>> good morning. this is "bloomberg daybreak: europe." these are the stories that set your agenda. the u.s. says there will be retaliation for the killing of three of its troops in jordan in a drone attack blamed on iran backed militants. a hong kong court orders the liquidation of the world's most indebted developer, china evergrande in a new test for the embattled property sector. and european earnings in focus. we bring you the details on midst delivery plans for boeing and investors watching out for phillips as the dutch radical device maker reports -- as the dutch medical device maker reports. let's look at the earnings. ryanair.

in terms of the latest details and earnings. a four year profit at one point eight 5 billion to 1.95 billion. the top end. in terms of profit coming through. guiding a slightly lower profit outlook. the top line had been looking to 2.05 billion euros. slightly lower on the back of fuel costs and demand. we are looking at expectations for the key summer season and the deliveries of the boeing aircraft. they had been expecting to take delivery of 45-50 aircraft for june. they still see customers at about 183.5 million. marginally below the previous

estimates in terms of customers. third-quarter revenue coming in at 2.7 billion. slightly below estimates. ryanair customers, 41.4 million. slightly below the estimates. the number of customers are above estimates but it is the revenue that is slightly softer for the third quarter. the red head is the guidance around the four year profit. we will be joined by neil sorahan, the cfo of ryanair to get his take on the boeing component of that story in under 10 minutes. top winds coming through from phillips. the device maker halting the sale of the sleep apnea devices in the u.s. after a deal with

the fda. we know they had recalled these devices, the sleep apnea devices on the back of a probe i the authorities in the u.s. they have halted the sale of these devices. the dream station 2 in the u.s. after the fda deal. in terms of earnings, the adjusted ebita missing the estimates. fourth quarter sales slightly below estimates. they had expected to see growth of a little over 3%. we will speak with the cfo of -- the ceo of phillips. the chief executive, roy jakobs will join me later and that interview will be live in london. that's check in on the markets. a strong session in europe on friday closing the day with

gains a little more than 1%. we wait for the earnings season to get more details. the u.s. and europe amid a significant week for central banks. the federal reserve making its decision on wednesday and the bank of england on thursday. european futures currently pointing lower. the context is that they racked up gains on friday. the ftse 100 futures lower by .1%. nasdaq futures flat on a major week as well for tech earnings. $10 trillion in market value. reporting between tuesday and thursday, five of the magnificent seven crucial in terms of investor expectations as to whether the tech element can continue to drive gains. let's flip aboard and look cross asset.

oil in focus because of the geopolitical tensions. the attacks on u.s. troops in jordan and the u.s. promise of a retaliation. we watch that as well as the continued attacks by houthi rebels on shipping in the red sea. wti closing in on the $80 a barrel level. iron ore also in focus up .2%. there was an expectation that more would come through from china and its property sector. euro-dollar in focus. 1.08 after ecb saying a rate cut could come at any point pushing back on the view from some that we will have to wait until summer to get an ecb cut. the 10 year focus given that is a major -- that it is a major week.

back to the geopolitics. president biden has vowed retaliation after three u.s. service members were killed in a drone attack on a base in jordan. the u.s. has acute militants of the attack which also injured dozens of troops -- the u.s. has accused militants of the attack which also injured dozens of attacks. sylvia, what do we know? >> one of the big questions is how does the u.s. react to the attack? it happened just inside jordan along the border area with syria and iraq. it is the first deaths of u.s. personnel in an attack since the escalation in the middle east started. and it really is important now. it is a real dilemma for buying in an election year. how does he react to an attack by anna rainey and backed group? there are various -- by an

iranian backed group? the u.s. did retaliate against iran previously. it was a significant blow to iran. back then, iran did not escalate in a large way. there are various ways you can look at targeting iran. but they are always weighing the risk that if they retaliate, how will it strike back it become a back-and-forth between the u.s. and iran which is something the u.s. wants to avoid. tom: we will watch for that potential response from the u.s. in the red sea, houthis striking a ship this one carrying russian fuel. how does this play in? >> i think for the energy

markets it is also about recalculating risks. this is a fuel tanker. if you look at the wider sense there was an immediate reaction from the oil market. more broadly, though we have seen this conflict escalating in the red sea disturbing global shipping, oil is still flowing and all shipments are still going. they are also rerouting shipping traffic via other routes. we have not seen any direct attacks on oil fields or oil infrastructure in the latest,. though it is a short-term risk that the oil market will be impacted, people still say they have not seen a big escalation or impact on oil supply that would show that something -- that a real escalation has happened. tom: and all of this happening as we know talks continue around

