francine: president-elect biden unveils his long-awaited stimulus plan. the aid package totals nearly $2 trillion. we'll have more on that. global virus deaths near 2 million. france tightens restrictions, germany may follow. and shares in xiaomi plunge. the trump administration blacklists china's smartphone giant in a surprise move. good morning, everyone, and happy friday and tedious week. i just heard kit juckes say the market is -- tom: i thought he was really on about a worn out market with all the movement that we saw, the gains we saw in equities last year. some of the big figure moves of foreign exchanges. it is one of those weeks of churning. i really would suggest that on the market basis it is almost healthy. but you have got to tell me about downing street.

every time a president moves out of the white house, whatever, there is always an uproar about furniture. there was 20 years ago when the clintons moved out. they had to return a few pieces. when people move out of downing street, do they take stuff? francine: as far as i'm aware, they don't redecorate downing street, so there's not much to take with you. i have been to downing street the last 10 to 15 years, so i have seen four to five prime ministers. you have the private quarters which are much smaller than the white house. they bring their own things and they take them out. what the actual downing street, the meeting rooms, no one takes anything as far as i'm aware. tom: you do it better than us. it is a fun moment within all the drama of washington. francine: more light than the news we saw the last few days. let's get first word news with her. ritika: president-elect biden will go big with his first major

piece of legislation, asking congress for 1.9 trillion dollars for the next coronavirus relief package. more than $1 trillion in direct relief spending and $440 billion for communities and business. it is twice as big as this to miss bill passed last month, and it is expected to attract swift republican opposition. president trump plans to leave his mar-a-lago resort in florida after he leaves the white house. he will fly there the morning of the inauguration. the world is about to hit a terrifying benchmark. the death toll from the coronavirus is about to surpass 2 million. there are few expectations that the numbers will drop soon. the u.s. leads the way with almost 390,000 deaths. experts say even with vaccinations, the roads are slim that the outbreak will be controlled beef -- the odds are

slim that the outbreak will be controlled by the summer. on monday, china is expected to report gdp rose 2.1% in 2020. that would make it the only major economy to have avoided a contraction. china's success in controlling the coronavirus has allowed it to boost its share of global trade and investment. 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 am ritika gupta. this is bloomberg. tom: thanks so much. one data screen today. it is a quiet market, a little bit of softness. futures at 11, dow futures at 83, and they 10-year comes churning in, 1.1%. it is a quiet market. i've got nothing more to say. i guess bitcoin, 38,605 on bitcoin. francine: i have bitcoin.

it's like you are reading my mind. i have bitcoin fluctuating. overall, u.s. futures lower. i think a lot of the size of the package was priced in, so there is a lot more concern about it now being watered down under congressional opposition. i'm hearing more and more questions about taxes rising in the u.s., so that is probably where i would point our focus when looking at the markets. and a bit of data a little bit later. president-elect joe biden will ask congress for $1.1 trillion as relief from the economy. the symbols plan -- the stimulus plan provides $130 billion to open schools and $2000 to families. jack, i have a million questions about actually how many moderate republicans will support this. your initial feeling is, how

much of this can actually get through? jack is a big package that is more in line with democratic rentable's than republican ones. we haven't heard a ton of feedback from republicans as of last night, but there is pushback. the direct payments, the unemployment stuff, $350 billion for state and local governments. that is the stuff that is probably going to push away a good number of republicans. it is interesting they decided to try to do this in a bipartisan way rather than the book -- the budget reconciliation route. this is more of a list you would expect from democrats than bipartisan republicans. francine: any insight into what the biden administration would be willing to compromise on? jack: it was a little bit of a surprise that they called for the inclusion of a minimum wage increase in this package that was covid related.

on one hand, some of the stuff i just mentioned is stuff they would have to compromise in order to get republican votes. on the other hand, they may compromise on their stated goal of getting as many republican votes as necessary to get 60 votes in the senate. they may go the budget reconciliation route and have to pull some things out that don't qualify for budget reconciliation, which would be some health care funds and some of the other stuff. so that is really a tactical decision that i don't think they have made yet. tom: the quickest way for you to turn the channel off bloomberg surveillance is a discussion of budget reconciliation. it is greek. jack, 1974 they introduce reconciliation. senator byrd -- fine. if they use reconciliation, do we go through a normal washington process of committees

