♪ >> good morning, this is bloomberg daybreak europe. tesla shares soar after elon

musk's promise of making cheaper cars sooner. stocks gain in asia, pay $69 billion sale and solid demand as a 5% coupon appears allusive. biden says a will flow to ukraine after senate passes and aid package. let's check in on earnings. volvo cars with the focus on price and cost cutting. we know sales across europe have been slowing. volvo cars sees full-year revenue up at least 15%, pushing forward, revenue is a miss. logging 93 point 8, 90 4 billion

krona in terms of revenue below estimates that had seen shy of 100 billion. in terms of operating income, that came in below estimates versus just shy of 6 billion. margin is a mess. just shy of 5.7, but revenue up 15%, a company we will watch at the open as we contend with softness. competition from china, price cutting. we will be speaking to the volvo car ceo and president at 7:15 am u.k. time. and the swiss drugmaker first-quarter sales coming in shy of estimates.

14.4 billion, estimates for 14 billion, a small miss. we know in terms of covid-19 input, that slowed sales, the business dating so that could have been a drag. more details of course and then the impact of the swiss franc is a factor as well. confirming their outlook, not a big surprise. 420 .24. first-quarter sales a slight miss in the first quarter. let's check in on markets because the earnings story is part of the package, but there are catalysts in the upside. good news is bad news with business activities slowing which suggests there is a window

for the fed. there was the treasury option and the outlook from tesla. pushing forward a cheaper model. european futures pointing higher. commodities getting a lift. s&p futures above 5000 and looking to gain 3/10 of a percent. nasdaq futures are higher. let's look cross asset given that the two-year auction was well-received. euro-dollar at 107 but back above the 106 level. brent up a 10th today, supplied close to 5%.

>> optimism indeed as we saw, remember how it was tentative in the asian markets and infotech was eaten up. middle east tensions and tsmc guidance, asian markets are getting their groove back. we knew earnings would be a key test. what we're hearing from tesla is providing promise and optimism, we've seen everything moving higher. hang seng in the green, a racing declines.

amid stockmarket inflows, taiwan dollar doing well. they hot inflation print and yen weakness despite the bloomberg dollar index moving toward 155 on dollar-yen as the boj heads into a policy meeting. weakness will figure into conversations about inflation. i want to take you to chip stocks after texas instruments gave a solid forecast. japanese chip stocks are moving up. let's take a look at ev stocks. tesla allaying concerns saying

it will push out cheaper models. it is taking a long suppliers and piers listed in hong kong, tom. tom: asian markets getting their groove back, thank you. asian market action, tying it to the tesla story, shares surging after it accelerates the launch after decline in sales, it aims to start production ahead of the 2025 timing pledged by the company. let's bring in robert lee with the deep dive when it comes to tesla. arguably it was about the call and the conversation that alleviated investor concerns.

>> market anticipated weak results, but those are in the rearview mirror. investors gains confidence given that it seems to be focusing on the market and going into lower price ev's, robotaxis are a focus, but a longer-term opportunity with various questions as to when these become viable. the cyber truck which is a low-volume product, elon musk confirmed production is ramping up and that gave the market confidence that that business could break even in quarter number four. those were two positives that

the market did not see coming. that's why you're getting a short squeeze and a rally. tom: how is that tying into earnings for tesla? robert: i guess analysts are penciling away. yet to see consensus numbers. the numbers could come up a little. looking at the numbers, the gross margin came higher-than-expected and tesla has been cutting costs. there is incremental upside in the near term. most agree mass-market opportunity is near term and as you said in your intro, they are rolling out faster. robotaxis i would argue are in the realm of science-fiction.

