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tv   Bloomberg Markets European Close  Bloomberg  January 11, 2023 11:00am-12:00pm EST

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guy: european these resumed their climb higher. even the ftse is up. retailers, luxury, banks, the insurance sector the one exception. the countdown to the close starts now. >> the countdown is on in europe. this is bloomberg markets european close, with guy johnson and alix steel. guy: let's look at what european
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markets are doing. stoxx 600 up by around 0.4%. every sector is in positive territory bar a couple. the insurance sector having a tough day. retail story is beginning to develop. we are going to talk about retailers in a moment. sainsbury, the u.k. grocer, out with good numbers from the christmas period. the numbers were largely priced in. sainsbury's down by 2.12% on the back of that, but we will talk about the recent rally we have seen for european retailers in a moment. some fantastic reporting on credit suisse. there is a management team that is mulling the possibility of cutting the bonus pool significantly. 50% is the number being talked about. the market likes it.
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i suspect that many at credit suisse do not. alix: if you were not expecting a bonus cut, i don't know what to tell you about that one. the s&p is up by 0.3%, so i feel like we are biding time for the cpi number. the question is how you trade with the kind of volatility we are going to see tomorrow, and where the tail risk is going to come from. the airline index, we are up by 0.6%. i still would not want to be at laguardia, to be honest. the dollar index sitting at neutral. the longer term moving average -- never really a good sign. i highlighted the 10 year. we have an auction coming at 1:00 p.m.. over $30 billion. the increase is not anything surprising, but how the takedown will be come up with the supply, definitely in question. guy: where have you been?
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what has been going on? alix: i'm so sorry. internal panel. guy: need to know basis. i'm kind of thinking this is the alix steel -- this is something you could be responsible for, not directly, but i think part of the theme. we do see significant spending continuing. i think that maybe something we need to discuss later. european retail, look at these numbers. jd sports, year-to-date -- jd sports fashion is up. next has great numbers. the market actually a little cautious after we saw those numbers. still up by 10%. i could go on. these are year-to-date numbers. they are absolutely incredible. the market seems to be getting very excited about the european consumer again. we are getting a series of numbers over the next few days. the christmas period is looked
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fairly good. how is the budget going for you? alix: i have a budget for a week. it rolls over. i have been doing a good job. but i think i am going to be part of the problem for retailers. margins are going to be compressing, but the top line was making up for it. the top line revenue, alix buying stuff, rolls over. what levers do you have to pull? grocery sales -- we spoke to the ceo of conagra yesterday. that is a food retailer in the u.s.. they make things like hungry man, slim jim's. we talked about how inflation is impacting his business. >> inflation is beginning to moderate. i don't think we can say the sun has set on it yet. we are still forecasting inflation in the back half of our fiscal year, what it is beginning to come down. we are seeing variability in different commodities. it has been incredibly persistent. that has been our mantra, to
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persevere through this super cycle of inflation. we are beginning to come through the other side right now. guy: spoke to us yesterday. really interesting conversation. let's talk about european retail in more detail. some incredible numbers being posted over the last few weeks. the question we are asking today is, is it actually a reality? still too early to buy retail in europe? here to discuss it, bloomberg columnist andrea fell stead. you have seen the numbers. they are incredible. people may not be buying everything right now, but they are buying european retail. andrea: christmas was not the turkey everyone expected. the worry is that the pain has not disappeared. it has just been deferred. it looks too far, too fast. guy: you are not a buyer of the buying? andrea: no, i think the worst is yet to come. i think the next few months will be difficult. that spending over christmas has
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got to be paid for. much of it would have been on credit cards. there are energy bills to come through. the hope is that as we get further through the year, inflation comes down. perhaps that gives people a little bit of leeway. maybe things will be better as we go through the year. but at the moment, i would still be braced for more pain. alix: katie, where is everyone buying? cooking a lot over christmas, i'm going to have to go in by stuff, but i may not going by a coat. katie: it absolutely depends. the king at grocery, we have seen discounters in the u.k. doing well. it is really still to be seen whether shoppers traded up over the christmas period, went to more expensive supermarkets. when we look at nonfood, sainsbury's say that people have been buying air fryers, electric
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kits, things to keep warm at home and try to save energy. i think those are key areas where people have been spending. guy: but are we focusing on what we are seeing right now? we knew that people were going to be spending into the christmas period. that is already priced. the surge at the beginning of this year -- is it a prediction that things are going to not be as bad from here? we knew christmas was going to be an advantage point. but in a couple of months, maybe things improve. is that the reality we are pricing here? >> last week, when we saw the next report, they raised their profit guidance and said that despite real strikes they had a really strong performance. at that point, i think investors said we could see fantastic christmas updates across the board. now, i think they are beginning to think we got a bit carried away. we saw the reaction to sainsbury's was not so gangbusters. it is yet to be seen, going forward. alix: that is my question.
