00:00> > NEWSMAKERS AND MARKET MOVERS, THIS IS "THE PULSE WITH FRANCINE LACQUA." JOUHMANNA: GOOD MORNING AND WELCOME TO "THE PULSE." I AM IN FOR FRANCINE THIS WEEK. NVIDIA HAS SIGNALED THE TO YOUR AI SPENDING BOOM IS DECELERATING WITH THE SALES FORECAST THAT FELL SHORT OF THE HIGHEST WALL STREET ESTIMATES. IT IS EXCITING REVENUE OF AROUND $54 BILLION IN THE THIRD QUARTER AND HAS REMOVED CHINA FROM ITS FORECAST ALTOGETHER AS TENSIONS REMAIN OVER SALES OF ITS H20 CHIP. THE LATEST AFTER OUR TRADING ACTIVITY SUGGESTS THE STOCK IS POISED TO OPEN DOWN 2%. IT WAS 3% EARLIER ON THE SESSION. SO PARING SOME OF THOSE LOSSES. THE CHIEF EXECUTIVE JENSEN HUANG SAYS HE STILL HOPES TO SELL NVIDIA'S MOST POWERFUL CHIPS INTO CHINA. > > I THINK THE OPPORTUNITY FOR US TO BRING BLACKWELL TO THE CHINA MARKET IS A REAL POSSIBILITY. WE JUST HAVE TO KEEP ADVOCATING THIS INSTABILITY AND THE IMPORTANCE OF AMERICAN TECH COMPANIES TO BE ABLE TO LEAD. AND WIN THE AI RACE. JOUHMANNA: THIS SPRING IN ROBERT LEA. THERE ARE NOT THAT MANY COMPANIES IN THE WORLD THAT ARE SEEING THEIR QUARTERLY REVENUE SALES GROWTH EXPAND BY 56%. THESE ARE STILL VERY HIGH NUMBERS AND YET PERHAPS NOT ENOUGH TO SATISFY WHAT INVESTORS WERE LOOKING FOR. > > ABSOLUTELY. LET'S BRIEFLY GO BACK TO THE ABC OF STOCK MARKETS AND BROKERING. SHORT-TERM STOCK MOVEMENTS, PARTICULARLY ON RESULTS, ARE DRIVEN BY INCREMENTAL SURPRISE OR LACK OF. THAT IS WHAT WE DID NOT SEE LAST NIGHT. THERE WERE SOLID NUMBERS LARGELY IN LINE WITH EXPECTATIONS, MAYBE SLIGHTLY AHEAD IN TERMS OF WHAT WAS REPORTED AND WHAT WAS GUIDANCE. I GUESS INVESTORS HAVE GOT USED TO THIS SO-CALLED BEATEN RACE WHERE THE COMPANY HAS BEEN SUBSTANTIALLY BEATING NUMBERS. THAT DID NOT HAPPEN LAST NIGHT. I THINK THE SET WAS PRETTY TEXTBOOK. THE REACTION WAS STRAIGHT OUT OF THE ABC OF BROKERING. IT IS NOT SURPRISING WE SAW PROFIT-TAKING ON WHAT WERE SOLID NUMBERS BUT WITH NO MESS INCREMENTAL SURPRISE. JOUHMANNA: ROB, ALL OF THIS WEEK WHEN WE HAVE BEEN PREVIEWED NVIDIA, A BEEN USING THE ANALOGY OF ONE LEG IN, ONE LEG OUT. IT APPEARS TO STILL BE THE CASE FOR NVIDIA. ONE DEVELOPED AND TESTED OUT TO ME FROM THE EARNINGS YESTERDAY, THEY DID NOT SELL ANY H20 INTO CHINA IN THE LAST QUARTER OBVIOUSLY DUE TO SOME GEOPOLITICAL TENSIONS. HOW DO WE SEE THIS PAINTING UP IN THE COMING QUARTERS? COULD THAT POST SOME UPSIDE SURPRISE OR TAILWIND TO NVIDIA IN THE COMING QUARTERS IF THEY DO START SELLING THAT CHIP INTO CHINA? > > SURE, I WILL GIVE YOU A CLEAR ANSWER. I WOULD SAY ON BALANCE IS HIGHLY UNLIKELY THE COMPANY IS GOING TO SELL H20'S IN CHINA. IT IS CLOUDED BY A LOT OF GEOPOLITICAL DRIVEN UNCERTAINTY. AMERICA, THE U.S. ARE MAJOR, GRAVELS, GEOPOLITICAL RIVALS. CHINA IS PUSHING STRONGLY TO ACHIEVE TECHNOLOGY SELF-SUFFICIENCY. AS I HAVE SAID, FROM A CHINESE PERSPECTIVE, AMERICA IS AN UNRELIABLE PARTNER. THERE WERE UNCONFIRMED REPORTS THAT THE CHINESE AUTHORITIES ARE ENCOURAGING COMPANIES IN THIS PART OF THE WORLD TO BUY LOCALLY SO I THINK IT IS HARDLY LIKELY. THE MAJOR TO GO IN FOR MY POINT OF VIEW COME THE CLIP U.K. FROM JENSEN HUANG, I THINK MAY BE CHANGED THE STRATEGY A LITTLE BIT ON CHINA, IT IS EVOLVING. IT POTENTIALLY LOOKING -- I HAVE SEEN THEIR LOBBYING PRESIDENT TRUMP AND HIS ADMINISTRATION TO GET PERMISSION TO SELL THE MORE ADVANCED BLACKWELL CHIP INTO CHINA. I WAS A FROM A CORPORATE POINT OF VIEW, I AM SURE IN THEORY THE CHINESE COMPANIES MIGHT WELCOME THAT. WHAT THE CHINESE AUTHORITIES AND REGULATORS WILL THINK OF THAT REMAINS TO BE SEEN. I THINK THAT IS A WAY THE STRATEGIES ARE EVOLVING BUT I WOULD SAY BASED ON WHAT WE DO KNOW, IT IS HARDLY -- HIGHLY UNLIKELY AT THIS POINT THE H20 WILL BE SOLD INTO CHINA BY NVIDIA. JOUHMANNA: AND THE SEE WHAT UPSIDE THAT ACTUALLY DOES BRING IN TERMS OF REVENUE. ROBERT LEA FROM BLOOMBERG INTELLIGENCE, THANK YOU SO MUCH. JOINING US NOW IS JOHN BELTON, HEAD OF GLOBAL MULTI-ASSET STRATEGY AT J.P. MORGAN ASSET MANAGEMENT. AT THE TOP OF THE SHOW, I WAS SAYING NVIDIA ITSELF, SINGLE STOCK REPRESENTS A PERCENT OF THE S & P SO YOU CAN SEE WHY IT IS SO IMPORTANT FOR MARKET MOMENTUM IN THE NEXT FEW DAYS. IS THERE ANYTHING YOU TOOK AWAY FROM THEIR EARNINGS REPORT YESTERDAY THAT SHOULD OR COULD SLOW DOWN THE POSITIVE MOMENTUM WE HAVE SEEN IN U.S. STOCK MARKETS AS OF LATE? > > WELL, I THINK WITH THE MARKET WE HAVE TO TAKE A BIT OF A STEP BACK BECAUSE THERE IS CONCENTRATION IN THE U.S. MARKET AND U.S. IS CONCENTRATED WITHIN GLOBAL MARKETS. IF YOU LOOK AT WHERE THE MARKET CAPITALIZATION THE TOP 10 STOCKS IN THE U.S. IS, IT IS SORT OF IN THE MIDDLE 30'S. THE EARNINGS CONTRIBUTION IS IN THE UPPER 20'S. THIS IS NOT AN UNJUSTIFIED POSITION FOR THESE BLOCK OF SORT OF MEGA CAPS NAMES WITHIN U.S. INDEX. TO USE AN EXPRESSION, THEY ARE VERY MUCH WASHING THEIR FACE IN HER EARNINGS AND CASH FLOW TERMS. ADD ON TO THAT MANY OF THEM HAVE DOMINANT BUYBACKS GOING ON AND YOU CAN SEE WHY THEY ARE SO IMPORTANT TO THE INDEX. JOUHMANNA: IT IS NOT JUST THAT DRIVING IT BUT PERHAPS ALSO INTEREST RATE CUT EXPECTATIONS. IN THAT REGARD, THE FED CHAIR POWELL'S SPEECH TO JACKSON HOLE WAS QUITE DOVISH. DO YOU EXPECT TO EMBARK ON