♪ good morning and welcome to "street signs." i'm joumanna bercetche and these are your headlines. unicredit jumps on 8.5

million euro on the back of the record on 2023. the ceo gives us his view on the rates in the year ahead. >> in the u.s., it feels rates will be higher for longer. will it apply to europe? it is unknown at this point. everyone expects in the second half of the year. the wild ride in chinese stocks stretches into the second week despite efforts from regulators to calm the situation. money markets temper expectations for a march cut after fed chair jay powell pours cold water moving too fast, too soon. >> if we feel we can approach the question of when to begin to reduce interest rates carefully. we want to see more evidence

that inflation is moving down to 2%. we have some confidence in that. we want more confidence before we take that very important step. turkish inflation nears 65% in january underscoring the challenges facing the new central bank governor and the previous incumbent steps down citing a character assassination. good morning. lots to get through on the show today. we will kickoff by taking a deeper look afternot what is hag with unicredit after the bank will distribute 10 billion euro to shareholders after the profit of. # 2.81 billion euro. you see the reaction is stark. the stock is up 9.5%.

charlotte is joining us from milan. charlotte, the price action is telling. investors are clearly excited about what they heard today. the story for unicredit has been about the shareholder distribution and the fact they are generating so much organic capital. they have the highest ratio out of the eurozone banks. today, another very solid report. >> reporter: absolutely. you were saying the performance in q4 confirming the trend from the year of 2023 with net income beating expectations. 5.7 billion. they had a tailwind with 3.6 billion and 1.8 on fees. that is a stretch on the chair to get a focus on the business on the fee generating.

it is helping with that strategy. boosting the bottom line was lower loan loss provisions. lower than expectations at 300 million. you were saying a lot of focus on the pay policy of shareholders. a most generous one in europe. distribution of 8.6 billion for the year. they paid 18 billion in total since 2021. they reached the target they set for the end of 2024 one year earlier. that was a strategy by the chair with the valuation of the shares of the bank. very much in focus to pay 100% net profit this year and pay 90% next year. big focus there on the payout. we talked, of course, a lot of m&a. unicredit is at the heart of speculation, particularly domestically. more recently, last week with

shares moving off the back of the rumors over the interest in buying a stake in another bank. i asked the ceo's intentions on the m&a front. >> there is an obsession on the m&a, i would say. what we are focused on at unicredit is how much value can we create? without major m&a, we can create a ton of value. that drives everything. with respect to m&a, that say lever to increase value. in other cases, it didn't and we will not be dragged by pressure or whatever in doing a transaction that doesn't fit or doesn't hit our metrics. we have plenty to do. the ambition is well set. the next three years in phase

two, we will continue to drive results. if m&a comes about at the right levels, we will do it. if it doesn't, we will return money to shareholders. >> i ask you because there is a lot of noise with that. the shares moved on rumors of unicredit being interested. can you clarify ? >> i think in davos, i said my intentions are the same. we look at every single target or partner in every market. in italy and germany and austria. we look at it in every market. we evaluate. that is our job to be ready if one opportunity arises and the right metrics, we he e move. i said in davos, the metrics don't work and we did not move. we will not move. if the metric works on that or

anything else, we will move. we are not obsessed about that. there is a team that looks at them and depending if the numbers work, we will do it or we will not. in the meantime, i think what is important is that there is still a lot of value to create in the bank. we are not done. we are beating the target. that's the focus. >> reporter: he is talking about how they are looking at m&a and bought a stake in alpha bank. they are expanding in eastern europe. domestically, the metrics don't work. putting that message out clearly. i asked about the russia business. as one of the banks that is still active there. the strategy hasn't changed there. they are winding down the business. they made a profit, but still winding down the business. they have not found a buyer for

the unit in russia. in 2024, they expect to give a guidance of net profit in line with 2023. despite the tailwind of the nii, there is more uncertainty, but they can keep the same level of profitability. investors are cheering the results. joumanna. >> the very interesting thing about the story, shcharlotte, i investors expectations are high and they still managed to bit, not beat, but smash through them. solid result this morning. as you just explained. thank you for the report. other european banking stocks are rallying. sao paolo is up 1.9%.

