>> we are in a very serious environment. >> it's a lot of bad news to get through in the next quarter or so. >> the tea leaves have never been harder to read. >> these reports are getting overshadowed. >> what monetary policy could do most importantly is support fiscal policy. >> this is "bloomberg surveillance." jonathan: four four our audience -- for our audience world ride, ferro alongside lisa abramowicz.

tom keene is away and no doubt he would like to talk about this, the redhead blind across the bloomberg with continuing eu trade talks year coming from a spokesperson. lisa, you asked about deadlines. according to the lease -- latest deadlines, what do we do about trade talks? lisa: i love that you say the tomo want to talk about this, the implication being that you will not. that's a very, very not subtle subtext here as you talk about what is a deadline, after all. jonathan: he is of course are chief exit correspondent and he will be interested in the headlines, as will many in the u.k. they are rolling up continuing trade talks next year with the prime minister engaging with a phone call with the commission president later on today. that's the story for the markets . otherwise not paying much attention to this whatsoever. the rest of the world has been

focused on the headlines around the pandemic. it's a record high in the s&p right now. record high and the nasdaq. in the nasdaq we had eight days of gains on the 100. in the russell, five straight weeks of gains. rally after rally, week after week. fundamental's a question, how much can the wall of cash offset the issue in thes that people have pandemic, economy, frexit, and more trade sanctions overnight from china on hong kong disputes. these were all issues that people cared about a couple of years ago. they don't come anymore, because there are fiscal support packages being passed, the fed is on board, how can they lose? toathan: condition did not care. vaccination start tomorrow in the u.k.. could be approved this week in

the u.k. and the policy, everyone believes it works. we have been conditioned to the experience that fallbacks should be bought in the fed can keep conditions loose, even with a large slice of the global economy closed. that was the lesson of 2020. i don't know if you can extrapolate it out for another decade, i know it feels uncomfortable, but that's why so many are piling behind this view. lisa: i do wonder, though, if fiscal so -- fiscal policy doesn't support monetary policy, do things continue and get that much more divorced from the underlying economy? the good newshan: is that the stimulus plan looks like it's getting more support in d.c. stanley director of fixed income research joins us now. up in risk, down in quality.

that's the conclusion for morgan stanley. why? good morning to both you and lisa. i think that where we are is the tremendous support of policies that you alluded to. monetary policy to remain extremely accommodative and we expect more fiscal policy friday.through after we are in a place supported by policy. the better-than-expected results , it all is in combination with it paying to keep the faith. trust in the recovery, go down and risk assets.

jonathan: that has been the mantra coming out of morgan stanley since spring and you have been handsomely rewarded if you have done it. vaccines, good for humanity and global economic prospects, but not for the dollar. are they bad for treasuries? and if so, how bad? >> we expect to see a gradual pickup in the treasury rates. we will remain very anxious past 20 22, meaning that we expect to see the 10 year treasury curve steepen. our expectation at the moment is that over the course of next year the 10 year will go from where we are today to 145 by the end of next year.

gradual, not like a spike, but a gradual increase in the 10 year part of the curve. lisa: and that's the point, the idea that the pathway up should be slow and measured and that is how the fed is going to engage market going forward. absolutely. the fed has been very clear on that. they have the tools to keep the , the financial conditions, relatively stable. i think about it mostly with financial conditions and their to keep those financial conditions very accommodative. fed cane tools that the easily deploy. we are not expecting them to change anything indeed with maturities in the meeting.