a potential israel-how moss cease fire. what are the details? >> the original sparking of the conflict was the how moss attack on israel october's -- was the original hamas attack on israel october 7. there has been a u.s.-backed effort to try to consolidate the position of countries in the region, arab countries and how they can help bring about something that would look like a postwar gaza. right now israel is concentrating on taking out how mass in gaza hama -- hamas in gaza. there is pressure from allies. probably the most optimistic people are saying there could be another temporary pause if the talks go ahead but anything

longer term will be more difficult to get to at this point right now. tom: thank you very much. let's look at the asian trading session. checking in on the markets. top line, asian markets performing quite well today. >> yes. given the situation in the middle east, you would not think there would be appetite for riskier assets and get a gauge show stocks are advancing because you have a gauge of energy counters climbing. this is to the highest levels since the middle of 2022. at is the readthrough from the tensions in the middle east. and it is the energy as well as the financial stocks supporting the nikkei and the topix. it seems the tensions are sparking the concerns about upside risk for inflation which

could nudge the boj into action and an exit from its negative rate policy. dollar-yen reflecting that as well. to china come over the weekend we saw a couple of measures which in theory should be supportive for the stock market. in a top-tier city, wenzhou we saw a restrictions there being eased. we also got regulators adjusting some of the restrictions related to shortselling. all in you should see a stemming in the route but it proved too great. the china evergrande concerns is bringing down sentiment. worries about financial market contagion. csi 3000 eked out some improvement. offshore yen is also weaker. tom: thank you with a check on the asian markets.

evergrande a hong kong court has ordered china evergrande to liquidate after it was unable to reach a deal with creditor's. bloomberg's the red a chan joins us with -- bloomberg's loretta joins us with the details. >> this is a two-year long process for evergrande to come from defaulting on its u.s. dollar debt. the next thing is happening in hong kong court. the judge that decided on the liquidation case will give out her reasoning behind that. and further there will be a liquidator appointed to the case. they process will kickoff from there. and this morning we learned that the key creditor group behind this liquidation process will be the ad hoc group of evergrande.

these are the creditor is holding a majority of evergrande's dollar debt. they will replace the original company that asked to drive the process going forward. tom: what are the ramifications for the broader property sector in china as a result of this? >> from evergrande, it is a clear sign that investors are not expecting much recovery from the failed restructuring plan. for the broader property sector, i think there will be more downward pressure on sentiment. you will see investors continue to price in this downward spiral in the property sector. home sales continued to go down despite these stimulus measures on the demand side or for the refinancing side. evergrande through all of these months of stimulus has never

been included in any of these stimulus drives. we are expecting that to happen with some of the other weaker privately owned developers in china. overall it is a bad sign for the property sector. tom: over three $30 billion of liabilities for that company alone. ryanair cutting prop -- profit guidance. we speak with the cfo later in this hour, neil sorahan. and more with roy jakobs on his companies decision around the fda to remove its sleep apnea device in the u.s. this is bloomberg. ♪

tom: welcome back to "bloomberg

daybreak: europe." we are about and hour and a half from the european open. ryanair earnings lowering their profit for the four year because of fuel costs. and the question around boeing deliveries. we are joined now by the cfo of ryanair, neil sorahan. give us your take on the topline results, the fuel component -- how do you expect that story to people? neil: fuel will be tricky for the next few months. we are now guiding somewhere in the range of 1.8 5 billion profits for the full year. beyond. we are well hedged. we have hedged 65% for fuel.

that is a good place to be starting as we move into a new financial year from april of this year onwards. when i look at the summer, we have a bumper summer schedule up 9% on last year. 169 new routes. and the capacity in europe will be constrained due to the engine issues we are seeing. you are probably looking at some fare increases. tom: the pratt & whitney issue is an issue. do you continue to benefit from that? neil: last year the european capacity was about 94% pre-covid. this year with 10% of the fleet grounded as a result of this, we will be 93% pre-covid capacity.

