balance. in georgia, democrat raphael warnock defeats republican kelly loeffler, and jon ossoff currently leads republican david purdue. the gop could lose control of the senate. beijing tightens its grip. hong kong police arrest around 50 people, including a prominent american lawyer. it's the biggest crackdown yet under china's controversial national security law. and boris johnson says one person in every 50 in england has covid-19. it comes as chancellor angela merkel tightens germany's lockdown to contain the outbreak. good morning and welcome to "bloomberg surveillance." i'm francine lacqua in london. tom keene is in new york. tom, i know you have the ins and outs of politics of the georgia senate race. i would point to what is happening with treasury. we have some interesting calls not only from columbia threadneedle about the 30 year longer-term but also what could happen to the 10 year treasury in the short term if we do see a blue wave. of: it is a real dovetail

the political world into the bloomberg world, no question about that. just the 10-year yield is launched from 1% out to 1.02% in two lousy cups of new york coffee. in terms of the race in georgia, kevin cirilli will join us in amendment. we just saw a new take with mr. also if expanded his lead -- mr. awsat -- expanded his lead. i should point out it is in the recount bracket. it is that close. francine: the market seems to be moving. tom: the market is voting on it, no question about it. francine let's go to first word news with ritika gupta. ritika: the democrats hope that taking control of the u.s. senate hangs in the balance today. the other is too close to call. democrat raphael warnock

defeated senator kelly loeffler. raphael warnock is a civil rights activist and pastor. andrace between jon ossoff david purdue is a dead heat with a number of votes still to be counted. purdue's senate term expired sunday for two distinctly if her and events taking place in washington today. on capitol hill, lawmakers gathered to certified joe biden for president. some republicans have promised to vote against it because of unproven allegations of vote fraud. thousands of trump supporters have gathered in washington. unprecedentedan crackdown on the pro-democracy movement. dozens of opposition figures were arrested under a controversial national security law. -- joeican lawyer who is biden tweets the secretary of state calling the arrest and

assault on hong kong's democracy. a surprise move by saudi arabia, the saudis took charge of the oil market with a large cut in crude adduction. that papered over cracks in the opec-plus coalition and sent crude prices jumping to a 10 month high. -- ofhares of and judy energy companies surged. global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more i ritikacountries, gupta. this is bloomberg. tom? tom: thank you so much. equities, bonds, currencies, commodities. naz get -- nasdaq gets crushed. 214 large, nasdaq 100 points. red and green for the bigger blue-chip market makes shows that. of a in from 29, the angst few days ago. dollar weaker. in the yield space, watching that benchmark, the 10 year yield, 1.0% breached off the news from georgia, and a seven

basis point move, 1.02% on the 10 year yield. the curve steepening on inflation expectations rising as well. francine? francine: it is all about treasury rates. everybody knows this, but democrats prevail in the senate, the thinking knows it will usher in -- the thinking goes that it will usher in more growth. one of the things that the so-called blue swing would do is change the yield curve, which currently is edging steeper, and i really want to spend a bit of time on the 10-year treasury, sending measures higher. i also want to look at europe in 32,292, european stocks gaining 6.6 percent. democrats have taken one of two georgia senate seats that will determine which party controlled the u.s. upper house. has ousted kelly loeffler. democrat jon ossoff is currently

16,000 votes ahead of david purdue, but the race has not been called yet. joining us now is amy pope, u.s. jeopardy advisor to president obama. thank you for joining us. are we jumping the gun? tom is looking for by vote what we know. are we in for a recount? thisit is not clear at point. what is clear is that there is incredible turnout. this has been almost unprecedented in terms of the number of people coming out to vote. and of course it is extremely close, which does suggest that the president's interventions here has made it different but not necessarily in the way people had hoped. there has been a lot of conflict within the republican party itself, and you see the governor and the secretary of state of georgia really at odds with the president, most notably in the

last couple of days with the conversations that they had about finding more votes. one has to think that has been -- that what has been playing out over the last few weeks has created the situation. it is not what the president wanted in the end. tom: i'm going to avoid the punditry. have wall-to-wall punditry on cable news worldwide right now and we are watching it very clear. for example, the new york times off victory.an oss i got out the trusty calculator and i rested -- i estimate that 28% of the vote was an election day vote. that is an american revolution. do you expect to see the revolution of 2020 and 2021, that we will forever move beyond an election day vote to all of these other forms of voting, including right and absentee? the i do think that

