caroline: from bloomberg world headquarters in new york and from its european headquarters in london, i am caroline hyde. romaine: in u.s. markets, stocks rising, bonds dropping. a lot of concern for what the european agent -- what the legislative -- what the european agenda will look like for the next few years.

caroline: ever since the dust settled from the u.s. election, the runoff voting george of seats for the two senate has been seen as pretty critical for political and market watchers alike. but how critical is it from a policy perspective? take bothmocrats seats, republican support will still be needed to pass major legislative changes. no matter how the vote falls, and whenever the results come in, biden will still have a battle on his hands with covid, but may be of a battle when it comes to the economic data because it did not look too bad today. joe: everyone expects there to be some sort of lull right now. but, not looking too bad. manufacturing ism number in the u.s. came in well below -- well ahead of expectations. at itsers was basically

highest since like 2004. the index, not an absolute is your of activity, more of a relative measure. the manufacturing sector growing extremely fast. romaine: i just want to point out, london is a wonderful city but it is not new york. sorry. the european in union. i am a european at heart. us with more insight, bloomberg news u.s. economy reporter reade pickert. how much does this confirm the view that generally speaking, the momentum of the u.s. economy is on track? measuresm manufacturing topped all expectations this morning. it was not just that the overall adex itself expanded at such fast pace, but the details

themselves looked really good. orders, inckup in construction, and employment. you're getting a boost both from inventories but also from a strengthening u.s. economy. that is really helping to support this sector's growth. in terms of how it plays in the overall picture, manufacturing as a relatively small part of the u.s. economy. looking at the jobs report later this week, manufacturing employment is expected to boost that number as well. caroline: where are we going to see the help from a regional perspective? where in america is this helping? >> we get these regional federal reserve measures as well that we really track in areas where

we are seeing a pickup. in general, manufacturers across the board are doing really well. looking at the survey this morning from a national perspective, but of the 18 manufacturing industries they reported of those growth. that is a lot of different types of companies within the manufacturing sphere and also a lot of regional diversity. romaine: at the end of the week, we will get a monthly jobs report, expectation of job growth. what are you expecting that? reade: in general, economists are expecting a modest increase in employment. but really, forecasts are across the board. at least from our bloomberg survey, we have forecasts ranging from an employment gain of 400,000.o a loss but we are released -- what we are really trying to see is if

this surge of virus cases and renewed business restrictions come into play in terms of what that meant for job losses, job gains, and overall momentum in the labor market. joe: we are going to be talking about the georgia runoff in a moment but one of the reasons it really matters for the market is the possibility of further stimulus. more checks. may be green new deal. how much could that move the dial in terms of expectations of how fast we move to precrisis levels of activity? >> from what i am hearing from economists, stimulus could help boost growth in 2021, perhaps lowering unemployment faster, or giving a greater boost to gdp. time, 2021, the

current baseline forecast is for a pretty solid year. for unemployment to really decrease as the year goes on, as we see more widespread vaccine deployment and a snap back in general activity from people being able to go to their favorite restaurant or go back to a sports game, or even just travel more. romaine: reade pickert givenness that breakdown of the state of play. out today.in manufacturing numbers and of course we will get those jobs numbers on friday. tomorrow, you have that big senate runoff race in georgia. you have a u.s. congress divided. race wille of this determine whether that makeup stays the same or if it changes in favor of the democrats. this is bloomberg. ♪

romaine: today, we are focused on that runoff vote being held in georgia. of course, what it could mean for investors and the economy. the balance of power in the senate in question right now. joe: a lot is riding on tonight's vote. a little replay of what we got a couple of months ago. they momentum according to the polls seems to be with the democrats. there you see the pole at 538 average, jon ossoff slightly ahead of his competitor, david purdue. raphael warnock ahead of his competitor, kelly loeffler,

since 2016, brexit, u.s., i ignore all things polls. but i do look at the bedding markets. seems to bemarket going with a little bit more vomit behind -- a little bit more momentum behind dems too. joe: i am sure we will find out in a few weeks. no one knows what will happen tonight. who knows whether we should trust the polls. this of course is coming on the eve of the election certification. shenanigansnks and we expect tomorrow. what is the significance of this say,tonight in terms of, the future of the republican party. >> the significance is, if the republicans lose both seats, and losing both seats would be a tie and basically giving control over to the democrats, you will

have recriminations upon recrimination, a lot of it directed at president trump, who, by continuing to insert himself in the postelection targeting georgia, made this race or about him then than itre about him possibly would have been. generally speaking, republicans have an edge in runoff elections. the fact that it is basically tied, that the democrats may have a slight edge, is a potus to the democrats. i think there will be screaming and yelling amongst republicans going forward, also arguing what this means for the republican party in a technically speaking post trump america. romaine: there may be a lot of screaming. in interesting backstory

terms of what happened in the first week of november, the idea that you had a huge voter mobilization campaign that was specifically designed to combat voter suppression that had been out there for so long and cost a lot of folks there seats, at least in stacey abrams, that is how she would characterize it. i'm curious whether these efforts that seemed to work well with regards to the presidential election, whether they have been applied or will work well in this runoff. >> by all accounts, that seems to be what is going on. stacey abrams, many people perhaps not unfairly characterized her as a sore loser coming out of 2018, she kind of put her money where her mouth is and started this large voter organization campaign and apparently shared some of her tactical skills with some of the other groups. it certainly worked in the

presidential and it will be interesting to see if they will be able to do a twofer, or technically a three-fer. caroline: do you think this spells a long-term shift in the way in which whether it is red, blue, purple, whatever we see georgia being in the future. statesre seeing several in the south, particularly those with large urban this and -- large urban hubs and larger suburbs that have college-educated voters. you are seeing it in north carolina, though not to the extent in georgia. you are seeing it in arizona. it may eventually be texas as well. that will be the approach. one of the things that came out of november showed that

