>> the course of the virus, the pandemic and the vaccines, will determine the course of the future economy. >> a demand shock of covid. >> the economy has showed resilience to this third wave. >> the bottom has fallen out of low income. >> the mood has changed dramatically. >> you are likely to see some churn. you may see a pullback in markets. >> last year, it was about hoarding cash to make sure you survive. this year, it is about investment.

>> this is bloomberg surveillance with tom keene, jonathan ferro and lisa abramowicz. lisa: good morning. this is bloomberg surveillance, the simulcast. jonathan ferro, tom keene, lisa abramowicz. interesting to see how the tumult of washington, d.c. continues with the expected impeachment vote today, the further splintering of the republican party. tom: we saw that with five republicans moving over, congressman -- congresswoman cheney leading the way. what do we do after 5:00 p.m. as they move impeachment forward to the senate? to remind you, it is a two step process in the senate. convict or not? they are in search of 17 votes. that will be difficult. lisa: what are the political consequences of this splintering of the republican leadership from president trump? does this mean a more unified congress that can push through some sort of stimulus package, as biden would like to see?

this is probably more consequential to markets then questions about the future of the nation. tom: our conversation with robert doll will be important. we have to frame this to get the optimism of bob doll. instantly, we go from a measured $1.3 trillion of stimulus. i am hearing a framing of numbers in the vicinity of $2 trillion. lisa: there'slisa: -- lisa: there's the appetite in the republican party. jonathan ferro would be saying where are the budget hawks? tom: they were defeated. lisa: they don't exist. tom: no. maybe he is mr. manchin. maybe he will be the one who steps in. the tone really appears to change. futures are -14. they deteriorate. the fix up, 22 point 85.

bitcoin, we have a quote for bob doll. 34,000 $120. bitcoin down for zillions of dollars -- four zillion dollars after bob bought at the top. bob doll is a guy who kept you in the market to enjoy 18 year return of 15% plus. the dull mandate -- you have to be in the markets to play. -- doll mandate you have to be in the markets to play. why should i be in the markets? robert: we will have the strongest growth this year in at least 20. this will be a great year for the economy and earnings. i think it is just a good year for the stock market. i thing multiples are held back

a bit because of modestly rising interest rates ended elation. -- inflation. robert: -- tom: behind you is the logo of the esteemed nuveen in chicago. do you need to raise your actuarial assumption with double-digit returns, democratic president, house, senate? do you begin to lift up actuarial return? robert: maybe for the next few months, tom, but longer-term, i don't think so. stocks and bonds are both expensive relative to their history. therefore, the next five and 10 years, the return will be probably lower. that's the law of averages. it will be harder to make a buck going forward. lisa:, charter? are we looking at a one-person future or a 3% or 4% future?

it makes a difference. tom: stocks were 15% -- robert: stocks were 15% for the last 10 years. i would say half that. bonds, less. the return on treasury bonds is going to be close to zero. lisa: meanwhile, we have the u.s. continuing to borrow money. tom and i were talking about how the hawks have been defeated, have disappeared, whatever. are we moving to a modern monetary theory world and what does that mean for markets? robert: i suspect we are in that world whether we have called it that are not. i think the question i get from financial advisors most is what about the deficits? my response was and still is it does not matter -- yet. pc interest rates have fallen faster than the debt has gone up -- interest rates have fallen

faster than the debt has gone up, so expense as a percentage of error economy has gone nowhere. -- of our economy has gone nowhere. tom: i am reading bernstein on the debt and the deficit. bob doll, i want to get back to the markets. you know the chart out of yale, but there is rotation. how do you play the rotation of 2021? robert: after a decade where economic growth globally has been so so at best, which has favored the u.s., our economy, our markets, and our currency because we are the most defensive economy in the world. we have fewer cyclicals. we are now re-fleeting. thank you, central banks. we will have stronger growth and, therefore, batons are