and powerful chairman and chair women, or is this going to be an original budget process wrapped around reconciliation? jack: they can do a shell budget. they don't have to go through regular order really to go through reconciliation. these days the point of reconciliation is essentially to be more partisan than bipartisan. but it would pull in the budget chairman in the house and senate, which means bernie sanders in the senate, who is pushing for very aggressive aid. so if they want to go the more partisan route, it is notable that the instructions originally would have to be written by bernie sanders. tom: we are getting into this as we go to the state of the union speech in february. you just assume, jack fitzpatrick, that whatever the number is, there is a follow on many billions for

infrastructure. jack: yes, that is something the biden team has mentioned, that there is going to be a call for more later, and there has been a lot of talk on not necessarily a covid specific stimulus package, but something probably broadly focused around infrastructure, especially green infrastructure, may be energy spending included in that. that is also something that i think they are probably even more likely to try to push through with a simple majority in the senate and go through that reconciliation route rather than trying to get up to 60 and getting a bunch of republicans. francine: at the margins in the market, they are also worried about tax hikes in the u.s. what is the thinking on that? jack: i have heard for a wile from some democrats that they don't think it makes sense to impose an immediate tax hike, even on the wealthy or big corporations, because we are

trying to recover from a recession. i will say just a couple days ago i asked bernie sanders, who would be writing these instructions for major legislation, and he says he sees no reason to wait. his focus is the wealthiest people and big corporations, and he says why not raise revenue in the very, very near future. that is a debate the democrats are going to have to have in terms of, do you want to pull any money out of the economy and try to get more tax revenue now, or do you pass legislation now that a few years down the road these could come into effect? they clearly haven't entirely decided on that. francine: thank you so much for all of your reporting there. bloomberg congressional reporter jack fitzpatrick. tom, i also -- the definitive

source has answered the question, tim ross has answered the question about whether furniture can be taken on downing street. this is bloomberg. ♪ good morning. 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: bloomberg surveillance. from london, from new york, good morning. it feels like march 20. it has been that kind of first 15 days of the year, and maybe this is the first quiet day, a lovely friday. there is news out of washington, there is other news around the world, but maybe it is a time to actually reassess where we are in the markets. mark dowding is with bluebay asset management, their chief investment officer. mark, i need a thoughtful

discussion after the craziness of washington. have you adapted your allocation from your original view of 21 he won? mark: to be honest with you, not very much. we came into this year thinking that in the first part of the year we would witness a market backdrop where markets would be supported by ongoing policy accommodation on the one hand, and the hope that things get better later in the year on the other hand. that is a powerful combination which is pretty constructive for risk assets, and we think it can actually be quite supportive over the course of the next couple of months. for ourselves, what we are much more concerned about is later in the year, if you do see more reflation trade which lists yield more substantially. could it be a situation where at that juncture in time, we have spoken about the k shipped trajectory in 2020 am aware wall

street does very well -- k shaped trajectory in 2020. is that going to be the moment when financial markets find it much more heavy going? so later in the year we are cautious. but here and now, we think we can see the continuation of what we saw over the course of the last couple of months because in the near term, the trajectory on the virus is going to mean that policy support stays with us at least for some time. tom: the ambiguity of hybrid -- of higher interest rates, and what level of u.s. 10 year yield do we single -- do we signal a different ambiguity? is it a 1.50, is it a 2? or is it something back a decade ago? mark: part of this is the speed

at which any move may occur. in the past few weeks we have seen treasury yields move higher. have a target of yields moving up to 1.10 on the 10 year note, which they reached on the back end of last week, which we put topics on a short that we were running ourselves. for the time being they should be between 1% and a quarter on the 10 year. if you do move higher on this in the near term, it is going to start weighing on risk assets and potentially tightening financial conditions. i think we started to see that in the early part of this week, which is why we saw a number of fed speakers in recent days say there would not be an early end to the policy accommodation. from that point of view, it seems to have brought a bit more stability back to yields. the question about where you will see it at the end of the year, we think after a range bound first, they will resume as

they move through the year, they will end up higher. at some point we think that is going to have an impact on other assets more generally. as mentioned, last year was a year where we saw strong returns on the back of liquidity, financial assets, inflation on the central bank easing and buying of assets. when you have passed the inflection point where central banks are not giving more additional accommodation, we think that there is more potential for a retracement. but that is later in the year. in the here and now, even as the days are dark and gloomy in the middle of january, it is a sign for making money. as things get muddier for the rest of us later in the year, this potentially will be the time to be more cautious. that would be the narrative as we come into the start of 2021. francine: is there a danger that the markets confuse reflation with inflation? mark: i think there certainly is

that risk, yes. the backdrop there is that reflation is all about getting growth coming back, and you can have reflation and you can have stronger growth without necessarily igniting the fires of inflation themselves. and at a time when unemployment is very elevated, it is unlikely we will be seeing big gains in terms of wages. therefore, i don't think we should be feeling that inflation is going to be running off to the races. also, although we have seen expectation inflation -- inflation expectations, i have seen inflation in bonds move to the point where we are pricing inflation round about 2%. i don't think there is anything to get overly concerned about when it comes to inflation taking off anytime soon. but the idea that the fed is going to be behind the curve in the cycle, ultimately we do think inflation will be north of