A SERIES OF SEQUENTIAL RATE CUTS OR DO YOU THINK IT WILL BE MAYBE ONE IN SEPTEMBER AND THEN REASSESS THE OUTLOOK BEFORE COMMITTING TO FURTHER INTEREST RATES? HOW DO YOU SEE THIS ALL PAINTING OUT? > > THE FED ARE -- WE TALKED ABOUT DATA DEPENDENCY A LOT. I THINK THAT COMES IN AND OUT OF FASHION. THE FED MORE THAN ANY OTHER CENTRAL BANK PROBABLY ARE DATA DEPENDENT. WE HAVE HEARD -- WE HAVE HEARD SOME MIXED SIGNALS AND WE EXPECT A RATE CUT IN SEPTEMBER OF 25 BASIS POINTS, ANOTHER ONE IN DECEMBER, AND THEN A COUPLE MORE NEXT YEAR IN THE FIRST HALF. WE WOULD STICK WITH THE IDEA IT COULD BE QUARTERLY. JOHN WILLIAMS, THE GOVERNOR OF THE NEW YORK FED, HAS SAID EVERY MEETING IS LIVE. WHAT HE ALSO SAID RECENTLY WAS THE POLICY AT THE MOMENT IS MODESTLY RESTRICTIVE. THAT MEANS THEY CAN CUT AND STILL KEEP IN BALANCE BOTH THEIR EMPLOYMENT MANDATE AND THEIR INFLATION MANDATE. AT THE MOMENT, I THINK SOME OF THE DOVISH COMMENTS THAT WE SAW OUT OF JACKSON HOLE REALLY POINT TO THE FACT THEY ARE PERHAPS SLIGHTLY MORE FOCUS ON LABOR MARKETS JUST NOW BUT MAKE NO MISTAKE, THEY ARE STILL AWARE OF THE ELEPHANT IN THE ROOM, WHICH IS INFLATION RISK. JOUHMANNA: AND A LOT OF THAT IS JUST SO AND CERTAIN AT THIS POINT IN TIME. IT IS VERY DIFFICULT TO SEE THE ACTUAL REAL ECONOMIC IMPACTS SO MANY OF THESE POLICIES ARE GOING TO HAVE. LET ME ASK FROM YOUR STANDPOINT, YOUR PERSPECTIVE, WE HAVE SEEN A BIG STEEPENING OF THE U.S. YIELD CURVE AS OF LATE. DO YOU HAVE A VIEW OF WHERE KIDS SHOULD END UP? WHAT APPROXIMATE FAIR VALUE IS? AGAIN, WE ARE POSSIBLY ENTERING INTO UNCHARTED WATERS ON THE BACK OF SOME RECENT JOBS THE PRESIDENT HAS MADE TOWARD THE FED AS WELL AND THE FED'S INDEPENDENCE. > > WE DO EXPECT THE CURVES CAN STEEPEN FROM HERE BUT MUCH MORE ALONG THE LINES OF THE VERY LONG END WHERE WE ARE PRICING IN SOME OF THAT INFLATION UNCERTAINTY INTO 30 YEAR BOND. WE SAW A LITTLE BIT OF THAT DURING THIS WEEK AS WE HAVE HAD SOME OF THE RHETORIC BACK AND FORTH BETWEEN THE FED AND THE WHITE HOUSE. OF COURSE EVEN AS WE SAW THE 10-YEAR NOTE RALLY, WE SAW THE BACK END OF THE CURVE SELLING OFF A LITTLE BIT. THAT STEEPENING BETWEEN THE FRONT END, AND THE BACKEND IS SOMETHING WE ARE KEEPING A WATCH ON. IN TERMS OF WHERE THE 10-YEAR NOTE SITS, WE HAVE SEEN IT BEHAVING EXTREMELY WELL DESPITE SOME OF THIS RHETORIC GOING BACK AND FORTH. WE THINK THE FAIR TRADING RANGE AT THE MOMENT IS SOMEWHERE BETWEEN 3.75 AND 4.20. IT IS LIKE IT IS PRETTY MUCH OF THE MIDDLE OF THE RANGE. IF WE DO GET THOSE CUTS AT THE FRONT OF THE CURVE AS WE EXPECT, THAT WILL HAVE A GRAVITATIONAL PULL ON THE TENSE BUT AS WE PRICE IN INFLATION RISK, THAT WILL LEAD TO THAT BULLISH STEEPENING OF THE CURVE THAT WE WOULD EXPECT TO SEE. THAT IS SOMETHING WHICH WE WOULD EXPECT TO WEIGH ON THE U.S. DOLLAR OVER THE COURSE OF THE FOURTH QUARTER AS WELL. JOUHMANNA: AND LET'S TALK ABOUT CENTRAL BANK THAT PRESIDENT TRUMP HAS BEEN PAYING A LOT OF CLOSE ATTENTION TO AND THAT IS THE ECB REARED WE ARE GETTING SOME COMMENTARY FROM ONE OF THE ECB POLICY MAKERS. LET ME BRING YOU A COUPLE OF LINES SAYING THERE'S A REASON FOR COMPLACENCY, MUST BE ALERT COME INFLATION FOR NOW IS IN GOOD PLACE. HE DOES NOT THINK AN INSURANCE CUT IS NEEDED WITH INFLATION AT 2%. BUT THEY DO MAINTAIN FULL FREEDOM FROM NEWBURGH. I SHOULD MENTION IS ONE OF THE MORE DOVISH MEMBERS OF THE COMMITTEE. AND ON INDEPENDENCE, HE SANG THE PRINCIPLE OF FED INDEPENDENCE IS BEING UNDERMINED. LET ME ASK YOU ABOUT THE ECB. I THINK THE ASSUMPTION IS THERE PRETTY MUCH DONE WITH THEIR EASING CYCLE. IF YOU LOOK AT WHAT IS PRICED IN COMING UP GO ALL THE WAY OUT TO Q3 OF NEXT YEAR TO GET A FULL INTEREST RATE CUT PRICE IN. IT IS NOT VALID IN YOUR MIND GIVEN SOME OF THE PERHAPS DISINFLATION AND PRESSURES THAT ARE GOING TO COME THROUGH TO THE EURO ZONE ON THE BACK OF THESE TARIFFS? > > I THINK IS REASONABLE FOR THE MOMENT. WE HAVE NOT SEEN THE FULL IMPACT OF THE TARIFFS COMING THROUGH YET WHETHER IT IS IN THE STATES IN TERMS OF HOW MUCH THEY'VE COLLECTED AT THE BORDER OR WHETHER IT BE THE IMPACT ON EARNINGS AND DATA SUCH AS INFLATION OVER HERE IN EUROPE. I THINK THAT STILL HAS TIME TO PLAY OUT HERE. I WOULD DRAW THE DISTINCTION THE POLICY IN THE EURO ZONE COMPARED TO POLICY WHETHER IT BE HERE IN THE U.K., THE U.S., IS DEFINITELY ON THE MORE ACCOMMODATIVE SIDE. HE MUCH IN LINE WITH WHERE THE BALANCE OF THE ECB WANT TO SEE INTEREST RATES. REMEMBER, NEXT YEAR WE HAVE GOT SIGNIFICANT FISCAL THRUSTER BE GIVEN IN TO COME ACROSS YOUR ZONE. BEGINNING TO REVERBERATE FROM GERMANY. MAKE NO MISTAKE, THE OUTLOOK FOR THE EURO ZONE HAS TOPSIDE RISK BECAUSE OF RELATIVELY EASY AND SEVERAL POLICY. BUT ALSO THE ROOM TO BE ABLE TO DO THIS FISCAL PUSH WHICH TOGETHER WE THINK CAN REALLY PUSH EUROPEAN GROWTH TO SURPRISE POSSIBLY TO THE TOPSIDE OVER HER FULL YEAR 2026 AND 2027. AGAINST THAT BACKDROP, I THINK THE ECB BEING A LITTLE MORE OF A WAIT AND SEE MODE IS PROBABLY APPROPRIATE. YES, THERE IS A DISINFLATIONARY IMPACT OF TARIFFS. FRANKLY, IT LEAVES A GOOD OVERHANG IN COUNTRIES OUTSIDE THE U.S. BUT OF COURSE THERE IS ALL OF THIS GOOD STUFF FROM FISCAL AND I DON'T THINK THE ECB