♪ >> good morning, this is

daybreak europe with tom mackenzie and these are the stories that site your agenda. china's past holiday optimism fades. a target for the s&p on profit expectations. israel gives hamas until ramadan to release hostages or face a ground offensive on the city. u.k. labour leader is in focus with banks set to report. we will preview. let's check in on these markets because it is presidents' day in the u.s.. u.s. futures as we look to the reopen are currently pointing hi. after a modest loss on friday. inflation is higher than expected on the two-year on friday. nasdaq futures in europe esau a

two-year high. solid gains but profit-taking being flagged by futures. ftse 100 futures on softer iron or and copper prices, futures pointing lower by 2/10. let's have a look at the asian session because there was optimism that china would come out of the gates on the back of optimistic data. that is not quite how it has paired out. hong kong seeing losses in the session. a bit of profit taking. csi 300 on the mainland, 6/10 of 1% tomorrow. the nikkei is flat.

let's look cross asset, we can see the pound and what is happening with the pound. gains coming through above the 2000 level. china remains in a very weak space with hotels over the holiday disappointing in china. down 7/10 as the demand story offsetting geopolitical risks. struggling to hold onto gains. moods spring in jail for the analysis. what do we know for the

potential economic boosts coming through from all that travel in china? >> there are a couple of things that markets are digesting. headline numbers put out by china's tourism ministry showed some heavy figures on spending and tourism for travel around china. we saw numbers exceeding levels in 2019 so that is a good sign. for one thing, the country is much more opened than last year. a good thing to keep in mind is the holiday this year was longer by a day. . we are hearing per capita

spending such as spending over the holiday is weaker than 2019. that is in line with some trends we've seen, people spending money on services so people are more frugal. yvonne: shanghai is up 1%. a relatively strong session and pressure in hong kong. >> when you're looking at mainland stocks, the one thing to remember about the uptick is last week in hong kong, hong kong was not closed. they reopen on wednesday. stocks rallied toward the end of

last week. we saw some the similar play out, and a lot of expectation leading into the onshore market reopening. you can see a boost in the mainland. as playing into consideration that people are looking beyond headline numbers. you're seeing gains in hong kong. it supports the idea that what investors are looking out for is policy action. something else to make sure any uptick in consumer spending is sustainable through the first quarter and first half of this year. yvonne: bloomberg's jill with that. mainland market reopening. thank you indeed. the s&p rising up from its december estimates of 5000 100 on increase profit. companies are warning that the war on the middle east and red

sea shipping chaos threatened the record rally. let's goldman, the view of course being raised, the forecast being raised from 5100 mid-december to 5200 now, a little under 4%. is that becoming a little bit more consensus? what do you make of it? paul: good morning, tom. the goldman forecast is quite high relative to the market. relative to our consensus at this moment. toward the top end of that. as you were saying it is only 4% away from where we are right now. part of the problem is the s&p gains and for that matter the nasdaq at the start of this year have already pushed the markets toward the year-end levels people were looking for. there's a sense that in some ways, analysts are moving to catch up. goldman is saying they have seen reason to be optimistic, leading

to revising the forecast higher as well. the market has the bit between its teeth with the gains and the momentum we have seen. the excitement about tech and ai. if you look across the global risk complex apart from china, you know, there is plenty of signs the market is very confident at the moment. take credit spreads. economic indicators beating estimates. subdued volatility. all these ingredients feeding buoyancy in the markets at the moment. goldman revising its forecast up is a sign of that. tom: we had a reminder, the relative stickiness of consumer prices and on friday of course producer prices. what stands out to you as the potential risks going forward? tom: you mentioning inflation is

certainly very pertinent. what could go wrong, what if the fed changes its mind and decides it needs to start hiking? that would not be a consensus view. it might do something that would upset the market or generally, there was talk in one of the stories over the weekend, what if the fed starts warning about this irrational exuberance in the market, starts to say it is worried about the amount of risk-taking? maybe that would slam on the brakes somewhat for stocks. give people more room for caution in credit markets. we know about the geopolitical risks hanging over markets. we know about the other ongoing risks, the drag from part of the world still over here in asia. aside from that, maybe the market just runs out of gas. those gains have been so striking. there's going to be a need for a bit of a breather even if it is

