guy: european stocks go sideways. we are awaiting the earnings season. it is starting to kick in. it is all about margin. at countdown to the close starts right now -- the countdown to the close starts right now. >> this is bloomberg markets european close, with guy johnson and alix steel. 29 minutes to go until the close in europe.

we are all holding our breath and trying to figure out where this turning season is going to deliver -- if this earnings season is going to deliver. we going to wait and see. early indications are stirring down a little today. the pmi data today is not that bad. these diffusion indexes month on month. i think we are still on track for a 50 basis points from the bank of england. we are seeing yields coming down. we are in a bit of the bull market today. europe has got so lucky. so lucky this winter. gas prices coming down. alix: in the u.s. i was

surprised by the pmi, you have a slowing. the input prices rose and you are seeing them being passed along the consumer. that is not so great. we are pretty much flat on the day. if you dig inside some of the worst performers, 3m down. they got a lot of work to do. advanced micro devices also down 2%. it winds up getting a downgrade overhead bernstein. the only reason they are going to be getting customers, new clients is because of heavy discounts and that intel is putting pressure on them. you're going to get a $42 billion worth of supply coming on at 1:00. guy: let's get back and talk more about the pmi's broadly. i think it is interesting takeaways for the u.s. data.

that is also true for what we have been seeing in europe today. in isolation, these numbers do not look clever. these are data you have to read with a sense of direction. the sense of direction is positive. you take a look at the eurozone numbers. it is actually north of 50 again. we are back into positive territory. the direction is upwards. germany kind of floating around the level. the data telling us positive things about europe. as chris williamson was highlighting earlier, there are plenty of bumps along the road this year. the first one i think should be taken with a pinch of salt. even soft data turnaround. alix: part of that is the price issue. the europe edit u.k. prices were

stickier for services and supply chains were better? sticker price is staying sticky. chris williamson talked to us earlier in the hour and broke it all down for us. chris: but even in the u.k., you have the indicators coming up now. its biggest jump in upward confidence since the reopening of the economy in 2020. even in the u.k. you will see this turnaround. guy: chris williamson talking for his numbers. let's get to the analysis we are seeing through this data. what we are seeing in these numbers and in the u.k.

tom, let me start with you. objectively, when you look at this data, it does not look good. are these numbers bubbling out -- bottling out? tom: those four indicators are looking a lot brighter. i think we always knew the start of this year was going to be a fairly grim start. we have the cost-of-living crisis probably peaking in the last couple of months. if you're a business and you are looking forward, you're probably looking toward the end of the year. you'll think inflation will be then it was from the start. all of the surveys recently show that businesses are still hiring. i think that is a sign that the confidence. alix: i do not even know what is happening tomorrow.

zoe, the data that we seem to come is this a green light for as to continue to go to 50? >> the euro number surprisingly went back to growth. what it does mean, the whole danger the euro area is hiking that might push the euro area to recession, that is fading. if there had then a recession, it would mean inflation might slow more quickly in a way that the brain on inflation is not there. we have been -- in a way that that inflation is not there. guy: let's talk about what we can glean from the data that is today in terms of where we are from the inflationary journey. the concern now, eurozone inflation could be significantly more sticky. we are seeing that to a certain

extent in the labor markets. >> what we are seeing overall, the headline number four inflation will be coming down fairly quickly, however how we get from 4% to 2%, which is the ecb's target is the question. what policymakers are saying is, let's ignore the headline numbers we have these base affects. what we really care about is core inflation. that strips out volatile elements, such as food and energy. with that, we had a new record there. 5.2. that is such a high number. we get new numbers next week before the ecb's next decision. alix: what have we learned about prices in the u.k.? is it worse, better? what do we notice? tom: we are seeing price growth

is stronger than we like it. i think it is definitely easing. if you're the bank of england, the one thing you worry about as you would in the euro zone is at the jobs market. bailey has singled out the jobs market in terms of the battle against inflation. playing out in market expectations. in the u.k., trade is expect bank to go for and i have percent with their policy rate and leave it there until the end of the year. in the u.s., i know the trade is -- by the end of this year. we like to keep the policy rate in a more restrictive rate because of the job market pressures. guy: u.k. services number today

down 49.9 two 48 on the nose. to what extent are we seeing the effects of strikes? and the effects of the industrial action broadly within the economy and data. i am wondering if i can read that services slow down anomaly and like other reasons in europe the number comes back. tom: it might be a anomaly. i think it is probably why to read today's numbers on the strikes. we have not seen major strikes impacts. we are definitely expecting some impact in december's gdp number, which are still strikes in the rail sector, postal sector, health sector, all kind of reached fever pitch.

what we will see well depend on -- can agree with some pay deals. alix: thanks a lot. we really appreciate it. coming up, corporate debt has been rallying since the start of the year. is that still part of the fomo thing and is it sustainable? jonathan levine will be joining us next. this is bloomberg.