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how do retailers manage their margins? got hit on the cost side. if it does not live up to expectations, what fat do they have to trim? andrea: they could cut costs. that is the main way. but that is dangerous, because you start eating into customer service. what we have seen is the food retailers do very well out of inflation, because it inflates the top line. i suspect that those food price increases are running ahead of their own costs. that is why sainsbury's was able to upgrade its profit outlook today. if inflation starts to fall back, that is very good news for consumers. it is not such great news for the food retailers. they really dislike deflation. they have to sell more tins of beans and more loaves of bread to make up that volume of sales. guy: tins of beans and loaves of
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bread sounds fantastic. we need to be a little bit more precise when we talk about the retailers? i suspect a lot of people that buy from jd do not have to worry about grocery bills, the heating bill, the rent, mortgage, or whatever it is. are there sections of the consumer that are still doing well, sections that are going to be hit hard? at the moment it feels like we are putting everybody in the same bucket. do we need separate buckets? katie: i think we do need to differentiate between the different retailers. jd came out saying a lot of their shoppers are young. they're in their 20's or younger. they may be living with their parents. they don't need to worry about mortgage costs or energy bills. we may see that for some of the other countries -- we have asos reporting tomorrow, fast fashion. it will be interesting to see how they do. generally, the story with asos
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is not strong at the moment. we are seeing that luxury spenders still want to be spending. that is a pretty good category. and people still need to buy food. they need to put food on their table. discounters are doing pretty well. i think furniture is an area where we have seen people really pull back. people did a lot of buying on their homes through the pandemic and now they do not see such a need to be buying furniture or other home-improvement elements. so there is a reason to look granular at retail. alix: really appreciate the conversation. i obviously love the topic. thank you for your analysis. our next guest says use the recent rally to reduce exposure in european stocks. joseph little, hsbc asset management, joins us next. ♪
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alix: german chancellor olive schulz is calling for new programs to help compete against u.s. subsidies for green technology. this is going to turn into an enormous point of conflict between europe and the u.s. what is schulz proposing here? >> this is an early draft and you know things change dramatically in europe.