interesting trials, technology is nowhere near mass deployment. ev's could generate medium-term upsides assuming they execute in a competitive market. tom: rob on the near term and long-term prospects. senior analyst at bloomberg, thank you as ever. now to the u.s. macro when it comes to the fiscal front, 69 billion dollars sale of two-year notes, solid buyer demand and questions even as the 5% coupon proved elusive. it comes as business activity expanded at the slowest pace in four months. jobs also softened. mary nicola joins us for the

breakdown. let's start with the auction and to what extent this is well absorbed. a positive, it seems. mary: yesterday i was on your show saying there were headwinds for the two-year auction, but the 5% coupon is attractive. it could signal a good one for the five-year and the seven year , but the run-up into these auctions and how treasuries are playing out, momentum right now looks precarious when you have gdp data and of course pce on friday as well. tom: australia, a reminder inflation is not just sticky in the u.s., it is sticky in australia and markets are

pushing back from the central bank. talk about the relevance of the inflation dater out of australia. >> it resolute's -- resonates from the fed and rba. it shows the stickiness of inflation and you have the resilience in oil prices, they remain high. there are still upside risks to inflation to keep central banks on the sideline. rba is the perfect case heading into the data. swap markets were looking at a 70% chance of a cut, now less than 50% chance this year. a lot of the inflation numbers are showing central banks have to be more careful before considering rate cuts. tom: hard work to get through the last mile with three plus

percent handle, cpi was 3.6%. mary, thank you. walking us through the inflation print out of australia. 7:00 a.m. u.k. time, big week in bank earnings. we will get lloyds banking group earnings, so think about that in terms of scrutinizing the u.k. banking space. 9:00 a.m., german business climate will take up, expected to build out modestly improving german economy. that data is out at 9 a.m. u.k. time and another big day. boeing, meta and the ai catalyst. ibm and forward, all those earnings later stateside.

u.s. president biden is expected to sign an aid package into law today clearing away for resume shipments to ukraine of weapons as soon as this week. details are next, this is bloomberg. ♪

tom: welcome back to daybreak europe. joe biden is expected to sign a $95 billion emergency aid package for ukraine, israel and taiwan which clears the way for shipments of weapons to ukraine this week. let's bring in kriti gupta for the details. what can we expect? kriti: we've had the british prime minister talk about long-range missiles, so ammunition is coming from other parts of the world, but drone warfare is getting replenished, $14 billion of defense when it comes to the machinery, equipment and firearms.

this is a key piece of the equation because president trump's initial idea brought on right wing congressional representatives, but that has to do with aid in communities. not related to ukraine, that is the key part of the bill when the ports are in focus. we are looking at grain shipments under pressure as russia makes ground. tom: the ukraine segment was important but there was a lot including sanctions on our random, they are heavily sanctioned. do the sanctions move the dial? kriti: javier made a great point, it is about enforcement. the fine print is important because it's not just targeting refineries or ports or vessels,

which is being done, it is targeting infrastructure that ends up in china. i love javier's column where he said output is branded as malaysian crude. this bill targets infrastructure. banks, institutions that carry out trades. eurasia group saying strict enforcements of sanctions would add two to three dollars per barrel. it comes with the implication that there has to be strict enforcement which biden has had pushback on. even the white house is saying they are ok with doing this. tom: the enforcement has not been there, so we watched that. divestment of tiktok will be signed into law. they have time to work through

that. kriti: it does not happen quickly, it has been hotly contested. you have leadership at bytedance in china and tiktok saying this is a long legal battle if indeed the u.s. passes the bill. it will not disappear. the concern is the algorithm. it looks like it is the united states hard line. we are looking at a long legal battle in the supreme court. tom: users will be looking at that and monitoring that. thank you for the breakdown of this bill heading to the president's desk where he will sign it. boeing prepares to release rose salts for the cash burn in the wake of the max seven crisis. challenges for boeing and how that is feeding in.

we set you up with a preview of that, stay with us, this is bloomberg. ♪

>> we believe for the next five years there is banking, insurance, optimized ecosystem. and then we've got an operator in mexico, spain. online lending business and a platform over time. the brand that we've built, a

digital platform, that is what we believe is the long-term plan. tom: that was the ceo of south african lender speaking to jennifer who will be leading our special coverage next friday on africa amplified on bloomberg tv so tune in for that. the earning story, boeing's cash burn will be in focus. they are engulfed in a crisis involving its main source of revenue. let's get more from bloomberg's said philip in great detail. what are you and the investors looking for from boeing results? sid: what investors are looking for is cash flow and cash burn this quarter, because they may

