♪ caroline: from bloomberg world headquarters, i am caroline hyde. joe: i am joe weisenthal. romaine: i am romaine bostick. the record highs set on monday, weighing a little indecisiveness as investors weigh the trajectory of the economic recovery. joe: the question is what you missed? caroline: you missed quite a lot. it's interesting. it's like we played it. with everything from record

highs of the s&p 500 all the way to certain cases of covid to a fight between the fed and treasury and condemn it really money -- and pandemic relief money. we got progress from moderna and pfizer, making impressive headway for a vaccine. trump's campaign still unwilling to concede the election. all of these headlines causing a tug-of-war in the markets between long-term fears and hopes. these five days, we are trying to work out where to place our bets. joe: yeah, that's exactly right. as you mentioned, we hit record highs at one point this week. today, not much going on. despite optimism in some markets and more vaccine news, if you look at long-term yields, look at that. u.s. 10 year yield back down to .82%. we were talking about will it break one? i do really feel as though we

look at this economy, perhaps we will struggle a little bit over the next several months and it is going to be a very long time until we see any kind of rate lift off. romaine: it is interesting. you are now getting into this tug-of-war between the short terms and longer-term optimism. we take a look at this global risk aversion, you look at this hodgepodge of a variety of indicators like spreads, slop volatility, etc. it gives you an idea investors have started to embrace. as it gets into negative territory, that means it gives you a sense that people are sort of willing to embrace risk more. that index went negative last week. that is a good thing. it has been flatlined around zero. joe: let's talk more about markets. we want to bring in katie. thank you for joining us. what is your number one headline for the week that was? katie: i want to talk about

small caps and the rotation. i feel like it quieted down midweek. up russell 2000 index, it is 2.4% for the week which i found pretty surprising. this rotation is still turning. you are still seeing cash coming off the sidelines. i know it is talked about a lot but let's talk about money market funds. who have seen assets drop for 14 of the past 15 weeks which is a record. when i've asked analyst where is this money going, they tell me it is rotating into beaten-down areas of the market, which makes sense when you think about it. if you have been sitting in cash for months now that you have the election in the rearview, the vaccine on the horizon, you want to put that to work. that is something that fueled into areas such as small caps what you saw this week. caroline: the nasdaq is the only index in the green for the week. it feels as though we have a

split market in terms of where you should be putting your money. katie: you do. it is interesting, you saw the nasdaq finished the week higher paid the s&p ended in the red. the russell 2000 eight the nasdaq for the second week in a row which feels like the rotation kind of fell off the radar this week. it is still there. romaine: you point out not only the russell is up but when you lay it up against the s&p 500, you are talking about a 3% differential, basically matching what we saw last week. i am curious though, while we are seeing people rotate back into the cyclicals and some of the small-cap names, a lot of those small-cap names, at least the ones that gotten the bit earlier were travel stocks, leisure stocks. things that were supposed to benefit from all of us getting back out until economy and all i see right now in new york is things being shut down again. katie: that is true. if you look at what dragged down

the s&p 500 today, it is those travel stocks. norwegian cruise line, carnival corp., those sorts of names. you are seeing caution and that is why you are seeing a positive week for the nasdaq 100 as well. going back to those safety names. you are starting to get mixed messages. small caps are rallying, tech is. the s&p 500 is falling. bonds are rallying so it is kind of mixed readings. you are still seeing optimism that we will have a reopening within a few months if we get a successful vaccine but still caution around the edges. joe: don't you think it is funny that when you talk about rotation and so forth, the nasdaq was up and the nasdaq 100 outperforms -- even on the rotation, it can really slow down. to thei think that gets point where we really married the tech names as a haven asset. i think it is important to keep in mind that even if we do enter

economic growth, that should still help companies such as apple and amazon. there is no reason they cannot keep growing with good economic growth. i think investors are coming to that realization. even if we do get a broad reopening and you see people gravitate to the more beaten-down areas of the market, there is no reason why the faang names cannot continue to post a earnings and outperform. romaine: always love your insights. have a great weekend. we will catch up with you soon. theline: interesting in rotation, we saw emerging markets this week up about 7%. i am looking at what's happening in terms of the emerging markets. south africa getting a rate cut from moody's which has an .utlook negative it is to levels below high-yield and it is a level below that coming all the way down to

double minus. keep an eye on south african assets towards monday as well. romaine: one thing i have my eye on is this you go index which tracks all the companies that benefit from the shift to electric vehicles. those stocks having a monster week. we will talk to a top executive in that space. we will talk about their big plans to take advantage of wall street. this is bloomberg. ♪

