Apple & Google Must Pay $17B in Fines to the EU | The Opening Trade 09/10

Intro NANA: AN HOUR AWAY FROM THE OPENING TRADE. HERE'S WHAT YOU NEED TO KNOW. APPLE REVEALS ITS LATEST AI POWERED IPHONE IN THE TECH GIANT WAITS FOR AN EU RULING OVER A POSSIBLE 30 BILLION EURO TAX BILL. CHINESE EQUITY HEAD FOR THEIR LOWEST CLOSE IN MORE THAN FIVE YEARS AS BEARISH SENTIMENT GRIPS THE MARKET, BUT EXPORTS FROM CHINA UNEXPECTEDLY JUMP TO A TWO-YEAR HIGH. PRIVATE EQUITY TAKE CENTER STAGE IN PARIS. WE ARE LEE AT -- WE ARE LIVE FROM THE CONFERENCE WHERE WE WILL HEAR FROM SOME OF THE BIGGEST NAMES IN THE 30 -- 3 TRILLION SECTOR. GUIDE: THIS MORNING WAS LARGELY FLAT. WAITING FOR INFLATION OUT OF THE UNITED STATES AND WAITING FOR THE DEBATE OUTCOME. THAT WILL BE A KEY STORY FOR THE MARKETS. FUTURES ARE FLAT. AT JUST CHINESE EQUITIES ADDED FOR A FIVE-YEAR LOW. WE GOT A U.S. TWO-YEAR LOW, KEEP AN EYE ON THAT AS WE GO INTO THAT DEBATE. WE WILL SEE WITH THE BEST METRIC IS TO JUDGE THE OUTCOME. BITCOIN, THE TWO YEAR, U.S. EQUITY FUTURES. EURO-DOLLAR 11040. KEEP AN EYE ON THE DOLLAR FOR THAT TRADE. THAT WILL BE INTERESTING, U.K. DATA COMING IN AND A MOMENT. ALL OF THAT ON THE COUNT DOWN TO THE OPENING TRADE STARTS RIGHT NOW. The Agenda: Apple's New iPhone and EU Court Cases, Chinese Stocks, IPEM Paris 2024 TUESDAY THE 10TH, SOME MORNINGS WERE NOTHING HAPPENS. THIS IS NOT ONE OF THOSE MORNINGS. WE WILL BE IN PARIS IN A MOMENT WITH GREEDY, BUT WE HAVE A ROCKET LAUNCH THAT WE WILL BE FOCUSING ON. WE'VE GOT THAT PRESIDENTIAL DEBATE. THIS IS THE FIRST OR SECOND, I'M NOT ENTIRELY SURE. IT'S GOING TO HAVE A REAL IMPACT, YOU COULD ARGUE THE FIRST ONE TAKING BY AN OUT, THIS WILL HAVE HARRISON IT, HOW WILL WE JUDGE IT. WE'VE GOT THE COURT RULINGS THAT WILL BE IMPORTANT ON BOTH SIDES OF THE ATLANTIC AND LABOR MARKET DATA DROPPING ONTO THE SCREENS IN JUST A MOMENT, HUAWEI WILL LAUNCH AS WELL AFTER APPLE LAUNCHED ITS LATEST APPLE PHONE LAST NIGHT, LOTS OF OTHER GADGETS. IT WAS MEANT TO BE IN A IPHONE. IT'S IN A IPHONE AT SOME POINT. ANNA: ABSOLUTELY, IT'S GO TIME OVER AT. THAT WAS THE NAME GIVEN TO THIS LAUNCH. SO A NEW PHONE, WE GOT NEW INFORMATION, NEW STUFF ON ALL KINDS OF PERIPHERALS. BUT THE FOCUS FOR US WAS REALLY GOING TO BE ON AI AND IS THIS GOING TO BE ENOUGH TO CONVINCE PEOPLE TO UPGRADE THEIR PHONES. IT'S THE REAL ANSWER TO ARTIFICIAL INTELLIGENCE. FOR MANY PEOPLE, THIS WILL BE ONE OF THE CLOSEST. WE'VE HEARD ABOUT AI A LOT. WE CAN HAVE FUN GOING ON THESE SITES AND ASKING IT TO DO STUFF, BUT HOW WILL HE INFLUENCE OUR DAILY LIVES? TO QUOTE MARK GURMAN, WHO I GO TO AT THESE TIMES OVER IN THE STATES, IT'S GOING TO FOCUS ON SUMMARIZING MESSAGES AND NOTIFICATIONS AND IT WON'T BE GEEWHIZ, LIKE IT'S MY FAULT. I'M NOT SURE IT'S ENOUGH. GUIDE: RED MARKS PEAS. EVERY TWO OR THREE PARAGRAPHS IT WAS LIKE, IT'S COMING LATER, YOU HAVE TO WAIT, IT WILL BE ROLLED OUT SLOWLY. IT'S CAPABLE, BUT YOU DON'T GET THE SOFTWARE THAT GOES WITH IT, SO IT'S KIND OF IN AI NEARLY PHONE. ANNA: AND IT WAS ABOUT NEW COLORS, THAT WAS SOUNDING ALL OF IT 10 YEARS AGO. THE PHONE WILL COME IN THIS COLOR. THE MARKET DID SEEM OVERLY MOVED IN THE DIRECTION BY ANY OF THIS BUT WILL IT CREATE ENOUGH FO MO? I SUPPOSE WE CAN TAKE THIS BIGGER PICTURE AND TALK ABOUT WHERE THIS LEAVES AI AND U.S. TECH AND LINK IT SLIGHTLY TO WHAT WE HAD IN EUROPE. AND A LACK OF TECH AND A LACK OF INNOVATION. GUY: YOU WILL GET TO ONE OF TWO THINGS, ONE IS DRAGHI AND SAY WE ARE IN A SITUATION WHERE WE HAVE TO LOOSEN THE RED TAPE TO DRIVE INNOVATION. WE HAVE TO DO THAT IF WE COMPETE. YOU THINK ABOUT THE FACT THAT HUAWEI WILL LAUNCH A PHONE THIS EVENING. WE WILL BRING YOU PICTURES LATER ON. BUT YOU ALSO HAVE THESE TWO COURT CASES ON TAX AND GOOGLE'S DOMINANCE IN KEY MARKETS, AND THAT IS ALSO PART OF HER LEGACY BECAUSE SHE WILL BE DEPARTING VERY SOON AND THAT JUST MAKES THE EUROPEANS TRYING TO BE THIS REGULATOR. IT'S TRYING TO DELIVER, IS REALLY INTERESTING. ANNA: SHOULD WE GO TO THE LABOR MARKET OUT OF THE U.K.? GUY: I NEED TO BRING UP MY SCREEN AND TALK ABOUT IT. LOOKS IN LINE WITH EXPECTATIONS FIRST READ, THE WEEKLY EARNINGS BONUSES, AND APRIL IS DROPPING OUT, SO THE APRIL NUMBERS VERY STRONG BECAUSE OF THE MINIMUM WAGE. THAT NUMBER DROPS OUT SO THAT BRINGS THAT DATA A LITTLE BIT LOWER. THE UNEMPLOYMENT RATE LOOKS LIKE IT'S STATIC. IT COMES TO 43.1. THIS IS IN LINE WITH EXPECTATIONS. THE UNEMPLOYMENT DATA IS TAKEN WITH A PINCH OF SALT, THE LOW RESPONSE RATE. ANNA: SO WE DO TAKE THAT WITH A PINCH OF SALT. ONE OF THE THINGS THAT BLOOMBERG ECONOMICS DREW OUR ATTENTION TO IS WATCHING PRIVATE SECTOR. THEY ARE SAYING THAT THAT SPECIFICALLY IS WITH THE BANK OF ENGLAND IS COUNTING ON TO DROP BACK A LITTLE MORE, SO WE WILL BE LOOKING FOR THAT DETAIL. THAT DOESN'T COME UP INITIALLY IN THE DATA, SO WE WILL WAIT TO GET THE DATA. BUT THE BIG PICTURE AND THE U.K. IS ABOUT THE BUDGET. IT'S ON THE FISCAL SIDE, IT'S WHAT THE GOVERNMENT WILL DO AND WE HAVE TO WAIT UNTIL THE END OF OCTOBER TO GET ALL OF THE DETAILS. GUY: THIS DOESN'T ALWAYS FEED INTO IT. YOU THINK ABOUT WHAT'S HAPPENING WITH THE EMPLOYMENT STORY AND THE WAGES STORY, WHAT CAN THE BANK OF ENGLAND DO NEXT, HOW QUICKLY THE RATES COME DOWN BECAUSE THAT WILL HAVE AN IMPACT ON HOW MUCH FISCAL SPACE THEY HAVE. IT'S ALSO GOING TO IMPACT THAT. SO THE RELATIONSHIP BETWEEN THE BANK OF ENGLAND AND THE BUDGET IS REALLY INTERESTING. THE DATA OUT OF CHINESE THIS MORNING WAS ACTUALLY OK, THE EXPORT DATA WAS ALL RIGHT. SO THAT'S A POSITIVE, BUT YOU WONDER HOW SUSTAINABLE THAT EXPORT DATA IS. I THINK IT DOESN'T REALLY CHANGE THE GLOOMY PICTURE SURROUNDING THE CHINESE ECONOMY RIGHT NOW, WHICH IS REFLECTED IN THE MARKETS. ANNA: CHINESE EXPORT DATA TELLS YOU EVERYTHING ABOUT THE REST OF THE WORLD AND THE CHINESE STORY SPECIFICALLY IS NOT A GOOD ONE. THE EQUITY MARKET RESPONSE IS NOT BEEN TOO NEGATIVE BUT IS NOT FAR FROM ITS LOWEST CLOSE IN ITS LOWEST LEVEL SINCE JANUARY OF 2019. THE CSI IS HEADING FOR A FOURTH YEAR OF LOSSES, IF YOU LOOK AT WHAT'S LIKELY TO HAPPEN THIS YEAR. AND THAT REALLY IS A BIG GLOBAL CONTRAST. TOM WAS USING THIS CHART AT THE END OF THE LAST HALF HOUR. GLOBAL COMP CAR CHESS -- CONTRAST TELLING A BRIGHTER STORY THAN CHINA. THIS IS ALL THE TOUGH WORK, THE WORK THAT MANY SAID NEEDED TO BE DONE AROUND PROPERTY DEBT LEVELS, THAT STILL OVERHANGING AND HAS A WEIGHTY EFFECT ON CONSUMERS GUY: IT'S HARD TO GET OUT OF ANY WILL NEED TO SEE A VERY SUBSTANTIAL RESPONSE. THERE IS NO INDICATION AUTHORITIES ARE CLOSE TO DELIVERING THEM. YOU WONDER WHAT EFFECT IT WILL HAVE ON THE GLOBAL ECONOMY, IT'S STARTING TO SHOW UP IN THE DATA IN EUROPE, HE COULD SEE IT IN THE GERMAN ECONOMY, ETC. GREEDY IS IN PARIS AT THE INTERNATIONAL PRIVATE EQUITY CONFERENCE. IT'S INTERNATIONAL YOU THOUGHT WOULD BE I PAM. WE WILL PARDON THAT THOUGHT. IT'S UNDERWAY IN PARIS. INVESTORS BASICALLY TRYING TO TIME THE CAPITAL MARKET -- TIME WHEN THE CAPITAL MARKETS WILL OPEN UP. PRIVATE INVESTMENT. KRITI GUPTA OR IS THERE. WHAT ARE YOU HEARING? KRITI: THIS IS ALL ABOUT WHETHER OR NOT THAT SEARCH FOR YIELD IS COMING TO AN END. IT HAS BEEN 2-3 YEARS OF MASSIVE OUTPERFORMER'S WHEN IT COMES TO THE PRIVATE CAPITAL MARKERS. IF YOU ARE LOOKING AT A STOCK MARKET OVERVALUED OR A BOND MARKET AT THE WIND OF THE CENTRAL BANKS AROUND THE WORLD, WHERE YOU ALLOCATE IN PRIVATE CAPITAL HAS BEEN FOR INSTITUTIONAL INVESTORS FOR A LONG TIME. THE PROBLEM HERE IS THAT IT HAS BEEN SO JUICY AND SO OUTPERFORMING, BUT THEY ARE NOT ABLE TO RETURN THAT CAPITAL TO A LOT OF THEIR INVESTORS. THEY ARE NOT ABLE TO ACCESS THE CAPITAL MARKETS BECAUSE OF THE RISK AND VOLATILITY WHEN IT COMES TO MONETARY POLICY, GEOPOLITICAL RISK AND ELECTION RISK. THIS IS WHERE THE CONCERN LIES. IN A ENVIRONMENT IS WHAT WE ARE EXPECTING TO SEE FROM AROUND THE WORLD. DOES THIS OPEN UP THE DEAL SPACE AND DOES IT FINALLY GET THAT LOOSENING WE DESERVE? THE PROBLEM WITH THAT OPTIMISM IS THAT WE MAY NOT SEE THOSE DEALS COME TO FRUITION. WE MAY SEE MORE AND MORE PEOPLE STAY ON THE SIDELINES. HOWEVER, EUROPE MAY BE THAT GOLDEN OPPORTUNITY, AT LEAST THAT'S THE TAKE THIS MORNING. THIS IDEA THAT THERE IS SO MUCH DESIRE FOR INVESTMENT, FOR CAPITAL. YOU HEARD IT FROM MARIO DRAGHI IN THE LAST 24 HOURS. YOU HEARD FROM THE FRENCH AUTHORITIES IN PARIS, THE PROBLEM IS JUST HOW MUCH INVESTMENT, THERE SEEMS TO BE OPTIMISM AND THIS IS THE ONE PLACE IN THE WORLD, THE ONE ASPECT WHERE YOU MAY BE OUTPERFORMING THE UNITED STATES. I HAVE TO SAY IT CATCHES A LOT OF PEOPLE'S ATTENTION. ANNA: THANK YOU VERY MUCH. KRITI GUPTA WILL BE WITH US BRINGING US PLENTY OF GUESTS AND LOTS OF SUBJECTS AS SHE HAS GONE THROUGH OUR RADAR AS A RESULT OF THIS EVENT TAKING PLACE IN PARIS. WE NEED TO FEED THAT INTO OUR RECOVERY. WE ARE ALSO WAITING FOR FINAL RULINGS ON APPLE AND ITS ISLAND CASE. WE ARE ALSO WAITING FOR A DECISION AROUND GOOGLE IN A COMPETITION CASE. EUROPEAN CASE AND LEGAL RULINGS. WHILE WAYS PHONE LAUNCH COMING HOT ON THE HEELS OF THE APPLE ARTIFICIAL INTELLIGENCE. AT 3:00 P.M. WE HEAR FROM THE FED OVER IN THE STATES. 