bpr bank is up 1.5%. again, there are lots of consolidation rumors swirling. the timing is not right yet. the focus is on organic capital generation. that may change in coming months. did not rule it out see a small rally. let's bring in our expert voice who joins us from opimas. wonderful to have you on the show today. let's start with unicredit. what i find interesting about the position is it is a very loved stock within the european banking index. obviously starting 2024 off on a solid foot. one of their main characteristics is the distribution profile. the fact they have had a policy of distributing 100% of profits

and looking ahead at 90% which is still very high. what allows s unicredit to be s apart from the other banks? >> unicredit haven't taken a big risk. they have been csteady in the approach. that is paying dividends. that is more than anything else. they have been stable and careful to look at operating expenses. it is a well-run bank all around. you talked about m&a activity. they have been reluctant about getting involved in mergers and acquisitions and the distraction that may cause to the management. it is a steady as she depogoes approach. >> what are the signals you are getting on the net interest

margins and how that plays out? i spoke to him a couple of months ago and he said we were past peak net interest income. looking ahead, it is surprising they still manage to do well on nii. what is the landscape for the rest of the european banking community? >> i think in general, we will start to see the end line be squeezed. we are seeing that in certain countries. among the french banks, net interest margins have come down because the state regulates the interests the banks pay on the savings accounts. french has larger interest rates more quickly. basically, there is a lot of deposits out sitting in bank accounts generating little or no interest at all. those depositors are chasing higher returns and taking the money out to deposit in higher money market accounts or bonds

that puts the pressure on the banks. it has been slow. it has been a surprise how reluctant or willing these depositors are taking on poor loan interest rates on deposits. that is changing. >> of course, there was a lot of political pressure on the banks to do something about the low rate on deposits. as you said, the deposits have been sticky and banks' management did not feel the need to enter into the competitive races to raise interest rates. that will be an interesting perspective. something to think about in 2024. looking at the few banks which reported so far and another thing that struck is the dispersion in responses. deutsche bank was up 4% on the day, the same day bnp was down 8% in tradtrading. the market was disappointed for the guidance in 2024. what does that tell you about

how the investor base is thinking about the complex this year? they will have to be discerning based on each individual bank and not geography, but by specific bank. >> you are absolutely right. in the past, over the course of the last year, we see most european banks move together in a correlated way. what was true for one bank was true for the other, more or less. what we have seen this quarter is this enormous dispersion among european banks. stark difference from one bank to another. you have it look at each individual bank and say what's going on there. there is still a cluster by countries. obviously, soc gen and bnp swim in the same waters. they will carry on in similar ways. that is why soc gen pulled down with bnp pulled down with the bad bnp results.

those two banks are not only active in the same markets, but similar business strategies. the expectation is that is coming up for soc gen as well. you have to look at individual banks carefully and see how they are positioned and how they respond to and squeeze on the interest margin. >> that is it. another big one tomorrow is going to be ubs. again, a lot of focus on how the integration is going with credit suisse and costs is a big topic. what are you looking out for with ubs earnings? >> ubs is an outlier. they are looking at enormous acquisition with credit suisse. it is easy to forget this merger went through in 2023 which was the first time they were able to cut expenses. ubs will be busy on that front. last quarter, they showed us they were serious of taking that

to heart with the idea of cutting expenses and the credit suisse expenses. they are serious about achieving that. i expect to see bad results because the pressure these restructuring puts on the pal sheets. the market will look at that favorably. they seem to be serious about cutting costs. >> it certainly appears to be the case. we will watch for comments tomorrow. silvia will be in zurich. thank you for joining me today on the show. wonderful to chat with you. the ceop of opimas. let's look at the stocks. vodafone is down 8% in trading

after the third quarter revenue dipped 3% on the year. the telco has seen a slowdown in germany. the group said it is in talks over potential deal in italy after rejecting a merger bid from illiad last month. that was the story throughout january. you see the stock, however, has a lot to do to get back to where we were a year ago. we were down 25% on the year for vodafone. delivery hero pre-released fourth quarter and full-year earnings. it delivered on the full-year targets. the food delivery giant posted 11.1 well euro. the company expects a positive cash flow this year and revenue is 17% higher. the stock is down 2.7% today in trading. renault shares are moving

