francine: button on the brink. michigan goes blue. the next four years hang on georgia, nevada, and pennsylvania. qe from the boe. officials boat -- vote to boost stimulus to preempt double-dip recession. good morning, everyone. welcome to "bloomberg surveillance," and welcome to our election special. i think it is a conviction on the markets, spec tatian's we are not going to see extra regulate -- on expectations that we are not going to see extra regulations in the u.s. and as we look at a possible biden presidency with a republican senate. what is interesting is what the vix is doing, and i look at pound because we need to mention the boe, a bigger package than expected full-time and guy johnson will speak with governor bailey. importantwill be an

interview for global wall street. i believe david folkerts-landau is scheduled with us, from deutsche bank. the sun has not risen on the east coast yet. when it does, we will start to see the trickling in of the final 5% of voting in some states, and in some there is still a very large gap involving tens of thousands and hundreds of thousands of votes. what am i focused on? i guess i have to be focused on nevada. i may be wrong on that, but that is the one state on focused on right now, francine. francine: what i'm focused on is the legal challenges. i think it is pretty much being dismissed by the markets, and a lot of legal experts are also saying there is not a path forward for the president to challenge the voting. my want to see how that pans out and if there is a bigger impact. let's get to first word news with ritika gupta. just oneoe biden is

battleground state away from becoming the next president of the united states. biden already won two key prizes in the midwest, the states of michigan and wisconsin, putting him at just six electoral college votes away from the 270 he needs. his best chance appears to be in nevada, where he holds a lead over president trump. for the president to be reelected, he would have to win all the battleground states that have not been called yet. president trump's team is pursuing a contradictory legal strategy. the president is trying to stop vote counting in states where he is ahead, but he is demanding counting or recounting where he is losing to biden. the president has repeatedly claimed that there is widespread fraud in voting by mail. and the tightly contested election is putting more pressure on the federal reserve to support the economy. policymakers are not expected to announce a shift today when they conclude their two-day meeting.

coming changes to the fed's bond buying program. chances of aggressive physical spending for households and businesses faded when a democratic sweep did not happen. regulations take effect in england today, and forcing the closing of pups, gyms, and nonessential shops -- of pubs, gyms, and nonessential shops. prime minister boris johnson warned that england faces the "risk of mortality on a grievous scale." global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more i am ritikantries, gupta. this is bloomberg. tom: thanks so much. let me get to the data check right now before we get to an important conversation on the political moment. futures up 56, a leap up this morning. over 28,000 on the dow. the nasdaq 100 maybe not as big

a day as yesterday, but nevertheless green on the screen. the main story for equity market 26.56, ace, the vix, stunning statistic as uncertainty comes out of the market. maybe that is mr. biden. most likely that is the u.s. senate. as francine alludes to, the 10 year yield, .73%. other than that, pretty much stasis. dollar weakness this morning. thecine: i'm looking at dollar, and i'm also looking at the 10-year treasury yield. the fact that i'm not sleeping is also messing with my voice. we had some mixed election results, and that raises the likelihood of a divided congress but also raises bets on the markets that it will not trigger major changes to taxation, that it won't trigger major changes to regulation that have underpinned the bull market. i'm looking at the european stoxx 600, definitely climbing,

and it is really technology stocks that are moving that. if you look at the other things we are watching out for, gilts are also rallying after the bank of england said it is really interesting, the impact on pound also counterintuitive. it used to be pound weakness wendy -- current -- it used to be pound weakness. joe biden on the cusp of winning the white house, donald trump is not giving up. here are the two gentlemen. mr. biden: after a long night of counting, it is clear that we are waiting enough states to reach 270 electoral votes needed to win the presidency. i'm not here to declare we have won, but i am here to report when the count is finished, we believe we will be the winners. we will be going to the u.s. supreme court. we want all voting to stop. we don't want them to find any

ballots at 4:00 in the morning and add them to the list. we will win this. tom: remarkably two different stories, but we have seen that throughout this campaign. a wonderfulhis is conversation because of the perspective of texas. these are the london school of economics and the professor of international relations after a -- lyndonreer in baines johnson is the -- treater -- p. thatter trubowitz knows lyndon baines johnson was the -- very6 electoral votes to goldwater's 52 volts. how did we go from the trouncing of the goldwater and others along the way to such a divisive nation? peter: it has been a long road, tom. good to be with you and francine this morning. this kind of divisiveness and polarization did not just start on donald trump's watch.

