>> good morning.

this is bloomberg daybreak europe. i'm tom mackenzie and here are the stories. chinese and korean stocks way on markets in asia as traders brace for a flood of economic data this week including the fed's preferred inflation gauge. volodymyr zelenskyy say is at least 31,000 ukrainian troops have died since russia's invasion two years ago. his push for more u.s. military support. double whammy. nikki haley loses a key financial backer after a crushing defeat in her home state. we discussed where the loss leaves the race for the republican presidential nomination. let's check in on these markets. profit taking, given the run-up we saw, the ai powered run up last week and the gains on the back of that. global markets come on those highs. today, a mixed picture across asian markets, flat across msci

asia pacific. we will break down what is happening. a couple downgrades for chinese corporations, part of the mix. european futures getting close to the 500 level, locking in further gains on friday, just lower by about zero point 2%. positioning for a bit of a loss when it comes to european markets. when it comes to ftse, lower by zero point 2%, watching the oil majors and minors as we look at profits. s&p futures down 0.2% after ending the friday session flat on the back of an ai powered rally. nasdaq futures 18,000 level, marginal be current -- marginally current. this will be the focus in terms of expectations around the fed with personal consumption expenditures index key as well as manufacturing data and gdp. let's take a look across asset.

let's look at the u.s. 10 year, the benchmark yields down around two basis points across the curve. looking at the euro-dollar, 1.08 on a big week with european inflation with expectations of the 2.5% level. brent crude under pressure in the session today, down 0.4% after weekly losses last week. demand versus supply with china on one side, geopolitics on the other end the fed plays into expectations around oil prices. iron ore up 115, a four month low on softness in terms of demand from china. we will look at the majors as well. yields down two basis points. let's cross and get details on the asian session. what is standing out to you this monday?

>> china demand. an important part of the equation. we are seeing is brent crude starts with declines, the energy sector is the biggest loser on the asc i asia-pacific. it is a week of a lot of data, not just from the u.s. but japan cpi and chinese economic activity, those are due. investors are more cautious at the start of the week. among energy counters and profit taking, capping the gains on the nikkei, 14,000 is the next milestone to watch. the kospi down after a corporate reform plan the disappointed. csi 300 and hang seng negative, chinese local governments unveiling spending plans or borrowing plans i should say and they came in weak, raising expectations we could see beijing stepping in.

i want to take you to some of the movers in the stock market in the region. let's look under the hood and look at auto stocks, moving in china and south korea but for different reasons. in china it has to do with the chinese president encouraging this consumption, consumer upgrade and that is boosting auto and electrical appliance related stocks. in south korea, these auto and financial stocks that have been climbing in recent weeks thanks to loss expectations of how corporate reform plans will unlock shareholder value, that plan was light on details and enforcement measures and that is why you see these stocks and south korea coming under pressure. automakers, financial related ones, let's flip the board. as we look at the nikkei we have been keeping an eye yen. it has been trading in tight ranges.

you look at the one-month implied volatility, that could come down further and to the level that is the lowest since march 2022 because don't forget, when you look at dollar-yen, there are opposing forces that could move it in both directions. you have the rising intervention odds and on the other, u.s. interest rate bids -- bets. tom: thank you very much indeed. underlying u.s. inflation, probably rose in january by the most in a year. highlighting a path to taming price pressures. pce data, the fed's preferred metric is due on thursday and will lightly validate -- likely validate the stance that they are in no rush to lower borrowing costs. let's bring in gina, chief equity strategist for bloomberg intelligence. fantastic to get you on the show.

record after record crumbling in the face of an ai rally stateside despite that we are hearing from fed officials may be the first cut is pushed further into the year. should investors be concerned? what do you think? gina: that is a great question, one that we talk about a lot. what is happening with inflation? don't -- what does it mean for the equity market? we are captivated by stocks and bonds but we forgot about the fact that inflation has been a remarkable tailwind as it decelerates, particularly as import prices are falling and producer prices are decelerating faster than consumer prices. the education is margin expansion on the s&p 500. inflation right now is contributing to extraordinary gains in profitability on the index as long as consumer prices remained somewhat sticky, producer prices continue to decelerate and import prices fall. it is a positive condition for

