city, in our state, and our country are not going to return from this. >> people are stretched as far as they can be almost. >> the tea leaves have never been harder to read. >> i am worried that markets are getting ahead of the politics. >> the stimulus isn't there yet, and you got a complete lack of coordination. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. from new york and london, for our audience worldwide, good morning. this is "bloomberg surveillance ," live on bloomberg tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. with your equity market adding to the record highs of the close on the s&p 500 and the nasdaq, we had dents -- we advanced 0.15%. somehow we are making progress down in d.c. i hear a lot of noise. i since very little progress. tom: as you know, the news gets

made in the late afternoon and into the early evening in and there is no talk of a single $600 check. i don't know you how you sell that to a huge part of america flat on their back. deutsche bank reemphasizing at all in 12% unemployment rate. jonathan: different sounds, same story. that is the issue down in washington now. same issues, liability protection, state aid. leader mcconnell saying let's put those two points aside, agree to what we can agree on, and revisit those in early january. whether theea democrats will come along with that right now. it doesn't look like it. tom: that is the split of the nation. movement.you see the this market is moving so fast for the elites, for the haves of

america. years hasime in 14 sentiments and so up -- has sentiment been so up, up, up. i know that will be the theme this morning. jonathan: sentiment the narrative. how many times have we read that headline, stocks are up because of stimulus talks? i think the perception of how stimulus talks are going is basically shaped by what is happening in this market. for the conversations we are having, that seems to be what did eights them at the moment -- what dictates them at the moment. lisa: i think you are right, but there has been a change in the political pressure, especially postelection. i think that is the question heading into the january 5 georgia election that is going to determine the dominance of the senate. there's a greater sense of urgency as you see the economy .ontinue

you can see initially, there was that spike up, and now it has been decelerating. could that add to the feeling we are losing momentum? we will get the crude oil inventory report. i know both of you are hanging on the edges of your chairs. however, there has been a steady increase in the inventories of gasoline, basically indicating that people are not driving around as much. this means less commercial activity, and again, deceleration adding to that sense of urgency. at 1:00 p.m., the u.s. is planning to sell $30 billion of 10-year note. this will be interesting, especially ahead of next week's fed meeting. how are investors going to be by end with the expurgation the fed to come in and bid up prices? are people going to take note of some of these inflation forecasts from jamie dimon and from jeff gundlach? you are laughing, jon. i can hear you. be alook, this is going to

theme this morning. jon, jump in here. this is really important. we have seen this for over a decade of people modeling out a higher interest rate environment , time after time after time it hasn't happened. credit suisse years ago had the mother of all charts on this. it has been the great missed c all of i am going to say 15 years. jonathan: i think whatever the ceo of a bank starts making calls about markets, it makes it very awkward for everyone who works at the bank when that issue comes out a little bit later. you're telling me jp morgan has nothing to do with 10 year treasuries now? tom: mr. dimon listens and phones every morning, you guys. let's be clear, the rest of them don't agree with their ceos call on debt. jonathan: they didn't back in 2018 either, when jamie dimon said you better be prepared to

deal with rates 5% or higher. that never can around. on the equity side of things, he's been prolific since 2016, when we had that huge growth shock around china, when he basically kicked the bottom of the market. but we have seen it time and time again, people who are expecting yields to climb, and yields keep going lower. i know you caught up with steve major at hsbc. i know he is seeing 25 basis points into 2021. jim caron of morgan stanley joining us right now. weigh in. i know it gets awkward with the ceo of a bank starts to make a call, but it isn't your ceo, and i haven't heard goldman say anything about 10 year yields recently, so what are you looking for in 2021? jim: we are looking for yields to drift a little bit higher, but i think a lot of these calls for inflation and significantly higher are premature.

