♪ caroline: from bloomberg world headquarters and from right here in london, is "what'd you miss?" is "what'd you miss?" -- this is "what'd you miss?" the s&p 500 -- romaine: the s&p 500 closing at record high in going continuing it march higher. joe: the question is, "what'd you miss?" caroline: another day, more

andrds, across indices across assets, even as we saw u.s. jobless claims climbing to their highest level in three months. it couldn't slow down the optimism on the stimulus. and it isn't just big names we hear about all the time, small caps hitting a record high as ennl with names like p gaming leading the charge. will this enthusiasm wane? romaine: s&p 500 index closing out a record high. ♪ another day, another set of records. there certainly has been made yet in the markets across equities, indices, cross assets, even as we saw u.s. jobless

claims unexpectedly jumping to the highest level in three months. some of these fed facilities under tears officially coming to an end, potentially need capping some of the response on direct -- under a theoretical biden administration. romaine: even if you do get this done, caroline, you wonder what the actual impact is going to become of the economic impact, and whether it is going to make up lost ground we have had the last few months. so much to be made up for at the moment. let's get the latest from bloomberg government's emily wilkins. joe outlined stumbling blocks and what republicans want to shoehorn in. what is holding it up? one, republicans are asking to terminate the federal reserve pandemic lending facility. democrats, in while, are pushing to match for covid relief.

those are the last sticking points coming up in these discussions, however, there are other smaller issues swirling around. this might not be the last hurdle. tell.t is hard to what should we be watching for in your view? are the details the key thing, or is it more the mood music that all the leaders on both sides seem to want to actually make a deal? emily: it is a little bit of both. think we have finally gotten to the point where we can safely say all leaders want to make a deal, they have all said they will not be leaving the capital until an agreement gets done. at this point, it is the devil in the details and how much push they all feel from their respective constituencies. the upcoming christmas break is usually a very strong motivator for congress to get worked on.

romaine: emily, how much is the white house involved in this? last time we had a big bill like this, the cares act, stephen mnuchin was pretty involved in the negotiations. it doesn't seem like we have heard from them much? emily: mnuchin has really stepped back. he said he was going to let majority leader mitch mcconnell take over his spot. and it makes sense. mcconnell is ultimately go to be the person to decide whether this goes to the senate floor, so you have seen republicans and democrats in both chambers work together, you have seen ongoing discussions into late last night, and early today, and it seems in that regard, the group is making progress. romaine: we will keep an eye on the progress of the fiscal stimulus bill. if there is any news, we will bring it to you live here on bloomberg. bloomberg government's emily wilkins with the update. our next guest says, even if we get a relief package ahead of the holidays, it may be too

timid. i'm sure there is some rationale for what he said, coming up after the break. this is bloomberg. ♪

♪ we are focused on the enthusiasm and markets, indices hitting records, the stock indices, and joe, we are getting ready to print out our

bitcoin. for our hats. romaine: you can't -- joe: you can't just print the bitcoin. romaine: i thought so. a lot of pain and progress out there that we still need to make. joe: it really is striking, we talk about the gap between markets and the real economy. the real economy has improved since the worst of the crisis, but it is not in a euphoric state, like we seem to be seeing in markets. more confirmation of that weakness today, initial jobless claims rise to 885,000. precrisis, we were in the low 200,000, so this is a massive increase, arise from last week, worse than expected, a sign that this winter, covid waves slow down is very much here. co-author ofn the a bloomberg opinion piece on this topic.

how much in your view is what we are seeing right now in the economic data, failure to get stimulus, already evidence of a policy failure from d.c.? think the markets have pretty well digested the reality, which it looks like we are going to get something. it is not going to be a lot. it is not going to help everyone in the people it does help, mainly workers, ordinary americans, hopefully we will get them through the next several months, the vaccine goes well and they go on with their lives. that it is not the type of robust and thoughtful package you would ideally want congress to be able to pass in the middle of a crisis. not muscular fiscal stimulus, but it will have to do, i suppose. we have known this was going to be the reality for some time, because this is all we are going to get. i think markets have digested all of this.