we are seeing very strong bookings coming through. i think we will see some fare increases on the back of that with fuel locked in at relatively good levels. tom: what is the percentage increase in fares? neil: not as much as last year which was 14% but i do think we will see increases this year. tom: when it comes to the question of capacity, we have to think about the deliveries of aircraft and boeing. you had penciled in 45-50 i june. what is your level of confidence you will get those deliveries? neil: i was in seattle a couple weeks ago and i met the senior management team. i'm reasonably comfortable we will get in 50 aircraft for the summer. fewer than 57 which is what we

had hoped to have. i am pleased that it will be 50 aircraft in the fleet. we will be able to operate a bumper summer schedule up 9% from last year. tom: we have heard from executives at american airlines, southwest and united criticizing boeing. you said you were there. what is your message? neil: get us our aircraft on time, high quality aircraft. in fairness, we look in more detail at the 12 aircraft that we got pre-christmas. we have put more engineers in seattle and in spirit in wichita and we are working with dave calhoun and brian west and the boeing team and we are supportive of what they are doing. tom: what has to change at boeing to fix the safety issues? neil: in fairness i think they are improving and moving in the right direction.

they have to make sure we are getting high quality aircraft on time all the time. and i believe dave calhoun and brian west will do that. tom: i have confidence in the team. what do passengers say? is there anxiety? neil: no. when the first max committed a flying we said we wanted to switch. nobody wanted to. we are flying a high load. i came over on a full flight from dublin yesterday. people are happy to fly and we operate a safe operation. we have 546 boeing's in the fleet and they perform at a high level. tom: you you are almost exclusively boeing. neil: there were certain airlines out there last week talking about delaying.

but we are very happy with this aircraft and would love to get more. tom: you are sticking with boeing for now. the summer season is looking bright. how is the demand changing? you think about the wildfires and heat of last summer. you getting more bookings for scandinavia and eastern europe? neil: we are in over 37 different countries. we have new markets like morocco. domestic morocco, albania for the first time. and a lot of demand for dubrovnik. the destinations you referred to are filling up very quickly. tom: when it comes to oil and the fuel cost, how are you looking at the red sea ramifications? this is something that team at ryanair is focused on? neil: in fairness, we are well

hedged. we see a lot of short-term volatility out of the system. the curve -- the forward price is still cheaper than spot. we are 65% hedged out to march of 2025 which takes a lot of the short-term noise out of the system. we are locked in at better levels than we were last year and we are locked in at lower levels for our euro-dollar. 109 last year and 111 next year. we take it with a 12-18 month view. you will never beat the market long-term. tom: have you projected out into 2025? and we look at the capacity and ability of airbus and boeing to get aircraft to their customers. how are you thinking about the

leverage ryanair might have? neil: we already have. we did a 300 aircraft deal earlier this year and the timing was immaculate. it was in may. we signed the deal and got it approved by our shareholders in september. we have aircraft out to 2024. at the same time, the o ae has constrains. you're looking at the oam's. ryanair is in a unique position. we have aircraft coming in and game changes between now and the summer of 2025. tom: always a pleasure. good to see you, neil sorahan,

the cfo of ryanair. plenty more coming up as we speak with the ceo of philips as well in the next 20 minutes. this is bloomberg. ♪

tom: welcome back and happy monday. we have learned the u.s. is going to announce grants at the end of march supercharging domestic production. the awards are slated to go to intel and other chipmakers. it is to help them build factories in the u.s. a big week for central banks for the fed and the boe delivering rate decisions. we discussed what to expect from po

>> good morning, this is

bloomberg daybreak: europe. i am tom mackenzie in london. these are the stories that set your agenda. the u.s. as they will be retaliation for the killing of three of its soldiers in jordan. hong kong court orders the liquidation of the world's most indented developer, china evergrande in the new test for the embattled property sector. the cfo tells us he is still optimistic. let's check in on these markets on a big week. we were talking about ryanair. we have the phillips ceo coming up on the back of their earnings.

states i, it is a massive week for the megacap tech companies. the picture when it comes to these features, the european futures, u.s. futures currently flat. nasdaq futures are up. given the fact that the megacap tech companies are powering through. let's see what the cross as a situation is. the u.s. are blaming them on those i backed groups. brent is currently trading at 83 or $84 per barrel. iron ore also in focus for

today, given some of the measures coming through from time to support the property sector. the relaxation of some of those measures. the euro-dollar is at 108. now it is shaping up to be a pivotal week for markets. two of the big central bank meetings. the fed will keep -- kick things off with their decision following on thursday. let's bring in anna from bloomberg economics. what can we expect from the fed? question morning. the fed acknowledged that the tybee cycle was over. it is ready to start talking about rate cuts. there just wondering how fast these rate cuts can come.

they think that a dovish tweak to the guidance is possible. what they are really looking for is for the fed to lay out the conditions that need to be met in order for rate cuts to start. they think there has been fast progress in the u.s.. they think there are no meaningful revisions to the seasonal factors coming on in february. >> all right. when it comes to the boe, rates at 5.2 or 5%, are they ready to start talking and thinking about rate cuts? >> the boe is lagging behind. so far they remained with a hawkish tone.

