right now -- the countdown to the close starts right now. >> the countdown is on in europe. this is "bloomberg markets: european close," with guy johnson and alix steel. ♪ guy: 30 minutes to the close here in europe. european equities back on the front foot. 459 is where we are trading, but context is important. we closed in europe at session lows in the united states yesterday, so around this time yesterday, we were down circa 3%, 4% in the united states. then we got that monster rally priced in. that is why european equities are higher. european foreign-exchange, different story. the euro is down i around zero point 5%. we are trading back below 1.30%.

we've got weakness on every currency against the dollar. the dollar up zero point percent as we continue to watch that geopolitical tension develop around ukraine. kriti: the selling pressure perhaps easing in europe, still coming in hot and heavy in the united states, and really the best example of this is the russell 2000. we have seen the s&p 500, seen the nasdaq, the dip buyers show up. we have not seen that pressure be relieved for the small caps. we know some all caps are kind of the proxy for broader economic growth in the united states. take a look at what else is rising. the two-year yields, your classic fed rate hike that, the front end of the curve being favored here. the bloomberg dollar index as well higher on the day. this is something to watch as we talk about persistent commodity demand. at what went is that bid for commodities not attractive anymore, given the dollar strength and that persistent

commodity demand showing up in brent crude, up 1.4%. guy: let's get back down to what is happening at the corporate level. some headlines coming out from gm. the company and thing up its approach to the ev story, accelerating its drive to lead the industry. a $7 billion in dish and a one investment being made there -- billion additional investment being made there. it is basically going to buy a more positive, faster switch to ev manufacturing for the michigan manufacturing sites where it is focusing attention. that investment is going to create 4000 new jobs and the retraining of another 1000. the company is talking about the idea that this chip shortage, which has held this industry back, is going to persist through 2022. kriti: we also have more news, breaking news after breaking news stateside, this time on the semiconductors. you do have the commerce secretary calling on congress to

pass a measure to boost that chip production. she is also saying the semiconductors supply is very fragile, with concerns that could persist into on a 22. we will see of some of these forecasts are actually going to be relieved 2023. it is fascinating, two years out from this pandemic crisis, we are still dealing with these issues. guy: how much longer they persist for i think is a key question, particularly for these industrials. it is a factor we have put to the equity market today, just one of the factors we are trying to think about. that comes to our question of the day. u.s. equity markets are lower once again, sharply lower. what is behind today's slide in stocks? let's bring in joost van leenders, senior equity strategist at kempen capital management. what do you thing is happening in these markets right now? you have a series of things investors need to think about. we are coming up on the fed

tomorrow. we've got the situation in ukraine continuing to develop. we don't know what is going to happen there. we are watching the earnings story. pull it all together for me. how are you think about these markets and the really whippy price action we are getting? joost: there's a lot of things coming together. we had the rise in yields, the threat of higher yields and a hawkish fed. the markets started to cope with that overall, not certain sectors or particular stocks which were hit hard, but the story in ukraine is adding up. we are in a bit of a growth soft patch, and i think that is all coming together. how long that will last, i don't know, but when you look at the earnings season, that seems quite ok to me. growth is a bit lower than in previous quarters. we knew that was going to happen. there is still an upward

surprise about it percent, which is looking pretty good. i think it is about fed and what powell will say this week, and the geopolitical tensions, of course. kriti: i am curious how you price that into the stock market, especially into those european stocks that do have that exposure, and of course the european consumer does have exposure to those rising gas prices. how do you square what is going on in the commodity space with what is going on in the equity space? joost: i think it is very difficult to have this priced in. we don't know if there is going to be a russian invasion into the ukraine. if it invades, smaller or larger scale, we don't know if gas will keep flowing into europe. luckily we are getting to the end of the winter, so governments may compensate. we see that they are trying to get gas from some other places, but obviously if those gas flows