situation has changed. in the first instance, we have demonstrated that this may be a better way to get voter turnout. we know obviously in the moment of covid, where people are afraid of going out to vote in some cases, it makes a lot of sense. but also in terms of dealing with the elderly, dealing with a whole host of people who may have trouble getting to the polls on a particular tuesday during working hours, that this might actually prove to be an efficient and effective way to get their votes out. tom: it is routine business in the western states. i'm going to guess off the top of my head five western states. clearly it is a pandemic business. do you just assume whether you hire democrat -- or do republicans assume, that this is a trend with washington state and oregon and the rest? amy: i do. despite the politicking and

allegations of fraud come etc. come etc., in the end, when we take a step back and look at what the outcome has been, there is very little fraud and it has been an effective way to get people to vote, and ultimately that is what the system is designed to do come to make sure that every american who has the right to vote is able to do so. this willmoke clears, have proved to be a very effective experiment that will be very attractive for other states moving forward. francine: if we do have the so-called blue wave, what does president-elect joe biden actually do in the first 100 days? amy: i think we need to be careful about not overstating the impact of the blue wave. the margin is so close, so even ofthe democrats take both these, they will need the vice president to break any ties. the key difference is that means the senate will be controlled by the democrats, not republicans,

and that makes a difference in terms of what legislation can get on the floor and what nominee can be confirmed. when it comes down to the big-ticket pieces of legislation, that is still going to be tough and you will still have to bring republicans along for the president to get past. francine: does that mean less spending, that the market is currently priced in, or less stimulus? amy: it means they are going to have to fight it out and come to some kind of compromise. it means that there is not a free pass for democrats to move forward with all the spending proposals that they would like to move forward. it means that they will have to make a lot of compromises. expectations ar little bit. this is still going to be a road for joe biden to get through any major piece of legislation. francine: whether it is oprah winfrey and "the color purple," in georgia, the basic idea is that we are moving

toward purple states. do you just assume that we are going to see a sequence of out, people speculating less on texas and maybe more on florida and others as well, is this a voter democratic revolution towards the color purple? amy: i think what we are seeing are aically -- there couple of states that went for joe biden that were big surprises. arizona most significantly. the fact that there were real questions about whether texas could vote for joe biden -- that is very significant. it reflects a change both in more of who is voting, immigrants, it is not your traditional voters who we have in certain parts of the country and without vote a certain way. i do think this is something that both parties need to take into account.

you cannot make any assumptions, you need to look at the individual issues. and again, the trump factor -- trump was not a typical conservative republican figure, and we still need to figure out what that means in terms of the future. francine: thank you so much for joining us, adam housley associate fellow -- chatham house associate fellow. up next, we speak more about treasuries and the recovery, given the symbolic way that some of the vaccines are being distributed around the world. we speak with stephen king, hsbc senior economic advisor. this is bloomberg. ♪

tom: bloomberg surveillance on

an election day in november as we walk into wednesday money. we are monitoring the results right now. we had a tweak here at 98% of the vote in on georgia. 10 minutes ago or so. i'm just looking for the next print out there and i don't see it. jon ossoff, the head of senator -- ahead of senator perdue, but it is fractional. we will get an update from the associated press as we can. we have a market reaction and that full gin to economics. it is a perfect time to speak with stephen king. i have to digress and move to the pandemic, and i'm going to call it the grave new pandemic off your wonderful book. when we have an exhaustion is -- an exile janice -- know first of all is -- wee have had the most

know that governor -- governments have not provided much stimulus, encouraging companies to go into hibernation during lockdown in the expectation that things get better once we have a vaccination program successfully applied over the months ahead. i think what governments are hoping for is that once the vaccination programs have really hit home as they have been well-established in countries -- there is also pent up demand from households in particular, will be unleashed and you will end up with a very robust recovery. of course the risk is that many of the companies that are in that there will be business failures come and with business failures the rebound will be more limited. it is a very different kind of story than a normal recession, where there is financial opposed toom --

health distress which we have seen. you have the advantage of steven major, really worldwide i believe you sent major off to hong kong to solve all your issues over there. you cannot move stephen king to hong kong because the piano one move. that is all there is to it. stephen king, when you talk to steven major about this yield move, is it for real, or do we get a major reversal? steven: oddly enough, published a piece talking about this and he emphasizes strongly that supply issues, the kind the way a fiscal stimulus and treasure issue, actually there is not much issue of drive with what happens with regard to interest rates. although yields have a knee-jerk reaction over the last few hours. understandably perhaps because of the blue wall we are having