it has gotten much worse for sure, and it is plainly evident today. but this has been coming for some time. the country is just deeply, deeply divided. those people that were hoping that this election would be clarifying -- it is not this bection, it is not going to remembered for its political clarity. even in flipped states like a wisconsin or a michigan, biden won by running up the vote totals in reliably urban democratic strongholds. what you are not seeing is people like crossing over. there is one really interesting exception to that right now. maricopa county, arizona. up,he vote tallies hold that county has voted republican in every election since 1948. it looks like it is going biden

blue. tom: let's rip up the script because fossils like me look at arizona as 47 people and a lot of desert. and of course that is not the case. where 11 electoral votes, wisconsin only has 10, and that statistic just stunned me. peter trubowitz, frame for our global audience right now how we do not understand maricopa county, how we do not understand the future of this nation as exemplified by phoenix. peter: the thing about maricopa is that it has a lot of independent voters, and they have typically traditionally voted red, voted republican. we still have to wait. there are still ballots to come in and so forth, but it has been called by the ap and fox and some others. blue,trending right now

and it is very striking. but here is why arizona really matters, in terms of a larger picture. if it is flipped by biden in the end, it means he doesn't need pennsylvania to get to 270. if we assume that wisconsin, michigan hold up and that the nevada vote does go the way it appears to be going, democratic. those 11 electoral votes really do matter. the other very interesting story here is georgia. i mean, we may very well be headed toward a recount there. because the difference, it looks like it is going to be under 1%, less, half a percent or the difference between the two. and biden can call for a recount if he wants. don'tne: professor, i want to call it early, but if

joe biden is president and he says he wants to unify the country, how does he do that in terms of policies? who does he put in his cabinet to have a real crack at that? peter: francine, it is going to be very, very tough because i think the big take away here is say for the sake of argument that biden does get elected and the court challenges don't hold up by trump. but the take away is going to be that on balance they are willing to take a chance on joe biden but not willing to make it easy for him to govern. if we end up with a divided government -- i know that is music to wall street's ears, but it means that many of the problems that face the country, from income inequality to racial division to the urban rural polarization will not be programmatically addressed. aboutvery hard to think who he is going to put in place

to overcome these divisions. he will have a tough road to slog. for onehave only time more question. i want to talk about what happens to populism after the leader of the populist moment moves along, whether it is he would longer williams jennings bryant -- william jennings bryan, etc. what happens to trumpism after trump? peter: it will not disappear after trump, and i don't think trump will disappear. it is real, it is not going away, and donald trump -- if joe biden is the next president, he's going to have to deal with it. there are going to be republicans who pick up that mantle. you already here it, tom, we are the party of the working class -- and by that we mean the white

working class. they are going to play that and they are going to push that. i just think this is with us. it is not just the united states. this is a story about oecd democracy, across the west. it is still here in the u.k., where i'm talking to you from. it is still in the west, where the pandemic has in a sense kind of tamped it down, but i think it will come back. that is where i am on it. it is not a happy -- there is division and so forth, it is problematic, but that is the reality. francine: professor, thank you so much. trubowitz, professor of international relations. coming up, we tracked covid-19 through the vaccine. we speak with the astrazeneca chief executive. that is coming up shortly, and this is bloomberg. ♪

francine: this is bloomberg surveillance, tom and francine from london and new york. let's check with the data is telling us. a lot of the focus is on a possible majority for joe biden. we also look at the senate, and it looks like it will be held by republicans with a focus on the markets that actually we could see not to regulation being taken out, and we could also see a bit of a boost when it comes to some of the things including extra stimulus. astrazeneca third quarter profits did fall a bit short of analyst estimates. the drugmaker is on track with -- i am delighted to welcome to surveillance the chief executive

