tom: good morning this is bloomberg daybreak: europe. i'm tom mackenzie in london. these are the stories that set your agenda.

chinese stocks tumble, suffering their biggest loss since 2020 has concerns grow about beijing's stimulus measures. the u.s. justice department ways breaking up google, alleging it uses its products to promote its surf service. google says splitting off chrome or android would "break them." boeing talks collapse. the playmaker withdraws its offered to staff with the shut down during the one month mark. s&p says boeing's debt could be cut to jump. a wall of red sounding the movement that comes to the european stock story. the downside coming through and it is pronounced heavy losses in the mainland chinese session. on the ripple across european futures currently down.

the other part of the story is the u.s. performed very well yesterday. mega cap tech, the mag seven driving stocks higher and gains higher on the back of that and towards the end. beside gains on the nasdaq 100 and gains on the s&p. ftse 100 futures lower. the s&p pointing lower. a bit of a breather after the gains of yesterday. nasdaq 100 futures pointing lower by 53 points. 14 straight days of gains for nvidia. let's flip the board and look across assets to the adjustments across the treasury space. still, markets pricing and 50 basis points of additional cuts from the federal reserve. we will hear from fomc beakers and unpack that story in the next minute. the 10 year currently yielding 4%. 4.02. euro-dollar at 109. softness coming through. brent, you saw a sharp drop yesterday. currently at 7775. up with the middle east continuing to be in focus.

go at 2680. just down. let's cross over now to singapore. avril hong standing by with a check on the asian markets. avril: we are seeing a bit of a mixed bag in the asia pacific where china has been underperforming for much of today. but if you take a look at the nikkei, it is tracking those gains on wall street. tech is outperforming against the backdrop of those fed rate cut bets. stabilizing the story of today is really about china. we saw the hang seng losing as much as 3.5% at one point. somehow managing to plot gains again. the csi 300 pairing those declines of five, six plus percent in the session. the bottom line, even though we see a mixed picture in terms of chinese as well as hong kong equities is that investors want to see more in the wake of stimulus. there were not impressed by the end drc just one day ago -- ndrc

one day go. we see the holiday spending out of china. it was lagging. these are the drivers for chinese markets. for some of the superlatives, the csi 300 at one point saw its worst session since february 2020. i don't have to tell you a happened to the hang seng just a day ago. really bad lead. the worst in 16 years. it's not just china in focus, we also had central-bank action starting with rbnz. it cut rates 50 basis points. this was as expected. if you look at the reaction in the kiwi dollar, you might not think that was the case. one of the things important to highlight is how the rbnz's comments suggested that financial conditions are still restrictive. that suggests there could be more easing to come. this is not even accounting for the action coming from london traders yet. we also had a decision from the

rbi. rates unchanged in india. this was unexpected and consensus is for a move in december towards a cut. what is inch -- interesting for the indian central bank is how it shifted a stance to neutral. this is something that suggests easing to come. there are things that support this. inflation has softened. against that backdrop from the federal reserve, and that rate cut with 50 basis points really opening the door for these em central banks. tom: avril hong and singapore. thank you, more details on the china story. lines crossing on the bloomberg terminal. details coming through from the ministry of finance. china's finance ministry to hold a briefing on october the 12th at 10:00 a they will be briefing on fiscal policy. that will be on saturday. there's a redhead on the terminal right now. you are seeing strength on the chinese u.n. for the back of the

story in pairing for losses on mainland china. csi 300 currently down. but far below the heavier losses . china's ministry of finance will brief on fiscal policy on saturday, october the 12. this is the piece of the puzzle that investors have been waiting for. will they expand the deficit limits. will they issue more debt in terms of those sovereign bonds, and will they allow greater fiscal space and fiscal spending, particularly around consumer households. china's 10 year government bond futures raising those gains. the u.n. strengthening on the back of this and you are paring losses on the csi 300. still down 3.7% but well off the lows of the session. jamie dimon says the fed was right to cut its benchmark interest rate by 50 basis points last month. they were right to do that. that is the view from jp morgan

ceo. in our exclusive interview, j.p. morgan had warned that that inflationary forces still remain. jamie: inflation is coming down, they don't want to come into recession, unemployment has been going up, they are raising rates very high, rapidly to 5%. and they are will right to take their foot off the gas. i don't think it matters that much. but i think it was ok. . tom: let's bring in bloomberg's valerie for reaction to what dimon had to say. what do you make of this and to what extent this plays into the debate that continues around the fed's next steps. valerie: you went through this checklist of his inflationary worries when it comes to the u.s. economy, he mentioned the re-militarization of the globe and fiscal deficits, the green economy on the energy transition, and demographics playing into forces weighing on

