guy johnson. ♪ guy: tuesday the 14th. 30 minutes into the trading day in the united states. from london, i'm guy johnson. alix steel over in new york. welcome to "bloomberg markets." cpi coming in a little lower than expectations. used car prices dropping quite sharply. i guess that is transitory. alix: maybe i did time in 12. remember -- time at well. remember, about that used jasper. jasper, my new used car. this is kind of where we are set up. when that cpi disappointed, we had a spike higher within the s&p. dollar dropped like a stone.

a teeny bid back into the bond market. s&p now flipping into negative territory, down by 0.2%. financials still the outperformer. you wonder how long that is going to last. if you have higher ppi, not as high cpi, where is the margin squeeze? that's the question in the equity market. then you get an even bigger bed into the bond market in the u.s., yields down by about four basis points. do we wind up seeing margin pressure? what does that mean for long-term growth if inflation is transitory? crude moving on its own. maybe an inflationary impulse, but this is about another storm going to have the gulf coast. we will talk about that in just a second. guy: i think it is interesting that stocks are struggling to hold on the gains. dave wilson was pointing this out earlier. initially out of the gate, reasonably ok. then starting to fade. i think that may be a signal

that maybe things are tougher than we thought in the equity market. u.s. consumer prices a little less than forecast in august, suggesting some of the upward pressure on inflation may be beginning to wane, or maybe this is just a delta story. airline fares coming down. used car prices, i will continue to reiterate this, also falling fairly sharply. mike mckee, bloomberg international economics and policy correspondent, joining us now to dig through the details. michael: you call this disappointing, but he was disappointed? jay powell is not disappointed. if they are looking at margins for corporate profits they might be disappointed, but let's see how this all plays out. a 0.1% gain in the core rate was the real surprise, only up 4% on the year. it is definitely slowing. used cars down 1.5%. airfares were down 9.1%. car rentals down 8.5%. here's the case of a problem-solving itself. car rental companies sold off their fleets at the beginning of the pandemic get it went into

the used car market to get more cars, and drove up the prices. now they've got their fleets. used car prices are down. car rental prices are down. hotels and motels down. hotels and airfares maybe a story of the pandemic because with the rise in the delta variant, people traveling a little less. but it is also the end of the summer, and people are going back home after vacation, so that may be a reason as well. let's take a look at an area that is a real surprise, and that was housing and food. people expected that we might see a rise in the food price, food away from home, because restaurants have to pay more to get people to come back to work as waiters in which assist. it doesn't happen as waiters and waitresses. it doesn't happen -- as waiters and waitresses. it doesn't happen. same true with housing. housing not showing any real movement from the last couple of months, even though we have seen this 13%, 14% increase in home prices over the year.

the question becomes where does it go from here the fed. it looks like the bond market is betting that the fed is either going to stay on track or slow things down a little bit because you are looking at five year breakevens here. they immediately fell off a cliff. inflation not a danger to the most sensitive area of the curve to the fed right now. alix: mike, thanks very much. in my defense, i bought jasper in july. some breaking news on what happening with the 10 year come a session low below the 50 day moving average at 1.28%. the main event in new york city last night was progressive congresswoman alexandria ocasio-cortez using new york's premier fashion event to make a political statement. she wore a white dress with the message emblazoned in red, "tax the rich." it comes as divisions within the democrat party are exacerbating

president biden's struggle to get spending proposals. we love it. it is like $300,000 to get into the met gala, and she says tax the rich on her grass -- rich on her dress. annmarie: to our defense, a number of elected officials are invited to the event every year, and another congresswoman was there with a message on women's rights. what this comes down to is what is happening right now, and a big debate right now in washington, d.c. regarding the tax plans for the reconciliation bill. it is going to be debated day and tomorrow in the house ways and means committee before it goes to the budget. one thing you mentioned is that not every part of the democratic party is getting what they want in this. they are going to have to be compromises. divided administration is coming short of some of the higher rates they wanted you look at the likes of capital gains.