romaine: welcome back to what you miss. we are focusing on the wild week of the markets. one thing that was wild is what we saw on the electric vehicle space. tesla dominated the headlines

for a number of reasons but a lot of other stocks really rising. blink charging, a company that makes charging stations, doubling this week alone. fuel cells. a lot of companies that stand to benefit from this ev boom. investors want to be a part of it. joe: i hate to say i am losing track of these companies. at one point it was kind of easy. telsa, nikola. ok, interesting. now i look at all these. candy, electromechanical. that one went nuts. i had not heard of that. there are a lot of listed names now. romaine: that is one with the three wheels? caroline: they're coming by spac. really over accentuate that #2 020 vibe. romaine: very 2020 this year. joe: ok, for more on this, we will bring in to talk more about ev's, one company called arrival. it has agreed to combine with

blink, a transaction valued at $5.4 billion. it would provide the u.k. based electric vent and bus maker with a listing on the nasdaq. we are joined by arrival's president and chief strategy officer. thank you for joining us. really appreciate it. why now, in your view? why is this this moment where everything seems to be coming together, the financing, the maturity of the companies, and the appetite for the stock market for so many companies in this space that we generally call ev. >> i think when you look at what's happening in the market, there is an understanding right now that the whole car park will have to go electric. it is the right way forward when you look at the prices of vehicles. what arrival is doing is we are making electric vehicles the same price as diesel vehicles. when you add that to substantial benefits on cost of ownership, it is a no-brainer for the

commercial vehicle segment we are focused on to shift over to being fully electric. romaine: i'm curious about the commercial segment because whenever we talk about ev's, it typically tends to be talked about from the commercial segment, the passenger car segment i should say. what has been the delay in getting commercial enterprises and little more up to speed on electric vehicles? avinash: i think it might be the price point. when you are big operator and need to make an initial capital purchase and obtaining the price premium, that is a barrier. what we are doing at arrival, as i mentioned earlier, when we produce a vehicle that is the same price as diesel and you have all the operating costs benefits, you shift over to being electric. we have a partnership with ups. that is one of the driving forces for them looking at in order for us of 10,000 vehicles and an option for 10,000 more. that is because we have managed through our approach, we have

over 1300 employees, an amazing team. we've developed the high-voltage components. we have a unique competent material that meets the need for metal. micro factories that can be deployed anywhere. lower footprint. that gets us the price point. caroline: i'm interested about the order value. you said you have about $1.2 billion in value. 10,000 vans on order with ups, option for 10,000 more. what about binding orders? are these orders binding? have they put money where their mouth is? avinash: it is a signed agreement between ups and arrival. caroline: not money? not money? this stage, we are in the prototype stage with ups. we are rolling out prototypes. not just ups but a range of

customers. over the next year, our first van will hit production in 2022. joe: when you hear people talk about some of these companies, and in particular tesla, you hear them described as beyond automakers. they are software players. plays on the data or platforms. when we talk about companies in those terms, there's often a winner take all aspect. is this a winner take all area or can there be lots and lots of winners in this space, both in terms of vehicle makers and component makers and technology players? avinash: i think when you look at the size of the fleet that is going to be transformed, you got the big players like ups, 100,000 vehicles that have to move over to be electric. you have a bulk of the actual market being small, medium enterprises and any to shift over as well. there is huge upside here for arrival to really penetrate the market. i think that is what you are

seeing. romaine: with regards to the road to public market, the use -- the idea of using a blank check company to come to market, is there a general sense here that this creates for your company, i guess, the potential for more value? or is there something else i am missing? avinash: when we looked at it -- again, it comes back to what we are doing in the micro factory. typically in an industry, you are spending billions of dollars to build a factory. we are spending about $50 million. when we look at what we needed to do over the next few years, and we have been around since 2015, that technology has matured. we have prototypes already. when we look at the next few years, we have a micro factory and south carolina, another one in the u.k. for us, it was about raising the capital and partnering with a good partner to really do the expansion rollout. that is what we are focused on. caroline: does a mac -- micro

factory help you reach price parity? getting prices down? avinash: it does. it comes from multiple different aspects. we designed high-voltage, low voltage systems. the micro factories help us produce vehicles at lower cost but they also help us bring local factories all over the world. we can actually deploy the micro factories in months. you can put them anywhere. that is a real transformation in the way the industry operates. we have decentralized the manufacturing process for electric vehicles. joe: you mentioned your ipo. there's often i begin -- ambiguity with these companies and what is owned, what is licensed. we have seen controversy about that, for example, with nikola. describe what specifically is yours proprietary versus components of other manufacturers? avinash: we do all the

high-voltage and low-voltage systems. we have the battery model. it's literally a full list of all of those high-voltage, low voltage systems. the material which is a fabric we are able to produce these panels that are more durable, lighter and more efficient. it does not require metal. the micro factory itself is also our ip. we have a strong ip portfolio that we developed. joe: great stuff. really appreciate you joining us. inah, arrival av president and chief officer. the clash between the treasury and the fed over key pandemic lending programs. we will discuss that next. this is bloomberg. ♪