2. tom: mark dowding with us, and we will continue with a reset on a quieter friday. futures coming in a little bit. peace on earth as we go through this tumultuous january. do you want to point out, operation i do want to point out operation warp speed started in may. david kessler with all of his work. dr. kessler will lead operation warp speed for president biden. coming up, on bloomberg markets, mohamed el-erian of the university of cambridge and bloomberg opinion columnist. good morning. this is bloomberg. ♪

>> i am bullish about 2020 one overall, and that is really dependent on covid. we have got some really hard months ahead of us. we go into the year with robust growth, but i want to remind everybody that it is a default. even with robust growth, we will take a long time to get back to where we were prior to covid. we came to a 10 year expansion where we could not get inflation up to target. i'm more confident now that with our new framework review that we released in august and with the support we are giving, it will get inflation back up to 2%. but i'm not at all worried that

there is this run-up in inflation around the corner that we will need to preemptively stave off. francine: that was san francisco fed president mary daly. that goes back to -- tom also asking about the good assets or some of the value that he saw out there. mark, what do you do with european fixed income right now? mark: european fixed income, i think it is quite a story, frankly. whereas we are seeing a more expansionary fiscal path in the u.s., i think in europe there is more of a likelihood that as we move later in the year, northern european countries will have to take back some of the fiscal easing that we have seen to date. we could see the u.s. -- over the course of 2021. that means although we may see a move up in u.s. yields, we don't think very much is going to change in the context of euro

fixed income. and therefore, i think the message is going to continue to be about a reach for yield. we continue to like assets within euro fixed income like support financials. this is merely where yields remain mostly attractive. generally speaking, we think there is more compression to be had in some of the parts of the credit market, in the context of the eurozone. francine: is there anything that makes you worried about maybe some of the expectations about the size of stimulus that we will get in the u.s.? mark: i think off the overnight, we have had -- i'm pretty sure that 1.9 is not going to be the number that we get. i think will be -- i think a figure closer to $1 trillion will be likely in the first package that biden will want to work upon. we do have a real sense there will be further fiscal measures

thereafter. we think there will be a supplemental package later in the year that will be focused more on infrastructure spending and the green economy. but it is significant that if you think about yellen's posting there, she has been someone who is fiscally conservative, quite parsimonious with her own finances and her lifestyle. i think she will be able to do a job that shows senators that the u.s. can afford a more expansive fiscal trajectory over the course of the next years. i think fiscal policy has got a real vaulted place. in the medium-term, i think there is more to be done on the fiscal side in the u.s. francine: this -- tom: this has been wonderful, mark dowding, bluebay asset management's cio. mark dowding. it has crept up on us with all

the distractions, and that is the banks will report. francine, i have been hugely remiss in getting up to speed on this. i've got to do a quick study, j.p.morgan before 7:00, to the group and wells fargo together at 8:00 as well. helping us drive forward the discussion, we have a great team set up to inform you on the performance of the big banks. the cfra -- kenneth leon of cfra. looking forward to speaking with mr. leon here. futures at -14, the vix 23.74. stay with us. from london, from new york, this is bloomberg. ♪

>> this is bloomberg surveillance.

the overseer of u.s. banks are infuriating wall street. brent brooks has finalized the rules that. -- joining us is mohammed l visa . i read the story this morning to see if i had missed something. this come out of the blue by decree? the trump administration deciding that street needs to land to all controversial industries? >> part of the concern was that wasn't enough time people to weigh in and those concerns to be aired. the worry is that the bigger banks that have access not find themselves in a situation where

they cannot outright boycott and walk away from certain industries. those industries being the gun makers and some of the energy companies that could have been singled out as being targeted to these boycotts. the concern is that the banks are somehow prohibited -- or it is difficult to make their own decisions of who they want to lend. francine: what does it mean for the biden administration? if you're pushing for banks to do more to combat climate change, this is the reverse. can they just change that law? can they walk it back quickly? elsa: the silver lining is that there are several wise -- several ways it can be opposed and it may not come into thought

