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tv   Bloomberg Markets Americas  Bloomberg  December 23, 2021 10:00am-11:00am EST

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guy: we are 30 minutes in the u.s. trading and it is thursday, december 23. what do you need to know? what are you following at this hour? stocks heading into the holidays with a huge tailwind. optimism is growing that omicron might be breaking soon. we've got vaccine good news. we've got antiviral good news. travel stocks continuing to outperform. we could be heading for a fresh record close. amazing to think about that happening. plus, the 2022 food fight. why u.s. farmers might be planting different crops next year. what is that going to mean for meal planning and inflation?
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from london, i'm guy johnson. my cohost today in london, sonali basak. welcome to "bloomberg markets." what a turnaround for a monday. today feels like a good news day. sonali: you have markets scraping it every bit of good news because remember in that consumer confidence data yesterday, consumers are still worried about inflation. but with spending just in line with expectations, the jobless claims in line with expectations, that merck authorization for emergency use is just the good news we need to get out of the green -- get into the green on a holiday. guy: santa does seem to be in charge finally of this week. let's deal with the data. it is a bit of a data dump as we head into the holidays, so let's work our way through the numbers and what they tell us about the right now. university of michigan. the headline number, 70.6.
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that is pretty much in on patient. in terms of current conditions, 70 42. expectations actually pick up, but think is interesting. now let's get to the real meat of the story. where is one your inflation from that? the headline inflation, 4.8%. it is still an elevated number. consumer confidence around inflation i think is being eroded. you have seen that in the spending number today. new home sales coming through strong as well. we did see something of a rebound in the housing market right now. let's turn our attention to the question of the day. can central banks take this kind of inflation without causing a recession? certainly, central markets are not anywhere near pricing a recession, but you start to look
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under the hood and some of the other data, maybe that is what we are starting to see. lynn initially a table -- yelling a shula tape -- yelena, let me start with you. the fed is saying it is going to hike three times next year. i am hearing a lot of economists saying potentially it may need to go four. history says that when the fed starts tightening, a recession isn't too far behind. what do you think? yelena: i would say it is all in the hands of the consumers. it will be very important to see what consumers do in this environment with omicron and consumer resilience to omicron, as well as inflation, what that does to gdp growth. so i think the fed is very serious about inflation. they are going to tighten policy , and they can absolutely tame
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inflation, no question about that. i think what is really important is what happens to growth. this is not in the fed's hands. what is really important to see from omicron is if it is really going to push growth lower. the fed is very serious about tightening, no question about that. sonali: we normally look at the twos-tens yield curve, and i am wondering, the fives-30's was flattening far before the twos-tens was. i'm wondering if bonds traders should look farther out on the horizon to look at the flattening in terms of what it is signaling for a future recession vincent: i think that is a really good point because the fed is tapering in the belly of the curve. so as bad bond purchases come off, more likely than not you will see some flattening between the fives-30's.
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people would typically say that is potentially recessionary as curves flatten because they see somewhat of a potential for inversion. i don't think that is going to happen. i think the yield curves are going to ratchet up altogether. but you certainly do risk some more flattening because of that space. i think the earlier comment about the u.s. consumer is bang on. we are seeing real earnings declines because of elation increases that he rose disposable income, and we see spending dropping today. potentially withhold first-quarter growth into this quarter with consumers fearing higher prices for next year. guy: how much trust do you put in market pricing around inflation? yelena: i think what we need to see is what happens with the yield curve. that goes back to your question about the fed. the fed will start tightening.