that pause that refreshes at some point among this big rally. tom: excellent analysis has always. s&p e-mini is point to gains of 0.1% when the u.s. markets reopen tuesday. . let's think about -- president'' day, no trading of u.s. stocks. those reopen tuesday. we will be getting fed minutes as well. interesting in terms of how the markets have adjusted. it was in january the markets were pricing in, traders were pricing in as many as 150 basis points of cuts from the federal reserve. that has been reduced to 90 basis points don't forget the dot plots. trade is not far from the dot plot forecast in terms of the extent of cuts to come through. the minutes from the fed could enforce those forecasts and that discussion. on the earnings front, crucial to the enthusiasm around

artificial intelligence. nvidia earnings coming out wednesday. will the earnings be enough to sustain the upside from that stock? year-to-date, gains of 46% for nvidia. estonia's prime minister: europe to issue billions in bonds to fund defense spending -- calls on europe to issue billions in bonds to fund defense spending. more on the munich security conference coming up next. this is bloomberg. ♪

tom: estonia's prime minister says the eu should work on a plan to issue 100 billion euros in bonds to boost the continents defense industry. telling bloomberg in an interview at the munich security

conference that in the meantime bloc -- the bloc must do more to get weapons to ukraine. good morning and thanks for joining us. what do you make of this call by the leaders of estonia? how realistic is it? what does it speak to the urgency in europe to ensure they have the defenses needed? >> what it really reflects is this growing concern that at some point in the coming years europe may be on its own. you can see that from the climate in the u.s.. regardless of who wins the election at the end of the year. there is a nagging sense that at some point europe has to become more self-reliant. there has been talk for years but they have not got there in terms of defense spending and supporting their domestic defense companies. what she's talking about in a way is a bit like the pandemic. the member states all came together and issued a huge amount of debt to basically fund

their economies during the pandemic. what she's talking about is a similar exercise to fund the defense sector. given they are still chewing through debt from the pandemic, you can imagine some countries, particularly germany and others that pride themselves on fiscal prudence. france and other nations may push for it. it's a difficult prospect to see anytime soon. it is interesting because it does reflect those dynamics. tom: what is the difference between europe and its defense needs if we get to the point where -- where is europe in terms of its defense needs if we get to the point? do they have the weaponry to keep ukraine less on the back foot then they are now arguably? rosalind: most countries are running out of weapons themselves because they sent so much to ukraine. the problem is the supply chain to replenish them domestically

because their industries are quite antiquated, quite slow, they operate on long-term contracts. what they try to do is backfill themselves to continue to supply ukraine. they cannot even do that. germany for example, some of those countries are meeting this goal for nato defense spending contributions but the german defense minister is talking about going to 3.5%. some nations are not getting to two. what he is saying in that is we have to make tough choices to spend more on defense. this is something european nations did not do for decades. they thought they did not need to. the last few years have been a wake-up call. tom: a watershed moment in defense spending in europe. there have been territorial losses for ukraine over the last 24, 48 hours. how significant could that be in terms of the fight on the ground for ukraine? rosalind: it reflects the issue of the fact ukraine is running out of weapons.

it is a strategic win for russia, not a key city in the scheme of things, but the follow the city is a win -- the fall of the city is a win for russia sending the message that ukraine is on the back foot on the ground. tom: thank you very much indeed. the debate playing out in europe about its own defense needs. rosalind matheson leading the team here. israel says it will launch a ground offensive. in the rough area of gaza, unless hostages still held by hamas are released by the start of the ramadan holidays. next month. israeli war cabinet member benny gantz promised to facilitate the evacuation of civilians in court nation with the u.s. and egypt in urgent -- in order to minimize casualties. i'm joined by patrick sykes in dubai. how realistic is this deadline? >> as of now, we had over the

