nar ertainly there is an argument to be made. you see possible numbers start to disappoint. the real yield hasn't gone up, another reason the fed price has impacted. it is difficult to latch onto. spending, people are the timing of that spend has really shifted. >> i see getting back to something close to normal in the second half of this year. >> this is bloomberg surveillance. for our audience worldwide, good morning, good morning. this is "bloomberg surveillance." tom keene and lisa abramowicz i'm jonathan ferro. at all-timearkets

highs. once again we are playing deal or no deal down on capitol hill. in the washington there was a shift for those of you waking up in america, what you knew at 4:00 p.m. or 5:00 p.m. yesterday is gone. there is a real stalemate. talk of a partial shutdown from the dakotas. brexit,ke breaks it -- they will work all through the weekend. jonathan: there will be consequences if they don't make a deal in the united states. through the weekend they go. trying to hash out a deal on funding the government and sticking with a massive relief plan. that relief is very much needed. we have seen the economic data through december. tom: i think we really need to recalibrate. . thought we brushed it over

.laims were almost 900 million we can't say, 230, enough about how out of whack the labor economy is versus what normal was four quarters ago. that is pretty dreadful. tom: the problem is i'm thinking about the conjunction of saturn and jupiter. this was on monday. jonathan: don't question it. lisa: should we talk about brexit the whole time? jonathan: we could clear this up quickly. last last day. it is just my last day of this cats.erding next week i will not be here and

the week after that these two will not be with. this is the last show together work 2020. lisa: as you were taught, the deadline -- as you were talking about the deadline is midnight to prevent that government shutdown. talking about the potential damage if we don't get a deal. even if it is only over the weekend. what is the deadline? we will talk all of these questions into next week. 10:00 a.m. we will look for some indication of how the economy is doing. the leading index from the conference board coming out, it has been trending lower. each data point not necessarily market moving in its own way. given the feeling of the direction and possibly given the environment this week giving it a little more to washington dc on the beltway. get something done and get it

done more quickly. the fed will be releasing the stress test results. i will be looking for any signs that they will be loosening up restrictions from dividends. possibly this could circulate more money into big shares. perhaps an indication of the economy given all of the above -- of these banks. jonathan: will you really be on live at 4:30 p.m.? lisa: i will be. my plug for the real stress test later on. jonathan: i look forward to that on bloomberg radio and tv. of final friday trading day 2020. there we go. up a little more than 1/10 of 1%. is unreal.aps seven straight weeks of gains.

big cap tech up about 3% on the nasdaq. tom: all of us have a stock which we held flat for years and one day boom, that is what small caps are doing right now. returnst readjust total for people and some kind of diversified portfolios. jonathan: what a couple of months it has been. with a lines start from your research. over the last decade it has been less than reliable. , are you a little bit cautious? way.n: we have run a long if i told you a year ago that we would be where we are now given the economic backdrop, given the public health crisis that is

directly in front of us, it would've been very difficult to believe. that youno denying could sort of put it in terms of interest rates at zero. we are at all-time high valuations. to us, that is a sign that we want to be at least balanced in the near term. also is about sector choice. i don't mean sectors like cyclical. i am talking about broad global analysis. what do you look at when you look at international, midcalf, other true sectors that could diversify from one his work of this year? alian: 2020 is going to be watershed year for a number of reasons. what you have had is really 14 years of an investment paradigm. u.s. growth over everything else. when we think about 2021, the only conclusion we can come up

attack is no cap longer the only game in town. this push for diversification because our expectation is we will have global synchronized growth next year will lead to outperformance in all of the byces that has been shunned investors for the most part. value, annal equity, area like small caps. areaseverybody says those will be the beneficiaries next year. an increasing number of people are saying it has gone a little hot recently and we are pricing in a little too much. what exactly are we pricing in sort ofpect to some financial stimulus from washington, d.c. we are certainly pricing in that politicians will get a deal done by christmas. assumption number one

coming into the new year that needs to be revised downward. pricing in what president-elect biden is talking about. the deal we get over the next week will be a down payment on a further deal. north ofa lot call it $2 trillion in aggregate that we are thinking about pricing in. again, respect, once even though the s&p 500 is relatively the most expensive index out there, the fact that we have had the degree of catch usin small-cap value gives more pause to be more selective. prime for anynot sort of negative news. what would actually lead to lower equity markets? toould many people struggle answer that question through much of this year.