getting passed from growth to value, they to small, u.s. to non-us. tom: there is a general feeling out there about stockpicking or sector picking or the value of buying indexes or sub indexes. which is it? robert: in a year like last year, when the big five stocks outperformed by massive amounts, that's a year for the index. if this is a year when those half-dozen stocks do not perform as well as the averages, which is our gas, then the average stock -- averages, which is our guest, then the average stock perform better and the average manager has a chance. lisa: you take a look at robinhood accounts and people getting their stimulus checks and putting them into individual equity. a handful of penny stocks

accounted for 1/5 of all u.s. equity trading on monday. how do you think about that increased retail presence in equity trading when you think about asset allocation? robert: it is definitely a force. it is a narrow group of stocks, as you hinted at, and you have to know where they are playing. some of those robinhood investors did well. they bought into the decline last march. we have to watch them carefully. that group, along with the algorithms, create issues for buying and selling stocks. you have to be careful. lisa: you have these tech ipos coming out. we were talking about a firm earlier with an incredible valuation. some say they are worth it, others say signs of frost. how are you playing in some of these ipos? robert: lisa, i think there is merit to the fact that the size of them, the number of them, the

premium they are selling at means we have some speculation. it is easy to compare it to where we were at the dot com bubble. now we can at least touch the revenues of these companies. i do not want to sound the alarm like we could have or should have back then. tom: you have been such a sane voice for participating in the markets over the years. rich old edelman -- richard edelman joined us with his trust barometer. it is about media distrust, trust of politicians, vaccination. i want you to talk about your world in the friday onset of gloom that is out there. you know, as a rule, the gloom crew comes out to beat up bob doll. how do we get back to trust of

wall street strategists who have enjoyed this bull market? how do we get a believe in that optimism? -- belief in that optimism? robert: time and returns that are good. last march destroyed a lot of people's faith in all the things you just mentioned. all they had to do was hang around or blank. if you were rip van winkle, you thought last year was a good year, because nothing really happened from the beginning to end, but the m between. -- in between. volatility kills confidence, but then it is when you can make a buck. tom: robert doll, thank you. this is important to hurt richard edelman's work. -- important to richard edelman's work. lisa gives us the gloom. we are also giving you the optimism.

we are just trying to show, and of these debates, the back in the fourth. -- forth. lisa: as a representative of the gloom crew, we are nice. the wall of worry has gotten blown out. you have lost your shirt if you have that wall of worry. that's the issue. though shorts have been destroyed over the past 12 months. tom: your important observation is not only that you have been destroyed, but it is so hard actually early -- hard actuarial he to catch up. gina martin adams, same thing. you have to be in the game to participate. how many people with their retirement plans are not in the game? lisa: i keep going back to the statistic. 25% of increase in the amount of money in the economy.

i just going to the price of assets. tom: we will see the price of assets. -14 on s&p. 3780 on s&p 500. 30,900 on what matters. btr group with us next. this is bloomberg. ♪ >> with the first word news, i am ritika gupta. the house has voted to demand that mike pence use the 25th amendment to remove president trump from office. the vote was largely a symbolic act because he told house speaker nancy pelosi he would not comply. all this set the stage for a vote to impeach the president a second time. it comes one week after a pro-trump mob stormed the capitol. the number three republican in the house will vote to impeach the president. liz cheney of wyoming said president trump summoned the

mob, assembled the mob and let the flame of this attack. the daughter of former vice president dick cheney has been the target of internal republican criticism from trump allies. bloomberg has learned that president-elect biden will probably name gary gensler to head the sec. he ran the commodities futures trading commission during the obama administration. the role put him in frequent combat with the banks. the trump administration is set to unveil changes to fannie mae and freddie mac. they would allow the mortgage giants to obtain more capital, but many of the thornier issues of releasing those companies from federal control would be left to the by demonstration. canada's convenience store giant says it is in talks with a french company. the owner of the circle k chain has made an offer that values it at about $20 billion, a 29% premium.