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they will raise rates. but we will need to see. this goes to what vince was saying, whether the yield curve is going to invert. if we see signs of that, the fed will probably step back from that. i think that is the real story to watch in 2022. sonali: to that end, how much faith do you have in the fed controlling inflation? vince: i would say zero. historically, after you leave the volker era, historically federal reserve chairs in the federal reserve as a whole have missed forecasts, and missed badly. we saw a few years ago they thought we were heading into an inflationary period and they raised rates four times in a row by 25 basis points, only to a short time later take them down completely by that whole four
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interest rate increased. i think the fed is on the right track to raise, but the idea that they can actually get a grasp on inflation to be able to control inflation is extremely difficult, and i think the market has way too much confidence in their ability to get that done perfectly. guy: larry summers is talking about a recession followed by stagflation. how do you handicap that? vince: i think stagflation is quite real, to be honest. when you see rising inflation, and we saw a slight downturn in numbers, today, still a very high levels. you see an erosion of spending power in the consumer. that erosion of spending power means a slower economy because you're going to have lower earnings. if inflation doesn't come back down because the economy slows, and this is a supply-side driven inflation, that may not happen. if it doesn't come down and we just don't go up, to me -- go up
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to meet that inclusion increase, then we definitely might have stagflation. sonali: what is the risk that inflation does not start to subside in coming quarters? yekeba -- yelena: as vincent mentioned, this is very much a supply driven sort of inflation. we saw another disruption in terms of supply chains. we can see another spike in inflation. but also, let me just push back on one vincent said earlier. if today's numbers for november personal income, we saw significant increase in wages. that is building on the month of october, so we do see healing in the labor markets. we see that materializing in growth. guy: do you think those wages
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are going to keep up with inflation? because i guess that is the point vince is trying to get at, that if wages don't do that, then that is ultimately going to put a crimp on the ability of the consumer to get through this. yelena: absolutely, this is a very good point. but i think we will continue to see wages growing, and at the same time, consumers are getting some help from savings. remember, the savings glut that was built over the crisis is still there. consumers are dipping into savings. they are enjoying higher wages. i think inflation will reseed going into the next year. it is just that we will see a bumpy road with further disruption, creating risks around high inflation. but i think we are on the right track, and wages will eventually make a bigger contribution than what we see in terms of inflation. sonali: a bumpy road can be very good for traders.
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what is the best year trade that you've got? vince: i would say it is the trade that has held true for the last five years, and everyone seems to try to fight it. to me, there are two scenarios that play out. one is the variant is worse than we think and sticks around longer, and the dollar becomes a haven trade. the other is that that seems to go away, economies really explode to the upside. u.s. rates have to be raised more aggressively, and that would lift the dollar. so i'm a long dollar fan for 2022. sonali: thank you both for your time. coming up, we will continue asking our question of the day, whether central banks can tame inflation without causing a recession. jordan jackson, j.p. morgan asset management global market strategist, joins us next. this is bloomberg. ♪
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ritika: let's check in on the bloomberg first word news. merck's covid 19 pill received fda authorization. together, the treatments provide a new way to keep a sharp rise in infections from overwhelming u.s. hospitals.
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russian president vladimir putin urging the west to move quickly to meet russian demand for security guarantees to diffuse a standoff over ukraine. during the annual news conference today, putin warned that talks -- warned that he does not expect talks in geneva to produce quick results. >> it is not us threatening them. we did not come to the border of the united states or the united kingdom. no, get -- no, they came to our house come into our border, and they are saying we want ukraine to be part of us as well. and you want guarantees from us. no, you are among us guarantees now without any delay. not in decades. ritika: putin made no threat of military action, but said the kremlin will do what it needs to secure russian security. former treasury secretary larry summers's warning of a testing period for the u.s. economy in coming years with the risk of