-- significantly higher yields are premature. let me go through the reasoning and rationale for this. the point here is that we have a pretty significant output cap. credit growth in the u.s. is just about 2%. we grew this year at about -3%. therefore we are below trend growth by 5%. is what we call an output gap. the question that everybody asks themselves is when are you going to close that output gap, because that is when demand comes back into the economy and you have more demand that pushes prices higher. so until the output gap closes, you don't really get higher inflation. by my calculations, we would have to grow at 5% in 2021 in gdp in the u.s. and 5% again in 2022. that is beyond most forecasters. another words, next year, many forecasters have 5% or 6% growth, but the following year

in 2022, most forecasters have somewhere between 2.5% and 3% growth, so we are going to fall short. we need a significant amount of fiscal stimulus, continued monetary support in order to get these animal spirits moving higher to get prices moving higher. but right now it looks like we are falling short of that. it is not that yields can't start to rise. we are seeing that with breakevens. around breakevens are 190 basis points. real yields are falling. all of this is a reflection of expected stimulus, whether monetary or fiscal, but we are theactually seeing inflation come into goods prices. that is really the key. unless we get that, it is going to be hard to have a sustainable rise in 10 year treasury yields year, 1.25% or 1.4% next but that would just be a natural adjustment, not inflation scare. jonathan: 1.25% on the 10 year. the idea of this reflationary narrative doesn't evolve, that

is your view. when it comes to risk assets, you are perfectly aligned with the crowd. why? jim: because i think there's a shortage of securities, for one. there's a lot of liquidity in the marketplace and not enough securities. corporate supply next year is probably going to be lower in terms of net issuance by about -$500 billion, so next year we may expect around $1.3 trillion. and 1.3llion this year trillion dollars next year. the fed is doing qe and continues to buy $80 billion per month. maybe even extend securities next week. the point here is there is a lot of money which, by design, is out there to flood the markets. there's just not enough securities. there is going to be demand for yield. yes, it is a little bit counter consensus, but the point here is fiscal policy and monetary policy together will actually

stabilize the markets quite a bit and keep interest rates relatively low. i think rates rise a little bit, but i don't think they rise as much as what some may be thinking they might just because there is so much cash on the sidelines that is looking for places, looking for yield, and it will come into these markets. lisa: we've gotten a little bit philosophical on "bloomberg surveillance," and your note had a very philosophical undertone. the idea that there is this incredible divergence and tension between asset prices that continue to rise due to interventions from policymakers, and that fundamentals are really not checking up -- not catching up. what is the? breaking point for that -- what is the breaking point for that? jim: essentially what we need to have his aggregate demand come back into the market place. if that doesn't happen, all we are going to do is stretch valuations more and more. that's take this as example. investment grade credit spreads in the u.s. are straightening at about 100 basis points.

spreads is under 400 basis points now. we've brought forward a lot of the performance in the market at this point 2021. 2020 was about a promise. this will stimulus, monetary stimulus, and we hope things get better in 2021. all of that performance has been brought forward. if we don't deliver on this , the delivery of the promise versus the actual promise made in 2020, these asset prices are going to look a little bit expensive, and there could be adjustment downward and price to reflect the fact that we are not growing fast enough. it is not that we are not going to grow. it is will it be enough. jonathan: i will tell you a great story about 2022, just you wait. of morgan stanley global fixed income, thank you. even if we do get that downside

surprise, we miss expectations in 2021, and someone telling you a beautiful story of 2022 of normalization, things getting back to normal, growth rates. in fact, we are going to go above trend growth. maybe even the fed will thick about raising interest rates, it will be that good in 2022. tom: it is a single missed call of the last many years, and that is a statement by people in ties and bowties and women in fancy dresses, that it is a single-digit equity world. it has been wrong, wrong, wrong. there's no other way to put it. jonathan: this year has been phenomenal. the bond market, europe, portugal subzero on the 10 year. everyone calling it totally crazy. that's the bond market in europe right now. that's the reality. lisa: the ecb is expected to continue to add to that rally. i pulled this note, $5.6 trillion. that is how much the major

central bikes around the world have added input it into bees and purchases this year -- central banks around the world qe purchases this year. jonathan: incredible. [indiscernible] tom, we are talking over each other. up on themick coming decision tomorrow. this is bloomberg. ♪ ritika: with your first word news, i'm ritika gupta. the trump administration is making its first move since election day to break a long standoff over a coronavirus release package. treasury secretary steven for $916 billion in spending that would include aid to states and liability protections for businesses. house speaker maisie policy called it progress, but said it shouldn't disrupt biggest -- house speaker nancy pelosi called it progress, but said it