global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i am ritika gupta. this is bloomberg. ♪ so you're a small business, or a big one. you were thriving, but then... oh. ah. okay. plan, pivot. how do you bounce back? you don't, you bounce forward, with serious and reliable internet. powered by the largest gig speed network in america. but is it secure? sure it's secure. and even if the power goes down, your connection doesn't. so how do i do this? you don't do this. we do this, together. bounce forward, with comcast business. wanna lose weight and be healthier? it's time for aerotrainer. a more effective total body fitness solution. (announcer) aerotrainer's ergodynamic design and four patented air chambers create maximum muscle activation

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>> the initial reaction by some companies to suspend all political donations to me is not

intelligent. we should say those who voted against the approval of the electoral college vote need to be scrutinized. to say that we will not donate at all to politics is fallacious and not sustainable. tom: richard edelman this morning. important comments on his trust barometer. what we are good at, lisa abramowicz, jonathan ferro, and we self, we have a team that puts together guests. when the news changes, the facts change, we tell them to change. we can do that with lester months -- lester munson. we learned from the most important signal from a biden administration that they will take jfk's usaid program, a

political program for 50 years -- football for 50 years, and elevated to a white house position with samantha power. what is president-elect biden signaling? lester: for folks who follow foreign assistance issues and soft power and these more obscure assets of american diplomacy, it is terrific news. amanda power is a force, an intellectual powerhouse. i'm not saying she is right about every issue, but she is dynamic. she is interesting. she will bring a lot of energy and irv to what has been a -- energy and verve to what has been a sleepy agency. it is think of opportunity for president biden to make a difference around the world. tom: if we assume that we are restructuring usaid, are we going to restructure state? and do you look for the same drama from a new state

department? lester: great question. one thing that president biden appears to be doing is strengthening the nsc, pulling power into the white house. that's not great for the state department. tony blinken is a trusted advisor. if he is confirmed as secretary, that will be a plus for the department, but there could be rocky times ahead. lisa: as a never trump republican yourself, who worked in the bush administration, how does -- the republican party without trump stink which itself from the democratic party of -- trumpet distinguish itself from the democratic party up today? >> economic issues, social issues, foreign policy. republicans are a hawkish national security party. we need to find that voice again. it has been modulated and muddied up during the trump

years. liz cheney is as good a carrier of that message as anyone. adam kinzinger is another excellent voice and that regard. -- in that regard, so i see some of these younger, more dynamic republicans emerging from this chaos. lisa: do you think those republicans will vote in tandem with democrats to get stimulus through, some other aspects of joe biden's administration through, even if it muddies this line as they try to reestablish their identity? lester: that will be case-by-case. republicans are occasionally fiscal conservatives. nuts over the last four years. -- not so over the last four years. they seem to be rediscovering that. i think republicans will be more skeptical of massive immense in response to the pandemic, but there will be places where republicans, never trump's and

even some pro-trump republicans, will find a way to vote with the biden administration. i think there will be more bipartisanship than people think. tom: can the senate find 17 republican votes to convict the president of the united states? i know that is an unfair question, but it is the question of the moment. lester: it is and it is what everyone is reading in between the lines for. it is a difficult goal. it is a high bar to get over. the fact that mitch mcconnell is signaling that he might embrace this is telling. he does not do things on a whim. he would only be sending the signal if it looked like there was progress towards that goal. there is plenty of road to go down, even if it is just a few days. there's a lot of work to be done, but it seems things are trending in that direction. it is probably too difficult to

get there, but we are on the way. tom: where on the way and onto new changes. -- we are on the way and on to new changes. i want to circle back to foreign policy. will there be a strategy or theme you can glean from biden foreign policy or not? lester: it is hard to say. during the campaign and transition, the biden people would put out boilerplate statements saying they want to restore leadership in the world. those of us in the swamp are a little more cynical comic kind of dismiss that -- more cynical, kind of dismiss that. biden will have to take active steps to restore the image, the posture and leadership of the u.s. it will take a long time. tom: lester, thank you, particularly on that breaking news of any new usaid -- of a new usaid program. lester munson.