they want to just under 40%. it is not getting anywhere near there. when it comes to corporate rates, it is a little bit higher than what moderate sediment -- moderate senator joe manchin said he would vote for. it is going to be a big back-and-forth fight because a lot of these democrats have different views on how you should be raising taxes in terms of income and as well as assets. guy: thanks very much, indeed. bloomberg's annmarie hordern joining us from d.c. let's turn our attention to wall street. goldman sachs is set to beginning a new cfo. stephen share going to be replaced. joining us with the details, wall street reporter sonali basak. why is he going to be the new cfo? what has this guy got to offer that others don't?

what does it signal about the direction of travel like goldman sachs? sonali: musical chairs again at goldman sachs. it is certainly a big deal. when he had come into this position as cfo, it was an early move as david solomon was named as cfo. now dennis coleman, the global head of financing, will be stepping into that role. another investment banking veteran, finance particular. we see goldman really leading in the financing universe. i also want to mention another big move, beth hammock stepping into dennis' role. it is unclear according to my sources whether she will be remaining as chair of the treasury borrowing advisory committee, the treasury's bond whisperers. she's a very important person in the market, and certainly at goldman sachs taking a new role. alix: the new york times has a

piece that elizabeth warren is asking the fed to break up wells fargo. sonali: they've gotten another regulatory penalty just as they were looking like they were turning the curve here. i also want to mention, an addition to this report by the new york times, elizabeth warren sending this letter to jerome powell. you also have last week's senate banking committee sherrod brown saying wells fargo's new fi -- new fines show that the bank is too large to manage. it is unclear what this means for charlie scharf's turnaround, though it pose competitions. alix: -- pose competitions. alix: the other top story where watching is -- pose complications. alix: the other top story we are watching his china as restructuring looms. joining us with more is timothy tan of bloomberg intelligence. what do we know? how bad could it get?

timothy: in our view -- [indiscernible] the recent approval to allow the company to renegotiate terms also means that authorities are giving the company time to do this. we believe that the inventory liquidation is the only way for the firm to get its liquidity situation under control and financial leverage down. divestment may be done by m&a or complete sale to other real estate firms in the country. private firms are unable or unwilling to be competitors still, it will have to be done -- so more is not generated. guy: timothy, thank you very

much, indeed. greatly appreciated. hurricane nicholas has made landfall in texas, bringing torrential rainfall already that is threatening to unleash flooding in houston and in other parts of louisiana, which is still recovering from hurricane ida and the flooding that followed there. david westin is joining us now in houston. talking through what we are seeing on the ground at the moment. we've only just recovered from ida. what is this going to turn out to be like? david: so far it is looking like houston and the offshore oil complex is mostly dodged a bullet. you're dealing with mostly a power loss issue, not so much a flooding issue, although we are still watching for that. 480,000 customers are without power in texas, 95000 and louisiana, still recovering from ida. we know the colonial pipeline, a

key conduit to the northeast, has shut right now due to lack of power, and of course, houston is closed until 10:00 tonight. alix: thank you. we will definitely be watching that, as companies have a hard time getting oil production back online. we are going to break out of this down for you, what it means for the market action, coming up. victoria fernandez come across mark bubble investments -- victoria fernandez,? global investments -- victoria fernandez, cross mark global investments chief market strategist, will be joining us. this bloomberg -- this is bloomberg. ♪ ♪

alix: inflation prices went up surprising, not to the upside. we wind up having higher ppi

prices and lower cpi prices than expected. is that what is worrying markets right now? we continue to rollover within the s&p. joining us with more is victoria fernandez, crossmark global investments chief market strategist. are we in for a rocky 2021 when it comes to earnings? how are we modeling that right now? we were -- right now? victoria: we were anticipating we would see that come down little bit because of supply chain issues we had. we heard it from a lot of food companies like to poke like, from procter & gamble. now it is looking like perhaps does not being passed on, maybe as much as we anticipated. i think we are going to see

