guy: european stocks are a session highs. rent looks good. it is monday 23rd of january. 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: here we go. this monday, this is what the session looks like. technologies are the top. chemicals are at the bottom. margin warning in one key chemical company out of europe may set the tone.

session highs, euro has come back over the last hour. pound is negative against the dollar. 1.2369. we get a lot of pmi data tomorrow. soft data at the moment, quite negative but not translating into hard data. cable, 123 -- 1.2372. pay attention to this, this is going to have a potential lead indicator as to what the inflation story is looking like. driving running over a little bit. nevertheless, we are seeing that as a factor. maybe that element we have seen so strongly on the downside from the inflation data starts to turn around. at the moment, stocks continue to push on. alix: same in the u.s., making another run at the 200 day moving average. we broke above that level a couple of times and rolled over. will this time be different?

tech leading the way, nasdaq 100 up almost two full percentage points. it was happening in the semis. amd, barclays had a nice upgrade across the board. the why was interesting. amd poisons -- poised to take more intel for market share. if you have exposure to them, they like you. they liked seagate and qualcomm. checking on the treasury market, supply this week. $120 billion worth. seeing treasuries trade and -- heavier. how we do on the takedown should be interesting. guy: i bumped into a bunch of people in davos last week. one thing that stands out was the amount of interest there was at the world economic forum in -- and the inflation reduction act. it was the star of the world economic reform --form.

europe is not going to figure out how to respond. u.k. has got to figure out how to respond. over the weekend, you get the german chancellor meeting with emmanuel macron, the french president. they are trying to figure out how they respond. take a listen to what was said. />> [speaking non-english language] it is necessary we handle the inflation reduction aid and formulate a european answer. firstly, we have to make sure that as a european union, we are not treated worse than neighboring -- treating worse than neighboring companies like canada or mexico. it cannot accepted local content regulations that are in their cause discrimination of european businesses and their activities in the u.s. guy: europe feels like it has been caught flat-footed when it comes to the inflation reduction act. this is law already, i find it amazing we are at the point this

is now embedded in the statute books in the united states. europe is scratching its head figuring out how it is going to respond. it is probably capable of responding. how i think needs to be decided. europe never moves particularly quickly on this stuff. alix: it is different in terms of how they both are addressing it. europe is on rules, you have to get to zero emissions by the state. etc., versus the u.s. now which is like, here is a ton of subsidies and rewards for building these plants. is europe able to change what it does in terms of regulation, add actual money to it? or, is it going to be tax breaks? i'm not sure. guy: historically, there have been a number of countries in europe that have loved subsidies. rules in place to level the playing field, i think europe has to figure out the rules you're at how those rules are going to be adapted so they can put the subsidies to compete with the united states in play.

it is a tricky thing for europe. europe does not move quickly on this kind of thing here let's get another view on what is happening. alec katz joins us now to give us a sense of how the french are thinking about this. alan, the french were early to realize the impact inflation reduction act could have. they have been banging the drum. emmanuel macron has been banging the drum, talking about the fact needs to act. others are waking up, the germans are figuring out they need to take action. we saw this meeting over the weekend. are we any further forward and --and figuring out what europe is going to do about it? >> a little bit, but not really. you say the french were early to respond. they were, sort of. i have two hats, my american hat and my french hat. with my american hat on, it was surprising how late they were to respond to it. as you mentioned before i came on, this was a bill for a long time in the u.s.