his mind, he went on to warn on these fiscal deficits, especially when it comes to the u.s., saying peace time 7% deficit is way too high and that the u.s. needs to fix things before they go hockey stick. he echoed the things that ray dalio said yesterday on this morning about the fiscal deficit and he says the combination of these inflation risks risk a higher for longer world when it comes for interest rates and says they might stay here and could tick down as opposed to going straight down. tom: that's an inflation view coming through from jamie dimon. we've had a number of fed speakers, what have they been saying, do we have more clarity? valerie: they are all talking about this balance of risk between inflation and unemployment. many are using this buzz word of balance we heard from jefferson yesterday saying the risk has been roughly brought into balance. we also heard from adriano kugler yesterday talking about

this balanced approach. we heard from boston's fed president susan collins, take a listen. susan: looking ahead, preserving the favorable conditions will require adjusting monetary policies so as not to unnecessarily restrain demand. that will require a careful databased approach as we balance the risk. there are risks on both sides. >> this buzz word of balance is catching the markets i because we do not want them to talk about the risk to inflation being in the upside that would dent the equity market. let's look at how equity markets have behaved. we are very close to all-time highs, just a quarter of a percent away. so we could pivot in today's session. we want to hear fed members keep talking about this balanced approach, which makes you think

they could look through a possible string of hot economic data, we do not want the market to start thinking about a pause or a skip on the cards if they keep easing through economic data that is the bull case for the equity market. tom: breaking down what we've been hearing from fomc members. to a corporate story on a major one, the u.s. weighing on an historic breakup of google. a breakup of google as a remedy in its monopoly case. the doj may force google to sell off parts of its operation seeking to prevent it using products including chrome and android to its advantage. let's get more with our tech reporter annabelle droulers, who standing by. this would be, if it comes to pass, a historic antitrust breakup. annabelle: certainly, but i think that big question is if it comes to pass. we haven't seen washington pushing to break up a major u.s. tech giant for monopolization going back to microsoft two decades ago.

in that effort was not successful. this is very significant, this development. over the summer we have the u.s. judge ruling that google had illegally monopolized the search market. now we are moving to the remedy phase. we are getting the proposals that the doj puts forth. that came through in a 32 page filing yesterday. and included's quite extreme measures, you could say. as you said, yes that proposal that they could be forced to break up the business. that would be one of those. there are other things in play, including forcing google to provide access to underlying data that it uses to build its search results for its ai products. that's one other solution. they are looking at requiring google to allow more websites to opt out of its ai features. lots of different things being proposed in those 32 pages. but of course it's that question of whether this comes to pass any measures at all given google is prepared to fight back quite strongly.

tom: bloomberg's annabelle droulers, thank you on that major story around google and its potential future. later this hour we will speak with the cofounder of tech investment firm gb. we will get his view on big tech and whether it's distorting the markets. also his take on where to invest in europe's burgeoning aia ecosystem. so, stay tuned for that -- interview. you can get around of of the stories you need to know to get your day going. terminal subscribers can go to da why bigo -- dayb . there's potential breakup of google and the china stocks. that has moderated to some extent. the briefing on saturday. switching focus after the break, israel's defense chief postponing his trip to washington. more on that and what it means for israel's potential and very likely retaliation against iran. that is next. this is bloomberg. ♪

tom: welcome back to bloomberg daybreak: europe. the pentagon says a u.s. visit by israel's defense chief has been postponed. bloomberg understands last-minute objections from israeli prime minister benjamin netanyahu were behind the move. for more our horizons middle

east & africa anchor joumanna bercetche he joins me. why then was this trip postponed, to what extent is a link or not to the debate going on in israel about how to respond to iran? joumanna: the trip to the u.s. was built as an opportunity for the u.s. and israel to come together to potentially craft a common strategy on how israel was going to retaliate to the iranian ballistic missile attacks on israel one week ago. but according to an israeli official that bloomberg spoke to, it seems as though the prime minister himself had reservations about him undertaking this trip because what they wanted to do beforehand was to have an already established stat on what they were going to do before presenting it to the u.s.. so as we understand per bloomberg reporting is netanyahu was pushing to have a security cabinet meeting first to discuss what the appropriate response should be. and then later he himself wanted the opportunity to speak

