caroline: welcome to bloomberg's world headquarters in new york and european headquarters here in london. i'm caroline hyde. joe: i'm taylor riggs. caroline: we managed to brush off a lot of earlier concerns of risk aversion, only off by 4/10 of 1%. . tesla drags it down. goldman climbed higher. banks are risk on as we see more buybacks. the pound though, falling. taylor: the question is, "what'd

you miss?" caroline: that's beautiful. [laughter] when we all woke up this morning, it seemed the markets in the u.s. were ready to follow downwardd post a big but it petered out. the u.s. might have taken it in stride today but there is concern with increasing cases of covid and a new mutant strain of the virus in the u.k. with all the markets showing bullish sentiment, could the vix break out once again?of course, all of this is tesla rising in the s&p 500. digest a more volatile relationship between tech titan apple and facebook. let's start, big picture, volatility. joe: we saw the vix moving at a 25 handle, but it is fixed month versus the spot vix that has my attention. that's what you see in yellow at

a 26 handle here. and this as you know, the emergence of a variance, a mutant of the covid-19 over in the u.k. that is offsetting some of the volatility we got around the $900 billion stimulus in the u.s. volatility slowly rising. it has been elevated all year long. hard to panic too much. it's a 25 handle, not a 40 handle. caroline: it really it is just amazing, the levels of this volatility. how low it has remained, not break it -- breaking above 20 for 200 days. relative toned a record highs, but someone wrote about saying the market is inclined to unjustified extremes and overshoot. john authers is with us relative good -- is with us. volatility is relatively good but with this breakout, what do you think it signals, getting

about 40? some sort of nerve in his -- nervousness in my market? >> it has been very noticeable. in a perverse way, it has been a -- ish sign that the people vol has knock on down to the typically comatose level of the qe era. despite financial conditions suggesting things are easy as they have ever been, but to some extent it shows you people are not quite as alarmingly complacent as some of the numbers might show. virus, i haveant parents, family and so on, where you are. it sounds pretty alarming to me. it is only right to be worried about it.

the great worry is that it is more infectious rather than more deadly. that's the right way for it to humanutated as far as the race is concerned, but it brings a new element that needs to be understood and causes uncertainty until we understand what we are up against. joe: it was interesting, you talked about the low level of the volatility up until early 2020. now we are sort of in this new trading range. does this persist as new -- this new trading range 20 to 30 versus the below 20 levels in 2019? >> i would imagine it is going to be difficult for it to go away. one of the other things we had learned today is that it is the virus. able to takeall off our masks and stop thinking about this all together, which

is certainly still a matter of at least since the -- until wewhen the know we can all take off our masks and not worry about it, i would imagine the vix is going to stay higher. there will be a risk. if we find out some horrible side effects of the vaccine and there woulds time, be a very dramatic day on the market. if it turns up this new infectious variant in the u.k. is also more dangerous, actually creates more damage to life, that is going to have an effect. it makes sense that people are counter, taking account of that elevated risk, but it's

harder to explain in financial terms when they are trading in options. caroline: the people you are speaking to when you write your daily comment, you are looking at content and you are seeing, you write about contrary trades and dig into the details on relief package, brexit, and the u.k. nightmare situation, are people staying hedged at the moment? are people saying they are wary of this outside risk or are they not? >> they are not. as a general rule, if you look at sentiment over the last months or there about, it's as optimistic as they have been. findmanagers surveys that there's a great certainty that -- the survey, which they've done for 20 odd years, you see very great confidence

across the board. but we have further reflation coming next year because of the money that has been printed this year to get us through and because the virus is going to go away next year. agreeerall picture i do s like the people you talked to earlier, is slightly worrying. whenever you get that strong a consensus in any direction, that has to cause concern. at this people -- at this point, it would be outlandish not to be long tech and short oil, poor short the energy complex. that sets up the conditions perfectly for the market to step on a rake.