2:00 A.M. U.K. TIME. WE'LL HAVE THE TRUMP/HARRIS DEBATE. THIS WILL BE IN FOCUS. A LOT OF DEATHS ON WALL STREET BUSY TO WORK OUT WHAT POLICIES MEAN FOR THE U.S. ECONOMY AND FOR GEOPOLITICS IN MUCH BEYOND. AT THE END OF THE DAY, IT WILL PROBABLY BE GETTING A SENSE OF HOW THESE TO COMPARE AS THE LAST DEBATE WAS SO CONSEQUENTIAL FOR REASONS THAT WE KNOW VERY WELL. GUY: THEY'VE NEVER MET, THEY'VE NEVER SHAKEN HANDS, THIS IS THE FIRST MEETING OF THESE TO WHICH IS FASCINATING, BITCOIN IS THE WAY TO WATCH THIS ONE, YOU WANT BITCOIN IN ONE SCREEN IN THE DEBATE IN THE OTHER TO GET A SENSE OF WHAT'S HAPPENING, THAT WILL PROBABLY GIVE YOU THE MOST REAL-TIME REACTION, THAT WILL BE INTERESTING WE WILL TALK ABOUT WHAT'S COMING OUT IN TERMS OF U.S. CAPITOL RULES. THAT'S A BIG STORY AS WELL. KEEP AN EYE ON THAT ONE. AS I SAY, IT IS A REALLY BUSY MORNING. LET'S UPDATE YOU ON THE OTHER THINGS WE ARE WATCHING, THE HIGH-RISK POLARIS DOOR AND MISSION BY SPACE X IS GOING TO FEATURE THE FIRST EVER LAUNCHING AROUND THREE DAYS TIME. WE HAVE GOT ONE OUT OF 26 MINUTES UNTIL LAUNCH. I THINK AT 39 A AT THE NASA KENNEDY SPACE CENTER IN FLORIDA. WE WILL HAVE LIVE COVERAGE OF THAT EVENT. LOOKING AT A LIVE PITCHER COMING TO YOU FROM CAPE CANAVERAL. REALLY EXCITED ABOUT THIS ONE. WE WILL WALK YOU THROUGH THE LAUNCH PROCESS. MARIO DRAGHI'S VISION FOR THE EU FACING A WALL OF OPPOSITION. THEY HAVE TAKEN AIM AT THE CENTERPIECE OF THE FORMER ECB PRESIDENT'S PLAN TO BOOST PRIVATE INVESTMENT. HE SAYS HE'S SKEPTICAL ABOUT DRAGHI'S APPROACH. BLOOMBERG HAS LEARNED THAT U.S. REGULATORS ARE PLANNING CHANGES FOR THE CAPITAL HIKES. THE BIGGEST BANKS WILL FACE 9% INCREASE IN CAPITAL REQUIREMENTS FROM THE ORIGINAL PLAN OF A 19% INCREASE, WHICH IS WHY YOU WANT TO LISTEN TO MICHAEL A BIT LATER WHO WILL POTENTIALLY BE TALKING ABOUT THE SUBJECT. ANNA: DO WE HAVE SHORT MEMORIES OR IS IT TIME TO FORGET THE POST GFC? THAT'S WHAT THIS GOES BACK TO, THE ATTEMPTS TO REGULATE THE SECTOR BETTER TO STOP THAT THING FROM HAPPENING IS WHAT THIS GOES BACK TO. THERE HAS BEEN A LOT OF LOBBYING FROM THE BANKING SECTOR. THESE RULES OF SCALE BACK AND WE SEEN OTHER JURISDICTIONS IN EUROPE SAYING WE ARE NOT MAKING DECISIONS UNTIL WE KNOW WITH THE U.S. ARE DOING AND WE HAVE CLARITY. GUY: WE ARE GETTING A LITTLE BIT OF CLARITY. THEY ARE BASICALLY SAYING IF YOU REQUIRE US TO CARRY MORE CAPITAL, WE WILL BE LENDING LESS GOOD THIS WILL HAVE A REAL MACROECONOMIC EFFECT IF YOU FORCE US TO DO THIS. I WONDER WHAT THE SPREAD IS ON 19-9 IN TERMS OF THE ECONOMIC IMPACT. IS THIS ANOTHER BOOST FOR THE U.S. ECONOMY OR A JAGGED? ANNA: THAT'S THE WAY THEY ARE TRYING TO CAST OUT. INTERESTING BREAKING NEWS OUT FROM ACROSS THE SECTOR. ALL KINDS OF NEWS. GOLDMAN SACHS COMMENTARY FROM SPEAKING OF THE EVENT ABOUT BANKING AND A COUPLE OF LINES ON THIS. YES HE WAS TALKING ABOUT A TRADING UNIT AND REMEDIES THERE MIGHT BE LOWER THAN HAD BEEN ANTICIPATED. IT SEEMS TO BE THE ISSUE, BUT THE THING THAT STUCK OUT TO ME IS TALKING ABOUT SO ACTIVITY FROM BUYOUT FIRMS. SOMETHING TALKED ABOUT IN THE CORRIDORS OF PARIS AND WHETHER IT'S TURNING AROUND. GUY: THE INVESTMENT BANKING SITE'S BEEN REALLY TOUGH FOR QUITE A WHILE. THERE WAS BANK THINGS THAT WE ARE SEEING TURNAROUND, TRADING IS CARRIED THESE BANKS FOR A LONG TIME. I THINK YOU HAVE TO BEAR IN MIND YOUR COMMENTS AROUND THE SIDE THAT WAS VERY STRONG, MAY BE A LITTLE BIT OF THE FADE OFF THAT, BUT THERE HAS BEEN A HOPE THAT THE INVESTMENT BANKING STORY WILL TURN AROUND. ANNA: WE ARE STILL WAITING. HSBC NEW CEO COMING IN. THEY WERE TALKING ABOUT CONSIDERING COMBINING THEIR COMMERCIAL AND INVESTMENT BANKING BUSINESSES. SO WHEN YOU SEE HIM TRYING TO MAKE HIS MARK PERHAPS ON THAT PARTICULAR BUSINESS. GUY: AUSTRALIA IS GOING TO SCRAP THE 81 BONDS ARE USED AS HIGH-RISK THAN CAPITAL. THEY WILL GET RID OF IT BECAUSE OF WHAT HAPPENED -- HAPPENED WITH CREDIT SUISSE. ANNA: LOTS OF DIFFERENT THREADS. COMING UP, WE GET BACK TO A NUMBER OF THESE STORIES ONCE AGAIN. THE EU COULD MAKE A MAJOR RULING IMPACTING THE TECH SECTOR. WE WILL DISCUSS WITH THE FORMER EU COMPETITION OFFICIALS WHO ARE WAITING TO HEAR ABOUT LEGAL CHALLENGES TO APPLE AND GOOGLE. PLUS, APPLE HOPES TO TAKE A BIGGER BITE OUT OF THE MARKETS WITH ITS LATEST AI IPHONE OFFERING. WE WILL GET ANALYSIS OF WHAT WAS HEARD, WHAT WAS REVEALED. UP NEXT, CREED HE IS LIVE IN PARIS WITH A SPECIAL GUEST FROM THE PRIVATE EQUITY CONFERENCE. IF YOU HAVE ANY QUESTIONS PLEASE GET IN TOUCH WITH THE TEAM THAT PUTS TOGETHER THE PROGRAM. I.B. PLUS BBT BIGO IS THE FUNCTION TO USE THIS MORNING. IPEM Paris: Apollo Europe Head Rob Seminara on M&A Uptick >> WE ARE SUDDENLY SEEING A REALIZATION THAT RATES ARE NOT GOING BACK TO ZERO. SPONSORS ARE NEEDING TO SELL THESE COMPANIES. WHAT WE SEE IS A CONVERGENCE BETWEEN BUYER AND SELLERS IN A PICKUP AND TRANSACTIONS. WE'VE BEEN INCREDIBLY ACTIVE RECENTLY LETTING OUT OVER $2 BILLION IN EUROPE ALONE. SO WE SEE THAT EXPECTATION NUC HIGH QUALITY COMPANIES BEING SOLD AT PRICES WITH SECULAR TRACK TO -- WE THINK ARE ATTRACTIVE. GUY: APOLLO SPEAKING WITH KRITI IN THE LAST HOUR. LET'S GO BACK THERE RIGHT NOW. BACK OVER TO YOU. KRITI: THANK, ONE OF THE BIG CONVERSATIONS RIGHT NOW IS WE'VE SEEN THIS MASSIVE OUTPERFORMANCE THAT WE ARE SEEING IN THE PRIVATE CAPITAL IN THE LAST COUPLE OF YEARS JUST BY A HIGHER INTEREST RATE PICTURED. NOW WE ARE GOING IN THE OPPOSITE DIRECTION OF HOW IT SHOWS UP IN THE PRIVATE MARKETS AND SPECIFICALLY IN EUROPE. FREDERICK OF PAI PARTNERS JOINS ME HERE. THEY MANAGE ABOUT $31 BILLION OF A UM. PLEASURE TO HAVE YOU ON THE PROGRAM. THANK YOU FOR JOINING US. TALK TO US ABOUT THIS GLOBAL EASING CYCLE THAT IS RIGHT ON THE HORIZON THAT WE ARE SEEING. THE FEDERAL RESERVE, THE ECB ON THURSDAY. IT FEELS LIKE SO MUCH OF THE PRIVATE CAPITAL GROWTH THAT WE'VE SEEN IN THE LAST COUPLE OF YEARS HAS BEEN THE SEARCH FOR YIELDS IN THE FACE OF VERY HIGH VALUATIONS CROSS ASSET. IN THE FACE OF A GLOBAL EASING CYCLE, HOW DOES THAT AFFECT PRIVATE MARKETS? >> CLEARLY, INTEREST RATE HAS SUPPORTERS AND THE PERFORMERS. I THINK IF YOU LOOK AT STRATEGY, THEY ARE STRATEGY AND PRIVATE MARKETS. THOSE THAT ARE MORE OPERATIONALLY DRIVEN ARE IMMUNE FROM INTEREST-RATE RATE CYCLES AS YOU ARE GAINING PERFORMANCE RATHER THAN THROUGH FINANCIAL ENGINEERING. THAT'S WHAT PI DOES. MORE FUNDAMENTALLY, THAT'S WHAT THEY SHOULD BE ALL ABOUT. IT'S ABOUT THE HIGH-LEVEL TRANSFORMATION WE'VE BEEN FOR BUSINESSES RATHER THAN FINANCIAL ENGINEERING. KRITI: HE FEELS LIKE THERE IS A REST RETURN CAPITAL FOR INVESTORS. WE HEAR FROM HEDGE FUNDS, ENDOWMENTS, WHEN YOU SPEAK TO FOLKS WITHIN THE INDUSTRY, THEY ARE NOT FEELING THE PRESSURE. HOW LONG? >> WE DEPLOY CAPITAL, OUR CLIENTS OF CAPITAL. BUT SETTING BACK AS A HAPPEN. THE INDUSTRY FACES AND DRIVETIME OF FUNDRAISING. I THINK IS THE CYCLE STARTS TO ACCELERATE, THERE'S MANY REASONS WHY THE MARKETS ARE REOPENING IN THE LOWER INTEREST RATE SAYS THAT CYCLE WILL START AGAIN AND SHE IS SENDING THE CAPITAL AND REDEPLOYMENT WILL START. I THINK HEDGE FUND AND ENDOWMENTS HAVE A SLIGHTLY DIFFERENT PERFORMANCE MATRIX AND MORE IMPORTANTLY, IN TERMS OF INVESTMENTS. GUY: -- KRITI: SO MUCH OF YOU TALK ABOUT HINGES ON THE CAPITAL MARKETS OPENING UP. IF YOU DON'T SEE THAT HAPPENING DESPITE LOWER INTEREST RATES IN THE BACK HALF OF THIS YEAR GOING INTO NEXT YEAR, WICKETS IN THE WAY OF THAT? >> WICKETS IN THE WAY IS IT'S ABOUT INVESTING, IT'S ABOUT CONFIDENCE IN THE WORLD AND CLEARLY WHAT WE HAVE SEEN IN 2024 IS THE FINANCIAL CONDITION TO YOUR POINT THAT THE CAPITAL MARKET HAS PROBABLY NEVER BEEN A STRONG IS WHERE THEY ARE. IF YOU LOOK AT SPREAD VERSUS RISK. BUYER'S WILLINGNESS TO FUND THESE IS JUST NOT THERE. IS THAT GOING TO CHANGE, YES, I THINK THE WORLD IS THE EASING HAPPENS YOU WILL SEE A POSITIVE MOMENTUM THAT I WOULD EXPECT NEXT YEAR TO BE QUITE BUSY. KRITI: THERE'S A LACK OF CONFIDENCE ON A LOT OF IT FEELS LIKE IT'S COMING FROM THIS TENSION FOR THIS NEED FOR INVESTMENT, DEEPENING CAPITAL MARKETS AND THE EFFICIENCY YOU SEE IN OTHER PARTS OF THE WORLD. YET, THERE'S NO MONEY TO DO THAT FROM A FISCAL PERSPECTIVE. DOES THAT CLEAR THE WAY FOR PRIVATE CAPITAL OR CLEAR THE WAY TO OPERATE? >> THE RESERVATION IS PROBABLY MORE STRINGENT AND THERE'S PROBABLY MORE IN FOR PRIVATE CAPITAL. YOU SAW THE DRAGHI PAPER, BUT IF YOU LOOK AT THE AGING AND THE ECONOMY OF OUR FACILITIES, IS TOO OLD, WE NEED TO INVEST, WE NEED TO MODERNIZE. THAT WOULD REQUIRE PRIVATE CAPITAL. I THINK THE GOVERNMENT ARE RECOGNIZING THIS. ACROSS EUROPE YOU WILL SEE MORE WILLINGNESS TO ENGAGE WITH THE CAPITAL PROVIDER. WHETHER IT'S ENOUGH FOR THE ACCELERATION TO HAPPEN, I'M NOT SURE. THERE'S NOT ENOUGH MONEY IN PUBLIC HAS TO DO THAT, SO THEY WILL NEED TO TURN TO SOMETHING DIFFERENT. KRITI: CONVERSATION WE HAD WITH APOLLO MADE THE ARGUMENT THAT A WAY TO ENCOURAGE THAT PRIVATE INVESTMENT AND ELIMINATE RISK IS FOR GOVERNMENTS TO HAVE THE BACKSTOP. IS THERE A WAY THAT YOU CAN INCENTIVIZE THAT WHEN IT COMES TO ALMOST ASSURING HER BACKSTOP INVESTMENTS? >> I THINK THAT'S AN INSURANCE MODEL THAN A PRIVATE CAPITAL MODEL, I DON'T THINK THAT'S A RIGHT THINKING BEHIND IT, I THINK THE REALITY IS THAT THE CLINICAL MODEL IS VALID AND THERE'S RETURN AND INVESTMENTS, BUT I THINK THE PRODUCT IS MORE THAT EUROPE NAMES TO STABILIZE ITS REGULATORY ENVIRONMENT. WHEN YOU MAKE AN INVESTMENT YOU MAKE IT WITH THE 10, 15, 20 YEAR THAT'S POSITIVE. CONSTANT CHANGE, INCREASING PRESSURE MAKES IT DIFFICULT. WHAT WE HAVE BECAUSE OF THE RULES THAT COME OUT OF BRUSSELS, WE NEED TO MAKE SURE THERE'S A CONTINUUM AND THERE THERE'S NOT A CONSTANT THREAT OF REGULATION ON TOP OF NEW REGULATION, WE ARE PROBABLY THE MOST REGULATED PART OF EUROPE. IT'S QUITE DIFFICULT WHEN YOU LOOK AT LONG-TERM DEPLOYMENT KRITI: WHAT WOULD YOU CHANGE IT IF YOU HAD A MAGIC ONE, WHAT WOULD YOU CHANGE? I DON'T THINK ABOUT -- TAXATION IS ONE THING. I'M TALKING GERMANY TAXATION AND R&D STABILITY IS GOOD. THAT'S WHAT LUXEMBOURG HAS HAD SUCCESS BECAUSE IT'S A VERY STABLE REGIME. I THINK THE REST OF EUROPE NEEDS TO AGREE WITH WHAT THEY WANT TO DO AND IT ALLOWS YOU TO THINK ABOUT LONG-TERM INVESTMENTS. IF YOU HAVE A TWO-YEAR WINDOW, IT'S NEVER GOING TO WORK. KRITI: PARTNER OVER A PA PARTNERS, HE'S MAKING THAT CRUCIAL POINT WHICH IS, YOU HAVE THIS TENSION, YOU WANT THIS INVESTMENT IN EUROPE AND REGULATION GETS IN THE WAY. IT'S A CONVERSATION RIGHT OFF THE HEELS OF WHAT MARIO DRAGHI IS TALKING ABOUT. ANNA: ABSOLUTELY, THANK YOU FOR THAT CONVERSATION, AND WE WILL BE PICKING UP ON THAT REGULATORY PUSH AGAINST BIG TECH IN EUROPE AND THE LEGAL CHALLENGES AGAINST BIG TECH. TWO OF THEM COMING TODAY. THIS NOT THE ONLY TECH HANDLING TODAY'S PROGRAM, WE WILL BE UNPACKING WHAT WE HEARD. AIMING TO ENTICE BUYERS OF THE PROMISE OF AI POWERED TOOLS. WE WILL ALSO LOOK AHEAD TO THE SPACEX LAUNCH JUST OVER AN HOUR AWAY AND WE WILL HAVE LIVE PICTURES COMING TO YOU FROM FLORIDA, FROM CAPE CANAVERAL, THE TEAM PUTTING THE FINISHED EDGES TO THAT MISSION PLANNING AND WE WILL GET TO THAT SHORTLY. ANNA: 30 MINUTES FROM THE START OF OPENING TRADE IN EUROPE. FUTURES PICTURE FOR EUROPE LOOKS FAIRLY MIXED. IF YOU LOOK AT FTSE FUTURES, THEY ARE DOWN A LITTLE, WHICH