directly with u.s. president biden. they reported a couple of hours ago that that call is scheduled to take place later today. u.s. president joe biden has been reiterating that they would not like to see israel go after nuclear facilities or oil infrastructure because of concerns about this growing into an all-out conflict in the middle east. in about the potential consequences it could have on global oil markets keeping a close eye on what's happening with oil markets over the last week. but equally, israel has shown an unwillingness in the last couple of months to actually heed u.s. advice, when you think about it in the context of the cease-fire discussion surrounding lebanon and ongoing cease fire discussions around gaza. it's unclear how much leverage the u.s. can exercise on israel's decision-making. this as the situation in the region continues to get worse. overnight there were airstrikes on damascus. the residential building was

struck by israeli forces. they were saying there were going after another has villa commander but this morning the syrian health minister has said that seven people have been killed in that attack. ongoing airstrikes in lebanon. let me leave you with a quote that we heard from the united nations secretary general who says, "the middle east is a powder cake with many parties holding the match." tom: joumanna bercetche he with that importing update out of the region. thank you very much for the latest on the region. bloomberg understands that ukraine's allies are detected that volodymyr zelenskyy may be ready to adopt a more flexible approach as they look for ways of helping in russia's war. u.s. president joe biden will host a meeting with zelenskyy and other russian allies over the weekend in germany. this comes as south korea's defense chief says north korea is likely to deployed troops to

battle fields in ukraine. meanwhile in the u.s., kamala harris is seizing on claims that donald trump sent russian president vladimir putin covid tester and the height of the pandemic. the allegations against trump have been published in a new book from journalist bob woodward. trumps campaign is pushing back on the allegations and accusing the journalists of bias. coming up, talks between boeing and its largest union and to end the strike. they have broken down for a third time. we will have the details on that impasse and what it means for boeing. that's coming up next. this is bloomberg. ♪

tom: welcome back to bloomberg

daybreak: europe. boeing has withdrawn its payoff to union saying talks don't make sense at this moment. meanwhile, s&p said the plane maker may be cut to junk on those stripe concerns. let's get the details from our aviation reporter danny lee, who has been across a story from the outset. what brought these latest talks to a halt for the third time? danny: it depends on who you talk to. clearly in this two days of talks, nothing really was new offered on the table here. boeing stuck to its original offer it made a couple of weeks ago. it's most recent offer with pay raise, also some tweaks on annual bonuses and retirement. that is not enough for the unions who presented its own nonnegotiable offer. and that for boeing is too tough to stomach because it needs something that is competitive and is not going to jeopardize the business in the long run. therefore both sides are at an

impasse and it's clearly bringing a strike into a month now and every day that boeing has a strike, it's potentially losing up to 100 million u.s. dollars in revenue daily. tom: up to 100 million u.s. dollars in revenue for a company that hasn't made a profit since 2019. what is the impact? do we have more clarity on what the impact is going to be and in having on this business, in particular, its debt pile? danny: the fact that it still needs to make money, we did see some figures produced for september. it has been able to deliver to customers at a reduced rate as the strike started in the middle of last month. as the strike goes on, this impact will worsen as there is nothing coming through the production lines. the risk is with its cash pile evaporating. that does put a risk on its credit rating. the fact that s&p and moody's has now warned that its credit

rating may be at risk. particularly the investment-grade credit rating. for boeing, what has been saying is it would have to focus more on the near term on cash preservation. how much more it has to preserve cash in terms of trying to make sure it extends itself, given the entrenched positions between both sides, the union for a trying to protect itself. tom: cash preservation and focus for boeing as they continue to wrangle with their workers. what was the broader impact in terms of the deliveries of these planes to the broader airline space? to what extent is this causing issues for airlines globally or are they able to replace these boeing aircraft with example aircraft from airbus, or is there a crunch happening right now for these global airlines? danny: we have spoken to multiple customers over recent weeks and they have all been told and expected to see futures delivered today for the next couple of months.

clearly as it extends into next year, we see the risk and pressure on airline strategy at how they expand into next year. there isn't many options between boeing and airbus and there has been that stress on the supply chain. for boeing, they may come under even more pressure. not so much from shareholders, but from customers to resolve the strike. we don't see any hint on whether boeing will really move forward, offering bigger pay raises in order to resolve the strike. that will be critical if they will arrest this cash grab. tom: denny lee, our aviation reporter with the details. danny, thank you. let's get back to the china story because the headlines are also the finance minister. this is the piece of the puzzle investors have been waiting for on china. we've had the monetary policy, we had the central bank action. what's come through for the fiscal support for the economy. the ministry of finance will be giving a briefing on saturday in