in the u.s. we have already been through massive fiscal stimulus over the last 12 months, not just in the u.s. but also elsewhere in the world. for the most part bond yields have remained extremely low. of course, there is an extra twist in the u.s., which is that we have a federal reserve encountering treasury, which will be run by someone who used to run the federal reserve, and -- more in case of the way with fiscal stimulus and less on monetary stimulus alone, which is probably true. think there is a reasonable chance that yields remain low throughout. massive increases in government debt, massive increases in government debt and share of gdp. meals are absolutely rock-bottom. francine: are we expecting too much? if the senate does go democrat, are we expect in too much

spending, too much stimulus? still very early days come as your earlier correspondent was mentioning. moreruth is that there is in the way of antitrust legislation, more in the way of higher corporation taxes, more in the way of taxes on the rich, all these kinds of things being talked about through the .ampaign issues of spending on green infrastructure in particular, u.s.hether that is -- the is very unlikely u.k. in the u.k. if you are the chancellor of the checker, you can do pretty much what you want. u.s., it is stuck in congress one way or the other, it is a much slower process. even at the end of the day if you see significant changes --ing through

francine: i don't know if you want to talk about shape, but is there too much hope that vaccinations work where there is talk about strains that may not be protected by of course the vaccination, and in general, we have maybe underestimated how difficult it is to vaccinate 80% of the population worldwide? stephen: i don't think anyone has any illusion about how difficult it is. i think there are some countries have the opportunity, that are ahead of the game, if you like. there is in a sterner success stories with the new vaccinations. there are big issues as to whether you can get the right supply chains in place to deliver exactly on time, and what the u.k. has promised with a huge number of vaccinations over the past few is, there is doubt whether there is the logistic infrastructure to

deliver those promises. some countries are ahead of the game but others are well behind. even if israel or the u.k. or the u.s. are unlocked in terms of vaccinations over the next few months, other countries, particularly in parts of the emerging world, simply don't have those types of resources. without those resources, the chances are that these countries could be in lockdown or could be aiming for some kind of rather unpleasant -- i think the world as a whole will take much longer individual then some countries. tom: stephen king with hsbc. we will talk about economics and the link to interest rates. i'm rounding up with substantial curve steepening, 89 basis points, the difference between the two-year and a 10-year yield. 1.9%, $54 -- $54.59.

politicaly on a wednesday. kevin cirilli is scheduled to be with us as well. please stay with us. from london, from new york, this is bloomberg. ♪

ritika: i'm retake a group to with your bloomberg business flash.

another all-time high for bitcoin. smashing through the 35,000 barrier. that is just two days after it fell 17%. bitcoin quadrupled in 2020, a range of factors cited for the rise. some traders pointed to j.p.morgan as a long-term price forecast. for tim kurt, the company saying it would pay out trash for tim cook. the company saying it would -- a big payday for tim cook. restricted stocks and invested during the year. that is your bloomberg business flash. francine? going on quite a lot in the markets, but this is basically some repricing because of what we are expecting in georgia. many people think it is too close to call, but there is an assumption in the markets that we will see democrats prevail, and that means that it will

probably issue in more spending, so the thinking goes, to support economic growth, but also bring in tougher antitrust scrutiny to technology giants. european stocks gained from zero point 7%, crude oil with saudi arabia taking charge of opec, above $50. tom: the yield market moves with a vengeance. we are eight basis points out, the higher yield, 1.03. that is a true 1.03%. taking the data on politics, jon ossoff up around 16,000 votes against senator purdue, but not pass the recount margin. they still count the votes in georgia. this is bloomberg. ♪

francine: this is bloomberg surveillance. arrestingpolice

dozens of opposition figures in the largest round up to date under beijing's new national security law. it prompted a response from joe biden. the secretary of state -- of state elect called it an assault on those rightly agitating freedoms. this is bloomberg's china's government editor who joins us from hong kong. what do you make of the timing of this? from china toage the new administration. >> it's the last few weeks of the trump administration. they have led the global chart for criticizing china for its crackdown in the city. we are really reading this as beijing sending a stark message crackdown.th this his china policy is something we talked about almost more than

anything among international policy. something that could lead the u.s. to take further action. we will see what happens. tom: could you make a direct link between these arrests and what we saw between the executive order at the treasury department action over the weekend affecting the new york stock exchange? karen: it's hard to know what china is thinking. we know there's been a flurry of activity increase that is angered the u.s.. making a police statement. this is angered others across the world. officers were

used to carry out these raids. the u.s. is distracted by the georgia runoff and the u.s. and u.k. are distracted by the virus. you can read into the timing, but it is hard to know. effect this beginning to -- affect the american banks. ways it's business as usual. -- virus has been you go out tomorrow morning and there will be a lot of people going about their business going to the office. in other ways things are absolutely not normal. it.s shocking the scale of concerned about the national security law and what it will mean for the future , whether there were still be --