, pascal soriot, who joins us now. pfizer and maternal are seen as the front runners in developing a possible vaccine because of a setback that you face in your trial and the pausing of your trial in the u.s. despite that setback, could you still come out and have that first vaccine available? good morning, francine. first of all, we hope that there will be several vaccines available to people around the world. the quantities that are required are enormous, and manufacturers have to work to make sure that we have enough. we at astrazeneca have two programs. one is a u.s. study of about 20,000 patients, and it has been delayed because of a problem we experienced. the other program is the international program that is relying on 22,000 patients who the u.k. anded in

brazil, and that program has been working very well and we believe we should get results by the and of -- francine: in light of the u.s. trial halt and setback, do you believe you will get approval for a vaccination in europe and in the u.k. before you get it in the u.s.? for thethis is regulators to decide this. -- thely depends on international program will deliver results that we will have to be assessing by the regulators, including those in the united states. so they may want to wait for the results of the u.s. study, and they may review the international program and give us an emergency approval. i cannot really comment. it will be up to the regulators,

individual countries to decide. francine: when you look at this vaccination, what is your biggest concern, that mathematically you have a formula but it is very difficult to store it and to put it out there, that people will not want to take it, that regulators are too slow or too quick? what is the one thing that could get you off track? i worrythe only thing about is making sure the vaccine works. we still don't know. we have been doing a lot of work and running very quickly to be ready, but at the end of the day, we don't know. data, but wegood will know soon whether it works or not. if we have good safety as we hope and expect to get, i think the public should be reassured

by the fact that not a single regulator, but many regulars around the world will look at this data independently from each other. looking at the data regularly, look in then we u.k. and japan, canada, and all those regulators will look at the data and make their decisions independent from each other. that should reassure the public that many independent health experts will look at the data. tom: tom keene in new york. thank you so much for joining us. i am very curious as to what your vaccine will cost, and that it is a -- virus based versus the fancy genetic vaccines. do you have any idea of the range that your vaccine will be distributed and what the price will be? pascal: the important point here is that we have committed to distribute this vaccine at no

profit for the duration of the pandemic period, each means hundreds of millions of doses that have been ordered already, regardless of when they are delivered, would be supplied at no profit, and it will be four dollars to five dollars out the door depending on where the vaccine is manufactured. the variation is simply due to the variation of cost structure. tom: i think this is a huge mystery, and i was speaking with alex morales about it on our pharmaceutical team. what is so important here is for our audience to understand, we get a vaccine, and when we'll we would be that when will we be in our doctor's offices? do you have any sense of that timeline? data -- we clinical hope it will be the case that it will be positive, and we expect the data by the end of this year. government, not

ourselves, but regulators. they review the data quickly, and i'm sure you have seen that many of those regulators around the world have announced they started his so-called running review of our data, which means they look to the data, they submit to them, and on that basis day should be able to make a determination very quickly. so we would hope that vaccinations large-scale would be possible starting in january next year, possibly even december. francine: does the u.s. election and who gets into the white house actually change the speed of approval or the speed of acceptance among u.s. citizens of a vaccine? pascal: i think what will influence the speed of vaccinations in different countries is really public trust independent health experts'

review of the data. a very is of course stringent regulator, and it is not only the fda that will look at the data. but the u.k. and other regulators around the world will look at this data, and i think the public can be reassured that if vaccine is effective regulators give it the green light. i don't think it depends on which administration in a given country is in charge. i think it really is the regulator, the health experts have to give that confidence to the public. has baffled you most about the virus? we look at this day in and day out. is it the response that people can re-catch it? is it symptomatic cases? is there something you thought you would never really see in a pandemic? pascal: the biggest thing with this vaccine is that it is very infectious, and so, you know,

many, many people get infected very quickly. so everybody has to be really cautious and keep in mind to wear a mask in public places, wash their hands, observe measures of social distancing that have been recommended. then for the vaccine, the key question of course will be, will it work? another question will be, in how many patients, what percentage of patients will it work? another key question will be, if it doesn't work completely, does it at least stop people from being hospitalized? patients where it may not become -- protecting them completely, if it stalls the disease, then you have turned this disease into a very moderate infection. many questions we do not have answers for yet, but hopefully those clinical trial reasons will and lightness a little bit.

is the one thing that must change in a post pandemic world? canal: i think if we develop a vaccine that works well, i would also say that a number of companies are antibodies, and we are developing long-acting combination of antibodies come and we hope it can protect people for up to 12 months with a single dose. if you have antibodies, they cannot be exited because they have a dude -- an immune disease, and we can treat people that have been vaccinated, then i think we will have been able to return to a normal life. trendsr of long-term that we have seen developing have accelerated -- the rise of digital, working differently.