>> what happened in 22, there was nowhere to hide. >> markets, opportunities to assist. i think our sectors in geographies that are interesting. >> people are looking in 23 to be more helpful. guy: it always makes me happy when i see people wearing coats.

that makes me feel a little bit better as i freeze up in london. let's dig deeper into what is happening with credit, private credit. this is one of the highlights for me. jonathan is dropping by to see us. it really nice to see you. jonathan: it is freezing. great to be here. guy: let's talk about the start of this year. in some ways, it is about maybe last year but may be more so, credits came out of the gate strongly. equity markets in europe came out strongly. when do you make of january? january 24. it jonathan: i am always very careful not to draw conclusion 24 days into the year.

last year was such a difficult year for these market that when the 13 month number into context, it is still a tough run for credit. i think the weren't as bad as people feared last year feared they were actually low last year. i think people are anticipating worse to come but now are anticipated to say it is priced in. guy: last competition i think you sent to you said to were looking for a 3% -- last conversation, i think you said to me you are looking for a 3%. jonathan: that was the right area. it actually turned out to be 1% last year. we think companies have sure it up there balance sheets a little better. should there be a recession, people have been talking about it for a long time. there is a debate on whether or not there is consensus on this

kind of movement does that ever happen. of the best data available is that. we have seen a lot of companies come to us in our lending businesses. we also think that -- different than previous cycles where they are driven by industries. if there is a default, a cycle is probably driven by the broader macroeconomy, it is a top-down more like 08. we do not think the recession would be as severe as 08. even if it is more severe than people are anticipating, you are just not going to see the staggering default numbers that he would have seen in previous cycles. you may see it sustained for a couple of years. guy: you're not in the soft landing cap? jonathan: i am in the soft landing camp but you do not get

comfortable. you have to constantly reevaluate. we are not going to jump at each earnings number and go from one side to another. upon this day we think everything is great and this take you think the world is ending. you have to paint that mosaic and constantly reevaluate your hypotheses. filter out the signal and the noise and focus on the things that will get you paid back. equity stories are different then debt stories. alix: you are based in boston. are you saying it is worse in the u.k. then boston? jonathan: life is all about expectation. when you get off the plane in london do not expect her to be this cold and windy. -- expect it to be this cold and windy. alix: where is it the good value? where is the goodbye in credit -- good buy in credits.

jonathan: it is a couple of things. i think you have to be willing to look at securities that have traded off. where the general consensus is, there's going to via problem. there could be value in like a space. if the companies recover, we think there's some value in securities and debt securities. things that will have called cusp speed where they are in between two ratings category. people overreact to good news. therefore, they are focused on things that have legally downside but have not been priced as a troubled situation. alix: it seems like the market is opening up a little bit.

what are the ripples you see with that that you can take advantage of? jonathan: you have to be able to pick your spots. you want to make sure you are buying this debt knowing that you could own it for a while. there are not short-term trades. people got very fortunate in 08 that the market turned around fast. i think there are different dynamics. i am not saying it will not happen. i think there is not the same magic wand. we are in a different interest rate environment. it there is more -- there is more global issues. buy things you are willing to own for two or three years, do not buy things will think you will have a capital markets take out. jonathan: we're looking at a lot of things. we have fought a few -- involves bought a few we are looking

at the places that are priced at a level that we could be wrong on economic cycle and these businesses could still survive. if they take extra nine months, it is ok, we can sit on it. guy: is your time frame longer now than what it would be? jonathan: yes. trading liquidity has been good early in the year so far, better than it has been. there is the risk that you have the compounding risk, if learning scope soft trading liquidity will get bad and prices will get bad. therefore, we are extra sensitive to shock we are not going to buy stuff with the hypotheses, if this happens or that happens we will be able to punch it out. we might recognize it might be hard to punch it out. that leads to nuanced between the loan and bond markets.

