♪ caroline: from bloomberg's world headquarters in new york, i am caroline hyde. joe: i am joe weisenthal. romaine: i am romaine bostick. the rotation trade continue today, just in the other direction, the s&p 500 managing to rise. joe: the question is -- [no audio]

caroline: bloomberg's economic model is seeing a double-dip downturn. there was much good news on the vaccine front, but joe, the euphoria has ended. investors are trying to work out how they get through until spring when the vaccine is going to be more widespread. joe: we've had a powerful rally for the first couple days, but then you look at the action with the nasdaq surging and itrything else lagging, and does seem like the vaccine opposition is running head to head with reality, which is that right now the covid situation is bad. hospitalizations, hitting a record. ineurope, you see the surges germany, italy.

at some point, it seems likely we are going to get a vaccine, but the current situation, not good. romaine: it is really the sustained trajectory of this latest wave that is most concerning. the one thing, if we are going to find some silver lining, his hospital seem to be more prepared this time around than where they were back in march and april. joe: absolutely. with more, tech reporter michelle cortez, thank you so much for joining us. we are not even at the curve-bending part. if anything, it feels like the curve is on the upslope. is there any sign that this is going to curve or slowing down and hospitalizations, or are we looking at a lot of straight lines up? michelle: we are looking at exponential growth when it comes to coronavirus cases. when it comes to the number of people infected, that as you mentioned, hospitalizations.

risingber of deaths is as well, but that is going to come on the back and. we aren't technically into winter. it's going to get much worse. caroline: i look across to the united kingdom entering its second lockdown. in the u.s., new york start into clamp down on people who want to go to the gym after 10:00 p.m. romain is one of them, apparently. are we going to get any lockdowns that stem this curve? michelle: we saw that lockdowns do work. that is how we got the virus under control in new york, new jersey, the massachusetts areas that were so hard to hit early in the outbreak, and then the same thing is what happened across the southern states, the sunbelt, that got hit when it was hot. we know that is what it is going to take. there are no indications across the united states that anyone is willing to do that, and the

point is, hospitals are better equipped to handle this, but in many parts of the u.s. that are starting to get hammered, they don't have the kind of infrastructure that you have in new york or boston or minnesota with the mayo clinic. you have smaller rural areas that do not have the capacity for all of these coronavirus cases, and i think that is what is going to have to happen. we are going to have to be walloped before people know they have to go indoors. romaine: we've seen some hospitals stretched to the limit out west. i am curious about the therapeutic side of this. obviously, there was a lot of talk about the treatment president trump received. alternative, ae possibility right now if someone does come down with a severe case of covid-19? michelle: the therapeutic that lilly'snow was for eli

product, which is signal -- but it is regeneron, for people with mild to moderate infections. it's not for those really sick people pulling them back from the edge. it is knowing who is highest risk and might turn the corner and start getting sick that would get this kind of infusion. it is an infusion. you have to go to a doctor to get it. who goes to the doctor to get these kinds of things? usually, it's cancer patients who you want to keep far away from anyone with coronavirus. there are going to be challenges, and of course, they only have a limited number of supply, maybe 50,000 doses. not a lot of people are going to be able to get this. joe: there's going to be some time before there is a vaccine or any robust therapy at scale, but there had been reports that over time throughout the last several months that the

fatality, the odds of dying have got lower as hospitals have gotten better at treating it with the drugs and therapy they have on hand. is there any reason to think that perhaps from a death level that this wave will not be as bad as the top line numbers .2? michelle: there is certainly that hope. we know back in the beginning when this hit, in new york particularly, but other places, hospitals, officials, everyone was saying, don't go to the hospital unless you are on the brink of death. we don't have anything for you. it's a mess at hospitals. we had a people who were struggling at home, and when they felt like they had no other option's, they went to the hospital, and of course, there was very little to be done. we know what kind of ventilation, how much air they need to be getting. we know they do better when

placed on their stomachs. we have dexamethasone. that is going to help people, but for sure, the number of deaths is going to increase. caroline: also the infrastructure in terms of what went wrong in new york and what , abeing learned elsewhere lot of it seemed to be the fact that you couldn't transfer between public and private hospitals. there were these emergency use cases, big buildings being set up to help no one because no one was being transferred in ambulances. do you think that infrastructure is ready? michelle: for sure there was infrastructure. in naval, they brought ship comfort to help handle some of these patients, and they accepted no one. that exact same situation we are seeing across the united states.