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caroline: today, we are focused on the events of the past week, everything from record high on the s&p 500, the dow to progress on a vaccine and a fight between the fed and treasury. that flight over pandemic money drawing interest from many investors as the fed is giving the markets a psychological backstop. joe: we have seen this breaking news headline move across the terminal, so perfect timing. they set it up for us. powell saying the fed will return unused money to treasury, has asked. it came out around the time yesterday that treasury, asking the fed to return money from their lending program. they're going to return it. the question is what does this mean for the fed's ability to deploy emergency lending? romaine: it also means where

this money goes. steve mnuchin really trying to make the case that they are to be a better use for that money if it is put in the hands back in the treasury. we were on the phone with him yesterday. he was saying the companies that are impacted by covid such as travel and restaurants, etc., they don't need any more debt. that is what the fed program would do. they need more ppp money. they need more grants. he talked about basically there is a better way to distribute this money. talking about a man who effectively has two months to pull this off so interesting to see what the plan is. joe: let's bring in the bloomberg managing editor for asia economy and government, but following this story. chris, thank you for joining us. what do we know about the motivation for this request from thmnuchin to powell, which powell will comply with. some say this is potentially new capping economic aid under the biden administration.

treasury saying it is about redeploying the money. what do we know about the goal here? chris: it is a bit of a head scratcher. ,n the one hand, that is true as secretary mnuchin says, that the market does not seem to need this help right now. -- the carnival cruise carnival cruise folks do a big bond sale today, getting $11 billion for $2 billion worth of issuance. on the one hand, mnuchin is right, for now the market does not need it. he has come out since last night's announcement to say what he would like to do is have the unused funds repurposed for grants and fiscal spending. this is, again, a little bit of a head scratcher because the congressional budget office counts loan money not as

appropriations, not as spending. that money is supposed to come back. and then theut government gets it back. you cannot repurpose that for fiscal spending. so, what net -- one narrative we heard from the trump administration, we heard from larry kudlow earlier today, was that the thing is, the economy is coming back. it does not need so much help, thatybe the narrative is we've achieved recovery. we've done what we needed to do. we are going to declare victory and leave it to the next group to clean up the mess. caroline: a belief that you try to declare victory just as we are going into what seems to be a pretty bad second wave. certainly, that is what the likes of a chief economist was saying. tim was with us earlier. he managed to make money on some

of the lending. he thought it was far too early to be repurchasing money. from your perspective, there has been hopes and prayers from the market which has not responded much to this that we will get some sort of fiscal stimulus. what do you think the reality is of that? chris: what we have seen here is a very unusual split between the fed and the treasury, right? you're used to seeing the fed chairman and the treasury secretary, you know, in lockstep on relief and emergency packages and so on. so, this kind of split between these two institutions feeds into the narrative that washington is really kind of broken here. they cannot get a fiscal package done. they've been negotiating it for months. they're still where they were back months ago. $1 trillion apart on the fiscal stimulus package.

now the fed and treasury cannot even agree on renewing some blending facilities. so, it does feed this narrative that something is really broken in washington. you saw this in the statement that the u.s. chamber of commerce put out last night, saying that american businesses are tired of this kind of partisan bickering. just pull together. everybody should be rowing in the same direction and help the economy. caroline: well said. we thank you for bringing that perspective. romaine: just a reminder, you can subscribe to our weekly podcast. you will find all the best content each friday. enjoy over your weekend. it is available wherever podcasts are available. caroline: unless you are addicted to hulu and looking at the new animaniacs. joe: no they won't, they will be listening to "what'd you miss." we have a great one on quants coming up on monday. caroline: you had me at quants.

we are sadly going to have a week off. romaine: am i allowed to listen to it? have a great weekend, everyone. joe: this is bloomberg. ♪

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this is bloomberg technology coming up in the next hour, pfizer asked the u.s. government for emergency approval of its vaccine, that means it could start seeing -- being deployed as soon as december, the u.s. is now nearing 200,000 new cases a day, we are going to talk to a