but it doesn't mean that the option doesn't exist for them. so, there is more that the fed can do and is able to do. we think that the fed will gradually wrap -- allow rates to go higher without threatening financial conditions. lisa: let's sit on that, you don't expect the fed next week to change the duration of their bond purchases. last week at td securities we heard that if they don't, it could cause a taper tantrum because this is the expectation baked into markets. do you agree? >> the market has assigned great a pup probability on that extension, but we think that over the course of the last week or 10 days, the market has come to terms with that may not be happening. think thatt really

the markets will be terribly disappointed at this point. a lot of it is already reflected where just because it doesn't happen in december doesn't mean it isn't going to happen at all. it is an option that the fed will keep. there's another elephant on the long end, anyway, the ecb. italian 10 year yields are down 60 basis points in the spread over germany is 120 eight with -58 basis points on the german ten-year. -- 10 year they think the fed will keep buying over a longer amount of time. i think many people in the treasury market are wondering how high yields can go. if they go in the other direction in europe. >> i totally agree with that. which is why we think that we

should completely higher the relatively measured where we are to 145. that's certainly a meaningful would callothing i dramatic. we wouldn't expect a spike here. >> there is that part are better places to pay credit, but it is a part of the trade. jonathan: where are the better places? >> they are on both sides of the atlantic. we expect investment grade with triple b or single-a. the incentive for those companies to remain investment grade are substantially higher

and we think that the expectation that earnings will pickup meaningfully, my colleague has talked to you about this, we think that the companies are going to be acting in a much more credit friendly preserve their capital structure in the credit spectrum where we liked being loans over the bonds over the coast of the year with the rates not rising gradually having an effect on high-yield performance on the back half of the year, actually favoring the leverage loan yield world with bonds in the back second half of next year. overall, down in quality, that's intact even though we have seen compression within the quality spectrum and more compression yet to occur.

jonathan: always great to get you on the program, sir. that's the outlook for 2021 on fixed income and equity. loans over high yield on the backend for the second half of 2021, reaching out to morgan stanley for more on that, high-yield, the spreads have got more to run. the triple b's and double bees are still the sweet spot, but they found religion, incentive to keep the credit rating investment for the triple complex. the fed has already been soaked high and you have beaten this drum for several months but it just keeps getting tighter. lisa: the spreads are the tightest since february but the yield is the lowest on record. for high-yield bonds, 4.39%. you got that in investment grade. triple b is on the treasury yield, john. jonathan: unbelievable.

i did say that treasuries, you know, the assets are now investment grade and investment grade is now high-yield. where high-yield is, i don't know. coming up on this program, tina fordham, head of global political strategy, heading down to d.c. in just a moment. this is bloomberg surveillance. with the first word .ews, i'm ritika gupta one republican senator predict that president trump will get on board with the package for coronavirus relief. cassidy told fox news that mitch mcconnell will back it, to. he's a member of the group pushing the measure. president trump's lawyer rudy giuliani has tested positive for coronavirus and according to reports he has been hospitalized

in washington. his son says he's getting great care and is feeling well. giuliani has been leading the efforts to overturn the results of the election. exports jumping in china since july of 2018, pushing their trade to a monthly record high, underlining how global demand for pandemic related goods is helping the chinese economy rebound. another potential blow to the new york city stature as home of the u.s. financial industry with goldman sachs considering plans to move their asset management unit to south florida. operating remotely during pandemic they have persuaded firm leaders that jobs can be moved out of new york to save money. university music is perching the entire song catalog of bob dylan in what is described as a blockbuster deal, spanning six decades and has songs like blowing in the wind and the times are a changing. people familiar with the terms

say that his songs are worth more than a few hundred million dollars. quicktake, global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. ♪

>> we are going to focus on those most vulnerable and those on the front lines with covid with the initial 40 million doses in the next month and we

will progressively keep adding more and more people. be thinking in that timeframe that you will see more general vaccination and by the second quarter of next year we will have more vaccine for every american that wants it. andthat's -- jonathan: that's the timeline from alex azar. good morning. the timeline for vaccinations, perhaps in another q2, the stimulus program, how much of we talked about this? it's about the bridge to the end of q2. you and i have both said the same thing, making the mistake of calling it stimulus. really, it's an aid package to get us to the end of q2. stimulus is something that you think of after that. i'm curious as to whether there will be direct payments to individuals. the word is there won't be.

