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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Big

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Speaker 1: Big Daybaqut podcast. Good morning, It's Wenesday, the eighth of August.

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Speaker 1: I'm Caroline hepkeat in London.

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Speaker 2: And I'm Stephen Carroll. Coming up today. Donald Trump focuses

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Speaker 2: on pharmaceuticals, semiconductors, and India as his next tariff targets.

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Speaker 1: Open Aiyes in early talks about a chess sale for employees,

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Speaker 1: valuing the startup at five hundred billion dollars.

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Speaker 2: Plus why more of Europe's biggest companies are picking insiders

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Speaker 2: as their new CEOs.

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Speaker 1: Let's start with a round up of our top stories.

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Speaker 2: With less than twenty four hours before Donald Trump's latest

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Speaker 2: tariffs come into effect, the US President says there are

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Speaker 2: more levies to come on pharmaceuticals, semiconductors, and countries that

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Speaker 2: buy Russian oil. Trump says the sector specific tariffs will

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Speaker 2: be announced within the next week or so. Speaking to CNBC,

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Speaker 2: the President singled out India for an announcement in the

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Speaker 2: coming hours.

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Speaker 3: We do very very little business with India because their

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Speaker 3: tariffs are so high. So India has not been a

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Speaker 3: good trading partner because they do a lot of business

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Speaker 3: with US, but we don't do business with them. So

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Speaker 3: we settled on twenty five percent. But I think I'm

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Speaker 3: going to raise that very substantially over the next twenty

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Speaker 3: four hours because they're buying Russian oil, they're fueling the

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Speaker 3: war machine, and are they're going to do that, then

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Speaker 3: I'm not going to be happy.

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Speaker 2: Donald Trump patter that he was close to extending a

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Speaker 2: trade truce with China, which is due to expire next Tuesday.

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Speaker 1: Switzerland's President Currin Calusuta has arrived in Washington to make

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Speaker 1: a last minute bid for a deal to lower the

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Speaker 1: country's tariff rate of thirty nine percent. Bloomberg understands that

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Speaker 1: she flew to DC without a formal invitation from the

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Speaker 1: White House, hoping to make progress before the new rate

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Speaker 1: kicks in tomorrow. President Trump's move last week stunned the

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Speaker 1: Swiss after talks that they had thought looked promising her

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Speaker 1: shuttle diplomacy for an emergency government meeting where ministers agreed

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Speaker 1: to present a new offer to the US. Gold, agriculture, planes, drugs,

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Speaker 1: and energy are some of the areas that may feature

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Speaker 1: in any talks.

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Speaker 2: The S and B five hundred is near all time

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Speaker 2: highs despite the tariff gloom and the bumper gains will

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Speaker 2: boost Wall Street bonus pools. Compensation consultant Johnson Associates says

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Speaker 2: payers are set to rise across the sector as expectations

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Speaker 2: edge higher. Bloomberg's financi repporter Catherine Dhugherty says, it's not

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Speaker 2: the usual hotspots.

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Speaker 4: It is a good thing for the traders on Wall Street.

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Speaker 4: Equity trading has seen records in the second quarter that

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Speaker 4: is translating through to compensation. I mean right now, equity

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Speaker 4: traders are projected to get as much as a thirty

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Speaker 4: percent bump. That's the highest across any of the financial

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Speaker 4: industry that we have seen. The question becomes, does that volatility.

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Speaker 4: Does the momentum that we've seen through the first half

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Speaker 4: of the year continue through the.

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Speaker 2: Second half to her as the debt traders are also

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Speaker 2: showing strong performances, but the positive news comes as firms

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Speaker 2: also look at how AI might help them streamline their

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Speaker 2: staff and costs and manage expenses.

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Speaker 1: President Trump says that he will decide on a replacement

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Speaker 1: for outgoing Federal Reserve Governor Adrianna Kugler this week. The

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Speaker 1: FED announced on Friday that Kugler would resign, giving the

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Speaker 1: President an earlier opportunity to install a candidate sympathetic to

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Speaker 1: his calls for lower interest rates. Despite Trump's pressure campaign,

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Speaker 1: Andrew Sheets, global chief of Corporate Credit Research at Morgan Stanley,

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Speaker 1: says the Fed is still likely to hold rates in

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Speaker 1: the immediate future.

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Speaker 5: On Morgan Stanley's economic forecast, the next couple of months

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Speaker 5: are going to see inflation tick up and growth tick down.

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Speaker 5: Growth continue to deccelerate, and we think that puts the

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Speaker 5: FED in a difficult position. As you mentioned in the

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Speaker 5: markets are pricing roughly a ninety percent chance of a

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Speaker 5: September cut. We still think it's more likely that they

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Speaker 5: do not cut in September, given that.

