Join Capital Group CEO Mike Gitlin on the Capital Ideas Podcast. It's your look inside one of the world's most experienced active investment managers. Invest 30 minutes in an episode today. Subscribe wherever you get your podcasts. Capital Client Group Inc. The forces shaping markets and the economy are often hiding behind a blur of numbers. So that's why we created The Big Take from Bloomberg Podcasts to give you the context you need to make sense of it all.
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This is the Bloomberg Daybook Podcast available every morning on Apple, Spotify or whatever you listen. It's Thursday, the 21st of November in London. I'm Caroline Hepcare. And I'm Stephen Carroll, coming up today, when great still isn't good enough and video exceeds sales forecasts, but warns rising costs will eat into margins.
US prosecutors accuse Gautam Adani if being involved in an alleged $250 million bribe plot. Plus, we take a look inside the charm offensive to lure Britain's super-rich overseas.
Let's start with a round-up of all-top stories.
Blackwell production is in full steam. In fact, we will deliver this quarter more Blackwells than we had previously estimated. And so the supply chain team is doing an incredible job working with our supply partners to increase Blackwell.
Despite Jensen Huang's bullish comments, the firm also warned that production and engineering costs will weigh on profit margins going forward. The news was met with a tepid reaction from investors who have bid up Nvidia shares almost 200% this year. Shares fell 2.5% in after hours trading.
India's Gautam Adani has been charged by US prosecutors over an alleged bribery scheme. Federal prosecutors say that the tycoon and other defendants promised to pay more than $250 million in bribes to Indian government officials to win solar energy contracts worth billions of dollars.
The Eastern District of New York, which brought the case, says the defendants then concealed the plan as they sought to raise money from U.S. investors. Phone calls an email to Adani Group's U.S. officers requesting comment weren't immediately returned. The indictment has caused Adani Group's stocks to tumble, while units of the conglomerate also say that they have now scrapped a $600 million bond offering.
The founder of Archigos Capital Management, Bill Huang, has been sentenced to 18 years in prison. In July, a jury found Huang guilty of misleading banks into providing Archigos with billions of dollars in trading capacity. Bloomberg's Shaquille Omari says the former financial express progressed during the proceedings at a court in New York.
Wang was remorseful telling the judge he felt deep pain for what happened to Archigos. Now prosecutors they wanted a 21 year sentence because they said that Wang was a repeat or fender in all of this because back in 2012 he pled guilty to insider trading with his another company Tiger Capital. Now on the other hand his defense they wanted no jail time but the judge says that was oddly ridiculous.
Our reporter Shaquille Omari there from outside the courtroom. Arkegas fell into a spiral after its March 2021 sell-off and Viacom shares prompted billions of dollars in margin calls leading to the collapse of Wang's $36 billion family office. The fallout included the demise of Credit Suisse and significant losses at Morgan Stanley, UBS, Nomura Holdings and other banks.
Now Ukraine has fired British cruise missiles at military targets in Russia for the first time. Sources tell Bloomberg that the UK approved the use of storm shadow missiles in response to Russia deploying North Korean troops in its war against Ukraine. The strike comes a day after Ukraine deployed U.S.-made attackums for the first time to hit a military facility in the Western Brienzk region.
Ukrainian MP Yev Yeheina Klavchuk says that Russia's actions led to the developments. Kremlin understands that they need to put this pressure so the Western allies in Ukraine would blink first and sort of fell into this emotional drain and push on the battlefield.
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Car sales across Europe are stagnating, pushing carmakers to make severe redundancy plans. New car registrations inch top just 0.1% in October compared to a year ago to 1.04 million units. Bloomberg's global autos editor Craig Trudeau says he's seeing profit warnings across Europe.
You're talking about Volkswagen or Stellantis or BMW, Mercedes. It's really been across the board that a lot of manufacturers are having trouble with the increase in competition at a time when we're not seeing demand growth. And so that leads to some real need to take a look at how many people you're employing, plants you've got running, and whether you need to take shifts out or even go so far as to potentially take plants down.
Trudeau adds a key factor has been governments pulling support in subsidies for electric vehicles. Ford is looking to cut 4,000 jobs or 14% of its European workers after already cutting a similar number last year. Europe's biggest automaker Volkswagen faces widespread strikes as it looks to cut 17 billion euros in costs.