IS INTERESTING BECAUSE COMMODITY PRICES ARE NOT. I WONDER IF THAT'S HOW THINGS COME TO PASS. EURO STOXX 50 FUTURES ARE ENTIRELY FLAT. MIX ON THE EUROPEAN FUTURES PICTURE. LET'S HAVE A LOOK AT WHERE WE ARE ON CHINA, CSI 300 COMING OFF ITS EARLIER LOSSES. WE HAD EXPORT DATA THAT WAS TELLING A MORE POSITIVE PICTURE OF THE CHINESE ECONOMY, EVEN IT'S ABOUT THE REST OF THE WORLD RATHER THAN CHINA. THAT SEEMS TO BE WEIGHING INTO ARE FACTORED INTO THE THINKING. WE SEE THE CSI COMING BACK JUST A TOUCH. IT IS NOW FLATTENED OFF ONCE AGAIN. THE POUND HAS BEEN UNMOVED BY THE DATA COMING OUT THIS MORNING. KRITI: -- GUY: I WONDER WHAT MARKETS ARE WAITING FOR, IS IT THE DEBATE? ANNA: THERE'S A COUPLE OF THINGS YOU COULD WAIT FOR IF YOU ARE SO INCLINED. GUY: BOTH SEEM LIKE MAJOR EVENTS. WE WILL SEE. IT DOES SEEM AS THOUGH MARKETS ARE OFF THE ESTIMATE OF THE EQUITY BOUNCEBACK. ONE STOCK THAT DIDN'T BOUNCEBACK PARTICULARLY ON THE BACK OF ITS LATEST IPHONE WAS APPLE. SO IT HAS LAUNCHED THE 16TH. THE GIANT IS BETTING IT COULD ENTICE WITH A MODEST UPGRADE. THE PROCESSING IS PRETTY AMAZING , BUT THE WHOLE IDEA OF THIS LAUNCH WAS THAT WE WERE GOING TO SEE THE AI TECHNOLOGY THAT WILL BE ULTIMATELY INCLUDED WITH THE PROJECT AND START TO GET AN IDEA OF THE IMPACT THAT IT'S GOING TO HAVE. IT WAS VERY MUCH A, HERE'S THE PHONE, YOU HAVE TO WAIT FOR THE AIA. MATT FROM BLOOMBERG INTELLIGENCE JOINS US NOW. ANY SURPRISES, WAS THAT IN A IPHONE? HE DIDN'T FEEL LIKE IN A IPHONE, IT FELT LIKE IN A IPHONE WAITING FOR SOFTWARE THAT WILL MAKE IT IN A IPHONE. MATT: CLEARLY IT'S AI CAPABLE. IT'S THE SOFTWARE IN THE SOFTWARE IS IN READY YET. IT WON'T COME UNTIL OCTOBER FOR THE REASON THAT WE WAIT AND BE ON THAT. REALLY YOU ARE LOOKING AT 2025, SIGNIFICANT CHANGES IN WHAT THIS DEVICE IS CAPABLE AND WHEN YOU START TO CAPTURE THE IMAGINATION OF CONSUMER. IN THE SAME TIME WE'VE GOT THE HOMELAND PUSHING FORWARD. THERE'S A BIT OF CATCH AND THEY ARE STILL IN THAT CATCHUP PROCESS. NOTHING IS REALLY SURPRISING YESTERDAY WITH THE EMPHASIS ABOUT THE DEMONSTRATION WITH THE HARDWARE FEATURES LIKE THE CAMERA CONTROL, WHICH IS QUITE NEAT. ANNA: WITH THAT ALL SAID, IS AN AI READY PHONE ENOUGH TO DRIVE ANOTHER SMARTPHONE SUPER CYCLE, BECAUSE THAT'S WHAT THE COMPANY WILL BE HOPING FOR. FOR ALL THOSE WAITING FOR AVERAGE CONSUMERS INTO SOCIETY, PEOPLE HAVE BEEN WAITING FOR SOME KILLER AI OUT. MAYBE THAT'S NOT WHAT WE SHOULD LOOK FOR. CLICK SOON CMS OF CYCLE ON THE NEAR TERM, THE DECEMBER QUARTER COMING UP WAS A MASSIVE QUARTER FOR APPLE IN TERMS OF IPHONE SALES. MAY BE 50% MORE THAN ANY OTHER QUARTER. BUT I THINK IN TERMS OF THE PROSPECT OF A SUPER CYCLE, IT REALLY IS -- AND PERHAPS WE HAVE TO WAIT FOR THE IPHONE 17, WHICH MIGHT BE A MORE SIGNIFICANT FORM BACK TO CHANGES'S BEFORE YOU GIVE BIG EXCITEMENT. GUY: THEY ALL LOOK THE SAME. I DON'T KNOW VERSION OF APPLE PHONE YOU'VE GOT, BUT IT LOOKS SIMILAR. ANNA: PEOPLE WHO ARE MUCH YOUNGER THAN ME CAN TELL THE DIFFERENCE. GUY: MY CHILDREN COULD DEFINITELY PERFORM THAT TASK. TRIFOLD PHONES. WE ARE ABOUT TO GET IT. APPARENTLY WE ARE WAITING FOR THE FEED TO COME UP THAT WILL SHOW US PICTURES. ARE WE STRUGGLING WITH THE FORMFACTOR, IS THERE ANYTHING CHANGING FOR THE FORMFACTOR? DOES THE APPLE PRODUCTS STORY TAKE A BIG LEAP FORWARD AS WE GET A NEW PHONE? I'M STRUGGLING WITH WHY YOU WOULD WANT TO TRY, BUT WE'VE GOT THAT THOUGHT AS WELL. BUT IS THERE ANYTHING, FROM A VISUAL POINT OF VIEW, FROM CHARACTERISTICS OF VALUE INTERACT, IS THERE ANYTHING HERE THAT KIND OF CHANGES THE NARRATIVE, OR IS THIS ALL GOING TO BE ABOUT SOFTWARE? MATT: WE'VE SEEN THE ANDROIDS WITH THE PHONE, THAT'S QUITE A NICHE PRODUCT. IT WAS HELD BACK FOR A LONG TIME, WHETHER WE WILL SEE ONE, I THINK WE'VE ALL GOT VERY USED TO WHAT THE SMARTPHONE FEELS LIKE IN YOUR HANDS. SO I THINK IT WILL BE QUITE SOMETHING TO SHIFT THE CONSUMER AFFECTION FOR THIS DEVICE. YOU'VE GOT THINGS UP A YOU WRAP IT. IT'S A MORE SQUARE DEVICE AND VISUAL. PEOPLE ARE EXPERIMENTING WITH THINGS BUT I THINK IT WILL TAKE QUITE A BIG LEAP TO KIND OF REALLY CHANGE THE SMARTPHONE FORMFACTOR. ANNA: YES, ABSOLUTELY. WE ALL MAY REMEMBER THOSE. TECHNOLOGY MIGHT REMEMBER LITTLE. WE'VE DONE A COUPLE OF LAUNCHES, APPLE LAUNCH. YOU TALKED ABOUT HUAWEI'S LAUNCH . IN ANOTHER LAUNCHED A FOCUS ON THIS MORNING, A SPACE X LAUNCH. THERE WERE MANY OF THESE, BUT THIS ONE IS SIGNIFICANT BECAUSE OF WHAT THE ASTRONAUTS ARE GOING TO BE DOING IN THREE-DAY TIMES WHEN THEY GET UP IN SPACE. MATT: IT'S KIND OF A PRIVATE ENTERPRISE SPACE MISSION FOR ASTRONAUTS GOING UP AND THEY WILL BE COMPLETELY DE-PRESSURIZING THE CAPSHAW AND IT GOING ON SOME SPACEWALK. SO THERE'S LOTS OF THINGS ABOUT THIS, WHICH IS SIGNIFICANT FOR THE BIGGER PICTURE SPACE, OBVIOUSLY THIS SPACEWALK'S ARE SIGNIFICANT AND IT WILL BE THE HIGHEST ORBIT EVER, AND THEY ARE TESTING LOTS OF THINGS, THEY ARE TESTING THIS SUITS, THE SPACESUIT, WHICH IS SIGNIFICANT. ALSO BUILDING BASES ON THE MOON AND MARS. ANNA: SO IF WE GO WE WILL NEED CHEAPER SUITS. MATT: YES, AND ALSO THE SCIENTIFIC TESTS, WHICH ARE SIGNIFICANT FOR LONGER SPACESHIPS TO UNDERSTANDING SPACE TRAVEL ON THE HUMAN BIOLOGY, SO THERE'S LOTS OF SIGNIFICANCE HERE ABOUT THE MID TO LONG TERM. GUY: THE SPACESUITS ARE COOL. THE HELMETS LOOK PARTICULARLY AWESOME. THEY'RE GOING TO LOOK AMAZING IN SPACE. THANK YOU VERY MUCH. WE WILL BE BACK WITH MATT LATER WHEN HE BRINGS IN THE ROUND -- ROCKET LAUNCH. TRIFOLD PHONE, DO YOU NEED ONE OF THOSE? ANYWAY, HUAWEI IS LAUNCHING ONE. YOU ARE LOOKING AT LIVE PICTURES. THIS IS THE LAUNCH, WHICH LOOKS DRAMATIC, TO SAY THE LEAST. ANNA: IT LOOKS LIKE AN OLYMPICS OPENING CEREMONY. GUY: IT DOES. ANYWAY, TIM COOK, PAY ATTENTION. THIS IS GOING TO REVEAL AT SOME POINT, A NEW TRIFOLD PHONE. IT HAS BEEN TIMED SIGNIFICANTLY FOR THIS APPLE LAUNCH. ANYTHING DO YOU DO, I COULD DO BETTER. WE'VE GOT LOTS OF LAUNCHES TO FOCUS ON, WE WILL BRING YOU THE LOT -- THE ROCKET LAUNCH, THE HUAWEI LAUNCH. WE ALSO HAVE A TAKING PLACE. KRITI GUPTA WILL BE BACK IN THE PARTNER OF KKR. I MEANT TO PRONOUNCE THAT CORRECTLY, IS GOING TO BE JOINING US CORRECTLY. THIS IS BLOOMBERG. Apple Unveils iPhone, Huawei Launches Tri-Fold Phone KRITI: THIS IS THE OPENING TRADE. LIVE IN PARIS AT THE CONFERENCE. WE ARE TALKING ABOUT PRIVATE MARKETS DOING IT AS WE STARED DOWN THE BARREL OF A GLOBAL EASING CYCLE ON THE HORIZON. DOVISHNESS COMING OUT OF THE ECB. POTENTIALLY 50 BASIS POINTS. AS A POTENTIAL UP OUT OF THE FEDERAL RESERVE SHORTLY AFTER THE ECB. ESPECIALLY WHEN WE ARE TALKING $3 TRILLION WRAPPED UP IN THE MARKETS, THE PEOPLE ARE WAITING TO BE DEPLOYED. I'VE GOT THE PERFECT GUESS. ALISA WOOD, A PARTNER IN KKR JOINS ME IN PARIS. A PLEASURE TO HAVE YOU ON THE PROGRAM. THANK YOU SO MUCH FOR MAKING THE TIME. I HAVE TO KICK IT OFF OF THE QUESTION EVERYONE IS ASKING, WHEN DO NOT PRIVATE INVESTORS GET THEIR MONEY BACK? >> I THINK THE MARKETS ARE FUNCTIONING TODAY. IF YOU SEE WHAT'S HAPPENING ACROSS THE MARKET, YOU SEE ACTIVITY LEVELS YOU HAVEN'T SEEN SINCE THE EARLY PART OF 2022. IPOS ARE UP, M&A IS UP 30% YEAR-OVER-YEAR. I THINK WE HAVE FIVE LBO LOANS PRICING AND THE MARKETS TODAY. THEY ARE PROBABLY ANOTHER 30 YEARS -- 30 LOOKING AT PRICE. THAT SHOWS THE MARKETS ARE FUNCTIONING AND CAPITAL IS FLOWING, WHICH IS WHAT WE ALL NEED FOR MONEY TO COME BACK. KRITI: WE DO, EXCEPT THEY HAVEN'T FULLY OPEN. I'M CURIOUS HOW MUCH OF THE INTEREST RATE STORY HELP SET ALONG? >> AN INTEREST-RATE CUT HELPS EVERYBODY. LET'S NOT FORGET THAT PIECE OF IT. CAPITAL MARKETS ARE DISCERNING. THEY ARE VERY SPECIFIC TO MANAGERS, VERY SPECIFIC TO COMPANIES, AND WHAT WE'RE SEEING IS INVESTORS ARE LOOKING AT THE DIFFERENCE. THAT'S A GOOD THING FOR MANY FIRMS AND MANAGERS LIKE OURSELVES TRYING TO PARSE THROUGH WHERE IS THE SIGNAL AND WEARS THE NOISE. KRITI: IT FEELS LIKE A LOT OF THE SIGNAL MIGHT BE COMING FROM THE PACE OF RATE CHANGES. I SAY THIS ON THE CONTEXT OF THE OUTPERFORMANCE OF PRIVATE MARKETS. FEELS LIKE A FUNCTION OF MASSIVE INTEREST RATE CYCLES. A HISTORIC ONE WHEN YOU TALK ABOUT THE PAYSTUB. THERE A WORK THE SAME WAY ON THE DOWNSIDE? UBC HISTORIC PACE OF USING TO MANAGE SOFT LANDING, HOW DOES IT SHOW UP IN THE PRIVATE MARKETS? DOES IT HELP OR HURT PRIVATE MARKETS? >> WHEN WE SAW A RATES GO UP YOU HAVE TO BALANCE IT OUT WITH VALUATIONS COMING OUT. IT WILL TAKE A LITTLE BIT OF TIME FOR IT TO HAPPEN THE OTHER WAY, BUT I DO THINK IT WILL HAPPEN. I THINK IT'S REALLY IMPORTANT THAT IF YOU ARE AN INVESTOR AND YOU ARE BUYING COMPANIES, WHAT ARE YOU RELYING ON TO DELIVER YOUR RETURNS? IF YOU RELY ON CHEAP DEBT, YOU HAVE A PROBLEM. IF YOU ARE RELYING ON FOCUSING ON GROWTH AND YOUR BOTTOM LINE, REALLY TOP LEVEL AND MANAGEMENT, THIS IS AN ENVIRONMENT WHERE YOU CAN FOUND SOME VERY INTERESTING PLACES. THIS COULD TURN INTO SHARES LOOKING AT OUR 50 YEAR HISTORY, THAT'S WHAT WE'VE SEEN. KRITI: WE ARE HERE IN PARIS, THE CONVERSATION IS THAT A BE PRIVATE MARKETS CAN COME TO THE RESCUE WHEN THE GOVERNMENT SCANS, TO WHAT EXTENT IS THAT TRUE? >> IF YOU LOOK AT THE DEAL FLOW, IT SITS IN THREE MAIN PLACES. WE ARE SEEING MORE CORPORATE CARVEOUTS, TAKING NON-CORE SUBSIDIARIES OUT OF COURSES BECAUSE THEY NEED TO FOCUS ON THEIR CORE BUSINESS AND FAMILY PARTNERSHIPS WHERE YOU CAN PARTNER WITH A FOUNDER, FAMILY-OWNED BUSINESS, THEY ARE THREE TIMES MORE FAMILY-OWNED BUSINESSES IN EUROPE THAN IN THE U.S. IF YOU LOOK AT WHERE WE ARE PUTTING CAPITAL TO WORK, 80% OF THE DEAL FLOW IN EUROPE, THE DEALS WE'VE INVESTED IN HAVE COME FROM THESE PARTNERSHIPS. THAT'S CREATING A HUGE AMOUNT OF OPPORTUNITY WHERE WE COULD BE A PARTNER TO THOSE COMPANIES. THEIR FOCUS ON ONE MAIN THEME, HOW DO THEY GROW, HOW DO THEY INCREASE THEIR OPERATION BECAUSE THAT'S A COMPETITIVE ADVANTAGE AND THAT'S WHERE THE RETURNS ARE COMING FROM. 80% OF RETURNS ARE COMING FROM GROWING THE BOTTOM LINE AND BEING THEMATIC INVESTORS NOT WRITING INTEREST RATES. KRITI: THE POINT YOU MAKE IS THE ALMOST QUINTESSENTIAL WHEN AND THEN SO MUCH OF THE MASSIVE GROWTH ONES ARE STILL WRAPPED UP IN FAMILY-OWNED BUSINESSES. YOU SEE IN THE LUXURY SECTOR AND IN FRANCE AS ONE EXAMPLE, IS THAT