Newsmakers and market movers, this is "The Pulse." Markets are watching a couple of key risks this morning. Dominating focus is the yield on the 30-year U.S. government bond climbing back to levels seen just before Treasury Secretary Scott Bessent expanded the buyback program in an effort to contain borrowing costs. Bessent is attending the G20 finance meeting in the U.S., where divisions with China came to the fore. Bessent said the Group of 20 prevented China from issuing a joint communiqué. President Trump played down the chances of a deal, saying he isn't trying to force Iran to the bargaining table. Oil prices up again. All the uncertainty weighing on European industry. In France, political risk is emerging in markets several years before the country's presidential election. How is business in France navigating all this?
I am pleased to be joined by... Welcome to London. Thank you for joining us. Give me a sense of what you see for the future. You look at the results for the first half, really solid across all businesses. We will get back to advertising, maybe a weak spot. But the Middle East is still there. Do you worry about the future?
Not really. For us, the Middle East has no impact. Thanks to the Ukraine war, we learned about inflation and all the indexes we need to put in the contracts. So the impact on the global group is low. There are things we decided to add that it is very important for us. The main impact for us was a very small thing. It was the diesel price. Within a country with thousands and thousands of people, it was quite low compared to the global revenue growth. The key thing is it is not the real, direct impact. What will be the global impact on the economy? This is the main thing.
What are you expecting on the third and fourth quarter? You could say everything is up in the air, even if you had good results.
I started out in 2016, in 2020 with Ukraine, and in 2025 and 2026 we have Iran. Every time we are flexible enough to adapt. One thing that is important for us is when you look at our portfolio, it is very diversified, with many countries and many activities. The book is solid. We have good visibility for 2026 and 2027. For me, it is what will happen in 2028. I hope that the year will be behind us.
Talk to me about telecom. How is that going?
This is in a process of antitrust. The U.K. shows it is possible to go from four players to three players. The U.K. is not part of the EU anymore, but we are quite optimistic about this process. It's a long process. It takes like 18 months to get the final decision. It will be given by December of next year. I think we are on the right path. We will see.
Are you optimistic? Do you worry about losing clients?
The key thing is, annual pay returns are very important. First of all, it's revenue per user. Second is the number of users. If there are less users, at the end of the day, it's balanced. The key thing is the revenue per user — is it stable? It is stable. The churn is not so bad. We will see. In the contract we have, there are real values. It is a very, very long process. I'm not worried about this.
When you look at the sector, what is your hope for infrastructure? You are involved in data centers.
It was very good business in Europe in 2024. 2025 they just moved. In the U.S., we were there and now we are. We will take a fair share of this huge amount of money spent. They come back in Europe by the end of last year. Now we have something similar to 2024 in Europe. We have good contracts in Australia. The data center is huge. Maybe it's a bubble, but it is a huge business. We try to take a fair share of it and do it quite well.
Do you worry about it being a bubble?
There is one thing that we are worried about. When you look at the cost of using AI, and you compare what happened in the U.S. and what happened in China, the cost of using AI is much lower in China. The key thing is, will China finally impose this kind of price? In 2026, it will finally spend $745 billion just for one year. If the final cost of usage is China, we could say there was a bubble in the U.S.
Infrastructure is roads, data centers, and also nuclear plants. Are you excited?
Nuclear — when you look at 2011 in Japan, there was a nuclear plant. Now, this is electricity that is very stable. There is really good business for this in the U.K. There is a huge project in France. This is a good trend, one of the specialties we've got. This is why, when you ask me about the future, we have, for many subjects, on a very, very sustainable trend, we are able to sell or scale for this kind of customer. I'm not worried. We are not on a simple project. We are doing only a complex one. We are lucky. When you look at what happened on the very noble construction business, a hospital is difficult to build. This is something with the population getting a hold of more and more needs. We have a hospital in London, Toronto, and Vancouver. We have this kind of specialty, where there is sustainable demand for many years.
What do you do with media? Your weak spot was media because of advertising revenue.