whether it will still be a place for international business. or will it make foreigners here a bit nor nervous and more cautious. this is something that's really concerning people. what does it mean for companies having business in hong kong. what is it mean for international companies? karen: this is something that's been a major question for people operating in china for a long time. this is only going to concern people if the net -- if the national security law doesn't

discriminate. as we find out more information about who is arrested, that will inform how those play out. francine: thank you so much. let's get straight to the bloomberg first word news in new york city. ritika: democrats need to pick up both seats in the georgia runoff election to take control of the senate. they are now halfway there. according to the associated press, democrat raphael warnock defeated senator kelly loeffler. he will be georgia's first black senator. the race between democrat jon ossoff and republican david perdue is a dead heat with a number of votes still to be counted. in washington today, president trump will address thousands of protesters that gathered on the overturn of the election loss of joe biden. will certify the result. normally that's a pro forma

matter but a number of republicans plan to protest the move. -- protest the vote. trump has signed an executive order banning u.s. transactions. -- this does not take effect until after the president takes office. intelligence agencies are pointing the finger at russia -- russia saying it's behind a major hack of the federal government. that contradict president trump's efforts to suggest china might be responsible. global news 24 hours a day on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ready to group to -- i'm rich to group to -- ritika gupta. francine: we have a number of

questions on china and the growth trajectory could have. and we seeinflation that moving treasuries. where would we see it first? obvious place to see any kind of pressure is commodity prices. some of those have been relatively robust. they've been playing the idea of recovery trade. markets currently are still very weak. up.umbing rates are high we have seen on many occasions the occasional increases in commodity prices. wages compensate

for the increase. surprised ifld be we saw much in the way of an inflation pick up. quiddity put in place -- tremendous central bank liquidity put in place. qe, therel of that isn't much inflation around. it may not be the last -- the best. tom: francine, go ahead. francine: when you look at the relationship between the u.s. and china, it's happening in hong kong, what is the relationship with china for trade in the world economy. >> this is a tricky one.

we know relations were souring in the u.s. and china even for trump became president. -- that wee biden will see a sudden reset where it's all happy families from now on. we will still see pressure coming through on the china u.s. relationship. push forl be trying to a confederation of democracies around the world to isolate china. gone andthat trump is life becomes easy i don't think is correct. >> i love the phrase confederation there. back to another time and place. what will the biden pivot be?

they've won the house, maybe they won the senate, if they won the presidency, what can the democrat american pivot be? >> as with all presidents when they first come in, what they want to do is pivot back to the issues which is typically domestic issues. , he george w. bush came in wanted to focus on domestic issues. by presidency was dominated the catastrophe of 9/11. in many ways whenever the president wants to pivot towards , i think in biden's case it will be the investigation. the issue is what he can control in the world will come back to haunt him. you think by the cuban missile crisis or all sorts of things. that of upset presidencies of the last 100 years or so.

of course there was under obama a pivot towards asia. it may be an opportunity to china.bout around celebrate this week ian's work at eurasia group. they talk about 2021. to bremmer, i would love dovetail that did i'm fascinated. ,'m stealing this from you confederation is absently brilliant but we do it in a -- world. how do we accomplish that? the g20 itself was an oddity

with a mixture of a series of big economies. but with very different politics. this is an attempt to try and bring countries together which in many ways have echoed trying to say we do fundamentally believe in certain ways of doing things. in those circumstances you can workhe u.k. in u.s. try to more closely. it will be the same type of stories we live through. improving u.s. china relations. it's a source of strain rather than optimism. tom: thank you so much, greatly appreciate it this morning.

-- $800 million spent on the georgia campaigns. i think somewhere in the vicinities of $200 per voter. $181.78 per voter. maybe i'm off a little bit. mr. ossoff ahead by 16,000 votes. ,adio and television worldwide the bloomberg surveillance simulcast. futures red and green, the nasdaq slumping. this is bloomberg. ♪ ♪