shouldn't disrupt discussions already underway. u.s. regulators won't get a chance to rule until early next year. astrazeneca and johnson & johnson together would provide up to 2 million doses of vaccine in the first quarter. the supreme court has dealt a sharp blow to president trump's efforts to overturn the election results. they rejected a request from some of his allies to overturn joe biden's victory and penciling a. the high court's decision -- victory in pennsylvania. the high court's decision did not say whether any judges dissented. poland and hungary have agreed on a compromise with germany, according to the polish deputy prime minister. poland and hungary had vetoed the funding plan. they objected to tying funding to the adherence of rule of law. 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. i'm ritika gupta. this is bloomberg. ♪

but mcconnell what i -- sen. mcconnell: what i recommend is andet aside state and local

pass those things we can agree on, knowing full well we will be back at this after the first of the year. jonathan: senate majority leader mitch mcconnell can to lay aside some differences and may be agreed to a deal down on capitol hill. will the democrats come along with him? from new york and london, good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. live on bloomberg tv and radio, let's get the price action this wednesday morning. shaping of us follows on a record high on the s&p 500. we add some weight to it, up seven, 330 700. we are up another -- up seven, through 3700. we are up another 0.2%. showing some strength off of the highs we had last week. just a little bit of a left, about two basis points on the 10 year, about 94 basis this morning. tom: i'm glad you point that out, jon. it is really germane come of -- it isd right now

really germane, the real yield right now. it really lifts equities up. i want to this with evans a really, our chief washington correspondent. cirilli, our chief washington correspondent. talking of the nevada decision 6-0 they voted against trump and allies on the nevada election. they talked about one single phrase, to demonstrate error of law that did not occur. have we ever seen an error of law in any of this presidential litigation? kevin: look, i mean, all of these cases, now close to 40 cases, have been tossed out by judges across the country. think what you saw with regards to pizza when you is really -- with regards to pennsylvania is an indication that the results are not going to be overturned. i would say the following, that

just several months ago, in conversations and reporting that the entire industry had been at eight entire united states government to be politicized similar to the 2000 election, that has not happened. the supreme court has not been andped into a questionable polarized political fight. lisa: meanwhile, let's talk about stimulus talks that are continuing in washington, d.c. stephen mnuchin entering the fray with his $916 billion plan. a lot of people using this as justification for a new optimism in markets. jon noting you're not seeing any which made. has any progress been made? kevin: significant progress. the fact that there has been a proposal from secretary mnuchin, coupled with the continued

rhetoric coming from senate majority leader mitch mcconnell, yesterday i spoke with one republican lawmaker in the house of representatives who essentially told me that they are still incredibly optimistic of this will get done in the seven to 10 days, even if there is only a $600 fiscal stimulus check, and yes, that will mean senator bernie sanders and congresswoman alexandria because you cortez -- alexandria oak osseo cortez -- alexandria ocasio cortez have said they will not vote for this. jonathan: he's only saying he will give that up if speaker pelosi and minority leader chuck schumer give up on state aid. any sign they are willing to do that? kevin: to be candid, i think when you look not necessarily at the language that speaker pelosi is using, but other top democrats in the house of representatives like steny hoyer and others in that circle that

really revolve around the orbit of speaker pelosi, yes, i do think they would be able to get behind that, provided that, and this is where it is washington speak, that aid to state and local governments could be re-translated into grant programs for state and local it isments, in which case defining something on someone else terms. tom: washington speak, that is not playing on west 55th street in new york. it is not playing on streets jon ferro knows in london. when does washington speak wake up and listen to the nation, both republicans and democrats? first and foremost, the conversation you are seeing on fiscal stimulus is likely going to continue down to the wire, but secondly, yesterday the president-elect joe biden announcing that he is promising essentially 100 million vaccines

in the first 100 days of his administration. administration is really saying that the vaccinations -- tom: i don't mean to interrupt, but this is so important. i would just talking with michael from bedford, saying, why are we counting 100 million? what are we doing about business in america? and i don't mean big pharma or big technology like bloomberg. what are we doing right now in washington speak about small business america? kevin: this is where it comes down to with the grants, as well as the loans. if you look carefully at what senator marco rubio, republican of florida, democrat from maryland, what they have been looking for my french bill from arkansas -- looking for, french arkansas, with regards to main street. tom: the economist jon ferro has us nailed.