once it was passed into law from an american perspective, it was obvious little was going to change. it took the europeans a long time to come to that realization. they are still coming to that realization. in europe, changes -- laws change all the time. a parliamentary system, you can just change the law. they are only now figuring that out. at the summit, did they make much progress -- france and germany seem like they are on the same lineup. they are both wanting to put in large amounts of money. they want the eu to come up with a proposal that will allow them to provide a bigger amount of money to provide subsidies for their companies. they are worried about a potential trade war. it is slow coming, but finally advancing. alix: put on your array for its -- your beret for a second. can you be prounion and also

like subsidies for certain industries? can all of these coexist at once? alan: totally. that is not a problem. in france, it is a status place. the government loves intervening in the economy, whether labor market or companies. there are a lot of companies that are state-owned or partially state-owned in france and they are happy to give them subsidies. many companies were reined in by the european union which wanted to prevent wealthier companies in europe from subsidizing companies more than less wealthy companies can do. france and germany i believe, would be happy to pour a ton of money into subsidies for companies to build the kinds of factories and rnd centers you need for the future economy, the economy of 2030 and the economy of 2050. guy: great stuff, as ever. i think you look fantastic in a

beret. alix can't do hats. she is jealous. alan: next time, i will wear one. guy: we look forward to that let's get another perspective. tony is the director general of british industry, he says it is the wrong time for a tory tax war and the u.k. needs to catch up with its national rivals with more investment in green energy. this speaks to the same narrative that we have been discussing. tony, welcome to the program. if the u.k. could figure out the inflation reduction act, what would it look like and how quick we could we get there? >> i think the problem is, we do not have the money that joe biden has put into the inflation reduction act, nor ursula von der leyen has put into the european spun spewed the u.k. is going to have to outsmart the others. we have been good in britain with this the last 10 years. we have used lots of market

mechanisms, something called contracts for difference, which is where the government underwrites the risk of the private sector investor. we will have to use some of those assets to compete. there is no way we can catch up with the spending of the inflation reduction act or the european response. alix: when you talk to companies, what specifically do they want? would they prefer a check from the government or tax subsidies? do they need other ways to compete and attract financing into the u.k. out of europe? is it more rules? what is it? tony: what they want is upfront government support for the technologies that are essentially precommercial. that upfront rmd together with technologies to be affordable, adaptable, dispersible. at that stage, the market will kick in. that is the first thing. the second thing they want is to get with the government did on offshore wind. they say, there is a wall of green money that wants to invest

in these technologies. we need to build the right model that makes it a highly investable proposition. if mark carney is right that there is 130 trillion assets around the world looking to go to the best market that provides a return, britain has to be good. we have to make green markets that makes us the best place for the private sector get return. that is hard, given where we have been with windfall taxes and the fallout from the ukraine war. i think britain can have a go at that, being the best place to invest your money. guy: shouldn't this be a brexit benefit? this is a government that talked about how nimble the u.k. could become in a post-brexit environment. you think that is the reality? tony: i do. it has been interesting to watch ursula von der leyen talk at davos last wake to say she would suspend state rules to do that. at brexit, europeans fought so hard to make sure u.k. couldn't break state aid rules.

the commercial reality of these countries is, everybody is fighting for share. actually, we could be agile and nimble. one of the great challenges we have in britain is planning laws are incredibly slow. lots of local politicians do not want to have onshore wind pylons anywhere near their areas. they do not want to have solar panels, thus spoiling the green fields of britain. that is getting in the way at the moment. sure, we cannot compete on subsidies. we have to get much better at planning projects quickly. getting electrical vehicle charging infrastructure quickly. getting onshore wind farms quickly. that at the moment is holding up the british response. i hope the government will crack that thing open in the next year if we are going to compete. alix: great point. it is the same in the u.s. you can talk all you want about funding, but unless you get pipes in the ground it is a different story. do not have the same worker issue the u.k. has. what is the best solution to this? how do you manage a workforce that is still not there, even

though the money comes in? tony: i think this is really tough. british policymaking has turned around and said post-brexit, we do not want to have as much economic migration. exit -- brexit, the boat had to do a lot with immigration. some of the issues we are dealing with, the world over be it people wanting to stay at home post-covid. people retiring early. people having long-term sickness conditions from covid. you are right, the british government is going to have to have bold answers for that because we are not willing to use immigration to get the skills we need right now. that is why today i have put a lot of pressure on the government to say whether or not it is childcare to help moms get back into work, whether or not it is the interrelationship between the benefit system and part-time work, the government will need to make big changes to get skills into the labor market as soon as possible because we are short there. we are not willing to use immigration. i am afraid that is not good