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it is usually european leaders that have to agree. there are a lot of ideas that get thrown around. there has been a lot of regulation not just from germany, but from an -- a number of countries, to the idea of state aid that has to be revised, the funding in order to be competitive with the massive program the united states has put forward. what i think beyond the detail -- to be frank, i don't think we are there. this is not the final proposal european leaders will debate when they gather in february. think what this really underlines and highlights is the anxiety that european countries have about losing their industry to both the united states, but also china, and they're very aggressive industrial policies. yesterday, when i spoke with the belgian prime minister, he was really vocal about this. he said the inflation reduction act is a threat to european industry and you cannot have a continent that does not have an
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industry. that is not the way it works. guy: maria, is this now a tacit acceptance of the fact that the europeans cannot persuade the united states to change the inflation reduction act? maria: i think that would be a fair interpretation. based on the reporting i have done over the past few days -- you have to keep in mind we had the winter break, the christmas break. a lot of the talks would continue the next few days. the indications we get back or that we get on the way back from the break, is that european officials are not satisfied with some of the solutions that have been proposed, feel they do not go far enough. it ultimately will come down to the european union to come up with potentially something that looks like a response. a copy and paste, but come up with their own package. the united states is not going to significantly change theirs. guy: maria, thank you for
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jumping on and giving us some details. maria joining us out of rustles. if we were to see more fiscal stimulus coming out of europe, would that be another catalyst to buy european assets? that is one of the things we are thinking about right now. europe has come out of the gate really strongly at the beginning of this year. people are buying european assets. there is significant outperformance of european assets. you can see that on the chart we have got in front of you. the stoxx 600 outperforming the s&p 500, the best outperformance we have seen since 2009. joseph little, hsbc asset management global chief strategist is joining us now. that me ask you -- i'm going to throw this at you on short notice. if we were to see europe delivering on fiscal stimulus, targeted fiscal stimulus, trying to get the economy moving, trying to compete with the united states, is that a reason to buy european assets?
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joseph: i think it is a sign of the times we are living in that we have seen the kind of response from policymakers which is coming on the fiscal side and on the monetary side simultaneously. we have to think about that delivery of policy as support or management together. we are used, over the last decade or more, this thinking about monetary policy. fiscal policy is in a holding pattern. it has been monetary policy on steroids. but we are in a different regime, a different environment for investors. it involves creative thinking on how monetary policy and fiscal policy are working together and perhaps against each other. depending on the nature of the package, would monetary policy makers at the ecb have to offset some of that? or would it be, as you indicate, quite targeted, quite focused, rather than more spread out among different types of measures? the details matter.
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important think about the monetary and the physical supports together. alix: goldman did this exercise a couple days ago. they said what if europe had an ira that matched the u.s.. that would mean something like 4 trillion euros to do the same kind of thing the u.s. is doing, a huge amount of money. as an asset manager strategist, do you have to start thinking about ways to invest in this? this is where the capitol is going to be going into over the next decade. how do you play that? joseph: we have to wait for the details on the package itself, but you are quite right. the medium-term timeframe is the timeframe we would always be focused on. in that context, thinking hard about the price you are paying for the assets, thinking hard about the environment we are going to see, the regime of the economic environment -- they are going to be the critical values. in that sense, it is the same
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playbook. but the difference we face today is that we have no longer got an environment where it is just about monetary policy. we have also got fiscal development and uncertainty around the geopolitical side of things playing into a much bigger part of it, so it is very complicated for investors, whether than just thinking about what is going on with aggregate demand. we also have supply-side volatility with policymakers changing the rulebook. i think it requires a broad set of instruments. and more than anything, the active approach to investment management. it always that focus on medium-term investment performance is key. guy: european equity markets have been outperforming. they have been scorching away this year, so far, certainly from the s&p. does that have legs? is that sustainable? is that something you want to invest in? joseph: it is hard not to see the news flow, the data we have seen already this year, as not being good news and supportive
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for european stocks. and i really mean the development on the gas prices, and a really mean the development we have seen on european inflation, with the data coming in better. in that context, the outperformance of european stocks is not a puzzle. i think the surprise is gas price rather than maybe the european equity market response to that. the critical issue is the extent to which now, after a big move, after a big performance relative to other equity markets -- you see european equity market outperformance versus the u.s. is pretty remarkable and not something we see every day. after that development and after a situation where european equities are back to the level they were before the ukraine situation unfolding last year, what comes next? i have to say we are a little bit more cautious on the outlook for european stocks at this point in time. we're worried a little bit more about the growth picture. alix: why?