he's looking for income substitution. kevin: i feel like this is a broader conversation you and i should be having. all of my favorite people to the hay adams because they've got a great green smoothie for breakfast, so i feel it we should continue this. tom: it's closed. lisa: over a liquid breakfast. kevin: we could have john have johnjoin us -- malkovich join us. by the way, it's also john malkovich's birthday. jonathan: happy birthday to him, too.isa: -- to him, i don't want tom: tom: to take over the show, but jon, you have absolutely nailed this -- tom: i don't want to take over the show, but jon, you have absolutely nailed this. it is about income substitution. jonathan: otherwise, how can you expect them to comply with the advisory they get from state and local officials? i think it is so painful for small business, for restaurants

to be told if got to close up shop and that they can do business. to watch a restaurant go under, and we talked about this all year, it is brutal to watch loved ones go through that. it really is absolutely brutal at the best of times, but to be told you can't open up and even try to survive, that's even worse. to have those same officials tell you you've got to do that and then not offer you help off the back of it, that just isn't on at all. tom: tom brady is a football player, lisa, and he's got some business transaction where he got a lot of small business aid. i don't know. but i think everyone out there right now agrees and how unfair all. this is -- how unfair all this is. lisa: gary cohn put out a twitter post yesterday that i thought was fascinating, talking about the disconnect between the stock market and small businesses truly struggling. jonathan: from new york and

london this morning, good morning to you all. alongside tom keene and lisa abramowicz, i'm jonathan ferro. coming up on the program, mark mccormick of td bank. looking over to that. futures adding some weight to the rally in the record highs, up six on the s&p. this is bloomberg.

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jonathan: record highs coming into wednesday morning. good morning to you all worldwide. live on bloomberg tv and radio, this is "bloomberg surveillance ." up six on the s&p 500. 10 day winning streak on the nasdaq 100, longest winning streak of the year so far for big tech. we pulled back just a little bit on nasdaq futures, off by about 0.1%. 3700 on the s&p 500, already getting to goldman-s year-end target, looking for 60 more -- target,an's year-end looking for 16% more in 2021. this morning, yields higher by a couple of basis points to 0.9394%. looking at what is happening across the continent on the other side of the atlantic, subzero on portuguese 10 year

debt. we will talk about the ecb. a regular guest on this program pointing out that, given what he expects from the ecb tomorrow, the european central bank next all of thebuy 70% of bond supply that comes from european governments through the entire year. 70%. that is not net supply, either. that number is much higher. here's the story for foreign-exchange. euro-dollar going into that meeting, $1.21 flat. tomorrow the big one for christine lagarde and the governing's counsel -- and the governing council. this year andinto some of the challenges we see in a time of output gap, we spend a lot of time on politics this morning, a lot of time on the dynamics of brexit. how about the markets? we speak with mark mccormick of td global head of foreign-exchange -- of td,

global head of foreign-exchange strategy. i want to bring it right over into the great litmus paper of the system which is your world, which is dollar dynamics. what does that due to to foreign-exchange in dollar dynamics? mark: iq. what it -- thank you. what it does is pushes the dollar down. the way this works is the way the world's repricing reflation. ciber yield curves, higher commodity prices, pick up and emerging markets, focused in asia. a lot of that is pushing the dollar down because what you are seeing is there is expectation that the global economy is going -- economy is going to reflate mixed year. one thing we have tried to articulate to clients is if you have a view on equities or the global yield curve, you also inherently have a risk with the dollar, so it is one giant trade driven by the same global dynamics, regardless of how you want to look across markets.