beijing and there will be a lot of scrutiny with the briefing at to what extent they come through for additional fiscal measures. there's a market reaction. they heavy losses we stop -- saw at the start of the session, the csi 300, they have paired those losses. still down 3.6% on the csi 300. the commodities read across is pronounced brent up. iron ore rallying on expectations that if you get more fiscal support, that will create greater demand for iron ore. up 2.4%. look at the miners, basic resources at the open 8:00 a.m. u.k. time copper getting a lift up. let's flip the board and have a look at futures as well. this is tying into the futures story. pretty much in negative territory in terms of european futures. those potential losses are paired. european futures are flat. ftse 100 futures pointing to gains.

you can expect the minors in basic resources to give a lift to u.k. equities at the start of the open. s&p futures currently down. nasdaq 100 futures, after decent gains yesterday, around 1.5% for the nasdaq 100, lifted. currently looking at a bit of profit-taking, down. here's what else to think about for the rest of the day. 10:30 a.m. u.k. time, we will get a debt sale out of germany. germany 15 year bond sale. we see what the appetite is as the sovereigns continue to issue pretty significant amounts of debt into the market. to what extent the market is able to absorb that. the broader macro concerns about the health of economy, about the expectations that there will be zero growth this year for the euro's origins largest economy -- eurozone's largest economy. the focus switches to france and commentary on the ecb for the bank of france governor. at least that will be the expectation.

they said the door should be open to another cut from the ecb at this month. we will see if he builds on that view 5:00 p.m. u.k. time. 7:00 p.m. u.k. time, the minutes coming through from the fomc. that crucial meeting of the fed back in september when they cut by a jumbo 50 basis points. we know there was dissension from michelle bowman, but to what extent was jay powell consequential, using a soft power to persuade others on the committee to go for 50, where their doubts about that. we get more clarity on the question of the fomc minutes as traders price and another 50 basis point cuts by the end of the year. florida residents coming out of -- running out of time as hurricane milton

♪

tom: i'm tom mackenzie, chinese stocks tumble. finance ministry outlines fiscal plans on saturday. breaking up google, alleging it promotes its search service. hurricane milton heads to florida potentially causing damage. president biden says it could be the worst in one century. china front and center, a briefing watched by investors. you've had central-bank action, now expansive measures to

support consumers. a bit of a move in commodities. msci is up. that compares to a drop of 6%, you've paired losses. up 6/10 of a percent and china enterprises is up. as you gear up for the open, resources in focus. european futures are flat. positive start out of china. s&p futures down. nasdaq looking to trim gains but after a solid run nvidia is up.

let's lacrosse asset and pass commentary for the federal reserve. gold currently flat. tsmc coming through with sales numbers, the producer of accelerator chips for invidious sales at 251 billion taiwanese dollars. sales up, sales of close to 40%. sales up. of course a maker of chips up,

chips up. breaking news, talking about rio tinto buying arcadia, $6.7 billion, transaction expected to close in 2025. that is a stop to watch. rio tinto. hurricane milton regaining category five strength, residents fleeing ahead of its landfall. substantial losses as the combined force triggers payment clauses. mary, but our forecast are saying about milton's strength?

mary: what we are hearing is top speeds of wind will slow down, indeed it has. now 160 and slow as it approaches the 130 mile per hour , category three or category four. top wind speeds are not the only thing, we should look at the size of the storm in the winfield of milton, extent of the wind will grow as it

approaches landfall, significantly increasing the size of the area impacted. tom: what do we know about where milton will make landfall? mary: late wednesday night local time, exatly where, so much can change, the storm can wobble or loop so forecasters are staying forecasts can be off by 70 miles. bigger question is whether it will make a head-on hit on tampa bay or go north, south. wherever it hits exatly, we know

there will be large areas of storm surges and that will bring damage to the area. tom: our weather reporter mary as we watch the storm and impact. progress has ramped up, harder to do carbonized. it is a reminder of the climate crisis. joining me now is hokum, a ceo. thank you for joining us in the studio. we are six weeks away from the u.n. climate conference. how much progress has been made?