we have come up with these neat narratives to fit any given day over the last couple of months. that has gone from one extreme to another typically around the election. could you walk me through what is happening in the auctions market -- options market? whether you think there is a fundamental story behind it? julian: the fundamental story is 2020 is the year that a younger generation of investors who have been chronically under invested discovered stocks and more so discovered options. more so discovered options that expire in two weeks or less. the activity has been absolutely frenzied. to think the day before thanksgiving could be among the highest option volume days of the year is absolutely preposterous by anything that we as professional investors have seen in the last 20 plus years.

still, that is what you had. the public really is to look -- greater degree more so than at the peak in 2000 is the marginal price in the equity markets right now. the marginal price in the margins right now. we are very dependent on the continuation of public flows. very much with the way you saw after the election in 2016. 2017 was really the only year in this cycle where you had to influence. we believe that is possible. you're going to need it to keep stopped moving higher. jonathan: thank you so much for everything. just wonderful. chief equity and derivative strategist. that has been the story for 2020. the participation in this market. at the lowest of this market when everyone got sent home at the end of march.

tom: the new leg up from november, the election leg let's call it is really a thing that caught people. what abouto where revenues, what about margins, etc.? the consensus i see from people is corporations are going to deliver. election trailing the risk was one thing, i think the vaccine news was critical. it allows people to deemphasize the near-term risk. on the backcuses end of 2021. right now, that is where the market is. headlines are out of los angeles and how grim it is. it is absolutely unprecedented. way out over where it was in april and may. jonathan: did you see the

numbers from axios? one in every 200 americans diagnosed with covid last week. the numbers are crazy. good morning, for our audience with lisa abramowicz and tom keene, i'm jonathan ferro. this is bloomberg. ♪ ritika: the unit -- the u.s. is on the verge of having a second coronavirus vaccine approved. the food and drug administration could authorize this shot today. the vaccine showed a high rate of effectiveness in late stage trials. faces the prospect of a partial weekend shutdown. top leaders in both parties are working to complete the coronavirus relief deal that's tied to a giant government spending budget.

we really go may not go to a funding extension which could lead to another shutdown. the u.s. at two blacklist dozens of chinese companies. maker them is the top tip -- chipmaker. the blacklist events the chinese companies from buying u.s. technology. chief negotiator warns time is running out to reach a trade agreement with the european union. says talks will fail unless the eu backs up -- off its stance on fishing rights. fedex has failed to keep up with wall street soaring expectations. doubts about how much fedex will cash in from record package deliveries. global news 24 hours a day on

air and on bloomberg quick take powered by 2700 journalists and analysts in 120 countries. i'm ritika gupta, this is bloomberg. ♪

♪ >> a bipartisan agreement appears to be close to pass.

the outline i have been discussing with democratic leaders pelosi and mccarthy would get bipartisan support out the door as fast as possible. we would be able to nail down every detail. jonathan: mitch mcconnell, senate majority leader and republican from kentucky. good morning. a missing piece of a bullish puzzle down in washington, d.c. along sign tom keene and lisa abramowicz i'm jonathan ferro. in yesterday's session. equity futures with a little lift on the s&p 500. in the bond market, yields unchanged. mighte the fact that we be shutting down the government temporarily going into the weekend. similarly, a republican senator saying we must be in d.c. this weekend for funding talks. tom: the gentleman from utah