higher after media speculation it could be a takeover target for stellantis. the ceo questioned the renault strategy last week saying he would make sure stellantis is a winner of the ev transition to pursue further opportunities. renault has not responded to the cnbc request for comment while the stellantis spokesperson described baseless speculation. you can see the market hasn't stopped speculating. you have to think about competition given the size of the respective automakers. renault is up 2.2% today and stellantis is down 1% in trading. coming up on "street signs," the u.s. launches fresh strikes on the middle east after the coordinated strikes by the uk. we will have the latest from the region coming up next.

ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com. why choose a sleep number smart bed? because no two people sleep the same. only sleep number smart beds let you each choose your individual firmness and comfort. your sleep number settings. it's so smart, it actively cools and warms up to 13 degrees on either side for your ideal sleep temperature, and effortlessly responds to both of you. for your best sleep, night after night. now, save 50% on the sleep number limited edition smart bed. plus 0% interest for 36 months on select smart beds. ends monday. shop for a limited time and sleep next level. only at sleep number.

switch to shopify and sell smarter at every stage of your business. take full control of your brand with your own custom store. scale faster with tools that let you manage every sale from every channel. and sell more with the best converting checkout on the planet. a lot more. take your business to the next stage when you switch to shopify. so, you've got the power of xfinity at home. now take it outside with xfinity mobile. like speed? it's the fastest mobile service around... and right now, you can get a free line of our most popular unlimited plan. all on the most reliable 5g network nationwide. ditch the other guys and you'll save hundreds. get a free line of unlimited intro for 1 year when you buy one unlimited line. and for a limited time, get the new samsung galaxy s24 on us.

welcome back to the show.

friday's focus was on the jobs number in the u.s. and it was a blowout number. adding 353,000 jobs for the month. unemployment rate at 3.7%. both of the figures defying expectations. contrary to what you think would happen, although rate yields moved higher, but we saw a strong end to the day. s&p once ending at a record high. in asia overnight, we saw a rocky hand over from asian be equities. the stoxx 600 is split between green and red this morning. trading down five basis points. trading around the flat line. there is a lot going on in terms of individual company stories and sectors. let's get to the sector breakdown. you will see banks should be somewhere close to top. dispersion here and unicredit is one we are watching in the stoxx 600 is up 10% in trading.

utilities is up .40%. food and beverage is putting in a good session today. up .60%. on the flip side, autos is under selling pressure. this is due to stellantis and the potential tie-up with renault. that is media speculation. stellantis is trading weaker in trading and the ongoing p competition from china is weighing on automakers. and oil and gas with the bounce in spot oil prices especially with the jitters in the middle east over the weekend. retail is down .40%. it is important to look at what happened in the asian session. it was volatile. this is just happened overnight with the three asian indices.

shenzhen was down 6% in trading before somewhat recovering by the end of the day. still, down significantly at more than 2.5% today in the trading session. actually down 3%. shanghai composite down 1% as well. these chinese stocks cannot seem to get a bid. we saw brief support throughout the course of the week, but it is very challenging. the support doesn't appear to be sustainable. elsewhere, the united states will launch further strikes against iran-backed groups in the middle east according to the white house security adviser jake sullivan. this comes after the attacks on iraq, syria and yemen over the weekend. speaking to cnbc, nbc, rather, sullivan talked about the importance of further strikes in the region. >> it began with the strikes on friday night, but that is not the end of it. we intend to take additional

strikes and additional action to send a clear message that the united states will respond when our forces are attacked or our people are killed. at this point, we are still assessing the question of how many casualties there were among the militia groups. our military will provide the president with the assessments. we degraded the ability of the militia groups attacking us. we will continue to send a strong message about the united states' firm resolve. >> the united states wanting to send a strong message. dan joins us right now. dan, i believe you are standing at a shipping port. the context here is important because all of this is not happening in a vacuum. it is, of course, in response to several attacks that we have seen on commercial vessels going through the red sea. just give us a sense of what the

mood is like within the shipping community now, especially after the u.s. response over the weekend. >> reporter: indeed, joumanna. 30 attacks against commercial ships since november from those iranian-backed houthi rebels. u.s. air strikes in retaliation. the issues in the red sea is intensif intensifying. some port operators are on alert. we have a better crisis of the red sea and how it is impacting the port operators and vessels. we see a significant spike in prices. we have seen also an increase in delays when it comesto getting things to where they need to be on time and, of ourse, an increase in prices as well for the consumer. with regards to the cost of transferring goods, some of the