>> i think a lot of things is being done, we are still at a very early stage. on the positive side if you look at the increase the installation will adapt year on year but still only 500 gigawatts and we need to reach 11. tom: each cap. is it -- is it -- is it realistic at this point? >> a lot of good efforts are being put in but we will not make it on the current pace.

tom: what is global demand for green energy? >> there is significant growth if you look at texas, 40% of power these days are renewables. u.s. seeing challenges, you need balancing power. wind does not always blow, the son does not always shine. this is where we coming in as well, providing balancing power technology. in europe it is going ahead but renewables growth is hampered by

permitting, getting permits and -- and -- and we need to create the right mechanism. how do you get paid? a lot of work on balancing. china has a lot of foresight power, but they are the biggest investor in renewables. in china, long way to go. tom: do you worry about a renewable shift? >> when we talk about potential administration we should take a step back. if you look at u.s. situation a lot of renewables has come into the system, 20% of generation is based on renewables. we see it accelerating.

it is affordable so we see it happening. tom: which technology has the most potential? >> green is not black or white. no simple solution, we need all the tools to be close to where we want to go so it is about carbon fuels, carbon capture, all the things. the key technologies are here. now the challenges is capital, infrastructure and of course the political approach.

tom: is there a canary in the coal mine? >> look at the different companies building technology, each have their separate story so i don't think it is a canary. we all know the global capacity so the prices are coming down, very competitive but please note several technologies we will use in the future so therefore there is a lot of exciting things happening in other spaces. tom: what are you doing? what are you looking to add?

>> we are a technology leader and it is all about innovation and services. we focus on organic growth. >> you bring in niche competence. focus on organic growth. we are probably in the best position because of technology. tom: thank you indeed. we've run out of time. fascinating on some of the transition unfolding. he is one of the key guess in london for the bloomberg nef summit.

scan the qr code on your screen to get a virtual attendee take i believe. more details by scanning the code. now the french government survived a motion brought by leftist lore makers, far short of 289 needed. president macron have appointed a premier from the left-wing coalition. carrie has named santino as the gucci ceo leading a turnaround. the former lvmh executive takes over in january. gucci has struggled with cooling demand for goods in chiner,

falling by more than 40%. co-founder of gp with his views on where to invest in ai coming up. this is bloomberg. ♪

♪ >> happy wednesday. breaking news from the french and bank of governor, excuse me, central-bank governor. it won't be the last. it won't be the last. he suggests space for the ecb.

90% chance of another cut, it will be the furred one,, markets expecting 47 basis points of cuts, euro-dollar 109. the u.s. is weighing breaking up google seeking to prevent it from using crown and android to its advantage. google said that would break them. gp all star awards kickoff in london. let's bring in a manager of gp bullhound. how big tech is shaping the go system.

is this supportive? talk about concerns amongst lawmakers? >> dominance is growing false. a little bit of dominance can benefit the customer and we want that. there are classic examples of amazon, they changed lives but they are dominant. the ability to order pretty much anything has improved lives of many. there is a tipping point where you abuse charging different prices and this has to be regulated.

a good statement said we've got the wayne gretzky philosophy, he would skate where the puck was going. tech is moving sophos with the ability to look at different industries, dater is the new oil, it is hard for regulators to stay ahead of that. best way to make sure ecosystem stays fair is competition and ai , google was dominant and now you're seeing predictions that they may drop driven by tiktok, perplexity and others, ensuring

that ecosystem is thriving is that he. tom: this week is the all-stars event. what is exciting, what is exciting, how has the ecosystem changed? >> bad news in the private market. analysts came out with the report venture funding was all-time lows, quarter on quarter. 180 billion year to date so my -- my view is the venture market has frozen but i am optimistic about the market and what is driving that is companies emerging. a few stacks is stripe came out

with an impressive report and the stat was to reach a million reaches 11 months and staggering jump changing the landscape. ai companies are reaching 30 million faster than previous cohort, scaling fast. companies are vertical, taking benefits of horizontal players, huge amounts of dater and ability to reason, building deep knowledge in the legal sector

and property sector connecting on the call-center platform and when you marries these two things you see companies felt proprietary data, it is spectacular so many grow from tens of millions into hundreds in less than two years. tom: we have one minute left, are you not as concerned about? evidence that that is coming through? >> it's not everybody. good businesses perform, capex is intense, 100 million. but when you see entrepreneurs

getting together, the rate of growth is shown by this -- it is spectacular. tom: ok. indeed. the context ahead of the all-stars event, managing partner and cofounder of gp bullhound. this is bloomberg. ♪

tom: china front and center, ministry of finance holding a briefing. how extensive and to what extent it will be implicated as a question. chinese stocks are still down

but when i came and it was down 5% so you want a stronger. selling coming through. msci is up. gains in hong kong, let's flip the board. experience comparing s&p, come back and here is how things play out. s&p still up, csi up 10%. fundamentals are there. ♪

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