REALLY JUST A QUESTION OF FLOW, IS THAT A MARKET PLUMBING ISSUE THAT YOU LEVERAGE THAT OUT AND HOW RECEPTIVE ARE THESE FAMILIES YOU ARE TARGETING? >> I THINK THESE FAMILIES WANT BEST IN CLASS OPERATIONS BECAUSE WHAT THEY HAVE TO DO TO BE COMPETITIVE IS TO GROW TO BE THAT MARKET LEADER. AND I THINK MANY OF THE FAMILIES UNDERSTAND WHERE THEY COULD DO IT ON THEIR OWN AND I THINK THAT'S LESS OF AROUND THE MARKET DYNAMICS WERE MORE AROUND THE OPERATION OF EFFICIENCIES THAT HAPPEN WHEN YOU THINK ABOUT PRODUCTION EFFICIENCIES, MANUFACTURING. KRITI: WE'VE TALKED ABOUT THIS AND I THINK IT'S FASCINATING AND WHEN I DID NOT CONNECT THE DOTS ON. OH, A GERMAN COMPANY, VERY SIMILAR BUSINESS MODEL, THAT YOU ARE NOW LEVERAGING AS A PRIVATE CAPITAL PARTNER AT A TIME WHEN AI, SPACE, SATELLITE DATA IS HELPFUL, HOW DO YOU VALUE A DEAL LIKE THAT ONE IN THE PUBLIC SECTOR THOSE VALUATIONS ARE SEEN AS TOO HIGH? >> ONE OF THE EXAMPLES IS A GERMAN ONE WHERE WE PARTNERED WITH A GERMAN FAMILY, A FOUNDER OF THE BUSINESS CALLED OHV, ONE OF THE LEADERS IN SPACE WHO ARE FOCUSED ON THE SATELLITES, BUT THE ENTIRE SPACE ECOSYSTEM AND VALUE CHAIN. THIS IS ONE OF THOSE OPPORTUNITIES WHERE YOU COULD GO IN AND BUY SOMETHING THAT THE MARKET DIDN'T UNDERSTAND IN WHAT THEY ARE FOCUSED ON HIS GROWTH. HOW DO YOU MAKE YOUR MORE OPERATIONALLY EFFICIENT, HOW DO YOU FOCUS ON CONSOLIDATION, AND HOW DO YOU CAN HELP THEM BRING IN BEST PRACTICES TO ROAD -- GROW THEIR BOTTOM LINE. YOU COULD TAKE THEIR FAMILY PARTNERSHIP BUT ALSO THEY WERE PUBLICLY TRADED AND NOT UNDERSTANDING THE VALUE DYNAMIC IN THE MARKET. KRITI: ARE THESE DEALS CHEAPER THAN IN EUROPE BECAUSE IT'S SUCH A NEW PHENOMENON TO THESE FAMILIES? >> I THINK YOU ALWAYS HAVE TO PAY A FAIR PRICE. THIS IS NOT THE 1980'S WE CAN GET THINGS ON THE CHEAP. YOU WILL PAY A FAIR PRICE BUT WHAT YOU PAY AT THE END DAY, A FOCUS ON THE WHO VERSUS THE WET. IT'S FOCUSED ON WEB VALUE GET OUT OF THE BUSINESS AND HOW DO WE GROW THIS TOGETHER. IF YOU ARE THE RIGHT PARTNER, THERE'S A VALUE IN THAT THAT'S WAY BEYOND. KRITI: IN THE LAST 24 HOURS WE HAD A REPORT COMING FROM MARIO DRAGHI THAT WE NEED MORE MONEY AND WE NEED MORE INVESTMENT, WHAT ATTRACTS PRIVATE CAPITAL WHEN WE ARE LOOKING AT AN UNDERDEVELOPED ECONOMY AND NOT A DEEPER ONE, WHAT IS THE SWEETENER FOR FIRMS LIKE KKR? >> IT COMES DOWN TO FINDING THOSE GOOD COMPANIES THAT YOU CAN MAKE GREAT. IT'S THE QUALITY. IF YOU'RE TRYING TO ARM THE MARKETS, IT'S ABOUT THE FUNDAMENTALS. LOOKING OUT THE TECHNICALS, THE FUNDAMENTALS, THAT HE FIND GOOD COMPANIES WHERE THEY WANT YOUR PARTNERSHIP AND YOU CAN DOUBLE DOWN FOCUSING ON BEST IN CLASS OPERATIONAL PRACTICES TO DRIVE RETURNS. IT'S A PARTNERSHIP IN THE OPERATIONAL VALUE ADD. KRITI: I'M CURIOUS TO SEE HOW IT SHOWS UP. WE WILL HAVE THAT CONVERSATION SOON. TALKING TO US A LITTLE BIT ABOUT HOW YOU FIND THE ATTRACTIVE OPPORTUNITIES IN EUROPE, A PLAYBOOK THAT IS VERY DIFFERENT FROM HOW THEY OPERATE OVER THE STATES. ANNA: REALLY INTERESTING CONVERSATION. IT'S BEEN A TOPIC OF CONVERSATION, DIVINE ACROSS THE ATLANTIC FOR MANY DECADES. KRITI CONTINUES THE COVERAGE IN FOCUS OVER THERE IN PARIS. THIS GO FROM THERE PRIVATE MARKETS TO THE PUBLIC MARKETS TO TALK ABOUT WHAT'S HAPPENING. OUR MARKETS LIVE EXECUTIVE EDITOR, LET'S TALK ABOUT THESE MARKETS AND WE ARE WAITING FOR SOMETHING. WE SAID EARLIER, ARE WE WAITING FOR CPI ON WEDNESDAY, FOR THE DEBATE THIS EVENING JUST TO GET A SENSE OF WHAT THE VOTING IN SWING STATES, IS THAT WHERE WE LOOK FOR CLARITY ON POSTDEBATE? GUY: -- MARK: I THINK IT'S THE DEBATE WE ARE WAITING FOR. WE WON'T KNOW THE IMPACT IMMEDIATELY. UNLESS THERE IS A COMPLETE, CLEAR VICTORY LIKE THERE WAS WITH THE TRUMP-BIDEN DEBATE. BUT WITHOUT SURPRISE OR SHOCKING DISAPPOINTMENT FROM ONE OF THE CANDIDATES, IT MIGHT TAKE TIME TO PROCESS BUT IT IS THE DEBATE THAT IS THE FOCUS. IT'S INTERESTING GIVEN THAT MOST OF US FEAR CPI HAS BEEN AN IMPORTANT PRINT AND IT SHOWS HOW WE HAVE MADE THE TRANSITION TO JOBS BEING THE FOCUS WILL -- BEING THE FOCUS RATHER THAN INFLATION. AGAIN, WE CARE ABOUT JOBS OVER INFLATION. PARTICULARLY BECAUSE WE'VE GONE THROUGH THE COVID TIME OF WHEN WE WERE GETTING VOLATILE INFLATION PRINTS. WE KNOW THERE WILL BE LESS OF A SURPRISE. IF IT MISSES IT WILL ONLY BE BY A MINOR AMOUNT MORE IN THE ROUNDING. GUY: IF I'M WATCHING THE DEBATE, WHAT IS MY INDICATION, IS A BITCOIN, FUTURES, EQUITY FUTURES, THE TWO YEAR, WHAT AM I WATCHING? MARK: THE BETTING MARKETS ARE PROBABLY THE BEST WAY TO GET THE STRAIGHTEST INTERPRETATION. THERE'S A LOT MORE THAT THEY ARE INCREASINGLY MANIPULATED BECAUSE PEOPLE REALIZE THEY USE THE BETTING MARKETS AS A GUIDE AND YOU GET MOMENTUM THROUGH THE BETTING MARKETS. IT WILL BE SLIGHTLY UNDERMINED. I THINK YOU HAVE TO TAKE A BIT OF THE BETTING MARKETS. YOU HAVE TO TAKE WHAT'S HAPPENING IN CRYPTO AS A KNEE-JERK REACTION, THEN YOU HAVE TO LOOK AT SOME OF THE BASIC ASSET, THERE'S A BIT OF A DIVIDE, AND IT GOES INTO THE POLITICAL DIVIDE ON WHETHER EACH CANDIDATE IS GOOD OR BAD FOR VARIOUS ASSET CLASSES. IN THE SHORT-TERM TERM, UNTIL YOU GET POLLS, I DO THINK, EVEN THOUGH THEY ARE NOT PERFECT, IT'S BETTING MARKETS ARE PROVIDED BETTER GUIDE TO THE MARKETS. ANNA: Harris, Trump Presidential Debate Later THINKING OF THE MACRO STORIES, WE ARE DEALING WITH A BIT OF NEWS FLOW OUT OF CHINA, WHETHER IT'S THE INFLATION FRONT OR THE EXPORT DATA THIS MORNING, THE TRADE DATA THIS MORNING, CHINESE STOCKS TURNED AROUND AND ACTUALLY COMMODITY PRICES ARE FURTHER. THAT HAS NOT BEEN THE STORY AT THE LAST DAYS WHEN IT COMES TO COMMODITIES, OR THE LAST YEARS WHEN IT COMES TO CHINESE STOCKS. MARK: THERE IS STILL A LOT OF PESSIMISM THERE, IT'S REALLY NOT CHANGING THAT CHINA NEGATIVITY, THE PRICE ACTION IS MARGINALLY REASSURING AND SHORT-TERM BASIS, BUT THAT IS IN THE CONTEXT OF SEVERAL YEARS OF NOT BEING VERY REASSURING. I'M STILL VERY CONSTRUCTIVE ON GLOBAL STOCKS INTO YEAR END, I AM NOT SEEING CONCERNS GLOBALLY, BUT PARTICULARLY IN THE U.S., THE FED HAS JUMPED OVER THE PAST WEEK. WE ARE SEEING GOOD GROWTH IN THE U.S., OK GROWTH GLOBALLY, AND I THINK STOCKS WILL CONTINUE TO TRADE POSITIVELY ON THAT STORY OF SOLID ECONOMIC GROWTH, EVEN IF IT'S NOT AT Stocks to Watch: Astrazeneca, Daichii Sankyo, Oracle STANDING. GUY: EXECUTIVE EDITOR OF THE MARKETS, MARK CUDMORE, SIX LETTERS, MLIV , BUT IT SHOWS IN AND GET FANTASTIC ANALYSIS. LET'S TALK ABOUT THE SINGLE STOCK STORY, JOE EASON HAS THE DETAILS. JOE: WATCHING ASTRAZENECA IN LONDON AFTER A NEGATIVE UPDATE ON ONE OF THEIR KEY LUNG CANCER DRUGS THAT DID NOT MEET SIGNIFICANCE OF THE CHILD THAT WAS EXPECTED TO GET ACCORDING TO A STATEMENT FROM A COMPANY LAST NIGHT. WE SAW THE STOCK DROPPED AROUND 2.6% IN U.S. TRADE AND THIS IS THE ADR ON THE U.S. STOCK OF ASTRAZENECA. THE DRUG IS STILL LIKELY TO GET APPROVAL, ACCORDING TO ANALYSTS, GIVEN IT DID SHOW SOME STRONG SURVIVAL RESULTS BUT IT'S NOT AS STRONG AS EXPECTED. THERE WE TAKE A LOOK AT THE JOINT VENTURE PARTNER OVER IN A SHOW. GETTING ABSOLUTELY SLAMMED ON THIS RESULT GIVEN THAT THEY HAVE TEAMED UP WITH ASTRA, DOWN ALMOST 9% OVERNIGHT FOR THAT ONE. DEFINITELY ONE TO WATCH IN LONDON. WE ARE ALSO WATCHING THE SOFTWARE STOCKS THAT SOARED IN THE U.S. STRONG BOOKINGS ON THE CLOUD BUSINESS DRIVEN BY A WITH DEALS FOR THE UNIT WITH COMPETING WITH COMPANIES LIKE MICROSOFT AND AMAZON. THAT STOCK UP AROUND 9%. WE WOULD EXPECT A BOOST IN THE LIKES OF S&P. ALL OF THOSE WORTH WATCHING IN TERMS OF THE READ ACROSS THERE. THEN WE ARE ALSO WATCHING IT DOWNGRADED OVER AT BARCLAYS, THEY ARE UNDERWEIGHT CITING THE RISK OF COMPETITIVE THREATS FROM SHEIN AND OTHERS, KEEP AN EYE ON THAT ONE AFTER A MASSIVE RALLY. IT'S UNDERWAY. IN A CULINARY EQUITIES REPORTER JOE EASTON WILL BE BACK AFTER THE MARKETS OPEN TO GIVE US A SENSE OF WHERE STOCKS HAVE BEEN HEADING. FUTURE PICTURES ARE NEGATIVE. FTSE DOWN. ALSO ARE LOOKING SLIGHTLY MORE POSITIVE. European Market Open, Alti Global's Nancy Curtin on Macro Environment GUY: TUESDAY THE 10TH. LET'S LOOK AT THE LEGACY GOING INTO THIS MORNING'S OPENING TRADE. THE WHITE LINE IS EUROPE. WE CLOSED OUT IN EUROPE NOT TOO FAR FROM WHERE WE FINISHED IN THE UNITED STATES. THE LEGACY OUT OF THAT AFTERNOON TRADING SESSION FROM THE U.S. POINT OF VIEW NOT THAT GREAT FOR EUROPE THIS MORNING, MAYBE WHY WE HAVE FUTURES AS THE COLUMNED AS THEY ARE THIS MORNING. KEEP A FIRM EYE ON CHINA AND THE DEBATE COMING UP IN THE UNITED STATES. CPI DATA SHORTLY OUT OF THE UNITED STATES. THAT'S A STORY MAY BE TOMORROW. THE FTSE 100 GIVING BACK A LITTLE BIT OF GROUND AFTER YESTERDAY'S RALLY. DOWN CIRCA 0.6%. ELSEWHERE, WE'RE FLAT ON THE EURO STOXX 50, NASDAQ FUTURES ARE SOFTER. APPLE DID NOT DO MUCH YESTERDAY. SOME KEY CORPORATE EARNINGS FOR BIG TECH OUT OF EUROPE THIS MORNING. ANNA: SOME OF THE THEMES WE WERE HEARING ABOUT FROM JOE EASTON A MOMENT AGO. WE WILL KEEP AN EYE ON ASTRAZENECA. WE WILL TALK TO THE MANAGEMENT IN A COUPLE OF HOURS TIME ON BLOOMBERG TV. AN HOUR AND A HALF IN FACT. WE HAVE SEEN THE SHARE PRICE OF DAIICHI SANKYO WHICH IS IN PARTNERSHIP WITH ASTRA, LUNG CANCER DRUG IS UNDER PRESSURE IN THE ASIA SESSION. WE WILL BE LOOKING FOR WHAT RESPONSE WE SEE IN ASTRAZENECA. WE ARE FOCUSING ON THE READ ACROSS FROM ORACLES RESULTS AND WHAT THAT MEANS FOR THEM EUROPEAN NAMES. PROFITS CAME IN ABOVE ESTIMATES. LOATH -- GROWTH IN THE CLOUD BUSINESS IS CRUCIAL AT ORACLE. AND ASOS IN FOCUS. DOWNGRADED AT BARCLAYS. A LOT OF FOCUS ON THE COMPETITIVE CHALLENGES THAT BUSINESS MIGHT FACE. GUY: THE ROCKET LAUNCHES BEEN PUSHED BACK. THE EUROPEAN MARKET OPEN HAS NOT. IT IS TIME FOR THE EUROPEAN OPENING TRADE. I THINK YOU'LL SEE A FAIRLY QUIET SESSION TODAY. THE MARKET IS OPEN. THIS IS THE PICTURE ON THE SCREENS IN FRONT OF YOU THIS MORNING. FTSE 100 IN AND OUT OF NEGATIVE TERRITORY. THE FUTURE INDICATED A NEGATIVE OPEN CIRCUIT 0.6%, SO WE WILL SEE THE DOWNSIDE AS THE MARKET GETS FULLY OPENED. STOXX 600 FLAT AS A PANCAKE. SIMILAR STORY FOR THE SPANISH MARKET. WE WILL WAIT AND SEE WHAT THE CATALYST WILL BE LATER IN THE DAY. MARK CUDMORE INDICATED IT COULD BE THAT U.S. DEBATE. HOW THAT TRANSLATES TO FINANCIAL MARKETS WILL BE