40-foot containers will cost $4,000. that is up from $1,300 in november. we have seen that price continuing to rise for the last eight weeks as tensions continue to escalate. i spoke with the coo of tp world. he talked about how the port operators are responding. he says prices are likely to rise unless there is a resolution to the conflict in the region. listen in. >> i think first and foremost, the shipping rates are up. we can all see that. we have come out of a period where covid saw high sea freight. the cost is up. you need more ships and burn more fuel. there is higher cost in the inefficiencies in the network. rates are going up. it is nowhere near at the peak during covid. i must say that there is a

higher cost and how that cost will find its way to the consumer? we will have to see. >> dan, thank you for bringing us that report. a lot of noise behind you. that is a reflection of how busy it still is in the port where you are standing. thank you. we will continue to monitor the latest from the middle east. coming up on "street signs," european corporates are under pressure. we will look at wheels european dis distress. more on wthat when hewe come ba. s in the right amounts, that's all it is. it's so simple and it works. golo was the smartest thing i ever did.

i'm andrea, founder of a boutique handbag brand - andi - and this is why i switched to shopify. it's the challenges that we don't expect, like a site going down or the checkout wouldn't work.

what's nice about shopify is when i'm with my family, when i'm taking time off, knowing that i have a site up and running and our business is moving forward because we have a platform that we can rely on. that is gold to us. start your free trial at shopify today. only sleep number smart beds let you each choose your individual firmness and comfort. your sleep number setting. and actively cools and warms up to 13 degrees on either side. save 50% on the sleep number limited edition smart bed. plus 0% interest for 36 months on select smart beds. ends monday. only at sleep number. ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or

visit coventrydirect.com. welcome back to "street signs." i'm joumanna bercetche and these are your headlines. unicredit stock surges. the ceo gives cnbc his view on the year ahead. >> when you look at the u.s., it feels like rates will remain higher for longer. will that apply to europe? it is difficult to say at this point. i think everyone expects the declining rate to occur in the

second part of the year. the wild ride in chinese stocks stretches into the new week with the shanghai composite hitting a fresh 52-week low despite the regulators looking to calm the market. and jay powell pours cold water moving too fast too soon. >> we feel like we can approach the question of when to begin to reduce interest rates carefully and we want to see more evidence that inflation is moving sustain br sustaina sust sustainably down to 2%. we want more confidence before we take that step. turkish inflation is moving to 65% inflation as the previous incumbent steps down over a

character assassination. welcome back to the show. a bit of data for you coming out. the pmi composite number for january for the uk is the final print at 59.9. that is against the initial number of 52.5. a small revision to the january pmi. welcome for the uk economy. it tells you things are beginning to move in the right direction with the activity indicators. compare that to the eurozone pmi number which came through a half hour ago suggesting the flash print of 47.9 is the same as well which is still below the 50 mark. that is the mark between contraction and expansion. what we have here is eurozone

number at 47.9. the uk number , in contrast, at 52.9. it tells you things are beginning to moderate or move in the right direction when it comes to the uk economy. that is welcome if you think of it in the context of the economic data that's been coming out in the last couple weeks. as for broader european markets, stoxx 600 is trading on the flat line. it is mixed, but most indices are leaning to the red. ibex in spain is down .50%. santandair with the report that suggests iran is averting sanctions. compare that to the ftse mib which is up .75%. unicredit is up 10% today and trading with strong results from

the eitalian bank. the cac 40 is down .20%. some autos under selling pressure. the ftse 100 is positive as well. sw switching to currencies, the dollar is firmer against the euro. the pound is off at 126. we have focus on the rimimbi overnight. that is weak over the u.s. dollar to the tune of eight basis points. switching to fixed income. we have to spend a few moments on this. we are seeing a big reaction on yields this morning. first in response to the strong jobs numbers on friday. higher than the market expectations. that allowed investors to pare down the march rate cut. now sitting at 20%. you can see this morning the