will stop or be lower, then you have a very difficult situation in europe, so for the time being i thing it is very difficult to assess. we have not really positioned ourselves for that worst outcome. i think it is difficult to have a situation with a large potential impact, but you don't know really how big the risk, how big the chance that there will be a negative outcome that will happen. guy: what does that mean for equities, in particular european equities? how should i be think about european equities as an investor now? joost: we still look positively at european equities. when you look at the growth picture, it has been weakening. we have the prospect of this improving with the pandemic going in the right direction. the earnings season looks quite ok. the numbers, the expeditions are

not that high, so that is easier to beat. valuations are low, so actually we have been discussing whether we are at the point where we want to buy more european equities and not sell them at this moment, but we have not taken that addition because obviously, the assurances are very high. kriti: thank you very much. we really appreciate your time. this is really the question of the day. of course, as to why stocks are sliding, do you essentially take your money out of the u.s. market and put it elsewhere? do you put into commodities? it seems like there's not really a consensus on where that money goes. guy: and it is a relative trade. am i going to outperform relatively if i put money to work in the united states or europe? and if i do make the choice either way, am i still going to get an absolute return? arbors market going to go down, just one less than the other?

i don't know the answer to that. the u.s. looks like it's got stronger growth right now. i come back to the gina raimondo comments. the global chip shortage is going to threaten through 2022. these inflationary pressures are going to exist for a while. maybe longer than we anticipated. does europe have a smaller problem with inflation? i don't think we quite know the answer to that question yet without understanding what is going to happen in ukraine. maybe the gas story completely blows that up and we see superhigh energy prices causing huge problems for europe. i think it is too early to call at the moment. very hard to make a decision. kriti: in the face of that, you look to nontraditional assets, currencies, commodities as a kind of proxy for that lack of yield you might find in stock and bond markets? we are them to have that conversation coming up. boris johnson troubles get worse now that police are involved in the investigation into pandemic parties. how will markets react if the controversy forces the prime

ministers to step down? we will talk about it with jane foley, head of fx strategy at rabobank. this is bloomberg. ♪

pm johnson: any attack on its neighbor will be followed by further signs in on russia, helping ukraine defend itself, and by increased nato resins to increase our allies on the eastern flank. guy: boris johnson speaking earlier today. a chance to talk about something other than what has been going on inside 10 downing street.

the focus on foreign policy probably a welcome break. the growing controversy over allegations that he and his staff held a series of parties that broke government pandemic rules at the height of the lockdown really the major story surrounding boris johnson. today we understand that the police are now investigating a number of those parties, and we await the gray report into what exactly happened. joining us to get a sense of how much longer boris johnson may last as prime minister, bloomberg's david merritt. the involvement of the police is a significant step in the wrong direction for boris johnson. david: it really is. listening to the commissioner this morning, we are all waiting for the gray report, but she tender revealed what is there. she said they have been given information, and that prompt of the police to say they are having to investigate for criminal behavior throughout these events. so the kind of answer is there for you to see that clearly the evidence is bad enough that the

police felt that they had to act. a pretty shameful spectacle to have the police announcing investigations of an event right at the heart of government. boris johnson today also talking in the comments, trying to get a bit of positive spin, saying it is a good thing because it is going to draw a line under these events in the eyes of the british public. i think the truth is very far from that. i think it is a very shameful event for the prime minister to have to admit to, and i think as the drip of these things keeps coming every day, his personal poll ratings only keep going further south. kriti: guy hinted at this in his intro, but how much can the russia-ukraine conflict, essentially the foreign policy story of the u.k., help or perhaps hurt boris johnson's personal politics? david: one of the problems with this ongoing scandal is about credibility. we had the former chairperson of the conservative party talking last night, and she said in the eyes of the world, this is a death by 1000 cuts.