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recession, followed by stagnation. -- by stagflation. summers says the fed has been late reacting to inflation, and that core prices could tip the economy into a slump. 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'm ritika gupta. this is bloomberg. sonali: thank you so much. let's get back to the question underpinning this market. that is whether central banks can contain inflation without causing a recession. to help us answer that question, we have jordan jackson, j.p. morgan asset management global market strategist. thank you so much for joining us . what is the risk here of a recession? jordan: i think the risk is very low. the reality is demand for labor continues to be very strong. the inflationary pressures we are seeing are primarily supply-side driven inflation, and if that can be effective -- if the fed can be effective in containing that, we realize that
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monetary policy may be a blunt tool, but given that supply-side inflation probably can't really control supply chains being backlogged, manufacture is not being able to get goods on time, but they can raise interest rates and ward off demand, particularly when we look at some stickier parts of inflation, things like owners equivalent rent. if the fed raises rates, this directly impacts of portability in the -- impacts affordability in the housing market. so monetary policy may be a blunt tool, but it is somewhat effective in warding off some of the inflationary pressures that we see bubbling up as we look forward to 2022. guy: where does that leave us in terms of the cycle? i am hearing people increasingly
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talk about the fact that we are late cycle, and if we are late cycle, we need to start adapting the way we are investing, particularly in equities. jordan: i think real rates continue to be very materially negative, and typically late cycle, we start to see real rates start to move at least towards zero and potentially into positive territory. i think it is a little bit premature to say we are late cycle. i think what we can say is we think about positioning is that the easy money has been made. this is an active market in which you want to be doing a more bottoms up approach in stockpicking, so the easy money has been made. as we move to a period in which the fed is tightening, there's a big question mark on how much fiscal stimulus is going to come through, as bill beck better makes its way through. i think you want to have a bottoms up approach, an active approach to the market today. sonali: you mentioned the
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cooling of shelter inflation forget borrowing a recession, which asset prices are you most worried about in the next six months? jordan: i still want to see how auto prices develop, how energy prices develop. we want to see if used autos north of 20% year to date can persist. i think energy prices is another question mark. we are looking at oil inventories across the globe relatively low relative to history, so that can still provide support for energy prices. of course, jet demand is going to be pretty important, so industrial or airline travel potentially takes a bit of a breather as a result of omicron. that could potential he keep energy prices a bit elevated. those are two of the more transitory pieces of the inflation aspect that are going to be watching in the hopes that
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they start to cool in the quarters ahead. guy: do you think we are going to cease and volatility next year? if so, do i want to be fully invested, or do i want to think about having dry powder to take advantage of some of those dips? jordan: i think you absolutely want to be fully invested. the reality is that is the reason why we diversify our portfolio because we can't really tell what sort of black swan event is going to happen. for those investors to have been sitting on the sideline in the third and fourth quarter waiting for a pullback, we continue to see the market grind higher. you don't want to be left on the sideline, so you try to mitigate your downside. you hedge products, derivative options to help mitigate some of the downside risk within portfolios, but i think you certainly want to be fully invested, particularly when cash is giving you a negative real return. sonali: when you look at cash,
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are you still worried that people are taking on too much leverage, given where we are in the cycle? jordan: not too concerned about the leverage picture. i think when i look at the markets more broadly, we are currently in a period where liquidity is a bit shallow as you are running through the holiday season. i think as we move through the fundamental picture, as we look to next year, earnings growth is still expect it to be relatively robust. i do expect buyback activity to pick up as we move over the course of next year. i think a resilient consumer is going to provide a lot of support for fundamentals of the market more broadly. so i think even though a lot of talk about moving late cycle and how investors should be deleveraging, i am still of the opinion that i am a little more optimistic and pessimistic about market returns next year. guy: it has been great to catch up with you this year.