WANT TO BE CAUGHT NAPPING, CUTTING RATES AND THEN SOMEBODY AVENUE PUSH THE BACKUP AGAIN -- SUDDENLY HAVING TO PUSH THE BACKUP AGAIN. JOUHMANNA: YOU ARE PRETTY BULLISH. WHAT ABOUT FRANCE FROM THE ELEPHANT IN THE ROOM? ARE YOU NOT WORRIED ABOUT PERHAPS THE MORE BROADER, SYSTEMIC IMPACT SOME OF THE POLITICAL GYRATIONS ON CONFERENCE COULD HAVE ON THE REST OF THE EURO ZONE? > > I'M ALWAYS WORRIED ABOUT POLITICS. AT THE END OF THE DAY, THAT IS JUST A MATTER OF LIFE WHEN IT COMES TO MARKETS. A LOT OF WHAT WE TRY TO DO IS SEPARATE OUT THE SIGNAL FROM THE NOISE. IN THE EURO ZONE, THERE ARE 19 COUNTRIES -- ALL OF THEM WITH FOUR TO FIVE YEAR ELECTION CYCLE. IF WE GET HUNG UP TOO MUCH ON ONE OF THEM, I THINK WE MISS THE GENERAL MOVE WHICH HAS BEEN TOWARD THE FISCAL IMPROVEMENT IN EUROPE, RELATIVELY LOW RATES ENVIRONMENT, AT THE BEGINNING WE ARE SICK IN TERMS OF THE TURNS AND ECONOMIC DATA GO PLACES LIKE GERMANY, ONGOING STRENGTH IN PLACES LIKE SPAIN. SURE, THERE ISSUES ENCOURAGED BY SOME OF THE COMMENTARY TO TRY TO RUN REPAIR AND AVOID STEP ELECTION IS TODAY. I THINK WE HAVE TO REALIZE THIS IS BACKGROUND NOISE ACROSS YOUR ZONE AS JUST A MATTER OF LIFE. I WOULD LOOK THROUGH THE ECONOMIC DATA AND THE OPPORTUNITY FOR GROWTH TO EXPAND ACROSS THE BLOC AS A WHOLE. JOUHMANNA: THANK YOU SO MUCH FOR COMING ON THE SHOW, JOHN BILTON, JP MORGAN. NOT JUST NVIDIA, THERE ARE OTHER CORPORATE EARNINGS WE ARE KEEPING AN EYE ON. PERNOD SHARES GAIN AS MUCH AS 8%. THE COMPANY EXPENSE OVERALL SALES TO IMPROVE TOWARD THE SECOND HALF WITH AVERAGE GROWTH BETWEEN 3% AND 6% FROM 2027. FOR MORE, I'M JOINED NOW BY JENNIFER CURRY. IT IS INTERESTING BECAUSE THEY ARE ONE OF THE STOCKS WERE PEOPLE PERHAPS HAS SUCH LOW EXPECTATIONS, THE BUYER WAS PRETTY LOW FOR A BEAT HERE. WHAT DID WE LEARN FROM WHAT THEY RELEASE ON THE EARNINGS THIS MORNING, ESPECIALLY AS IT PERTAINS TO SALES IN BOTH CHINA AND IN THE U.S.? > > DEFINITELY SURPRISED THE MARKET. FOR Q4 SALES, THERE WAS A BEAT. IT WAS FAIRLY FLAT. IT WAS BETTER THAN THE .8% DECLINE THAT ANALYSTS WERE EXPECTING AND FOR FULL YOUR PROFIT THERE WAS ALSO A BEAT. UNSURPRISINGLY, STILL A BIT OF WEAKNESS IN CHINA AND THE U.S. IN CHINA, ORGANIC SALES DOWN 21%. THAT IS DUE TO SOFTER DEMAND, IMPACT OF TARIFFS, THE REMOVAL OF DUTY-FREE COGNAC SALES. IN THE U.S., SOME OF THAT WEAKNESS IS DUE TO TARIFFS AS WELL. ONE INTERESTING LINE FOR MANAGEMENT TODAY IS SOME BULLISH STATEMENTS ON THE OUTLOOK FOR GLOBAL TRAVEL RETAIL WITH THE RESUMPTION OF DUTY-FREE SALES IN CHINA AND THAT'S EXPECTED TO COME INTO EFFECT IN Q2. LOOKING AHEAD, IN Q1 OF THIS FISCAL YEAR, THE COMPANY IS EXPECTING THERE TO STILL BE SOME WEAKNESS BUT A LOT OF THAT RECOVERY WILL THE WEIGHTED TOWARD THE BACKEND OF THIS YEAR. SO THINGS ARE LOOKING UP FOR THE COMPANY AND YOU CAN SEE THAT REFLECTED IN THE SHARE PRICE TODAY. JOUHMANNA: MOST DEFINITELY COME UP ALMOST 60%. THANK YOU, JENNIFER. I WANT TO BRING YOU SOME LINES WE GOT THROUGH ON SELLING TAKING PLACE IN HONG KONG STOCKS. INVESTORS IN THE MAINLAND CHINA HAVE SOLD A RECORD 20.4 HONG KONG DOLLAR -- $20.4 BILLION HONG KONG, 2.6 BILLION DOLLARS, WITHOUT OF HONG KONG LISTED STOCKS ON THURSDAY, TODAY. THE REIT IS PERHAPS THIS MEAN SOME OF THOSE INVESTORS ARE ACTUALLY RETURNING TO THE LOCAL MARKET INVESTING BACK ON SHORE IN CHINESE EQUITIES. AS WE'VE BEEN TALKING ABOUT THE LAST COUPLE OF WEEKS, CHINESE EQUITIES ARE IN THE MIDDLE OF A $1 TRILLION RALLY. THERE YOU HAVE IT. SOME OF THOSE LIQUIDITY METRICS COMING THROUGH THIS MORNING, SELLING COMING THROUGH FROM MAINLAND CHINA ON THE HONG KONG STOCK EXCHANGE. ALSO BEAR IN MIND THERE WAS A BIT OF A NEGATIVE IMPACT THIS MORNING FROM MITCH ONE THAT PUT ON THE OVERALL INDEX, DOWN ABOUT 10% TODAY IN TRADING. COMING UP, AFTER FIVE YEARS HAVE TENSIONS, CHINA AND INDIA DRAW CLOSER IN THE FACE OF DONALD TRUMP'S TRADE WAR BUT WHO WAS IT THAT MADE THE FIRST MOVE TOWARD REPAIRING THEIR DAMAGED RELATIONSHIP? DETAILS NEXT. THIS IS "BLOOMBERG." ♪ JOUHMANNA: THE INDIAN PRIME MINISTER MODI WILL MEET THE CHINESE PRESIDENT XI JINPING NEXT WEEK AS THE TWO COUNTRIES PUT ASIDE TENSIONS THAT HAD BEEN SIMMERING FOR YEARS. BLOOMBERG NOW UNDERSTANDS IT WAS PRESIDENT XI, THE FIRST MOVE TOWARD REPAIRING THEIR DAMAGED RELATIONSHIP WRITING A LETTER TO THE INDIAN PRESIDENT BACK IN MARCH COINCIDED WITH THE U.S. PRESIDENT RATCHETING UP THE TRADE WAR WITH BEIJING. JOINING ME NOW IS OUR CHIEF ASIA CORRESPONDENT ROSALIND MATHIESON. THIS IS SUCH AN INTERESTING STORY AND PERHAPS SPEAKS TO THE BYPRODUCTS OF TRUMP'S TRADE WAR ESSENTIALLY BRINGING THESE PARTNERS WHO HAD BEEN SOMEWHAT ECONOMIC RIVALS CLOSER TOGETHER. > > THAT'S RIGHT. THERE'S A LONG HISTORY OF TENSION BETWEEN INDIA AND CHINA AND TRADED AS PART OF IT. BUT ALSO THERE HAVE BEEN LONG-RUNNING BORDER DISPUTES BETWEEN THE COUNTRIES THAT FLAREUP QUITE REGULARLY. CHINA SUPPORTING PAKISTAN WHICH INDIA HAS NOT LOOKED FAVORABLE ON. THERE'S A LOT OF UNDERLYING TENSION. THEY BEEN EQUALLY EFFORTS TO PATCH THINGS UP OVER THE YEARS. IN 2023 AND 2024, BUT THEY REALLY DID NOT GO ANYWHERE. WHAT SEEMS TO HAVE BEEN THE CATALYST, THEIR MUTUAL INTEREST IN