driving the story forward. radioorning on bloomberg as well. you heard the senator from kentucky. the story has migrated from there. kevin cirilli joins us. our chief washington correspondent. i read the papers this morning and what i see is a lot of distrust. a massive debate over the role of the federal government in crisis. this trustget from and the debate over the compromise. senator mike lee saying they will have to be here this weekend. not just what they have been told. some of the sticking points now. i had was hesitant to use this phrase, they are donning their eyes and crossing tease -- dotting their i's and

crossing t's. either side,s democrats or republicans forecasting will this be a long-term government shutdown. one of the sticking points is the $300 million we saw play out with chairman jay powell and how that is going to be utilized. jonathan: well said. i look at fema. is, does thestory president play into this debate at all or is he missing in ?ction kevin: they have taken up the issue with georgia to be his final assignment so to speak between now and january 21. jonathan: we are pushed for

time. top of the news flow is the federal government. large u.s. multinational companies as well. by the day this seems to be getting a lot more serious. what is your take on this? kevin: the president has received a briefing on the side were attacking. we have not heard from him directly. president-elect joe biden coming out with a statement saying the cybersecurity will be front and center of his administration. will beo are doing this held responsible. thirdly on capitol hill this is a much broader issue that dates back more than nearly a decade ago to the target data breach in which you had the private sector experiencing headline risk every time they report a hacking. the government sector largely being able to avoid that. are seeing unfold now with the public and private sphere experiencing cyber

hacking is that this could happen to anyone. yesterday i spoke with one lawmaker who is a democrat from michigan. the conversation from the g7icymakers is they need the or the organization of that caliber. in order to respond to whomever hacked in these situations. the u.s. could respond. is there any talk about what the u.s. response could be towards russia? are pressingnators for there to be intelligence briefings on this matter. there have been some briefings on cybersecurity. to be quite frank, president-elect biden is the most we have seen coming from a period of transition. the timing of this pact at a

time when they were so hesitant about the election, for this to happen in a period of transition is sending some type of message. we will see what that response will be. tom: from trump to biden, do you expect opening -- some controversy or drama in the first days of the biden government? kevin: you look at german chancellor angela merkel and what they have done to opening the door to huawei. ofarly this is a reset search. that thesome test secretary of state will have to immediately take on in the first few days in office. it isne final question, so important. i was stunned and deeply moved

by the idea that a pueblo indian with centuries of heritage in new mexico out west of albuquerque would be selected as secretary of interior. did that surprise you? i was flabbergasted. is one of twoland native americans elected into congress representing the beautiful albuquerque, new mexico. representing also the laguna pueblo native americans. now has her nomination prospects the opportunity to really highlight and spotlight the issue pertaining to native americans. themselves with environmentalists. with john kerry, one of the key focal points in the administration.

the importance of that from an energy specter -- sector perspective will be unpackaged during her confirmation process. historic moment regards to what she represents with this nomination. yourhan: we appreciate time. chief washington correspondent. on that final point i think for many people that was more than just a nod to history. that was about looking forward. absolutely. the moment of it for the nation just before the civil war of our homeland. our department of interior. it is absolutely extraordinary to see. i take your point. those hearings will be fascinating to see how progressive the congresswoman from new mexico is. jonathan: two hours away from

the opening bell. good morning. we are set to add some weight to them. from new york and london, good morning, this is "bloomberg surveillance." ♪ the usual gifts are just not going to cut it. we have to find something else. good luck! what does that mean? we are doomed. [laughter] that's it. i figured it out! we're going to give togetherness. that sounds dumb. we're going to take all those family moments and package them. hmm. [laughing] that works.