it is not just about boris johnson's reputation at home. it is around the world as well. these are serious problems that nato and the western alliance are trying to tackle. the problems in russia and ukraine. nobody at home, and potentially know what around the world, is listening to boris johnson. britain is a victim or of nato, trying to assert itself on the world stage. of course, this was boris johnson's big plan for post-brexit britain, and being consumed by these controversies at home, that is not where any british prime minister would want to be. kriti: bloomberg's david merritt, thank you very much. fascinating. if johnson is out, how would financial markets react? joining us is jane foley, head of fx strategy at rabobank. let me put this to you. what happens if prime minister boris johnson is actually expected to step down? jane: i think there could be some relief in the pound. certainly if we look at what has happened to the pound over the recent weeks since we have had all of these accusations,

sterling has held pretty well, and that is largely because of the end has patient at the bank of england could be hiking interest rates as soon as next month. that is the main factor, economics. but i think if we step back and look at the bigger picture sterling, perhaps we see some thing a little less attractive, and that is since we've had that exit referendum in 2016, sterling has not come close to winning back the levels it was at ahead of that referendum, suggesting that really, in the last years, there has been some element of political risk pushing down on the pound, and therefore if we had strong leadership return to the u.k., perhaps there could be some relief. guy: there are some suggesting that the party politics may influence boris johnson and his chancellor rishi sunak to remove the national insurance and cory we are going to see in the u.k.,

this labor tax that is imposed, because of what is happening at the cost of living squeeze. if that were to happen, and whether it happens for economic reasons, for societal reasons, or party politics reasons, would that give the bank of england little bit more wiggle room in terms of its ability to raise rates and therefore to push the pound a little higher? jane: i absolutely think that is right. if we see what the money markets have priced in for u.k. rates this year, it is about 100 basis points or so by the end of the year. in our view, that is too much. we think they will go again in february. assuming we do get that april tax hike, we are really going to have quite a lot more news about the cost of living pressures on the u.k. consumer because it is not only about the tax rise. it is of course about gas and electricity prices. by then we will be through the winter. people will have really seen what their energy bills look like. so price inflation will be higher as well. all of these things put together

we think, as things stand, the bank won't be able to follow through with those 100 basis points of rates, meaning that sterling could be vulnerable perhaps in the spring or the summer as they get priced out. if they don't do that tax hike, monetary policy is more likely to go up, so again, we could see those interest rate expectations endorsed and sterling finding support on that. kriti: we have to talk about the geopolitical conflict at the top of the headlines, russia and ukraine. talk to us about the ruble here. we are looking at close to 80 rubles to the dollar. what is next for the ruble? it is testing that key 80 level now. could it weaken further? jane: it could, and that the bins on the news of whether or not there are lucky to be sanctions. clearly it has we already quite substantially in the last few sessions, and the last week or so. if there are more signs of tension building, if sanctions

become inevitable, i think the russian ruble could fall further. it is quite difficult to gauge how much growth impact there has been from sanctions. putin would like to project that perhaps the russian economy has not seen that much reaction. an awful lot of western economists suggest that is not right, we have seen the russian economy lose a lot of growth potential as a consequence of those sanctions. that is a line that many investors would go by, and certainly if the economy in russia looked likely to be structured by -- to be struggled by sections, i think the ruble would suffer. guy: how would the hero we act -- the euro react? gas prices would likely go up fairly sharply. europe is an industrial heartland, and other result of which, there would be an impact there, but there could also be in place neri impact as well, which might force the ecb to take action.

how do you think the euro would deal with that? jane: i don't think the euro would like it. if we look at the inflation impact, i think that would only be a short-term impact. it is not the right sort of inflation. the inflation that central banks like to see, or at least if they want to raise interest rates, is demand generated inflation. they can repress that with interest rates. costs, that is the sort of inflation that eats into consumer pockets. energy prices, food prices go up. we end up buying less of everything else and spend our money on food and energy. so if the euro were to go up on the back of that expectation that ecb rates would go up, i don't think it would be very long. i think very soon we realize that that sort of inflation, another pop higher and gas prices would actually create demand to fall, growth to fall, and quite destabilizing. i think we would see lots of people in various different countries in europe really quite

unhappy about pushing back on their polity -- about it, pushing back on their politicians. kriti: does that mean they go back to the haven trade of 2021? the bloomberg dollar index is starting to creep back to those 2021 peaks. do you start to see flows going to be dollar, into the yen, into the swissie? jane: i think the dollar of the three right now is probably the favorite just because you are getting paid. you're getting yield on dollars that you would not get elsewhere. the competent poly positions of the swiss and the yen -- competent policy positions of the yes and the yen -- of the swiss and the end are unlikely to change, so i think the dollar would be the safe haven asset of choice. guy: in terms of being more nuanced on what is happening with the dollar, how should we think about the dollar not broadly, but against individual pairs?

