>> central banks are showing no sign they went to take their foot off the gas. >> activity is still really in the doldrums. >> we could see it get back into negative territory. >> i am expecting a tumultuous year. >> the rebound is going to be incredibly be shaped. >> it will be v-shaped for some. it may not be v-shaped for others. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. carol: a very good morning, everyone, from new york city and berlin. to our audiences worldwide, a very good morning. this is "bloomberg surveillance ," live on bloomberg tv and radio. i'm carol massar, alongside matt miller. tom keene, jonathan ferro, and lisa abramowicz have the day off. i remember in holidays past, it

would be very quiet. there has been so much going on between brexit wrapping up, another pandemic relief bill here in the united states. we are seeing lots of individual stocks hitting records. we are watching things like apple. we have been watching bitcoin hit records. so it has not been a quiet holiday week. matt: not at all. typically the european union does like to wait until christmas, new year's to get things done. iremember the euro crisis, was working late on new year's , waiting for a resolution to that. , wes true that in the u.s. have historically been more sensible about the year-end holidays, and that has not proven true this year. when i see we, i made americans, of course. not sensible at all. waiting until the last minute to sign things. a lot of unemployment benefits being derailed for millions of americans.

now, so fascinating to watch mitch mcconnell go directly against president trump's wishes and shoot down the $2000 stimulus checks, placing them effectively in a poison pill package so that they can be passed by the time this -- they can't be passed by the time this congress finishes sunday. carol: i think mitch mcconnell has something in his pocket. we will talk about this with kevin cirilli later on. it was not only the relief package. there's also the defense bill which had some ancillary issues connected to it. now if mitcht mcconnell is looking for some negotiating act makes when it comes to the democrats. i think that a some thing we will have to dig into when it comes to kevin. about one clean issue. it is all about these other issues that get connected ultimately to legislation, so we will see what he has to say about that. having said that, we can't

ignore the big virus news. the astra/oxford covid shot gaining approval in the u.k., although as you dig a little bit deeper, it sounds like it is maybe not a civic. there is still -- not as effective. there is still u.s. testing to go through. but again, it is just a reminder that we've got lots of drug companies, lots of teams around the globe working on individual vaccines, and i'll of those will ultimately be necessary to vaccinate the billions of people around the globe. matt: but that wasn't enough, that vaccine, to push markets much higher. i think it is interesting, you see the stimulus moves markets more than headlines. s&p futures are up a little bit, but if you look at european markets, you will see we have gone absolutely nowhere today. we are up and down on the ftse, up and down on the dax, but not

gaining any real traction. a sickly coming back to ash basically coming back to unchanged every 10 or 20 minutes. -- basically coming back to unchanged every 10 or 20 minutes. the astra headlines did move markets minimally for a moment, but that gain turned around and dissipated right away. updo see bitcoin putting another all-time high today. at one point it reached $28,000, reached $28,572. bitcoin is one of the places we have seen actual market movement , but you can see from this board quite well, everywhere else there is all lot of nothing. carol: it is starting to mellow out a little bit. let's see what our first guest this morning has to stay. steam jacobson is with us, chief investment officer at saxo bank -- steam jacobson -- steen

jakobsen is with us, chief investment officer at saxo bank. whether it is bitcoin, ipo's, stocks, we faang have seen big global moves. how does that set the stage for 2021? teen: it is more of the same, and i think you are leading into the question that is clearly indicating that we are all right now waiting for january 4 in the runoff in georgia to set the stage for what is the next level, and i think to some extent, mitch mcconnell is playing that card. he wants to be seen to be fiscally prudent into deciding what is going to be the next two years before the midterm elections. i think there's a very big political game going on in washington in terms of the u.s. market, but in terms of policy response, we know exact what is going to happen in 2021.