all these changes have been , and the post covid world will be a different world where technology has played a bigger part. tom: thank you for being with us this morning. on the story of the lockdowns we have seen across the continent, this has been expected. greece considers if it will act on a three-week lockdown. tois directly linked hospitalization in other nations. francine, i want to note that markets take another substantial leg up right now. the dow futures up 365, and the vix slams in to 26.75. francine: to be honest, i'm looking at the bloomberg outinal trying to find exactly what is underpinning that. i don't know whether they expect because of these

extra lockdowns. i don't know whether they are relying on more central banks. serve -- certainly european tech stocks are gaining on the back of the production of the u.s. election. we still don't know for sure who will be present, but the market is betting on a biden presidency with a republican senate. owner is set to seek billion a $180 valuation. pretty much in line with what we are respecting, but still huge number that will have repercussions for the rest of the industry. coming up in the next hour, we track covid-19 with jason farley , johns hopkins nursing professor, at 6:30 a.m. in new york, 11:30 a.m. in london, and this is bloomberg. ♪

>> we have been a deeply increasingly, deeply divided country going back several years now. gridlock is good. we're not going to see higher taxes. >> v-shaped recovery has intact. a fed, regardless of who wins, will continue to have their foot on the gas pedal. >> both cheer us and to fear. >> contingent in washington i think will lead to slower stimulus matter what party wins the digital election. >> without any kind of clarity from congress -- >> we're just going get it going

slower. >> things are intending to be incomplete and we just have to wait. as hard as that might be. closer than expected and still undecided u.s. election. for market analysis, let's get to gene frieda. always great to speak to you. thank you for coming on. the markets are really liking what they're saying -- seen. is it reflective of a possible gridlock in u.s. politics? you're seeingwhat in the market is not so much a verdict on an election outcome one way or the other. you are basically seeing a verdict on the fact we are getting through the event. this was seen as a binary event. it looks like we have a result

or we are close to a result, and the markets can now move on from that. -- thecertainty is abatement and that uncertainty is driving the market, not so much a verdict on one outcome or another. francine: what happens to u.s. stimulus? gene: it is interesting. whatf the big outcomes of seems to be the most likely result now is we are going to get a rebalancing of jose. there was an expectation that seamless would do the heavy lifting coming out looks like monetary policy will have to take out more the slack. in some ways you're getting a trade-off in terms of equity market relief and a strong bond market response to what is likely to be greater reliance on the as that applies -- price reflation.

rather than a reliance on large fiscal stimulus. that said, i think you will get a reasonable physical response impactal response to the of the covid crisis on the economy. francine: at some point, do not run out or do central banks not run out of tools they can deploy to face with covid and and lack of stimulus? what does that mean for treasuries and also global bond markets? gene: yeah, i think it is right to question the impact on the economy over time. i was a relative to three months ago, that outlook for the u.s. economy has become more uncertain because we did go over a fiscal cliff and working to the buffers that were created from the prior fiscal response.

it is not so much a question of his stimulus ineffective -- maybe this is a sub optimal outcome, but we still think in terms of backstopping the u.s. economy, backstopping the global recovery, this policy mix will be reasonably affected. it may not be particularly effective in raising potential growth in making for a superstrong recovery once the covid crisis abates, but it cuts off the left tail risk of recession. you play the do asia resurgence? china is doing pretty well if you look at the economic data, one of the fastest growing gdp figures. from a strategy point of view, how do they take advantage of it? china was first in, first out. they have been rewarded in terms

of equity market performance, currency performance. the question i think is when you start to play the last in/last out trade, at the moment there is a lot of pessimism around europe but obviously, we have seen in the prior round, once you go into lockdown, there tends to be a reasonably strong response. in europe, a lot of that is built in. in the u.s., we may have more to come on that front. they seem to be running a few weeks behind europe. from that perspective, it is about looking across the valley to a time when the pandemic is not dominating activity. we are going from a couple of events that have been deemed binary. one being the election and one is when the vaccine actually comes. as we get through those initial events, things become much more nuanced and focused on the speed