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Speaker 1: Inflation path Morgan Stanley's Andrew Sheets. There, President Trump reiterated

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Speaker 1: that he is still considering four candidates for the main

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Speaker 1: posts of FED chair. Whoever is chosen for the open

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Speaker 1: governor position will also likely be in the running to

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Speaker 1: lead the bank after Chair Powell's term ends.

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Speaker 2: We too some breaking earnings news this hour from Germany's

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Speaker 2: Commerce Bank, which has reported net interest income that beat

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Speaker 2: estimates in the second quarter two point zero six billion euros.

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Speaker 2: Also applied for an up to one billion euro share buyback,

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Speaker 2: and the commerce bank has a high bar to meet

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Speaker 2: with these earnings after its strong share performance so far

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Speaker 2: this year. The stock is up one hundred and six

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Speaker 2: percent year to date, which is the biggest gainer in

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Speaker 2: the stock six hundred banks index. It's been boosted by

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Speaker 2: Germany's fiscal expansion and unicredits interest in the lender.

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Speaker 1: Now open Ai is in early talks about a potential

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Speaker 1: a whole share sale that would value the business at

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Speaker 1: five hundred billion dollars. Bloomberg understands that the stock would

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Speaker 1: be available for purchase by current and former employees and

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Speaker 1: existing investors, including Thrive Capital, who have been asked about

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Speaker 1: buying some of the employee shares. If the deal goes ahead,

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Speaker 1: it would elevate open Aiyes on paper price tag to

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Speaker 1: roughly two thirds its previous valuation stood at three hundred

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Speaker 1: billion dollars. The move comes following the news last week

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Speaker 1: that the startup has secured eight point three billion dollars

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Speaker 1: from a syndicate of investors in a financing round that

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Speaker 1: was oversubscribed by about five times.

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Speaker 2: In the UK, and u assessment from a leading thing

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Speaker 2: tanks as the Chancellor of the Exchecerator, Reeves is facing

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Speaker 2: a fifty one billion pound hole to fill in her

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Speaker 2: autumn budget. The National Institute of Economic and Social Research

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Speaker 2: has warned the Chancellor may have to break Labor's pledge

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Speaker 2: not to raise taxes if she wants to make up

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Speaker 2: for the short slow growth. Higher than expected borrowing and

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Speaker 2: you turning on planned cuts to welfare benefits has put

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Speaker 2: Reeves on track for a large hole in the government's

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Speaker 2: spending plans. NISA is also projicting that uk GDP will

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Speaker 2: grow by one point three percent this year and one

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Speaker 2: point two percent next year, though it warns that tax

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Speaker 2: rises in the autumn would likely weaken the economy.

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Speaker 1: Now too, Israel, which is weighing an expansion of its

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Speaker 1: armed presence in Gaza. Prime Minister Benjamin Netanya who is

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Speaker 1: considering whether to deploy the Israel Defense Forces into the

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Speaker 1: twenty five percent of the Palestinian territory not already under

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Speaker 1: its control. The deliberations come as Israel faces an international

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Speaker 1: outcry over its near two year long war. The families

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Speaker 1: of Israeli hostages held captive by Harmassa urging Netanyah, who

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Speaker 1: not to go through with the offensive. One relative, Nama Shurika,

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Speaker 1: says that she wants a peaceful resolution.

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Speaker 6: We need to get rid of Hamas. That's one hundred

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Speaker 6: percent right. But I think there is one way to

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Speaker 6: get the hostages out right now, and it's making a deal. Obviously,

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Speaker 6: fighting in Gaza, it will put the hostages in danger.

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Speaker 1: Nama Schuik speaking there, whose cousin is being held hostage

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Speaker 1: by Hamas. Several international governments have soaken out against the

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Speaker 1: spiraling humanitarian toll on Gaza's two million plus population.

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Speaker 2: Those are your top stories on the markets this morning.

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Speaker 2: The MSCI Asia Pacific indexes down is obscuse me, two

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Speaker 2: tenths of one percent. Eurostocks fifty futures are three tenths

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Speaker 2: higher this morning. The ten year treasury yield is upper

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Speaker 2: basis points at four point two two percent, and the

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Speaker 2: euro just slightly stronger against the dollar in trading today

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Speaker 2: at one fifteen seventy nine.

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Speaker 1: Now, in a moment, we'll bring you more on the

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Speaker 1: tariff pressure on India and Switzerland ahead of new levies

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Speaker 1: coming into force tomorrow. Plus also why European companies like Nova,

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Speaker 1: Nordisk and Reno are picking inside a CEOs to handle

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Speaker 1: economic turmoil.