. there is potential of it never taking effect. you can see why across the consumer group, the democrats, and the banking industry were united in the concern about the potential implications about a law. tom: it is probably not going to go into effect, it is just political posturing. we are going to get bank earnings out through the mornings, three big banks. how are the american banks doing in europe? elsa: american banks are doing pretty well if you look at the numbers from 2020 which we will have later today, it has been remarkable how they have been weathered -- how they have weathered the health crisis and economic crisis bolstered by qe and fiscal stimulus. what that has helped has been trade and businesses -- trade

with businesses which has had record revenue. that is helped in the bottom line. tom: if i going to germany and i am a big business or a middle business or small business, is jp morgan for citibank in my decision tree of doing banking business versus german banks? elsa: for sure. there is evidence of slight treat, but absolutely they are still the global lenders european lenders will look to because there are few global lenders that remain on the european side. if you look elsewhere, deutsche bank has a treated. you are not left with many domestic choices so you have to include those.

francine: talk about consolidation in europe, what a cross border -- cross atlantic consolidation make sense? elsa: if you look at these potentials on paper, some of them would make a lot of sense, particularly across borders in europe. whether they are doable from a regulatory standpoint because of the hurdles that remain and moving capital around clearly across europe -- then you need to consider the cultural issue which across europe would be considerable. add to that of the cost and the destruction of executing those at the time when banks are under a lot of pressure. a lot of that points to being difficult for these deals to happen. francine: thank you so much.

now, let's get to the first word news. ritika: joe biden has released -- has released a coronavirus relief pan. willie price tag be too high for republicans? includes money for the coronavirus outbreak directly for family, businesses, and communities. he campaigned as a dealmaker and he will need to get some republican support for his plan. joe biden because the vaccination effort a failure nts outlined plans for a immunization program. he is asking for money money for testing, contact tracing -- for more money for testing, contact tracing, and administration. nancy pelosi and mitch mcconnell are silent about what is next in the impeachment process. pelosi has not said when she will send the impeachment to the senate. democrats will be in charge of

the senate which means they will be handling the trial after he leaves office. where's johnson revels -- boris johnson revels in his conservative party and demands a clear path after lockdowns. it could be ages after pandemic -- if pandemic restrictions last through the spring. 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. this is bloomberg. francine: coming up, each of these governments hang in the balance. this is bloomberg. ♪

francine: this is bloomberg surveillance. tom, each of these governments is pushing for a bigger deficit expense. this comes in the wake of the sparks of former prime mr.. -- fa former prime minister. joining us is dean of the person school of international affairs and former prime minister of italy. italian politics is almost impossible to understand when you're outside and even foremost italians. i am glad we have a former prime minister explaining what the options are. is it a possibility we go to an election? is there a unique italian way

for this government to go ahead? >> the parliament meets next tuesday. it will be the day of truth because the prime minister will ask parliament to have the confidence vote. one party is trying to challenge so they decided to withdraw their confidence vote. is he able to suit his votes with the votes in parliament or not? if he does, his government will last and we will continue and he will lead the g20 because because he is the chair of the g20. the government will manage the

recovery fund and so on. if he does not, two options. a new government or elections. at the end of the day, you have three options. cassette be konta -- conte continuing or -- for new elections. francine: that is clear. how important is it that you have stability at this moment to take care of the pandemic but also to make sure that the recovery fund is disbursed in the right way to relaunch the economy? enrico: because of the rules in the way in which the constitution is done, to have a new government or to have new

elections, you need time. the key point is can italy allow in this very moment a waste of time for negotiations for the creation of a new government maybe with a new majority in parliament? or a long electoral campaign and new elections and then negotiations to have a new government? the key point is timing. managing the pandemic with the third wave and managing the recovery fund and applying the recovery fund and having a good spending of all of this money and trying to relaunch in the economy needs stability and a government in place. the key point -- this is my view , it is very complicated to

spent three months in political negotiations without an effective government. this is a big risk today and a big risk not only for italy but also for europe. italy's crisis will worry europe very much. francine: you certainly here in the markets that there could be a government led by mario draghi. could you speak about difficulties of managing a democratic government? how much of a nightmare is it? enrico: this parliament is a parliament where five stars movement is at 35%. liga cellini is that 15%.