any slowdown in the economy, any increase in virus cases will be policy by the fed and global central banks, and will sit very loose on the politicians. whatever the come from it is all about supporting a market with no looking at the detail and actual unintended consequences. for me, deep down, the only question that really matters to me is where we end with tenure u.s. interest rate in 2021. 150, 200, i think the rate of the stock market will come like -- will come to play. carol: do you really think we will get to that rate on the 10 year? steen: absolutely. i think two things are going on. we have been so dependent on the digital online transformation can noe physical world longer actually follow the

success of that. we have been too successful in digitization and online sales, ups and fedexthat cannot do the deliveries. simply the fact that the infrastructure no longer is able to deal with the success of this online story, that is inflationary itself. on top of that, we've had none investment into the mining sector for year and -- for years and years. it feeds essentially into this theme on green transformation, the green cabinet that ayden talks about he's appointed, the eu deal which is green, and of course, china 2060. absolutely i thick inflation is coming back in 20 why one, and i think-- in 2021, and i growth will be higher. matt: 1.5% to 2%, does that mean

we see more movement from the seeat the year-end if we the fed get to that level? steen: of course, the position of the fed right now is dovish, and with the position changing for the federal reserve board coming into the new year, they are getting even more dovish. they come into the year one he could do more on the downside. first they need to move to if they see a huge surprise on inflation, they will be caught short. don't forget, the fed does not expect himself -- expects themselves the dot plot to move before 2024. that is absolutely unrealistic in my mind. i think the fed is one of the worst predictors of growth in the u.s. of anybody. i am just wondering because they said they will hold pat until 2024, and if we do see the kind of inflation you are talking about, if we do see

rates creep up, if markets continue to act as irrationally , as the airbnb ipo proved, the fed has to do something maybe beyond moving to neutral, don't they? , but i amt is my take just making the case that we first need to move to neutral, and then into a hiking cycle. when we get to a hiking cycle, i think we will have a detrimental effect on the stock market because if you look at the nasdaq 200 index, they've had no earnings increases over the last two years. so all of the increases in valuations we have, mainly in our technology, is that we have interest rate activity supporting the stock. the worse the economy gets, the the support you get from interest sensitivity part. would we go to a high inflation rate, a higher capacity

utilization, clearly the rate positive.y will be matt: thanks so much for joining us. really appreciate your time. it-- really appreciate your tim. akobsen, happy new year's eve. tantrum -- aper taper tantrum would have to be forthcoming. i think it would stock the markets. we know the fed has consistently and constantly said that they are going to be data-dependent. they are going to watch what is going on around the globe, but if we did start to see inflation take higher, i don't know if i necessarily agree with his assessment. i think there are a lot of things potentially keeping inflation downing 22 anyone -- down in 2021. we have a lot of cheap money coming into the marketplace

after the financial crisis. what we got was a very long, but low growing economic expansion. jay powell has talked about that happening again. we will see if that is ultimately what we get in 2021. matt: it will also be interesting to see what happens with fiscal policy alongside the fed policy because if steen is correct and the fed moves to neutral, and then starts to contemplate tightening at the same time as the government is doling out to thousand dollar checks every quarter -- out $2000 checks every quarter and spending on an infrastructure package, you might not see the kind of taper tantrum you saw last time. there is so much cash on the sidelines as well, this financial repression has been pushing people into riskier and riskier assets. even if that rotates back into safe names like apple, you are still going to see the kind of run-up that you saw in 2020,

84%, the gain. apple is worth $2.3 trillion now. carol: it sets up for an interesting year. coming up, eric nelson, wells fargo macro strategist. you are watching and listening to "bloomberg surveillance" on bloomberg radio and bloomberg tv. this is bloomberg. ♪ ritika: with the first word news, i'm right up cooped up -- i'm ritika gupta. senate majority leader mitch mcconnell is rebuffing but the president and, kratz -- and democrats on action that would increase direct stimulus payments to $2000. the president warned that failing to act now amounted to a death wish by republicans. a new variant of coronavirus that emerged in the u.k. has now been found in the u.s., raising concern that a more transmissible strain could spread widely across the country. a man in his 20's from colorado is the first american known to be infected with the mutated form of the virus. he has no recent travel history.

a republican congressman elect from louisiana has died from coronavirus. luke letlow was elected in november. he was 41 years old. he was hospitalized with the disease on december 19. british prime minister boris johnson plans to rush his brexit trade deal through parliament. he's confident it will be easily approved. a group of hard-liners in johnson's conservative party plan to back the accord. the main opposition labour party also plans to back the measure, even though it because it inadequacy -- even though it calls it inadequate. bitcoin has risen more than 47% this month and has almost quadrupled in 2020. critics have questioned bitcoins validity as an asset class. 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.