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we always appreciate your time. thank you so much for some of it today. have a very happy holiday. jordan jackson of j.p. morgan asset management, thank you indeed. still ahead, cruising along. the cruise sector advancing once again this morning forget it has had a whipsaw week. covid worries at the beginning. much more positive as we come through the end. we will deal with the details when we come back. this is bloomberg. ♪
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♪ sonali: the reopening trade is still on. travel and leisure stocks leading gains in both the u.s. and europe on positive virus data. bloomberg's ritika gupta is here with more. ritika: it turns out travel
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stocks have turned out to be some of the big winners on the week, but a reversal from what we saw at the start of the week with those fears of the gonvarri and. now they seemed to have really shrugged those off -- of the omicron variant. now they seem to have really shrugged those off. carnival up some 20%. norwegian cruise lines up 16%. still, nonetheless it has been a challenging environment. it has been a challenging year for them, as they have had to navigate those restrictions. some of the ways they have been able to navigate through that is by racking up a lot of debt. you can see that here with our three key cruise line operators. 2021 debt levels in the double digits. for carnival comedy 2021 debt levels more than three times what we saw the long-term debt levels in 2019 pre-pandemic. let's focus on the here and now, focus on this week, what we have
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seen on the broader travel sector. you can see airlines up some 8.5% or so. this is really, as we saw the passenger levels last week for airlines actually approaching those 2019 levels. also seeing the casinos giving some strong gains here. we had that big ces convention that is going to be live, not virtual. that is something to be optimist about. taking a look at europe, we are also seeing travel and leisure getting a boost their on the week, despite the fact that we did get that profit warning from ryanair earlier today. guy: the travel industry has had a really bumpy ride. ryanair's balance sheet is probably one of the best that is out there. nevertheless, this is an industry creating huge amount of debt as we have gone through this process. losses have been absently massive. is there any optimism based around what we are seeing in terms of share prices that that may start to turn around now? ritika: if we just focus on some of those losses you have been talking about, if you look
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within the s&p 500, the 10 biggest losers on a 12 month trailing basis, travel actually accounts for more than half of those, so that is something to keep in mind. carnival comedy losses more than $9.5 billion net loss, and what's more, 2022 is a year of two halves. they see next year perhaps getting a profitability, but for now, some losses ahead. guy: summer season going to be absolutely pivotal in all of this. the winter is usually quiet. looking like it is going to be tough. up next, we are going to talk about the energy crisis hitting europe. we are down today in terms of gas prices. francisco blanch, bank of america global head of commodities and derivatives, joining us next. this is bloomberg. ♪ ♪
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guy: we are in our into u.s. trading. re: on track for another fresh
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record high -- are we on track for another fresh record high? bloomberg's abigail doolittle is here with the details. abigail: omicron fears that it was really going to dent the global growth picture. he we are, three up days, heading to another all-time high. the s&p 500 up 3.4%. really and oppressive turnaround similar to what we have been seeing in recent months. clearly, a big piece of this is the reflation trade. banks are sharply higher as yields are higher. what makes this so interesting, the 10 year yield really in the sweet spot, you could make the case, for the fed. right around 1.5%. answer higher, earlier up 1%, but nonetheless a nice lift. we also have a nice lift for the travel trade. if we look at the last five days, you can see the hotel index, the airline index, along with wynn resorts and las vegas
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sands, are higher. big declines more recently, but nonetheless very impressive with the airline index. the hotel index actually up more than 12% over the last five days. finally, rounding it out, we have energy higher. we have exxon mobil and chevron higher, and of course, gasoline higher, up 0.7%, at one point up 3%. exxon mobil has that refinery fire down in texas that has brought the price of gasoline higher, so lots of green on the screen, including energy. guy: let's talk about the natural gas market. gas prices are absolutely plunging today, down really sharply, as you can see. we've just had some inventory data, bang in line with estimates, down by 55 bps. that's what the inventory data is telling us. that is a significant divergence from what we have seen recently. milder weather certainly a
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factor going forward from here. we also have a change in the narrative and europe. european net gas has come down sharply. one of the reasons for this, and i hope you can see this on the screen, is you've got all of these lng carriers heading out of the united states towards europe. european prices are superhigh right now, and as a result of which, these cargoes are moving across the atlantic as we struggle in europe to deal with cold weather that is certainly here at the moment. the absence of russian gas which vladimir putin was talking about earlier on today. is this just going to be a blip, this move we are seeing down today? are we going to see prices was human their upward trajectory, which have been so steep so far this year? at the moment, it looks like help is on the way from the united states. we just need more liquefaction plants to help us out. francisco blanch, bank of america global head of global
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commodities and derivatives research. thank you for taking some time to talk to us. what do you make of the move in gas today? it is a big move to the downside. is this a blip the start of a sustainable trend? francisco: there's one thing in commodities that goes along the way of high prices. the cure for higher prices is higher prices. so when you have supply like this, you get reactions. there's lng cargoes going into europe. you will also probably get some demand instruction in the process. a lot of the european industrial players have been trying to curtail their consumption pretty aggressively because of these prices. nothing really makes sense, and puts it at a competitive disadvantage. but europe still needs to get through the winter, so there is still concern. we have pretty low inventories, and when inventories are at these low levels, you get these extreme price moves.