members of parliament are voting for five stars or liga cellini. it is not very easy. it is a completely different parliament from the one that allowed mussolini 80 years ago to run a government. you have to take into account that this parliament is a different one and this is why it is not easy to foresee a technocratic government. tom: thank you so much for joining us. i only ask for more nonstop flights to venice. trump is leaving and there is the image of the president in sicily standing up to other leaders, arriving in a golf cart, etc. there is a trumpet method. has the trump style begun to

adjust italian politics? has any that rubbed off on the discourse of italian discussion? enrico: i think so. i think in these years there was a big influence in terms of behaviors, languages, raptors -- raptures. i don't like these kinds of behaviors and languages. it is a model and is still a model. even if today -- what is happening in the u.s. is changing in italy what trump represents. you mentioned d7 -- g7. italy this year will lead g20 and it is an opportunity to

lunch g7 or g20. that was under attack and the period of trump. joe biden will be there. it will be the first and maybe unique moment where joe biden and european leaders will meet together. this is why i think the role of italy is important. this is why i don't see us using the crisis as something useful. francine: thank you so much. we will talk more about international matters and how europe fits in this u.s.-china trade war. coming up, we speak with scott -- scott minerd. this is bloomberg. ♪

francine: this is "bloomberg surveillance."

--ritika: this is "bloomberg surveillance." -- the heart of a tesla thesis is centered around china. general electric is accusing stevens energy of stealing trade secrets. stevens energy still -- they claim they still secrets worth billions of dollars. the company says it has not seen a lawsuit yet but said it's integrity will not become or must. canada is trying to ease concerns about a takeover. bloomberg learned about the convenience to operate will pump $3.6 billion into the french retailer. their bid will prioritize investment cost cuts or drop reduction. that is your business flash. tom: you grew up in a house of

mathematics, enrico letta is now holding court at the school of international affairs. as you know, italy is a magnet for china tourism. in 2019, year-over-year travel was up 16%. it is a boom-boom relationship. there is a relationship with china to the u.s. and china to europe as well. how will europe and the u.s. fair as they discussed china? enrico: i think it is one of the big changes from trump and biden in terms of methods and procedure. trump challenged china without

any clashes with europeans. china is a complex topic. i think that can be the way to relaunch the role of g7. g7 is missing in action in the past years because of trump. it is the only place where you have japan, north america, and europeans together. my feeling is that it is maybe the right place to have a discussion. and a place to manage the common positions of the western countries toward china on technology, protection, security. i think that can be the right place and the right way. for me, what is important is the fact that we will have the first meeting between biden, jie zheng

peng, and the european leaders. i don't know if these talks would give positive solutions but it is time to talk. the european union before the end of last year decided to announce the agreement with china on investments, rules of investments. . we had to try to have common positions between europeans and americans. francine: what does that mean for european's relationship with china question mark we need to choose where our -- with china? do we need to choose where our allegiances lie? enrico: there is no doubt europeans are with america. it is more strong with biden, it is clear. i think it is in the entry of both to find solutions that

avoided new cold wars or tense situations with the chinese. if we are together, we are strong enough to find a positive solution and peaceful solutions on many issues like technology, security, and trade. it will be a question, one of the most important questions in terms of topics for the future. i'm sure that the u.s. administration, the biden administration and europeans can find a common track on this. francine: there is so much politics. we looked at the riots on capitol hill, u.s.-china trade, the china relationship with hong kong. there are things we have not talked about for the news flow swept under the carpet which is the south china sea and some of

the hot points we used to look at. what do you worry we are underestimating? there's also a big election in german. enrico: human rights, you mentioned hong kong, is a crucial issue. november 15, great countries of china, japan, australia, new zealand, signed this new agreement. it is something completely new. it is another question but maybe there is a change in what is happening in asia. it was the first move toward a post-covid world. it was a way for these countries to substitute the u.s. with china because the first idea was coming from obama five years

ago. it is a way for them to maybe try to find a framework to have peaceful discussions among them. you mentioned germany, the elections this year. september will be the most elections in germany -- in europe. tom: after september will move on to october and hopefully we are involved in g20 meetings. thank you so much, greatly appreciated on this important friday. futures are -13, dow futures -98. michael scholl next. this is bloomberg. ♪

tom: this morning, things changed at the --after the elections. a heated debate has come a near $2 trillion in stimulus, more coming as joe biden gives to congress information on the state of the union come february. financial markets are quite3 new debt yields are lower. a moonshot revolves from 90. lincoln is missing, can trump exit the white house? they say there is a bust of lincoln. would someone please count the silverware? shades of the lincoln 20 years ago -- of the clinton's 20 years ago. this happens every time ts