earnings growth. we saw that emerge in the second and third quarter of last year, but even in the fourth quarter earnings season which we are wrapping up, we see s&p 500 net income margins expanding year-over-year. it is clear inflation is a support on the earnings side. while it may restrain valuation expansion, and there will be volatility affiliated with uncertainty with respect to fed policy, the earnings component of inflation is important to monitor. tom: that is interesting. positive input coming in from inflation through the margins for corporations. is it all about, clearly it is not just ai but there is a temptation to focus on that catalyst for these markets. how are you decoding the ai inputs in terms of the rally? what do you think the next catalyst could be in the days and weeks ahead as we look at the data? gina: i think it is a good

point. it is easy to get overly enthusiastic about what is going on with ai, considering what we get out of and nvidia and the beat in the tech sectary and communications stocks that are levered to that theme. if you look at the s&p 500, a couple interesting things stood out. even though nvidia was the headline driving beat of the week, we saw more than 50% of s&p 500 industrial stocks making new highs last week. similar, more than 40% of financials were making new highs . health care are starting to break out. the bigger story is, certainly ai is leading the charge but there are some followers and catch up themes where some of the broader index really hasn't gotten a lot of discussion but they are beating expectations. roughly 76% of the s&p 500 beat expectations in the fourth quarter. it wasn't just tech or nvidia or

ai, which are the strongest beats and most important in terms of driving market gains. there is more going on here. tom: we need to broaden the lens. in terms of the volatility in the bond market versus the relatively benign picture across equities, that disconnect, does that concern you? do you see that continuing? does that raise questions further down the line? gina: i think it is a great question. certainly something we need to contemplate as earnings season comes to a close. the reason the s&p 500 has been able to sustain gains at a better pace than the bond market , certainly ignore some of the bond market volatility, is because of these earnings. because of the earnings conditions which are improving especially in the u.s. and with that earnings backdrop, the s&p has said, if the bond market

loses its footing because the bond market is concerned about what will happen with the fed, we can ignore that in the short term. no that earnings season is ending, i think the sensitivity of the equity market the bond market movements probably picks up to the degree that the fed is going to maintain rates, however, as long as they maintain rates because economic growth is relatively solid, that would suggest a conducive environment for earnings growth going forward. the stock market has to balance what is happening with the economy and earnings growth because if the economy is stronger than anticipated, that may support a better earnings growth outlook which would support prices. at the same time, if we have to contend with higher interest rates, the price support may mean constraints from multiples which are sensitive to rates. it is more balanced in the right -- in the equity markets. the bond market will be pretty choppy based on the prospects for fed to ease but if rates are

on hold because of solid economic conditions, that is probably pretty great for earnings growth and equities may really levered to that theme. tom: equity markets could live with that picture. gina martin adams, chief equity strategist for bloomberg intelligence, appreciate your input. to geopolitics, volodymyr zelenskyy says 31,000 ukrainian soldiers have died since russia's invasion of the country two years ago. let's bring in bloomberg's news director. what are these comments from zelenskyy? it was something, i don't know if it was official but seen as a state secret, the casualty count for ukraine up to this point. he came out with a number and we can debate how accurate that is. why now? what is he trying to achieve? >> you said he put a figure on the casualties. he didn't talk about the number

of soldiers who had been wounded . no exact figures but civilians have also been killed or wounded in the conflict. whether the numbers are entirely accurate in a war is sometimes hard to be sure. we do know ukraine has suffered severely on the battlefield as well as russia, from russia's invasion of ukraine. it is interesting he put a figure on it because at the moment, they are debating heavily in ukraine, how can they encourage people into the army? is there a need to push bills to try to mobilize more people into the army, more men into the army? that is contentious politically in -- and growing more so in ukraine with the war in its third year. people are saying i don't want to be forced into the military. they are struggling with manpower. perhaps he is trying to send a message that we have suffered heavily but we have a long way to go because of course, part of his speech was quite defiant despite the war coming into its third year. he still says they feel like

they want absolute victory and they can get there. russia is holding onto quite a bit of territory in the east and south and starting to gain again in some of those areas. in the face of that, is zelenskyy being realistic is probably the interpretation. is there a moment where he starts to talk to the ukrainian people about other options? tom: there is a domestic audience and the international audience. part of that is what is happening in washington, in d.c. has there been any movement towards getting more aid to ukraine? >> still no movement and it looks pretty stark. this week, the u.s. is consumed by the possibility of another partial government shutdown. the deadline of friday could affect a number of government departments. you can imagine the focus will be very much on their own affairs and can they keep the lights on in their own government. that pushes it back by at least a week. there is no sense there is