enough. guy: i hear what you are saying about the government. clearly, there needs to be supply-side reform for the labor market to improve participation. what role does miss this -- does business plan that? what does business need to do to make that happen? tony: you are right. because we have had labor shortages the last 18 months in the u.k., firms have been dry -- some of the stuff firms are workingthese blockages. i think firms are getting incredibly nimble and trying to work on -- with less labor. firms in the u.k. are racing ahead on decarbonization. top to my opposite countries all over the world. they think british businesses are miles ahead because of the net zero targets we set early. as yet, it is not transforming itself into an extended leadership position. there is a feeling that we have

done well as an economy up to this point that it is getting harder and harder when people like joe biden pass legislation like the inflation reduction act. alix: we appreciate it. thank you so much. look forward to hearing from you again. coming up, what do you do in an investing situation where you have a rally underway and nasdaq 100 over 2% and european equities still up? insight on the question of the day. is it time to sell the european rally? that, next. this is bloomberg. ♪

guy: it is monday the 23rd of january. i need to give you numbers. year to date, the s&p is up by 4.85%. euro stoxx 50 dollar adjusted is up 11.2%. europe continues to outperform. it has come a long way off the lows we hit october, november last year. the question of the day is, is it time to sell the european rally? let's ask the question to the principal asset management chief asset strategist. what do you think, should we

sell it? >> this has been a tremendous performance. if you think about asking yourself what the key drivers are behind this strong performance, the european gas situation has improved beyond what was expected the second thing, china reopening story is proving to be a little more robust than may have been expected. there are two things which could be sustained. we are questioning how much longer, is it something we can see lasting be on the next six months, next year or so? we are still undecided. one thing that europe is going through is valuations. it is very cheap here that the margin it says any kind of improvement, investors will rush to european stocks. if you are looking from 8 -- standpoint, the u.s. has more challenges, has the economic slowdown ahead of it.

for europe, it may well be that most of it is behind us. alix: if you do not want to be selling it now, could you be buying it now? seema: i think you could be buying it in certain areas. you do increasingly see the kinds of -- the big question is not necessarily, are equities going to do -- going to go down, but the u.s. versus the non-us stocks story. you do feel like there is some kind of traction in which case maybe we could see this as a buying opportunity. from our perspective, we are mutual given -- guy: it was interesting, never experienced this kind of interest before. do you think we have seen a paradigm shift? since 2008, it has been one-way traffic. the u.s. has outperformed. we have had that conversation many times. have we seen a paradigm shift? are we in a different environment now? seema: i think there is a

potential. the reason is, the next five years, there is a general expectation we are not going back to zero interest rates. general expectation is interest rate doesn't go below the 2% level on average. from then, you think what part of equity stocks can outperform? growth or value? from that perspective, it is a tie for value the next five to 10 years. and which region has a greater demand is europe. that is one area which could suggest this is more sustained and a paradigm shift. the big drawback for me, this is where i stop to hesitate. you were just discussing it before. europe is a slow mover. any regulation changes, novel ideas, it takes a long time. i think that will work against europe over the next couple of years. whereas for a long time investor, you want to have a long-term view. i think europe is almost a take it quarter by quarter at this

stage. alix: for the medium-term view, what is the base -- s place to put? is it e.m.? if the u.s. does roll over, at some point it will take everyone else with it. seema: this is nothing we have been trying to way up, for emerging markets, china's reopening story is fantastic. if you get a u.s. recession and the fed is not cutting interest rates, that is a big negative for emerging markets. that is something we would expect them to struggle with. if you are looking over the next year and although we are expecting recession in the u.s., we do not think it is going to be prettily -- partake early or prolonged. the next year or so, maybe this is a good time to be increasingly exposed to merging markets. as a strong growth story, especially the chinese government is genuinely willing to put in place regulatory structure reform and stimulatory changes needed to sustain