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Speaker 2: That story been reading this morning from our food editor

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Speaker 2: Kate Krater about using AI to plan dinner, which is

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Speaker 2: apparently now also big business as well as something that

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Speaker 2: I think quite a lot of us might admit to

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Speaker 2: if we were asked.

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Speaker 1: H Yes, I think that meal plan is one of

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Speaker 1: those jobs that you always need a bit of help with.

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Speaker 1: But Hello Fresh is apparently spending seventy million dollars on

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Speaker 1: expanding its menu for subscribers with the help of AI.

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Speaker 1: So the boss in North America's talked about how it's

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Speaker 1: going to deliver more restaurant quality ingredients, global flavors, so

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Speaker 1: higher quality ingredients, bigger portions, but more choice over the

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Speaker 1: meals and the menus that you can choose over the

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Speaker 1: course of a week.

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Speaker 2: So I sent you the way the AI comes into

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Speaker 2: this is that the more that you order from this company,

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Speaker 2: the more they're going to give you Netflix style prompts

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Speaker 2: of what you might want to cook next. You know,

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Speaker 2: you enjoyed this lemon chicken, have you tried this other

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Speaker 2: chicken dish or whatever. But part of it is also

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Speaker 2: the filtering is based on how essentially how labor intensive

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Speaker 2: your the recipes that you pick are. So if you're

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Speaker 2: always picking ones that take five minutes to make, the

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Speaker 2: AI will guide you towards those.

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Speaker 1: Is there any recipe that takes five minutes to make

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Speaker 1: that counts as cooking sandwich?

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Speaker 7: Maybe?

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Speaker 2: I think that's probably as close as you might get.

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Speaker 2: But an inst agreed from Kate Grader, and we'll put

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Speaker 2: a link to it in our podcast show notes.

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Speaker 1: Now, let's bring you up to date on the latest

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Speaker 1: trade tariff news. This morning, Donald Trump says that he

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Speaker 1: will raise tariffs on India within twenty four hours over

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Speaker 1: its Russian gas purchases, while the Swiss president is in Washington,

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Speaker 1: apparently without an appointment to see the US president. Our

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Speaker 1: EMEA News director was Lim Matheson joins us this morning

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Speaker 1: for more Good morning, was So, we've been reporting on

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Speaker 1: the pressure that is ramping up on India from the

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Speaker 1: White House. Does Narendra Modi look likely to give in?

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Speaker 8: Well, that's going to be the interesting question, because, of course,

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Speaker 8: it's such a tourn of events between these two leaders

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Speaker 8: who until recently, you know, very warm, very warm relationship,

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Speaker 8: almost effusive praise for each other, and suddenly Donald Trump

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Speaker 8: is really singling out India in all of this particularly

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Speaker 8: over its purchases of Russian energy, which have continued since

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Speaker 8: Russia's invasion of Ukraine. He's not really going for China

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Speaker 8: on this, but he definitely is singling out India and

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Speaker 8: indicating that he's going to increase penalties on India over that.

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Speaker 8: And that's on top of the existing tariffs that are

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Speaker 8: going to be coming onto India and possibly also on

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Speaker 8: pharmaceutical the pharmaceutical sector also, which would be potentially very

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Speaker 8: damaging for India. And the question is how does India

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Speaker 8: respond to this. This suggestion at this point is that

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Speaker 8: India won't retaliate to it, but equally that they're not

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Speaker 8: going to give in.

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Speaker 7: They're going to hold the ground.

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Speaker 8: Perhaps they can make some concessions elsewhere, like many other countries,

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Speaker 8: look for something to give Donald Trump. But are they

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Speaker 8: going to back down from purchases of Russian energy? So

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Speaker 8: far it doesn't seem so. And so the question is

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Speaker 8: can they find some other thing to give Donald Trump

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Speaker 8: to make this all go away? And at some point

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Speaker 8: is that the personal relationship again between Narendra Mody and

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Speaker 8: Donald Trump, that has to find a way through.

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Speaker 5: Well.

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Speaker 2: Pharmaceuticals also in focus for Switzerland, but they're facing a

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Speaker 2: more looming problem, which is the thirty nine percent tariff

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Speaker 2: due to come in to force tomorrow. The Swiss President's

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Speaker 2: gone to Washington without an invitation from the White Ayes.

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Speaker 2: But is she likely to make any progress when it

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Speaker 2: comes to talks with the US president?

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Speaker 8: Well, speaking of personal relationship, she doesn't really seem to

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Speaker 8: have one with Donald Trump, and that possibly is a

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Speaker 8: real issue. They had a folk call recently which didn't

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Speaker 8: appear to go particularly well. He said that he felt

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Speaker 8: that she came to the conversation with nothing to offer him,

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Speaker 8: and was she really prepared for that conversation, And so

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Speaker 8: she doesn't really have the leverage of a long runny

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Speaker 8: relationship with him, and turning up in Washington added out

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Speaker 8: also in a way seek here seeking a bet, potentially

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Speaker 8: seeking a bet with him. And the question is will

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Speaker 8: he be willing to see her or is it one

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Speaker 8: of those horrible moments where she turns up in Washington

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Speaker 8: and doesn't get the meeting it needs to leave again.