that leads to us being pickier. guy: in terms of the geography that i can put on top of that. thank you for stopping by. are you looking outside the united states more? are you looking within the united states more? the rest of the world is not -- traded for so markets in the decades. people have gone up in financial markets. how has that world now changed? jonathan: we were a global firm with a global footprint. we have been doing business across the globe. our special situations business had the best run in asia it has ever had. there are opportunities to provide private capital in europe, not just traditional privacy, but real estate private credit. the place where the u.s. is the

most attractive market is the place you would be trading and where there were to be liquidity . the liquidity is so much higher in the u.s. markets then it is over here. guy: 25 years old, how has the business evolved? jonathan: that is very kind of you. guy: the business is 25 years old. what has changed in the time? what does the history gave you? what does the history bring to the business as you work your way through what is going to be a bumpy few years? jonathan: several things. we have a history and a number of have the firm within 20 years is really important, that we have a cohesive team that has grown, but we have a lot of

steady hands that have been around a long time. we saw a rush of default, 9/11, worldcom. i can go through everything. that helps remind people we have seen bad things before and at the markets recovered. it is what you do during those times that defines the next five years of success. secondly, how we look at investments. back in 1998, it was very simply long bond, pick the best credit, it did not matter which one you had, rates or stable. over time, that has become much more nuanced. there is a long bond, floating fixed. it has been a -- the markets have grown up in the way that asset allocation matters more. are there is a lot more trading of volatility -- there's a lot

mark trading in -- there is a lot more trading of volatility. how we think about credits, traditionally it was the macroeconomic analysis. today, it is 50-50. we have to consider geopolitical things like the u.s. debt ceiling, on onshoring and tech companies. there are all sorts of things we have never thought about. guy: e.r.a. politicals made -- you are a political major. good to see you. this is bloomberg.

guy: time for the last call. a positive note on the airline sector today.

let's talk about erickson, melissa positive there. it -- less positive there. let's wrap things up get to the close. the close is next. this is bloomberg. thanks to avalara, we can calculate sales tax automatically. avalarahhhhhh what if tax rates change? ahhhhhh filing sales tax returns? ahhhhhh business license guidance? ahhhhhh -cross-border sales? -ahhhhhh -item classification? -ahhhhhh does it connect with acc...? ahhhhhh ahhhhhh ahhhhhh - [announcer] imagine having fuller, thicker,

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guy: wrapping up tuesday's session in europe. i think equities are kind of holding their breath waiting for the earnings season to deliver their message. whether we get that message is remaining to be seen. london is a little bit of a lag. it is interesting to see the pound go down. in some ways they are antagonistic. let's take a look at the session and how it is developed. you can see a little bit of a selloff.

kind of just going sideways throughout the day. we are down 2/10 of 1%. from the sector point of view, let's break it down and show you what is happening. we are getting numbers out of europe, which is interesting. there's a upgrade today. actually, i think it is a downgrade. insurance is outperforming. both positive notes on the airline sectors today. we will get numbers from easyjet tomorrow. commodities, a little bit of slack coming through the market. i am not sure how much a signal there is. individual stocks, i think that is probably where you will want to focus. really strong numbers today with

luxury brands. thursday, i think we get aftermarket. that is the big one. avf today down 2%. the sugar business are also investing heavily in primark. that is probably why the stock is up. i have been wanting to say this today, scandinavian salmon stocks are leaping today. basically, the government in norway is proposing maybe easing up some of the taxation on the salmon industry. this is a part of a taxation

program of those who have been hitting the industries. maybe some -- from the government. let's talk about what will be coming through tomorrow appeared let's talk about rather tomorrow . parts and parts of the narrative that we have been seeing today. a very tight labor market. you have asml earnings. we will see a lot of the chips coming out in a few days. the equipment that produces the chips, watch out for those numbers. upgrades coming through from easyjet in terms of the price target. you will continue with german data as well. the pmi data, really quite positive. the manufacturing side was

better. i'm fascinated to see how it is going to come out. the european economy looks like it has a bottomed out. alix: the soft data moving into the hard data, if things are better, do we see that reflected in the hard data? storage, what do you think about the numbers for tomorrow? -- stuart, what do you think about the numbers for tomorrow? stuart: it is steady or an improvement. even if there is a small decline, it looks like the currency market is prepared to shrug them aside, as long as there are no big surprises to the downside appeared the focus is drifting to central bank meetings. there's more optimism about the european economy about the china