♪ jonathan: our listeners on radio will miss this. just leaving against it. tom: just want to be casual, it works. jonathan: you want to do the whole thing leaning against it? tom: i love it. we have green on the screen. do your market check, get to the bottoms so you could get briefed for the real yield this afternoon. jonathan: equity markets at all-time highs. the s&p 500 and the nasdaq. we have some weight on the s&p. the nasdaq up to tenths. the rest of the small-cap, seven straight weeks of gains.

unreal performance the last couple of months. pick your poison. what year it has been in the bond market. we started at about 160, we are down to about 12 basis points. we started the year at about 192. right now about 100 basis points after that, 0.93%. that curve a little bit steeper off of this rotation. we talk more about that in just a moment. is 122.62. what is interesting about this is the year end medium target on the euro-dollar is only a little bit north of where we are now. 123 point 45. the highest forecast i have seen , up to 128. we are almost there. through strength coming

this market in the last couple of days. talking about dollar weakness in 2021, i haven't seen the targets back it up. rebecca patterson was mesmerizing this morning. she was heated that they will step in earlier this time around. we heard the same thing from jim o'neill as well. about how nations will respond to a weaker dollar. look for that to be a real theme for surveillance in our first quarter. in 2021.ck together whatssance macro, i love you say about runaway inflation. the parsing of good inflation, bad inflation and runaway inflation's. what is the character of our inflation forward? people are sort of amped up for higher inflation.

planning those summer vacations after they get the vaccine. outside of a few pockets of related sectors it is really hard for me to see inflation pick up next year beyond those industries. prices that move slowly. things like rent, they have collapsed this year. they tend to move quite slowly. of the inflation in the u.s. this year has been in goods. cars, appliances, furniture. that is a function of the pandemic. people kept buying stuff. factories were shut down. you had a depletion of inventory. that is normalized. prices for goods have moderated.

i think this is so important. the great call from early in the year is the service sector inflation revert to the mean of state three percentage. it stay subdued in this great inflation? neil: i think it will stay subdued. youdifferent prices -- don't have a services inflation growing rapidly. it has always been a process. next year you will have the most positive supply shock in the later markets ever. schools are reopening and people will go back to work. that positive supply shock in the labor market is inflationary. there will also be more jobs created. you have to think about the

political -- one of the reasons why inflation is up is health care inflation. we know the government has been making hospitals for covid related care. god willing that will not be much of an issue next year. lisa: you have been really good throughout the year about being more optimistic and rightfully so. like othert seems people have brought forward their optimism. your call for suppressed inflation is not a negative. rather it gives the market more room to run given the concern some people have about inflation being higher. what you think about the consensus in terms of economic growth next year. neil: i think they are undershooting. if you look at the latest data, they are around 4%. you have a lot of growth in the

pipeline. there is a lot of construction activity in the pipeline. we've had new homes sold not get started up over 90%. we talked about the dollar earlier in the show. the dollar means a stronger export activity. there is a large pool of available savings for people to draw down. which i think they will. dining out, travel, we know the distribution of savings tends to be on the higher end. that is what they do. as the savings comes down that will drive stronger consumer spending. me, the risks are skewed to the upside. down, which they will early next year activity

will resume. they don't have much of a story to tell them the economic lockdowns. that may hurt the economy for the next couple of weeks. as an investor, you cannot do anything with that. are five earlier this week that the forecast will be higher and it will remain the same. that was the change over the fed. you called that has to be using. a lot of people wondering if that holds up in the middle of next year when the data starts and inflation starts to go higher. will the fed come back in? body think that holds up into the middle of next year? a lot of people make the call thef what we now taper tantrum of 2013. they will continue

to buy active purchases. or testnot really know the fed framework really unsold macroeconomic conditions resemble what they did in late 2019. basically pre-pandemic. of course you have to hold that for a period of time before they really start thinking about it. people inthere are the markets if you asked around. of -- i would tend to say that. of the time but i think the fed will reinforce the posture over the next number of quarters. great to catch up and wonderful call earlier this year. we all remember the moment. it was the morning of payroll, that -20 million number. neil came out and said this will

be the worst we will get. his call was really important. that we would snap back much faster than people anticipated. we did. tom: since we will all be on vacation, it will be nice to stagger january early. only one who is looking at january 8, looked at that ec oh screen. there are minimal surveys in their right now. average payrolls precrisis i will call it conveniently $200,000 per month. how far are we right now looking up into quarter one of next year? michael: we are still above it but not going to be a whole lot above it at least in the month of december. the feeling is we will have a very bad month year. we have seen really bad numbers in terms of the jobless claims and in terms of the regional fed surveys that have shown hiring