weekend the qatari media throughout this process saying the trajectory of how the talks have been going is not very positive to quote them. it is interesting, this date, the start of ramadan, operationally this muslim holy month has nothing to do with the situation on the ground. it feels like it is almost just putting the ball into hamas's court. the negotiations continuing away from the negotiating table. the past few days, israel is saying some of hamas's demands were delusional. they included full is really withdrawal from the gales the -- full israel withdrawal from the gaza strip and release of prisoners. it feels like more of a negotiating tactic away from the table itself. israel willing a response that it sees as more credible from hamas. tom: we know there's been a lot of concern about the plight of

civilians in that city of rafah. when israel talks about working with egypt and the u.s. to facilitate safe passage, do we know what that might look like at this point? >> i do not think we do. it does speak to the fact, obviously the conflict has caused humanitarian catastrophe but it has this clear focal point in rafah. one million palestinians displaced. collected there, seeking shelter. there is huge international pressure building on israel to change the way it goes about this operation. i think it is going to be particularly sensitive in the case of rafah. for egypt it is obviously a huge concern that they do not want to see an influx of people over the border. they have an interest in not seeing palestinians displaced further from their homeland. it is a security issue, it is a humanitarian crisis waiting to unfold tom: the conversations,

the negotiations between hamas, the u.s. has been involved and israel. where does that stand? the qatari is central to those negotiations. have they been derailed? is there still hope? where do negotiations stand? >> if there's hope, it is in israel making comments about the start of ramadan, at least sort of signaling, here is a period of time in which there can be talks. the format may change. the last round did not go anywhere. we had israel opting not to send anyone to egypt to take part. if there is any optimism, it's in there has been at least a period of time specified now ahead in which parties can work on something.

the mediators are saying things are not positive at the moment. tom: bloomberg's patrick sykes. thank you. coming up, tensions boil over between ethiopia and somalia at the african union summit. more on that story next. stay with us. this is bloomberg. ♪

tom: welcome back to bloomberg daybreak: europe. dubai international passenger numbers surged year on year in 2023, surpassing pre-pandemic levels. paul griffis, the dubai airport cfo spoke to bloomberg about how

he plans to save time for passengers. >> what we do is invest very intelligently in new technology, because airport infrastructure is very expensive and quite difficult to build, particularly on a constrained site such as dsp. without building anything, if you can actually double the rate of capacity throughput, you have doubled the capacity of the overall airport. that is a very intelligent way because of course i have not met a single customer over the years i've been in the business that actually wants to spend more time at an airport. usually they interface with the product if it is efficient and quick, that wins a small plot and's from our customer than any single factor. >> presumably you would need more slots. how constrained are you for airlines? paul: runway slots we still have

a little bit of capacity left. aircraft stands, we are still ok. there's a program to build more passenger processing capacity is probably our biggest single barrier to expansion. the involvement of everyone improving the process, investing in the technology to measure the customer journeys and optimize the performance in every pinch point through the airport, that's one of our most successful and key focus areas for the entire business. paul: that was paul griffiths speaking to bloomberg earlier. let's get the latest from the horn of africa where the feud between ethiopia and somalia is boiling over. the two rivals already at odds over a maritime packed class at the african union summit over the weekend.

somalia and ethiopia then, differences coming to light once again. these are not new differences. they have been around for a while. walk us through the latest. what transpired at the summit? ondiro: somalia's president said. ethiopia security forces had tried to restrict his and his team's access to the au summit premises amid the ongoing differences in a memorandum of understanding between ethiopia and somalia that will allow ethiopia access to the sea. however the president says ethiopia has never had access to the sea but rather how ethiopia wants to access the seat. he went ahead to say that if ethiopia is preparing ground for territorial annexation, which he says is against the sovereign and territorial integrity of somalia, and should they try, they will retaliate. ethiopia has downplayed potential for conflict. they say the weekend was an

slated incident were somalia tried to access the premises -- an isolated incident were small you tried to access the premises. what we learned is the diplomatic to is nowhere near over -- diplomatic tiff is nowhere near over. tom: the president of rwanda taking time to clarify that countries position with regards to the drc. what were the key takeaways? ondiro: the president reiterated the fact rwanda is not going to hesitate to protect their security and their people. he has always alluded to the fact that nearly three decades ago, one million people lost their lives during a genocide. that is a place they never want to go back to. the irony is while he was making a case for rwanda and sovereign integrity, drc was accusing them of a drone attack that damaged a civilian aircraft at an airport in northern kivu.