i was watching tv and i tear up when i see that seen in home alone tw -- home alone two. mayor de blasio announces they will pull all relationships with the trumpet organization. -- trump organization. the first thing i thought i was home alone. lisa: you are doing research. tom: i have seen it 15 times. lisa: this is significant in terms of the personal fallout, the financial fallout for the trump empire and what it will look like. there was a report out of the new york times reporting that president trump was more upset about losing the pga tournament from his florida property then the impeachment. -- than the impeachment. he goes to the question of what it will look like following his exiting of the presidency. tom: he has made clear, i

believe, he is taking up residence in florida here at the end of his presidency. mayor de blasio on trump organization. we will have much more on that through the day across bloomberg news. what do you see on the tape? it is a snooze fest to me. lisa: between gains and losses, fluctuating. yields is what i find interesting. price, yields down. yesterday, that 10 year option was strong. we get another option of u.s. debt, 30 year bonds. and investors want to buy. we are seeing that deficit reported today. people still want to buy the debt, because where else will you go? it is high relative to the rest of the world. tom: brad emails in and says -- last year was 9.4 net clean for the trump administration. 9.1 million of that 9.4 was concessions and hockey fees for

the king family? lisa: have you ever bought hot chocolate at wallman rink? that would explain. tom: bitcoin -- lisa: seriously. tom: so you're a small business, or a big one. you were thriving, but then... oh. ah. okay. plan, pivot. how do you bounce back? you don't, you bounce forward, with serious and reliable internet. powered by the largest gig speed network in america. but is it secure? sure it's secure. and even if the power goes down, your connection doesn't. so how do i do this? you don't do this. we do this, together. bounce forward, with comcast business.

tom: in morning. -- good morning. michael mckee with us on economics. the idea of futures at -11. do we inflate, deflate, reflate? mike: we are inflating. 4/10 rise for cpi. the year-over-year rate rises to 1.4%. the core rate comes in up 1/10 on the month. it is 1.6% unchanged from the

prior month. the government is saying energy prices rose by 8.2%. gasoline, 8.4%. we are looking at an energy-driven increase. a jump in new vehicle prices. medical care falls by 4/10, even though we are all going out trying to get our vaccination shots and covid tests. the housing industry is the overall category, but that is under control. lisa: it is not enough to get recovery this year, we need a boom. that applies to inflation. we need to avoid a

disinflationary spiral. what is the tipping point to get us out of this vortex we have been in? mike: lower for longer, or higher for longer, put it that way. the inflation rate will climb to two point -- to 2% and above. we are going to get inflation. last year, the arrow, that is where we are. you look at april, may, june. we had deflation because of the shutdown of the economy. when those fallout of the calculation, we see inflation jump. it will have to stay higher for longer. tom: i see goods up. there is no turnaround here in

service sector disinflation towards a higher level. mike: the service sector is shut down. there is not an opportunity to raise prices. until the economy opens again, until people are confident to go out, we are going to see prices held in check for some time. this is the consumer price index we are talking about. we are looking at the dec, which runs lower than the cpi. tom: thank you. it is time for a reset. agony of a pandemic, michelle myers joins.

on your spreadsheet, out to the end of 2020 one, what numbers have you tweaked? what are you changing at the margin, given the outrage of january? michelle: good to be with you this morning. on the upside, it is what you have been focused on, the news coming out of washington out of the prospect of additional stimulus. the extent to which that is passed in the year with transfer payments to unemployment insurance, that can provide a jolt to the economy in the spring. that is the upside. it is important. on the downside, we have to continue to pay attention to the virus. virus cases are rising,

restrictions are ongoing. we saw moderation of growth at the end of 2020. these offsetting factors, which are important as we look through the months. tom: is the housing boom only about the haves removed from this pandemic? michelle: it reflects the case shaped recovery. those folks who have been able to make -- to keep their jobs have done so with stable wage growth and a lot of unintentional savings. that has led to greater investment in housing and housing related items.