The world is changing, definitely. We tried French markets in 2020. Authorities considered it was not the right time. We think that the novelty will not last for long. We could shift to streaming. The young generation does not hold the TV, you could say. When you look at the head of TF1, we have a very special agreement with Netflix. Finally, Netflix would take and broadcast on their site the content. Thanks to this, a role to expose our younger generation who were not aware of what we did.
And you take a percentage of that. It's also the blueprint.
It gives some growth for the audience of TF1 and it allows Netflix to have better content and a good license. It is a win-win situation. It is new for them. It is new for us.
You are happy with it so far. Have you had to adapt content?
This is a win-win solution.
There are elections in France. Investors are a little worried about what comes next, because of the fiscal discipline or too much spending, possibly, because of rules that the EU will not accept depending on who wins. What are your thoughts? How do you adapt a big business such as yourself in this environment?
If you know that our exposure to the French market, the key thing is we are depending on the French economy. There will be a problem for real estate, but there's already a problem, so it's not a big deal. With the new president, how long does it take to realize the real constraints and what kind of gaps would get between what they think before, and what they could do after? I think it won't last long.
You think reality will hit. Any person in charge will understand.
Yes, it's difficult. I'm not so worried. These are things that cannot last long.
Independent of the French elections, are you looking to grow outside France?
Absolutely, yes. We are looking to move into the U.S. because it is a very interesting, profitable market. We want to grow in the north of Europe, because it is a country with a lot of discipline. And we want Germany, because Germany is really new compared to what we can do considering the size with the goal of $2 billion to $3 billion. It's not easy to buy a company in Germany. It's a very specific market.
U.S. and Germany — one for infrastructure and the other for?
Our construction business and a service based on energy transition. These are two companies we push really hard in the U.S. and Germany.
Thank you for coming. Great conversations. I hope it is the first of many. That was the chief executive. Coming up, in the global bond sell-off, we discuss the outlook for investing with ING's Anneka Treon.
Welcome back. Stocks and bonds continuing to fall as renewed fighting in the Middle East pushes oil higher and with it expectations of higher inflation. That comes as the scale of AI-related spending is adding to concerns about broader inflationary pressures. Let's get more with Anneka Treon, Global Head of Private Banking and Wealth Management and Investments at ING, and Matt Bloxham of Bloomberg Intelligence. This is like the fifth story we have on Nvidia in the last three days. They are in advanced talks to acquire AI startup Hugging Face. What more do we know about this deal?
It is a deal priced at $14 billion, including a billion dollars for employee incentives. This is essentially an AI models app software forum, if you like, a community, and it is focused very much on the open model concept. So you've got the likes of OpenAI and Anthropic, which have closed models — you cannot play around with parameters. If you look at the Chinese models, they are largely based around open source, so you can play around with parameters. What Nvidia is trying to do is continue what it's done for some time: invest in the broader AI ecosystem, continue to keep that flywheel going and make sure the open model environment continues to flourish and thrive alongside that closed model environment, because quite a few of those closed model players are working with rivals on alternative technologies to what Nvidia is providing. It is an offensive play in the sense — an offensive play.
What were your key takeaways from Dell?
The big one is you've got big upside and the revenue opportunity — $25 billion upside this year, about 10% ahead of consensus. I think that is enough to flow through into the 27-28 numbers, too. They are a big partner of Nvidia. A lot of servers they sell have an Nvidia kit inside them. I think they will get that benefit. It is further confirmation that this broader AI server environment is growing still. So the CPU servers they sell, the more traditional servers that are used by companies for inference using AI, that is growing very strongly.
Overall, a lot of the focus on global bonds, it's on energy and all the other good stuff in asset classes. How do you play into the AI?
AI is not just about semiconductors, and we are seeing some companies' earnings — we see it is benefiting software companies. There was this big fear around software, but we see it is benefiting software companies, but also power, etc. If you look at the last earnings season, it is very hard to find a company that is not seeing — and in its analyst calls, we see so much more opportunity with AI, and these are authentic discoveries companies are seeing in terms of the growth, productivity, etc. We are just very excited about this earnings bonanza that is partly, and very largely, driven by AI. We still believe in leaning into it. We are still very much overweight tech, overweight power, etc., on the back of this.