maybe a bit of a reversal next month, kind of like we are anticipating in the labor market. we think the delta variant played a huge part of the less than expect it labor numbers, and i think you saw that in cpi when it comes to the transportation, hotels and motels. a lot of that pulls back when the delta variant was increasing, so after that peaks, which hopefully is soon, we will see some of that cpi inflation come back perhaps next month. guy: the big thing that drives the market at the moment is liquidity. you've got all of these worries come up get a margin squeeze, labor shortages, all kinds of factors coming into play at the moment, and there's plenty to think about, yet there's a huge a month of liquidity still out there. does today's data, does the data broadly push us towards the idea that maybe the fed taper comes later in that liquidity lasts for longer? this seems to be the pivotal moment we are all waiting for. victoria: i think the reports we

have seen lately actually puts the fed and a really good position. if you have people saying they need to go ahead and taper now, they have some precedent to do that because you've got canada, reserve bank of australia, the ecb not officially tapering, but reducing their purchases. so they have a little bit of precedents to go ahead and taper now if they want. but coming back to the reports we just talked about, the labor report and the cpi report, that gives them a little breathing room to say september is not the month to announce this. it gives them a couple more months to wait until the next meeting in november. so i think they are sitting in a really good position regardless of which way they want to go. in reality, whether they start tapering in september, november, i don't to get mike's a big change in our outlook. alix: two guys point -- to guy's point about the liquidy issue, and the fund managers survey,

they said that there was disconnect between asset prices and fundamentals. you can understand that is basically because of the fed, and that that disconnect is actually growing. do you agree with that kind of assessment? we saw just in the last few days you have strategist after strategist calling for a correction or being worried about it, yet we have record highs for the s&p. victoria: the liquidity is out there, and it is not going away. the balance sheet is still growing every month. it is still growing, so the liquidity is out there, and people know that. i think that is why you continue to see markets reach towards new highs, only 2.5% off of a new high again. so i think that liquidity is there. it is supporting the investor. they are going to go ahead and keep investing in equities, which we think will trend higher even though we are going to see some rocking us through the end of the year -- some rockiness through the end of the air. guy: which markets?

some have already been underperforming in fairly significant fashion. small caps look like one of those. if we do see inflation abating, that means we start to see another rotation sweeping across the market? maybe we start to see small caps in that segment of the market coming back. victoria: there probably will be multiple rotations. we have seen it the last six months, the question of growth versus value, small caps coming in and the reopening play, and how you want to position yourself. it is really to try to time all of those perfectly. when you ask what equities, i think an investor has to look at their total portfolio and say we like some of these growth names, some of these secular growth names that have done so well and maybe trim those names a little bit, and build that portfolio out a little bit, whether you call it a barbell or a balanced portfolio, and add some cyclicals, add some value names.

that way when you have the choppiness in the market that we anticipate, you have that balance built-in. alix: where? we talked about tjx in one of your top holdings. where do you get that value now? victoria: i think you look at where the consumer is. we really think the consumer is the backbone right now. we know that savings have come down from where they were maybe a year ago, but the demand in this economy is so strong. we are not seeing the demand lag , and the consumer is there to do that. we think tjx is a great way to play that as stores open backup area we like capital one. we talked before that we always liked the credit cards, even during the pandemic, because of the payment component. capital one ties in a little more on loans with consumers, and as we start to open up and as they start to spend more, we think that is a great way you can play the consumer while still having that balanced portfolio. guy: we are going to leave it there. ask for your time today.

victoria ash thanks very much for your time today -- thanks very much for your time today. victoria fernandez, crossmark global investments chief market strategist. coming up, boeing expect sales to bounce back. or on that story up next. this is bloomberg. ♪

ritika: it is time for the bloomberg business flash. i'm ritika gupta. amazon is going on a hiring spree. it will higher 125 thousand workers for transportation and warehouse jobs in the u.s. amazon will offer average starting pay of more than $18 an hour. the company will also offer sign-on bonuses for up to $3000 in some locations. center elizabeth warren once the fed to break up -- senator elizabeth warren wants the fed to break up wells fargo.