all of this is an a ways to soften their guidance and we can acknowledge that the hiking cycle is over and that the next move is going to be down. this is below what the boe forecasted. we had just -- a sustainable fall energy price. that effectively means the 2% target is inside and can be reached in april. it is a radical change. >> all right. we look for that potential softening. anna with the preview there. thank you very much indeed from bloomberg economics. the ecb divisions are appearing before policymakers. the governing council member says loosening could come at any point this year. the comments come just days

after christine lagarde said there was consensus at last week's meeting and that it was premature to discuss cuts. let's get back to the corporate earnings story. speaking to me earlier, they also spoke about the recent troubles at boeing. he said the carrier plans to continue working with the company. >> i was in seattle couple books ago. i met this managing team. we were reasonably comfortable that we will get them there for the summer. that means that next year we will fly somewhere close. i am pleased there are 50 aircraft in the fleet. >> all right, let's bring in the global aviation reporter who is coming to us out of dubai.

how much concern is there? they have lowered their guidance . not hugely but lower than expected. >> they look to assess how demand is playing out. the fourth quarter is typically the weakest quarter for ryanair which makes most of their money during the peaks. in terms of how demand plays out over the next 12 months is key to what ryanair invested in. especially with them talking about higher fuel prices. and the impact of lower fares because of what has been happening with all of the online travel agents. that is what a key driver of demand is. it is interesting to see how it pans out.

it will be interesting to see what demand looks like going into 2024. >> all right. we talked to the cfo about his confidence around those bone deliveries as well. he said he was pretty confident they would get about aircraft by late june. what will you be looking for? everyone will be looking at what the impact of the affairs decision looks like. the moment everyone is really keen on what boeing does next -- that could be about three weeks on the ground. they talked about it $150 million impact on earnings. they essentially said we expect compensation. what the build for boeing on the

ground is. >> that was said fill up a preview there. the need to focus on the impact. thank you very much with the context. also making news is the world's largest cement maker hoping to spin off its north american unit to pave the way for a u.s. listening next year and a potential valuation of more than 30 billion u.s. dollars. this was company also named its european head as his new ceo. the move goes into effect from may the first. we will be hearing from this year at 7:20, u.k. time. now, bloomberg understands the u.k. government has asked the city of london firms to submit proposals on a potential retail

share offering. they have been asking for bids by late february with the treasury hoping to announce the trail sale. u.k. holds a stake of more than a third here. all of this rescue during the global financial crisis. staying with u.k.. job vacancies fell by the most in three years in december. another sign that a red-hot labor market is slightly less red-hot. job postings dropped almost 7% last month with early data suggesting january we will see similar sized one. and there are more measures placating farmers. they have been protesting across the country over higher production costs and new e.u. regulations. they have offered to reverse a measures including a plant tax rise on farming fuel.

more concessions are expected this week. we will speak to the phillips ceo, royale cups joining me next. stay with us for that conversation. this is bloomberg. is it not

>> welcome back to bloomberg daybreak: europe, i am tom mackenzie. happy monday. phillips has suspended sales of its sleep apnea devices in the united states after striking a deal with the fda over faulty medical equipment. joining me is the phillips ceo. they posted the earnings today. we will go through those. thank you for joining us this morning. let start with the recall just to get a bit more detail in terms of what has been set aside in terms of cash to account for

some of this. a billion has been set aside but half a billion for lawsuits. what is -- what is the total amount you are expected to have to put aside for the litigation in the recall? >> thank you for having me on the show. we are now one year into the plan that i announced in january. when we announce to the plan we said we would do low single-digit growth. we will improve profitability to high single digits. we actually closed the year with 7% growth, 10.5% and cash generation of 1.6 billion. we have actually made a lot of progress. that gives a lot of confidence for the second year.