THE U.S. AND THAT IS DONALD TRUMP'S TRADE WARS, TRADE TENSIONS WITH COUNTRIES, PARTICULARLY OF LATE, AND ZEROING IN ON INDIA FOR PURCHASING RUSSIAN ENERGY, GIVING CHINA A PASS AT THE SAME TIME ON IT. THE RELATIONSHIP BETWEEN THE U.S. AND INDIA HAS DETERIORATED. THERE IS A MUTUAL INTEREST FOR CHINA AND THE U.S. DRAW CLOSER AND TO PAPER OVER THE DIFFERENCES AT LEAST FOR NOW. WHAT WE ARE SEEING IS SOME TANGIBLE SIGNS OF THAT ON THE TRADE FRONT, THE BUSINESS FRONT, AND MOST OF ALL, WITH NARENDRA MODI GOING TO CHINA IN A MATTER OF DAYS TO SIT DOWN WITH XI JINPING MOST OF THE QUESTION IS IN ALL OF THIS, AND THAT LAST -- CANNOT LAST? JOUHMANNA: CHINA IS ALSO COURTING WITH KOREA WITH KIM JONG-UN SET TO ATTEND A MILITARY PARADE IN BEIJING ON WEDNESDAY. HOW SIGNIFICANT IS THAT? > > THAT IS ALSO SIGNIFICANT WHEN YOU LOOK AT THE WAY THE CHESSBOARD IS MOVING BECAUSE YOU WILL HAVE THE LEADER OF THE RUSSIAN PRESIDENT VLADIMIR PUTIN ALSO IN CHINA AT THE SAME TIME WE HAD THE NORTH KOREAN LEADER SAYING I AM COMING ALONG AS WELL WE HAD AND CHINA HAS BEEN A LITTLE ON THE SILENCE WITH NORTH KOREA OF LATE BECAUSE THE RELATIONSHIP HAS BEEN DEEPENING BETWEEN NORTH KOREA AND RUSSIA SO CHINA, MAYBE THIS IS A CHANCE TO GET BACK THERE WITH NORTH KOREA. IT IS ALSO FOR THEM COLLECTIVELY TO SHOW SOME UNITY OF SORTS AGAINST THE U.S. BECAUSE DONALD TRUMP HAS BEEN FLOATING THE IDEA IN THE LAST FEW DAYS AT SOME POINT COULD HE HAVE ANOTHER MEETING WITH THE NORTH KOREAN LEADER? HE HAD TWO SUMMITS WITH KIM JONG-UN IN THE FIRST WAS FAIRLY SUCCESSFUL. THE SECOND ONE DID NOT GO PARTICULARLY WELL. HE IS SAYING MAYBE HE WANTS TO HAVE A CONVERSATION WITH THE NORTH KOREAN LEADER. IT IS QUITE GOOD FROM THE CHINA PERSPECTIVE, FOR THEM AND RUSSIA TO BE HOSTING HIM AT THE SAME TIME NEXT WEEK. IT WILL BE INTERESTING TO SEE WHAT CONVERSATIONS EMERGE TANGIBLY ONCE THEY ARE ALL THERE AT THE TABLE TOGETHER. JOUHMANNA: NO DOUBT PRESIDENT TRUMP WILL BE WATCHING CLOSELY. ROSALIND MATHIESON, THANK YOU SO MUCH. LET'S GET MORE ON A BLOOMBERG SCOOP. WE HAVE LEARNED THE MEXICAN GOVERNMENT PLANS TO INCREASE TARIFFS ON CHINA AS PART OF HIS BUDGET PROPOSAL NEXT MONTH. THE MOVE WOULD PROTECT THE NATION'S BUSINESSES FROM CHEAP IMPORTS AND SATISFY A LONG-STANDING DEMAND OF U.S. PRESIDENT DONALD TRUMP. WE ARE TALKING TO BRANDON MURRAY. FOR ONCE IT IS NOT THE U.S. THAT IS THE SOURCE OF THESE TARIFFS. ACCORDING TO OUR OWN REPORTING, IT IS MEXICO LOOKING TO APPLY TARIFFS ON CHINESE IMPORTS. WHAT IS THE RATIONALE BEHIND IT? > > IF THIS GOES THROUGH, THIS REALLY WOULD PLAY WELL IN WASHINGTON. MEXICO IS TRYING TO WALK A VERY FINE LINE BETWEEN IT'S PROTECTIONISM AGAINST CHINESE IMPORTS AND MAINTAINING SOME SORT OF TIES WITH BEIJING ECONOMICALLY. THERE ARE A LOT OF CONCERNS IN WASHINGTON THAT MEXICO HAS BEEN A BACKDOOR FOR CHINESE PRODUCTS AND INPUTS INTO THINGS LIKE AUTOMOBILES AND MACHINERY. AND SO MEXICO IS APPARENTLY TAKING STEPS TO ADDRESS THOSE CONCERNS AHEAD OF TIME BEFORE THESE TALKS ARE GOING TO GET UNDERWAY BETWEEN OTTAWA, WASHINGTON, AND MEXICO ABOUT RENEGOTIATING THE U.S.-MEXICO-CANADA TRADE AGREEMENT. THIS IS ALL PART OF A LONGER-TERM STRATEGY TO APPEAL TO THE TRUMP ADMINISTRATION IN A WAY THAT SETS IT UP TO RENEGOTIATE A GOOD DEAL ON USMCA. JOUHMANNA: SO THAT IS NORTH AMERICA. JUST GIVE US -- GET US UP TO SPEED ON WHERE THINGS STAND RIGHT NOW WITH THE EU-U.S. TRADE DEAL. > > EUROPEAN UNION IS TRYING TO TAKE SOME LEGISLATIVE STEPS TO PUT INTO EFFECT THE TARIFF DECREASES THAT IT PLEDGED ON U.S. INDUSTRIAL GOODS AS A WAY TO APPEASE AMERICA SO THAT IT WILL LOWER AUTO TARIFFS ON EUROPEAN EXPORTS. THEY ARE TRYING TO RUSH THIS THROUGH TO GET IT DONE. THIS IS PART OF THE FRAMEWORK DEAL. OF COURSE PRESIDENT TRUMP RECENTLY THROUGH THE DIGITAL TAXES ISSUE INTO THE MIX AND POTENTIALLY THREATENS A NEW KIND OF ASSAULT ON EUROPEAN UNION'S DIGITAL REGULATIONS WHICH THE EUROPEAN UNION HAS DRAWN A REDLINE AROUND AND SAID WE HAVE SOVEREIGNTY OVER THIS ISSUE AND YOU CAN'T FORCE US TO DO ANYTHING WITH IT. THEY ARE CLOSE TO GETTING A FRAMEWORK DEAL AND TO FORCE, BUT THERE ARE FACTORS THAT HAVE CROPPED UP THAT HAVE THROWN THAT INTO QUESTION AT THIS STAGE. JOUHMANNA: BRENDAN MURRAY, THANK YOU FOR THE OVERVIEW ON ALL THINGS TRADE AND TARIFF-RELATED. COMING UP, AS MARKETS DIGEST NVIDIA'S EARNINGS, WE WILL EXPLORE THE AI AMBITIONS OF THE U.S. AS CHINA LOOKS TO ERODE AMERICAN DOMINANCE. SO SOME PICTURE THEMES. IN ADDITION TO WHAT WE ACTUALLY GOT AWAY FROM THESE EARNINGS AS THE STOCK SLIPS A LITTLE BIT IN AFTER HOURS, TRADING DOWN ABOUT 2% IS THE LATEST. THAT IS ALL COMING NEXT. THIS IS "BLOOMBERG." ♪ JOUHMANNA: GOOD MORNING AND WELCOME TO "THE PULSE." THESE ARE YOUR TOP STORIES. NVIDIA SLIPS IN PREMARKET TRADING AS A WORLD'S BIGGEST COMPANY SIGNALS A SLOWDOWN AFTER A TWO-YEAR SEARCH IN AI DEMAND. MEXICO PLANS TO RAISE TARIFFS ON CHINA AFTER MONTHS OF PRESSURE FROM PRESIDENT TRUMP. INDIA AND CHINA MOVED TO RESTORE RELATIONS AFTER TRUMP'S TARIFF BARRAGE WITH SOURCES REVEALING DETAILS OF A SECRET LETTER FROM PRESIDENT XI TO HIS INDIAN COUNTERPART. LET'S GO TO OUR TOP STORY WE HAD NVIDIA REPORTED A 