We invest around it. We see the opportunity because the earnings growth we find very real, the sales growth is real. Multiples have de-rated. We keep talking about how markets are at all-time highs — markets have de-rated year to date. For the first time, the equal cap-weighted S&P is outperforming market cap-weighted. We see it as relatively healthy dynamics.
What do you do with bonds right now? You're neutral equities, neutral bonds overall. Feels like they are testing until the Fed or other central banks actually do something.
That is exactly how we feel. Our conviction is once Kevin Warsh makes that rate hike, which we believe is very likely in September, that can put the bond market at ease because that restores credibility again and restores credibility for him. Because many wondered, is he going to follow what Trump wants, etc.? That can signal to the markets that inflation is being controlled, so we can continue to look back at the equity story, at the growth in the markets, and that's what we believe clients should continue to lean into.
Going back, we had this incredible story, figure, survey from PwC saying they are expecting global data center spending to reach $36.6 trillion by 2050. Is that more or less than we expected?
We have not done a similar number, not out that far. It is hard to figure out what next year's figures are going to be. I think it's reflective of the fact that we are still at the early stage of this massive technological upheaval, if you like. And there is still huge amounts of innovation to come. We are seeing various plays in the investment community, but we have not really seen some kind of end-users of AI emerge, new players upending business models and industries. You still got quantum. That may well be another massive change in what we see. The numbers look very big, so we will have to see, and it may well be within that timeframe there is another technology revolution that comes that actually changes where that spending goes. Clearly, the future of the global economy is increasingly tied to technology investment.
The concern is if you're in Europe — we have just had a good conversation with the chief executive who is helping build out the data centers, but of course we don't have the LLMs, we don't have any of the Big Seven. So how do you play the European investment scene?
Europe is challenged in two ways. I think the appeal to Europe is mainly driven by the diversification. I think what a lot of people are seeing — individual clients but also institutionals — they are so heavily weighted U.S. dollar, etc., and diversifying away from that is important. The main challenges we see is, number one, to your point, the lack of AI innovation, the lack of data center capacity. Number two is this big Achilles' heel on energy. You look at gas prices in Europe versus the U.S., and with geopolitical uncertainty that keeps prevailing, that becomes problematic. You do find very exciting stock-specific areas. Look at the banks, look at the insurance companies in Europe, even energy companies. Take an energy company, list it Europe versus the U.S., sometimes the multiple gap is 2x.
Are your European clients investing differently than U.S. ones in terms of volatility? ETFs are a much smaller market here.
We think this is such an exciting time for Europe, and we are talking a lot at ING about getting Europe to invest, because there's been a lot of talk on U.S. households investing much more than European households, but this is changing and changing very fast. I think this pension ticking time bomb problem, especially in Europe, you see that people are actually starting to lean in. What you see in terms of client activity, we see a very barbelled approach. On the one hand, they are seeking yield, seeking capital protection solutions. But on the other hand, clients are really looking into AI, tech, etc. 75% of the flow has been in ETFs. We've never seen this before.
Why is that? Because it is just as volatile as other asset classes.
It is, but we see a very deliberate choice of clients to seek diversification, and obviously ETFs is a great way to do so.
Thank you both for joining us. Anneka Treon, Global Head of Private Banking and Investment Management at ING, and Matt Bloxham of Bloomberg Intelligence. We discuss tensions at the latest G20 meeting as the U.S. criticizes China for its trade practices. We have a roundup of everything we are seeing in markets. Stocks remaining under pressure as the sustained advance in oil markets fueled speculation that global policymakers will be forced to raise interest rates. We will have plenty more on that, next. And this is Bloomberg.
Good morning, everyone. Welcome to The Pulse. Global bonds extend losses over U.K. inflation fears, with U.S. Treasuries wiping out the gains made after Scott Bessent's intervention. The Middle East conflict pushing oil and gas higher. Andy Burnham will face his first Prime Minister's Questions as a surge in U.K. borrowing costs. U.S. Central Command says it carried out a fresh wave of strikes against Iranian military targets and says Iran retaliated with attacks on U.S. bases in the region. The news is pushing oil prices higher for a third straight session. European natural gas at the highest since 2023. Both the U.S. and Iran playing down the chances of a deal. What are they actually saying?