INTERESTING. WE HAVE THE DATA TODAY JUST OVER THE NEXT THREE HOURS OUT OF THE STATES. THE FTSE 100 NOT DELIVERING THE DOWN SIDE WE ANTICIPATED. CIRCA DOWN 0.2% AT THE MOMENT. WHAT'S BELOW THE SURFACE? ANNA: GAINS IN THE TECHNOLOGY SECTOR SEEM TO BE BELOW THE SURFACE. WE WERE TALKING ABOUT ORACLE READ-ACROSS AND PERHAPS THERE IS A LITTLE BIT OF THAT. CAP GEMINI UP 4.8% WITHIN THE TECHNOLOGY SECTOR, ONE OF THE BIGGEST INTO READERS TO POSITIVITY. TECHNOLOGY IS BEST PERFORMING SECTOR THIS MORNING. UP 0.4% GRADE ONLY TWO OTHER SECTORS IN POSITIVE TERRITORY TO YOUR POINT. PRETTY QUIET SESSION IN TERMS OF THE FUTURES EXPECTATIONS. THERE WERE MUTED. MOST SECTORS ARE IN NEGATIVE TERRITORY. AUTOS AND PARTS IS THE WEAKEST PERFORMING, DOWN 0.4%. VW IS IN THERE, SOME SUPPLIERS TO THE AUTO SECTOR ALSO LOOKING WEAKER. THAT STAND OUT STORY TO THE UPSIDE AROUND TECHNOLOGY SEEMS WORTH LINGERING ON FOR A MOMENT. THE LIKES OF CAP GEMINI MAKING GAINS PERHAPS LINKED TO WHAT WE HEARD OUT OF ORACLE. GUY: THE BIGGEST POINTS AGAIN ON THE STOXX 600 THIS MORNING. CAP GEMINI. BUT ASML IS ALSO ADDING POINTS. AFTER THAT, IT IS A MORE ECLECTIC MIX OF STOCKS ON THE UPSIDE. ON THE DOWNSIDE, WHAT IS CLEAR IS WE'RE SEEING WEAKNESS IN THE DRUG SECTOR MORE BROADLY. YOU ARE TALKING ABOUT ASTRAZENECA BUT THE OVERALL DOWNSIDE, NOVO NORDISK DOWN, ROCHE DOWN, NOVARTIS UNDER PRESSURE AS WELL. YOU SEE SOME OF THAT TRADE COMING OFF. I THINK IT IS MORE THAN THAT. I THINK IT IS SAFETY TRADE WE ARE SEEING WEAKNESS IN TODAY. THE LIKES OF NESTLE UNDER PRESSURE. DEFENSIVES HAVE BEEN A PERFORMING CYCLICALS FOR A WHILE, MAYBE AN UNWIND OF THAT TRADE THIS MORNING. OIL IS LOWER, SHELL IS DOWN, TOTAL IS DOWN. IS ANY OF THIS RELATED TO CHINA? I'M NOT SURE. THAT'S OIL TRADE WILL BE ONE WE WILL WATCH OUT FOR. PEOPLE CALLING MORE DOWNSIDE IN OIL. ANNA: IT IS A CONFUSING READ ACROSS FROM THE CHINA STORY INTO LONDON. IT WAS ALWAYS A LITTLE MURKY BECAUSE THE BIGGER PICTURE IS NEGATIVITY AROUND CHINESE STOCKS. WE COVERED WEAKNESS IN COMMODITY PRICES FOR MANY SESSIONS, BUT THIS MORNING LOOKING AT THE GMM, WE HAVE STRENGTH IN SOME OF THE COMMODITY MARKETS, CERTAINLY, THROUGH THE ASIA SESSION EVEN IF IRON ORE IS DROPPING INTO LONDON TIME BUT MAKE STREET ACROSS FROM CHINA INTO EUROPE. WE ARE SEEING WORSENING TRADE AROUND AUTOS WHICH IS INTERESTING, THAT SECTOR NOW DOWN 0.8%. LET'S DIVE INTO A DIFFERENT SECTOR. INITIAL SERVICES. GOLDMAN SACHS' CEO DAVID SOLOMON SIGNALED A NOTE OF CAUTION TO INVESTORS. THE TRADING UNIT IS ON TRACK TO FOLLOW MORE THAN ESTIMATES LED BY DECLINES IN ITS FIXED INCOME TRADING BUSINESS. >> FIRST, WITH RESPECT TO TRADING, I WOULD SAY THAT WITH FICC AND EQUITY WE HAVE AN EXTREMELY STRONG THIRD-QUARTER IN 2023. THIS QUARTER, GIVEN THE MORE CHALLENGING MACROENVIRONMENT, PARTICULARLY THE MONTH OF AUGUST, THAT BUSINESS IS TRENDING DOWN CLOSE TO 10%. ANNA: GOLDMAN SACHS' DAVID SOLOMON SPEAKING YESTERDAY, ON MONDAY, WITH A LITTLE BIT OF GUIDANCE AS TO WHERE THE BUSINESS GOES. NANCY CURTIN, GLOBAL CIO AT WEALTH AND ALTERNATIVE MANAGER ALL TT DEBT GLOBAL IS WITH US THIS MORNING. MAYBE WE WILL DIVE INTO THE FINANCIALS SHORTLY. DAVID SMALLMAN ON WHAT TO EXPECT FROM THAT SECTOR BUT I WANT TO START WITH THE BIGGER PICTURE BECAUSE HAVING READ YOUR NOTES THIS MORNING I FELT ENTIRELY MORE BECAUSE HAVE ABOUT THE WORLD. MAYBE WE CAN DIVE INTO SOME OF THAT DETAIL. YOU SAY ANY NEGATIVITY IS JUST A POLE BACK. YOU DON'T SEE ANYTHING LIKE A HARD LANDING IN THE U.S. YOU SAY THIS IS WHAT A SOFT LANDING LOOKS LIKE. GIVE US THE TOP LINE ON THE LEVEL OF BULLISHNESS. GEOFFREY: FIRST OF ALL, THE MARKET IS UP ALREADY 16, 18% DEPENDING ON WHICH DAY BECAUSE IT HAS BEEN SO INCREDIBLY VOLATILE. THE IMPORTANT THING IS A SOFT LANDING WAS ALL ABOUT SLOWING THE ECONOMY, SO WE COULD GET INFLATION DOWN. THAT IS WHAT HAS BEEN GOING ON. WE HAVE COME OFF THE TORRID PACE OF LAST YEAR. JOBS HAVE COME IN LITTLE BIT THERE ARE POCKETS OF WEAKNESS IN THE U.S., MANUFACTURING LOW END CONSUMERS ETC. BUT GENERALLY WE THINK THE U.S. ECONOMY REMAINS RESILIENT, AND WHERE THERE ARE POCKETS OF RESILIENCE HELP IS ON THE WAY BECAUSE THE FED WILL EASE NEXT WEEK AND THIS IS THE BEGINNING OF FURTHER POLICY NORMALIZATION TO COME. ANNA: HELP ON THE WAY AND IN TERMS OF FEDERAL INTEREST-RATE CUTS BUT IF THINGS ARE JUST NORMALIZING, OR COOLING, NOT COLLAPSING, THEN WE WILL NOT GET A LOT OF HELP IN A HURRY FROM THE FED, ARE WE? NANCY: I THINK IT WILL AIR ON THE SIDE OF CAUTION. AS INVASION HAS COME DOWN, REAL RATES HAVE GONE DOWN, THAT WOULD BE PASSIVE TIGHTENING. THE FED WOULD BE TIGHTENING MORE IF THEY DIDN'T BRING RATES DOWN. WE THINK THERE IS MAYBE 25 NEXT WEEK, MAYBE 75 FOR THE END OF THE YEAR. IT WILL BE DATA-DEPENDENT. WE WILL HAVE TO WATCH THE JOBS AND INFLATION NUMBER, AS WE HAVE DONE THIS YEAR, BUT GENERALLY WE THINK MID TO UPPER END CONSUMER IN THE UNITED STATES IS DOING FINE. INVESTMENT SPENDING IN THE SECOND QUARTER REVISION OF GDP WAS UP 7%. THERE IS A LOT OF GOOD THINGS TO TALK ABOUT IN THE U.S. ECONOMY. THE POCKETS OF WEAKNESS ARE IN THE INTEREST-RATE SENSITIVE PARTS OF THE ECONOMY AND THAT'S FOR THE HELP IS COMING. IT'S NOT JUST THE FED, ECB LIKELY CUTS RATES ON THURSDAY, BANK OF CANADA CUT LAST WEEK, SO THIS IS AN ADVANCED ECONOMY GLOBAL SYNCHRONIZED USING AND THAT HELPS AS WELL. GUY: IF THE FED CUTS 50, WILL THAT SHAKE YOUR CONFIDENCE? NANCY: AT THE END OF THE DAY, THEY WANT TO GET AHEAD OF WHAT THEY SEE AS WEAKNESS IN THE LABOR MARKET, OR AT LEAST, SLOWING. IT IS NOT REALLY COLLAPSING BUT DEFINITELY SLOWING AND THEY WANT TO GET AHEAD OF THAT. IF THEY DO 50, THEN THEY WILL DO 25 NEXT MONTH. GUY: YOU TALKED ABOUT VOLATILITY, IF IT PERSISTS, SHALL I TAKE LESS RISK? NANCY: NO, YOU HAVE TO RIDE THROUGH THIS. VOLATILITY TENDS TO INCREASE IN THE MONTH BEFORE A PRESIDENTIAL ELECTION CYCLE GOING BACK 10 ELECTIONS, IT ALWAYS GOES UP IN THE COUPLE OF MONTHS BEFORE, WE HAVE THIS UNCERTAINTY ECONOMICALLY ETC. WE ARE ALSO EXPERIENCING MARKET ROTATION. THAT BRINGS VOLATILITY BECAUSE PEOPLE ARE SELLING DOWN TECH AND POSITIONING IN OTHER PARTS OF THE STOCK MARKET. NO, WE HAVE GOT TO STAY PUT. THAT'S THE POINT OF LONG-TERM INVESTING. SEE THROUGH THE VOLATILITY. LOOK WHAT HAPPENED THE MONTH OF AUGUST. IF YOU HAD MISSED THE TURN, YOU WOULD'VE MISSED A DECENT AUGUST, SO NO, SO NO COMING AFTER RIDE THROUGH IT. ANNA: YOU EXPECT INVENTORY BUILT AHEAD. NANCY: MANUFACTURING. ANNA: THIS SOUNDS LIKE IT COULD HELP EUROPE. NANCY: EUROPE IS A DIFFERENT LITTLE CATALAN FISH AND I THINK DRAGHI IS TRYING TO DO SOMETHING THERE. INVENTORY TO SALES RATIO IS AT A SIX-YEAR LOW IN THE UNITED STATES. WE HAVE HAD FIVE MONTHS OF MANUFACTURING CONTRACTION. RATES ARE COMING DOWN. WHO WANTS TO HOLD INVENTORY IN A HIGH INTEREST RATE ENVIRONMENT? IF GROWTH CONTINUES, WE THINK INVENTORY BUILD WILL BE A POSITIVE CONTRIBUTION TO GDP. WE EXPECT THAT TO PICK UP AS THE FED BRINGS RATES DOWN AND MAKES THE COST OF FINANCING EASIER FOR COMPANIES. ANNA: YOU MENTIONED DRAGHI. LET'S THINK ABOUT THE EUROPEAN STORY BECAUSE AND WE ARE GETTING THE BENEFIT OF MONETARY POLICY EASING FROM THE ECB. THERE ARE ALL THESE STRUCTURAL ISSUES AND COMPETITIVE ISSUES WE HAVE BEEN TALKING ABOUT FOR 20 YEARS IT WOULD SEEM. IN 2003, THERE WAS A SIMILAR REPORT TALKING ABOUT LACK OF COMPETITIVENESS IN EUROPE. DOES THE FACT THAT DRAGHI IS SAYING IT, SUCH A SERIOUS CHARACTER AS DRAGHI, MAKE ANY DIFFERENCE FOR WHAT YOU INSPECT TO SEE WITH YOUR INTERNATIONAL PERSPECTIVE IN EUROPE? NANCY: I HOPE SO. EUROPE NEEDS A DRAGHI SOLUTION AND HE DEFINITELY HAS COME OUT WITH A STRONG CLARION CALL. AND I AM VERY HOPEFUL THAT VON DER LEYEN LISTENS. GUY: WHAT ABOUT 50 BASIS POINTS OF CUTS FROM THE ECB? NANCY: EUROPEAN GROWTH IS MORIBUND AT THE MOMENT. GUY: DOES EUROPE NEED RATE CUTS MORE THAN THE U.S.? "BLOOMBERG THINK THE ECB WILL BE CAUTIOUS -- NANCY: I THINK THE ECB WILL BE CAUTIOUS. I THINK THE BETTER SOLUTION IS WHAT DRAGHI TALKS ABOUT. GUY: THAT IS SUPER LONG-TERM. NANCY: THAT IS WHAT THE MARKETS NEED TO SEE. THEY NEED TO SEE EUROPE BEGINNING TO INVEST STRATEGICALLY TO THINK ABOUT ECONOMIC GROWTH IN THE FUTURE. THAT IS MISSING. ANNA: SOME EXAMPLES OF ACTIONS THAT NEED TO BE TAKEN, BANKING UNION, FOR EXAMPLE, AND YOU CANNOT AGREE ON THE DETAIL -- NANCY: WE PROBABLY NEED A CRISIS. I THINK DRAGHI'S REPORT WAS A REAL CLARION CALL TO THE EU GOVERNMENT THAT THEY NEED TO DO SOMETHING. OTHERWISE BY THE WAY THE UNITED STATES WILL CONTINUE TO INVEST STRATEGICALLY. THIS IS THE NEW MANTRA FOR GOVERNMENTS AHEAD. STRATEGIC INDUSTRIAL POLICIES. GUY: THAT FEELS VERY LONG-TERM AND SPECULATIVE. NANCY: LOOK AT WHAT THE INFLATION REDUCTION ACT IS DONE. GUY: WHY DO I PUT MONEY TO WORK IN EUROPE RIGHT NOW? NANCY: I THINK THERE WILL BE RECOVERY IN EUROPE. EUROPE AT THE TOP DOWN NEVER LOOKS TERRIBLY GOOD, BOTTOM UP, THEY HAVE SOME VERY GOOD COMPANIES. IF WE GET THIS ADVANCED ECONOMY EASING, MANY GLOBAL COMPANIES WILL BENEFIT, AND STOCKS ARE CHEAPER ARE IN EUROPE. I'M NOT BANGING THE TABLE FOR EUROPE. WE STILL THINK THE U.S. IS THE MOST INTERESTING STOCK MARKET ALBEIT MORE EXPENSIVE. ANNA: WE FOCUSED ON APPLE AND ITS OFFERING IN THE AI ARENA. WHAT DOES YOUR THINKING LOOK LIKE AROUND AI? AND THE EXTENT TO WHICH YOU WANT EXPOSURE TO TECHNOLOGY BECAUSE OF AI IN THE SPACE OR MAYBE AI DELIVERS IN OTHER SECTORS AS WELL. NANCY: AI IS EARLY INNINGS. THE MARKET IS WORRIED ABOUT TECH COMPANIES AND ALL THAT SPENDING. THAT WILL COME BUT IN TIME AND WON'T WEIGH ON SENTIMENT. AI IS AN S CURVE. WE WILL MOVE FROM ALL THIS ADDITIONAL INFRASTRUCTURE TO AI AT THE EDGE. THAT'S IN OUR PHONE, APPLE 16, 17 AND BEYOND. THERE WERE SO MANY ENHANCEMENTS, IT WAS NOT EXACTLY SIRI ON STEROIDS, BUT I THINK THERE IS MORE TO COOPER. WHEN AI TAKE HOLD IN PARTS OF THE ECONOMY, SECTORS LIKE INDUSTRIALS AND FINANCIALS AND HEALTH CARE, AND THAT IS NOT PRICED IN, AND THAT'S WHAT WE THINK IS A POWERFUL LONG-TERM STORY. GUY: THANKS FOR STOPPING BY TO SEE US. NANCY CURTIN, GLOBAL CIO AT WEALTH AND ALTERNATIVES MANAGER ALTI TIEDEMANN GLOBAL. MORGAN STANLEY SEES THE EURO TANKING 7%. BACK TO PARITY. ECB MAY BE ESCALATING ITS RATE CUTTING