the details matter, especially if the pandemic is getting worse. thathan: and will we get funding in state and local aid? let's start with your read on negotiations on capitol hill? certainly seems more constructive over the last two force-out. what's your take? >> i always get worried when it starts to sound constructive, because part of that signal that talks are going well is in itself just a reflexive political imperative for both sides to be working in the country's best interest during this time of crisis. everyone uses the same expression, devil in the details . the observation about this being aid rather than stimulus is astute. we forget how toxic the term fiscal stimulus can be in the u.s. context.

so, i am less optimistic, actually, now, than i was the last time we spoke, but then i was wrong, so, i think it will be in republican interests to be seen driving a very hard bargain. especially since we have the signposts of the georgia runoff coming. jonathan: what's the main opposition, state and local funding? is that still the main sticking point? >> i think there is room for compromise, but republicans will want to be seen as driving a harder bargain. one of the new twists we have experienced since the presidential elections is republican finding -- republicans finding religion again on deficit spending. they are not going to want to be giving it to democrats and that's why i worry that markets are getting ahead of the politics on this one. we haven't had a lame-duck

session as contingent in this one -- is this one is likely to be and i worry that the scorched-earth tendencies that we have seen thus far might bleed into the stimulus discussion. looking at where the deficit hawks come back into play, mitch mcconnell did propose a skinny bill with talk of him signing onto the bipartisan agreement once details were hashed out. president trump seemed amenable. who are the deficit hawks? >> listen, we have seen a different tone in congress. i'm here in london talking to you about global macro. i think that the political imperative to get a stimulus bill done was there before the elections. i'm worried that if there is tension, particularly contentious moves where we haven't even gotten people to recognize the result of the

presidential election in the house, that gives a lot of wiggle room to say that you know, we want to do the right thing for the country but we can't get there. jonathan: you mentioned the importance of language, aid not stimulus because the word is toxic for the politics of the united states of america. when you start to hear the words state aid, to another person that's just a bailout of poorly ran states. we have heard it so many times from the administration. i'm wondering, from your perspective, is there anyway that they can offer aid without it being considered a state bailout of what many republicans in the electorate might consider to be poorly run states? >> to me this is all code. i've been living outside my country for 20 years. there didn't used to be debate about which states were run well by the governors on which side.

i'm really worried that we are even normalizing this discussion . it's the biggest crisis in decades in terms of impact on lives and livelihood. to suggest that it is in any way rational or reasonable to do anything other than pass a thatlus right now, i think doesn't put the economic interests of the country at heart, which is why i said what i did about the return of fiscal discipline and, frankly, finding a pretext to avoid doing what needs to be done. the united states in a crisis were picchu are losing their lives it be differentiated between well-run states and poorly run states based on political tribe. to me this is a pretext to not do what needs to be done, what every economist, central banker has all agreed upon. this is getting held up in congress. go one stepwould

further. it exposes the intellectual dishonesty in some parts of the debate, the people who are unwilling to offer aid to what they consider to be run poorly run states are considering offering aid to airlines, which many people on wall street would consider to be poorly run in the context that they had no cash when things hit the fan. run enterprises, shrinking enterprises, even dying enterprises. i think you might have struck a nerve. i'm just not willing to use the current terms to have this debate. the stimulus should be passed. in europe where i am, the governments, composed of many political parties, are finding common cause and are seeing these things past so that people can move on with their lives. we have a few more months to go. what really worries me about what's happening in the united

states is we have the worst of all worlds. we haven't even had the fully fledged lockdowns. they have been partial, they have been late. a vaccine, thanks to the hard work of scientists and epidemiologists, is coming, but we have many weeks to go before that rollout and markets are buoyant on the amazing news that the vaccine is coming but we could have many months of delay, which is why i worry about what populi risk, week state capacity combined with anti-vaccination sentiment, compounded by these delays in the stimulus that's necessary could make things truly problematic in the coming months. jonathan: challenges are still to come in the near term. tina, thank you. alongside lisa abramowicz, i'm

jonathan ferro. audience, for our worldwide, heard on bloomberg radio, seen on bloomberg tv this monday morning, equities are pulling back just a little bit. this is bloomberg. ♪