of the global recovery. i think so far the market has been right to look through the short-term hits and look at them as something that is sharp, but likely short-lived in terms of the impact of lockdowns. pretty effective policy response going in this places. importantly, to your point on asia, this is not a synchronized hit in contrast to what we saw the first quarter of the year. anwould expect asia to be engine, but we also think it is pretty well priced and in the market already. francine: are negative rates in the u.k. already priced in? gene: not entirely. only very marginally. i think it is right to say there is a much higher version -- a version 10 negative rates in the u.k. than there was on the .ontinent

as a result, the bar to go to negative rate policy is very high. we can still envision a set of circumstances where we might get to negative rates in the u.k.. but again, we think today's attemptin some ways an to avoid the outcome by providing very large on market purchased stimulus. i think you probably need to see shockr new shock even for before you see negative rates in the u.k. francine: thank you so much for joining us today, gene frieda, pimm: double strategy. pimco. biden is six electoral college modes shy of the 270 he needs to win. his best chance may be in nevada

where he holds a lead over president trump. the president's campaign is suing in michigan to stop vote counts that have been training toward biden. the president could still be reelected but would have to win all the battleground states that have not yet been called. once all of the votes are counted, it is still likely to be a divided u.s. congress. democrats hoped bar regaining control of the senate have faded. most of their teams to defeat incumbent republicans were unsuccessful. meanwhile, democrats will retain control of the house but will lose seats. oregon, hundreds of protesters angry about president trump's challenges to devote smashed windows and businesses. governor brown declared it a riot and called out national guard troops to help law enforcement handle the violence. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg.

francine? tom? so much. thank you coming up next, we dug germany, david and the u.k. with folkerts-landau. this is "bloomberg." ♪

good morning, everyone. extraordinary news flow. huge anticipation to the morning on the east coast and out to arizona and nevada over what the

results will be. i have them in front of me on of nevada,llance" arizona, georgia, pennsylvania are the key focus this morning. let's not forget potential recounts in particular and wisconsin as well. right now as a real highlight, and a true halep because of guy johnson's interview scheduled with the governor of the bank of england. front and center is the discussion on negative interest theory, an application. no one has been more vocal than david folkerts-landau deutsche bank. we are thrilled he could join us this morn. how is that experiment going, david? how is the negative rates experiment of the continent of europe? much int is still very intellectual dispute. there is no solid evidence that supports that negative rate has been stimulated.

i believe within the bank of england, that is been recognized as it is within the fed. that leaves the ecb alone. on theory, it was good. in practice, it looks rather bad. many negative impacts. negative rates do not enjoy strong, intellectual support within the institutions. i think the ecb has been limited in that i cannot believe they would go any lower, even if the overall economy were to deteriorate. i think the u.k., as you sell this money, did not even mention it, so -- londonur office is in outside the third century roman wall. it is great and historical, but london is different than the continent. can negative interest rates work

in an anglo-american financial system? problematic because of deep money markets and money market funds, negative rates in the u.s., for instance, would have to make some significant institutional changes and precautions to deal with that. overall -- the thing to remember about negative rates is no solid pickle evidence that supports that negative rates have done any good at all. --is more a question of rates go down and consumption goes up. savings go down, investment goes up. that is -- when you talk to a cfo, that is just not the way the world has worked. when rates are this low.

not appropriate policy. i believe if it is in fact beching stimulus, will not used more aggressively than it has been so far, even by the ecb. francine: david, how much -- and good morning from london. how much should we worry about debt in the u.s. because of the pandemic? election, ie the would have been servicing worried. talking about a massive stimulus, the new green deal, and those kinds of policies. i think with the split government, that stabilized. i think with mcconnell back in the seat of power in the senate, a is nearly impossible to get $2 trillion policy bill through.