have burn through 4 billion in cash. that would reduce their cash, so that is a big concern to see what the burn looks like. and how they can get cashback toward the estimate that they had at the start of the year before. tom: ok, so the cash flow is in focus for investors. what about moves from regulators? how consequential have they been ? what actions have regulators been taken? sid: they have been under scrutiny because of the blowup in early january on the alaska airlines plan, a big concern for production because they restricted regulators and

demanded audits. they've done quality checks in that had an impact on deliveries, so boeing is not able to deliver as many planes. they are hamstrung in terms of ramping up production when demand is soaring. tom: give us steps boeing is taking to address these issues? sid: they've taken measures including announcing a management change with the ceo stepping down. the chairman stepping down. and they replaced the head of the commercial airplanes unit. they have announced leadership changes and they are looking at acquiring spirit air, and important supplier which makes 70% of the fuselage. so they have announced various measures and now it is a question of implementation and

investors looking at questions about the next ceo, what the board is looking for and where they go from here. tom: ok, bloomberg's said philip setting us up with a preview for earnings. questions need to be answered. they've adjusted to these challenges in the cash burn will be in focus. thank you very much. do not miss our interview with the ceo of their competitor, airbus tomorrow. that interview is worth tuning in for. let's check in on the futures. catalysts pushing us up in terms of a positive day across equities. a solid handover from asia and gains from the u.s.. a european futures pointing higher by 5/10 of 1%. the earnings story is there, but that the treasury option was well received, ftse futures

pointing up. commodities and copper and iron plate into that. coming up, tesla's burning miss, but it is undertaken by a plan for cheaper cars faster. he is optimistic on the prospects. the details of the key story next. this is bloomberg. ♪ you're probably not easily persuaded to switch mobile providers for your business. but what if we told you it's possible that comcast business mobile can save you up to 75% a year on your wireless bill versus the big three carriers? you can get two unlimited lines for just $30 each a month. all on the most reliable 5g mobile network—nationwide. wireless that works for you. for a limited time, ask how to save up to $830 off an eligible 5g phone when you switch to comcast business mobile. don't wait! call, click or visit an xfinity store today.

tom: good morning, this is bloomberg daybreak: europe. these are stories that set your agenda. tesla shares soar as investors cheer elon musk's promise of

making cheaper cars sooner. investors overlooking a big miss on the earnings. stocks gain in asia following a tech field rally -- fueled rally on wall street, $869 billion sale of treasuries look solid by demand, even as a 5% coupon improves elusive. european earnings gear up with volvo missing estimates for the first quarter and it comes under pressure after gucci sales tumble on weak demand in china. let's check in on these markets then. in terms of the earnings picture, mixed when it comes to your. catalyst coming through, two straight days of solid upside for the s&p logging gains of 1.2%. the best back-to-back rally for the s&p in two months. the nasdaq 100 ending at 1.5 percent. european futures point to gains of 5/10 of a percent. keep an eye on copper, iron ore prices and basic resources. that index pointing higher.

s&p building on the gains of yesterday 5100 26 looking to add 19 points. nasdaq futures, 17,034 looking to add 7/10 of a percent. optimism around tesla despite lackluster earnings. outlook coming through from elon musk. semiconductor space could alter through to europe from the back of what we saw from texas instruments and an upgrade, or more positive outlook coming through from that key semiconductor maker. let's flip the board across asset. the u.s. two-year in focus, four 92, well received in terms -- in terms of that auction. some relief across the treasury market. euro-dollar, 107. brent up to tenths of a percent. iron ore soaring just shy of 5%. copper getting a lift. redhead crossing when it comes to the real estate story of china. iron ore ties into that as well, interesting -- interestingly. this is around country garden in the news coming through that

they have negotiated to extend the yuan bonds in terms of the payment for those bonds to avoid a first local default. for the context, country garden, one of the biggest real estate companies in china. it's a brand that's very well-known. they did default on their dollar bonds. that default has happened a year ago. it's the global bonds on which they have avoided their first local default. a it of relief coming through in terms of the ability for this key real estate company in china, to negotiate its debt payments at a time when we continue to see pressure across the real estate market in china. 83% slump in home sales just last month and that cash crunch is proving extremely painful for the country. relief coming through for country garden. we watch the local bonds on the back of that. more on tesla in terms of the earning. shares surging after a promise to accelerate the launch of more affordable models following a

