows the number of employers who expect entry level recruits

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<v Speaker 1>to be AI competent has tripled in Brooks Ta out

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<v Speaker 1>of Bio has more.

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<v Speaker 5>Before the launch of chat GPT, just two percent of

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<v Speaker 5>the professional certificate market was focused on AI. Now, short

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<v Speaker 5>term AI training programs, often called boot camps, have exploded

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<v Speaker 5>to nearly a third of the credential market, according to

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<v Speaker 5>Workforce Database for Velio Labs. Some businesses are even willing

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<v Speaker 5>to foot the bill to prepare their teams for what

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<v Speaker 5>they see as a fast approaching future. According to the

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<v Speaker 5>National Association of Colleges and Employers, anxiety about AI has

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<v Speaker 5>surged along with demand for quick training programs. Meanwhile, universities

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<v Speaker 5>are beginning to offer AI courses to everyone from C

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<v Speaker 5>suite executives to software engineers as they face declining enrollments

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<v Speaker 5>and threats to their business model. In London, to You

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<v Speaker 5>added Bio Bloomberg Radio.

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<v Speaker 1>And a multi million pound energy project was diverted in

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<v Speaker 1>Britain because of Harry Potter fans. The four hundred and

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<v Speaker 1>thirty million pounds green Link interconnector joins the UK's national

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<v Speaker 1>grid to Ireland's and came online last year. Brooks James

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<v Speaker 1>Wilcock has the story.

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<v Speaker 6>Modern technology can sometimes feel like magic, but listening to

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<v Speaker 6>green Link's form of project managers Simon Ludlam talk on

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<v Speaker 6>the Energy Revolution podcast about building it.

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<v Speaker 7>It may be more of a curse. Apparently we're going

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<v Speaker 7>to go straight through Dobby's grave, And said, Dobby, who's Dobby?

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<v Speaker 7>And they said Dobby, Dobby. I don't know Dobby, and

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<v Speaker 7>so fored Dobby and Harry Potter you pointed out very

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<v Speaker 7>clearly where his grave was and that the cable's going

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<v Speaker 7>to go directly through it. And I said, well, it's

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<v Speaker 7>a fictitious character in a fictitious book. The whole thing's fictitious.

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<v Speaker 7>What are you talking about, No, sod, it's very very serious.

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<v Speaker 6>He was speaking there to the Energy Revolution podcast. As

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<v Speaker 6>Britain wrestles with how costly and complex it has made construction.

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<v Speaker 6>Every UK mega project since nineteen eighty has been over

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<v Speaker 6>budget and the majority have been delivered later than planned.

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<v Speaker 6>The challenge for Britain is how to make infrastructure as

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<v Speaker 6>popular as its fictional characters in London, sadly not Platform

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<v Speaker 6>ninety three quarters James Wacock, Bloomberg.

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<v Speaker 1>Radio, and those are your top stories on the markets

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<v Speaker 1>this morning. The MSAL Country World Index upper tenth of

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<v Speaker 1>one percent this morning. Global stocks hovering near record highs.

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<v Speaker 1>The Nikki and Tokyo by nearly two percent. European stock

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<v Speaker 1>features just pointing ever so slightly higher this morning as

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<v Speaker 1>we're watching the dollar on the Bloomberg Dollar Spot Index

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<v Speaker 1>up a tenth of one percent, on the Japanese en

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<v Speaker 1>weakening further one hundred and fifty eight thirty two against

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<v Speaker 1>the dollar. Oil and gas prices are slightly higher as well.

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<v Speaker 1>Brent Krute is just close to eighty four dollars a barrel.

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<v Speaker 1>Well in a moment, more on that brighter picture for

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<v Speaker 1>Europe's economy and markets, plus what a lavish wedding in

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<v Speaker 1>Zimbabwe tells us about those who hold power in the country.