lisa: i'm glad jon ferro talked about the ecb coming into the segment, how you see an ongoing push to buy assets there. when you talk about the dollar, this is related because you are seeing strength in the euro. at what point will the ecb care? jon has talked a lot about this. my question is can the ecb do anything to change this dynamic given the pressures on a bigger dollar they go beyond monetary policy? mark: i think part of what they can do is stem the rally. there's an element here that the global reflation trade is way too optimistic, at least relative to how it is pricing in growth markets. if you look at mobility and consensus expectations for growth, the dollar should be about 2% to 3% higher, and global equities should be about 4% or 5% lower. so the markets are already way ahead of the optimism that may not even be delivered next year given the competition's around vaccines or he just tickled

issues, but for the ecb, what they can try to do this at least stem the rally. i thing markets are already trying to get ahead of that since the euro has not really been able to add on momentum the last couple of days. it seems to be fading. but this is very close to the multiply saw in 2017. the euro rallied exponentially in a short time, and then just sold out. i think people might say this is cause and effect, this is basically because in the euro to stop. i think there's a bunch of factors. the ecb can be a catalyst to basically help what would be a positioning induced squeeze, but europe is still not a gross leader. what we saw on covid and what we have seen over the last few weeks is european mobility data is collapsing. indicatorsn growth are suggesting that the euro should not be above $1.20 now. jonathan: is ecb qe euro positive or euro negative?

if they disappoint tomorrow on the size of the package, what does that do to the currency? mark: i would say the euro rallies if they don't disappoint. eurotried to talk down the , then it is bullish for the euro because it justifies the momentum that people are trying .o trade this on in that environment, it is kind of a signal that they are willing to accept less inflation and a stronger euro, which would reduce some of the credibility in terms of the things they have been trying to tell the market that matters to them. absolutely. jonathan: so to some degree, do you think rate differentials matter in the traditional way? that if they don't push yields down any further, the euro has? ? got an advantage -- the euro has got an advantage? mark: i think real rates still matter.

the most important thing is equity momentum, so we are not seeing euros and related equities match the movement we have seen in u.s. and asian equities. the euro zone has a strong balance of payments and a current account surplus. we have also seen the rally in the euro kind of reduce the pricing gaps across normal interest rate channels. but real rates have collapsed in the u.s. and are higher everywhere else in the g10, but essentially you are not trading the euro as much on rate differentials, but what you are hoping is that if the ecb is willing to use the balance sheet to stem the appreciation, or at least induce more stimulus, that is just negative for the euro, at least in a very short-term manner, because they are trying to push it actively down. tom: you mentioned moments ago the dreaded verb exponentially. usually that is associated with losing money. as we go into 2021, how do i

play the speculative fx game not to make money, but not to lose money? mark: if you think about it, there's a couple of different themes. i think the double reflation theme is relevant. so it is too optimistic versus all of the potential bad things that would happen. i would call this the cognitive dissonance trade. do think there is room for the .ollar to weaken our e.m. team really likes the story in china, and also the carry trade. so you are long indonesia come along india, short taiwanese dollar, and to play on the growth impact that place on the reflation side and asia, you are long china versus taiwan. i think you could see the bias here is regionally focused on asia. this is going to be something

that is going to be driven by a month-to-month dynamic. i think the euro probably still peaks around $1.25 even if we get the up to mystic outcomes next year. lisa: so you are -- the optimistic outcomes next year. lisa: so you seem to agree with the consensus baked into a weaker dollar, stronger yuan, and even stronger euro from here. where would you push back against consensus trade right now? mark: the fact that it is consensus is challenging. we are all forecasting a year out amid the pandemic. if you overlay what the major theme is, there is complete dislocation without globalization, and if you want to call it the general public while globalization, biden will represent a change in foreign policy, the meta-theme of globalization and this age of

disruption is not going away. we are still going to live with extreme geopolitical uncertainty. we are still going to live with event risk that has to come through all kind of elections. risksould say that the are that all of these things that are happening so quickly and are changing the market rapidly are not going to go away. those things are likely to accelerate. so our view is that the thing we can map and the things we can forecast, which is the global economy is in a better position than it is right now, is dollar negative, largely because our dollar valuation models are overvalued, and the u.s. still has very low real interest rates and is likely to repress them further. interrupt,'t mean to to use tom keene's line, but what you're saying is consistent with what other people are saying as well, that basically the consensus makes us nervous,