u.s. yield curve speaks to higher yields. two-year note is up seven buspaces poi basis points. we had powell comments over the weekend. he sat down for an interview and said they should not be in a hurry to cut interest rates. that is having an impact on the fixed income curve with the european yields which are four points higher. as for u.s. futures, the u.s. stock market opens up in the red this morning. the s&p is down ten points and the dow is down 100 points. you will watch out for services ism numbers coming out in terms of data later today. jay powell says the federal re reserve expect to make three cuts this year. he told "60 minutes" that the rate setting committee expects the rates to come down from the

23-year high this year. powell expanded on the comments after wednesday's fed decision which saw the bank to vote to hold rates where they are and saying there is a risk of moving too soon. >> we have a strong economy. growth is going on at a solid pace. the labor market is strong at 3.7% unemployment. with the economy strong like that, we the feel we can approach the question of when to begin to reduce interest rates carefully. we want more evidence that inflation is moving down to 2%. we have some confidence in that. our confidence is rising. confi. >> money markets are overwhelmingly predicting the fmoc will hold rates at the next meeting. the expectation of the hold of 50%- higher than a month ago. traders were expecting six cuts,

but pulled back sharply after the strong jobs report on friday. the ten-year yield spiking overnight as we just spoke about. this after the nfp surged past expectations adding 350,000 jobs in january with unemployment holding at 3.7%. new job creation is at 686,000 in last two months after the number was revised in december. we have fed speak and economic data head and services pmi around the world today and comments from chicago fed president austan goolsbee and atlanta's fed raphael bostic. today and tomorrow, we have numbers from bp and air france. we will have fed talk from cleveland and boston and

richmond fed presidents. not yet finished. hermes and pepsi will wrap up the earnings week. we will see u.s. cpi revisions which are recalculated from 2023. if that has been a mouthful for me, it is setting the tone for a busy week which is coming up on the trading calendar. european corporate distress has deepened with challenges. the main drivers according to the european stress index. it states real estate is the most depressed sector with the high interest rates and falling valuation s and germany is the biggest. we have the partner here who is joining me on the set. wonderful to have you with us. >> thank you.

>> the high level take away here is this is a critical period for european companies. the stress levels have started to pick up. give us historical context. how does it compare to previous episodes? >> if you think about what the stress index does from the european companies, ovthen go bk to the fanl inancial crisis. the sharp upparttick in distresd base levels of corporate distress. in 2008 and 2009, that's a huge spike and that tails off. picks up again in europe at the time of the sovereign debt crisis and greek bailout and the pandemic. not as high as the global financial crisis for the

corporates and banks in 2008. at the time of pandemic, it was corporates and not banks. it dipped to reflect government involvement. now, in the last 18 months, it has been steadily rising. to just put it in graphic terms, it is is half what it was durin the pandemic. it is half what we got during the pandemic and nowhere near the financial crisis. >> let me ask you a question. how do you define company distress? cash flow? balance sheet? what are the metrics? >> the great thing about european public companies is there is a lot of data available. profits and debt-to-equity ratios and dividend and cash to service dividends.

credit default swaps. we track 16 or 17 sets of data and build a model. we have been doing this now for a long time and tracked it back before the financial crisis to be sure the model behaved the way we he ee expected. we think it is correlated to default rates. over the years, as corporate distress moves up, so did the default rates. we prove that going back to 2008. >> it issing intis interesting that. unicredit said they see a cost of risk of 12 basis points. although there were signs of distress popping up in the system, you don't get the sense the banks are provisioning for the losses in the future. there a mismatch of the report and the visibility looks like more the ceos with interactions. >> that's true.