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<v Speaker 1>But first, another story that caught our eye this morning

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<v Speaker 1>on investing in YouTubers. Bloomberg opinion Columnst. Lionelle A Round

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<v Speaker 1>has been speaking to the founder of the investment firm Nugget,

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<v Speaker 1>which is putting five million pounds into British YouTubers, believing

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<v Speaker 1>they're an underserved asset. Nugget founder Jarathan Friedland has picked

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<v Speaker 1>creators like only Scran's John O. Yates to back. His

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<v Speaker 1>firms offer a mix of capital, investment and access to

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<v Speaker 1>tools to these creators for them to boost growth. And

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<v Speaker 1>he's not alone in wanting to invest in these creators.

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<v Speaker 1>The so called creator economy covering platforms like TikTok and Instagram,

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<v Speaker 1>is projected by Goldman Sachs to grow to four hundred

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<v Speaker 1>and eighty billion dollars by twenty twenty seven. That'll be

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<v Speaker 1>up from two hundred and fifty billion dollars in twenty

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<v Speaker 1>twenty three. Now, Lionel writes, this does feel like a

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<v Speaker 1>genuine tipping point for creators, as the more frothy and

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<v Speaker 1>fake influencer accesses fall by the wayside and regulators clean

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<v Speaker 1>up the space as well. It's also being driven by

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<v Speaker 1>the increased dominance of YouTube as a video platform. But

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<v Speaker 1>Lionnel points out, when it comes to an investment point

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<v Speaker 1>of view, the difficulty about niches as their tricky to scale.

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<v Speaker 1>Nobody's clear about how you can necessarily scale investment in

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<v Speaker 1>what can be a very fickle Internet space. The concerns

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<v Speaker 1>that investors might have what if bad creator behavior could

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<v Speaker 1>damage a brand, burnout if it's all based on one

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<v Speaker 1>person or even ai, and will money getting in behind

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<v Speaker 1>these creators destroy their niche outlook? Perhaps the arrival of

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<v Speaker 1>investors could taint them as well, So a minefield for investors.

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<v Speaker 1>But a really interesting read this morning about who is

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<v Speaker 1>putting money into this space. We'll put a link to

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<v Speaker 1>it in our podcast show notes. Well, let's bring you

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<v Speaker 1>more now on the brightening outlook for the European economy

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<v Speaker 1>and stock market in spite of the continuing geopolitical turmoil

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<v Speaker 1>in the Middle East. Garfield Reynolds, who leads our market's

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<v Speaker 1>live team in Asia, joins us now from more Garfield,

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<v Speaker 1>we're looking at this Bloomberg survey of analysts showing zeros

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<v Speaker 1>and economy proving more resilient to the effects of the

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<v Speaker 1>Iran War. How much of an upgrade is this, Well.

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<v Speaker 8>It's a pretty substantial one. The interesting thing is is

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<v Speaker 8>that a lot of it is about that second quarter,

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<v Speaker 8>which was when the war happened, or at least when

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<v Speaker 8>the biggest impacts from the war happened. That's when crude

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<v Speaker 8>oil prices jumped substantially. That's when there was a lot

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<v Speaker 8>of concern about what the impact was going to be

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<v Speaker 8>on the global economy and especially about Europe, which after

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<v Speaker 8>all is fairly dependent on energy. But instead, I think

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<v Speaker 8>you're partly helped by the massive release of stockpiles of

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<v Speaker 8>oil and gas and also the lingering impact of Europe's

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<v Speaker 8>shift towards spending significantly more on defense, and that of

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<v Speaker 8>course is a shift that got an extra boost from

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<v Speaker 8>what went on what's going on in the Middle East.

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<v Speaker 8>Europe is surprised by the just how strong its economy is,

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<v Speaker 8>which also is something that matches the lots of things

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<v Speaker 8>that are going on the global economy in general, partly

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<v Speaker 8>because of the impact of AI, partly because of those

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<v Speaker 8>efforts to smooth the impact of the war. The global

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<v Speaker 8>economy is chucking along reasonably well, and Europe is standing

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<v Speaker 8>out as part of that.

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<v Speaker 1>And this is also translating into a boost for European

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<v Speaker 1>stock markets despite the limited exposure to the AI trade

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<v Speaker 1>that's been driving driven driving stock markets higher elsewhere as well.

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<v Speaker 1>Can that momentum last if we look towards the rest

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<v Speaker 1>of the year.