the senator says it has run out of time to fix the problems of its customers. last week, regulators fined wells fargo over its management of mortgage accounts. boeing expect mobile jetline sales to bounce back from the pandemic later this decade. that is 5.9% larger than what boeing forecast last year. still, the company warned that the recovery could come in fits and starts. that is your latest business flash. guy: let's pick up and talk more about that. thank you very much, indeed. boeing's outlook, i still slightly struggle with how you could forecast something 20 years forward. we will talk about that in the next hour. let's talk about what is happening with boeing and a bit more detail right now. david wilson breaking down the numbers. over to you. dave: boeing is now talking

about $9 trillion in terms of aerospace and defense in the next decade in the markets that it serves. that is up from $8.5 trillion a year ago, $8.7 trillion two years ago, pre-pandemic. and a roughly even split between planes, aircraft services, and defense in space. boeing getting more optimistic because in part, as they put it in a press release, the global market is recovering largely as boeing projected in 2020, so you've got domestic air travel coming back. they figure regional markets will be next. when you talk about long-haul flights, they will be back to pre-pandemic levels by 2024. you put that altogether, that is going to mean demand for more planes. but when looking at $3.2 trillion worth of spending, a little more than 1/3 of the

total. 19,000 jets. clearly they are optimistic for the next 10 years beyond that because if you double the numbers, you don't get to what their 20 year projections are at $7.2 trillion in more than 43,000 planes. that number is up from year ago. put it altogether together, boeing meets optimism, and so do their stockholders because this is a company whose shares have never recovered from the hit they took as a result of the 737 max fatal crashes and grounding of that plane. alix: it is pretty incredible, those projections, i've got to say. bloomberg's dave wilson, thank you very much for joining us. we will be talking to mark allen, boeing chief strategy officer, in the next hour on the european close. the lack of visibility everyone else seems to have is puzzling to me. guy: the airline industry to me has a very murky crystal ball.

i don't know how you can project forward. they are leaning heavily on a continuation of the pickup we are seeing in freighters. i think they have a problem in the a320 one space. i think they are looking forward to this conversation. alix: they don't even have a chris to ball. they have an eight ball -- a crystal ball. they have an eight ball. shake it and see what comes up. but you were going to say that boris johnson is moment so i. -- is moments away. guy: boris is about to a here -- about to appear behind a podium. i have to say come our podiums are better. i've got lights. look at that. anyway, we are going to discuss the vaccination rates in the u.k.. we'll also talk about what is happening at the relationship between delta and the economy austin goolsby.

guy: 3:30 in london.

we are rapidly approaching that moment boris johnson is excited to appear behind that podium at 10 downing street. the idea of this press conference is that he's going to be briefing the nation on the plan for the winter. we are going to be getting covert shots, booster shots for the over 50's. i managed to just slip in that category. alix: yes, your old. you get a shot next week. [laughter] guy: hopefully my children will be getting shots as well. so all of this is coming together as we prepare potentially for another difficult winter because the flu is coming as well, and that is going to be a problem, too. basically, i also want to segue into what is happening in the states and draw a connection between what is happening with covid, certainly here in the u.k. and the united states, and what is happening with the cpi

data. transitory has been a word we have been talking about for a while. are we starting to see evidence of that transitory nature of this inflation surge starting to come through, or is this basically delta slowing the economy down, and therefore a temporary slow down and inflation is what we are seeing in the august data as well? that is the pitch. u.s. consumer prices basically coming through a little less than forecast in august. maybe suggesting that team transitory is right. part of team transitory is austan goolsby, former white house cheesy economist -- white house chief economist. thank you for joining us on what is a great aid to talk about inflation, with the cpi number coming for. you have indicated on a number of occasions that transitory camp. my question to you, is this delta just slowing things down, and does the inflation narrative cup as we go into winter?

austan: a little bit it is delta slowing things down because the virus drives the economy. you see that in the u.k.. you see that in the u.s.. you see that everywhere. but the team transitory folks like me, we have been saying that these pandemic related sectors, the inflation rate was going to slow down, and now it is slowing down, and people are saying no, wait a minute, maybe it is just slowing down for a totally different reason. i don't think it is a different reason. the thing that was temporary are the bottlenecks. if we have some cooling, they can get the computer chip lance started in asia so we can produce new cars and produce a bunch of electronic equipment and appliances that people want to buy, i think we could have permanent relief from transitory inflation. alix: what does the timeline look like for that?