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what kind of china reopening might that imply? joseph: thanks, the china reopening story is taking place, and that is a big support for global demand and for global activity. but our feeling is that probably has the biggest effect in the asia region. the challenge for europe is more connected to the developments we have seen on financial conditions being really tightened at pace. you think about what the ecb has been doing, the bank of england, the fed. the pace of interest rate hikes has been really very dramatic, especially versus anything we have seen in recent cycles. it is not just that we have reached interest-rate levels based on where bond market pricing is suggesting we might get to by the middle of the year. it is not just that we are seeing high levels of interest rates relative to what we regard as normal for the european economy. it is the speed with which we have seen that timing. i think that is the big challenge, really. it is a deal equivocation --
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deliquification process. conditions are becoming more restrictive. that is a challenging environment for profits, for economic growth and economic activity. we think it plays out over the course of this year, possibly induces recession toward the end of 2023. that is the situation we have for western economies in mind. the context of the very strong performance we have seen your to date so far in european equities, that is great, driven by a lot of good news. we have got to remember there are plenty of examples -- 2009 is 1 -- you see really good performance at the start of the year, and then challenges over the first quarter, lots of volatility in markets. that could easily be part of the playbook we see evolving from here. alix: we appreciate it. joseph little, hsbc asset management and global chief strategist. ♪
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guy: we are about to ring the closing bell in europe. it is time for last orders, or i guess you would say in the united states last call. european equities are a little bit softer. let's talk about some of the stocks that have been moving the market today. one stock that is softer's direct line. it is having an impact on the entire insurance sector today. you can see the gap lower first thing this morning as the company comes out and scraps its dividend. management had insisted that this would not happen. the market a little surprised, i think, as to what we got here. analysts say it was a major shock that the final dividend has been scrapped. that's talk about some of the analyst calls that had a big impact.
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jeffries upgrading vestas, the wind turbine business. interesting in light of what we have been hearing from olaf scholz. jeffries sees an inflection point for wind at this point. they talk about the fact that the regulatory support for the renewable energy, for the energy transition, is unprecedented. you've got the stock rated at buy, and a big upgrade. you have goldman sachs downgrading immersed. --- maersk. they see a big unwind in freight over at goldman sachs. the rating is now significantly lower. quite a big move to the downside. they are talking about a big move to the downside, a great unwind in terms of pricing. you can see that in some of the retail numbers we are getting today. lvmh stands out.
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delfina is going to do your. there is a big management shakeup. that stock is a little bit lower. the closes next. ♪
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guy: the european equities resuming the upward path we have seen since the start of the year, resuming the outperformance we are seeing over the united states. today, we are higher across the board. the dax outperforming. we are up by 1.1%. it is going to be interesting to see whether or not we get the german chancellor delivering on some of the things he has been talking about today. i decent upside move first thing this morning. we are up by about half of 1%. from a sector point of view, i think this is where things start
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to get quite interesting. real estate is basically the top on a daily basis depending on what is happening with the yield story. retail continuing and absolute surge we have seen so far this year. today, it is names like jd sport fashion that are doing really well. we brought you these numbers at the beginning of the year. this is a sector that had absolutely smashed it. luxury continues to do well, lvmh and dior smashing highs. the market likes this kind of planning. another 52 week high for lvmh. the bottom of the market is insurance. that is where we are seeing the pain in europe. it is directly a result of direct line. direct line down by 22.85%. the reason for that, quite simply -- this is a company that promised it would not do away with the dividend, and it has. the pressure is significant in the auto sector.
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the younger consumer is still spending. sainsbury, the big u.k. grocer, is down. the numbers were good. the outlook was good. the problem is it could have been better. i think that is what the market is reacting to. let's talk about the day ahead, because we are not done with the grocers. we need to talk about what happens tomorrow. first thing in the morning, we are going to get numbers from tesco, m&s, and asos. we will also get u.k. housing data tomorrow. i think we will get persimmon numbers. later, we are going to be watching out for gdp, and we have euro area data and u.s. cpi. keep an eye on these stories. u.k. housing from persimmon, but i thing retailers continue to be the big focus. alix: it is all energy and retail, the things i like.