CYCLE. LET'S FIGURE OUT EUROPE THIS MORNING. THIS IS WHAT THE CORE SIX LOOKS LIKE. LITTLE BIT OF GREEN ON THE SCREEN, LVMH AND FERRARI RISING, ASML DOING SOME LIFTING THIS MORNING. YOU SEE HEALTH CARE AND SOME DEFENSIVE STOCKS WHICH HAD BEEN OUTPERFORMER'S RECENTLY STRUGGLING A BIT. NESTLE FLAT. LET'S TALK ABOUT SINGLE STOCKS. THE HEALTH CARE SECTORS IN FOCUS. AND HEARING AIDS. DO I NEED TO WORRY ABOUT THE FACT THAT THESE NEW APPLE AIRPODS CAN DO THAT JOB FOR ME, JOE EASTON? JOE: THAT'S WHERE WE ARE GOING FIRST, IT IS HEARING AIDS, THESE STOCKS GETTING HIT FOLLOWING NEWS THAT APPLE IS POTENTIALLY GOING TO BE INTRODUCING A HEARING AID FUNCTION IN THE LATEST VERSION OF THE AIRPODS. THAT'S WHAT THEY SAID IN THEIR RELEASE LAST NIGHT. THEY DO SAY THEY HAVEN'T YET GOT FDA APPROVAL FOR THIS UPDATE TO THE PRODUCT BUT IT LOOKS LIKE A THREAT TO THE STOXX, SO WE SEE THE LIKES OF AMPLIFON AND DEMANT, A LOT OF THESE LISTED IN DENMARK AND CITIES AROUND SCANDINAVIA, ALL OF THOSE GETTING HIT ON THAT NEWS. STAYING IN HEALTH CARE, ASTRAZENECA, WE MENTIONED THIS IN STOCKS TO WATCH. IT IS A BIG MOVE DOWN 5% FOR ASTRA ON NEWS THAT A KEY CANCER DRUG DID NOT LIVE UP TO ANALYST EXPECTATIONS IN THE SMALL CELL LUNG CANCER. WE SAW THE JOINT VENTURE PARTNER FOLLOWING 9% IN ASIA OVERNIGHT. NEGATIVE NEWS, ONE OF THE WORST PERFORMERS ON THE FIRST 100 TODAY, DOWN 5% FOR ASTRA. A COUPLE OF DEALS MOVERS TO BRING YOU. ONE OF THEM IN THE U.K. A MASSIVE TAKEOVER FOR CENTAMIN, MORE THAN 2 BILLION POUNDS, THIS IS THE GOLD MINER. AT GOLD PRICES HAS HELPED THAT COMPANY. IT IS UP 23%. A TAKEOVER FROM A SOUTH AFRICAN COMPANY COMING FOR THE U.K. FIRM. WE ALSO HAVE ROV LOOKING TO SELL SOME ASSETS ACCORDING TO SPANISH PRESS. BUT THAT ONE NOT GETTING TOO MUCH OF A BOOST, IT IS DECLINING 1.5%. TO SOFTWARE STOCKS NOW. WE HAVE MOVES IN THESE. BIT OF A FROM ORACLE. SAP, SAGE, DASSAULTES, ONE OF OUR VIEWERS JUST MENTIONED AND NOTED THAT CAP JIM DOES HAVE A BROKER UPGRADE. I CONFIRMED THAT WITH MY SOURCES. BANK OF AMERICA UPGRADING CAP GEMINI. ALSO A READ ACROSS FROM ORACLE AS WELL. WE WILL DO A COUPLE OF MORNING CALLS. ASOS WE MENTIONED EARLIER AS BARCLAYS GOES UNDERWEIGHT ON THIS STOCK. THEY HAVE A 290 PRICE TARGET. THE STOCK TRADES NOW AT 416, SO A LOT OF DOWNSIDE, THE COMPETITIVE THREAT OF SHEEHAN THEY SAY IS THE RISK FOR THAT ONE GREAT AB INBEV GOING THE OTHER WAY. EXANE BNP PARIBAS UPGRADES THIS FOLLOWING A REBOUND IN BUDWEISER SALES. THAT IS THE WORLD'S BIGGEST BREWER AND IT IS UP 1.8% IN BELGIUM TODAY. ANNA: JOE EASTON FROM OUR EQUITIES TEAM. JOE WAS MENTIONING PRESSURE ON ASTRAZENECA AND THE LUNG CANCER TRIAL WITH DAIICHI NOT GOING AS WELL AS SOME HAD EXPECTED. WE WILL BE SPEAKING TO PASCAL SORIOT, FRANCINE WILL BRING THAT INTERVIEW COMING UP IN THE NEXT HOUR OF PROGRAMMING, JUST LESS THAN AN HOUR FROM NOW. GOOD TO GET HIS PERSPECTIVE. LOTS OF NEWS FLOW SURROUNDING THE BUSINESS IN CHINA RECENTLY. SPEAKING OF CHINA, WE HAVE HUAWEI DEBUTING THEIR TRIFOLD PHONE. WE HAD A CAST OF MANAGEMENT FROM HUAWEI SPEAKING DURING THIS LAUNCH. WE HAD THE DANCERS EARLIER, NOW THE SPEECHES. THEY UNVEILED THIS TRIFOLD PHONE. YOU CAN SEE IT ON YOUR SCREENS. IT LOOKS EXPENSIVE IF SOME OF THE PRICING DETAILS ARE CORRECT. MAYBE NOT EVERYBODY WILL BE GOING FOR THAT ONE. GUY: TRYING TO WORK OUT WHY DO YOU NEED A TRIFOLD PHONE? ANNA: IT GIVES YOU SOMETHING POCKET-SIZED BUT ALSO BIGGER? GUY: WE WILL CONTINUE TO PAY ATTENTION TO WHAT IS HAPPENING HERE. CLEARLY A RESPONSE TO WHAT WE ARE SEEING FROM APPLE. WE WILL TALK ABOUT WHAT IS HAPPENING ON THE LEGAL SIDE. THE EU'S TOP COURT SAID TO DELIVER TWO KEY RULINGS TODAY. IMPLICATIONS FOR APPLE IN THE TAX CASE. WE'RE WATCHING THE GOOGLE ANTITRUST DECISION AS WELL. WE WILL GET ANALYSIS ON WHAT TO BE WATCHING FOR ON THE SHOW LATER. THIS IS BLOOMBERG. ♪ EU Top Court Rules on Apple, Google >> TOP OF MIND FOR US TO MAKE SURE THE MARKET STAYS COMPETITIVE. EVERYTHING GETS FUELED BY ARTIFICIAL INTELLIGENCE. IT WILL CHANGE THE MARKETPLACE. IT IS REALLY IMPORTANT THAT NOW WHEN WE HAVE TECHNOLOGY THAT IS NOT JUST NEW TECHNOLOGY, IT IS BASICALLY A NEW WORLD THAT WE'RE LOOKING INTO, THAT WE MAKE SURE IT IS A COMPETITIVE NEW WORLD. GUY: MARGARET, THE EU'S OUTGOING COMPETITION COMMISSIONER SPEAKING IN APRIL ABOUT AI. TODAY IN SOME WAYS HER LEGACY IS ON TRIAL. THE EU'S TOP COURT WILL DELIVER FINAL RULINGS ON TWO CASES THAT COULD HAVE MAJOR IMPLICATIONS FOR BIG TECH IN EUROPE. THEY WILL DECIDE IF A 30 BILLION TAX BILLS ISLAND WHILE GOOGLE WILL FIND OUT IF IT ABUSED MARKET POWER BY GIVING PROMINENCE TO ITS OWN RESULTS IN ONLINE SHOPPING SEARCHES. JOINING US NOW, FIONA SCOTT MORTON, PROFESSOR OF ECONOMICS AT THE YIELD SCHOOL OF MANAGEMENT AND THE PREVIOUS CHIEF ECONOMIST AT THE ANTITRUST DIVISION FOR THE U.S. DEPARTMENT OF JUSTICE AND LAST YEAR WAS NAMED DIRECTOR GENERAL FOR COMPETITION BEFORE WITHDRAWING FROM CONSIDERATION. I THINK SHE IS QUALIFIED TO TALK ABOUT THIS SUBJECT. GREAT TO SPEAK WITH YOU THIS MORNING. THANK YOU FOR YOUR TIME. HOW SHOULD WE THINK ABOUT THESE TWO CASES THAT ARE COMING UP? IN SOME WAY SO DIFFERENT, BUT IN SOME WAYS, THEY ARE JOINED IN AS MUCH AS THEY REPRESENT EUROPE'S EFFORTS TO REGULATE BIG TECH, AND THE WAY ITS ECONOMIC EFFECT IS SPREAD THROUGHOUT THE ECONOMY. FIONA: THANK YOU FOR HAVING ME. I THINK THE GOOGLE CASES IN A WAY EASIER TO UNDERSTAND BECAUSE IT IS JUST SO OLD. THIS CASE WAS OPENED BACK IN 2010 OR THEREABOUTS, SO IT IS 14-15 YEARS OLD. WHAT THAT TELLS YOU IS IT IS A BIT IRRELEVANT. IT TELLS YOU THAT ANTITRUST IS SO SLOW THAT WHAT YOU NEED IS SOMETHING LIKE THE DIGITAL MARKETS ACT. INDEED THE EU DECIDED ANTITRUST WAS TOO SLOW, PROPOSED ADDITIONAL MARKETS ACT, AND IT IS IN FORCE BY NOW, ALL OF THAT BEFORE WE GET THE FINAL APPEAL. THAT TELLS YOU THERE HAS BEEN A PARADIGM SHIFT. THE AVERAGE CASE, THE STATE AID CASE IS A LITTLE DIFFERENT, BECAUSE THERE YOU ARE THINKING ABOUT ANALOGIZING, CAN A COUNTRY PAY A COMPANY TO COME BUILD A FACTORY THERE? IS THAT THE SAME THING AS THE COUNTRY PAYING THE COMPANY TO PUT THEIR HEADQUARTERS THERE BY LOWERING ITS TAXES? IF THIS DOESN'T WORK FOR VESTAGER, THAT MEANS THE EU HAS TO PASS LAWS IF IT WANTS TO CONTROL THIS KIND OF BEHAVIOR. ANNA: GOOD MORNING, FIONA, SO IF WE TAKE THE GOOGLE CASE IN THE FIRST INSTANCE, AS YOU SET OUT GOING BACK TO 2010. THE FACT THAT WE HAVE A DIGITAL MARKETS ACT NOW. DOES THAT TELL US THAT WE WON'T SEE ANY OF THESE BIG LEGAL TEST CASES AGAINST BIG TECH? WILL THE CONFLICT, IF THAT IS NOT TOO STRONG A WORD BETWEEN EUROPE AND BIG TECH IN THE STATES, TAKE A DIFFERENT FORM FROM HERE? FIONA: IT WILL TAKE A DIFFERENT FORM. I DON'T THINK WE WILL SEE NO MORE OF THESE CASES BUT THE IDEA OF REGULATION IS THAT EVERYONE KNOWS WHAT THE RULES ARE EX-ANTE, SO THEY CAN MOD ERATE THEIR BEHAVIOR AND THE REGULATOR CAN HELP THEM AS THINGS GO ALONG AND YOU DON'T GET AS MANY ANTITRUST COURT CASES AS BEFORE. GUY: HOW SHOULD WE THINK ABOUT WHAT IS ALSO HAPPENING IN THE UNITED STATES AT THE SAME TIME? I'M STARTING TO SEE THE DOJ TAKING SIGNIFICANT ACTION. I'M WONDERING WHETHER OR NOT IT REINFORCES THE EUROPEAN CASES WE ARE WASHING GO THROUGH AND THE EUROPEAN EFFORTS BEING MADE. IS THE UNITED STATES BEHIND EUROPE? IS YOUR APPROVING ITSELF TO BE CORRECT IN THE WAY IT HAS APPROACH SOME OF THESE CASES BY WATCHING WHAT IS HAPPENING STATESIDE? FIONA: THAT IS A VERY GOOD POINT. I THINK WE ARE SEEING THE EU BE PROVED RIGHT BECAUSE THE UNITED STATES IS BRINGING A LOT OF THESE CASES A DECADE LATER AND GETTING THE SAME ANSWER. WHICH IS A GOOD CLUE THAT THERE WAS A GOOD THEORY OF HARM TO BEGIN WITH. WE HAVE THE FIRST OF THOSE RESULTS, THE GOOGLE SEARCH RESULTS IN THE UNITED STATES, CONFIRMING THAT INDEED GOOGLE MONOPOLIZED AND ENGAGED IN ILLEGAL BEHAVIOR EVEN UNDER A DIFFERENT LEGAL STANDARD. BUT YOU CAN SEE THE FUNDAMENTAL BEHAVIOR BEING THE SAME AND BEING NOT COMPETITIVE. ANNA: SO THE U.S. FOLLOWING AND THAT IS YOUR VIEW ON THE OUTCOME. WHAT ABOUT WHAT EUROPE DOES FROM HERE POST DRAGHI? WE HEARD WHAT DRAGHI HAS TO SAY ABOUT COMPETITIVENESS. ONE OF MANY BUT A VERY IMPORTANT VOICE TO POINT OUT A LACK OF TECH AND INNOVATION IN EUROPE. WAS THERE ANYTHING NEW FROM DRAGHI THAT MAKES YOU THINK WE WILL SEE A DIFFERENT REGULATORY LINES IN EUROPE? FIONA: HE WAS KEEN ON ENFORCING THE DMA. HE SAYS IN HIS REPORT THAT HE HAS A LOT TO SAY ABOUT USING EUROPEAN AID, RATHER THAN AT THE NATIONAL LEVEL, AT THE EU LEVEL, TO ACHIEVE THE GOALS OF THE EU, IF IT IS THINGS LIKE MORE TECHNOLOGY, MORE INNOVATION, MORE SKILLS TRAINING. IT IS A LITTLE SUBTLE. NOT A DRAMATIC LET'S BLOW UP BIG TECH, BUT MORE A SUBTLE MESSAGE. GUY: BUT THE MESSAGE WAS ALSO EUROPE HAS TOO MUCH RED TAPE. HOW SHALL I THINK ABOUT THAT GIVEN WHAT HAS GONE BEFORE? ARE THESE COURT CASES AN EXAMPLE OF TOO MUCH RED TAPE? IS EUROPE ENGAGING IN OVERREACH. I HEARD WHAT YOU SAID EARLIER ABOUT THE UNITED STATES NOW BUT IS THE RED TAPE TOO TIGHT IN EUROPE? FIONA: IMAGINE IF YOU FOUNDED YOUR BUSINESS IN MASSACHUSETTS AND IN ORDER TO SELL IN CONNECTICUT, YOU HAD TO GO THROUGH THE WHOLE FOUNDING PROCESS AGAIN, ESTABLISHING YOURSELF AND WHAT YOUR PRODUCT WAS, AND A WHOLE BUNCH OF REGULATORY EFFORT. THAT WOULD BE A HASSLE EVERY TIME YOU ADDED A NEW STATE YOU HAD TO DO THAT. THAT'S WHAT EUROPE IS LIKE. YES, THERE IS TOO MUCH RED TAPE IF YOU WANT TO ACCESS THE SINGLE MARKET. ANNA: WHAT ABOUT WHAT THIS MEANS FOR COMMISSIONER VESTAGER? AS SOMEBODY WHO HAS WATCHED EVERYTHING ON COMPETITION FOR A NUMBER OF YEARS. SHE WILL NOT BE IN THIS ROLE MUCH LONGER. FIONA: IT WOULD BE LOVELY FOR HER PERSONALLY IF SHE WON THESE THINGS. I THINK THE STATE AID TAXES CASE IS REALLY UP IT PHILOSOPHICAL. I DON'T THINK IT IS ABOUT THE EXERCISE OF NORMAL COMPETITION LAW IN EUROPE. IT IS ASKING CIVIL SOCIETY WHICH WAY WILL WE CONTROL THIS BEHAVIOR? THE GOOGLE SHOPPING CASES IMPORTANT, IF THE COURT TURNS DOWN GOOGLE SHOPPING, IT IS MORE JUSTIFICATION FOR THE DIGITAL MARKETS ACT BECAUSE YOU CAN'T DO THESE THINGS THROUGH THE COURTS. ANNA: GOOD TO SPEAK TO YOU, FIONA SCOTT MORTON, PROFESSOR OF ECONOMICS AT YALE SCHOOL OF MANAGEMENT. INSIGHTS FROM ONE OF THE LARGEST FRENCH FIRMS IN PRIVATE SpaceX Polaris Dawn Mission Delays, Ardian's Benedetti at IPEM Paris MARKETS. WE HEAR FROM THE EXECUTIVE GUY: 8:30 IN LONDON. 