how long do you think transitory means when it comes to implementing a chip factory or clearing courts in china to the demand pickup? i wonder what the balance looks like. austan: it is important to figure out that balance. before delta started raging out of control, i thought that we would have modestly higher inflation for a year, but that beyond one year of inflation, it probably wouldn't last. now with delta slowing things down, maybe it would be even less than that. i would hope that the fed, when they committed to their new strategy where they are going to look past average inflation rather than just what is happening in the moment, that they would kind of stick to it for more than just a couple of months. that if a year from now you are still seeing rapid inflation, then the fed has got to be

thinking more about permanent. but i think on the six to 12 months timeframe, really suggests temporary is the order of the day. guy: i hear what you're saying when it comes to material shortages we've been experiencing. what we are now starting to see is a shortage of labor as well. the new york fed had a survey yesterday. the consumer is certainly expecting inflation to remain elevated for quite a while, and that in theory should feedthrough into wage demand. how do you see that side working? do you think we are going to see the supply side of the labor market improving in the same way that we are seeing the bottlenecks easing in the material side of what we are watching? austan: in a way, i don't think that, even though i am on team temporary. i think in my view, the main thing that has been leading to the labor shortages is people

that are afraid to go to work because they are afraid of the virus. i think it could make the labor supply problem works in the short run. whether that goes through into wages, that has more to do with due people and do employers view this as a temporary thing or a permanent thing. i still think if you look at the market-based measures, they show something very different than the consumer surveys, which is that the consumers in the market don't view that inflation is going to last for more than yourself. alix: when you look at the small business survey, goldman sachs had one out, 81% see an increase in pricing pressures.

86% said they are concerned about inflation. on a small business, medium-sized business level, what does the world look like for them right now? austan: if you look at supply pressures, it is tough to find workers, tough to get materials. we have gone through this room and bust cycle on lumber prices, on gas prices, on a whole bunch of the prices that they need to operate their business. so it is debt, and you don't know what is going to happen to demand because the virus is up, the virus is down, and especially for small business. it is also a renaissance of the birth of entrepreneurship, if you look at the data. we are way higher than what the

trend has been in the last 20 years. these are some of the biggest years for entrepreneurship that we really have ever seen. guy: which is certainly something that europe is watching with a great deal of interest. we are seeing a similar pickup over here, but we are watching what is happening stateside with a great deal of interest. let's talk about what the policy response to all of this should be. the biden administration is still pursuing a big fiscal spending plan. we are still trying to work out whether or not the fed should be tapering. do we need more monetary stimulus at this point? if you were on the fiscal side of the equation and on the monetary side of the equation, what would you be doing? austan: first, let's think about the fiscal side. in the package that biden is proposing, it is a large package of investments in areas where we have kind of neglected them for the last 20, 30 years.

health care, childcare, education, things in that space, as well as infrastructure, physical infrastructure. they are talking about paying for it with tax increases on high income people. anything that is paid for is not really conventional stimulus. i don't really anticipate that inflation has much to do with the argument over that. that is more an argument over do you make these investments. on the monetary side, like i say, the fed laid out before the inflation began that they thought there would be temporary inflation coming, and they told us that they are not going to overreact to it, that they are going to look at this longer average of inflation, so i kind of hope that for the fed's credibility, they stick to their plan. what is happening as exact what

they predict it would happen. so i feel like for them to change their strategy means to last longer than i thought it was going to last or be worse in some sense. alix: let's put the dude -- put the two together. something i feel like it's coming up is the shift to a greener world, particularly in the energy world, and what the ramifications we are learning are area the texas deep-freeze, for example, soaring gas and power prices in europe. do you think we could be in a situation where this green shift becomes inflationary in the medium-term and a more substantial way? austan: that is interesting. i hadn't thought of it that way. maybe. the thing you are seeing with the green energy is the way that they are gaining so much traction now, they've actually got the cost of those green energies so far reduced that they are more than competitive with fossil fuels. the only question mark in my