they are bringing in mobile morgues to handle all of the people who are sick and dying in el paso. that state doesn't even have a national mask mandate. we are seeing that in other parts of the country. we know what has to be done. it's going to be a matter of having the emotional will, the mental health will to actually do it, and with the idea there is a vaccine, an incredibly promising vaccine on the horizon, it's going to be a dark period of time. we are getting indications that it is there. people are going to have to hold on for four or five more months. case that the surge in cases we are seeing around the country is actually helping the vaccine makers accelerate their timelines and getting enough data? michelle: that is absolutely true. that is the silver lining. when you look at the pfizer data, that is what happened.

they were originally going to look at that trial result when just 32 people were infected, and because they started rolling this out in the summer when we were at the valley of cases, they were not getting a lot of people who were infected. they decided -- they got a lot of criticism for looking at 32 patients, so they shut down the analysis of the trial to reconfigure their paperwork basically. by the time they opened it back up, they were looking at about 60, 65 patients. by the time they opened it up, they had those 94 infections that allowed them to determine thatind of effectiveness they had a. it is happening unbelievably fast in comparison to how it was the summer. good for vaccine makers, bad for everybody else. romaine: a lot to unfold over the next few months, bloomberg's michelle cortez. we are going to continue with

this conversation, the surge in covid. it has yet to show up in the economic data, but we are going to look into some of that alternative data that might give us a glimpse into what this second wave might mean for the economy. this is bloomberg. ♪

romaine: welcome back. we are focused on the second surge in covid cases. investors are preparing their portfolios. one element investors need to take into account is economic data, and tomorrow, we get one of those points. moreprobably one of the closely watched ones, cpi. cpi, ofook at core course it plunged in the early months of the crisis.

this is the chart on a year-over-year basis. alreadyst month, it was stalling out well below that 2% target the fed looks for. this will be interesting to see whether we resume the upward march or if we are stuck in this lower gear. how many years is it going to be before we get a re-hike? romaine: this brings the question of what u put in front of this recovery, a k-shaped recovery, w-shaped recovery. line, that is your european pmi, the composite for the eurozone. you see how it rebounded and then flatlined. the white line germany is still up. the blue line is the u.s. this is backwards-looking data. the next round could show those lines weakening further. you might need to prepare

yourself for a w. where is management getting it right and where is it getting it wrong in terms of alternative data? we track the restaurants and some mobile data. this is what bloomberg intelligence shone a light on today. some of the dramatic moves you see from the blue line, france, how much we are seeing that economy roll over in terms of its shutdown and the impact, and the u.s., trudging along. china in the light green has managed to power ahead almost at 100. where can we learn from in terms of what lockdowns are needed, how to get the economy back in shape, and control the virus? joe: of course. that has been one of the big stories, how closely we watch this data, and it makes sense. this surge in cases is happening here, happening in europe. go to thenot going to

gym after 10:00. romaine: are we ever going to have an upbeat show again? it's depressing. caroline: you must be depressed you can't pump some iron at 11:00 at night. romaine: you know what we should do tomorrow's show on? we should get a debate on whether pluto should get its planet status back. joe: finally, we will talk about the real issues. we will talk with john turmeric. shouldout how investors navigate these complicated times ahead. this is bloomberg. ♪

caroline: today, we are focused on the surge in covid cases and how investors should prepare their portfolios. seems to have been put on pause. joe: nothing happening today, but big picture, we have seen a

fair bit of deepening. in the short-term, there is ,othing too good on the horizon no inflation, anything like that, but over the long term, things are looking better, and the vaccine helps over the long-term. we have seen this steepening. romaine: this inter-trade is going to defend on the economic recovery. joe: joining us to discuss all of this is the author of the chief convexity blog john turmeric.