♪ it's moving day. and while her friends are doing the heavy lifting, jess is busy moving her xfinity internet and tv services. it only takes about a minute. wait, a minute? but what have you been doing for the last two hours? delegating? oh, good one. move your xfinity services without breaking a sweat. now that's simple, easy, awesome. xfinity makes moving easy. go online to transfer your services in about a minute. get started today. wannit's timeight and for aerotrainer. a more effective total body fitness solution. (announcer) aerotrainer's ergodynamic design and four patented air chambers create maximum muscle activation for better results in less time.

it allows for over 20 exercises. do the aerotrainer super crunch, push ups, aero squat. it inflates in 30 seconds. aerotrainer is tested to support over 500 pounds. lose weight, look great, and be healthy. go to aerotrainer.com. that's a-e-r-o trainer.com.

designed this from the start, we would want more

focus on state and local government, unemployed people, on evictions, loans for small business, not based on giving everybody a check. carol: it sums like he agrees with what larry summers had to say. that is adam posen, head of the peterson institute for international economics. there are many out there who said we needed targeted stimulus and release programs. anyone in the restaurant industry feel like they have really been forgotten. there are individuals who can't make the rent payments or can't make mortgage payments, can't put food on their table. we have been talking about that all week. so we do have to make sure the stimulus is going to the right place. i would argue if we overdo it a little bit, and some people who don't need stimulus do, that will be one of the problems that arrives out of having to get stimulus out quickly. but i do think we have to ensure we are getting aid to the people who need it.

matt: remember, ben bernanke wasn't worried about overshooting with the economy either. famouslyn "60 minutes" that inflation is something that can control, deflation is more of a problem. i'm sure there's a lot of people out there who would argue for more targeted stimulus. some people out there argue for a universal basic income, including -- well, they are no longer with us -- from thomas payne to milton friedman, there are some real capitalists out there who would have argued for a universal basic income. larry summers is not one of those people. he's not a fan of that principle , has never been, and he certainly isn't a supporter of $2000 stimulus checks or letting the economy overheat. let's get over to kevin cirilli right now, bloomberg chief washington correspondent, who has spoken to dr. summers about this. i think the twist we saw yesterday, even more

fascinating, mitch mcconnell going directly against the 's very outspoken wishes, killing $2000 stimulus checks by not allowing a quick about, and then wrapping them up into something democrats will never agree to. kevin:kevin: first and foremost, because of that move, it makes it increasingly unlikely that there is a path forward in the senate between now and when the senate turns over to a new congress for there to be a vote on $2000 stimulus checks. there is still a single-digit chance that that happens, but it is interesting, secondly, the politics of this. what has gotten lost in president trump's message is that while he did come out in favor of $2000 stimulus checks, he also said he wanted to get rid of some of what he said was wasteful spending and the $900 billion bill. so it wasn't just a proposal of $2000 stimulus checks.

he also was proposing correcting some of the funds allocated for wouldrk, as he describe it, for projects around the country. if you look at this from a matter of leader mcconnell three items on his to do list, getting the defense reauthorization bill through today, getting there to be some type of closure as it relates to an increasingly contentious vote on certifying the results of the 2020 election despite the president's continued unfounded claims of voter fraud, and also having to fight for georgia to keep the majority, leader mcconnell yesterday on the senate floor speaking in a very stoic, somber tone, which is to be expected based upon my reporting of him over the years, but still, a to do list that would make anyone in the last week of 2020 nervous. carol: the thing i find interesting is mitch mcconnell

basically saying i will consider more stimulus package, but i want to consider other things. an investigation into alleged voter fraud. he also wants to shield businesses from liability. what is the goal for mitch mcconnell? those are issues very near and dear to president trump. kevin: for him, the goal is to keep the majority for republicans in the senate. when i spoke with one republican lawmaker yesterday about whether or not there could still be some kind of vote on the $2000 stimulus checks, you hit the nail on the head. whereuld have a situation there is a juxtaposed piece of legislation which would have poison pills for various politicians, depending on which camp they are in, where you could lump section 230 and the communications decency act with something like $2000 stimulus checks.