mind is that, as you know, joe manchin is going to be critically important to whether or not they can pass that bill, and joe manchin, being the senator from west virginia, has expressed publicly that he is not as keen on a lot of the green energy components. so they are going to have to negotiate that through, and i don't know how much of those proposed things are going to be in the final bill. alix: fair enough. austan, thanks so much. austan goolsby, looking forward to continuing the conversation at another time. coming up, it is the day of the year when apple unveils its newest offerings. we are going to have more on that next. and guy, you are old. guy: i am old, and i am probably going to be getting a shot. we can move on from the over 50 conversation. alix: no, not fair. i don't know. you got more. guy: there we go. i mulled. we've done that -- i'm old.

we've done that now. we can move on. boris johnson is speaking at 10 downing street, starting to lay out some of the strategies that could be potentially used to defeat another huge wave of covid this winter. going to basically keep further covid measures and reserve. not sensible to rule out vaccine passports completely. we are now getting the scientists briefing as well. we will continue to monitor what is coming out of downing street. this is bloomberg. ♪ >> there's been a gradual drifting up over the last few weeks. it has stabilized over the last weeks, but i think we should be careful not to over interpret, nor under interpret.

ritika: this is "bloomberg markets." you are looking at a live shot of the principal room. coming up, the barrick gold ceo at 1:30 p.m. new york, 6:3 london. this is bloomberg.

♪ let's check in on the bloomberg first word news. i'm ritika gupta. tropical storm nicholas tema sure -- nicholas came ashore in texas today, bringing torrential rainfall that is threatening to flood parts of louisiana still recovering from hurricane ida. those floods are described as potential he life-threatening, and they are expected to cross the deep south in the next few days. china will draft internet rules for the protection of minors. beijing reportedly will set up a nationwide platform to deal with online rumors. the government also seeks to have -- for online content. a new survey says more than 2/3 of businesses around the world are struggling to hire employees. businesses in europe and north america reported their higher --

their highest hiring intentions since the pandemic began. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i ritika gupta. this is bloomberg. alix: apple will be unveiling its latest products, including its newest iphone. here with the preview is sri natarajan -- is on on -- is anand. is anything really new going to come out of this? anand: short answer, no. we are going to see momentum continued from the 5g it launched last year or we will see 5g proliferate across a wider swath of nations with infra structure. we are going to see more models available in other parts of the world.

that's the short answer. we are going to see momentum from a units perspective continue. remember that they have an install base almost one billion iphones. how often this install base refreshes the phone is what drives units. there are only two factors in our view that matter for apple, services and iphone units. you improve one, and the other colors. it is a cascading cycle. the more services you have, and makes the iphones more attractive, and one drives the other. guy: is it still a walled garden? anand: we think so. one of the things we take away from the ruling from epic last week was the fact that there is no legal issues surrounding the fact that they had a walled garden and they can charge what they want for it. the question is, is 30% the right number?

can you control the users by not allowing any other payment system? for small developers, it doesn't matter. for the large developers, as a result of this ruling, they are probably going to set up their own payment systems, and they are going to try to make that attractive for apple users. what happens to the middle user base, the mid tier developers, and how much of that moves over to non-apple payment systems? worst-case scenario in our view is about $0.72 eps? is it makeuppable? i make upwards as i go along. alix: no, you're speaking my leg which -- my language. can they make it up with the service revenue on the other side?