but we agree with it and are jumping on it. so as an investor, do you hedge? can you hedge, given the fact that we are in such a low return, low yield world? mark: i think the part about being out of consensus is where we are now. we are getting a lot of pushback on the view that youth be fading these extremes, selling the euro. we are actively short the euro right now, short the swiss franc, and pushing back on the relation trade as we start year end. we are getting significant pushback on that because this is a momentum trade, and everyone likes the fact that moment and generates easy returns. , being out of now consensus right now is actually saying that the dollar is kind of reaching a short-term peak, and there's room for it to rally 2% to 3%, which means equities would come off. that in itself is entirely out of consensus. we are calling for a drawdown, but at the same time thing that is a good opportunity to read age -- to reengage. forecasts are generally in

the premise of consensus, but the tactical and strategic way you should trade it is completely out of the market mindset right now. jonathan: mark, love catching up. great to hear from you. mark mccormick their of td. i have to say, it is really finely balanced. if the ecb delivers an upside surprise or downside surprise, how the euro would respond to that, negatively or positively, either way. i could find people that would argue both sides of that. tom: i don't mean to argue here, but it is definitely true. [laughter] there is some ambiguity out of this, but what is so important about mccormick is it is nice to hear from somebody who is really pushing against the consensus call right now. jonathan: just a little bit, yeah. on the euro, i've got to say, if they deliver something big tomorrow, is that euro negative? doesn't that make people a little bit more constructive on the continent? tom: on a first-order condition,

i go with you. again, i don't mean to interrupt, but i think it is really important to see here what we do. [laughter] jonathan: lisa, what have you started here? lisa: i love this. keep going. what have i continued? are you pressing your own mute button? jonathan: kathleen smith, renaissance capital, coming up on the program. good morning to you all. this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. treasury secretary steven mnuchin is trying to break the month-long deadlock over a new coronavirus relief bill. he called house speaker nancy pelosi with a $916 billion proposal that includes 82 states and liability protections for business -- includes aid to states and liability protections for business. the offerlosi called progress, but was unhappy it did

not include unappointed benefits. --ong-running if you'd over a long-running dispute over aid to aircrafts. british premise or boris heads to brussels today on a rescue mission -- british prime minister boris johnson heads to brussels today on a rescue mission as both sides try to save brexit negotiations. if there is no deal by the end of the year, the u.k. faces a number of damaging disruptions, include in tariffs on exports to the eu. shares of doordash begin trading today. the food delivery service raised almost $3.4 billion in an ipo above its marketed range. that gives doordash a valuation of $38 billion. it is the third largest listing this year. 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. i'm ritika gupta. this is bloomberg. ♪

♪ jobhey have done a good with the couple of deals they've done. business, ae

distribution business, a branded business. it's got to make sense. it might be software. it might be for an -- it might be fintech. it might be something overseas. we are open-minded. mon.than: 1-800-di that steve online major at hsbc on line two. quite a remarkable statement from the leader of jp morgan saying, i'm ready to go. tom: the constraints are there. too big to fail and all that. but i must admit, i really noticed that was quite a comment from him, but it really speaks to what you see within this competitive landscape of one great roll up, and whether you will see one big combination as we move forward. catherine manette citigroup has really lead on this thinking. onathan: i want to touch

the market for we get to our next guest. we are up three on the s&p 500. another record high, and we add just a little wood of weight to it. through 3700. yields coming up a couple of basis points. no drama here, back to about 94 basis points on the u.s. ten-year. the main scheduled event now on the horizon in the diary is the ecb meeting about 24 hours away. tom: that is the economics of the moment, and that is what we do best here. we are thrilled you are with us on radio and television. right now, an adult conversation on the moment in initial public offerings. kathleen smith has provided terrific leadership at renaissance capital on clarity of thought on the frenzy of the moment in ipo's. we clear the air with her this morning. thrilled to have you with us. i am hugely skeptical.