the u.s. has come out to condemn this attack and ask rwanda to withdraw their forces from drc. tom: bloomberg has learned apple is set to face a fine of nearly half a billion euros from the eu over a row with music streaming rival spotify. we discuss that next, the implications for apple and its business in europe. stay with us. this is bloomberg. ♪

>> good morning, this is bloomberg dave europe.

i am tom mackenzie in london. these are the stories that set your agenda. goldman lifting his target for the s&p 500. plus, u.k. lenders and focus this week with some of the largest banks set. let's check on this here in the u.s.. we continue to reflect on the prices here.

down .2%. you would get to 5200. let's look across the asset there. gains around .9%. he had three state -- three

straight days of gains. currently flat on the session. let's go cross asset now and have a look at these currencies. the road dollars at 107. softness there, that of the china story. the demand concerns outweigh the geopolitics. the middle east over defy the global stop.

this is the best year in record for new listings. >> it is a fascinating place to be in a fascinating time to be here. rothschild just opened a new office. in the effort to diversify the capital markets in saudi arabia. >> other investors and officers that may have been weary are now deciding that the time could be read to take advantage of this

boom. it is part of vision 2030 which was launched seven years ago at this point. this is one of the how does infrastructure markets in the world right now. up until very recently, capital markets were basically financials. there is a huge effort to diversify that. we are seeing a huge amount of listing flow. basically we are rivaling euro in terms of capital markets activity. that is very positive for the saudi economy. there is more work that needs to be done. they want to make more products available. enter into the depths mark is a

little bit more. it is in the emerging markets index. about 4.3% of that. the emerging market index is flat. partially because of what you just said earlier. china is very difficult for investors to invest in. many say it is unvested of -- on investable. many of them are here today. with the success of the saudi economy. we will get more from him about the plans to pay back dividends to the saudi government as well. a very interesting couple of days.

>> thank you very much indeed. that fireside chat is that eight 1:50 a.m. london time. let's move on to technology now. apple is said to be facing an eu fine of nearly 500 million euros. what is behind this case? what is the essence of this case? >> indeed, that is right. nearly 500 million euros that apple is set to be facing over eu regulators investigation into allegations that it silenced music streaming rivals including spotify. this is the first penalty for --

for apple from the eu. informing customers there are cheaper services. the story goes back nearly four years ago when spotify filed a complaint alleging it had to significantly ramp up its monthly subscription prices because it had to cover the cost of operation in the app store. apple said that in fact it help spotify become the top music streaming provider in europe. apple and the eu officials had a

closed-door meeting in june were apple said it had already addressed the main competition concerns. >> is this part of a bigger crackdown? >> indeed the european commission on the competition market has made it more of a strategy to try to dismantle the dominance of bigger tech companies. what is coming next? the legislation dma that comes

into play may 7, this is is -- exactly trying to prevent competition progress and violations taking root. basically when dma comes into effect, big tech giants -- it will be illegal for them to favor their own services over rivals. thank you very much indeed. it is a busy week for earnings this week. it is a big week for european earnings. you can banks in the spotlight.

that will affect the investment bank in particular. we are expecting a slump in fixed income revenue. what's the strategy of different berkeley really and focus. where is the scrutiny. this is the margin eloquent the same context.

that is the theme around the globe. that is within the context of the financial regular. >> from banks to technology, really taking such a stage will be nvidia on wednesday. there is a tight european chipmakers. cliques we mixed results.

in this is narrative of a transition in 2024 go into a growth cycle in 2025. >> yes. that is up from the ai demand. the preview for another big week. then the tie. she repeated chipmakers. the success of this which was targeted for release this year. nintendothe device to come out in march of 2025 at the earliest. missing the key holiday shopping time. and jd.com is considering buying