decline in first quarter profit margins and sales. let's bring in bloomberg asia transport reporter standing by for us in beijing. tell us about what elon musk said during the earnings call that led to this optimism amongst investors. >> elon musk looking to bring forward intesa looking to accelerate the production or the unveiling of what should be the new local set of ev models. this is really important for tesla and its future growth story, in particular as around 2024, which tesla faces growth. therefore, having newer models, it helps potentially refresh a line that has become stale, also has become very small. investors are happier with this at a time like this with something that would happen at the end of next year in 2025 that could come as soon as this year or early next. this is potentially very, very

positive. unfortunately, there is still a lot of details that have yet to be clarified by elon musk. he is saying, wait until august when we will have an announcement on something related to a robotaxi and whether that could involve things that could be low cost and help to drive and revive this slumping stock performance. tom: and it just comes down to implementation. the key question as to whether they can implement the sped up time. danny joining us out of beijing. competition out of china has been one of the key factors, key challenges for elon musk and tesla. what stood out to you? danny: i think just across the range of metrics we were looking at, everything that had fallen in terms of missed estimates. this was not a surprise given what we saw based on weak first-quarter delivery numbers.

and so, therefore, way elon musk had been trying to do to turn this ship around on tesla, the fact that they have made the biggest workforce cut ever, and it's also really going to laser in on further cost cuts. that's the most interesting point, aside from this accelerated announcement on low-cost ev production. therefore, better financial standing gory -- going forward. tom: danny lee giving us the context around the tesla earnings. joining us out of beijing. another of the magnificent seven an action later today with meta-reporting first-quarter earnings today. the company's generative ai tools expecting to continue strengthening its position. mehta was ahead on the curve when it comes to building out ai. let's get more from matt bloxham from bloomberg intelligence. what are you looking for?

matt: i think the m word is magnificent. people are expecting a good result and they are come out of the markets for 26% year on year revenue growth. really big improvement in profitability and some of that is coming from ain they are really using those tools effectively to use impressions and they are saying we want to advertise on facebook because they are helping us to reach customers. tiktok has been a big shadow from meta-. wheels, which was the instagram rival as they get traction. i think when the streets looks at results they see positive numbers. i don't think they will disappoint, but it may be reflecting that already. another thing people were looking -- will look at is the forward guys where meta-will position revenue expectations

with the streets looking for $38 billion of revenue. people are expecting that could be conservative, so we will see. tom: you touch on tiktok, very likely will face, at least on paper, a band divested from bytedance. the president will sign that bill. there's a legal process and it's very unsure and uncertain whether you see that them in consequence, but it could prove consequential for meta-. >> this clock starts ticking on the timeline, maybe later today, there's lots of resistance expected from bytedance. he could proceed to at least delay it being implemented by up to a year, possibly longer. if ultimately tiktok in the u.s. is either sold or it has to be closed down, for sure, meta-is going to be one of the principal beneficiaries of that because it's such a big rival to

instagram, a lot of content creators will think, we have to go back to instagram and use that as an online platform. lots of different things could happen in the next 270 days, but i'm sure there's a lot of work going on within meta-to make sure they are well positioned. tom: the prospect is going to be tantalizing. thank you. setting us up for the importance of the meta-earnings coming out of the u.s. and what to scrutinize in terms of those numbers. matt from bloomberg intelligence with a deep dive. now the other stories making news. ibm is an advanced talks to acquire the software company with a possible agreement coming as soon as today. their shares jumped on the news posting that biggest one-day gain in more than two years given the san francisco-based company a market value of 5.8 billion u.s. dollars. ibm reporting later today. visa shares, meanwhile, gaining an extended trading after the company reported a profit eats.