Now Britain's parents have doubled the amount that they give to their children, largely to help them buy a home. Research by the Resolution Foundation has found that parents gave £29 billion over two years in 2020. Now that is up from £13 billion in 2010. Bloomberg's James Warcock has more. In 2010, the average house price was £168,000.
Ten years later, 247,000, two-thirds higher. That spiraling cost helps explain why the resolution foundation says it takes the typical young family more than 14 years to save up a deposit. Increasingly, their elders are stepping in where they can, passing on cash to get their kids out of the expensive rental market.
The findings highlight the scale of the UK's housing crisis. With the think tank warning, the economy could be harmed by a trap generation of young people. In London, James Wolkok, Bloomberg Radio.
Another 0.4% in yesterday's session with Eurodollar coming close to breaching 105. Gold climbed by 0.7%. It's rising further today in Asia. Bitcoin has jumped almost 3% to just over $97,000. The HangSang tech index is weaker in Asia. 1.2% as investors digest those soft Nvidia earnings.
Those are the markets in a moment will bring you more on those Nvidia results and also are reporting on how countries are trying to tempt Britain's super rich to move overseas. But first, bananas. There's an artwork that's gone on sale. Could you believe that if you duct tape a banana to a wall, it would sell for $6.2 million?
Oh, wow, six. I think this is extraordinary. So this is a 2019 artwork. It does indeed consist of a banana and a piece of duct tape and it goes on a wall and it was sold at Sotheby's in New York for three times, more than three times, the pre-sale estimates in six minutes, apparently a furious bidding and it was bought this sculpture by the artist Maritsio Catalan by a crypto entrepreneur, Justin Sun, who actually spoke to a limbo.
Look, this is, you know, he talked about that, you know, he's bought a lot of art. He's bought purses of Picasso and Andy Warhol as well, particularly captured with this. And he's not alone. This has gotten quite a lot of critical acclaim. I mean, I kind of make fun because it is a banana salad soup to a wall, but it is also considered to be quite an elevated piece of art. It's been shown at the Art Basel in Miami Beach, first of all, as well. It's been, yeah.
drawn huge crowds too. But I think the most bizarre part about it is that it's not like you get the piece already installed on a wall, you just get a banana and some duct tape. And apparently of big instruction manuals about how to hang it and where to place it and so on. But I like the quote from the crypto entrepreneur. He said that it echoes with our idea of decentralization in the crypto world, because this is a conceptual artwork. It's impossible for you to destroy the artwork itself.
Which I thought was quite relevant. I don't know if I've ever had a banana at the bottom of my rucksack. I think you just moved different argument about that anyway. Enough on that for the moment. Let's bring you more in our top story this morning and those results from Nvidia beating revenue estimates in most product categories, but still falling short of some analysts' lofty expectations. Let's bring in Bloomberg intelligence senior analyst Robert Lee for more. Robert, how strong then were these earnings from Nvidia in the third quarter?
I guess it's a bit of a repeat, as we've seen in many previous quarters with NVIDIA. There were strong numbers, but that was largely expected and built into the share price. Share price has been flirting with all-time highs over the last couple of weeks, and is trading on a lofty valuation, I think most would agree.
The only minor bit of disappointment was whilst the guidance for the next quarter did actually technically beat expectations. There was a bit of a so-called whisper number out there and the guidance didn't quite top that and it's inevitable you're going to get a bit of profit taking on the back of that. But I don't think the results raised any great fundamental concern. Demand continues to outstrip. Supply, it's superlatives all the way.
Yes, about where you put the bar and how well the company's leapt over it or not. In terms of the rollout, though, of the highly anticipated Blackwell chip, that has been one of the issues, and indeed we heard a bit from Jensen Wong on that topic earlier.
No, no, absolutely. This is their next generation chip, which is sort of being sampled to customers in a moment. I think they said they sampled to around 13,000 customers during the quarter. There were some earlier production delays, but they seem to have got through that in the near term. However, this is a large and highly complex chip, and driving it through to volume production, which is what's going to happen over the next two to three quarters, is a
Is it a really hard thing to do? It's a non-trivial task, and you're operating at the cutting edge of semiconductor technology. So I'm not in any way flagging that there will be disruption, but there is definitely scope for it when you're dealing with such a highly technologically advanced chip. So I think there is still residual execution risk for them and their main foundry partner, TSMC. So I think investors definitely need to keep that in mind.
and we want to see a nice smooth rollout and actually just one very brief thing because the production yields and therefore the margin on this new chip won't be particularly high in the near-term and again that's as expected that will actually depress their gross margin a little bit so we're going to see the margin come off for the next few quarters and then hopefully see a rebound into the second half of next year but again you know where's the near-term catalyst for this where's the near-term positive surprise it's sort of hard to see at the moment so I wouldn't be surprised if we see more profit taking in the near-term
Okay, Robert Lee, Bloomberg Intelligence Senior Analyst. Thank you very much for joining us.