that presents a really difficult choice for lawmakers who might agree with one of those positions, but does agree with another. the, leader mcconnell is a political chess player. he knows this -- the bottom line , leader mcconnell is a political chess player. he knows this is what he's doing. carol: is there any support in the republican party and the gop behind president trump to continue fighting the selection? it is interesting that was still in there. kevin: polls would suggest the president's questions about the legitimacy of the election and trust in the election process have resonated with the base of the party. there is no evidence to suggest that any election fraud took place. then at her new general william barr has set as much publicly. in terms of where this goes from a political angle, i would note the political strategy of someone like senator ted cruz,

likely running for president in 2024. he is trying to inherit some of that political argument. vice president mike pence is going to be presiding over these proceedings. he is in a tough spot in terms of keeping the trump base if he wants to one for president. there's a lot of competing political interests at play right now. carol: this is why you need term limits. i am just going to put that out there. people are constantly thinking about their next election. back inresident trump, pre-20's esteem, wanted term limits. that is -- in pre-2016, wanted term limits. carol: that is interesting. matt: i wonder what we should think as we watch these social media companies that are worth so much money and continued to rise in price, should we be worried that they are stripped of their protections eventually, anytime? kevin: i keep going back to this -- look, if there is one trend bloomberg has done such an

incredible job of reporting, it is how governments around the world are scrutinizing tech companies, whether it is in china with the communist party of china looking at jack ma, but here in the united states, there is a process. you have democrats arguing there should be some antitrust investigations, and you got republicans arguing that there ought to be a look at how some of these, the communications decency act is looked at. but there's a process here in the united states that is playing out, and i would anticipate that that regulatory forecast and he conversation around that is going to continue regardless of the upcoming georgia. a perfect always process, but is a process, which is a good thing. kevin cirilli, the hardest working man in washington. coming up, we are going to check in with eric nelson, wells fargo macro strategist come at you talk a little bit more about the market trade. it is really quiet. you can see s&p 500 futures just

up about 12 points, but we continue to see some records and some of those big tech names like apple. we will see what he has to say about the outlook for 2021. i'm carol massar, along with matt miller come on bloomberg radio and bloomberg tv. this is

♪ , everyone. morning i'm carol massar, along with matt miller. this is "bloomberg surveillance ." jon, lisa, and tom are off on this wednesday. it is a holiday shortened trading week. s&p 500 futures are indicating other higher open, just up about 12 points. $1.22 --t the arrow at the euro at $1.22. up to 0.94%yield , so a bit of a move. bitcoin hitting a new record. we are actually on track for our biggest monthly gain since 2019. it has really been one of the big stories, kind of an indication of the sentiment, and all of that money and investors

looking for yield out there. that is your market check. matt? matt: investors looking -- well, i think maybe some of them worried about what is going on with all of the liquidity sloshing around. central banks looking to weaken their own fiat currency. that was one of the original ideas in the bitcoin community, that you need to protect yourself from. . that kind of thing the u.s. -- from that kind of thing. the u.s. has been trying to protect itself from russia to some extent by putting some sanctions on a gas pipeline project that comes directly down here to berlin. vanessa doesn't from bloomberg news has been covering this very closely, and regardless of the attempts by the u.s. to stop this, angela merkel and the germans have pushed it through, together with vladimir putin. they are on the last leg now, and just about to finish before

the u.s. can tighten the sanctions even further. venice, welcome to the program. are they going to finish this? is nord stream 2 going to get completed? vanessa: thank you for having me. it sounds like russia is closer to its objective to complete it's really controversial project. there is still some work to be done, but analysts estimates operations could start as early as next year under kind of an optimistic scenario. it was halted because of u.s. sanctions, and on monday, a new milestone was reached with the completion of the pipeline section of germany's economic zone. there are about 30 kilometers in germany to be laid. it is important a milestone, so