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hopefully this last jump in prices will cure the challenges europe has faced and move us into a more stable price environment into the first quarter. sonali: open up your crystal ball and start to draw out what the conversation will look like over the next month or two. francisco: for the next month or two, we are still going to experience extremely high volatility in natural gas prices. the u.s. is different. in the u.s. we are getting a supply response, mainly from producers across the country. we have seen an increase in production between november and october. we are also likely expect them to see destruction coming through, so the sale industry is responding to higher prices in the u.s., but europe doesn't have that lever.
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it needs to experience a high price so that lng cargoes make it over there. go into the summer, i still see very high prices in europe because again, we have become too reliant on lng in russia. guy: what does next winter look like? there is this kind of expectation that inflation is going to fall as we work our way through next year, but if we see a repeat performance of what we are seeing in europe this year, next year, maybe we need to call that into question. we also need to call into question the gross impulse we are going to see in europe next year. as you say, industrials are maybe having to change their thinking around energy consumption. francisco:francisco: we do believe that europe in industrial recession right now with these kind of this. you are looking at $200 a barrel
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or equivalent in terms of the cost for gas in the region. so it is really unaffordable. we are looking at potentially energy consumption being to percent or 3% higher as a share of income in europe then it was at the heights of the european sovereign debt crisis, and when oil was at $147 a barrel. so europe is in a tough spot. politicians are starting to realize that this can't go on. it is not just gas. it is a tax that many industries in europe have to pay as well. so i think we are running before we can walk when it comes to the energy transition, and with this investment, it is a little too fast, and maybe why that is now why we are expecting this in credits -- why we are
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experiencing this in cripple volatility. you mentioned omicron now looks like less of a risk. if that is the case, we will start traveling again in 2022, as we did pre-covid. we are going to have a bottleneck. we are probably not going to have enough oil to make of that happen. so there is a risk oil spikes next year and omicron hits us fast and furious, and we go back in february and march to the travel pattern pre-pandemic. sonali: it is a fascinating projection on oil. i am wondering how high you think it can go, and what that means for all of the inflation watchers out there. francisco: that is a great question. we have $85 a barrel on brent as the forecast for next year, and $82 a barrel on wti. compare that to our more bearish
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outlook on the u.s. natural gas market. but importantly, the key thing here, we suspend our target of $120 a barrel by the summer of next year. we suspended it in the early stages of the omicron developed because we didn't really quite know how big a factor omicron was going to be. but we have confirmed that it will be slighty more fast and furious. it is not going to be as dangerous. that could have been quite bullish for oil next year, as the world gets back on track and everyone gets back to travel. so that is one thing we are really watching carefully. we are going to have an oil problem next year, and for inflation watchers, that is challenging. guy: no kidding. listed shale producers in the united states, very disciplined this year. very disciplined next year. this strikes me as being the swing factor in 2022.
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i'm not sure how much spare capacity opec really has. u.s. shale has got a lot of spare capacity. it has just got to decide to use it. francisco: yes and no. i think if you look at the returns that the industry has delivered in the last five years, i think the return on capital for the last 10 years has been 5%. there is a reason why energy has been the worst performing sector of the s&p in the last six or seven years. even if you go back in time, you will find energy is the worst performing sector. investors are tired of ceos and management teams in the energy names just throwing money into the ground. they want them to produce returns. so the past history is a drag on returns. the bigger challenge is the future, and the future here entails the energy transition.