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a food delivery analyst joins us. he has an outperform rating for tesco. what did you make of sainsbury closing down over 2%? were these numbers really worth 2% of the stock today? >> sainsbury's performed pretty well today. they posted a good 5'9" percent like for like. they had good free cash flow. the problem is it was up 38% over the last three months. consensus was not far off from the upgraded numbers. obviously, you could deliver a little bit more of that. guy: in terms of what they were telling us today about the consumer, what was the message? >> i think it was still relatively strong. we have seen upgrades from other retailers and from sainsbury's, saying that christmas trade was relatively strong. we saw an acceleration of performance into christmas. people are willing to spend more on the premium, private-label
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range. it shows despite the negative macro news that consumers are willing to spend. alix: what does this mean for tesco tomorrow? what is the reaction? >> i think tesco has not performed as well over the last few months. there has not been that strong run-up. we would expect not dissimilar numbers on a like for like basis. think the big thing for tesco is they have always come out with slightly more cautious guidance, a slightly more cautious tone toward some of the energy increases on their margins, and some greater concerns there. i think that is more of the focus tomorrow. where it is tesco land on margins and performance? guy: these grocers are trained to price match the price discounters. all the and -- aldi and lidl. can you price match the discounters? >> no.
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tesco did that six or seven years ago. they took a massive margin hit and have been on the recovery since then. you can get margins that are industry-leading to some extent within europe, but when you are looking at energy costs, labor costs, you get a lot of lumpiness. if you pass on higher wage costs, it becomes a bit tricky in terms of the margins over the next six months. alix: when we get clarity to say inflation has peaked for these guys? when do we know that? >> it is difficult to call. companies across europe are still talking about suppliers coming through with consistent price increases into the first half of next year. i think when you look at some of the more detailed industry data, inflation has peaked, and it has come down for two months by 10, 20 basis points, what we are not seeing it fall off a cliff and revert back to that 1% or 2% level you might expect. guy: what are you thinking about when it comes to general
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merchandising in the new year? people spent a lot of money over christmas. bills are landing. is that going to continue? >> that is the big question. it has to be a tough outlook for general merchandise. clothing only grew one point 3% year-over-year. slightly tougher comparisons, but there is a question -- a lot of sainsbury spending is in things like electricals. in the first quarter, there is a lot of question whether that can continue, whether consumers are willing to keep spending. alix: let's say you are like me, on a budget, and the top line comes down a little bit. what are the levers these companies can actually pull? i appreciate reducing the cost, but haven't they already reduced as much cost as they possibly can? what did they do next? >> in terms of cost reduction, it is hard, but they have targets out there, and i think it is about small operational tweaks they can make to the businesses.
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years ago, everybody used to unpack the boxes onto the shelves, and now they put the boxes with products on the shelves and do not unpack them. that is a huge cost saving. i think you will see further operational tweaks to the business model, to try to squeeze more margin into next year, and in the second half of next year, as you have a more positive view on energy, that could be a slightly more positive case for margins going forward. guy: these stocks have done well recently. what is the outlook? the point about sainsbury's -- is all the good news pretty much in the price, and trying to get the share price higher from here is going to be quite difficult? >> the stocks to perform better in a period of recession or negative outlook, because they are more defensive. people still buy food, while they do not by general merchandise. when you look at inflation outlook, high single-digit food and inflation outlook in the u.k. or europe, and you look at
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the expectations, they are still at low single digits. you could still see earnings upgrades across the sector of sainsbury's and tesco, which could drive supplies higher. alix: if inflation does fall sharply, what food retailers are going to be able to capitalize the most on that? who is going to win in that environment? >> falling food inflation is bad for the sector overall. think you will see outflows into more discretionary spaces. it is difficult because you see slower growth. i don't think there is anyone in particular who is going to benefit. if you see slowing inflation, you might see slightly less aggressive trading down and might see some market share come back from the discounters into the big for like tesco's or sainsbury's. guy: thank you for coming in. william woods bernstein, food delivery analyst. european stocks, 38 minutes since the close. let's look at the final numbers.