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lisa: from new york and london, good morning to you. this is "bloomberg surveillance." here is the price action. talk about rotation to cyclicals into small caps. 100, eighth monastic day winning streak. futures unchanged on the nasdaq. we pull back from all-time highs on the s&p 500. let's get to the bond market. just to give you an idea on the treasury curve. last week, steeper. yields up. this morning, flatter. yields down. round about 117. friday, payroll support. the reader cross, more chance to get stimulus in d.c. supply concerns. too narrow.

it is more important is what supply does to economic expectations, inflation, growth. rate expectations further down the road as well. that is the story. market, like treasuries, boat lift yields. you need better growth expectations. the idea we look at italy as an example, or greece, i will show you japan. overlked about it enough the last 90 minutes, you know where i'm going. sterling weaker. sneak peek at 113. you know what the conversation is, talks continue but they won't continue into the new year on trade. we learned that 30 minutes ago. i do not know if that keeps you more clarity. earlier therted prime minister was ready to walk away within hours.

hours later, we learned he will be having a phone call with the european commission president a little bit later this afternoon. talkslks about trade continue. lisa: it is exhausting, the brexit discussions. jonathan: i am exhausted. i have managed to ignore it for four years and i'm exhausted. lisa:lisa: we are all exhausted by it and the pandemic. this double whammy for cities like london and new york. with not just brexit respect to london, the london mayor sadiq khan was on bloomberg this morning with this idea of cities being cleared out. high cost cities suffering disproportionately. goldman sachs weighing plans for a new florida hub to house asset management. should allie bostic joining us. -- cinelli bostic joining us now. >> you already see this

happening at a lot of big asset managers. pick upne already and presence in the city of miami. ken griffin as well. goldman sachs is a bank. it has more than just asset management. if we see more parts of the financial industry move there, the question is how much of the industry moves out of new york? jonathan: what it comes down to is not the end of cities, the end of expensive cities. that should be the conversation. over the last few months, people have been talking about, will cities make a comeback? the conversations we are having right now is about what happens to the expensive cities, like london and new york. >> that is the question. we are not talking about them moving to the middle of the country, we are talking about them moving to palm beach county

, fort lauderdale, dallas, texas. another city i ask about is denver. you see so many tech titans moving there. about taxation. if your employees live in a lower tax base committed to you need to pay them as much? you can pay less for real estate as well. this is not about the death of a city, this is how about a city moves through a tough time and whether there will be flight from new york city we have not seen despite the risks. , you speak tokly the people that work at these banks at all levels. the asset managers as well. when you speak to people who are not making management decisions, do they want to go to south florida? >> not everybody. what is remarkable is some of this push is coming from

employees themselves. we do not know whether that is going to still be true for the investment bankers. your classic investment banker, i was talking to one who was spending all of his time in florida because that is where his clients were. youore asset managers move, see more of a reason for wall street to join them. jonathan: great work as always. latest onak on the this big move. this is a conversation that existed before the pandemic and it is important to highlight that. lisa: goldman sachs had a plan in place, trying to move employees away from high cost cities. they said this is just a continuation of that. you wonder if this is accelerating. jonathan: what does normal look like? let's bring in dan ahn, head of microstrategy.