it was an important step, but these two have some way to go. the bulk of the work will actually happen in denmark waters, with a vessel that can lay about one kilometer of pipes per day. so the completion is not for seen before the end next year, but closer than that objective. carol: this is always one of those that i say, ok, our audience is listening and washing and saying, why do i care? it makes president putin very happy, but also cements his control in a big part of europe specifically in germany, and terms of getting gas out. the u.s. and others are nervous about how reliant europe is going to become on russia specifically when it comes to energy and gas. yes, so europe is already reliant on russian gas. gass a big part of natural

imports that come come from russia. europeans and what germany says is that they need that gas. that gas production in europe has declined even further, so they need gas coming from russia, which is much cheaper than the ones that would come from the u.s. in vessels. argument that is going on here. europe is going to need more energy sources. russia can supply that cheaper than the u.s., and the u.s. can ,lso participate in this market but russia's dominance will increase after its pipeline is completed. you have to also consider that investors care because if you own shares in gas, if you

own shares in unit per -- in , or in competitors like exxon mobil, royal dutch shell, bp, this is a really important because german euros are going to help fund , the nextutin annexation of crimea, whatever he decides to do next. they are beating out these competitors in the delivery of natural gas and other fuels. important to say that natural gas is an important part of europe's energy mix, so you are correct. there are a couple of companies backing this project, and they are all betting on huge profits coming out of it. carol: it is always follow the

money here. interesting story and a reminder of some of the release chips that are continuing to evolve around the world. vanessa, thank you so much. em of bloomberg news, you can check out her story on the bloomberg. want to talk about the trade. it is very quiet this year -- or at least, quiet today. let's see what erik nelson has to say, macro strategist over at wells fargo. he joins us on this wednesday be a skype. -- this wednesday via skype. russia pushing ahead with this gas link. there's a lot of relationships and global relationships going on, as we know. china and europe also moving ahead this week on a big investment relationship. when you look at some of the big will macro stories out there, we've had a lot this past year, whether it is brexit or others. are the ones you are focusing on that you think will impact markets in the year? erik: that is a great question, and i think it is something

markets are not that focused on given that cobit is front and center, and risks number 1, 2 and three for a lot of people -- that covid is front and center, and risks number 1, 2 and three for a lot of people. there's also a pretty widespread consensus that under a biden adminstration, there is probably going to be a relatively benign relationship between the u.s. and china. we are a little bit less convinced on that. for one, there is very much bipartisan support for being tough on china on both sides of the aisle in the united states. there's not many issues that we can really say that about here in the u.s. the other thing you have to keep and china the u.s. phase i one trade deal signed last year, china has not lived up to its end of the bargain, so to speak. it has not bought all the goods it said it was going to throughout the course of 2020. that is going to be another issue that could come up under a biden adminstration. and also, you have to wonder and

maybe worry about the risk of more chinese aggression in places like taiwan and hong kong. carol: that is a really good point. matt: it is especially interesting as the eu and china approach this agreement to work more closely together. let me just ask you to pull your microphone out of your neck. it is step your collar, you're getting cut off a little bit. issue that is an very closely related to that, and pretty much everything else in your investment world, which is the u.s. dollar. so money people have forecast that will continue to fall, and that helps make u.s. exports cheaper, but if that doesn't happen, than the china relationship is going to be even more problematic, isn't it? it is a bit of a mixed bag because the stronger getsou on -- the yuan against the dollar, the bigger headwind that poses for china.

if they let the renminbi appreciate, that is going to pose a risk for this export market, of course. if they try to lean against that , and that is completely running a foul of their commitments under the phase one trade deal. so i think a weaker dollar and a stronger yuan does bring its own challenges, but hank the key for the global economy as a whole, it weak dollar is very much a good thing. i think the overall how china benefit from that, i thing it is an overall positive on the aconite front. matt: larry summers was i think encouraging janet yellen to adopt a strong dollar policy when she steps into the top spot of treasury. --president-elect biden well, if the democrats win this georgia runoff, does that mean we can count on even more dollar strength?