i have seen greater stress. that is part of the story. there has been a broad pickup in housing activity. it is not just the high end of the market. we have seen movement on the lower end. this morning, mortgage applications, 17% increase. purchase applications are up. we will head into that with more momentum for housing given where we are from mortgage rates. lisa: you talk about the case shaped recovery -- the k shaped recovery. there is the asset in rally prices for the broader economy for the haves and haves not. how crucial is it for asset prices to stay high for the economy to gain steam? michelle: it is a transmission

mechanism of monetary policy. by keeping rates low, they are lowering across the capital, and the wealth will be spent to some extent. elevated asset prices comes with easier financial conditions, which is an important mechanism by which monetary policy supports the economy. lisa: in light of cpi, there is a feeling the inflation we have seen, the money printed has gone into the financial markets and has not been able to trickle into the real economy because so much has been shut down. what is the risk that if we get

a disinflationary asset prices sellout -- selloff, a bust, that could disable the economy in a massive way? michelle: looking at asset prices is important, but think about the money supply that is the real economy that reflects the fiscal policies. there has been an increase in the money supply. none of the gain has yet to filter in to underlying inflation. it can if it supports higher economic growth and an increase in gdp growth, which prompts higher inflation. that is not the story today. we saw the cpi report. what if we have a big selloff or deflation in asset markets? it depends on what that looks

like. short-term correction is fine from an economic perspective. we get a little hit to confidence, but the link to the economy is limited. our sustained would be problematic. tom: secretary ellen will have to deal with what seems to be big fiscal packages. does a marginal 100 billion matter? we talk about trillions and the drama, but do you nuance 100 billion here, 100 billion there? michelle: the support to the economy from fiscal stimulus now, it has been extreme, the dollars pumped into the economy. we argue it was necessary and will continue to be necessary. that leads to a higher deficit, which will be problematic. i don't think it is an issue

that policymakers are paying attention to. that sentiment will be continued for the next years until the economy has fully healed. tom: thank you. greatly appreciate that. lisa, talking about the numbers in congressional districts, i just looked up nominal gdp, the ever-growing current gdp of the united states. i was only off by $3 trillion. when you do this every day, you get numbers from ages ago and i was like, $17 trillion. nominal gdp is $21.2 trillion. i did not know that. lisa: i love your idea of the nuance of $100 billion.

it shows how abstract some of these figures are. it is unprecedented in a real sense. what is the longer-term effect on that on inflation? that is one of the big debates of 2021. we are not seeing it in the economy yet. tom: we will see where we go. 1.12%, yields flat. what is so important, this is what we do on the simulcast, lisa, what is so important, is to get different opinions. i am thunderstruck how glenn hubbard is on the same page as claudia in michigan. lisa: right now is a time to borrow and spend. the consensus on that is overwhelming. tom: we have much more coming in.

we have a dearth on washington. kevin cirilli is on the watch in washington along with our bloomberg team. coming up, apple to the moon. this is bloomberg on radio, television. ♪ >> it is a historic day on capitol hill. the house will vote whether to impeach trump for a check and -- for a second time. it comes after a week of his supporters stormed capitol hill. they voted for mike pence to use the 25th amendment to remove him from office. the vice president already said he would not comply. joe biden will seek a deal on republicans for coronavirus relief. it could mean a small package that includes some priorities backed by mitch mcconnell.

the goal is to avoid trying to ram through a bill without republican support. biden has named samantha power to head the agency for international development. he will make the post part of the national security council. that is a sign he will emphasize the role in development of maintaining security. regulators have approved the london stock exchange 27 billion dollar takeover of --. that was the last hurdle for powerhouse. it gives them global scale to compete for the surging demand for data and analytics. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700

journalists and analysts in over 120 countries. ♪

>> we cannot have the companies generate riches and -- the

society. there were side effects. we had the benefits. the rest of the world had the negative side effects. the companies have to capitalize for those negative outcomes. it is doable. lisa: that is marty chavez. he is talking about regulating big tech and that becoming a big risk and potential necessity in the years ahead. coming up on the open, bob michele joining us to drive forward the conversation as we look at this confluence of drama and the steadiness, the consistency of the tone and markets. there have been ripples, but we have the same story going on. a wall of cash. tom: we move on to the impeachment ceremonies scheduled to begin in the vicinity of 9:00. this is the most important conversation of the day on the