-- macro strategy. what is normal in the conversations you have on the back half of 2021? means al probably growth range a lot closer to long-term potential. to 1.5 range, but not the large double digit annualized 30 plus and 30 minus growth we have seen before. numbers, itsimple is a question as to -- not so much what happens to demand. we think a lot of demand will areas be normalized, but where supply is going to have to adjust to a new reality, demand is never going to come back. we have been hearing about

people's locational preferences. does this mean that the demand for high end luxury condos in manhattan is going to change? does this mean business travelers going to change? mean that demand for digital services is going to be at a new permanent high? companies are going to have to adjust to this. while there are opportunities for some, there are challenges for others. lisa: how do you measure in an economy to -- dominate a biotech? -- dominated by tech? >> the classic way to assess where inflation is going is looking at the measurement of output slack in the economy. we just released our latest global outlook where we see technical measures of slack in

the economy close by the end of 2022. we do see higher inflation nominationting aside effects starting in late 2022, early 2023. how widespread is this going to be? is this going to be a general move across the entire economy, or are we going to see parts of the economy in the doldrums while others are red hot due to more demand? trend intong to higher wage pressure more generally, or just in a few sectors of the labor market? that is a big question the new administration will be asking. lisa: it is hard to imagine, if you think about fiscal support plans.

if the government were to engage in another round of helicopter money, with that fundamentally change your view on inflation? >> i do not think it will fundamentally change, but i think it will ward off some of therisk we could fall into deflationary trap. inflationary expectations, as you measure them by market breakevens are kind of teetering lower, ife of moving this does look like there will be lasting scars in the economy. the recovery and breakevens we have seen i think is out of hope that the scars will be less damaging as the vaccine rounds the corner. the question is, can there be enough fiscal support to -- us through this transition until the vaccine arrives that will

support inflationary expectations? that is probably the most important way in which this immediate fiscal support can nevertheless have long-term impacts on the economy. jonathan: let's make it simple and wrap up with this. number why the 250,000 we got last week is so important. how many jobs do we need to generate to fill the gap of the last nine months, and how long would it take at a rate of 250 k to get it done? >> we are talking millions of jobs still displaced. it is an open question how much of those are going to be permanently lost and how much of them should be permanently lost. that is going to be the sticking point here. there is no question some kinds of jobs are going to have to go of the post pandemic

normal looks different. are those necessarily have to go away? to newly adjusts reality, or are they -- because of bankruptcies were liquidities? that is going to be in the minds of not just administration officials, but also congress to consider debating. jonathan: great to catch up as always. my best to you at the team. dan ahn at b.n.p. paribas. just as a basic idea, if you think about the millions of jobs we need to recover over the last nine months, if you are going to generate up to $250,000 a month, you are not going to get it done for years. not months, years.

to fill those gaps is going to take a long time. lisa: i am struck by the participation rate that is remaining low. people have dropped out of the labor force. what is going to bring them back? will there be jobs they have the skills for when they are ready? jonathan: coming up, a struggle for this industry. -- onaniel blued restaurants and hospitality. this is bloomberg. ♪ ritika: joe biden has chosen javier becerra to be his health and human services secretary. his job will be to curb the pandemic and expand the affordable care act. -- formerreign congressman, but has little experience in health industry.

bill barr considering stepping down before president trump's term ends according to the new york times. the president was angered when barr acknowledged the justice department found no voter fraud. the u.k. will not continue trade talks with the european union next year if negotiators can't reach a deal this month. that comes from a spokesman for boris johnson. he said the transition period will not be extended past december 31. earlier, officials warned talks could collapse. looking to outperform intel -- planning a series of new processes for introduction exterior. apple engineers are working on successes to apple's main processor that debuted last month. if elizabeth's -- 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.