how do you see those election results coming in? erik: the odds of the democrats winning both races is very low. odds is even too high. purdue did very well, and probably will win a hand that will win handily -- will probably win handily against us ff based onnst oss the polling. i think what will become pretty obvious immediately is that there is not a lot that can get on with a razor thin 50 seat majority in the senate. big sweeping changes in taxes, regulatory structures, the filibuster, these are going to

be really hard to do when you're counting on harris as the tie-breaking vote, and you got people like joe mansion on the democratic side who kind of straddles both camps. so i think all in all, even if you get a democratic sweep, the longer-term marketing locations may be relatively limited. carol: it is certainly something we will find a new year. thank you so much, erik nelson, wells fargo macro strategist joining us from skype. it was interesting when you talked about china, i think china came out with its gross test -- with its growth estimates for 2019, and updated it. i think it is the only developed nation that is expecting to see some kind of growth come the new year, so i think the world is going to be largely reliant and watching certainly what comes out of china in terms of much-needed growth in the new year. seen ae have definitely lot more highly priced deals

going into china and to developed asia. the eu and china are expected still to announce a pledge to work more closely together. we keep watching out for that. and boris johnson is going to be holding a press conference at 5:00 p.m. london time which makes it noon in new york. among up, the former ceo of toys "r" us and hudson bay joins us. this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. senate majority leader mitch mcconnell has made it unlikely there will be quick action on an increase in direct stimulus payments. mcconnell says the senate will consider boosting payments to $2000 only in conjunction with other demands from president trump such as re-examining special protections for tech companies. an averagecinating of only 200,000 people a day against the coronavirus. while operation warp speed has distributed millions of doses, some states

have been slow to get them into people's arms. according to a bloomberg news analysis, the u.s. almost certainly won't hit the trumpet adminstration go of 20 million -- the trump administration's goal of 20 million vaccinations by year-end. deaths in the 24 hours through this morning in germany. germany joined european union partners in starting vaccinations on sunday. secretary of state mike on po reportedly is deciding whether -- mike pompeo is reportedly deciding whether to designate as a state sponsor of terrorism. it would be a thank you to cuban-american voters in florida who turned out for president trump. the u.s. a prima court is being asked once again to overturn -- u.s. supreme court is being asked once again to overturn election results. it is being asked in wisconsin

to discount 50,000 absentee ballots before congress meets to open and count certificates of electoral college results. more than 50 court challenges to the election have already been rejected. 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. ♪

> i think we have probably seen eight years of change in eight months. you now have digital being about

80% -- being about 20% of total purchases. that means 80% is done in stores. stores are still critically important. i think a lot of the changes we are seeing are here to stay. sadovehat was steve ceo of theerly the famous new york apartment store sac's. we've been up, we've been down, but really not far away from the zero mark. s&p futures up about 0.3% even after mitch mcconnell shot and buried the $2000 stimulus checks that president trump and nancy pelosi had been pushing for. you can see euro-dollar a little stronger right now at the greenback continues to show some weakness. investors feel comfortable enough to sell a little bit of the u.s. 10 year.

the yield there rising just a bit. in bitcoin, one of the interesting stories as it this morning hit another record high, $28,500 and change, right now trading up 4% at $27,000 911 -- at $27,911. carol: we are wrapping up a holiday season unlike any other. gerry storch is with us of storch advisors, management and advisory to a lot of other companies out there, former chairman and ceo of toys "r" us, former ceo of hudson's bay, former vice chairman of target. he understands the retail industry so well. nice to have you with us on "bloomberg surveillance." we have the conversations about a lot of the trends we have been seeing and retail that got sped up this year because of the pandemic. what trends really stand out for you that you think are going to

be significant drivers of retail going forward? and good morning, by the way. gerald: good morning. obviously you have to start with the shift to e-commerce. this is just massive. it was happening before, but there is no doubt it got trim initially accelerated. people -- got tremendously accelerated. people who weren't used to using e-commerce were forced to, and they found out it is not that bad. another big trend is the shift away from apparel, from clothing into hardline, electronics, other types of physical goods. apparel has been in long-term decline. if you look at it over a 10 year cycle, clothing is down. not so much people are wearing less clothes, but there has been a big casualization of the workforce. the average price point has declined with the advent of fast fashion. clothing seller's in the u.s.