pete even if people are confident the base case is positive, they are a rare of the risks of something really stillc messing that up higher than they usually are and it comes from the pandemic. joe: it is all relative. it is all relative. relatively high. thank you, john authers. another stock, tesla is stalling. it is the biggest drive on the s&p 500. the new position in the benchmark is coming up. this is bloomberg. ♪

taylor: we have breaking news from pella tom. after hitting a record high today, the company will buy another company for 420 milland trawlers -- $420 million. it will add to their mill -- manufacturing capability, something they have struggled with. they cannot make these treadmills fast enough. they are looking to this acquisitions as they expand to gyms, hotels, other commercial locations trying to turn these out faster. caroline: mine is being unused somewhere in new jersey. i'm sad about that. at one stock, said to add volatility, is tesla. taylor: it did. we had shares close lower as much as 7% earlier. i want to take a look at another chart i'm showing.

take a look at the volume on this. that's when it was announced it would be included in the s&p 500. since then, the volume has been slowing and slowly creeping up. it ballooned last weekend of course, today all of that fell apart. you wonder if some of the indexes have started to get ahead of this, given how big of a weight it is within the s&p 500. caroline: the vix largest waiting. $150 billion changing hands on that detail them -- friday alone in tesla shares. on news fell and i'll on perhaps there was an apple car. it is a kind of travel and arrive scenario. it is less of a buying scenario, it is actually in the benchmark and the buying activity comes off 6.5%.whenever you call it, it is a volatile stock. taylor: let's bring in more on this and tesla. index,dering, for the

preparing for the day and weeks leading up to this moment, what are they buying today? >> thanks for having me. that's right. we are definitely going to see that kind of ease off maybe this week and next. and for the next few weeks. weakness in the stock today, but i would side -- ,ay a lot of it was expected given the sharing by indexes and retreat around 20% can be expected in the near term and would really be a shop. -- shock. caroline: how much of an impact can that really have? how much

volatility does tesla have on the index? >> it brings a bit of volatility. teslamber this idea of being on the s&p 500 was coming up, but in fact it would be the other way around. happened today is index bya bought the four points. according to brokers, they --rted the volatile stock definitely bringing in more. taylor: and the recent share surge has not just benefited equity holder convertible bonds but also seeing increased convertible bonds before starting the debt and convertible into equity, if it gets high enough. what we know about convertible debt on the balance sheet? reporter: i'm definitely not the

expert to comment there, but tesla bought an upgrade last week, so that is good news for bondholders. caroline: meanwhile, i have to say thinking of all the furor and handwringing in the the manufacturing in the united states, feeding into the volatility in the dollar in the vix, have any of the worst case scenarios played out? the doomsday in tesla adding to the s&p, that came all in one fell swoop and not in allocations, it is pretty smooth actually? reporter: that's a great question. there are people saying that about tesla. said by elons is musk himself, saying it was on the verge of bankruptcy only two

years ago. now it is joining the s&p 500. everyone saying because of liquidity sloshing around, there's a bubble in equity prices. teslaays -- that said, chang has changed quite a bit operationally. hit manytely has interesting milestones. to call it that would be probably hyperbole at this point. caroline: one to watch, whenever on asset is switching coins as well. thank you. coming up, tech face-off. apple inlashing out at a series of newspaper ads. that's next. this is bloomberg. ♪

taylor: today we focused on volatility. we just talked about tesla and overall market. we also want to talk about the volatile relationship going down between facebook and apple. caroline: kind of stunning when tech titans take each other on. heldsn't just a privately matter. it was on major adverts across key u.s. newspapers. facebook has been taking out adverts trying to highlight that apple, they say, is bad for small businesses everywhere. there was a slight element, to competitors, see at the same time when they are being sued by regulators, it is

kind of ironic. but does facebook have a point? are smes being hurt if they are not able to target ads, because this is what the apple ios might do? it makes facebook ask users if they want to be tracked across websites and apps. i can imagine it being pretty easy to say, no, i don't want to be tracked. taylor: why don't we get an answer to the question you just asked with the chairman and cochair of e-commerce privacy and cybersecurity group venable. that is stu ingis. what do you take about this fight and who gets hurt? >> i think it's a significant issue. i think smes will undoubtedly be hurt if this goes through as currently articulated and i think ultimately consumers would be hurt. one of the challenges here is the reason consumers love and the reason i love my apple device, and the reason consumers