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>> the combination of the vaccine and mass testing of those who are asymptomatic leads us to have hope toward the new year.

we are hoping to see tourists return next summer. it is important they do so safely. jonathan: hope is a word you keep hearing. that was sadiq khan, mayor of london. good morning. i am jonathan ferro. tom keene is back tomorrow. open, richardhe bernstein, ceo and founder of richard bernstein advisors. interesting to hear how much people are positioning toward ongoing momentum versus pushing back on consensus. i want to turn to the landscape. seecities right now, you people trying to set up to get people into keep business as the weather gets colder. you are also seeing shuttered restaurant storefronts. frontaniel boulud on the lines, watching this with his

own restaurant as well as others he is working with to save new york city's restaurant scene. chef boulud, thank you for coming back. >> good morning. what do you think the new york restaurant scene will look like post pandemic? >> right now, we are trying to imagine it will come back to tweaking.h some right now we are really struggling. every restaurant is struggling all over the country, especially in the north with the fact they have to deal with cold weather. privatelle, we built bungalows. it is fantastic. but it ise that, still not a business model. -- we've got to go back to 100%.

once we are back in business? i do not know. right now, it is important to and uphold the community. it is important for people to go out and feel comfortable. lisa: we were talking with sonali basak earlier about goldman sachs and how they are thinking about moving operations to florida. that has been a feeling some of the financial industry will move away from new york city, and reduce business lunches. how concerned are you about that longer term on the prospect for higher end new york city restaurants? >> it will always exist. new york city will always have a restaurants.ess of we will see. we will deal with it, but there

will be companies taking the ability to come to new york city and i think new york city will be back to what new york city was for sure. years, take a year, five 10 years, i am optimistic. new york city is the biggest city in the world when it comes to doing business and banking. city foro a prominent that. will -- alldining dining -- because really, they support everything. supporting -- casual to fine dining, everyone gets impacted. now, they want to support restaurants, they should buy these certificates commit they should buy gifts to their

employees, their businesspeople. they are not doing corporate parties. at least give gifts to clients through that. delivered to their homes instead of having a dinner. creativealso destruction, the idea of restaurant tours that have had to shutter their restaurants, whether they actually see this as an opportunity to return as rent goes down. have you heard about that activity? >> of course. restaurants, thousands and thousands of restaurants of closed all over the country. to quit.not going no one wants to quit. surviving,hey are and for some they are thinking of what should be the strategy

next. me, i have my business in new york city and still i have to think of the strategy of reopening the rest of it. we are waiting in new york also to get back to normal with lincoln center, broadway, tourists, everything that makes the city vibrant and active. the city we have known. lisa: going forward, i know you have been involved in a number helpitiatives to try to both restaurants as well as first responders. can you give us a sense of where you are on that? foundedurse we have food first foundation with my partners. we have distributed almost through the end of december,

half a million meals to new yorkers in 25 different locations over manhattan and the five boroughs. shelters, of food course, homeless shelters as well. i support -- meals to elderly new yorkers. initiatives,f the but many of my colleague chefs have been on the forefront of supporting their cities. the first charity, one -- is the chefs, the second is the entertainer. here we are, frontline again to make sure we support our community. do youhen you are alone, cook elaborate meals for yourself? >> i like the one pot meals. lisa: join the club.

>> you start by what takes the longest and gives the most flavor to what will take the least, and maybe give particular texture to it. of course, always a pinch of spice. i have a young chef i used to work with me, he is doing an amazing array of spices already mixed so you already have a pinch of that to make the dish wonderful. lisa: thank you very much, daniel boulud, we appreciate you joining us. thisof luck as we face winter and beyond with the rebirth of a number of restaurants. as we all contemplate that one pot meal with a pinch of spice, the nasdaq has turned positive on the day. s&p off of the earlier low, now down just one quarter of 1%. vix coming up.

yields lower. yield. on the 10 year tom keene rejoining us tomorrow. this is bloomberg. ♪

>> the countdown to the open starts right now. we begin with the big issues sweeping across the country. states implement in tighter restrictions with hospitalizations threatening health care systems. california faces stay-at-home orders into next year. spread, withw the experts expecting -- >> we will not see a peak in infections until the end of december, maybe into january. vaccinations are on the horizon. the secretary revealed a possible timeline. >> will focus those who are vulnerable and on the frontlines lines of treating people with the initial 40 million doses, and then progressively keep adding more people. be thinking in the february/march timeframe you were going to se