driedort of -- sort of up. we did not get as much holiday hiring. they are hiring more truck drivers and delivery people then they are in the retail stores. feeling is this will be a bad month. payroll will be an open question. to go back to a jay powell and everybody likes to say, if the virus starts to go away again we will see more hiring. if not, it will be a cold winter. lisa: yesterday we got the initial jobless claims, tom mentioning nearly 900,000. much higher than we expected. people shrugged this off. maybe giving more inventive down to those in washington, d.c., to pass something. what does this truly become bad news and significant to you? tohael: two economists --

economists it is significant now and that is a lot of people out of jobs. that ald trust the idea significant number of people did lose their jobs in the last couple of weeks. obviously terrible for the individuals but bad for the economy because it is less spending power. wall street is looking past that to the middle of next year when hopefully most people are vaccinated and we could get back to normal. between now and then is when jay powell is talking about we need a bridge. the economy is going to be in much tougher shape. jonathan: great to catch up. want to bring you some news from the president of the united states. he said the magenta vaccine has been overwhelmingly approved. that is the start immediately. there is a process to all of this. what we learned yesterday from the advisory board is they have given the knob.

we have seen this happen with pfizer. the next step is to wait for the emergency use authorization from the fda itself. unclear at the moment as the president comments on this being overwhelmingly approved is whether he is talking about the advice in the last 24 hours giving this the nod or the fda giving an emergency use authorization. the other thing is the mystery of the distribution. that itself is a mystery as well. and good morning to you all we count down to the opening bell. equities at all-time highs. this is bloomberg. ♪ a panel of student drug administration advisors has agreed that the benefits of modernity coronavirus vaccine outweigh the risk. that sets the stage for

americans to have a second vaccine to authorize modernity shots as early as today. the visor vaccine -- pfizer vaccine was approved last week. the coronavirus is once again hitting meatpackers all across america as they tried to avoid shutdowns that left supermarket shelves empty early in the outbreak. cargill has temporarily closed one of its plants in canada after some workers tested positive. the world's top meat producer, jd s had employees home on paid leave. how thatview of just cyber attack russian hackers is. this presents a grave risk to federal, state, and local government and the private sector. leasterg has learned at three state governments were hacked. so was the u.s. nuclear weapons agency. global news 24 hours a day and

on air on bloomberg quicktake. powered by 2700 journalists and analysts in 120 countries. this is bloomberg. ♪

♪ the vaccine will always be a little bit variable. we are talking about production

at a scale that companies have never had to do before. you certainly should expect to see some variation of the number of doses that are coming through on a weekly basis. it will become more complicated in three or four weeks when people come back for booster doses. these are logistics problems. from new york and london this morning, good morning alongside tom keene and lisa abramowicz i'm jonathan ferro. the challenge will just be logistics, it will be confidence, public confidence around the vaccine. around the country, around the world. tom: if you do microbiology like i did, there is a rite of passage. it is called a small book, microbes and man. just as you said, you have to go people,it and show the nation, city, town that it is ok

. stark images for those of you on bloomberg radio, an american flag to the left in a hospital flag to the right. theinated is waiting for vice president of the united states and mrs. pence. an extraordinary moment. i'm surprised we haven't seen more of this. lisa: the idea of trying to engage the public. make them have confidence in this vaccine as we rollout. honestly, i have to say i don't think we have done enough with the magenta approval. that could be a game changer given how much easier it is to distribute. tom: i just want the elite to go out there and do this. will beyonce be getting the vaccine? jonathan: i don't know beyonce, we are not that close. i think it is important leadership gets out there. the people who approved the vaccine should be seen receiving the vaccine. tom: we have tried so hard to