56% RISE IN QUARTERLY REVENUE BUT A TEPID FORECAST FOR THE THIRD QUARTER AS INVESTORS WORRIED THE AI BOOM IS SLOWING. THE SELF-PROCLAIMED ENGINE OF AI IS MORE THAN JUST ANOTHER TECH GIANT, IT IS KEY TO PRESIDENT DONALD TRUMP'S $500 BILLION TARGET PROJECT AIMED AT LEADING THE WORLD IN ARTIFICIAL INTELLIGENCE. NVIDIA'S EARNINGS OUTLOOK IS ALSO WINTER TO THE PROSPECTS OF OTHER TECH COMPANY THAT ON A COMPUTING. -- THAT'S ON A COMPUTING. SOME OF THE BIG TRADES IN THE SPACE, TH ADRIAN COX JOINS US. IT COULD HAVE YOU WITH US. AS I WAS JUST SAYING IN THE INTRO TO YOU, NVIDIA HAS BEEN THE POSTER CHILD FOR AI, AI AMBITIONS, EVEN SINGLE HANDLE CONSTITUTES A PERCENT OF THE S & P. YOU CAN'T OVERSTATE ITS IMPORTANCE. DO YOU THINK WHAT WE GOT YESTERDAY OUT OF THESE EARNINGS IS BROADLY STILL POSITIVE FOR THE AI SECTOR AS A WHOLE? > > YES, I THINK AS YOU SAY, AI HAS BECOME A POSTER CHILD BUT ALSO TO MIX METAPHORS SLIGHTLY, IT IS ALSO THE CANARY IN A COAL MINE EVERYONE IS LOOKING AT. THERE IS AN ALMOST COTTAGE INDUSTRY OF PEOPLE TRYING TO SEEK WHETHER THERE IS GOING TO BE A SLOW DOWN OR EVEN A BURSTING OF THIS BOON WE HAVE SEEN IN AI IN RECENT MONTHS. NVIDIA OBVIOUSLY IS AT THE HEART OF THAT BECAUSE NOT ONLY IS IT PRODUCING 90% OF THE KEY CHIPS WHICH ARE CENTRAL -- ESSENTIAL FOR THE MOST SOPHISTICATED AI, IT IS FOUND ITSELF THE FULCRUM OF A GEOPOLITICAL CONTEST WHICH IS GOING ON BETWEEN THE U.S. AND CHINA. NVIDIA HAS ON HIS HIDE THE FACT THAT, NUMBER ONE, THE CHIPS THEMSELVES BUT ALSO IT HAS THE SOFTWARE WHICH PUMP SET UP AND ALSO THE WHOLE NETWORK OF INFRASTRUCTURE OF CLIENTS AND OF SUPPLIERS. WHICH MAKES IT VERY HARD TO CHALLENGE. AT THE SAME TIME, IF YOU LOOK AT THE U.S., THE U.S. HAS A NUMBER OF ADVANTAGES IN TERMS OF ITS ECOSYSTEM BUT IT IS NOT YET THEY ARE. CHINA IS A VERY STRONG COMPETITOR IN POOR AREAS WE SOMETIMES FORGET. LIKE FOR EXAMPLE, PATENTS, BUILDING HIS OWN CHIPS. JOUHMANNA: SO I'M GOING TO GET THERE IN A SECOND BUT I JUST WANT TO BRING IT BACK TO SOMETHING I PICKED UP ON FROM JENSEN HUANG'S COMMENTS YESTERDAY. HE TALKED ABOUT $3 TRILLION TO PORTRAY DOLLARS IN INFRASTRUCTURE SPEND -- T O $4 TRILLION IN INFRASTRUCTURE SPEND. HOW MUCH WILL BE POSITIVE FROM AN OPERATIONAL STANDPOINT WHEN IT COMES TO THE UNDERLYING BUSINESSES? HOW MUCH OF THAT REALLY IS GOING TO BE ABLE TO BE MONETIZED IS MY QUESTION? > > VERY DIFFICULT QUESTION. IF YOU HAVE A LOOK AT THE AMOUNT THAT THE HYPERSCALERS, THE BIG FOUR COMPANIES, ARE GOING TO SPEND, IT IS AROUND $300 BILLION OR MORE THIS YEAR. AT THE MOMENT, THEY SAY THE DEMAND IS OUTPACING THE SUPPLY. THAT IS FORECAST TO GO ON FOR YEARS TO COME. IT IS NOT JUST THE DEMAND COMING FROM THESE HYPERSCALERS BUT NVIDIA IS A BROADENING THAT OUT OTHER AREAS. THE MORE IMPORTANT QUESTION REALLY IS WHETHER THERE IS LIFE IN AI BEYOND JUST THIS FOCUS ON DATA CENTER BUILDOUT AT THE MOMENT. I WOULD SAY, YES, THERE IS. IT IS A TECHNOLOGY FAIRLY MISUNDERSTOOD AT THE MOMENT BECAUSE PEOPLE FOCUS ON THE IDEA OF IT BEING INTELLIGENT AND SOMETIMES EXPECTATIONS RUN AWAY WITH REALITY. ACTUALLY FOR THE COMPANIES WHICH ARE AT THE CENTER OF IT, NVIDIA AND HYPERSCALERS, THEY'RE GENERATING REVENUE AT THE MOMENT WHICH IS JUSTIFYING A LOT OF THAT EXPENDITURE IN SOFTWARE WHICH IS LIKELY TO BE TRANSFORMATIVE -- EVEN IF IT WERE JUST TO STAY THE WAY IT IS AT THE MOMENT AND CARRY ON FOR SEVERAL YEARS, LEARNING HOW TO IMPLEMENT IT, USE IT MORE EFFECTIVELY. JOUHMANNA: YEAH, SO INTERESTING. THAT'S COME BACK TO WHAT YOU WERE SAYING ABOUT CHINA AND ONE OF THE OTHER INTERESTING THINGS THAT STOOD OUT TO BE FROM THE EARNINGS CALL WAS THE FACT THAT NVIDIA DID NOT SELL ANY H20 CHIPS INTO CHINA IN THE LAST QUARTER BUT WHAT THAT HAS SPENT HIS CHINA HAS HAD TO WORK ON THEIR OWN ECOSYSTEM AND BUILD UP THEIR OWN CHIPMAKING ABILITIES AND ACHIEVE SOME LEVEL OF AUTONOMY. HOW DO YOU SEE THAT RACE BETWEEN CHINA AND U.S. PLAYING OUT IN THE COMING QUARTERS? > > THERE ARE NUMBER OF FACTORS WITH CHINA AND CHIPS. ONE OF WHICH IS THAT THEY HAVE BEEN ABLE TO MAKE USE OF THE CHIPS WHICH THEY HAVE, WHICH ARE SORT OF A DUMBED DOWN VERSION OF THE MOST SOPHISTICATED CHIPS, AND WERE ABLE TO DEVELOP DEEPSEEK -- WHICH IS THE LARGE LANGUAGE MODEL WHICH REALLY SET OF CONCERNS BACK EARLIER THIS YEAR ABOUT WHETHER IT WAS SUSTAINABLE, WHETHER THE AI SPEND WAS SUSTAINABLE. ON TOP OF THAT, THERE BEEN ACCUSATIONS FROM U.S. OFFICIALS THAT CHINA IS ABLE TO GET CHIPS THROUGH THE BACK DOOR. MOST IMPORTANTLY, THEIR DEVELOPING THEIR OWN CHIPS SO THERE WAS A REPORT JUST IN THE LAST FEW HOURS ABOUT CHINA LOOKING TO TRIPLE ITS PRODUCTION OF AI ACCELERATED CHIPS OVER THE NEXT YEAR. THAT IS AN EXTREME THE DIFFICULTY TO DO AND IT COMES DOWN NOT JUST TO THE CHIPS THEMSELVES, BUT ALSO TO THE EQUIPMENT USED TO BUILD THE CHIPS. THESE ARE $400 BILLION MACHINES WHICH ARE BEING USED TO CREATE CHIPS. IT IS NOT SOMETHING YOU CAN JUST SWITCH ON WITH THE FLICK OF A SWITCH. HAVING SAID THAT, CHINA IS VERY MUCH LEADING THE WAY IN A NUMBER OF AREAS WHERE THE U.S. IS POTENTIALLY SLIGHTLY ON THE BACK FOOT SO WHILE THE U.S. HAS THE ADVANTAGE FOR EXAMPLE IN TALENT AND PRIVATE INVESTMENT IN AI, CHINA HAS THE EDGE WHEN IT COMES TO GOVERNMENT INVESTMENT BUT ALSO ACTUALLY ON RESEARCH AND DEVELOPMENT. 