a number of people predicted the pot bottom of the market and lost money. it is important to take a long view. the markets react to short-term things. what we are showing is a long-term thing which is the challenge for governments and corp corporates. cost of debt for governments and corporates has increased. what we are highlighting is that as companies face that increased cost of debt, it is putting strains on the balance sheets across europe and results in increased signs of distress. doesn't mean the default rates will get back to what they were in the financial crisis or at the height of the pandemic, but there is no doubt as we go through the transition to the world of higher interest rates, there will be increased defaults

and restructuring. >> many companies are hoping the central banks do go along with the rate cuts this year. it is not just about higher interest rates, but costs. massive inflation shock in 2022 and 2023. i wonder what your report shows you in terms of how that impacted overall companies profitability and to what extent these companies were able to absorb those higher costs and that was going toing to impact bottom line and pass that on to consumers. >> that is right. in the world where the companies are profitable and absorb higher costs and costs of inflation, that's not what our survey shows. it is under great pressure in europe. the reason why the index is showing high levels of distress is profitability being poor. companies have less cushion. it is very hard to predict the short-term impact of inflation.

long term, for those who take a view that inflation is stubborn, but it has moderated somewhat, rather than going back to levels 18 months ago, inflation will remain. that will be a challenge into the feed into higher interest rates. >> the real estate is the most distressed sector. that is not a surprise to the viewers watching with the high interest rate environment. i think it was surprising that healthcare was the second most distressed sector. >> we were surprised by that, too. low profitability and high leverage levels. less ability to raise equity. that is by some margin, the europe's most desk inistressed . you have retail and consumer which improved a bit 12 months ago, but now the third.

real estate in europe with the european debt crisis starts with commercial real estate. >> it is still bubbling. andrew, we will leave it there. thank you. fascinating. i enjoyed listening to the take aways from report. andrew wilkinson. coming up, no delight for turkey's central bank chief as she resigns with strong words. that story is coming up next. hi, i'm ben and i've lost 60 pounds on golo. (guitar music) i've struggled with weight my whole life. i'm sure you're like me and you've tried diet after diet. if you want to stop the insanity, try golo. do you have a life insurance policy you no longer need? now you can sell your policy - even a term policy - for an immediate cash payment. we thought we had

planned carefully for our retirement. but we quickly realized we needed a way to supplement our income. if you have $100,000 or more of life insurance, you may qualify to sell your policy. don't cancel or let your policy lapse without finding out what it's worth. visit coventrydirect.com to find out if your policy qualifies. or call the number on your screen. coventry direct, redefining insurance. switch to shopify and sell smarter at every stage of your business. take full control of your brand with your own custom store. scale faster with tools that let you manage every sale from every channel. and sell more with the best converting checkout on the planet. a lot more. take your business to the next stage when you switch to shopify. only sleep number smart beds let you each choose your individual firmness and comfort. your sleep number setting. and actively cools and warms up to 13 degrees on either side.

save 50% on the sleep number limited edition smart bed. plus 0% interest for 36 months on select smart beds. ends monday. only at sleep number. there's nothing better than a subway series footlong. except when you add a new footlong sidekick. like the boss with the new footlong cookie. this might be my favorite sidekick ever. what? every epic footlong deserves the perfect sidekick. there's nothing better than a subway series footlong. except when you add a new footlong sidekick. like the boss with the new footlong cookie. this might be my favorite sidekick ever. what? every epic footlong deserves the perfect sidekick.

welcome back to the show. turkey's central bank governor has stepped down from the position citing a character assassination campaign against her. erkan was appointed in june and oversaw the series of rate hikes in the bid to tamp down inflation. fatih karahan is her

replacement. he will keep monetary policy tight until inflation comes down. data out this morning suggests he has a task on his hands. the biggest jump in august with the 6.8% rise. on the annual basis, inflation hit 65%. a lot going on with the turkish economy and a big focus of the cbrt. let's bring in the ceo of tan capitals. i know the outgoing governor was under a lot of pressure and a lot of talk that her father was interfering with the monetary policy decision making. it appeared president erdogan had her back. >> fatah is a quality fname.

i project we see the policies continue. i think there is a bigger issue indiv behind this. the central bank governor longevity has to belonger. we went through five in five years. the country needs a long tenure governor to implement the policies. >> this is a question of the central bank's credibility. this is what it boils down to. before the elections, president erdogan was applying pressure on the central bank. that changed once the elections took place.