covert policy change -- covid change. even if the pmi's slide slightly to the downside. guy: september, 95, 94. we are trading sly -- try apple 109. what kind of trade are we looking at here. ? >> it is still a dollar driven trade appeared it is still a unwinding of what pushed the dollar high in 21 and 22. it is still quite firm and taking itself back to the may level. the decline we have seen at the dollar since everything peaked at the bottom is a pretty significant decline in terms of the dollar. one that does not often get repeated in this three or four month. old.

onth period. guy: on the one hand, the pessimism over the dollar is strong. alix: there is a argument, if things get really bad you'll see the other side of the smile and money following -- flowing through the data. how much more selling pressure do you then expect? stuart: the starting point for the dollar was that it was oversold. you can argue now it is now oversold and may be a fair value. the reason it has declined, that was the market driving it higher. u.s. inflation has slowed. those impulses and risk story has reversed. people are less concerned about the impact from the ukraine conflict and positive about what is happening in china.

over the coming months they will shift to the other countries. other countries inflation declining appeared in the first half of the year, if not the first quarter qamar the central banks saying we had enough of our rate hikes. if they, the dollar down, they should have a negative impact. it certainly will not be an excuse to sell the dollar aggressively. guy: what is your outlook on sterling? today's data pretty grim. there is a few nuggets in there that points to a positive picture. nonetheless, it seems to be the escape valve for pessimism down today. where do we go with sterling? i am struggling to see much good news that could turn this around. >> we think so.

when you're looking at the economic outlook, it is still expected to underperform all of its peers. maybe the thing it might save it, it will not get the big thing where the market works up to that. it is aware of it and it is in the back of its mind. the market says, this economy is underperforming, why are we even currently keeping the current base levels. that probably provides a little bit of psychological's. guy: do you sell sterling if the bank of england rises 50 points again? the bank has probably has a problem with the labor markets. >> the downside is going to

very well. we do think that this could be the last rate hike, while they may squeeze out another one, the focus should shift. inflation, which still stays hyper towards the economic impact. that may not be in the first quarter, it may be in the second quarter. alix: i want to go to the boj before we end here. the boj was going to turn -- changing your yield curve control. when do you see that pivot point happening? what kind of inflows in japan do you see from asset classes? >> i am sure it will happen. the market seems to have called on that. and might be simply because it is shifting its focus to other central banks coming out. the key thing there, the

inflation forecast for japan, the boj's forecast sees it rising and then declining. it should decline after february onwards. the upper pressure inflation, which will allow the doj, i guess it has to a certain extent or disappear the longer they take to make a move. with the history with disinflation and inflationary risk in japan, it is a different position. i do not think that is going to be difficult for the new governor one inflation is likely to be slowing in height rakes or get rid of the yield control permanently. guy: great to see. great for stopping via. by. a little takedown during the

auction. these are the final numbers in europe. these are the markets that have come a long way very quickly. the luxury stocks will be reporting over the next couple of days. stay tuned for that. and bloomberg radio is going to be the destination for alex and i. we will dig further into the u.k. data. alix: let's talk about salmon stocks. it feels like it is meant to be key to our conversation. two tech companies are about to release results. microsoft sitting right on the one moving day average. we will talk about what to watch. this is bloomberg.

>> you're looking at a live shot of the principal ruling.

the union pacific joining bloomberg tv new york time. this is bloomberg. >> here is the first word. germany is expected to give poland it's ok to send a tank to ukraine. the approval could, as soon as wednesday. it requires approval for the export of its military equipment. in finland, the prime minister says the government may need to reconsider whether to move jointly with sweden toward membership in nato, that is after turkey raised new objections to sweden. the primary option is for the two countries to join nato together. like the u.k., more evidence

that the economy has slipped into the session. reddish company signaled outlook has dropped since the start of the pandemic. the debt deficit rose. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. guy: thank you very much indeed. let's talk about what we will be getting from the tech world. i think you have ti after the bell from the united states. the company is expected to forecast a strong sales. quite confusing given the fact that the rest of the industry does not sound positive. let's try to figure out how the mix match is going to be resolved.