it is not as bad as it looks. that given rates where they are and where we expect them to be, the u.s. 10 year for the next 10 years or so -- two years or so is reasonable to fund a modest sized stimulus without having to worry too much about that. having said that, this is not a problem that is going away. over the next three years, four years, some of that has to be paid down as the economy starts growing in interest rates go up. it won't be easy. but for now, that is a challenge for three years from now. right now we have important and a series of historical issues that have to be dealt with in terms of restoring economies and

moving away from a deflationary situation. francine: david, do you think we risk being in a deflationary situation if these lockdowns are on and off and overall, if the fed remains accommodative, even a bit more than they are now, will it be enough to get us out of trouble? david: well, we're not thinking in terms of fourth quarter here in europe and the estimates for 2021 are coming down rapidly from growth, so i would expect the ecb will address that in the upcoming meetings and increase -- make credit available to banks to lend because lending has come down somewhat in the private sector. and that is a good thing. it is an interesting question, how far this can go. my sense is that there are

locomotives in the world. i think the german economy is one of them, the chinese economy . ultimately, i think that will intont europe from falling a more dangerous deflationary situation. i do think it can be prevented, yes, but i think the outlook is precarious. and it all depends on how the second wave is going to come out. byhas cut many people surprise. it should not be as deep as it is. a vaccine is uncertain. in this may not be the last wave. we ease lockdown for christmas in december, we may find in january we are back in the same situation. then building up debt to make furlough payments and other support, it is getting to be much more problematic as to how to do with all of that debt

piling up. francine: david, thank you so much. david folkerts-landau stays with us. coming up in the next hour or so, in interview by guy johnson with andrew bailey as exec like am in new york, 11:00 a.m. in london. this is "bloomberg." ♪

this is "bloomberg surveillance." election special 2020. let's get back to david folkerts-landau deutsche bank. we talked about negative rates and we talked a little about the composition of the u.s. economy. when you look at europe, is the ecb the real game changer or is it really the recovery fund? when are we going to see the disbursement of this money make meaningful impact on the countries that need it the most? asid: the ecb is crucial lender of last resort, liquidity , held europe together in earlier crisis and will do so again. superbovery fund is a

supplement. in fact, the recovery fund really is -- it amounts to socialization of sovereign debt. it can be used for that. that kind of removes the risk from the table. the ability also of the eu commission to fund the recovery is a bigugh its own -- step forward in getting a unified european debt market with all of european members being guarantors of that. it is a huge step forward to your coming together fiscally. it removes italy as being a prime crisis risk. the recovery fund is important. the problem in europe, to make it work smoothly. it, all of these

things attached, and getting it all sorted out because he needs more than a couple of members to agree. that tends to slow things down. from that point of view, any kind of physical measures, it is easier to implement -- fiscal measures, disease or to implement -- it is easier to implement in the u.k. the recovery fund is hugely important, crucial innovation within europe. it can be seen in the race to which it is borrowed and things like that. tom: are too short of time. it has been 14 years on. winter the 14th year of the crisis of 2007 and 2008. great. when are we going to clear the deck? when i look back over my career, we have seen a financial crisis probably every five years on average starting at night -- .n 1982

global capital markets tend to generate a crisis every few years, and it doesn't matter how you think about it. very hard to anticipate. my sense is for now we are very safe because central banks have taken such an expansive view of their mandate. whenever a central bank is prepared to do that, the scope or national crisis are limited -- is very limited. earlier, we are piling up debt at an enormous pace. i would suspect by the time this is over, the eu and u.s. will be approaching the range of 100 450% -- 150% of gdp. those are dangerous levels. risinghave

rates, of a problem. rushed today within our election 2020. david folkerts-landau of deutsche bank. that much, much more coming up for you including perhaps we will begin to see those important counts in arizona, nevada. it is shocking how close georgia has become. the final votes of georgia dissipated. the difference, or 23,000 votes -- a mere 23,000 votes. we will continue our coverage. also in market to the moon, and up 65. ronald temple of lazard, next. stay with us. ♪

tom: this morning the gentleman

from delaware has a record 71,000,900 7000 votes. he is ahead by 2.5 percentage points yet always the counting of votes from phoenix and las vegas east to atlanta and worked to philadelphia and pittsburgh. this american morning, who will be our next president? remain calm. markets, look what we see. futures of 72. the vix plunges. mr. biden asked for temperature to be lower. limbs the commonwealth of pennsylvania. good morning. "bloomberg surveillance." on a really original day in american history, francine, lots more history in london as well. we will get to that important guy johnson conversation with the governor in moment. francine, just your thoughts on what you observed in the colonies? francine: first