the outgoing governor came in and she raised interest rates from 8.5% to 45%. in the past, president erdogan would not allow that to happen. inflation was on the right track, but the numbers suggest otherwise now. foreign exchange reserves are being built up again. things seemed to be on the right path. that is the episode do to the central bank credibility? >> i think it is a tricky one to navigate. the central bank needs to continue on the path to potentially authorize monetary policy measures. i don't think that will change, by the way. we have a local election coming up in the country. to get this message to investors, it is predictability and we will get back on track. this doesn't help matters.

what we need more than anything else from the investor perspective is to see whether elections or post-elections will be able to navigate the challenges for the country. >> you bring me to the next point. i thought it was interesting that russian president putin is scheduled to visit turkey next week. that is a surprise to me. turkey is a nato country. i know in the past, president erdogan is a power broker within the region. a diplomatic go-between with russia and ukraine. what does that tell you about president erdogan and he is hosting the west's enemy number one? >> i think president erdogan is one of the few people that can

play the mediary. the country has gone on to work with him. the nato allies are not providing the ammunition that ukraine needs. there is a debate of frozen russian assets can be used to finance kyiv war efforts. at the same time, the u.s. congress is holding $60 billion of ukraine aid hostage. the meeting, i don't think, is a negative significant al. whether it will bring results is unknown. unless the president of the united states changes and potentially trump coming in, putin will not make any concessions. >> many people say it is a waiting game for putin. that is one war going on. we have another war in

israel-gaza. i wonder your take on the strikes we saw from the u.s. this weekend on military infrastructure from the militant groups. how significant of an escalation does this pose? >> although the u.s. claims it is not interested in escalating this war, we are on thin ground. we are living in the age of war. what the houthis have done with the shipping is significant and it will be more significant. i understand the u.s. reaction, obviously a reaction to the u.s. soldiers being killed. however, they need to operate with a surgical precision rather than much more broader conflict. it will not take too much to get the region into a wider war. now saudi arabia and uae, in

particular, are nervous footing because they want this conflict to go away. they want a more constructive relationship in the region. saudi arabia very much needs that to happen in order to achieve the 2030 tar gets. it only takes one national actor to by accident to hit another one in this conflict for things to escalate. u.s. moves right now are contained and it has the ability to escalate to a moredangerous area. >> let me ask you this. we only have one minute left. in response to the attacks over the weekend, will the houthis slowdown the attacks on the vessels in the absence of

israel-gaza coming down? >> the idea of playing this war through proxies is that the actual targets are difficult to hit. although the u.s. says they have hit critical infrastructure with the houthis to stop them from doing this, only time will tell. the real question is does iran really want war? i don't think so. will houthis stop the attacks? i hope so. the global shipping and trade and global trade as a result will suffer if it doesn't stop. >> that's a fair assessment. one that we're watching closely from the economic perspective. i enjoy our conversations. the ceo of tanto capital. we will round up the show he l looking at how markets are faring. a mixed bag for equities. we are leaning to the negative. dax down 10%. the ibex down .40%.

you see u.s. futures look like they will open in the red. keep an eye out for ism services. that is a key focus for investors. "wlddexccehe bertc. orwi ehange" is coming up next.

you can make money the hard way as a bullfighter or a human cannonball... or save money the easy way, with xfinity mobile. existing customers can get a free line of our most popular unlimited plan for a year! not only will you save hundreds but you'll also be joining millions who have connected to america's most reliable 5g network. sure is a lot safer than becoming a stuntman for money. get a free line of unlimited intro for a year when you buy one unlimited line. plus, get the new samsung galaxy s24 on us. there's nothing better than a subway series footlong. except when you add a new footlong sidekick. like the boss with the new footlong cookie. this might be my favorite sidekick ever. what? every epic footlong deserves the perfect sidekick. there's nothing better than a subway series footlong. except when you add a new footlong sidekick.

like the boss with the new footlong cookie. this might be my favorite sidekick ever. what? every epic footlong deserves the perfect sidekick. it is 5:00 a.m. here at cnbc global headquarters and here is your "five@5." we begin with stocks coming off the best week since december after monster results from the biggest names in tech.ho