they digested it, but what is priced in? news withnews is good more hope on stimulus, but if this is a skinny stimulus, what happens in the market to drive in higher? nir: it all hangs on the vaccine. the base case at this point is a widely distributed vaccine in the next several months, maybe middle of next year. and then we can move on. and people will start resuming their lives, and you get companies basically going back to normal. the reason i say that is because a huge rallywe had across markets and it was a beaten-down corners of the market that did the very best, that looked to me like reflation, the markets basically saying, time to treat these companies as if they are going to go back to normal operations sometime soon. and the market does that

historically, six to nine months before events actually happened. he saw that with the financial crisis, we have seen that with previous crisis, so i am roughly summarizing what the market is telling us. if that turns out to not be the case, we are going to be in for some bumps. romaine: then that brings us back to the stimulus package or whatever we get out of congress, and tuck critical that would be to maybe fulfilling some of these bets that have already been made in the market. your column today seems to suggest congress isn't willing to use their full fiscal power, the fact we are talking about a bill that is less than $1 trillion seems to suggest that is true. nir: that might be problematic in two respects. one, longer-term. as i say in the piece, we have all kinds of deeper problems we need to deal with. and we have an opportunity, so at the end of this, we will spend $4 trillion. $4 trillion would have done a

lot for infrastructure, education, public health. we didn't get any of that. we did what we needed to do, but we didn't get any of that. so those problems will persist. and they were a drag on the economy after the financial strike thi -- financial crisis, and they will be going forward. the problem is, it looks to me that this is as good as we are going to do. it is hard to imagine anymore fiscal stimulus -- any more fiscal stimulus coming down the pike. so we are at the point now, where if it isn't enough, there could be another inflection point where markets are spooked, the economic reality is not great, where a lot of americans are concerned, but we have the hope now that this is going to a well and this is going to be enough and we can at least move on, and deal with larger economic problems down the road. joe: in your view, from a markets perspective, the fiscal stimulus, what is baked in? ofit a successful rollout

the vaccine and more or less, returned to normal in q2? is that the key thing that in your view needs to happen, to vindicate the bulls? nir: joe, yes. the market is saying that as long as the vaccine goes reasonably well and everything goes back to normal around summer, there shouldn't be any surprises. this latest round of stimulus is actually going to get people from here to there without having too much of an impact on spending. as long as those two things are the basehink that is case priced into the market. if we get any surprises -- it is hard to imagine a positive surprise, but if we getting any negative surprises from there, i think there is going to have to be repricing. have you gotten into

bitcoin yet? [laughter] not.i have i'm slightly embarrassed to say. romaine: it's not too late. jump on the bandwagon. [laughter] joe: i'm sure you have a lot of questions. great to talk to you, nir kaissar bloomberg columnist and unison advisors founder. cappeak with a small investor, frederick stanske of fuller and thaler management, all during the market mania. this is bloomberg. ♪

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caroline: today, we are focused on the mania -- what else could you call it? -- in the markets. 684% in 2020. yes. see it hit the s&p 500 tomorrow. impressed with't any move unless you price it in bitcoin first. caroline: [laughter] he is totally underwhelmed. for the rest of us, they have had an extremely impressive year and after the close tomorrow, it will be graduating into the big leagues, so to speak, with inclusion in the s&p 500, where

it would be the sixth biggest. romaine: going to be a major event there, and a lot of activity coinciding with the introduction of tesla to the index. we will see what happens. a lot going on in this market with big caps, small caps, everything in between. joe: all the caps. romaine: here to discuss behavior of the market and participants is fuller and thaler portfolio manager and whoner frederick stanske, specializes in behavioral investing in small caps. fred, what is the behavior telling you? frederick: the behavior is telling me everything is pretty good, that the rest -- that investors are well aware of what is going on and aren't making many mistakes right now. they made mistakes earlier in the year, but i think they have corrected themselves. fred, what are you analyzing to get that gauge of sentiment? retail sentiment? whose behavior are you studying? frederick: we study the insiders