we announced today -- i think it is an important announcement that we have agreed to the terms that the fda opposed. it is actually really important because it provides clarity. it provides compliance and with that we take another important step to bring phillips back to where it should be in terms of performance and also, we innervated that our plan will be presented in january. we will continue to grow in 2024, three to 5%. we have another year of strong cash generation. that includes some of the charges. that is part of the economic loss provision that we have. quick some of that clarity has come through. but i will need to push you a little bit more in terms of the cost you have to set aside for

these recalls and for the potential litigation. what is of the total amount you are potentially looking at? >> i think what is important is as you saw in the numbers, we took a provision of 363 million -- that actually gives clarity on what is needed for 2023. we said this will have an impact of 100 basis points for 2024 but that is included in the total company guidance. in the cash generation. 100 basis points is substantial but that is taking into account the guidance. one is litigation where we said

earlier that we were working on getting further insights and hopefully later in 2024 we could get more insight into the case and to provide that. secondly, it is the doj investigation that is also undergoing full control of the american authorities. we said that will not become clear before 2035. >> we will have to wait till 2025 to get bit more clarity on that front. when it comes to that agreement, the decree with the fda in the u.s., how you think it will take for you to meet the relevant requirements of that consent decree? >> as i said before, time to consent decree usually spends 24 on totality. this provides movement for us to comply in the moment we comply early, we could come back early. it is important to clarify that

we continue to remain servicing. outside of the u.s., we are also providing respiratory care and nuance as well as all the accessories that go with it. it is really important. we will be focused on complying. it is 7% growth last year. three to 5% last year -- next year will be important to achieve. most important leak, we can support the health care sector with the solutions that we have. >> how much will you be putting aside for personal injury place? >> as i mentioned, the litigations are something we are

working through. we don't have that clarity. it has to be seen if there needs to be something and then if there is something to base it on. what we were very much focusing on -- i was happy to see that we go through this. 6 billion in cash generation in 2023. 1.6 billion is what we generated. that also provides a very strong future and a base for the future of phillips because the cash generation -- we need strong operational performance. this is something that we need to take as a very strong underpinning. we will see a razor focus that we are executing the plan. >> you are also having to do with the legacy of another quality issue around this around

one of your products. do you have objection into the legacy? that would give investors clarity in terms of the timeframe they are looking at for potential legal recourse. >> we have done extensive testing that showed they support usage of our devices. that is the evidence that we have. i think it is as important that we look to all of the segments that we have. we were growing in connective care and we were growing across the world. we grew out of europe and out of america. despite the volatile economic environment we operate in, we have to become an idol to address that but that is why we changed our operating model. one billion in product --

productivity savings. that is also very important to ensure that we can continue to deliver on the plan we have set out and we are very confident that we will continue to do so. request talked in the past about your confidence longer-term in the chinese market. the chinese market and the challenges facing that economy, how much of a drag is that in terms of the business? >> we are committed to china. i think it is fair to say that china has challenges to work through. we see that from an economic growth model. we actually believe these measures will be beneficial long for us and will strengthen our position because we are doing business to get better at of

china. the consumer sentiment is strengthening a bit. we saw it in 2023, do core strengthening. but china is not yet as full power. we need to continue to draw significant growth. we have great opportunities in saudi. we need to make sure we are showcasing all of our innovations. we have asian indonesian and that america because that is the strongest market in the world. that is also where we believe we need to get a fair share of contribution. >> all right. that was the fellow ceo. thank you very much for joining us. we appreciate it. 20 more coming up. this is bloomberg. ♪

>> welcome back to bloomberg daybreak: europe. i am tom mackenzie in london. the state on the fed with the decision coming through on wednesday. expect the federal reserve to stand pat on this meeting. anything jay powell says about the prospects for march, that will be in focus. don't forget the context. the markets are well ahead of that. they are pricing in around 150 basis points by the end of this year. they have started to moderate the expectations around cards. this is what the chart shows. you're looking at that point. seven cuts being priced in by the markets. march is still 50-50.

it is the outlook that comes through that will be consequential in terms of adjusting the pricing. it is worth reflecting. back to september of 2023. where we were in terms of expectations around cuts. we have adjusted back from 75.5 but we are still expected to get round. around 320% by the end of this year. bond rates around the top end. let's have a look at the tech story. the central bank is also about those tech earnings. >> microsoft alone has a market cap of close to 3 trillion. we learn is come through between tuesday and thursday. $10 trillion. that is from five of the big seven megacap stocks. this is really consequential in terms of feeding into your views for whether or not the s&p could continue to grind through these records. the fed mobile rates and the ability for the ai enthusiast to

power these tech stories. dearness picture absolutely essential for the likes of alphabet. let's have a look at the property sector. evergrande in focus. this is a really consequential decision to start the liquidation process. just take your mind back to 2021 where they defaulted on their dollar bonds. this is a company that is a member -- a significant member of the property space in china. $330 million or thereabouts. how they got through this will be really significant for the property sector. coming up, stay tuned for the ceo on the back of a plan to spin off one of their businesses. that is 7:15, u.k. time. daybreak is up next. this is bloomberg. ♪