30 MINUTES INTO THE EQUITY MARKET TRADING SESSION. WE ARE WINNING FOR CATALYSTS TO COME THROUGH FROM THE UNITED STATES IN THE FORM OF CPI AND OF COURSE TONIGHT'S DEBATE. ONE THING THAT WILL BE HAPPENING IN A FEW HOURS TIME IS THE LAUNCH OF THE POLARIS MISSION FROM SPACEX. THE ROCKET IS STILL FIRMLY ANCHORED TO PLANET EARTH, AND WILL BE PROCEEDING IN CIRCA TWO HOURS FROM NOW. WHAT IS HAPPENING IN NEW YORK RIGHT NOW IS THAT MANUS CRANNY AND DANI BURGER ARE BASICALLY STUDYING ASTROPHYSICS. AND TRYING TO FIGURE OUT WHAT THIS LAUNCH WILL DELIVER BECAUSE IT WILL NOW BE IN THEIR POWER. -- HOUR. W GUY: THE EU IS PROPOSING THAT IT WILL LOWER TARIFFS ON TESLA'S AND OTHER EV'S FROM CHINA. THE TESLA TARIFF WILL NOW DROP TO 8% FROM 9%. IT WILL BE INTERESTING WHETHER THE AUTO SECTOR, MAYBE THAT IS WHY WE SEE WEAKNESS. FROM SPACE TO PARIS. KRITI GUPTA IS IN PARIS FOR IPEM . TAKEN AWAY. KRITI: I'LL MAKE THE CONNECTION BECAUSE I DON'T UNDERSTAND ROCKET SCIENCE. SOMETIMES PRIVATE CAPITAL MARKETS FEELS LIKE ROCKET SCIENCE. I HAVE THE PERFECT GUEST. I'M JOINED BY THE EXECUTIVE PRESIDENT AT ARDIAN. THEY OVERSEE 70 BILLION OF ASSETS UNDER MANAGEMENT. THIS IS A FRENCH FIRM. PERFECT THAT WE ARE HERE IN PARIS TALKING ABOUT IT AT A CRUCIAL TIME FOR FRENCH POLITICS BUT ALSO FRENCH INVESTMENT. WE WILL DIVE INTO THE BROADER STUFF IN A MOMENT. YOU ARE VISITING US FROM THE STATES. YOU OVERSEE A FRENCH FIRM. OUR YOU THINKING ABOUT THE INVESTMENT PROSPECTS OF FRANCE RIGHT NOW? MARK: OUR FIRM WAS BORN HERE IN PARIS. WE HAVE BEEN LOCALLY HERE FOR A TIME. WE VERY MUCH BELIEVE IN THE EUROPEAN STORY. IF YOU LOOK AT OUR ROOTS, FRANCE, GERMANY, ITALY HAVE BEEN AREAS WE HAVE BEEN INVESTING SINCE THE START OF ARDIAN 25 YEARS AGO. IT WILL CONTINUE TO DO WELL THE NEXT 25 YEARS. YOU HAVE TO BE MULTI-LOCAL. WE HAVE LOCAL PEOPLE IN OFFICES THAT HAVE BEEN THERE YEARS AND YEARS AND THAT HELPS DEVELOP RELATIONSHIPS WITH ENTREPRENEURS. KRITI: WHAT IS THE EUROPEAN STORY? MARK: IF YOU LOOK AT THE KIND OF COMPANIES WE INVEST IN, WE ARE SPECIALIST SET TAKING SOMETIMES FRENCH CHAMPIONS AND MAKING THEM EUROPEAN CHAMPIONS, OR MAKING EUROPEAN CHAMPIONS WORLDWIDE CHAMPIONS. WE INVESTED IN A COMPANY WHICH IS A WORLD RENOWNED BRAND AND HELPING THEM GROW TO THE NEXT LEVEL. KRITI: WHEN WE TALK ABOUT PRIVATE MARKETS, FILL IN THE GAP, WHERE FISCAL BUDGETS ARE CONSTRAINED, WE HAVE THE LIKES OF DRAGHI CALLING FOR JUST SHY OF ONE BILLION EUROS IN INVESTMENT. IS THERE REALLY THAT ENTHUSIASM FROM PRIVATE PLAYERS WHEN IT FEELS LIKE THERE IS A LOT OF HESITATION EVERYWHERE ELSE? MARK: THAT IS A BIG TAILWIND FOR CERTAIN PARTS OF PRIVATE CAPITAL. NOTABLY, OUR INFRASTRUCTURE BUSINESS. WE ARE THE BIGGEST EUROPEAN INFRASTRUCTURE INVESTOR. WE HAVE BEEN INVESTING IN EUROPE FOR YEARS AND YEARS. THEY NEED THAT CAPITAL INVESTMENT TO HELP THE INFRASTRUCTURE GROW, TO FLOURISH, TO BLOSSOM. THEY CAN'T DO IT ALONE. THEY NEED PARTNERSHIP WITH PRIVATE CAPITAL BUT YOU HAVE TO PICK THE RIGHT SPOTS. THESE ARE HIGHLY REGULATED ASSETS, SO YOU WANT TO BE IN AN AREA, COUNTRY OR CITY WHERE THE REGULATION IS AIRTIGHT AND YOU HAVE THOSE RELATIONSHIPS. KRITI: YOU LET ME WHERE I WANTED TO GO. THAT IS A BIG INHIBITOR FOR YOUR BROADLY. TO THE POINT THAT IT HAS DISSUADED A LOT OF COLLEAGUES IN THE SPACE FOR YEARS. WHAT NEEDS TO LIGHTEN THERE? MARK: IF YOU THINK ABOUT WHAT NEEDS TO LIGHTEN. FIRST OF ALL, YOU HAVE TO BE LOCAL. IT IS VERY HARD TO INVEST THROUGHOUT EUROPE IF YOU ARE DOING IT FROM A DISTANCE, OR FROM ONE OFFICE TO TO COVER ALL THE DIFFERENT GEOGRAPHIES. THE DIFFERENT DRIVERS IN ITALY VERSUS FRANCE VERSUS GERMANY ARE COMPLETELY DIFFERENT. YOU HAVE TO BE LOCAL AND SPEND THE TIME TO GET TO KNOW THE ASSETS, THE MARKET, THE REGULATORS. AND THEN YOU UNDERSTAND WHAT IS AT RISK AND WHAT IS AT PLAY. KRITI: I AM TERRY'S ABOUT DEAL FLOW, AS WE ALL ARE, AND WHEN CAPITAL MARKETS WILL OPEN UP, THERE IS $3 TRILLION WRAPPED UP IN CAPITAL MARKETS RIGHT NOW. TO THE DISDAIN OF HEDGE FUNDS, ENDOWMENTS, A LOT OF PLAYERS ARE SAYING WHEN WILL WE GET OUR RETURNS? MARK: THAT IS A GREAT QUESTION. IF YOU LOOK BACK ON THE LAST THREE YEARS AND WE LOOK AT THE CAPITAL CALLS VERSUS DISTRIBUTIONS, WE ARE STILL CALLING MORE MONEY THAN WE ARE SENDING BACK TO INVESTORS. GLOBALLY FOR THE PRIVATE EQUITY BUYOUT INDUSTRY. IT WAS 170% IN 2021. IT IS 110% NOW. IT IS GETTING BETTER. SOME OF THE LOGJAM IS LOOSENING UP BUT THERE IS STILL A LOT OF ASSETS TRAPPED THERE. WHAT GIVES ME HOPE IS A FEW THINGS. FIRST, THE ASSETS ARE PERFORMING WELL. WE HAD DOUBLE-DIGIT A BIT. GROWTH OVER THE LAST 12 MONTHS. WE SEE THAT ACROSS A LOT OF ESTABLISHED BY OF ASSETS. THAT IS A BIG PLUS. SECONDLY, THE DRY POWDER THAT WAS RAISED TO INVEST IN THESE ASSETS IS GETTING OLDER. THESE FUNDS HAVE RAISED MONEY AND THEY HAVE TO PUT IT TO WORK. 25% OF THE DRY POWDER IN PRIVATE MARKETS IN BUYOUT IS MORE THAN FOUR YEARS OLD. TYPICALLY THERE IS A FIVE-YEAR INVESTMENT PERIOD, SO GROUPS HAVE TO PUT MONEY TO WORK, SO THAT BID/ASK SPREAD SHOULD NARROW, I THINK IT WILL BE A VERY ACTIVE Q4 AND Q1. KRITI: PAUL SCOTT CALLED THIS DYNAMIC A PIG MOVING THROUGH THE PIPELINE. GRUESOME BUT ACCURATE. AND THE PUBLIC MARKETS. MARK: THAT IS PART OF IT. THE INTEREST-RATE DISCUSSIONS, WE WILL SEE WHERE IT GOES. PEOPLE ARE CALLING FOR DIFFERENT RATE CUTS OVER THE NEXT 12 MONTHS. I FIVE BASIS POINTS NOW THEN 100 LATER, WE WILL SEE. I THINK PEOPLE WANT A SUSTAINED A COUPLE MONTHS OF AT LEAST LOWER VOLATILITY IN PUBLIC MARKETS BEFORE THEY IPO THEIR ASSETS. BUT WE STILL SEE THE IPO MARKET IS SOMEWHAT FROZEN FOR THE EV FIVE TO 10 BILLION COMPANIES. FOR THE LARGER COMPANIES IF YOU HAVE REOPENED AND ARE DOING WELL, BUT IT IS STILL TIGHT IN THE MIDDLE. KRITI: WHAT IS THE BENEFIT OF BEING PUBLIC IN THIS ENVIRONMENT? GIVEN SOME OF THE JITTERS YOU ARE TALKING ABOUT. MARK: WE GET THE QUESTION A LOT. WILL PRIVATE MARKETS ONE OVERTAKE PUBLIC MARKETS? I DON'T THINK THAT'S THE CASE. YOU NEED A BIG ACTIVE PUBLIC MARKET OUT THERE REALLY FOR THE LARGEST COMPANIES. IF YOU LOOK AT THE MEGA CAP COMPANIES, THERE IS NO PRIVATE EQUITY SOLUTION FOR THESE MULTI, MULTIBILLION-DOLLAR APPROACHING TRILLION DOLLAR. IF YOU THINK ABOUT THAT, YOU ALWAYS NEED THE PUBLIC MARKETS TO FILL THAT ROLE AND I THINK THAT WILL HAVE TO CONTINUE. THAT MIDDLE MARKET WHERE PRIVATE EQUITY HAS BEEN PLAYING A ROLE IS MORE IMPORTANT THAN IN YEARS PAST. KRITI: PRIVATE MARKETS MAY NOT OVERTAKE THE PUBLIC ONES, CREDIT IN EUROPE? MARK: NO BUT I DO THINK ACROSS DIFFERENT PEOPLES ALLOCATIONS, THEY ARE STARTING TO SAY YOU KNOW WHAT, PRIVATE EQUITY HAS OUTPERFORMED OVER FIVE YEARS, 15 YEARS, 20 YEARS, AT LEAST 500 BASIS POINTS OR MORE. AND IF YOU LOOK AT THE VOLATILITY IN PRIVATE MARKETS COMPARED TO PUBLIC MARKETS, IT IS MUCH LESS, ALMOST A THIRD OF THE VOLATILITY COMPARED TO PUBLIC MARKETS. YOU HAVE GROUPS ACROSS EUROPE SAYING MAYBE IT SHOULD BE MORE THAN 10 OR 15% PRIVATE DEBT MARKETS, I SHOULD BE LARGER THAN THAT. THAT'S WHY WE SEE THE WHOLE INDUSTRY GOING FROM 13 TRILLION OF AOM TODAY UPWARDS OF 25 TRILLION BY 2030. KRITI: IT IS MASSIVE GROWTH. THERE IS A LOT OF OPTIMISM IN PRIVATE MARKETS BUT IN THE PUBLIC MARKETS YOU SAY THAT'S WHEN YOU KNOW A CRASHES COMING. WALK US THROUGH THIS IDEA OF WHEN THE PARTY STOPS FOR PRIVATE CAPITAL MARKETS. SPECIFICALLY BECAUSE IT FEELS LIKE SO MUCH OF THE OUTPERFORMANCE POST COVID HAS BEEN DRIVEN BY THE SEARCH FOR YIELD BUT IF YOU'RE GETTING THAT YIELD IN THE BOND MARKET OR EMERGING MARKET CURRENCIES OR THE STOCK MARKET WITH THIS AI BOOM, WHY GO PRIVATE? MARK: GREAT QUESTION. THERE IS A PICKUP IN YIELD RIGHT NOW IN FIXED INCOME WE WERE GETTING THAT IS QUITE ATTRACTIVE. I THINK YOU GET A STRONGER TURN IN PRIVATE MARKETS AND LONGER DURATION WHICH IS WHAT A LOT OF LONG-TERM INVESTORS ARE LOOKING FOR. TO YOUR POINT I THINK THE EASY MONEY THAT WAS MADE IN PRIVATE MARKETS AND THE REST OF FINANCIAL MARKETS FROM LOW INTEREST RATE ENVIRONMENT. THAT'S GONE. THAT'S NOT COMING BACK FROM THEM THREE YEARS OR FIVE YEARS OR 10 YEARS. IT IS BACK TO INVESTING IN COMPANIES THAT HAVE GROWTH STORIES, HELPING THEM GROW, OPERATIONAL STRENGTH, GREAT MANAGEMENT TEAMS. PRIVATE EQUITY 101 WHICH WILL RULE THE DAY FOR THE NEXT 10 YEARS. KRITI: ONE OF THE HINDRANCES OF THAT ARGUMENT, THE REGULATORY SCRUTINY. I WANT TO ZERO IN ON THE U.K. WHEN IT COMES TO TAXATION AROUND CARRIE AND INTEREST. HOW MUCH OF THAT IS A HEADWIND FOR INVESTMENT IN THE U.K. AND THE REST OF EUROPE? MARK: FOR US, ARDIAN, WE ARE AT 19 OFFICES AROUND THE WORLD. TAXATION EBBS AND FLOWS. WE SAW IT IN FRANCE YEARS AGO. THERE WAS A LOT OF QUESTIONS WHAT WAS GOING TO HAPPEN. IF YOU ARE MAKING A DECISION BASED ON TAXATION FOR A GIVEN GEOGRAPHY, YOU ARE NOT TAKING A LONG-TERM VIEW. IT WILL EBB AND FLOW, YOU MIGHT HAVE MORE PEOPLE OR LESS PEOPLE IN PRIVATE MARKETS IN THOSE GEOGRAPHIES BUT YOU HAVE TO TAKE A VIEW OF FIVE YEARS PLUS FOR THESE ASSETS. IF YOU ARE MAKING A DECISION BASED ON TAXATION, YOU ARE PROBABLY MAKING THE WRONG ONE. KRITI: THE BUDGET IN THE U.K. COMES OFF I BELIEVE AT THE END OF OCTOBER. WHAT YOU NEED TO HEAR FROM KEIR STARMER OR MACRON, TAKE YOUR EUROPEAN POLITICIAN, TO SAY THIS FEELS LIKE A BETTER REGULATORY ENVIRONMENT? MARK: THAT'S A GREAT POINT. FOR US, BUT WE LOOK FOR IS STABILITY. KRITI: SOMEONE ARGUE THE U.K. IS THE ISLAND OF STABILITY RIGHT NOW. MARK: ONCE PEOPLE HAVE A SENSE THAT THEY KNOW THE RULES OF ENGAGEMENT THAT ARE IMPACTING REGULATION ACROSS PRIVATE AND PUBLIC MARKETS. GOOD OR BAD, ONCE YOU KNOW THE PLAYBOOK, THEN YOU CAN IMPLEMENT WHAT YOU WANT TO DO. UNTIL THAT TIME YOU WILL SAY, LET'S WAIT, IF I WAS ABOUT TO DO AN ADD ON ACQUISITION IN THE U.K. OR EXPAND, IF THINGS ARE TOO MUCH IN FLUX, YOU WILL WAIT. THIS UNCERTAINTY, THAT'S THE KILLER FOR PRIVATE INVESTMENT. I THINK THAT YOU NEED SOME STABILITY. YOU NEED CLARITY ON WHAT THE RULES ARE. AND THEN PEOPLE ROLLED OUT THEIR PLANS FOR INVESTMENT. KRITI: WE WILL LEAVE THE CONVERSATION THERE. HE IS THE EXECUTIVE PRESIDENT AT