hungary surprising on the upside. latin american countries leading when it comes to hikes. we've got the fed tomorrow. if the fed is cautious and other central banks are raising rates more aggressively, how does that affect the dollar story? do i think about that as a bloomberg dollar index story, or do any more nuance or do i need more nuance? jane: i think we have to think about this in isolation of the risk story. if we take away the risk of an increase in tensions on the ukraine border, we can look at the economics. we got through member that if there were an increase in tensions, i think the dollar would just rise. but if we look at the economics, i think as we go through the course of this year, we are going to see more central banks raising interest rates. australia, we saw much stronger than expected cpi inflation data this morning, and the market is

getting a bit more excited about having to change its dovish tune, and some of that might come out in the every first meeting. so we will see i think the dollar struggling to hold some of its gains, certainly in the latter part of the year, perhaps as the market begins to focus more on ecb normalization, but i think we need to look at the rates story against the various individual currencies at the moment. guy: still a big deal tomorrow. it is going to be fascinating. that could really change the narrative significant a. jane foley, rabobank head of fx strategy, always a pleasure. thank you. this is bloomberg. ♪

ritika: it is time for the bloomberg business flash.

i'm ritika gupta. shares of eric -- of ericsson rose the most in almost a year. ericsson has had to do with supply chain problems. >> supply chains around the world are very constrained, and it is difficult supply situation. so far we have been able to cope with the supply constraints, and the uncertainties are going to be here for, i foresee it into 2023, actually. ritika: ericsson sales sell in china, but that was offset by demand for 5g and the rest of the world. unilever plans to cut about 15% of senior management roles, roughly 1500 jobs. bloomberg reported earlier that the ceo believes the number of managers at the consumer goods giant has slowed innovation. those cuts come at a time when activist nelson culp has

taken a stake in the company. guy: thank you indeed. interesting to see whether the playbook works this time around. has had some interesting impacts. p&g obviously stands out. but it is going to be i think a story of trying to upgrade some of these companies in terms of the growth outlook. demand is strong everywhere right now. you've just got to be in a position to take advantage of it. ericsson, one of those companies to be able to do just that. you saw huge upgrades in terms of the numbers, certainly beating expectations in acing that into way. kriti: talking about those activist investors in particular, kohl's and peloton both getting those. i wonder if this is the year for the activist stake. guy: european stocks coming to a close. this is bloomberg. ♪

guy: wrapping up the session in europe.

it has been in incredible 48 hours for global markets. europe is higher but you need to see this in the context of yesterday's session. a sea of green, the cac up .8%, the ftse 100 up 1.1%. pound weakness adding to the upside for the u.k.. this time yesterday we were closing european markets with u.s. markets at session lows. then we got that monster rally, which europe did not get priced in and has priced in today. that is why it feels like there is a disconnect. let's talk about how the session today has upon. you need the context of what has happened. it is a relatively tight session. we did see a move lower around an hour ago as the u.s. markets opened and dropped sharply. we have, off the lows. u.s. market still down hard.

not only today's session but the boat -- but the two day session story. every sector is in positive territory. telecoms are having a good day today. we will talk about the numbers in just a moment. energy is doing well. the miners back on top. bonhomie id of the market you have technology down, construction down, utilities down. clearly a reaction to what is happening stateside. banks are up as well. let's talk about what we have had in terms of the numbers. erickson out, talking about the idea we have seen a beat in terms of expectations. we have the ceo talking about the idea we will see some supply chain issues when it comes to the chip story. 5g is strong. ericsson trading up nearly 7%