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largely unchanged. the dax up by 1.2%. the cap current -- the cac 40 is up. we will be on d.a.b. digital radio to discuss ongoing strikes in the u.k.. what does that tell us about the economy? alix: coming up, you have a life insurance giant who has been big on asia. it has shed its european businesses and is in the middle of a management change. we will talk about the pivot, potentially the catalyst, and the challenges. ♪
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richey -- >> coming up, christophe weber of takeda
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pharmaceuticals. this is bloomberg. ritika: valletta mayor zelenskyy -- president zelenskyy promises the conflict will not turn into world war iii. he spoke by video to tuesday night's golden globes ceremony. he said the tide is turning although the war is not over. in the u.k., ambulance workers on strike again today. members of two unions are walking out as part of a dispute on pay in the national health service. because been warned they may have to wait longer for emergency services. china's biggest offshore industrial or is betting the economy will bounce back quickly on the wave of covid infections. they pledged to fund an increase in output. china' is reopening after the end of covid zero is expected to lead to more energy production.
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bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. alix: i want to stick with china's reopening. we spoke to the goldman sachs global head of commodities about what this means for the oil price. >> we think the reopening gains momentum when you get into two q. because this is a faster than expected reopening, you add five more dollars to the 95 to get you to 100. if we see those international aircraft get back into the sky and we see people going out of china and back in china, throw another five dollars, up to 110 by the third quarter. i think the key here is this is a big shift. alix: a huge shift, and potentially a big shift for companies that are based there, like prudential pnc, which spent
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the last decade expanding the footprint in the region. ceo mark fitzpatrick joins me on set. first of all, how do you see the china reopening involving? is it open the gates? is it bumpy? mark: we have all been surprised at the speed with which it has been opened up. this is huge for the whole of hong kong. to give viewers a sense, we printed a number 1.1 billion new business profit for the whole group. mainland visitors from china into hong kong provide $100 million of new business profit every month when we are in the full flow. it is huge for our business, very very exciting. this year's are 175th anniversary, 100 years in asia. it is a great way to begin the year. alix: this is still a person-to-person business for you guys.
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if the reopening is lumpy or than we expect, or borders do not all of a sudden go wide open, windows that delay the benefit you could see? mark: what will be fascinating is the run-up to chinese new year. it is early this year. after that, the speed with which visitors come southbound. if the visitors come southbound in numbers we used to see during the course of 2019, that $100 million i spoke about will come through to fruition quickly. in reality, we expect a more gradual increase in numbers of people coming down to hong kong from mainland china. at the moment, the numbers are about 6000, 7000 today. the previous year, just 2000 today. at full flight, it is a million visitors a week from mainland china into hong kong. we have quite a way to run yet. my sense is it is going to run and build through the course of this year and next year as well. guy: mark, good morning.