the payments giants set adjusted net income rose 17% cut over $5 billion. u.s. credit part spend it growing over 6% from one year earlier with worldwide -- worldwide payments rising 8%. heineken, the drinks maker do to report in the next half hour or so, expected to benefit from an earlier easter. some of those seasonal changes for preview on the number. i am joined for the details. what are we expecting. >> a lot of the consumer goods companies, last year was difficult because they had contrasting volumes. in this corner -- quarter heineken is expected to come back and sales are expected to grow 6%. so i think the key thing to look for is is it driven by price or value in the balance of that will tell us whether heineken is going to be able to claw back

its margin. tom: the price versus volume split will be important. in terms of outlook, it's more about the outlook now, what is the expect outlook for this company? >> i think the expectation is that there has been a grow volume and gross sales this year. and i think that the margin is expected to come back to and is expected to interest profitability and also find ways to bring back that raw material that it lost last year. tom: heineken dropping potentially in the next 20 minutes or so. the pricing question input and what's happening across the africa business is all going to be in and under the linens. here's what else to watch out for, you will get the earnings crossing from heineken. 10:30 am, u.k. time, germany will be coming through with a 10

year auction for 4 billion euros. 1:00 p.m. london time, asml, that begins, really important. the most important european tech company and changes at the top of the executive team. the ceo stepping down and making wait for a new ceo. 6:00 p.m. u.k. time. the u.s. will come through with that five year auction of $70 billion worth of five-year notes or five-year treasuries after the two-year treasuries were well received. that option well received yesterday. is the market feeling indigestion? the u.k. minister visits in germany, continues his european tour. antony blinken is arriving in china later today. expected to touch down in shanghai. he's got a message for his chinese counterparts. later, u.s. earnings report, boeing, ford motor, and meta-with the focus on the aia. coming up, lecturing spending

going out of style in china as the economy continues to struggle. we are going to check in on how that is affecting the biggest fashion brands. after gucci sales tumbled on weak demand. that is next. this is bloomberg. ♪

tom: welcome back to bloomberg daybreak: europe. we bring you their earning with that gas major, three with first quarter adjusted net income. comes in marginally above the estimates, just by hair, 1.58 billion euros. the estimates had been for 1.5 7 billion. the gas unit of this business would be before relatively badly within this quarter and it would be the downstream part to do the heavy lifting. first quarter production, one point seven 4 million barrels of oil. the estimates had been for 1.69. production coming in slightly higher than expected. explosion in production adjusted operating production coming in at 3.32 billion. the redhead across the terminal for adjusted net income coming in marginally above the income at 1.5 8 billion euros. now to the luxury space where

profit will plunge in the first half of the year after wealthy shoppers curb shopping on gucci products. comparable sales that shares a gucci tumbled 18% on tepid demand. in china joining us from the details is deborah from bloomberg intelligence. what is causing this deeper decline at gucci, deborah? >> so many different things. we start with the fact that the carrier for stock isn't working, that the product coming is only 7% if it's in stores and it's only in gucci owned stores, not the wholesale stores. also the fact that they are trying to push it cleaner. there is so much going on and we should see improvements in how about 3q. but that is going to make it much worse for 2020 versus consensus. tom: on the outlook and what we earn from the earnings in the earnings call over the last day or so and how that informs your

view about the second half, what is your expectation about how challenging it will be or if they can overcome the obstacles by the second half of this year. >> the company has guided that the second half -- through the first half of operating profit they look for 40% to 45%. against the pre-release sales number from -10 for the company for caring and minus gucci -- -20 for gucci, the consensus was expecting operating to be down 21%. so they guided 40 to 45. let's take the backend. the second half of q2 they are saying there is no pickup for gucci and for the band. there is no real pickup and spending q2 versus q1. so another soft quarter and softer than what was expected in the beginning of the year. what does that do, it probably means we get 100 basis point improvement on margin, but from a lower base. we are going to see margin istanbul.