The forces shaping markets and the economy are often hiding behind a blur of numbers. So that's why we created The Big Take from Bloomberg Podcasts to give you the context you need to make sense of it all. Every day, in just 15 minutes, we dive into one global business story that matters. You'll hear from Bloomberg journalists like Matt Levine. A lot of this meme stock stuff is, I think, embarrassing to the SEC. Follow The Big Take podcast on the iHeartRadio app, Apple Podcasts, or wherever you listen.
Now to one of our deep dives this morning, the UK is super rich are facing a charm offensive to lure them to other global wealth hubs, offering lower taxes, places like Dubai, Greece and Singapore, joining us now to discuss this is Bloomberg's Ben Stupels. Ben, very good to have you on the programme. What are they being offered? How's it being done exactly?
Morning Caroline, thank you for having me on. Fundamentally, the UK is ultra rich, are being offered, lower tax breaks, low tax rates, more specifically to be able to live overseas, sometimes not even live in the location. So that is a fundamental offering. Why? Because the UK has curbed is curbing as of the early next year tax rates for its non-non-population, that ranges from multi-believers to city of
the bankers. How are they doing this? Well, there are roadshow events, for example, where you can imagine us trying to book a holiday. That's sort of what's going on here. There's sort of different options being offered. Showcase events being offered in five-star hotels and some of London's best places that you can imagine in Night's Bridge, for example, there was one last week.
and the other side you've got territories trying to cultivate relationships with city of London terms lawyers are being lobbied in the city of London right now left right and centre about their relationships with the world super rich in London and just testing the waters of how much is your client really like living in London.
Well, why now, I suppose? Is this about the tax changes? What's driving this demand for these sorts of road shows? That's exactly right. The timing, the territories that are sort of landing in London right now, Abu Dhabi, for example, they had an event last month in the five-star Jamiro hotel in Nitesbridge. They do these events all over the world, so they do it in Hong Kong, elsewhere. So they would say, oh, we always do this.
But the timing is just right now, and the audience are maybe a little bit more receptive. Because last month, as we may all remember, Rachel Reeves, among many other policies, brought in sweeping changes for the UK's non-dom regime. So she scrapped it. She brought in a regime that's four years for a new regime that is similar to what we currently have. But the four years versus the current term of 15 years. Now, if you're a non-dom and suddenly you've gone from, I can claim tax breaks.
in the future if I'm only having four or suddenly the games changed quite a lot and that's making other countries go hang on a second I thought London was off the cards for lowering other residents but actually now London is far less attractive if you are prioritizing your tax as a reason for your living in the city.
Yeah, and London would argue that it's more than just that. But of course, what does it mean for the UK? I mean, it's interesting, isn't it, that your reporting shows that others have taken note so much? It really is. And I think it's a really fair point to make about the London lifestyle is still a really attractive reason, the reason to be here.
And I think what Rachel Reeves has done actually is call the bluff of the super-rich who was saying, we might go. I think what she said is, okay, if you're going to go, we're ringing in a four-year regime, which is quite competitive with some other European nations. Spain has a similar regime, for example. But Italy and Greece, they have 15-year regimes. Cyprus has a 17-year regime.
and has an event next month in the London Stop Exchange specifically targeting non-dombs. But what folks say is London has for a long time had a very bloated millionaire population, one of the world's highest per capita. So some folks are there saying, well, this is maybe just, if you imagine London as a stock, maybe this is just a natural correction in the market that's going on right now.
This is Bloomberg Daybreak Europe. Your morning brief on the stories making news from London to Wall Street and beyond. Look for us on your podcast feed every morning on Apple's Spotify and anywhere else you get your podcast. You can also listen live each morning on London DAB radio, the Bloomberg Business App and Bloomberg.com.
Our flagship New York station is also available on your Amazon Alexa devices. Just say, Alexa, play Bloomberg 1130. I'm Caroline Heppker. And I'm Stephen Carroll. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak Europe.
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