70% OF THE PATTERNS THAT ARE COMING OUT ON AI AT THE MOMENT VERSUS -- 2024 VERSUS 14% FOR THE U.S. COMING OUT OF CHINA, SO THERE IS DEFINITELY A LOT OF DEVELOPMENT GOING ON. YOU CAN SEE THEREFORE WHY SO CONCERNED WITH ITS AI ACTION PLAN IN MAKING SURE IT CAN MAINTAIN ITS LEAD AGAINST CHINA AND NOT CEDE THAT TOO IS A GEOPOLITICAL RIVAL. JOUHMANNA: REALLY FASCINATING. I GUESS MY FOLLOWING QUESTION FROM THAT IS, IS IT ULTIMATELY A ZERO-SUM GAME BETWEEN THE U.S. AND CHINA? IS CHINA'S GAIN THE U.S.'S LOSS OR ARE THEY TARGETING DIFFERENT CLIENTS, EVENTUAL END USERS? > > IT IS AN INTERESTING QUESTION. THAT IS VERY MUCH THE UNDERLYING MESSAGE YOU GOT IN THE AI PLAN, THAT THE U.S. DOES SEE THIS AS A ZERO-SUM GAME. PART OF THE BIG DEBATE THAT IS HAPPENING ABOUT NVIDIA AND ALSO THE OTHER U.S. CHIP SUPPLIERS IS WHETHER YOU NEED TO JUST SEND THEM ENOUGH IN ORDER TO BE ABLE FOR CHINA AND THE REST OF THE WORLD, ENOUGH CHIPS TO BE ABLE TO GET PEOPLE LOOPED INTO THAT ECOSYSTEM SO IT MAKES IT HARD FOR THEM TO DEVELOP THEIR OWN COMPETITIVE OFFERING. YOU SEE ON THE SAME SIDE THE CHINESE REACTING TO THAT BY SAYING, WELL, WE WANT TO RESTRICT THE U.S. OF U.S. CHIPS OR WE WANT TO ENCOURAGE PEOPLE TO USE ALTERNATIVES TO DOMESTIC ALTERNATIVES TO U.S. CHIPS AS A WAY TO AVOID DEPENDENCIES ON BOTH SIDES. THEN OF COURSE, THERE ARE THE UNDERLYING DEPENDENCIES AS WELL LIKE, FOR EXAMPLE, THE FACT NVIDIA IS IT MAJOR CHIPS MADE BY TMC IN TAIWAN WHICH ITSELF IS THE CENTER OF NOT JUST A SEISMIC BUT ACTUALLY ACHIEVE POLITICAL FAULT -- GEOPOLITICAL FAULT WITH U.S. AND CHINA AS WELL. IT IS A FASCINATING AREA WHERE THERE ARE 70 DIFFERENT COMPETING ELEMENTS, POSSIBLY UNLIKE ANY OTHER KIND OF BOON WE HAVE SEEN IN THE PAST. JOUHMANNA: DIFFICULT TO UNPACK IT ALL IN SEVEN OR EIGHT MINUTE INTERVIEW BUT YOU CERTAINLY DID YOUR BEST. MAKE IT SO MUCH FOR JOINING US ON THE SHOW, ADRIAN COX, DEUTSCHE BANK RESEARCH. JULY NEW CAR SALES DATA FOR EUROPE HAS SHOWN THE BIGGEST JUMP IN OVER A YEAR. ACCORDING TO THE EUROPEAN AUTOMOBILE MANUFACTURERS ASSOCIATION, REGISTRATIONS CLIMBED 5.9% FROM YOUR EARLIER DRIVEN BY MICELLES ARE FULLY ELECTRIC AND HYBRID MODELS. STOCKS DROP SHARPLY AFTER LOW COST -- LOW COST DEMAND. RYANAIR EXPECTED TO RECEIVE 25 737'S BETWEEN AUGUST AND OCTOBER. HE SPOKE TO GUY JOHNSON. > > I COULD WE ARE REASONABLY OPTIMISTIC. I'M NOT SURE THE MARKET IS RIGHT BUT WE HAVE HAD CONSTRAINED CAPACITY GROW SO BOEING LEFT A SHORT OF AIRCRAFT, THE SUMMER HAS BEEN STRONG, FORWARD BOOKINGS ARE ABOUT THEIR SLASHER FARES WERE DOWN ABOUT 7%. IT LOOKS LIKE WE WILL GET BACK MOST OF THAT 7% DECLINE THIS YEAR. NOT ALL BUT I WOULD BE -- GUY: WHERE'S THE MARKET LOOKING WRONG? > > FARES ARE RECOVERING BECAUSE CAPACITY IS CONSTRAINED. STRONG DEMAND FOR AIR TRAVEL. CERTAINLY FROM U.K. TO EUROPE. GUY: YOU'RE GOING TO GET MORE AIRCRAFT FROM BOEING. YOU'RE GETTING 737'S EARLIER THAN ANTICIPATED, OCTOBER RATHER THAN SIX MONTHS LATER. DOES THAT MEAN YOU INCREASE YOUR PASSENGER TARGETS? > > NOT IN THE U.K. WE ARE GROWING STRONGLY -- GUY: YOU'RE GOING TO RAISE PASSENGER NUMBERS BECAUSE OF THE AIRCRAFT? > > THIS YEAR WE WILL DO ABOUT 206 MILLION PASSENGERS. NEXT YEAR, SUMMER 2026, GROW ABOUT 250 MILLION PASSENGERS. GUY: DOES THAT BRING FORWARD THE AIRCRAFT? > > WE'RE TAKING THE AIRCRAFT EARLY TO SECURE THAT GROWTH FOR NEXT SUMMER. THE ONLY AREA WE CAN DEPLOY THOSE 25 EXTRA AIRCRAFT WOULD BE THIS CHRISTMAS. THERE WILL BE A LOT OF ADDITIONAL FLIGHTS INCLUDING EVEN IN THE U.K. AT CHRISTMAS BUT OTHER THAN THAT, NO, WE SET THEM ON THE GROUND. GUY: ARE YOU WORRIED ABOUT TARIFFS? > > WE ARE BRINGING THEM IN EARLY BECAUSE WE ARE WORRIED ABOUT TARIFFS BUT ALSO WORRIED SOMETHING IS MIKE: WRONG WITH BOEING SO GET THEM IN EARLY. -- SOMETHING MIGHT GO WRONG WITH GOING SO GET THEM IN EARLY. GUY: STILL WORRIED THINGS COULD GO WRONG? > > WE SHOULD ALWAYS BE WORRIED. THE EXPERIENCE OF BOEING -- THE FACT THAT BOEING WERE ABLE TO DELIVER THESE FOUR TO FIVE MONTHS EARLY IS A GOOD SIGN THE MANUFACTURING PROCESS IS GOING WELL. THE QUALITY OF THE AIRCRAFT WE ARE GETTING FROM THE FUSELAGE COMES AIRCRAFT MEASURABLY IMPROVED THE LAST 12 TO EIGHT MONTHS. GUY: SCOTT BESSENT HAS BEEN ON TELEVISION AND HE HAS CRITICIZED BOEING FOR DELIVERY A MASSIVE BUYBACK RATHER THAN INVESTING IN R & D. YOU HAVE SOME SYMPATHY? FOLKS I DON'T REALLY. SCOTT BESSENT, HE SHOULD BE SUPPORTING BOEING. ONE OF THE REASONS BOEING CAN'T MAKE MORE AIRCRAFT IS THE FAA WON'T APPROVE THE INCREASE IN PRODUCTION RATE FROM 38 TO 42. WE STILL NEED TO GET THE MAG SEVEN, MAX 10 CERTIFIED. SCOTT BESSENT, SECRETARY OF TRANSFER -- GET THE INCREASE, GET THE PRODUCTION RATE UP AND CERTIFY THE MAX 7 AND MAX 10. JOUHMANNA: THAT WAS THE RYANAIR CEO SPEAKING WITH GUY JOHNSON. COMING UP, WE SPEAK TO CHATHAM HOUSE ORYSIA LUTSEVYCH ABOUT PRESIDENT TRUMP'S EFFORTS TO END THE RUSSIA-UKRAINE WERE AND WHETHER THEY ARE WORKING. THAT IS NEXT. THIS IS "BLOOMBERG." ♪ JOUHMANNA: THE FRENCH PRIME MINISTER BAYROU SAYS HE WILL NEGOTIATE DIRECTLY WITH