growth. guy: let's focus on the u.s. for a moment. we were talking to mike wilson in the last hour. the question we posed to him was, can we have a profits recession without an economics recession? what you think about that? seema: we have been doing the same analysis as everyone else. historically, yes. it is typically, if there is a economic recession, earnings recession is much worse. you have circumstances there has been a earnings recession without economic downturn. typically, it happens in sit -- in three situations in one, prices have gone on. second, dollar has strengthened. third, the fed has hiked aggressively. those are three conditions that have been met. we think maybe you could say there is a question of a soft landing in the u.s. the labor market looks like a potential. for the earnings story, it does seem that this slowdown is going to be deeper than what markets

are expecting. alix: the whole, what happens to the economy versus actual earnings. wait to see you. principal asset management chief local strategist, thank you very much. this is bloomberg. ♪

guy: about to wrap up the european equity session. time for the last call. a look at some more influential stocks and analyst notes. city out with a nice note on remi. talking about a sizable re-rating. this on the china reopening story. later this week, pay attention to what happens in the luxury sector. europe has been driven in no small part by that trade. they got a 200 rating, 179 is where they are trading now. potential upside, they see a

sizable re-rating. let's talk about what is happening in the chemical sector today. it chemicals company that is dragging the whole industry lower today. stopped down by 5.22%. the gap lower first thing this morning. the reason is a margin squeeze. this is something i think the whole of this industry and most industries are looking for. are you going to see margin squeezes this earnings season and what are the calls going to look like? this could be a useful early indicator. you ventas cut at everone -- juventus cut at cheuvreux have been moved to ninth in syria. counting irregularity for the reason of that. i want to wrap up, rio with a strong move. the construction sector, great names continuing to power this

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guy: the rally continues. monday the 23rd of january. it has been a solid january. today, no exception. ftse up by 1.5%. dax and germany up by .5%. we continue to add to the gate and we are not too far off session highs. up by around .5% session highs in and around 15 minutes ago. the sector breakdown is quite interesting today. we may be getting an early look at the earnings season, which is fascinating. technology going relatively well today. you've got chip stocks doing ok. our sector is bouncing back.

real estate yield story, basic resources, a 52-week high. insurance and chemicals at the bottom in. chemicals is interesting. let's move to the single stocks to show you what is happening there. what you've got is symrise, the germinal -- german chemical company. that stock has been mock down -- mark down sharply. that margin story that you are going to hear about time and time and time again as we work our way through this earnings season. how different sectors react to it is going to be interesting. juventus down by 4.94%. i want to bring up what is happening in the mining sector. 52 week highs. a bunch of 52 week highs. european stocks continue to power higher. rio up by .7%. that was today. let's talk about tomorrow. let's get you set up or what you

need to know about what is happening tomorrow. tomorrow morning, you will see gf k consumer confidence data. keep an eye on the consumer, the labor market is solid. what does that tell us about the nature of the economic slowdown? if we see the consumer looking good, that could be the soft landing we are talking about. maybe foods speaking to that narrative. the western family, owner of primerica. a useful indicator of what is happening to the u.k. consumer. then we get into the data. tomorrow is one of the key days of this week. you get euro area flash pmi's. you get u.k. pmi's. we have been discussing that throughout today. what we have been seeing is the soft data and it has flown down considerably, not translating it into the hard data. julia coronado said the two are not necessarily one follows the other. mike wilson took a different view. that is what you want to pay attention to tomorrow. we also get u.s. pmi's.