and the 30% margin that they forecast around 30% for gucci just isn't going to hold. we are going to see those numbers come down. tom: that 30% margin looks vulnerable. chinese customers turning their back on this brand. some extent. what is the read across to the broader industry. it's more granular. it's not just a one-size-fits-all when it comes to the chinese consumer. the chinese consumer has a little more scrutiny into what they buy. >> if we go back to the portfolio overall, gucci is, in terms of perception, in the wrong place and is taking longer to fix. it needs to do more of the top to bottom end then chinese shoppers are scrutinizing on that. i think that overall, china is about -20% and i can compare that at the bottom end where we have l'oreal saying the market is flat in china, but that they are growing 6%. so is gucci doing something wrong versus peers like lvmh and

others? it's a difficult marketplace but if your brand is in the right place, you can do well. some of their other brands are doing better. but overall, you see elsewhere what they are doing with all of the other brands. if you think about yves saint laurent, it will be out the lower price point, balenciaga, you cannot get ahold of their banks, they are hot again. but, everywhere they are doing a cleanup whereby they are taking around 25%. you could see on the numbers, minus 25% out of wholesale. you have gucci dragging their own retail, no one is going in the store. they are pulling out of boutiques and department stores and trying to elevate all of their brands at the same time. it's really a difficult place for them. china, otherwise, you have to have your brandon scott. even for the gucci and all of their brand range. what we call the chinese cohorts moving out of the mainland, shelving elsewhere, japan is at

16% because weakness of the yen and we are seeing that also with gucci. some shopping on yen weakness from gucci brand in japan. but overall, china's probably down 20%. tom: sounds like a mountain to climb. i have no idea what that handbag is. i will have to google it. deborah aiken, thank you for breaking down those -- from kering. meanwhile, on fashion, chanel ceo lena says the luxury giant plans to continue investing in china. we have been talking about that despite the economic recovery. speaking to francine lacqua, speaking about the strategy behind recent price hikes. >> so weak prices according to the inflation, they are related to the cost price. we also made a commitment to price harmonization across the world, which means a client should not experience excessive

price differentials no matter where they buy. francine: how do you see the china market compared to the u.s. market? it's not that volatile, you have a base that stays for quite some time. >> china is a very essential market for the luxury system because of the fast adoption of luxury. because of the appreciation of's refinement and sophistication. it's a very important central market. i came back recently from china and i was very happy to see the energy and vibrancy in the market. we continue to run our business for the long-term and continue to invest in china in the long term. tom: chanel ceo speaking exclusively with bloomberg's francine lacqua. you could see the full interview on leaders with laqua nine: 30 p.m. in new york and tomorrow at 6:30 p.m. in london. there's plenty more coming up. stay with us. this is bloomberg. ♪

>> the theme is that it's a very unbalanced economy. post-covid it has just been a very unpredictable environment, some of the things we got right, some things we got wrong. i think we are trying to figure out for the next day. tom: morgan stanley's mike wilson. he is very firmly and closely watch but he is being cautious around how to make the calls of what happened in 202020 -- in 2024. strength has come through for the s&p. yesterday was the semiconductors. it was tech space, nvidia lifting the index. this chart shows it, the best back-to-back rally for the s&p in about two months. the earning story continues to propel the momentum. that's the picture when it comes

to the upside in the futures pointed to further gains. let's flip the board and have a look at what's happening with tesla because the earnings were not good. but the others came out and said they could've been worse. they're not as bad as they were, but more importantly, it's about the outlook and the fact that there's a little bit of hope that will sprinkle through coming through from elon musk. 21 billion on the revenue. aps as well, also amiss. $.45 versus the $.53. again, the reason that after hours tesla moved higher and we see that chart is because of the views and the details around these cheaper cars in the timeframe being pulled forward. there's all sorts of questions around how they implement this and how they get this out to customers. challenge from the automakers, but that getting a grain of hope from investors. they jumped on that,. tesla getting after hours 13 point 3%. let's look at texas instrument. the industry, auto, space, and they are seeing a drawdown and

seeing a turnaround and they are coming through with a stronger guidance, stronger guidance from texas instruments. it's likely to percolate through into the european markets, coming through from texas instruments, it has been under pressure, a turnaround and lower end chips, that stock rally on the back of that, we will jump to germany's comments, europe's largest economy, we will be speaking to them, markets today is next. stay with us. this is bloomberg. ♪

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