light at the end of the tunnel. how should investors think about these crosswinds? john: it is interesting in the sense that there tends to seem to be this path and the destination. there is likely to be a difficult few weeks because of the virus and mitigation measures taken as we are in this impasse in the u.s. while in the longer term, we know a vaccine is coming. one of the things i think about in trying to be more upbeat is i is thehe reflation trade bigger trade. becomeection news, it's more differentiated. we can get into that. joe: what are the two aspects? jon: going into the reflation trade, because pre-the election, reflation was this one-part thing. it would feed into a weaker and nowhigher stock, what i think is happening is because we aren't in a blue wave, there's vaccine reflation and fiscal reflation. it's much more of a traditional,

cyclical recovery where you have capital expenditure, restocking industries, and we are seeing the early parts of the cycle. for is traditionally good the global economy. i think it's an either or in that space. discounting that republicans will limit how much fiscal we can do in a biden administration. the vaccine has a fiscal cost to it. i think that's why we have had this rise in yields as the tail. removes the policy interested in the way you think ultimately the

recovery will recalibrate itself. history,look back in the economy doesn't tend to go back to where it was previously. instigated a normal recession. do think once we get the full bounceback of the vaccine, we will go higher than where we were previously, or what do you think? jon: that's a great question. christine lagarde was talking about this, what the scarring recession, andis i think it largely depends on how bolted it is by fiscal expansion. if we have a more traditional opensry in that a vaccine things up and we have this , ikup of capital expenditure

think that peters out. is a moree seeing positive and marginally influential part of policy is getting people to consume, giving them juice, and we've seen that from the cares act. household balance sheets are going to be relatively strong coming out of a recession, which is highly unusual. i think that this recovery could be very different from the 2008-2009 1. romaine: we are focusing on the u.s. recovery. we started to see a pretty substantial recovery in asia, particularly out of china. what are they doing right that the u.s. and other nations can take some cues from?

jon:jon: i think asia is in this interesting period where it has the benefit of having a better handicap of the virus and at the same time, as the global economy has transitioned into goods only because you can't do that much, asia has picked up the slack, and that is why we have these numbers coming out of china. asians can't really go to places like the u.s. or europe. catalyzed by some interesting policy choices. china is doing a lot of structural things that are pretty into string in terms of --l circulation, create seen

creating a version of the carry trade as they open up their bond market, and offering a competitive tech sector. joe: you've mentioned the cares act, and you are moving forward on fiscal stimulus, but we know the political will to spend more -- we could be in a situation where there isn't the political will to spend, and central banks are basically at zero. what does that post-crisis environment look like in which there is no obvious juice left from central banks and no spending capacity or desire to spend further? that's where we get into 2009 cycle.

i would caution that i think there is reason to be skeptical especially post-u.s. election. i don't think fiscal is going to zero. yes, we are on a fiscal cliff. i still think there is will and capacity to do some fiscal .ariation i think it is not going to go to zero, and i do not think it is a 2011, 2012 tea party dynamic. coupled with extensions of job loss schemes and fiscal buffers. would be net net i think it would create a

recovery dynamic of slow growth. caroline: how do you traded this then? jon: one of the interesting things about these two different types of reflation, the vaccine reflation or fiscal, they are both dollar negative. from the fiscal side, we have seen how it has worked through the trade deficit. have that either-or, and then the dream scenario is when you get both, if you get a big fiscal expansion and then this recovery. i think it points toward dollard weakness. caroline: great conversation. abroad -- traveling which we can't do --

joe: who cares? caroline: tomorrow, we discussed celsius versus fahrenheit. joe: and pluto. caroline: that's it for "what'd you miss?" technology isg next. this is bloomberg. ♪ - [narrator] this is kate.

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♪ emily: i'm am emily chang in san francisco, and this is "bloomberg technology." fresh off a political victory in california, lift riders are slowly coming back after the pandemic demo -- decimated demand. planse company's delivery differ from uber. plus, yelp shares shot up on news that the pfi