mental foundation of the market. let's not mince words. it is founded on one stock. we speak to daniel ives on what was brought in cupertino. you have locked it up to $106 a share in apple. talk about your core belief they will innovate. i want to go to the latest incarnation, the m1 ship. -- chip. it is getting rave reviews in the technology zeitgeist. how did they do that? daniel: cupertino, that is where the magic happens. if you look at what they have done from innovation, the m1 is a good example. it is a shot across the bow in terms of apple controlling more ecosystems. what you are seeing in stock and

innovations, across the food chain, apple is continuing to flex their muscle and expand it more, especially with the super cycle of reality playing out. tom: the missed call has been the innovation is going to end. the fact is the m1 looks like a ball over the wall. the bottom line is, what is in the pixie dust that gives you confidence they can continue to innovate? dan: it is the best product country in the world. we think with the m1 ship, ultimately in the next years, we see them partnering with volkswagen, hand day -- hyundai.

we are looking at a $3 trillion stock for apple as this plays out. haters will hate, but they continue to innovate. tom: you have no idea when the haters hate what it means. as you model out a $160 target and extrapolate out, $3 trillion is unimaginable. what are your linear functions, looking out five years, 10 years out for cupertino? dan: that could be worth upwards of $2 trillion. the service piece alone, that could be a part of the rereading. you look at the olden -- the golden iphone, that could be

worth upwards another $2 trillion to $3 trillion. this is a company in the middle innings of a renaissance of growth and the super cycle that continues to be in fifth gear. tom: what is the impact? somebody in the house is buying another piece of apple to keep dan ives life going. what if they redo or innovate imac or other products? is that in your excel spreadsheet? dan: it is incremental. if you look at what we see with m1 and other innovations, you further monetize that. that just adds the overall ecosystem to apple. it is further monetization of that. tom: should they do an

automobile? why should they? if it ain't broke, don't fix the model. dan: we are talking about a trillion dollar market. they would not make it themselves. they would partner. that is the opportunity. it is similar to what we are seeing in china. apple is going to dive into the deep end of the pool. tom: you play by the rules. you have that paragraph, special risks. what is the risk for cook? dan: china and the u.s. tech war. if you don't see a ratcheting down with the biden administration, that would be a risk. regulatory, that will be a beltway battle. tom: if we get troubles with china, what does that do as a percent basis on revenue growth?

how do you quantify that effect of trouble with china? dan: you start to play with the math, you could see 3% to 5% downside. of course, supply chain. they bet the horse in terms of foxconn. that is why apple is the poster child for u.s.-china hold tech war. tom: the pandemic has made it original. what is your guesstimate of the earnings call? dan: it will be a blockbuster. you will see more numbers continue to move up. tom: i am going to leave it there. i have to reset for an impeachment. daniel ives with terrific work.

the target is 160. i think he is really up there, top of the market. this goes back to the heritage of bloomberg on the economy of bloomberg surveillance. i got a phone call seven or eight years ago from the people at the world economic forum and they said we want you to do a seminar on financial innovation. i said no. they said we really want you to. i said ok. it is the best seminar i have done at davos. the people out front on innovation of technology, we see that again today. i cannot say enough. you know i don't care about these ipo's and i make jokes about specs, but this firm deal needs to be watched for all that it is. a firm goes public with a huge

up off the red herring, off the ipo. we will see where it opens. a conversation tonight with max election -- with max. ♪

lisa: i am in firm jonathan

ferro. the countdown to the open starts now. a historic day in washington. democrats repairing a vote to make trump the first ever president to be impeached twice. >> the facts are clear. the president called for this attack. i encourage my colleagues to open their eyes and hold this president accountable. lisa: a number of republicans joining with democrats, saying they support the resolution, including liz cheney, pinning the chaos on capitol hill on the president, saying he summoned, assembled the mob and lit the flames of the attacks, everything that followed was his doing. trump defending his remarks,