-- the bid was 32% higher than friday's closing price and would have valued them at $882 million. really interesting they are in conversation with the second largest e-commerce company in china. jd.com. talking of china, the benchmark on the mainland on track. gains of a little over 1% so far.

it has been relatively strong session for mainland china after the lunar new year holiday. getting back to 2019 levels. coming up, the pot continues over the death of alexei navalny. that is next. stay with us. this is bloomberg. easement

>> more than 300 people have reported been detained in russia. hundreds of people and dozens of cities gathered at memorials with flowers, candles. 200 arrests were made in st. petersburg. thank you for joining us in the studio this morning. the death of navalny, we don't know if it was planned. we don't know what the details are yet. >> the way that putin is using it, he is sending a clear message to his domestic audience in russia but also the international community, the u.s. and nato and his power is absolute.

he is able to take down the most prominent member of the opposition. >> on the question of retribution, the u.s. previously pledged a strong response. what would you expect a response to be from washington? what's it is difficult for the west to take any further repercussions against russia at the moment. the russian economy showed there has been some proof of them notwithstanding sanctions. it is difficult to see what they can actually do to punish putin at this point. >> navalny is incredibly

courageous. how representative was he of sentiment in russia? how much of a position is that at this point? >> even at his peak, it shows he had about a 40% approval rating. that is not significant. it shows he was not ever going to pose a real threat in the elections. he was an anticorruption crusader. he was modern, young. but he represented was what russia could be. that was a huge ideological representation. he never relisted a chance. with what you claim, many of the

liberal elite and russia have played this as well. it will be difficult for them to be -- for there to be real opposition with his organization went ahead. >> what do we make of the certificates of that and what does it tell us about the strategy of the russians at this point? are they still aiming for complete territorial conquest of ukraine? >> putin's strategy is to be in ukraine for the long term and keep making advances. this has been the strategy from the beginning. the stalling of it from ukraine. these were things in putin's favor. he is there to ultimately take what he can. the entire economy has been

geared up. building weaponry. i think as long as he can keep making advances, that is clearly how he set up the strategy. request the support spending package in washington is stalled. we don't know if they will be able to get that across the line. what do we know about the ability for ukraine to sustain its defense? what kind of timeline are we looking at? >> without that aid, it is difficult for them to carry on fighting. also billy they really did need that military aid. then either weaponry. we've already seen that russia has made advances without that and certainly russia has the upper hand right now. ahead of the u.s. elections, it is very difficult for the u.s. to be improving major bills for

ukraine. >> a timeframe of potentially just three to six months. >> very much indeed, thank you. there is plenty more coming up. stay with us. this is bloomberg. ♪

welcome back bloomberg daybreak your. happy monday. it is presidents' day in the u.s., europe and u.s. markets and u.s. stocks are closed in terms of trade and stay but the call for goldman sachs as a realtor that reopen on tuesday is that by the end of 20 24, the s&p will be hitting 5002 hundred. goldman sachs is revising higher their forecast.

it hasn't taken the net long to move the needle higher. they are positive. optimistic in terms of the profit and outlook for corporate u.s. and right -- in an environment where you get a soft landing. one of the highest forecast coming in. just 4% from the levels we are at now. what a contrast in terms of the fate of the s&p 500 and u.s. corporate's versus their chinese counterparts. let's have a look at the terminal on the day when tiny -- china comes back from lunar new year. this is the story of the three years. this is the grand low in terms of confidence in the mainland chinese investor. the downside of around 60% in terms of the drawdown. 60% of the drawdown over that three year time. they will stay they need more robust support for this economy

but not enough at this point to restore that confidence. that optimism is coming a little bit more baked in. the cfo will be speaking to bloomberg. the fireside chat is at 8:50 a.m. london time. markets today are next. stay with us. this is bloomberg. ♪

♪ >> good morning from london, this is bloomberg markets today. with the cash trade less than an hour away in europe here's what you need to know. system of the lar