we will spend a lot of time talking about this tomorrow. alix: this is preliminary. expectations for the u.k., u.k. manufacturing looking at 45.5 which would be a slight improvement. services below that 50 market, interior just a touch. for the u.s., also key, the color on the labor market. let me pull it up on my terminal. guy: [laughter] alix: for the u.s., services coming in at 45.2. not right, but better than we had before. the composite, 46 point four. manufacturing continuing to roll over. steady as she goes until the downside. how about that? guy: those are still negative numbers and diffusion numbers. they are month on month and survey data. i will -- i am wondering to get the markets take on this tomorrow. whether or not companies are

getting a -- accurate is the wrong word, but a perfect response to what they are seeing. it was interesting. cannot remember who we were having a conversation with last week. when you talk to companies about their companies, they sound positive. you talk about the maker -- macro data, they sound more negative because they have been bombarded by people like us with negative news about what is happening with inflation, etc. alix: you saw the uncertainty in davos. no one knows what is going to happen. they feel good about managing their margins and what they are doing. macro, forget it. anna joins us now. thanks joining us, we appreciate it. tomorrow, the pmi's europe, u.s. and u.k. what is the most important and where are you looking? >> if we look back the last few pmi prints, they have been relatively pessimistic in terms of absolute level suggesting

mild contraction in the euro zone and in the u.k.. in terms of direction of travel, though we have seen some improvement and we might see further improvement in january pmi's, especially when we contrast indications from soft data versus hard data where hard data has been suggesting elliptically stronger growth than what we have seen from the survey so far. guy: soft data historically, i am sure your students know what has happened in the past. if we see week pmi's, doesn't always translate into week hard data? anna: not necessarily. not always paid we have seen previous period's where we saw a day vergence -- a divergence of the two. usually they do not last that long. if we look at the last two quarters, pmi have under predicted growth in q3 and it seems that for q4, they are suggesting somewhat weaker growth than what the hard data is suggesting. overall, we would expect the two indications -- indicators to

converge. so far, it seems survey data is weaker than hard data. guy: the data that gets picked up changes quickly. month over month, how they are feeling about the world, etc., etc. china is reopening, gas prices are going down to what impact do you think those two factors are likely to have on this data? anna: when it comes to china reopening, we have seen indications of that fitting into pmi's in terms of supply chains easing and in general, the winter global supply chain disruptions we have seen significant easing on that front. that is partially reflected in pmi's. in terms of gas prices, we are likely to see some easing or reflection in pmi's firstly in terms of input prices. eventually, some lower pressures on companies. also importantly in terms of future expectations of companies eventually indicating some

improvement there. alix: if we continue to see a divergence between the hard and soft data, what is the usual explanation to that? soft data over hard data stays solid. why? anna: soft data is essentially measuring sentiment and given a lot of volatility from news flow over the last few months, that potentially was partially reflected in soft data. whereas hard data essentially is what goes into gdp accounting. in terms of growth indications, hard data is what we are especially closely watching. guy: how the ecb is viewing this data. we have been day loosed the last few days -- deluged the last few days with ecb speakers trying to make their points. you've got the hawks coming out. you can see the commentary on the wall. making negative comments.

are you suggesting we are going to see 50, potentially 50 after that? visco, stournaras out of greece. sounding more cautious. where do you think the balance lies on the governing council? anna: we expect the ecb to deliver a 50 basis point hike. going forward, the path is or data-dependent. if we look at the data unbalanced what we see is activity data is coming in stronger. inflation, headline inflation is declining. when we look at various measures of underlying inflation where inflation, super court etc., there are indications that do not suggest as broad-based improvement as you might think when you look at headline inflation. against this backdrop, we think unbalanced, governing council will stick to more hawkish tone. alix: we talked earlier about

europe's response to the inflation reduction act that we have in the u.s., unleashing extra spending. if you are sitting at the ecb, do you want to see that now or not? anna: when it comes to the ecb and fiscal policy, we have already seen a few cautious comments. first, acknowledging that at the moment, monetary and fiscal policy are moving in the opposite directions. essentially, ecb being very cautious so that fiscal policy or fiscal status trigger more response from the ecb. against this backdrop, i think what they will be looking at when it comes to fiscal response is full dashers to be targeted in order not to trigger even more risks when it comes to inflation outlook. guy: quite happy over at the ecb over one await now, 109 earlier on -- 108, 109 earlier on? the currency has strengthened