-- nearly 8% today. orpea runs retirement homes. there was a book published that suggest mistreatment of the elderly. the stock has reopened. this is a story the company strongly denies. we need to put that into what we are talking about. nevertheless the stock being punished. then we come in of banking sector and credit suisse. this is a business that has seen significant turbulence. we have seen a change at the top in terms of the ceo and now the chair over last few months. today we have had problems been terms of what is happening with the well business, which is still struggling, and the company is having to provision for issues on a multitude of fronts. clearly the provisioning story remains front and center for investors as they try to put the archegos story behind them.

credit suisse down .9%. kriti: let's take a closer look at that credit suisse story with bloomberg's tom metcalf. let's put this in context. credit suisse has had a tough year. put this into context when we are talking about the warnings for the deeper losses. tom: it is more bad news for credit suisse. most banks are up today but another bad news is bad news for the swiss lender. they are saying we will provide 500 million swiss francs for a legal case and they did not specify what that was against. second they were saying their investment bank is likely to make a loss in the fourth quarter. all grim tidings for the upcoming q4 results. guy: clearly archegos is front and center. do we know if it is related to that? tom: we do not know specifically

candidates would be archegos or maybe there are different issues that have not come to light. that is what everyone is trying to find out. kriti: is there any good news in this story at all? it seems like it piles on top of each other. tom: there is not been any good news for the last six to 12 months out of credit suisse. it is quite remarkable. maybe that is the light at the end of the tunnel. can it get any worse? they have q3 on february 10. in 2022 you have a new chairman, the ceo with the feet under the best. maybe they can start to turn a corner. right now it is all bad news. guy: is that what has affected the wealth management business? do you want to put your money to work with the business having all of these challenges? do you want to put your money with ubs, somewhere else?

what is happening with the wealth management business? this was meant to be where the bank was fitting towards. tom: lenders wealth is wonderful golden goose that has regular fees. it is two things. one is competition. other than ubs you have other banks coming into what has been a real strength for credit suisse. the richest people have wealth managers knocking on their doors so it makes the case for credit suisse harder. guy: bloomberg's tom metcalf on what is happening at ubs. european stocks ramping up the date. let me see what is happening with the ftse. a broadly positive story for european markets. the ftse 100 not seeing much action during the auction. up around 1.1%. let me see what is happened overdosed to day basis. that calculation is more important -- what has happened

over a two day basis. that calculation is more important. two days, down 1.64%. today bouncing a little bit. we will carry on the coverage of the top of the hour on bloomberg radio. taking the air 5:00 in london, 12:00 in new york. live on dab digital radio. if you cannot find is there you can catch the podcast on spotify and itunes. kriti: meanwhile, coming up the biden administration still giving diplomacy a chance in the crisis over ukraine. at the same time american troops on alert to deploy in eastern europe. judy dempsey joins us next. this is bloomberg. ♪

kriti: this is european close. coming up, goldman sachs global head of commodities research joins bloomberg at 6:30 new york time.

this is bloomberg. guy: let's get back to one of the big stories we are focusing on. what is happening in europe and what is happening on the ukrainian border. european governments struggling to decide which actions short of military action would trigger sanctions on russia. meanwhile the united states has put 8500 troops on alert to go to eastern europe. how would that work? what would those troops be doing? we are talking about boots on the ground. which ground and how would they be deployed? maria tadeo joins us now. are we getting any specifics on how this would work where the u.s. to deploy those troops? where would they go? what would they do? maria: it is very early days and this is a very delicate issue. nato secretary-general just now

saying he does not anticipate or were not sent combat troops from nato into ukraine. that would be a redline. in terms of the u.s. deployment you could argue a lot of this is acting as a deterrent for aggression from russia. the risk from the europeans is when you start deploying military action and personnel it could backfire and increase tensions. i want to remind everyone there is now a working dinner happening at berlin between the chancellor olaf scholz and the french president emmanuel macron. the idea is to put on a show of force but also unity. the two big powers in the european union signaling what the european way of dealing with russia can accomplish. the german chancellor has been under huge pressure in germany within his own coalition but also externally with many criticisms. germany continues to be ambiguous when it comes to the