anand: the question is, is apple's app store a monopoly? the answer to that was a resounding no. so how do they then build consensus around somewhere between 15% and 30%? in our view, the number is about 25%. so maybe 18%, maybe 15%. how may people move over? those are the questions to be asked. guy: how does apple usually behave around announcement like this? does it matter that we had the -- going into this? anand: that's a great question. usually you don't have something before the product announcement. the product announcement is usually followed by a selloff. this time around, you had the ding with the epic ruling already, so that might be a

little different. the long-term question for longer-term investors for apple is where does this fit in to the grand evolution of the iphone super cycle. in our minds, we are still early in the game, still 1/3 of the way through, maybe half of the way through. so in the grand scheme of things , we shouldn't take away too much from the event. alix: really good set up. thank you very much. to update you on gary gensler, sec chairman, testifying before the senate banking committee, we know he is gone to hit on everything from crypto, bitcoin, spac's, and every thing in between. he says the sec is considering greater disclosures for specs. he says only eight mom number of cryptocurrencies, not securities . he says stable coins might well be securities. all of that will depend on what the sec can actually regulate when it comes to crypto. we will keep you updated on the

headlines as they cross during this testimony. this is bloomberg. >> as i said to other senators, our role is described by congress about the issuing companies, these 7000 or so companies, and the investing public, and to bring consistent, comparable disclosure where investors want it. so, de-risk, investors have been asking for it, and hundreds of companies among the 500 largest disclosed something, but we can bring consistent

♪ alix: 90 minutes into trading in the u.s., equities around the lows of the session. you have a big move in the bond market. the 10 year yield sitting at 1.2 6%, down by about five basis points, around the lives of the session. 1.28 present was your 50 day moving average. we have the yield now below that level. the big move is in the long end. it did start with in the belly of the curve, and then it moved

to the backend as well. if you wind up having inflation that is not so hot in the cpi number, but you have a strong ppi number, you get that squeeze and wind up hurting margins for the equity market? the second point, does the delta variant way on-demand -- variant weigh on demand? that is weighing on consumer prices, and that is now weighing on the bond market. guy: just about 30 minutes into the session to go negative. what am i watching over here? u.k. nat gas prices are up another 6.5% right now. gas prices continuing to climb. we will talk about that in the next hour. we are going to figure whether or not this is going to be something that gets worked out fairly quickly or is it going to be fairly sustained. the other story i am watching right now is what is happening down at 10 downing street, just down the road. we are seeing a press

conference. boris johnson is briefing at 10 downing street, talking about the fact that he is unwilling at this point to take some of the measures we saw last winter off the table. boris johnson talking about this idea that maybe we will need to see covid passports being introduced. he's not ruling out lockdowns. these are the kind of things i think the market maybe hasn't fully factored in yet. we came out of last summer with 4000 cases on a daily basis. we are now running at circa 30. we are going to be vaccinated in younger cohorts, but nevertheless, it does seem as though it could be may a trickier winter than boris johnson would've hoped for. he's talking about the fact that it is vital to prevent the virus from being reimported. that doesn't sound like good news for the travel sector. alix: let's paint a picture of what guy is talking about. i feel like he's this really depressing grinch now for the winter time you're going to be at home, cold, no heat, 17 sweaters, and you are all in

luck because the winter is worse than you thought. this is not a good winter you are painting at this moment. guy: it is going to be cold because the gas prices are going to be superhigh, and i am going to turn off the heating. i children can huddle together. i'm sure they will be absently fine. i am painting an incredibly bleak picture. [laughter] i just think the level of certainty right now is quite low. alix: but i think the bar for a lockdown has to be high. guy: absolutely. but i think it is really hard to predict what is about to happen. the administration in london sounding fairly cautious, i would say. that boeing travel story is going to be related. owing sounded optimistic. alan, boeing chief strategy officer, joining us as well. this is bloomberg. ♪

>> the countdown is on in europe. this is "bloomberg markets: european close," with guy

johnson and alix steel. ♪ guy: tuesday the 14th. what do you need to know out of europe? boris johnson laying out contingency plans, including booster shots to protect the u.k. from a winter surge in covid cases and lockdowns that ultimately could follow to be avoided. gas prices continue to surge in the u.k. output from coal plants rising as well. government stepping in to protect consumers around europe. the eu climate chief warning that europe must not see these price spikes as a reason to slow the energy transition. luxury stocks sliding sharply as the sector is downgraded by alpha value, which describes the industry as "area vulnerable -- as "very vulneran