momentum on the republican side to entertain this. we are getting into the election cycle further, where they said there are no votes to be one in supporting more money and military aid going to ukraine so it is really caught up in the u.s. politics. is there a way through? the white house keeps calling and calling for some center -- some sort of way through with congress but seems like there is no desire from many republicans at least, certainly those listening to donald trump, the likely candidate, to find a way through. tom: on the back of that georgia victory for trump versus nikki haley. rosalind, thank you. ukraine entering the third year of the conflict. benjamin netanyahu says israel will have a plan for action for moving civilians out of rafah ahead of an offensive. the u.s. says it hasn't seen one. more on this story next. this is bloomberg.

tom: welcome back to bloomberg daybreak: europe europe. developments in the middle east, benjamin netanyahu says he will have an action plan for moving the civilian population out of rafah in southern gaza. speaking to cbs, the stress that israel and the u.s. were aligned. >> we agreed on this. we are on the same page with the u.s. on this because that is how we do it. tom: the comments are ahead of an offensive to dismantle remaining hamas battalions. the u.s. says it has not been briefed on any plan. >> we do not believe in operation, a major military operation should proceed in raw file unless there is a clear and

executable plan to protect civilians, get them to safety and feed, clothe and house them. we have not seen a plan like that. tom: i am joined by bill. israel has vowed, they did this over the weekend, vowed to move ahead with the offensive they had been planning and rafah but at the same time, we also hear from reporting out of israel that negotiations are moving forward. the negotiations continue in paris with qatar playing a key role. what is of the status of the ground as we waive these dual actions? >> i think the big deadline we have to keep in mind is march 10, when israel says if the remaining hostages haven't been released, they will go forward with the ground offensive in rafah. march 10 also coincides with the start of ramadan, so that would raise a lot of criticism,

additional criticism of israel from much of the muslim world and the wider world as well. that is the deadline they have set. you are right, there are some signs and the prime minister signaled that in his interview you referenced, that there have been some progress with these negotiations in paris. the u.s. says it hasn't seen a plan to evacuate citizens but the prime minister also went ahead and said, regardless of whether there is a temporary cease-fire, israel does plan on offensive in rafah either before or afterwards. his quote was, essentially, without a total victory we cannot have peace. prime minister netanyahu sees that something that will have to go forward. >> the humanitarian situation in

gaza has obviously been dire. we have heard about the situation on the ground for civilians. what would an offensive around that densely populated area mean? >> the prime minister said he was expecting to get a plan over the weekend that would allow for the removal of the civilian population. it is well over one million people. he said they would be moved north of raheb -- rough up without giving more details. the u.s. has said the details of the plan are needed before they get any kind of backing from the biden administration. there is still a lot that i think needs to come out before the plan goes forward. apparently, israel is also now stepping into not renew visas for humanitarian aid groups and

their leadership who are doing work in gaza and in the west bank as well. it is unclear from the israeli government what the delay is but aid groups say this is limiting their access and ability to help the population in rafah as well as elsewhere in gaza and the west bank. tom: bill, thank you for the update. plenty more coming up on the show. stay with us. this is bloomberg.

tom: welcome back. china's byd has debited its most expensive -- debuted its most expensive car. the supercar is pitted against luxury gas guzzling options offered by rivals like ferrari and lamborghini. the price tag, a bit over

$230,000 u.s. dollars. the details from danny who has been reporting on this for us. this sounds ambitious for byd. >> they are trying to push heavily into the luxury segment. expensive ev's are its bread and butter and it is pushing into areas where it can deliver higher margins and better profitability. they are known for affordable cars so by targeting luxury cars , a luxury supercar, it thinks it can take on the european supers like ferrari and lamborghini. it can get 0-100 kilometers per hour in 2.3 seconds.

it is the first fully electric sports car. rivals like ferrari and lamborghini are developing their product. some of these cars are still concepts or not quite there as fully electric. particularly as they start selling in china. >> as well as the price tag, that stood out, 0-100 in under 2.4 seconds. that is something. this company is the biggest ev maker in the world, byd or build your dreams. largely that is the affordable segment. why push into high luxury super top end, the most expensive cars? what does it matter for byd? >> by pushing into this more expensive segment, is going into

a ferocious price war particularly on more affordable ev's that many players are in. there is competent -- not much competition in the high and electric vehicles. by delivering better margins and better products that can sell well, it has that financial firepower to keep cutting prices in the mass market segment. in china, demand is weak across the board for consumers. it remains the leader in ev's. tom: danny, on the ev market. a new car, $230,000 from byd. berkshire hathaway's cash award jumped to a record $167 billion.