republicans have also got larger inroads in the latino vote aunt even some of the working class african-american vote. democrats can the take for granted that this particular turnout operation is going to work. they will have to work for every single one of those votes, and the republicans too. joe: tomorrow, we know that a number of republican senators will vote to oppose the official electoral count, but not all republicans are. we have some 2020 for opals who will acknowledge who won. onecotton for example is who will not oppose the certification. is there going to be a lane in 2024 in your view for senators

to try to work joe biden? to work with joe biden? >> i think there will be a lane, for want of a better phrase, the trumpist faction and the slightly more reality-based, more mainstream faction. right, tom cotton had his eyes on 2024. so does tim scott. he is not supporting the challenge effort. we have got ted cruz and josh hawley, possibly donald trump himself, that will be trying to 2020 the bloody flag, that was stolen. and that will be there because in 2024.

except that beau biden is the president, and their focus on 2024 will be running with that reality. romaine: we want to bring our viewers some breaking news. the new york stock exchange delisting those three chinese state-owned telecom companies. the decision to the list. the decision not to. weighing reverting back to its original plan to delist those. steve had called the president of the nyse and asked her to reconsider that. the potential rethinking of relisting of the delisting. coming up, could be market nirvana just on the other side of these georgia runoffs? this is bloomberg. ♪

caroline: today, we are focused on the runoff vote being held in remainingr the two senate seats. we have been digging in to some of the writing from wells fargo that this could be good for stocks. a column today on bloomberg opinion about how markets could look post at this vote. showing how there was concern underlying the market. joe: we had this run-up yesterday, this incredible run-up in stocks. everyone is all in, super bullish. , stillvolatility elevated well above precrisis

levels. clearly some residual anxiety. romaine: you wonder whether some of those lines on your screen, they imply volatility, if those come down in 24-48 hours. joe: let's bring in bloomberg opinion columnist john authers. talk to us about that elevated vix. it is still kind of high. why is there still this premium that we are seeing, a sign of anxiety perhaps? john: i am still wondering about that myself. i think part of it, the really astonishing phenomenon at the moment it's just how low bond market volatility is and how low it is given where stock volatility is. and very much looks as though

the bond market has been put to sleep in the last 6, 7 months. of volatility now, risk finds its way through the stock market. that i think is one point of these dynamics. these are very strange dynamics. i have never seen anything like this before. when it comes to why is is,tility as high as it georgia is a matter of concern. i do not think many people take the risk of something really serious happening tomorrow with the electoral college, but clearly there is some degree of nervousness about that. after that, there are very few binary events like this on the docket for quite a while. see the brexit referendum and 2016 presidential

election coming. we can see now that there are not any big one-off moments like that for quite a while. there is more of a chance that the world can get itself sorted out. i suspect there may be an element of, let's take some money off the table or let's take out greater protection against volatility just to get through georgia and after that, we are in the clear. caroline: it is kind of weird that the bond market has been so sanguine. would -- a democratic suite -- democratic sweep would perhaps have more ramifications. do get aen if you democratic sweep, how much legislative policy will you really see when it comes to taxation, regulation because you

still need 60 senators for that. ifnot only that, but even you find a way to do it through the procedures, 50 votes plus the vice president, you still have people like joe mansion will not sign up for the green new deal or anything remotely like it. i think you have put your finger on the other thing that does worry me quite noticeably. if there is a market that should be getting nervous ahead of georgia, it should be the bond market. i think you can overstate the significance of georgia. but, plainly, if chuck schumer controls the agenda and not mitch mcconnell, then somewhat more expensive fiscal policy and somewhat less expensive monetary policy does become possible. given where people are positioned in the bond market, that is something that you would want to guard against and might show up in the bond market.

investorsf bond should be scared, then i would think stock investors should be even more scared. the returns over the past few years here, the correlations between the bond market, if bond collapsed, is there a possibility that stocks collapse along with it? collapse,s genuinely and bear in mind that is still to an historically low yield, then i think stocks go down a lot. i don't quite see how that can be otherwise. grantham, i talked to him earlier this afternoon about a piece i have coming out tomorrow. romaine: is he bullish this year? [laughter] john: funnily enough, somewhat of the parish persuasion. the point he is making this

time, he is now prepared to say that this is as much of a bubble as 2000. the argument he makes for that is that this time it is about moral hazard and the degree of have that people yields are staying this loafer longer. the markets never believed the fed when they said they would be raising rates. now they are totally certain that the fed is not going to raise rates even though large parts of the market are predicated on the kind of economic strength that would require them to. thisperhaps after election, there are no more binary events. off anvestors have shook million things over the last several months and exhort of those. if't that a cliche, like

there is nothing left? john: that is another one of my least favorite market cliches. at that point, there are no more really significant one-off concerns holding people back. what you do then need to worry another risks such as mutation that is more deadly. the kind of thing that we cannot account for. romaine: great to catch up with you. thatwant to revert back to breaking a little bit earlier. those chinese firms that could potentially be delisted. the nyse weighing reverting back to its original plan to delist those shares. morelet's see how many decisions they make on this. it is a fascinating story especially with the turn of the administration coming up.

caroline: that is all from "what'd you miss?" joe: bloomberg technology is next. romaine: this is bloomberg. ♪

i'm emily chang in san francisco. this is bloomberg technology. the two senate runoff elections are drawing to a close in georgia. we will have the latest. social media is policing misinformation about the races.