love it, is the plethora of apps and streaming services and offerings, many of which are supported through advertising. supported through advertising and of course, this is the quid pro quo everyone has to understand. perhaps they didn't want to think they got a free email from google. you are selling your data if you weren't really realizing it. but now they are getting to grips with it. how can apple shine a light and bring transparency and ensure that we are aware of what we are being targeted, but without breaking off the food chain for small to medium-size enterprises? >> it's a great question. part of it is continuing education from the public of how all this works, but at least in the advertising space, there are good privacy protections that facebook, apple, and the reputable companies all offer

where consumers have had choices no. whether it's in the settings or industrywide choices, in order to protect privacy, but it is a bit of a false dichotomy. and in many be, cases, there are the abilities to protect privacy and ensure all d's offerings and benefits will continue to exist. -- these offerings and benefits will continue to exist. you don't want to stop all the internet and data flow and bring us back to a world with only three broadcast channels in the late 1970's. taylor:taylor: you said this would inherently hurt consumers and small businesses. if so, does apple do that to protect their business if they see facebook as a threat? what is that motivation? know what their motivation is.

i think the stated motivation of privacy is something they have been a proponent of, and i think it is not really in dispute. it's a question of who gets to make the rules, and what the rules are and how they are made. an effort i'm involved and called the partnership for responsible addressable media is composed of many of the leading brands and publishers and media companies aimed at figuring out, if we go into the next generation and the internet and build a better mousetrap, what does that look like? you need to involve all the players, and frankly it would be a national law set up. caroline: you of course are advising many businesses, but associations, the association of national advertisers. defend clients in terms of the fcc congressional investigations. i'm interested in these advertising associations you speak of.

how can we enlighten people? how can small to medium-size enterprises get the data to be accurate they need to bring joy to me rather than an advert i don't want to see, but it isn't just about the survival of facebook's business model versus apple's business model? >> it's a great question. the same trade association, which all of the members start the same way as apple, we want to do what's best for consumers. the association of national advertisers oftioned that is a who's who prominent, reputable companies who want to make sure they get it right. with ago in conjunction the federal government, the obama administration, they released choices that gave andumers privacy choices they still exist today. i think if the internet continues to evolve, there needs

to be more focused on that education and ensuring those choices. the value of a federal law which those associations had most recently called for is that it would allow for standards to be set in a way that was clear with everybody. want to know, when i used the internet, it is kind of like an airplane. i just want the airplane to fly the plane. i don't want lots of back and forth. i want great policy choices. taylor: just a minute left, you talk about the need for a national law. could you pin the odds of getting that anytime soon? >> i always tell people it is 50-50, either it will happen or it won't. in all seriousness, i think in the new congress, there's a chance in the next two years or four years. i don't think it will be the

thediate priority that economy or covid relief is. but it is on the agenda and policymakers understand we need to get it right because it goes to the heart of consumer confidence in the economy. i think there's a real chance you will see a federal privacy law. taylor: stu ingis, chairman of beddoe both -- venable, thank you for your time. that is all for "what'd you miss?" nine --, isn't it nighttime there? how are you even awake? caroline: it is 10:00 p.m., but i have managed to tell my children to not wake up until the late age of 8:00 a.m. thank goodness it is still dark in the morning. taylor:taylor: here's the good news, continuing to stay with us because "bloomberg technology" is next if you are here in the u.s. "daybreakit is

australia" if you are viewing in asia. have a great day. this is bloomberg. ♪

>> i'm vonnie quinn in new york in for emily chang. coming up in the next hour, we will stay here until we finish. that assessment from mitch mcconnell as congress gets to vote on a nearly $900 billion stimulus plan attached to a $1.4 trillion measure to keep the economy running.