it struggled to find deals. more on that story, as well as what they may do with the cash, given the lack of deals on the horizon. for berkshire hathaway. stay with us. this is bloomberg. ♪

>> good morning.

this is a big year. here are the stories any agenda. chinese and korean stocks waiting on markets in asia. it is a flood of economic data this week including the fed's preferred inflation gauge. let me zelensky says at least 31,000 ukrainian troops have died since russia's invasion two years ago. while vanilla his push for more u.s. military support. plus nikki haley this is a key financial backer after a crushing defeat to donald trump in her home state. we discussed whether she will leave the race for the republican presidential nomination. the gdp manufacturing consumer sentiment surveys.

all of that coming through this week. ftse 100 futures down by 2/10 of a cent as well. nasdaq futures dipping below 18,000. by .2%. let's put the board and have a look at the assets. 422 on the u.s. benchmark. one a, currently flat on the single currency. $81 a barrel. for the pressure down .2%. the next level gets down to 100. that is the call for some on that we could demand picture out of china.

tied to stop this around the real estate sector. the announcement for america's of prosperity action comes after a big loss in the latest republican primary. what do we take away from this? this is a major backing coming off. >> a lot of ago enjoyed advertising canvassing around the iowa caucus, new hampshire caucus. this was her home state. they kind of said if this was where she was going to be in sort of gains or headway, this would be the place. she did the exact opposite.

a 20 percentage point loss. speaking to the idea that president trump has already clinched the victory. she doesn't think so just yet but it is looking that way. >> why does she continue? what is the rationale? questions that said i'm not giving up this fight majority of americans disapprove of both donald trump and joe biden. it is as simple as that. she has talked about this in response to a lot of this funding. she is right. she has a very impressive number of both wall street donors and regular people. especially at a time when we are talking about things like treasury auctions. not to mention the new president has to do with the debt ceiling. it is the first thing on their docket.

nikki haley was viewed as the best person to do that. will she be able to stay through it? just until super tuesday. that will perhaps be her working point. quick thank you. breaking down implications of the loss for nikki haley. the team at cocaptain behind her from almost the start. warren buffett saying it is jumping to a record $167 billion. that was in the fourth quarter. an eye-popping performance was unlikely. charlie has been going through all of this. what is the rationale? what is supporting this cash pile? how do they plan to deploy it if

at all? it comes down to one buffet saying there was nothing to buy. he said a lot of the deals had been picked over by burger hathaway. nothing outside of the united states. she dated about $9 billion in share buybacks. burger hathaway stock has been performing incredibly well so far. click they were better than they were. that is the metric that warren buffett prefers versus 6.6 billion in the same time last year. they were bolstered by insurance

returns. it is a huge engine at the berkshire hathaway become despicably like geico were actually able to charge more for the premiums. these were addressed in that letter by warren buffett. he was talking about some of that -- some of those regulatory issues. >> and that letter, 16 pages i believe by warren buffett. bloomberg has learned that the group has acted sadow. and of course, this has followed so conclusively and comfortably for so long. what are the key things that will determine the outcome?

they have outbid one of the key competitors for these assets. has significant is this? chris trileptal bloomberg news that the investment banking jv unit -- ubs, the current owner right now is facing a dilemma because even though there was a higher offering, regulators are leaning toward having if your buyer take over the business. it was given under the contest that this would attract more global players. some hard decisions for ubs to make their. >> outbid and citadel for that business. whether or not regulators give

it the green light is a key question going forward. thank you. other stories making the news. disney is sounding a binding pact with his company to combine their companies in india. they are looking for more private credit deals in asia. a particular focus on india. the $1.7 trillion private credit market has doubled in size. it could be forced to cut back is summer schedule because of delivery delays from boeing. the airline may receive fewer

than 40 before the end of june. jim bakker said he is not planning to spend millions on a short-term fix for the football club. >> manchester united is one of the biggest clubs in the world. manchester united in terms of its brand is the biggest in the world. they have a favor this history and if we can't get it back to where it should be which i think we will, it will be a very big enterprise. all i am focused on is improving performance on the field.