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<v Speaker 8>Well, there's the potential for that momentum to actually accelerate,

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<v Speaker 8>because what we're what's going on at the moment is

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<v Speaker 8>precisely that investors are taking into account the potential that

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<v Speaker 8>the companies and countries sectors that are going to reap

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<v Speaker 8>the benefits of the AI boom are not necessarily those

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<v Speaker 8>that make AI as much as they could well be

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<v Speaker 8>those who buy it or those who buy it in

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<v Speaker 8>an intelligent fashion, those who might have more potential to

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<v Speaker 8>benefit from doing things. There was a piece recently about

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<v Speaker 8>the impact of AI showing up in parts of the

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<v Speaker 8>US as garbage companies were seeing their profits increase because

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<v Speaker 8>they were finding ways to increase efficiency. Now, I'm not

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<v Speaker 8>trying to make any analogy about what sort of companies

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<v Speaker 8>there might be in Europe that would do well, but

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<v Speaker 8>there are lots of ordinary bricks and mortar, whether it's consumers,

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<v Speaker 8>whether it's factories, you know, regular businesses in Europe. There's

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<v Speaker 8>no reason why they can't benefit at least as much

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<v Speaker 8>from AI as some of the shinier examples in the US.

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<v Speaker 8>And they aren't busy spending the enormous amounts of capex

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<v Speaker 8>that the hyperscalers are, which those hyperscales and that capex

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<v Speaker 8>those other things that in versus are more concerned at. Now,

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<v Speaker 8>what they're looking for are where are the places that

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<v Speaker 8>are going to reap greater benefits, quite possibly without spending

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<v Speaker 8>as much money as somebody like Meta is for example.

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<v Speaker 1>Yeah, really interesting stuff. Garfield, thanks very much for bringing

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<v Speaker 1>us details of our latest Bloomberg survey, but also that

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<v Speaker 1>outlook for stocks and how the AI trade plays into

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<v Speaker 1>the outlook for European shares as well. Garfield Reynolds there,

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<v Speaker 1>who leads our market's live team in Asia. Stay with

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<v Speaker 1>us more from Bloomberg Daybreak Europe coming up after this.

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<v Speaker 1>Let's get a Zimbabwe next, where an extravagant wedding that

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<v Speaker 1>happened in May is revealed the new generation of tycoons

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<v Speaker 1>who wield power in the country. It's an illustration of

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<v Speaker 1>how much has changed at a president Emerson man and

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<v Speaker 1>Gagwe since he came to power in twenty seventeen. Our

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<v Speaker 1>senior Africa reporter Anthony's Cuisine joins us now for more. Anthony,

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<v Speaker 1>Who was that this web and what does it show

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<v Speaker 1>us about the group of people who run Zimbabwe?

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<v Speaker 9>I meanes the guest list of the wedding was basically

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<v Speaker 9>a who's who of all the power brokers who do

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<v Speaker 9>business with government through state contracts, gold traders because that's

0:13:13.679 --> 0:13:19.160
<v Speaker 9>been a big boom industry in Zimbabwe and also most ministers,

0:13:19.280 --> 0:13:24.200
<v Speaker 9>senior government officials, people in the treasury. So really it

0:13:24.280 --> 0:13:29.559
<v Speaker 9>was the political and economic elite of Zimbabwe and what it.

0:13:29.520 --> 0:13:31.240
<v Speaker 1>Does show is that.

0:13:32.840 --> 0:13:36.839
<v Speaker 9>A country net for decades under Rob mcgarby was run

0:13:36.960 --> 0:13:40.400
<v Speaker 9>very tightly by a clique of former war veterans who

0:13:40.400 --> 0:13:44.000
<v Speaker 9>fought in the guerrilla war against the Rhodesian government. They're

0:13:44.000 --> 0:13:45.800
<v Speaker 9>beginning to get a bit older. Some of them are

0:13:45.880 --> 0:13:48.400
<v Speaker 9>no longer active, some have passed away, and what we

0:13:48.440 --> 0:13:53.559
<v Speaker 9>are getting now is a bunch of younger, business oriented

0:13:55.200 --> 0:13:57.439
<v Speaker 9>tycoons who are wielding a lot of power and are

0:13:57.440 --> 0:14:00.720
<v Speaker 9>now entering politics. They have senior positions in the ruling

0:14:00.760 --> 0:14:06.040
<v Speaker 9>party and as the story today shows, they actively bankrolled

0:14:06.080 --> 0:14:09.960
<v Speaker 9>a campaign to extend the president's time in power, which

0:14:10.040 --> 0:14:13.120
<v Speaker 9>is advantage to themselves as under the current regime they

0:14:13.160 --> 0:14:14.840
<v Speaker 9>are getting a lot of government contracts.