significantly. it has been a trade stock, and energy shot. currency with which we buy it has been stronger. how big an impact is this going to have? anna: low energy prices, stronger euro is positive in terms of bringing inflation down faster. however, what ecb is focusing on most of all is wage growth and what it means for core inflation. yes, currency, energy prices all matters. unless we see significant signs of underlying inflation easing and essentially aggregating the risks of second-round effects, stronger wage growth, etc., we would think the ecb will remain relatively cautious. guy: will we end up in a situation where the euro zone has structurally higher inflation then america? it feels like america's inflation is going to come up and come down quickly. i wonder if we will see a longer path in terms of the duration of this inflation experience in

europe. is that how things are beginning to look? anna: if we look at inflation dynamics u.s. versus eurozone, what we see in the u.s. is the initial trigger of the pickup in inflation was core inflation. in the euro zone, it was to start with purely exhorting us energy shock which has spilled over into core inflation. when it comes to declining profile in the u.s., we see given slowdown in demand, we have seen that being reflected in core inflation dynamics. in the euro zone, first given the pickup and wage growth started happening much later than in the u.s. plus the fact that even in core inflation, big part of this pickup was driven by high energy prices suggest that in the euro zone at the moment, inflation is higher. but, would not say it is going to take much longer for inflation to come down. guy: always great to catch up.

thanks you for dropping by, we appreciate it. joining us ahead of the pmi data tomorrow. quick look at where european equity markets have settled for the day. positive session not far off session highs. little fade into the close, to be honest as you can see on the screen. ftse 100 up by around .2%. through the end of the day, a little tick lower to join the auction with these final numbers. we spoke to the cbi earlier on about the inflation reduction act and whether or not that is something the u.k. can replicate. the answer to beat, no. we will be discussing that on dab digital radio, podcasts on spotify and apple later on. alix: guys favorite topic, the weather. it is supposed to snow wednesday. that will be a big deal. we have not had snow for a long time. u.k. national grid asking households to reduce power,

households asked not to use dishwashers and washing machines for a certain period. more on the impact on freezing temperatures around the country when we come back. ♪

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>> you are looking at a live shot at the principal room. coming up, the chief market strategist at fl putnam investment management joining bloomberg tv at 2:00 p.m. new york time. do not miss it. this is bloomberg. ♪ ritika: keeping you up-to-date with news from around the world, here is the first word. poland grants germany position -- permission to send leper tanks to ukraine. it would not stand in the way. failure to work out an agreement on tanks has overshadowed pledges to send more military aid to ukraine.

in the u.k., power credits -- our great is asking some households to cut energy use today and is likely to extend that request to tuesday. a plunging wind and freezing temperatures are testing power producers ability to keep the lights on. e.u. foreign ministers have backed more sanctions on individuals and entities over iran's crackdown on protests. sweden, which holds the blocks rotating presidency, said in a tweet the latest package " targets those driving oppression." the e.u.--the e.u. has previously sanctioned iran over human rights and sending military drones to russia. global news 24 hours a day, on air and on "bloomberg quicktake." powered by more than 2,700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. guy: thank you. just mentioning it, let's get back to the cold weather in the u.k. a frosty start first thing this morning. the issue lies this evening. that is the map across europe. we are fairly dark blue across most of the continent and we are

struggling with what is turning out to be a relatively short but relatively severe cold snap across the continent. let's talk about how the u.k. is responding this evening. i think for the first time we are going to be seeing a number of customers at energy companies being asked to turn things like dishwashers and washing machines off for a period in order to conserve power. we are firing up i understand the coal-fired power stations. rachel morrison heads the team covering the european head of gas and power in europe. walk me through what the u.k. is doing today. it is cold outside. we knew this was coming. what is the plan? >> the national grid identified there would be a squeeze this evening where there is not much wind generation around today and tomorrow. they saw this gap and things you can do are either increased supply or reduce demand. one of the tools they are ready

for this winter was to ask households to use less energy. that is in place tonight for the first time. this is not everybody, just customers who agreed to do this with their energy supplier. they get a discount for not using energy this evening when that crunch time happens. one analyst said you can save 12 pounds by not using your oven this evening during that time. guy: [laughter] rachel: if you can have a sandwich or a salad this evening, you can save yourself 12 quid. alix: i have to wonder if this is successful, does this become the template that works? can we say, ok, the u.k. can manage this stuff and it is not that bad? rachel: yes, this runs until the end of march. i think that is the point, it is getting people used to this idea that in future, we should be thinking more carefully about energy use and linking it to what is expensive. when there is not much wind and much electricity, use less and save money.