ARDIAN JOINING US FROM THE STATES, OVERSEEING ABOUT 170 BILLION DOLLARS IN ASSETS UNDER MANAGEMENT, THIS IS IMPORTANT IN TERMS OF ATTRACTING THAT CAPITAL TO EUROPE. THEY WANT THE INVESTMENT BUT THE REGULATION MAY JUST BE GETTING IN THE WAY. ANNA: KRITI GUPTA FROM THE IPEM CONFERENCE IN PARIS. INTERESTING VIEWS ON THE U.K. AND STABILITY AND THE ROLE OF PUBLIC AND PRIVATE MARKETS. WE THANK KRITI FOR BRINGING THAT TO US. WE DON'T HAVE THE SPACEX LIFTOFF TAKING PLACE RIGHT NOW, AS WE HAD ANTICIPATED, THAT WILL BE COMING LATER. IN THE MEANTIME, WE HAVE MORE TIME TO TALK ABOUT INTERESTING DEVELOPMENTS IN OTHER FIELDS OVER THE PAST 24 HOURS. FORMER ECB PRESIDENT MARIO DRAGHI IS CALLING FOR AS MUCH AS 800 BILLION EUROS OF NEW SPENDING. WHERE IS THAT GOING TO COME FROM? WE WILL TALK ABOUT HAS REPORT ON COMPETITIVENESS NEXT. THIS IS BLOOMBERG. Google Loses Antitrust Case, Apple Loses Fight over $14B Irish Tax Bill ANNA: WELCOME BACK TO "THE OPENING TRADE." WE HAVE NEWS IN CONNECTION WITH APPLE AND ITS LEGAL FIGHT. WE TALKED ABOUT THIS WITH A GUEST EARLIER. APPLE LOSES AN EU TO COURT FIGHT OVER A 13 BILLION EURO IRISH TAX BILL. THE COURT SAID APPLE WAS GIVEN ILLEGAL STATE AID. THIS RULING SEEN AS A BOOST TO THE EU CRACKDOWN ON TAX DEALS FOR BIG FIRMS. THIS GOES BACK TO THE OFFER THAT WAS MADE TO APPLE BY IRELAND AROUND ITS TAX RATE IF IT WERE TO POSITION CERTAIN OPERATIONS. WE HAVE SOME CONCLUSIONS. LET'S BRING INTO THE CONVERSATION OLIVER CROOK IN BERLIN TRACKING ALL OF THESE EU STORIES FOR US. THIS ONE IS FRONT AND CENTER TODAY. WE WERE TALKING TO A GUEST PREPARING US WHO WAS SAYING THIS WILL TEST WHETHER STATE AID RULES WERE ENOUGH OR WHETHER EUROPE WILL REQUIRE OTHER LEGISLATION. OLIVER: THIS HAS BEEN RUMBLING ON SINCE 2016. WHEN THE FINES WERE URGENTLY LEVIED BY THE EUROPEAN COMMISSION. THIS IS 13 BILLION EUROS OF FINES. THIS WAS THE KNOCKDOWN BY THE EUROPEAN GENERAL COURT IN 2020 AND THIS WAS SUPPOSED TO BE THE FINAL RULING. THIS WILL HAVE MASSIVE IMPLICATIONS FOR APPLE WHICH IS FACING A VERY LARGE TAX BILL IN IRELAND. THIS WILL HAVE IMPLICATIONS FOR IRELAND, WHICH MANAGED TO BRING SO MANY COMPANIES INTO ITS JURISDICTION BECAUSE OF THESE LOW RATES. IT HAS BIG RAMIFICATIONS FOR THE EU AS THE REGULATOR FOR ALL THESE COMPANIES. AND WE SHOULD NOT MARGRETHE VESTAGER TO HAS BEEN TWO YEARS IN THE COMMISSION FOR COMPETITION. SHE IS ALMOST DONE WITH HER TERM IN THE NEXT COUPLE WEEKS. THIS IS ONE OF THE LAST HURRAHS AND A SIGNIFICANT ONE IN HER QUEST TO BE THE BIG REGULATOR FOR TECHNOLOGY ACROSS THE WORLD. WHAT IS INTERESTING AS WE GET THIS AROUND THE TIME OF THE DRAGHI REPORT. THE OLD ADAGE IS AMERICA INNOVATES, EUROPE REGULATES. WE ARE ALSO WAITING FOR THAT RULING ON GOOGLE WHICH IS ANTITRUST ABOUT FAVORING ITS OWN SHOPPING SERVICES ONLINE. THAT'S ALSO BEEN GOING ON 14 YEARS. SO, A LOT HAPPENING OUT OF BRUSSELS TODAY. GUY: THE OTHER PIECE OF NEWS WITHIN THE LAST FEW MINUTES IS WE WILL SEE TARIFFS BEING APPLIED TO TESLA, TESLA EXPORTING OUT OF CHINA INTO EUROPE, BEING REDUCED, WHY? OLIVER: THIS IS AN ONGOING INVESTIGATION. THEY ARE GETTING MORE DATA AS THE INVESTIGATION BY THE EU COMMISSION GOES ON. IT'S BEEN GOING ON ALMOST A YEAR. THEY WENT TO THESE FIRMS IN CHINA WHO PRODUCE THERE AND TRY TO ASSESS HOW MUCH INCENTIVES THEY GET FROM THE CHINESE GOVERNMENT. DEPENDING ON THAT, THEY ARE ADJUSTING THE RATE. INITIALLY, TESLA WAS LOOKING AT SOMETHING LIKE 20%. I'M SEEING THAT THE GOOGLE NEWS IS CROSSING. THAT GOOGLE IS ALSO LOSING AN EU COURT FIGHT FOR A 2.4 BILLION EURO FINE. THIS IS A ANTITRUST CASE THE EU IS TAKING AGAINST GOOGLE. THESE ARE TWO MAJOR WINS FOR MARGRETHE VESTAGER THAT ARE THE FINAL RULINGS AT THE EUROPEAN COURT OF JUSTICE, ALL OF WHICH HAVE BEEN APPEALED, MANY FOR MORE THAN A DECADE. MORE THAN 15 BILLION EUROS OF PAYMENTS THAT WILL BE REQUIRED FROM APPLE AND GOOGLE THAT JUST CROSSED OVER THE LAST COUPLE MINUTES. ANNA: JUST TO REITERATE, GETTING THAT RED HEADLINE ON GOOGLE, GOOGLE LOSES THE EU FIGHT TO OVERTURN $2.4 BILLION OF FINES, A SMALLER FINE, BUT THE EU JUDGES THINK GOOGLE ABUSED DOMINANCE IN THIS SHOPPING CASE. TWO PIECES OF NEWS GOING EUROPE'S WAY. BUT WE HEARD FROM DRAGHI YESTERDAY, HE WAS NOT PASSING JUDGMENT ON LEGAL STORIES, BUT HE DOESN'T WANT THE EUROPEAN TECH STORY TO BE ALL ABOUT LEGAL CHALLENGE. HE WANTS THERE TO BE MORE INNOVATION IN EUROPE AND A MORE COMPETITIVE EUROPE. I SUPPOSE THESE STORIES ARE LINKED IN THAT SENSE? OLIVER: I DOUBT HE HAS IN MIND MANY OF THESE MASSIVE BEHEMOTHS THAT EXIST IN THE UNITED STATES. ON THIS GOOGLE CASE, THIS IS BEFORE THE DIGITAL MARKETS ACT, WHICH WAS PASSED RECENTLY TO DEAL WITH THIS SORT OF BEHAVIOR. INTERESTING THAT THIS PREDATES THAT AND STILL THESE FINES ARE GOING THROUGH. THE CONVERSATION MARIO DRAGHI IS TRYING TO PUT FORWARD IS DEALING WITH THE FACT THAT EUROPE HAS NO COMPANY LIKE APPLE, LIKE GOOGLE, LIKE NVIDIA, BASICALLY ZERO. HE SAYS IN THE LAST 50 YEARS, THERE HAS NOT BEEN A SINGLE COMPANY IN EUROPE THAT HAS A MARKET CAP THAT EXCEEDS 100 BILLION EUROS, WHEREAS IN THE UNITED STATES YOU HAVE SIX THAT EXCEED A TRILLION DOLLARS. HE IS SAYING EUROPE HAS FAILED IN TERMS OF CREATING COMPANIES TO CAPITALIZE ON THE DIGITAL AGE AND THAT HAS LED TO MASSIVE PRODUCTIVITY SHORTAGES AND A HUGE GAP BETWEEN WHAT YOU SEE IN EUROPE AND THE UNITED STATES. DRAGHI SAYING THIS COULD AMOUNT TO THE LOSS OF EUROPEAN COMPETITIVENESS. IF IT GOES UNTREATED, THIS WILL MEAN EUROPE WILL BECOME ECONOMICALLY IRRELEVANT IN THE DECADES TO COME. THAT SOUNDS STARK AND HE IS MILD-MANNERED AND WE DO NOT WANT ALARMISTS AT THE HEAD OF THE ECB WHICH IS PERHAPS WHY HIS MESSAGING COMES OUT SO TENDERLY, BUT HE IS TALKING ABOUT EXISTENTIAL THREATS TO THE EUROPEAN ECONOMY. HE TALKS ABOUT IN THE UNITED STATES THE AVERAGE WAGES, DISPOSABLE INCOMES HAVE GROWN MORE THAN TWICE WHAT THEY HAVE IN EUROPE OVER THE LAST 25 YEARS. BASICALLY EUROPE AS IT IS RIGHT NOW CANNOT ADDRESS AND WILL NOT ADDRESS AND IT IS A MASSIVE PROBLEM THAT THREATENS THE FUTURE OF EUROPE AS A POLITICAL ENTITY BUT OBVIOUSLY AS AN ECONOMY. GUY: IF FEELS LIKE WE HAVE HEARD SOME OF THIS BEFORE. BUT THE SOLUTIONS REMAIN THE SAME. I THINK EUROPE WILL STRUGGLE TO DELIVER THOSE SOLUTIONS. TWO KEY COURT RULINGS WITHIN THE LAST FEW MINUTES. WE WILL MONITOR THE FALLOUT FROM BOTH OF THEM AS WE WORK THROUGH THE MORNING TO THE U.S. OPEN.ONE THING WE WILL BE WATCHING AS WE HEAD TOWARDS THE U.S. OPEN IS THE SECOND WINDOW FOR THE SPACE ASK LAUNCH. -- SPACEX LAUNCH. WE WERE ANTICIPATING AT THIS HOUR, IT NOW LOOKS LIKE IT WILL HAPPEN IN A COUPLE HOURS TIME. LET'S TALK ABOUT WHAT WE HAVE SEEN THIS MORNING AND THE SIGNIFICANCE OF THIS LAUNCH. IT IS BECOMING QUITE COMMON TO SEE SPACEX LAUNCHES BUT THIS ONE FEELS DIFFERENT. KATE DUFFY JOINS US NOW. U.K. ONLINE SPACE REPORTER. DO WE KNOW WHY IT WAS DELAYED? >> SPACEX SAID IT WAS BECAUSE OF UNFAVORABLE WEATHER CONDITIONS. THEY CAN'T LAUNCH BECAUSE OF THE BAD WEATHER, SO MOTHER NATURE IS NOT ON THEIR SIDE THIS HOUR, BUT THEY HAVE TWO OF THE WINDOWS TODAY. ONE BEING IN THE NEXT TWO HOURS AND THEN TWO HOURS AFTER THAT. IF THAT DOESN'T GO AHEAD, HOPEFULLY, TOMORROW. WE THOUGHT THIS MISSION WOULD GO AHEAD TWO WEEKS AGO. BUT BECAUSE OF A HELIUM LEAK, THAT GOT POSTPONED, AND THEN IT HAS JUST BEEN BAD WEATHER CONDITIONS. THIS IS SO COMMON IN THE SPACE INDUSTRY. THIS IS NOT A SPACEX ISSUE. THIS IS WHAT A LOT OF COMPANIES FACE WHEN THEY TRY TO LAUNCH ROCKETS. THERE ARE FOUR PEOPLE ON BOARD. THERE IS EVEN MORE SAFETY PRECAUTIONS GOING IN THERE. THEY ARE WAITING FOR THE RIGHT WEATHER AND HOPEFULLY THEY WILL LAUNCH. ANNA: SO WE COULD SEE AT LUNCH LATER THIS MORNING EUROPEAN TIME. TALK THROUGH THE SIGNIFICANCE OF THIS. BECAUSE OF WHAT THEY WILL BE DOING ONCE THEY GET TO SPACE AND HOW FAR THEY WILL BE GOING? >> IT IS THE FIRST COMMERCIAL SPACEWALK WE WILL SEE. NO OTHER PRIVATE COMPANY HAS DONE THIS IN SPACE SO FAR. SPACEX WILL BE THE FIRST. IT WILL BE THE FURTHEST PEOPLE HAVE GONE INTO SPACE SINCE THE APOLLO MISSION REACHED THE MOON. IT WILL BE THE FURTHEST WOMEN HAVE EVER TRAVELED FROM EARTH. THERE IS A LOT HANGING ON THIS LAUNCH AND IT WILL BE EXCITING HOW IT GOES. THERE IS THE SPACEWALK, WHICH SOMETIMES SEEMS UNEVENTFUL. [LAUGHTER] ANNA: A SORT OF SPACES DANGLE. >> WE ARE NOT ENTIRELY SURE WHAT THE PURPOSE IS OF THIS PARTICULAR SPACEWALK. WHAT IT WILL DO IS ADD TO SPACEX'S PORTFOLIO. THEY HAVE A LOT OF THINGS GOING ON IN THEIR BUSINESS WITH STARLINK. IT IS SOMETHING ELSE THEY WILL BE TESTING IN THE MISSION. STARLINK IN SPACE. THEY WILL BE CONDUCTING LOTS OF SCIENTIFIC EXPERIMENTS WITH THE HUMAN BODY AND REACTION ON EARTH AND IN SPACE. IT WILL BE REALLY EXCITING WAS IT GOES AHEAD. GUY: THIS IS A PRECURSOR TO OTHER THINGS. BECAUSE OF THE SUITS. THEY TALK ABOUT MEETING LOTS OF THEM IN THE FUTURE BECAUSE THEY WILL BE DOING LOTS OF THIS KIND OF THING. STARTING ON THE MOON AND ULTIMATELY GOING FURTHER THAN THAT. >> THE WHOLE AIM IS TO CREATE THIS BASE ON MOON AND MARS AND IT SEEMS VERY DISTANT BUT IT SEEMS LIKE SOMETHING SPACEX WANTS TO START CREATING NOW AND SCALE UP THESE WHITE SLEEK SPACESUITS. THERE IS LOTS OF IMAGES OF THEM ON SOCIAL MEDIA. ANNA: IF I GO TO MARS, I'D LIKE TO BE COOL. >> THEY DO HAVE THERMAL MATERIALS IN THEM. THEY HAVE WORKED ON THESE FOR A WHILE. THEY HAVE THESE HEADS UP DISPLAYS INSIDE. SOMETHING FROM THE MOVIES. GUY: I THINK THEY LOOK AWESOME. STAY COOL OR STAY WARM, ONE OF THE OTHER, BUT THEY WILL OPEN THIS UP, AND EVERYONE WILL HAVE TO WEAR ONE BECAUSE THEY WILL DECOMPRESS THE WHOLE OF THE CAP STILL. ANNA: THANKS FOR BRINGING THE ANALYSIS. SPACE REPORTER KATE DUFFY WITH HER EYES FIRMLY FIXED ON FLORIDA'S CAPE CANAVERAL. WE ARE WATCHING THE UNITED STATES DEBATE BETWEEN KAMALA HARRIS, THE VICE PRESIDENT, AND FORMER PRESIDENT TRUMP. THE FIRST BETWEEN THESE TWO. GUY: THE FIRST WAS CONSEQUENTIAL INASMUCH AS IT EFFECTIVELY PUSHED BIDEN OUT OF THE RACE BUT THIS COULD HAVE IMPACT ON WHO ULTIMATELY OCCUPIES THE WHITE HOUSE NEXT. WE WILL HEAR FROM PASCAL SORIOT AS WELL. ANNA: ASTRAZENECA FACING HEADWINDS IN CHINA. THIS MORNING, THE NEWS IS AROUND A DRUG TRIAL FOR LUNG CANCER.