0:14:16.200 --> 0:14:20.680
<v Speaker 1>More broadly, how does this regime under President Managagua differ

0:14:20.880 --> 0:14:23.920
<v Speaker 1>from that of Robert mccaby.

0:14:24.120 --> 0:14:28.440
<v Speaker 9>Look, Rod mccaby's regime was much maligned because the economy collapsed,

0:14:29.080 --> 0:14:33.560
<v Speaker 9>there was some corruption and a few scandals, but mccavey

0:14:33.600 --> 0:14:37.320
<v Speaker 9>was very ideological. He was a Marxist and he keept

0:14:37.400 --> 0:14:40.600
<v Speaker 9>a very very tight control over the ruling party, ruled

0:14:40.600 --> 0:14:43.880
<v Speaker 9>it with a mind fist and generally cabinet members does

0:14:43.920 --> 0:14:46.920
<v Speaker 9>not step out of line he was a very disciplined man.

0:14:47.560 --> 0:14:51.320
<v Speaker 9>Teetotler kept himself very physically fit right until the end

0:14:51.360 --> 0:14:56.000
<v Speaker 9>of his life, and he absolutely abhored flagrant displays of

0:14:56.440 --> 0:14:59.680
<v Speaker 9>oscentatious displays of wealth, you know, driving expensive cards, holding

0:14:59.720 --> 0:15:03.360
<v Speaker 9>wedding like this where you know the list of gifts

0:15:03.640 --> 0:15:05.280
<v Speaker 9>exceeded twenty million dollars.

0:15:07.120 --> 0:15:10.120
<v Speaker 1>What state is Zimbabwe's economy in now?

0:15:10.240 --> 0:15:10.440
<v Speaker 5>Then?

0:15:11.040 --> 0:15:13.320
<v Speaker 1>Given that it has course been subject to such a

0:15:13.320 --> 0:15:17.800
<v Speaker 1>long period of crisis, so what is economy is a mess?

0:15:19.200 --> 0:15:24.760
<v Speaker 9>It is the longest defaulting country to the World Bank,

0:15:24.800 --> 0:15:28.160
<v Speaker 9>for instance, since nineteen ninety nine or two thousand round

0:15:28.160 --> 0:15:31.760
<v Speaker 9>above there it hasn't paid its debts. It's twenty billion

0:15:31.840 --> 0:15:35.600
<v Speaker 9>dollars odd in debts in our unemployment is enormous. Roughly

0:15:35.640 --> 0:15:38.160
<v Speaker 9>a quarter of the population has left for economic reasons.

0:15:38.160 --> 0:15:40.280
<v Speaker 9>Many of those now live in South Africa or the UK.

0:15:41.480 --> 0:15:45.200
<v Speaker 9>And generally for an ordinary Zimbabwean it's very, very difficult

0:15:45.240 --> 0:15:45.840
<v Speaker 9>to get ahead.

0:15:46.840 --> 0:15:48.800
<v Speaker 1>State infrastructure has largely collapsed.

0:15:48.960 --> 0:15:51.120
<v Speaker 9>So you know you have in a city like Arari,

0:15:51.200 --> 0:15:54.080
<v Speaker 9>the capital, people provide their own water, they provide their

0:15:54.120 --> 0:15:57.760
<v Speaker 9>own power, and the streets are largely unserviceable. Aside from

0:15:57.760 --> 0:16:01.160
<v Speaker 9>a few main highways, so it's in a very poor stick.

0:16:04.480 --> 0:16:06.840
<v Speaker 1>Thanks for listening to Bloomberg Daybreak Europe.

0:16:07.000 --> 0:16:09.560
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0:16:09.600 --> 0:16:11.800
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