>> do you have confidence in the manager? >> if you look at manchester united, none of the managers have done terribly well. there have been some really good coaches and the conclusion from that has to be there has not been a successful environment for the coaches. our focus is on how we change that environment. >> can i understand from that that he has your support?

-- it is an elite sport. people you need some support. we need to people with the right skill sets. >> would you bring masonry would back? >> i don't know. >> it is too soon? because he is controversial? >> let's talk about something else. >> there is another option -- there is another scenario.

they could act as a catalyst to regenerate -- it is tough. it is the first industrial park in the world. >> that was the chair and founder and manchester united co-owner jim ratliff. we will speak to pamela kyle hamilton, the director of the international trade center next. is bloomberg. ♪

>> streaming a necklace will be in south africa. and internationalism call with a doctor in india, downloading an e-book on a beach in bali.

they are just a few of the online transactions that could face new taxes. that is if a 26-year-old e-commerce deal falls apart. it obviously edifice major u.s. tech companies like amazon, med and netflix. there is also good news for smaller firms collected and do business in international markets. and it is big money. the u.s. exported more than $600 billion of digital services in 2022. perhaps the most depressing is the renewal of this deal. some countries want to make it permanent. experts think indonesia, india --

it would only take one to scupper the deal. the move would be hugely symbolic and could represent a big win for the global south. it may also be the biggest protection threat the internet has ever faced. >> issues in the spotlight. thank you for joining us. the credits was that it is not. it needs to be performed and that we are facing an environment of decoupling if not demobilization. increased tension between age of trading partners. it can be achieved in that scenario. >> thank you so much for having me on.

i think it is the same question that is asked about the u.n. a lot. anything that is done is also driven by the members. it will also rely on a decision of member states. what i do want to point out is that if we did not have the wto, we would have to invent it. the challenges with multilateralism as a whole. what we are doing is adjusting to the reality of today's world.

>> we walk through some of those reforms. two of these be matched for antagonism of the issues that we face globally. what with the priorities be if you had to choose one or two? where would you land in terms of the focus when it comes to reform? there are 50 elections taking place. one of which is in one of the major countries. that is critical. it affects the viability a lot of ways of the dispute

procedures and the fact that things can actually be settled. the second issue that is really critical is the e-commerce moratorium. i think it is important that that be extended. because it has provided so much for so many in terms of the digital transformation of the entire world. if you look post-covid, the growth of the digital economy has been way beyond anything that could have been imagined before. they need to allow the process to also empower the smaller countries. the more developing countries. all quotes and know you focus a lot of your times on sme's in some of the smaller nations.

if you think about the benefits coming through, how do we measure there is equitable distribution of those ai gains? >> that will be another major discussion. i think what is critical in this process is first of all how we ensure that the rules are fair and what happens when wills are not fair? people at the table are making those rules. we have to ensure that there is representation. representation of small businesses. who are able to inform the process as we are -- as we engage in artificial intelligence. we are able to music -- we are able to use it to help farmers be farmers and use it for

traceability requirements. there are more and more requirements for them to prove they are not causing deforestation. traceability issues. we had them use it for their branding. the rules have to be extended. >> former president trump has taken another big step forward to willingly primary for the republican party. he is in prime position to win the presidential election in the u.s.. is that being discussed? is that being discussed? as you think about the u.s. role in the years ahead? >> when you say -- it is not being discussed but it clearly is a subtext of any

discussions that are -- out they discussions are taking place in a vacuum. really appreciate your time. thank you very much. coming up we have plenty more. we will look at what is happening with south korea. we will check in on that story and give you a preview of the pce focus as well. that inflation gauge. stay with us. this is bloomberg. ♪

>> welcome back to bloomberg

daybreak: europe. we have talked about the fact that this is a big week. it is one of the most important data points, the pce. it comes out late this week thursday. the focus for the fed. that is month on month for the month of january. that is expected to be the biggest increase. for some it will raise the question around the stickiness of inflation in the u.s. and what it means for the fed. they also suggest even only get this month on month, it will be around 2% by midyear. let's flip the board and have a look at the corporate story and

a stock story of korea. a lot of the businesses are in focus. the foreign inflows are there. does that change on the back of this disappointment? we will see. plenty more coming up on markets today. stay with us as we count down to the open this monday. this is bloomberg. is it not -- ♪

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>> good morning, from london. this is "bloomberg markets: today." cash trade less than what i were away