LAWMAKERS NEXT WEEK AND HAS WARNED AGAINST NEW ELECTIONS AS HE BATTLES STOP FRANCE'S PARLIAMENT FROM FORCING HIM TO RESIGN. HE SAYS SERIOUS DISCUSSIONS MUST BEGIN OVER NEXT MONTH'S CONFIDENCE VOTE. > > THERE ARE 12 DAYS LEFT AND 12 DAYS IS A LOT OF TALK. I SAID SOMETHING SIMPLE, WE HAVE AN OPEN NEGOTIATIONS BECAUSE -- WE HAVE IT OPEN TO NEGOTIATION BECAUSE THERE IS A QUESTION AS BEFORE NEGOTIATIONS. IT IS WHETHER WE AGREE ON THE SERIOUSNESS AND URGENCY OF THE SITUATION AND IF WE AGREE ON THE SERIOUSNESS AND URGENCY, THEN WE OPEN NEGOTIATIONS. WE WILL STILL HAVE A MONTH BEFORE THE PRESENTATION OF THE BUDGET. WE HAVE PLENTY OF TIME TO LOOK AT THINGS. I SAID I WAS READY TO EXAMINE MEASURE BY MEASURE, AS THEY SAY, DECISION BY DECISION, EVERYTHING WE HAVE ANNOUNCED. JOUHMANNA: LET'S GET MORE WITH CAROLINE IN PARIS ALSO INTERESTING TO HEAR FROM THE PRIME MINISTER BAYROU. HE SEEMS TO THINK HE CAN WIN OVER SOME LAWMAKERS AND CONVINCE THEM NOT TO VOTE AGAINST THE GOVERNMENT THAT THIS CONFIDENCE VOTE SEPTEMBER 8. HOW SUCCESSFUL IS HE GOING TO BE? > > PUBLIC OPINION ON THIS 8:00 NEWS. LAST NIGHT. HE BELIEVES HE CAN MAKE IT THROUGH SEPTEMBER 8 EVEN THOUGH HE ACKNOWLEDGED MATHEMATICALLY IT IS NOT LOOKING GOOD. HE SAYS HE IS GOING TO GATHER ALL OF THE OPPOSITION PARTIES NEXT WEEK IN ORDER TO TRY TO CONVINCE THEM THE DEBT ISSUE IS THE MOST IMPORTANT ISSUE OF ALL. HE SAID THAT EVERY SINGLE MEASURE CAN BE DISCUSSED, INCLUDING THE PROPOSAL OF SCRAPPING TWO BANK HOLIDAYS, INCLUDING TAXING THE HIGHEST EARNERS, INCLUDING ALL THE MEASURES THAT THEY SAID SHOULD GET OUT OF THIS BUDGET. IN THE MOMENT, THEY HAVE CLOSE THE DOOR AND SAID THEY WILL NOT SUPPORT THIS VOTE OF CONFIDENCE. BUT THERE SEEMS TO BE ALSO MUSIC GOING ON INCLUDING IN MACRON THIS IS "BLOOMBERG." ♪ 'S CAMP ABOUT STEP LEGISLATIVE ELECTIONS. TO THE SOCIALIST REALLY WANT THAT? THEY HAVE BROKEN THEIR ALLIANCE WITH THE FAR LEFT. SOME OF THEM MIGHT LOSE THEIR SEATS IF THERE ARE NEW SNAP ELECTIONS. LAST NIGHT, CLEARLY, THE PRIME MINISTER FRANCOIS BAYROU SAID THIS WILL NOT PROVIDE ANY MORE STABILITY TO FRANCE. JOUHMANNA: MEANWHILE COME THE PRESIDENT IS DOING A LITTLE BIT OF HOSTING OF HIS OWN TONIGHT. THE FRANCO GERMAN SUMMIT. CHANCELLOR MURCH HEADED TO -- MERZ. HEADED TO FRANCE. ? WHAT ARE WE EXPECTING? > > IT WAS BEEN A COUPLE OF DAYS TOGETHER IN MOLDOVA TRIED TO DEFEND THE MOLDOVAN PRESIDENT AGAINST POSSIBLE RUSSIAN THREATS IN THE NEXT PARLIAMENTARIAN ELECTIONS AND TONIGHT THEY ARE STILL TOGETHER, THIS TIME THE SUMMER RESIDENCE OF EMMANUEL MACRON. LAST TIME HE INVITED A GERMAN CHANCELLOR THERE WAS IN 2020 FOR ANGELA MERKEL. QUITE A RARE OCCASION. TOMORROW WE WILL HAVE ANOTHER MEETING OF THE CABINET WITH 10 MINISTERS FROM EACH SIDE. THEY WILL DISCUSS TRADE BUT ALSO DEFENSE AND SECURITY. ONE ELEPHANT IN THE ROOM WILL BE THIS NEXT GENERATION FIGHTER JET. THIS IS SUPPOSED TO BE A JOINT PROJECT BETWEEN FRANCE, GERMANY, AND SPAIN. THE FRENCH COMPANY HAS SAID THEY WANT TO TAKE 80% OF THE WORK SHARE OF THE NEXT GENERATION FIGHTER JET. SOMETHING GERMANY IS OPPOSED TO. THEY WANT BROADLY IN EQUAL SHARE OF WORK. THAT IS SOMETHING THAT WILL BE DISCUSSED. PERHAPS THEY WILL MAKE SOME PROGRESS ON THIS TOPIC DURING THE CABINET MEETING IN FRANCE. JOUHMANNA: CAROLINE IN PARIS, THANK YOU. BLOOMBERG HAS LEARNED PRESIDENT DONALD TRUMP SPECIAL ENVOY STEVE WITKOFF WILL MEET THE UKRAINIAN DELEGATION TO THE U.S. THIS WEEK AS ALICE DISCUSSED POSSIBLE SECURITY GUARANTEES FOR THE WAR-RAVAGED NATION. OVERNIGHT, RUSSIA UNLEASHED A WAVE OF DRONE AND MISSILE STRIKES ON KYIV, KILLING 14 PEOPLE. JOINING ME NOW IS ORYSIA LUTSEVYCH. GOOD TO HAVE YOU WITH US. THERE WAS A LOT OF OPTIMISM AND HOPE I GUESS AROUND THE ALASKA SUMMIT A COUPLE OF WEEKS AGO AND ZELENSKYY'S VISIT TO THE U.S. THAT WE MAY SEE SOME FORM OF A BREAKTHROUGH OR AT LEAST PROGRESS WHEN IT COMES TO A PEACE DEAL. AND YET AS WE TALK ABOUT THIS, RUSSIA ATTACKS ON KYIV KEEP GOING OVERNIGHT ANOTHER -- AND ANOTHER MASSIVE AERIAL SALT. WHAT HOPE IS THERE OF A BREAKTHROUGH AT THIS POINT? > > YOU MENTIONED SOME OPTIMISM, A HOPE AROUND THE ALASKA SUMMIT. BUT IN UKRAINE, THIS EVENT WAS DESCRIBED AS SHAMEFUL AND DESPICABLE BECAUSE IN A WAY, IT ROLLED THE RED CARPET IN FRONT OF PUTIN, SOMEBODY WHO IS COME AS YOU SEE NIGHTLY, BOMBARDING UKRAINIAN CITIES, TERRORIZING CIVILIANS WITHOUT ANY SIGN OF WILLINGNESS TO EITHER AGREE TO A CEASE-FIRE OR NEGOTIATE IN EARNEST. IN WAY, ALASKA EMBOLDENED PUTIN TO CONTINUE HIS WAR, UNPROVOKED YOU CREATION -- AGGRESSION AGAINST UKRAINE. PRESIDENT TRUMP EMBARKED ON THIS PLEASING, THINKS IF HE LOOKS IN PUTIN'SEYE AND OURS SOME ECONOMIC DEAL, THIS WILL BE ENOUGH FOR PUTIN TO STOP THE WAR . PUTIN HAS ACHIEVED NONE OF HIS POLITICAL OBJECTIVES AND ALL HE WANTS TO USE THE WAR IN UKRAINE TO SPLIT THE UNITED STATES FROM EUROPE. JOUHMANNA: LET ME ASK YOU A QUESTION ABOUT LAND SWAPS. THAT IS ONE OF THE TOPICS THAT CAME UP IN THE RUN-UP TO THE ALASKA SUMMIT AND ALSO OUT OF IT AS WELL. HOW REALISTIC IS IT TO EXPECT PRESIDENT ZELENSKYY, UKRAINE, TO CEDE TERRITORY IN THE DONBAS IN EXCHANGE FOR FIRMER SECURITY GUARANTEES OUT OF YOUR AND