>> georgia, i am honored by the faith you have shown in me. i promise this tonight, i am going to the senate to work for all georgians. no matter who you cast your vote for in this election. tom: a moment of this for international audience for the united states of america is absolute extraordinary. i have clearest memories of the assassination of martin luther king on a beautiful summer evening. rev. warnock has announced he will stay at ebenezer baptist church as he takes over senatorial duties were georgia. emily, what will be the response of stacey abrams in the

democratic party to this historic moment? how do they deal with this history on this wednesday morning? emily: democrats have proved this is at least a purple state. out, particular among black voters were able to hand the victory to democrats. republicans held their big party in a big ballroom at downtown hotel and david perdue could not be there because he was in quarantine. we heard last night from rafael warnock as he said through a simple video chat. electionw he got this message. >> i want to fall back on your congressional expertise. of john kerryy stunning democrat -- stunning people in washington. thekennedy welcoming democratic nominee. how will congressional

washington react to this moment, not so much that we assume jon ossoff will win, but the moment of a changed voting process. absentee ballots and prior ballots completely changed the landscape of voting. how does washington react? >> this is an absolutely huge moment for democrats. not only taking the presidency in georgia now winning these senate races. frankly wasn't something expected. it is not just a matter of absentee ballots, it's a matter of organizers on the ground turning out votes. they hadn't been engaged before because no one thought democrats to chance. for joedoes it mean biden in his first 100 days?

this is a very close. if jon ossoff pulls off a win the, democrats will have slimmest of slim majorities. they will need all members in the senate to pass things. there are moderate democrats there who have no trouble breaking party ranks if they don't get bill coming to the floor is good for their constituents. it gives moderate democrats a lot of power but it also means good things for joe biden's candidate. we are more likely to see another stimulus bill move through. for the moment, the senate looks to be taken by democrats. do we know why people in georgia voted that way? emily: it was a number of things. that turn mobilizing people. hundreds of billions of dollars poured into the state. they were been with advertisements at every turn.

a number of democrats who i talked to had a chip on their shoulder. they were like our presidential election wasn't fraudulent, we are going to get out there and show people and that's what we are seeing part of. idea of gops this senator saying i think i'm waking up democrat. it's an age-old speculation. to selected republican senators cross the aisle and become democrats if jon ossoff wins? something like that happen in 2001, the lancelot -- that's last i waited 50/50 split in the senate. i couldn't tell you which republican senator is crossing the line. tom: come on, make some news here. >> it would be huge. moderate republicans will have a lot of power. you'll have a lot of power for mitt romney, from other moderates willing to work with democrats to get something done. francine: thank you for your

hard work. next hour,n the eurasia group managing director and a policy advisor to mitch mcconnell. that's coming up 40 minutes from now. this is bloomberg. ♪

tom: we welcome all of you. francine lacqua and tom keene. we continue to look at the georgia races. i see no change in the results here in the last hour or so. ahead by 16,000 votes. in celebration of small business with david solomon of goldman sachs. here is mr. solomon on his shop. >> we have a number of businesses, we have our big corporate investment bank with our businesses that serve govern institutions, sales and trading.

our clients have been very active. we expect that to continue. we are a significant asset manager around the world. we think there's a lot of opportunity for us to continue to help our clients. that's an area of growth for us. in addition, we have consumer wealth business that we are trying to grow so we can serve a broader array of clients with respect to all their financial and digital. we are focused the growth -- focused on the growth of that business. we see opportunities as we move forward. help our clients manage their financial needs. >> even after a pandemic is still have this excess capital. what will you do with all of that? >> we are making assessments in our business and that requires capital. we have not been able to return

capital to shareholders this year because we took that action with a number of other large banks back in spring. we probably are in a position to start that at some point in 20. we will consider both investments and return of capital asset programs as we returned forward -- as we move forward. all eyes are on be ana as there seems to appreciation in the market that we will see a blue wave with the democrats taking the senate. that is moving all markets. benchmark treasury yields touching 1% for the first time since march. technology futures tumbling as investors speculate on the outcomes of the race in georgia. in europe looking at cyclical assets posting strong gains.

bitcoin -- a lot going on. i also ensure you crude oil. american crude oil above 50. >> i've got to talk to matt miller. there's no question it's about the yield. the 10 year yield, it's going to be an extraordinary day in washington. the senator from kentucky, 36 years in the senate. we speak to david kelly of jp morgan and john lieber will join us. this is bloomberg. ♪

tom: this morning, the

assumption is of a more and greater stimulus and/or replacement expectations. yield.rge on the 10 year he returns to a pre-pandemic 1.00%. even higher right now. it is every republican for themselves. a challenging wednesday for the senator from kentucky. not destined this is different -- the pastor of martin luther king's church is the senator from georgia. good morning, bloomberg surveillance. francine lacqua in london. we are focused on georgia with no voting changes for ossoff and purdue. by 16,000 ahead votes. i want to stop right now and look at the other news in the world. , oneaid it to me earlier in 3