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it is guy, in london. you have a huge team in asia. that team travels around asia. the restrictions placed on hong kong were hugely problematic. do you think hong kong has been damaged as a result of what has just taken place? do you think that singapore has been enhanced? has there been a power shift as a result of this? mark: i think without a shadow of a doubt there has been damaged to hong kong in the short-term. it is a very brave person that is going to bet against hong kong. it is an amazingly resilient market, and i expect to see people coming back into hong kong, especially if you have those million visitors coming back from mainland china. i think it is going to be vibrant. i was there four times last year. each time i was there, it became busier, more energetic, more exciting. i think hong kong will rediscover the energy, the
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focus, and the vibrancy it used to have. i think that will bring people back into hong kong and bring business back into hong kong. alix: what products have shifted that you may be offering in asia and greater china, based on covid? mark: we have seen an increase in health and protection. we had an increase in health protection products and policies over 2020. the first half of left -- last year, we saw another double digit increase in health and protection products. i think covid has made consumers far more aware of their human frailties and the need to get some type of protection, especially in markets in asia where the state does not provide much in the way of a backdrop or support for difficult times. so having some type of protection, some type of cover, is very valuable not just for them, but also their extended families, because that is such an important part of asian culture. guy: let's talk what your focus
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on asia. it has been a few years, effectively, since we had the split with the london operation, the european operation. does the london listing still makes sense? has the covid story delayed may be a greater focus on asia? i know you guys in the past have made it very clear you are looking for more asian investors, more local investors. you moved the times at which you have your calls in the morning, to make sure that analysts are able to get onto those calls and have their focus. has that process been delayed? does the london listing still makes sense? have we seen a delay to may be a refocusing of that listing toward asia? mark: that is a great question. asian investors are starting to look at us in a very different way than they have looked at us in the past. i think we have started to see a greater appetite for asian
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investors to invest in the company. i think what you are seeing as well is an uptick in terms of awareness of how we are different from some of our peers. the london listing at the moment is still with the majority -- where the majority of the stock is traded. we have seen an increase in liquidity in the hong kong line. we raised on the hong kong line to try to increase liquidity. we are beginning to see some shares move from the london line into hong kong. it is an improvement, so that is encouraging. we have about 40% of our stock owned by u.k. and u.k. investors. it is quite a high hurdle to be able to move that. i think from seeing other companies relocate their stock to different listings, it is a multiyear process. i think it is going to take us time. we need to continue engaging,
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continue spending time with investors. i think we will see more stock moved to the hong kong line. alix: your interim ceo. you have a lot on your plate. are you ready for this transition? how is it going? mark: it is great to know he will take over. he has been operating in asia for many years. he was at citibank, so he knows the region. he knows the industry very well. i think it is absolutely right that prudential has an asian ceo to take the business forward, because that is who we are. when he starts at the end of february, he is going to come straight in, and two weeks later, he has the pre-lim results to do. he is fantastic and i have no doubt he is up for the
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challenge. alix: mark is definitely excited. thank you for joining us. ♪
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alix: u.s. stocks staging a solid rally with cpi numbers out tomorrow. >> it is impressive. this is the fourth update in a row for the nasdaq 100. but look at this. we are looking at a new series of higher highs even in this intraday period. the bulls are really out. that is what we have seen. 2023, not starting off in such a bad light. in terms of the technical analysis -- the idea that the
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bottom was back in october, whether this will prove true, we would have to take out the high here, and this. but the dow has done that, suggesting maybe the s&p 500 is going to follow. some people think the dow is too narrow. it's cyclical the value tilt has been more recent. the sectors on the year, it is pretty extraordinary. the s&p 500 consumer durable index is up almost nine -- 9%. that includes homebuilders, appliances. retailing, that is mainly amazon. airlines and metals both up 15% on the year. 2023 is starting positive for stock bulls.
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guy: it did not feel that way this morning. the depth -- the faa lifting an order that grounded flights earlier due to a system outage. priti: we are seeing a ripple effect. flight delays across the country. about a thousand flight cancellations. the expectation is this is going to end by the end of today. tomorrow, everything could come back, but we have warnings coming out of delta, united, southwest, that these changes have really impacted their schedule. even a two hour delay on a domestic flight can be pretty painful for a lot of these airlines. guy: kriti gupta at laguardia. a recovery, but the effect could last a while. balance of power is on bloomberg
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television and radio. alix and i are off to the cable show. we are watching carefully the ongoing strikes. ♪
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>> from the world of politics to the world of business, this is balance of power with david westin. ♪ david: from bloomberg world headquarters in new york, welcome to balance of our. the big news tomorrow is likely to be the cpi numbers that takes another look at it elation with expectations of it may be coming down. we welcome the professor of


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