right now are walmart, target amazon because of the average price point has declined -- target and amazon, so the average price point has declined. i don't think i am alone, i started learning more about how to bake, and now i am going to keep making, so there's going to be a lot of shifts towards the home. you have the shift away from the department stores and towards discount stores. that is continuing, only accelerated by the pandemic. matt: it is funny. upas well, have really taken cooking over the past few months, only because of this lockdown. retailer,nt out one one clothing retailer that has done quite well, at least partially clothing, is l brands. that's because they don't sell office clothes. they sell may be the less appropriate things you would wear to the office like victoria's secret, or things you

would use at home like bath and body works. one of the problems for retailers right now is that the just ask is so expensive. you can't find a truck out there. it is tough to get things on boats at a decent price. you see that kind of inflation for companies that need to ship their goods to people who now order everything on the internet ? gerald: i think the real topic is that there is negative arbitrage in the marginal cavity ability -- the marginal profit ability of what you sell and send to someone over the internet versus someone who comes in, picks it off the shelf, and takes it home. for a lot of retailers, this is the most frequent assignment i get to help figure this out, they have to sell twice as much on the internet to get the same marginal economics, the same marginal profitability is what they sell in stores because you

already have the stores. the customer does the last leg themselves. that is the biggest issue. during the pandemic, fedex and ups have had capacity constraints, and they said, ok, let the market clear it, and they put in big surcharges. eventually that will equalize, so i think over time, as the system gets built out, as e-commerce has a higher percentage of total sales, that penalty goes down over a period of years. not instantly. for some companies, what i like to look at is the margin pool. how many dollars of margin are in that shipment you are sending someone? a pack of toilet paper, there's not a lot of margin. it is bulky. but a diamond ring, no problem. a $1000 ring, you could have $500 of margin. the transportation cost doesn't matter. but it does when it is only a dollar or two. that's why you have to say who has the best margin economics,

who has the best margin pool to ship that to the home so that the shipping becomes less of it. customers are spending a lot of money with a big margin rate, so cost is trivial compared to the overall margin pool. carol: as you go up and down the avenues here in new york, there's multiple retail stores that were here before the pandemic that are not anymore. who takes advantage of that retail property on the others out of the pendant? -- the pandemic? who are the retailers who will be able to snatch up some of the so that thereons will be demand for their goods? gerald: we have to separate new york real estate from all other goods. for most of the united states, the winners are clear. costco.rget, walmart, they have done fantastic, not only on the internet, but a lot of their store numbers have been up because people have fewer places to go to, and they are

making big ticket purchases when they go to those places. those are big winners. other people like home depot and lowe's, these have been phenomenal. i don't think that is come to change in terms of a fundamental long-term trend, as we were discussing. people like the dollar stores. dollar general is just heading it out of the park day after day, week after week. so is family dollar now. so i think a lot of it is going to go to people at this. the mom-and-pop's are getting crushed. if you only have a single store, you have a limited line of offering. you've been killed by the pandemic. maybe you weren't declared essential. beyond that, you have capacity restraints. meanwhile, you can't even afford to set up a really great internet site, and even if you could, you would not be able to get the traffic to support it. carol: i wish we had in our just to talk with you. we are going to have to get you back. love talking about retail, and there is so much going on.

storch, stoprch advisors -- storch advisors ceo. coming up, jim paulsen of the loose hold group. that is coming up on bloomberg. ♪ ♪

>> central banks are showing no sign that they want to take their foot off the gas. >> domestic activity is still really in the doldrums. >> wickets is the first quarter get back into dented territory -- quarter dip back into negative territory. >> it looks like an asset bubble is brewing. >> the post vaccine rebound is going to be incredibly bust and v-shaped. >> it may be v-shaped for some. it may not be v-shaped for others. 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. be v-shaped for others. >> this is "bloomberg surveillancewi