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that we want to have a future without oil, and if we do, why should companies invest right now? this is where the energy transition is creating frictions. when you have the past and the future being hurdles to investment, things can get quite volatile in the energy space across the board, not just in gas. inventories in oil are also very low. we have been drawing at a rate of 10 billion plus barrels a week. inventories have come down in a straight line around the world, partly managed by opec, but now we are get into a point where russia may be has three more months of spare capacity, or saudi arabia, they have an extra one million barrels a day, but things are beginning to look tight, so we may have to pull shale. isaac we heard scott sheffield, the ceo of pioneer, saying he doesn't have the coal from the u.s. government -- the go from
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the u.s. government yet. so we will see if that comes through. sonali: for the christmas season, plenty of coal going around for sure. with the energy transition, i am wondering what you think will be the best at for investors -- the best bet for investors into next year. francisco: i think if indeed the news we are hearing on omicron does get confirmed, that we are starting to get towards the end of this pandemic, i think we are all hoping that this is the case because we are all tired of doing this remotely for so long, i think the concern i have here is that we have a tight situation in oil markets next year and the prices do spikes. but remember, one thing that could happen that may delay the upsurge in energy prices, we like oil. we like copper. we like the industrial metals generally as enablers of the energy transition.
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the one thing i am worried about is china because china doesn't have any natural immunity to omicron or coronavirus generally to covid-19, and china also has vaccinated people with non-mrna vaccines, and the vaccine escape is higher in that case. so it could be the case that china, with a zero covid tolerance situation, might struggle to manage 2022 from a transportation standpoint. china is the number two consumer of oil in the world. that is one thing. i'm concerned that we might not see the bull market in oil that we have in the cards here. that is what i am watching carefully right now to confirm a bull trend. i think the metals continue to perform well as they relate to the energy transition. aluminum, nickel, copper, we would be buyers of those metals on this.
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sonali: we will be watching your research closely. that is francisco blanch of bank of america global research. thank you for your time. coming up, we have kevin mcnew, the farmers business network chief economist, on his insights on where inflated food prices go next. this is bloomberg. ♪
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ritika: coming up, lara rhame, fs investments chief economist. this is bloomberg. ♪
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let's check in on the bloomer first word news. the european union is urging negotiators to speed up their efforts to resolve a standoff between iran and the u.s. when they meet on december 27 for the next round of talks aimed at reviving the 2015 nuclear deal. the eu's chief negotiator tweeted today that it is important to "pick up the pace on key outstanding issues." the u.s. exited the packed in 2016 and re-imposed sanctions on iran, and iran began to significantly accelerate its nuclear program. steady demand will help drive production growth in early 2022. bookings for all durable goods or items meant to last at least three years increased 2.5% from the prior month, partly reflect and a sharp rise in commercial aircraft orders. 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'm ritika gupta. this is bloomberg.
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sonali: thank you. we have it food inflation rising significantly. the cost of almost every input has risen come a much higher since 2017. in the last decade we have seen higher prices of sugar, higher dairy prices before. it is really these oils here that have jumped way beyond anything else, followed by cereals as well. these oil prices, you cannot make cookies with vegetable oil. here to talk more about this now and where it goes from here is kevin mcnew, farmers business network chief economist. i'm really curious here as to at what point some of these food prices start to calm down. kevin: i think as we look forward into 2022, i don't think there's any relief for consumers at the grocery store. as you mentioned, across the board we are seeing higher prices. last year it was more of a story of supply chain disruptions, more of a story around
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constraints in the processing sector like meet supply chain situations, but now as we enter 2022, it is really at the farm level. we see higher fertilizer prices that are up three times from what they were last year, driven by energy problems. we see farm chemical prices, a lot of the inputs farmers are buying, up four to five times from last year. again, constraining production. so as we look ahead into 2022, i think consumers are going to expect to see more and more price inflation on their food. guy: in terms of what farmers can do on this, deere is selling a lot more kits at the moment that are more efficient. we are seeing farmers shifting the type of planting they are doing. in terms of what can manage this process for the farmers, what are the best things they can do? what do you expect them to do? kevin: we have been talking to our farmers quite