i think as more people have electric eagles and electrify different things in their homes, they will start thinking about this more. guy: they are using coal. how much longer can we rely on these relatively old pieces of technology in order to keep the lights on? rachel: this reserve of coal is only supposed to be around for this winter. then, the u.k. has pledged to get rid of coal by 2024. it is there if we need it. last night, national grid thought we would need it and it looks like those stations will not be needed. they will be warmed up a bit, they are ready if needed tomorrow. at the moment, it does not look like we need them. they are there and that is the kind of backup plan, the insurance policy if we do not have enough supplies. we pay to have that, but we have not used it yet. we may still need it before the winter is over. alix: another part of this, houses there can be old and

drafty. is there a government support underway to fix houses and create better insulation, update boilers, burners, make things smarter so they use less energy? that would be in essence, the next step for a long-term plan. rachel: the u.k. does have particularly leaky homes, old housing stock. that is something the government is trying to do. they have tried a couple of times to roll out schemes on energy efficiency, but they have not worked. the uptake has been small. there is a renewed push to do that. you are right, if you have a home that does not leak energy, your bills are going to be lower. it makes sense what holds people usually is the upfront cost of installing extra installation of solar panels or things like that. we expect the government to speed up that. they have been coming under pressure from all sides to make that program happen quickly. guy: a lot of moving parts. rachel, thank you for bringing them all together for us.

thank you very much, indeed. we will see whether the lights stay on tonight. it is looking good. this is bloomberg. ♪

alix: tech stocks crushing, up over 2% leading the overall indices higher. microsoft, intel, tesla report this week. >> s&p 500, take a big piece of this. up 5%. back above 4000, this is impressive especially given the losses we saw last year. it is not just the s&p 500. let's take a look at other indexes on this year. russell 2000 up 7%. nasdaq up nearly 9%. stocks up 15%. china tech, up 19%.

20% this year. we are off to the races. this is an important month. historically if you have the sand clause rally and january higher, it leads since the great depression to basically -- the crash around the great depression, it leads to a 20% rally. let's look at another index that led it. the dow this year, up only a little more than 1% because the dow last year down vest 7% or so. really outperforming, taking out its 200 moving day average last year. similar to the s&p i've hundred trying to catch up. let's take a look at tech on the day. here it is. this is incredible. apple up nearly 4%. tesla up 6%. microsoft up 1.9%. advanced micro, barclays, chips up 8%.

microsoft making the ai investment, $10 million in the coming years pointing to the idea investors are looking past layoffs announced last weekend looking toward the future. guy: does make you wonder whether we are looking at the google search business in that. thank you very much, abigail doolittle on what is happening on the markets. what we are looking for the rest of the day. ecb president christine lagarde speaking at the annual recession -- reception. eu policy chief justin burrell will hold a news conference following the eu for meeting in brussels. the issue of leper tanks for ukraine, high on the agenda. alix: breaking news as we had to break. ford planning to cut 3200 jobs in europe according to ig mattel union. they are going to add added minerals in europe. if the market doesn't hold up, what happens to the? data and markets robert malley, u.s. special

envoy to iran will be joining david westin. this is bloomberg. as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig.

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announcer: 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 to our television and radio other than says worldwide, welcome to "balance of power." we will start with ukraine today, preparing for what the next phase of the war with russia will look like. we heard from the chancellor about how long the war may last. >> we must fear that this war will last for a long time to come, and that's why it is important for ukraine to show we won't stop our support and act as long as necessary. david: prior perspective on