Bloomberg - Evening Briefing - Scholz doesn't see recession

Chancellor Olaf Scholz said he’s sure Germany will avoid a recession this year, offering reassurance for Europe’s largest economy as it faces down Russia’s energy squeeze. Germany is getting through the winter energy crunch in better shape than feared just a few weeks ago, and Scholz said that diversifying gas supplies has been critical in helping to keep the economy going. “I’m absolutely convinced that this will not happen—Germany going into a recession,” Scholz said Tuesday in an interview with Bloomberg Editor-in-Chief John Micklethwait. He also voiced confidence about smoothing over a dispute with the US over climate subsidies and managing China’s emergence as a political and economic power. —Natasha Solo-Lyons

Citigroup has one of the more flexible policies on Wall Street when it comes to remote work. But if a worker’s productivity dips, they can expect to spend more time in the office.

BlackRock CEO Larry Fink said the narrative around ESG investing has become ugly and is creating “huge polarization.” “I’m taking this very seriously,” Fink said in an interview with Bloomberg TV at the World Economic Forum in Davos.

Larry Fink in Davos on Jan. 17. Photographer: Hollie Adams/Bloomberg

Chinese Vice Premier Liu He joined a chorus of cautious optimism from the global elite in Davos by projecting that the world’s second-largest economy will normalize as Covid restrictions ease. 

US stocks fell as concern over the outlook for corporate earnings weighed on risk sentiment while investors assessed the path for policy tightening. The S&P 500 closed in the red for the first time in five days after struggling for direction throughout the session. The Dow Jones Industrial Average dropped the most in a month, with financials weighing on the gauge of blue chips. Here’s your markets wrap.

Apple rolled out its first new products of 2023 on Tuesday, offering faster versions of its high-end MacBook Pro laptops and the Mac mini desktop. The new 14-inch and 16-inch MacBook Pros look the same as the prior models—which launched at the end of 2021—but add more powerful M2 Pro and M2 Max chips.

MacBook Pro with M2 Pro and M2 Max Photographer: Apple

Wall Street investors are punishing Goldman Sachs for its identity crisis and rewarding Morgan Stanley for its clear strategy: Goldman posted the day’s biggest S&P 500 loss, while its longtime rival was the biggest winner on Tuesday. That gain was thanks to Morgan Stanley doing what it’s been rebuilt to do: wealth management, where rising rates boosted net interest income, and the investment-banking business that fueled its profits for decades. 

Some of the biggest investors in US commercial real estate are looking to cash in before property values slide further. A group of property funds for institutional investors ended last year with $20 billion in withdrawal requests, the biggest waiting line since the Great Recession, according to IDR Investment Management, which tracks an index of the open-end diversified core equity funds. 

Bloomberg continues to track the global coronavirus pandemic. Click here for daily updates.

• China’s population shrinks for first time since 1960s in seismic shift.
• Bridgewater’s Prince says more jobs must vanish to tame inflation.
• Supreme Court rejects appeal on use of Covid aid for tax cuts.
• It’s down to managers to stop quiet quitting, Davos leaders say.
• SpaceX prepares for a breakout year with Elon Musk focused on Twitter.
• Merck is set to remove cancer-causing chemical from top diabetes drugs.
• Bloomberg Opinion: Why Mark Zuckerberg should face the threat of jail.

The big debate over hybrid work is settled: It’s here to stay. But how to brand the policy is a whole other matter. Employers are coming up with a whole new class of catchphrases to promote their flexible-work options, illustrating the various ways companies see the plans shaking out—and how hard it is to get them right. Some, like “Flex with Purpose” at audit, tax and advisory firm KPMG, try to balance workers’ desire for flexibility with bosses’ need for control. Others, such as 3M’s “Work Your Way,” put the individual at the center. A few, like “Amex Flex” from American Express, play off the company’s well-known brand. The names may come straight from CEOs, or get crafted by consultants. All of them, though, indicate the challenge of establishing norms in an ever-shifting modern workplace that consistently defies attempts to normalize anything. 

Pedestrians walk past the KPMG offices in Los Angeles. Photographer: Patrick T. Fallon

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