POTENTIALLY THE U.S. AS WELL? SET A REALISTIC QUID PRO QUO? > > I THINK THIS IS A RATHER ABSURD IDEA FOR TWO REASONS. ONE, YOU CAN DO LAND SWAPS BETWEEN THE TERRITORIES OF RUSSIA AND UKRAINE. BUT AS WE KNOW, UKRAINE RIGHT NOW DOES NOT CONTROL ANY RUSSIAN TERRITORY AND IT CANNOT SWAP ITS OWN TERRITORY. SECONDLY, THERE IS AN IRONCLAD PRINCIPLE THAT THE BORDERS SHOULD NOT BE CHANGED BY FORCE. WE DO KNOW THAT UKRAINE AND EASTERN EUROPE ALLIANCE DISAGREE WITH THIS PRINCIPLE. FINALLY, WHY SHOULD UKRAINE WITHDRAW FROM HIS LEGAL TERRITORY TO GIVE PASSAGE TO THE RUSSIAN ARMY THAT IS TORTURING, KILLING, AND RAPING CIVILIANS? THIS WOULD BE TOTALLY IMMORAL ON THE SIDE OF PRESIDENT ZELENSKYY AND IS NOT SUPPORTED BY UKRAINIAN PEOPLE. NEARLY 70% OF UKRAINIANS ARE AGAINST THIS IDEA. JOUHMANNA: SO DO YOU THINK THE U.S. SHOULD BE APPLYING MORE PRESSURE ON RUSSIA? IF THAT IS THE CASE, WHAT IS THAT PRESSURE LOOK LIKE? > > I THINK THIS HAS BEEN -- THE FIRST TASTE OF THE TRUMP ADMINISTRATION COME ESPECIALLY IN KYIV, THAT HE WILL TRY TO PURSUE PEACE THROUGH FORCE. SO FAR NO FORCE IMPOSED ON PUTIN . THAT COULD BE A VARIETY OF ACTIONS. ONE, SECONDARY SANCTIONS ON COUNTRIES THAT ARE BUYING RUSSIAN OIL. WE HAVE SEEN SOME OF IT IMPOSED ON INDIA THROUGH THE TARIFFS. SECOND, SUPPLIED TO MORE ADVANCED WEAPONS AND NOT LIMITING THE RANGE OF MISSILES THE U.S. PROVIDES TO UKRAINE AND ENABLING IT TO STRIKE MILITARY TARGETS INSIDE RUSSIA. THE THIRD ONE IS TO ACTUALLY CONTINUE THE PIPELINE OF SUPPORT TO UKRAINE TOGETHER WITH EUROPE SO THAT PUTIN UNDERSTANDS HE CANNOT WIN THIS WAR, THAT THE WEST WILL NOT ABANDON UKRAINE, AND TRUMP WILL NOT AGREE TO THE LIST OF HIS CAPITULATION DEMANDS THAT HE SEEMS TO BE PUTTING ON THE TABLE IN FRONT OF TRUMP, INCLUDING THE LAND SWAPS WE HAVE DISCUSSED. JOUHMANNA: HOW LIKELY IS IT THAT A TRILATERAL SUMMIT BETWEEN TROMP, PUTIN, AND ZELENSKYY WILL TAKE PLACE? DO YOU SEE THAT HAPPENING? > > WE DO KNOW FROM PRESIDENT TRUMP HE WILL ONLY HAVE A TRILATERAL SUMMIT IF THERE IS A BILATERAL MEETING THAT YIELDS SOME RESULT BETWEEN PRESIDENT ZELENSKYY AND PRESIDENT PUTIN. AT THIS STAGE, RUSSIANS ARE PUTTING ON THE TABLE A REQUEST TO UKRAINIAN SIDE THAT THEY KNOW UKRAINE CANNOT ACCEPT. THIS REQUEST IS BASICALLY THAT UKRAINE SHOULD HAVE A LIMITED SOVEREIGNTY. IT SHOULD AGREE, FOR EXAMPLE, TO RUSSIAN DEMANDS FOR THE RIGHT OF ETHNIC SPEAKING RUSSIAN MINORITY OR RUSSIAN ORTHODOX CHURCH OR FOR THE SAME MATTER, THE SIZE OF UKRAINIAN ARMY. THEY KEEP BRINGING BACK DEMANDS FROM A SYMBOL MEETING. THIS IS PROBLEMATIC. IT IS UNLIKELY THAT THIS MEETING BETWEEN UKRAINE AND RUSSIA WILL TAKE PLACE AT A HIGH LEVEL. JOUHMANNA: CAN I ASK YOU ABOUT HOW YOUR THINKING TOWARD EUROPEAN RESPONSE TO ALL OF THIS AND THE REAL MOVE TO PUT TOGETHER A COALITION BECOME A BIT MORE SELF-RELIANT ON SELF-DEFENSE AS OPPOSED TO LEANING ON THE U.S.? WHERE DO YOU SEE ALL OF THIS LEADING? > > WE SEE THAT UNITED STATES WANTS TO REFOCUS AND RECALIBRATE ITS MILITARY ASSETS FROM EUROPE INTO PACIFIC TO DETER AND POSSIBLY FACE CHINA IN FUTURE WAR. THAT MEANS EUROPE HAS TO BUILD ITS OWN MILITARY CAPABILITIES TO BE ABLE TO DETER RUSSIA AND DEFEND UKRAINE. THAT IS WHY THAT MEETING IN WASHINGTON LAST WEEK WAS SO SIGNIFICANT THAT UKRAINE WAS STANDING SHOULDER TO SHOULDER WITH EUROPEANS BECAUSE UKRAINIAN MILITARY CAPABILITIES ESPECIALLY IN A NEW TYPE OF WARFARE, DRONES, ELECTRONIC WARFARE, VERY SIGNIFICANT AND COULD ACTUALLY BE AN ASSET FOR YOUR BROTHER THAT LIABILITY. SO WE SEE EUROPE EXPANDING INDUSTRIAL SQUARE PRODUCTION FROM ARTILLERY SHELLS -- JUST OPEN TO PRODUCE MORE ARTILLERY MISSILES. EUROPE IS REARMING. IT WILL TAKE TIME AND PHASED OUT PLAN FOR U.S. PRESENCE IN EUROPE. I THINK PUTIN KNOWS THAT. THAT IS WHY HE IS ESCALATING RIGHT NOW IN ORDER TO ACHIEVE HIS OBJECTIVE BEFORE EUROPE RE-ARMS. JOUHMANNA: ORYSIA LUTSEVYCH, HEAD OF THE UKRAINE FORM AT CHATHAM HOUSE, THANK YOU SO MUCH. WE WERE SHOWING LIVE PICTURES FROM KYIV ON THE BACK OF YET ANOTHER RUSSIAN AERIAL ASSAULT ON THE CITY WHICH HAS KILLED 14 PEOPLE OVERNIGHT. THESE ARE LIVE IMAGES FROM UKRAINIAN CAPITAL. UP NEXT, "BLOOMBERG BRIEF." THIS IS "BLOOMBERG." ♪

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Nvidia Signals AI Boom Slowing After Record Growth | The Pulse 8/28/2025

Nvidia, the world’s most valuable company, gave a tepid revenue forecast for the current period, signaling that growth is decelerating after a staggering two-year boom in artificial intelligence spending. Sales will be roughly $54 billion in the fiscal third quarter, which runs through October, the company said in a statement Wednesday. Though that was in line with the average Wall Street estimate, some analysts had projected more than $60 billion. The outlook adds to concern that the pace of investment in AI systems is unsustainable. Difficulties in China also have clouded Nvidia’s business. Today's guests: John Bilton, JPMorgan Asset Management Head of Global Multi-Asset Strategy, Adrian Cox, Deutsche Bank Research Thematic Strategist, Orysia Lutsevych, Chatham House Deputy Director of the Russia and Eurasia Programme (Source: Bloomberg)