' behavior as well as results companies produce. if you look back to march of this year, you see record events of insider activity by insiders, buying up a lot of the stock that was being decimated in the market because of covid. and it looks like it was a pretty good bet right now. that is the kind of behavior we are looking at an kind of investors appointed time when you get extreme emotional reactance to the marketplace. joe: we were joking about pricing tesla in bitcoin, and we said in the intro that we used exuberance, throwing that word around. but maybe one day we will look at this and say it was not mania at all, maybe it will get crazier. to see whenlook for it is peak mania, euphoria, signs people are going all in? frederick: we would look at the behavior of the people that know

more about the company than anyone else. if so record amounts of insider selling right now, we are concerned. but we don't see that. or if we so record amounts of stock issuance, but we don't see that either right now. at we talkedat is about right now is 1999, and backing 1999, the technology portion of the indexes was close to 60% in the small-cap base. and we are nowhere near those type of levels. there was always frothing in some parts of the market, but overall it is solid. romaine: when we start talking about economic recovery, the market is obviously trying to front run that, get ahead of the beneficiaries of that recovery so if you are looking at small caps, some of those stocks that have been beaten down because of the pandemic and the recession, is the confidence out there right now that the rebound in earnings and revenue growth is along once the

actual economic recovery comes in? frederick: the insiders, like i said, that were buying back in march, they had a lot of confidence. and if you look at what analysts are doing in the marketplace right now, increasing the revenues, both on sales and earnings, i think there is a lot more confidence overall in what is going on. different parts of the market are having difficulty. and that is always going to be the case, but we are trying to find was situations where we find good information or bad information, but we think people are creating bad behavior based on that information. caroline: as they are reacting or under reacting, where are you seeing mistakes being made by investors? frederick: like you said, we think investors can overreact or under react in certain situations per right now, it seems there is not a lot of overreaction anymore, like there was earlier in the year. and there seems to be under reaction to earnings. a lot of analysts, earlier in the year, had dropped the

numbers way too much relative to covid and the economy. so those numbers are starting to come back up, and you are seeing people react to that information. and people had under reacted to that information for a couple quarters now, and that has really impacted a lot of stocks. joe: you say that you don't see a lot of equity issuance, insider selling, which in your view would be i hallmark of mania or a side of caution, but we see a huge amount of equity, massive ipo's, and anything that is not nailed down, it seems like people attract to take public in a spac. huge premiums in public market assets versus private market assets, look at air bn to be your doordash or some of these, why should we not consider these or doordash ornb some of these, why should we not consider these de facto selling? itderick: you can recognize

that way, but you can also recognize that a lot of the ascing that went on those ipo's came out, not moving as much as they did, i think there would be concerned about that. you are seeing a lot more retail investors getting involved in those ipo's, and that is probably not good long-term, but short-term, it is a minor part of the market right now. dollar amounts might be very large, but to small caps investors, it is not that big an issue right now. romaine: with regards to the retail side of this, during the tech bubble in 1999, there was concern back then about retail investors getting in other vehicles they were using to get into the market. we looked at it differently, but it was the same influx of folks to the market, and there were concerns than in some concerns proved to be founded, while others didn't. are there parallels we can find between what happened in the lead up to 1999, that pop and that bubble, and where we are today?

frederick: you can look at what percentage certain industries in thed technologies, small-cap index, it hasn't taken up a very large portion of anything unusual. also, you could look at how individuals are reacting. i don't know if you remember, daytrading was a very popular thing. it is not quite as popular now. in fact, there is robinhood traders, etc., but the number of companies right now are much larger. back at the peak, there was a host of companies coming out every day, much smaller companies, so you are not seeing that. you are seeing very large, solid companies at the public level. , you focus on smaller caps, and to a large degree, that is where goes unanalyzed, some buying and selling.

do you think more analysis needs to be done of the market? frederick: i think people are always going to go back to what they feel comfortable and familiar with. and sometimes, that is not exactly the behavior we are areng to accomplish, they trying to accomplish. i think people are going to make these mental mistakes we are talking about, and it is just an opportunity to take advantage of those, what people should be doing at all times. romaine: good insights here, fred, we appreciate you coming on the program, frederick atnske, portfolio manager fuller and thaler asset management. and that is it for "what'd you miss?" "daybreak australia" is next. caroline: have a good evening. this is bloomberg. ♪

emily: i am emily chang in san francisco and this is "bloomberg technology." coming up in the next hour, multiple states had google with another lawsuit accusing the search giant of using its dominance to steal content and start of its competitors of traffic. one of the many attorneys general behind the suit joins us this hour. the fda is on the