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aggressively about walking in their input needs for the coming growing season. prices are exceptionally higher right now, but we don't expect them to back down and we don't expect availability to really improve in the coming six months . we have been telling farmers to get really aggressive around locking in. as we talked to farmers this fall, a lot of them are sitting on their hands around fertilizer. fertilizer is so vitally important for corn production, so while we got some fertilizer applied this fall, they are going to need more heading into the spring, and they're kind of sitting on their hands to see if the back down in natural gas prices will improve the fertilizer market, but it is a little bit like russian roulette. we will see what happens in three to four months to make it to the field. sonali: some people call these supply chain issues. but you also start to worry about global trade. how much is the trade network
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concerned when it comes to what is coming in from china and other nations? kevin: that is a good question. china and russia both are major fertilizer suppliers for the world. as we saw this kind of fertilizer crisis looming the last three or four months, both of those countries -- [indiscernible] -- the amount of fertilizer they were going to export for the world market. so we will see as we get into. maybe some of these issues work through. but as we are looking at a three to four month clock for formalized that need fertilizer, i am not sure there's enough time to change the paradigm of record high fertilizer prices. guy: what do you see any protein markets? obviously feedstock is critical. that we have already talked
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about in some respects that is going to be more expensive as it works its way through. in terms of what we are seeing elsewhere, you've got a variant flu remain a significant factor as well. i am wondering where you see the protein market going. that looks like it is almost more challenged than some of the arable crops. kevin: great point. last year, the protein and what consumers were seeing in the be file -- the beef aislr -- the beef aisle was really around supply constraints. now it is really at the farm level, at the livestock producer levels. we saw major droughts in the northwest part of north america that kind of forced the liquidation of livestock herds. we have seen livestock numbers coming down as a result of that. we also see livestock numbers
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constrained because of rising feed costs. so i think 2022 is going to be a story where it is really starting at the farm level with higher feed prices, transferring into livestock, meat and poultry and dairy that is going to hit the consumers in 2022. so i'm not sure we will see the big gains we saw in 2022 like we saw in 2021, but i don't think there is any relief in sight, so i think price increases will be there. guy: we've got to wrap it up. thank you very much for your time today. had a very merry. kevin mcnew, farmers business network chief economist. looks like it is going to be an interesting year ahead. that inflation narrative just about everywhere you look at the moment. this is bloomberg. ♪
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♪ guy: we are about to head into
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the european close. here in europe, we are moving in that direction. the stoxx 600 is up by four points today, nearly five points, up 1%. tracking 483 right now. we got through the four 90's on the stoxx 600 not that long ago, so a little way to go. nevertheless, momentum pretty good. the pound is bid today. we are repressing the bank of england, and expectation that may be omicron won't be as severe, and as a result, looking positive. gas prices have come down massively on both sides of the electric. up next, we will talk to -- the atlantic. up next, we will talk to bilal hafeez, macro hive founder. ♪ ♪
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mom, hurry! our show's gonna start soon! i promised i wouldn't miss the show and mommy always keeps her promises. oh, no! seriously? hmm! it's not the same if she's not here. oh. -what the. oh my goodness! i don't suppose you can sing, can you? ♪ the snow's comin' down ♪ -mommy? ♪ i'm watching it fall ♪ watch the full story at www.xfinity.com/sing2
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guy: thursday, december 23. stocks are rallying, albeit on light volume. the countdown to the close
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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 go until we break for christmas here in europe. we do have a little bit of trading tomorrow morning, but i think a lot of people have made decisions basically to bailout already. the stoxx 600 is up by 1% at the moment. we are up by nearly five points here in europe. travel and leisure is having a really solid day. the market definitely looking through omicron. the news around omicron getting significant leak better versus the beginning of the week. the pound is also bid. we are repricing the bank of england, and there is an omicron factor in all of this. the other story you definitely want to focus on here in europe is the massive dro

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