relationship with russia, both on the trading front, the weapons, and politically. nord stream 2 continues to be a big issue. a final thank. we often hear germany should just ditch nord stream 2 but i have been reminded by a number officials that this needs to be certified, and two, if germany were to give up it would started investigation for german companies and also russian companies and that could risk a heavy cost for german taxpayers. all of the options look ugly for germany when it comes to nord stream 2. kriti: let's talk about the u.s. side of the equation. secretary blinken said sanctions are used as a deterrent but once you impose them we -- you lose that effect. what else is at stake? what else does russia have to use? maria: there are two things we need to factor. there are they differences of opinion in terms of where the sanctions are triggered. when i spoke to an official in

europe and asked could they be implement it in the space of 24 hours and he told me yes, we are ready. in terms of the context there is a lot of question about what the sanctions will look like. in terms of the detail, not a lot has leak. you can see this is part of the negotiating tactics. you do not want to put on the table everything you have. in terms of when could they be triggered or how could they be triggered, there is the understanding russia would have to make a move first in the u.s. is clear in backtracking on the confusion that incursion, smaller big, would be seen as a renewed invasion of ukraine. kriti: brea today of, thank you so much for your type -- maria tadeo, thank you so much for your time. for more let's bring in judy dempsey. let's talk about the german role in all of this. we heard maria give us a brief summary but what is your take on

how this plays into the geopolitics? judy: maria said the german role is ambiguous but this german coalition is split because the ministry under the greens once a tougher stance towards russia and the chancellery under olaf scholz is very reluctant. he has been on the fence. he is not said that much about germany's position. germany is key. as the largest economy in europe and the biggest country in europe it should be giving a clear direction but it is not. guy: we are awaiting some sense of direction. let me take you to the podiums that are now out as we await olaf scholz and emmanuel macron. as soon as their press conference begins we will take a listen and see what is going on. how sustainable is the german position? they are not providing leadership?

they are not providing the security guarantees many in eastern europe would like them to deliver. how sustainable is this? judy: security guarantees are another issue. germany cannot give security guarantees to ukraine because it is not nato. this is about the defense of nato members in the east. this is about whether germany wants to do this the european way and not the american way and this is divisive for europe because the eastern countries of the eu, the baltic states and poland, do not trust france and germany as they see the big countries is more pro-russian and they will do a deal while trying to do a deal separate from the united states. this is creating a lot of tension in europe. this is not the time for the two big countries to make deals. this should be a collective effort. kriti: talk about the natural

gas picture and how that factors into all of this. there was talk from the u.s. they would help arrange for the backup flows from qatar. now they are saying they are already producing at full capacity and cannot exit their long-term contracts. what is europe's backup plan if you start to see natural gas prices skyrocket more than they have? judy: europe can perhaps lead on some of the middle eastern countries, but the main problem for europe is they did not use the coronavirus crisis develop the storage facilities. secondly, russia has used energy, particular the nord stream 2, and the energy supplies as a strategic instrument. in some instances a geostrategic weapon. there is military buildup on the border with ukraine.

europe is looking at this wondering, maybe some of the countries are asking why did we diversify earlier and there are great reasons to diversify, but they have been very slow to do it. guy: one of the questions i keep being asked is whether or not the next generation fund, which some saw as a hamiltonian moment for europe common debt is repeatable, and i wondering whether or not a ukrainian crisis would provide an opportunity, a second opportunity for europe to think along those lines, for the eurozone to think along those lines. you think there would be a common approach when it comes to a financial response to such a crisis? judy: it is an interesting question. it is out there in some ways. we had this crisis before with

the chretien crisis. -- with the ukrainian crisis. europe has seen how russia has used gas -- weaponized ga in some ways in europe should have diversified. some governments are willing to subsidize consumers on this, but they have to move pretty fast if they have to get extra gas. the fed is going to be shale gas or energy. it is out there but you have to move quickly. kriti: john authers writes and says he is a big fan. let's talk about what the pan-european response could look like. judy: we are talking about 27 member states with very different views.