ian, this is the equipment maker that everyone goes to two throughout the kit they need to make chips. they have been signaling a very positive picture going forward at a time where this industry signaling that it is slowing down? how do we square the circle? ian: it is all and less spending. what asml has sent on is the market we own is vitally important. everyone needs the new machines. they will come to us regardless of whether that building in general because the technology is so important. what we will find out tomorrow is just how important it is. the question will be, how much growth? alix: to the point, the longer term picture clouded by whether or not they were going to join the effort to restrict exports of equipment to china.

do you think they come out with that tomorrow? how does it benefit and cloud their earnings outlook. ian: the dutch and the japanese government are both under pressure to basically make asml their equipment providers do with the american equipment providers do come operate under a much stricter regime in terms of what they can export to china. right now, the judge has already told asml you cannot give the chinese your absolute best stuff. china is a very important market if they are going to be more restrictive, then you will expected to be reduced significantly. alix: thanks a lot. i really appreciate it. the other earnings on deck, microsoft. let's start where we are.

microsoft is sitting on the 50 to 100 day moving average. what is going to really move the needle? >> a segment that everyone cares about from microsoft because it is --. i heard it is still twin 5% of their revenue. when it comes to -- 25% of their revenue. 75% is exposed to enterprise i.t. spending. the other 25% is consumer -- that is when the revenue, the gaming segment. maybe the layoffs that they did were more focused that the consumer segment which they can see is not going to grow for the next two or three years. if you try to extrapolate that to the overall market, it is may be a sign that maybe we will not see much of growth in the near term.

that is what microsoft suggested. guy: the markets have been buying tech into your numbers. we have been buying since then. is that buying related to what is happening with the numbers we are about to get? is the market from running and the fingers you are anticipating. >> you can make a case that market is looking for in 24 at this point in time. my thing is, right now it is hard to see any positive religions from any of the companies appeared that is the risk. no matter what you do, they are controlling costs and trying to preserve margins. you will not see any positive revisions because you will probably pull forward five years worth of transformation and two

years during the pandemic. it may be able to pull forward across the board. alix: what kind of declining growth the industry is modeling? 20% growth is ok. not when you are used to growing above that. what kind of deceleration are we going to see. >> now there modeling for mid 30% to low 30% growth. even that is good. it could slow down because now you have two -- what is discretionary and nondiscretionary. a lot of cloud infrastructure is not discretionary in my opinion. guy: we will find out a little later. we look forward to your coverage. this is bloomberg.

alix: you are looking at markets going nowhere fast. abby is tracking these moves for us. abigail: here is the rally pretty impressive at this point. a little bit of a dip. it feels directionless. it would not be surprising if we turn to gains later on in the day. let's take a look at the indexes on the year. it is not just the s&p 500. the nasdaq 100 up a .4%. of -- 8.4%. china tech up 19%. let's take a look at why that matters. it is similar to the dow breaking out ahead of the s&p 500.

this is out of the october 13 possible bottom. why we're looking at china tech in blue and yellow. china tech up 24% appeared the s&p 100 over that but not nearly as much. maybe there is some sort of catchup train. finally, speaking of microsoft, it is higher, not by a lot to some of the other movers we can take a look at. it is higher with tesla. visa and nike. visa in the tech index reported next week. the fcc is investigating that and having a investigation into that at some point. guy: abigail, thank you very much indeed. we are waiting for the earnings. what are we watching for the rest of the day? president biden hosting

congressional leaders of the white house a little later on. texas instruments under microsoft. alix: i am watching certain stocks and reactions. like, 3m. if you do not deliver, you do get punished. it is perplexing that you wind up having -- you know the consumer is bad, when they come in bad your stock still get punished a lot. on the flipside we get ge which bills mixed. i am struggling to understand the removable business. guy: i think everybody is. it is a problem over here in europe as well. it is not to take a while to figure some of the stuff out. in some cases what is happening in renewables and aviation is very similar. it is how you price of the stuff. aviation has definitely been through that. i guess we will hear from them a

little later on. alix: larry culp will be joining us. flying jumping salmon will be on the menu. this is bloomberg.

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 tower television and radio audiences worldwide, welcome to bouncer power. we start the white house were president biden will invite to different groups of people, one democratic leadership in the other new members of congress. to tell us what is on the agenda, we w