is this a manufactured boom? manufactured -- boom if technology companies keep private ownership and release an ever so slight public amount, thus creating a bidding war for that ever so slight public amount of shares? kathleen: let me just backup by saying that 2020 is not only going to be in the record books regarding covid, but in the record books regarding -- [no audio] -- end of this year we have seen -- ipo's than any on record. when you talk about a small amount of flow to the larger value of the company, we are seeing very large deals. these aren't little deals like we saw in 1999 and 2000. in the case of doordash which is going to open for trading today, that was the largest ipo so far this year. they do have very big market caps, and they are going to have to expand their tradable flows

eventually, but to your point on is it a squeeze, i think there's always a challenge of pricing right in the supply and demand, but eventually they sell in, and they have to be connected with the overall market, which itself is pretty frothy these days. lisa: i want to talk about the froth and sort of zoom out at the 106 $2 billion raised in u.s. ipo's so far this year, breaking records at a time of economic distress. companies that were left for dead earlier in the year coming out as darlings with much higher valuations than expected. do you see signs of froth in the latest valuations of airbnb, which is expected, and doordash, which is going to trade today? kathleen: we have specific opinions about each of those companies. we think doordash looks pricey to us. we think airbnb maybe not so much. so i think you have to look at the company and its trajectory. but if we step back and look at

overall, what is making the market so open right now for issuance, one is that investors have earned positive alpha returns on the existing set of ipos that have come to market, and we have an index that has shown very strong returns. the reason that the returns have been fraught, which begets more issuance, the returns have been strong because interest rates are low, as we all know, and then post-covid, the digital acceleratedreally in its integration in our lives, andalso the biotechs vaccine. the digital stocks are a common constituent of the u.s. ipo market. that is why these companies have done so well. the growth has accelerated based upon current economic conditions. lisa: although you are looking at the renaissance ipo etf which

you say has performed very well. understatement. it has returned about 20% year to date. basically, people chasing returns. jamie dimon looking for 1-800 call me to get any deal done of any sort. at what point do they have to prove that they are worth this at a time of economic uncertainty, despite all of the liquidity pump into the market? kathleen: that is the challenge for doordash, for example. you have a company whose growth has soared through the pandemic. everyone wants food delivery. but what is going to happen once we get back to normal life? that growth trajectory has to drop, and that is a key challenge in analyzing doordash. in the case of airbnb, that company's business has totally fallen apart with covid, and they are now digging themselves out i think in an interesting way. they have had a restructuring that has gone on with the company. so we are looking at airbnb is a company that is going to be

forward-looking. valuation is going to matter. tom: this is ancient history. there's a thing called a red herring, and you read them. the first thing you do is go to the capitalization. i am seeing on the bloomberg a preferred equity tranche of doordash that would choke a horse. i look at these as manufactured transactions to create scarcity. what about the so-called preferred equity in doordash? is that a tangible private investment controlled by private shareholders? kathleen: i think you have to look at some of these are convertible preferred, so they become equity at the time of the ,po, but i would point to you when these companies may be expensive, but when you look at companies like zoom, that company has been public for less than two years. do you question the value of zoom? or moderna, that created a

vaccine? these companies are new. they take time to be analyzed and figured out in the context of the overall market. jonathan: kathleen, wonderful to catch up with you. thank you for your time this morning. nailed it on many ways in a number of issues, just talking about ipo's. they are the most important thing sometimes. it is rather unique to financial markets and how people react with any given market. when price starts to go up, people have confidence. the higher prices go, the more confidence they have in the process. it feels like the more expensive it gets, the more valuable it seems to become to other people. tom: the only reason i put up he quotes -- about every 90 days, which a bit of thing. they pick up equity ownership with dilution. to me, it is a whole new world after all, jon. jonathan: you paid -- were you

paid to quote that? tom: ♪ a whole new world no, it's because i want to interview iger. ♪ let it go let it go ♪ lisa: oh dear lord. jonathan: this is bloomberg. ♪ bloomberg. ♪

>> this this mrs. in our city, in our state -- businesses in our city, and our state, and our country will not recover from this. >> the tea leaves are harder than ever to read. >> i worry that markets are getting ahead of the politics. >> fiscal stimulus isn't there yet, and you've got a complete lack of coordination. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. "bloomberg surveillance." , we say york and london good morning to all of