we are talking about 27 member states with no common perception . how the nordic see russia and how the spanish and portuguese see russia is two countries. i think the pressure will come from the united states. some of the signals from the biden administration are confused. it will demand immense leadership and i'm afraid it will not come from berlin or london or paris. i'm not sure we'll get a common eu position. the person who will benefit from this is you know who, the boss sitting in moscow. guy: does this then completely undermine the idea -- emmanuel macron has talked about this -- of some sort of security architecture based on europe rather than nato and other features of the current security architecture. if your -- if europe cannot deliver now, you think we will

ever see that architecture developing? a european mechanism for projecting power or providing defense. does that disappear if it cannot be provided now? judy: we have a serious problem with this issue. one can understand why president macron wants this, he wants to work with nato and the united states. france works with united states in the sahara region. european security architecture will not fly at the moment because there is too much distrust in the baltic states come in poland, in the central countries and freight -- in the central european countries of france. they fear france will decouple with nato. there is a residual fear that france will go their own kind of way with having a special relationship with russia.

this is undermining the trust in europe and it is undermining integration of a foreign security and defense policy in europe. we need a new think about what needs a security architecture. using these words in the middle of a crisis is not helpful. guy: on that note, we will leave it. always a pleasure. fantastic to have you on as ever . judy dempsey, carnegie europe senior fellow. we are abating -- we are awaiting the olaf scholz emmanuel macron press conference. in the meantime let's take it on the markets. european equity markets closing higher. in the united states come equity markets under pressure. the russell down 2.24%. we are waiting for the fed tomorrow. the dollar on the front foot. at the bottom, another

significant salon for the s&p. we are down 1.9%. this is bloomberg. ♪

kriti: let's get a check on where the u.s. markets are. the rotation to safety resumes. abigail doolittle is tracking the moves. abigail: the move out of risk is what is happening. the s&p 500 down 1.8%. the nasdaq 100 down 2.7%. relative to safety you can see there is little bit of a bid for bonds. the yen is basically flat. stocks selling up for another day, not including yesterday's rebound. havens not doing that much. what is ahead are big tech earners.

microsoft down 50% on the year. tesla down 13.5%. apple reporting on thursday. amazon is in a bear market during into the earnings report, suggesting the worst case scenario is priced in. that is not the case for netflix . for apple it is super interesting. everything has to do with earnings growth week. there is the expectation earnings growth will slow. last year 42%, for this quarter 14%. a lot of that is apple. let's look at apple stocks relative to earnings. it suggest there is a disconnect. white is apple stocks, blue's earnings. you can see the full year earnings estimates is $5.63 per share, that recommends the single-digit growth and the stock has driven much lower than that.

if they can hit that low expectation for earnings at this time, you could see perhaps there will be some catch up at some point for the shares of apple. at the same time catching a falling knife is a tough time for traders. guy: absolutely. at least of the volatility provides a nice trading environment. thank you very much. let's talk about the next 24 hours. microsoft earnings after the bell. that is one tech story. we also have the main event, the rate decision coming from the fed, jay powell's press conference something to watch. we are also watching what is happening in berlin. the breast conference just starting. we will bring you headlines from that. this is bloomberg. ♪

every day in business brings something new. so get the flexibility of the new mobile service designed for your small business. introducing comcast business mobile. you get the most reliable network with nationwide 5g included. and you can get unlimited data for just $30 per line per month when you get four lines or mix and match data options. available now for comcast business internet customers with no line-activation fees or term contract required. see if you can save by switching today. comcast business. powering possibilities.

>> from the world of politics to the world of business, this is "balance of power" with david

westin. joe: from bloomberg world headquarters in new york to our tv and radio audiences worldwide ,. welcome to "balance of power" i am joe mathieu in for david westin. markets are swinging wildly with stocks lower but off their lows. more in this hour. first we want to look at how the biden administration is dealing with waves of turmoil. joining us is annmarie hordern and emily wilkins live from washington, d.c.. we are watching the stages of the standoff in real time. i wonder when will see this document we heard about. the u.s. agreed to provide a written response following the meeting by secretary of state lincoln at the russian foreign minister.