talk to professionals that have been hugely successful. it is not the three of us. many others here every day struggling to find the people getting it done. with common spirit health. he is there physician of enterprise. an initiative across this nation. 100 90 plus hospitals lined up in the trenches of service. tom, your hospital chain is absolutely unique. the distinctive feature common spirit and your hospitals has learned over the last 12 months? we have had a lot of lessons learned. during this distribution phase we know that all of our markets are different. we have to work across state lines, different cities, we partner locally and try to coordinate nationally so we could represent -- purchasing

the refrigerators was a natural -- national on our part. we learned a lot about local distribution issues. thing we are clear on is how much the federal government is orchestrating this affair. what is your sense on that? dr. mcginn: the hard work of distribution is happening at the state and local levels. we are in 21 states, 130 hospitals. a lot of the efforts we go through with the city and state on that level much more than the federal level. we are a large local community hospital serving some of the most underserved communities. a lot of the hard work is working at that local level. lisa: there is one question which is a should it be done this way? people are talking about we have been planning for the vaccine for a while. should we have had some

orchestrated way to have these health care organizations to buy those refrigerators and get this distribution in place? should be done on a local level? dr. mcginn: i think it will always be a mix-and-match, they understand better where the deeds are and how to get things done. the larger question such as procurement may have been benefited a little bit more from a strategy. so there was an even distribution of some of these things. around certain issues where the vaccine is going to go on the ground is a very local position that will be very difficult at the federal level to do. about what you learned in los angeles. this seems to be a focus on this friday morning. the california hospital medical center, what have you learned about the scarcity of beds in the worst case, los angeles? dr. mcginn: usually when you look closely at these problems and you start thinking about it, we are able to stand up icus, we

have the ventilators, a lot of what we are struggling with is the staffing. at the end of the day it is our front line nurses, respiratory echs, those of the folks we need more and more of. they are becoming harder and harder to find. a solution of higher compensation? you've been doing this for years. what is the solution and all of the industries we follow you raise compensation and they show up. is it that easy or is it a harder mission? dr. mcginn: this is much more complicated than just compensation. uss was suddenly thrown upon . we opened several new covid hospitals overnight. this was a very specific area. in the last 6-8 months that we needed this rapid

increase of staffing. jonathan: appreciate your time this morning, thank you. executive vice president of sufficient enterprise. waiting for the vice president, mike pence, to receive the vaccine along with the second lady. that is taking place in just a few moments. tom: karen pence will show up with the vice president. the second lady could hold my hand when i get my shot. this is a symbolism of the moment. know how we distribute the vaccine given the temperature constraints in the trenches of this? in places that don't have all of the luxury that we see at the eisenhower executive office building. forthan: you're speaking the pfizer vaccine, one that will be administered to the vice president and the second lady. the moderna vaccine is much more significant in terms of the

temperatures you need to keep that at and the ability to roll that out with a little bit more ease. i'm speaking of logistics here. on the dharna, the president commented moments ago saying the distribution would start immediately. it has been overwhelmingly approved. a spokesperson for the fda has come out and said the mid-dharna moderna-- vaccine is not yet completely authorized. giving this vaccine the nod, what needs to happen is the fda needs to gives it -- give it emergency use authorization. that has not happened yet even if we expected to happen -- expect it to happen. tom: lisa, what is your observation on this? lisa: it is important for public officials to come out and show it is safe. with moderna, i guess this is why it is important for public officials to get it.

the idea of giving people confidence it is safe. jonathan: the mode and speak to each other. in about five minutes time the vice president of the united states, mike pence, will receive the covid-19 vaccine from pfizer. this is bloomberg. ♪ ♪

♪ >> certainly there is an argument to be made. >> something that has these moves, there will be a reckoning. >> you look at hiring, layoffs increase. >> you will see numbers start to disappoint. >> the real yields have not gone up which is why the fed price has stood. >> it will be difficult for the fed to latch onto the notion that they're not going to do anything. >> the way people are spending has shifted. >> i see the economy getting back to normal for the second half of next year. >> this