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Speaker 8: And the question of leverage there what can Switzerland offer

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Speaker 8: Donald Trump? I mean like Chinda has got the advantage

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Speaker 8: of having rare they've got leverage. Again, what does Switzerland

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Speaker 8: have in terms of leverage, what can they give him

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Speaker 8: again to make this all go away? And can they

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Speaker 8: do something else along the lines of perhaps other sectors

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Speaker 8: than pharmaceutic course, perhaps agriculture, gold or something.

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Speaker 1: Yeah, absolutely, I'm Swiss perhaps also have maybe a unique

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Speaker 1: issue with the relationship because their presidents are only in

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Speaker 1: office for one year. It rotates amongst all the cabinet members.

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Speaker 1: So yeah, really interesting. Wells, Thank you so much for

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Speaker 1: being with us this morning thinking about what's happening with

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Speaker 1: the White House. Our EMEA news director Wilson Matheson no Voon.

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Speaker 2: Just reports it's latest results today after the weight class

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Speaker 2: drugs maker has seen it's finally dropped by two thirds

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Speaker 2: in share price in the last year. It's also one

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Speaker 2: of a growing number of European companies that have picked

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Speaker 2: a new CEO and within their own ranks. Reno, Nasley

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Speaker 2: and Unilever are among the firms that have chosen insiders

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Speaker 2: for the top job in recent months. Our reporter at

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Speaker 2: sabah Meddings has been looking into this trend and she

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Speaker 2: joins us now for more. It's about what are the

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Speaker 2: common threads among these companies.

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Speaker 8: Then I think you've kind.

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Speaker 7: Of summed up quite a lot of it there with

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Speaker 7: your talk on tariffs and also Novo. With the tumbling

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Speaker 7: share price, it's you know, it's particularly exposing time to

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Speaker 7: be a chief executive, you know, with headhunters that we

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Speaker 7: spoke to telling us that this is a period of

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Speaker 7: unprecedented challenge and a lot of companies that really they're

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Speaker 7: grappling with consumers under pressure. Perhaps at the start of

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Speaker 7: the year, you know, they were sort of trying to

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Speaker 7: get used to the new normal, and now it seems

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Speaker 7: that things are changing all the time. Boards are now

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Speaker 7: willing to more willing to pull the trigger. So then

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Speaker 7: we have seen this this bate of these changes on

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Speaker 7: the top ranks, and companies need quick change. They are

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Speaker 7: sort of looking to people, you know, from within their

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Speaker 7: front benches perhaps to take over. Investors are wondering what

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Speaker 7: the plan is, and so all of these companies that

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Speaker 7: you've sort of mentioned there, they've sort of they really

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Speaker 7: need to get their house in order, and they look

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Speaker 7: to make a change at the top.

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Speaker 1: Yeah, so boards are choosing them from within their own

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Speaker 1: ranks rather than recruiting outsiders. I mean, you've talked a

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Speaker 1: little bit there about why there might be advantages to that.

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Speaker 1: I mean, are companies missing out on an opportunity if

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Speaker 1: they don't look externally at all? What's the thinking there is?

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Speaker 7: There is that risk there and certainly, you know, perhaps

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Speaker 7: an insider some experts that we spoke to said they

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Speaker 7: may be a little bit too entrenched in the culture

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Speaker 7: to make real change. But if you're you know, over

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Speaker 7: the last five years there's been much more pressure from

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Speaker 7: investors for boards to really have a known succession plan,

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Speaker 7: like what does happen if the CEO needs to move suddenly?

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Speaker 7: If you're recruiting internally, they say that they're a non entity.

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Speaker 7: You can understand their trek record. They're much more sophisticated

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Speaker 7: now with kind of tests to make sure they're really

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Speaker 7: aware of how people react under press share and also,

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Speaker 7: you know, if you look at you Lever and some

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Speaker 7: of the other companies, they have brought in quite dramatic

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Speaker 7: cuts within the company, big reorganizations, and the suggestion is

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Speaker 7: that someone who already knows the staff known to the

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Speaker 7: company really well can kind of get get the troops

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Speaker 7: on board with quite dramatic change and perhaps has that

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Speaker 7: rapport and has sort of a bit more loyalty within

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Speaker 7: the company to make those tough decisions and kind of

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Speaker 7: get people on side with them. You know from Fernando

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Speaker 7: Fernandez that you leave it.

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