francine: janet yellen takes charge of the treasury, but president biden's team struggles to invite part -- bipartisan support for the $1.9 trillion relief plan. the utility -- italy's prime minister will resign today in an effort to form his third government. ubs announces a share buyback of up to $4.5 billion in a big beat on net income. we will hear from our exclusive interview with the chief

executive. welcome to "bloomberg surveillance." the big focuses is on markets after the disappointment we could not get the 1.9 trillion dollar relief bill in the u.s., at least before march. this is what we are seeing a global trade. stocks are mixed, the dollar is also unchanged, treasury yields are rising. if you look at europe, the m&a deals have given it a boost, but we have more worries about the virus variance and hurdles to the biding that merit -- administration's proposal putting a stop to the rotation. european stocks, i'm looking at not only the technology stocks but others that have beat estimates, global infrastructure and overall, the european stock market is gaining a touch. pound, 1.36 42. let's get to the first word news with leigh-ann gerrans. >> the u.k. is set on -- to

decide on a plan to use hotels to quarantine visitors overseas to stop the spread of new variants of coronavirus. britain's death toll is likely to pass 100,000 this week with hospitals still feeling the strain. across the channel, france is warning a new lockdown will hit its economic recovery. >> if there is a decision of lockdown in france, of course it will have a impact on our forecast and it will be difficult to reach 6%. >> the italian prime minister is stepping down in what is being described as a tactical resignation. he speaking -- he seeking to avoid a defeat in the senate and plans on asking the president for another shot at forming the government. the five-star movement has slumped in the polls and stands to lose the most if early elections are called.

janet yellen has been confirmed as the 78th treasury secretary of the united states. the first woman in the job. she will oversee the economy, charting a course out of the pandemic. she was the first woman to lead to the federal reserve and becomes only the second person to hold both jobs. global news, 24 hours a day on air and on bloomberg quicktake powered by 2700 journalists and analysts in more than 120 countries. i'm leigh-ann gerrans. this is bloomberg. francine: thank you so much. how to address the worlds problems is always top of the agenda at the world economic forum. this year, the political and business leaders attend ching -- attending the virtual davos event have much to discuss as well as the economic crisis which shows no signs of abating -- how will we make the world better? joining us is the vice chair at pimco, with a long line of

understanding these big world problems and a davos veteran who usually joins me on the slopes for the first interviews to kickoff coverage. it is great to have you, even if we are not in dabo's today because the problems have been accelerated in the last 12 months. are we looking at things in the wrong way? are we expecting too much of the vaccine to make everything better? >> thank you very much for inviting me and it is special given you and i always have a chance to kickoff dabo's francine: are we looking at things in the wrong way? are we expecting too much of the vaccine to make everything better. >> frank -- thank you very much for inviting me, given you and i has always have a chance to take off davos together and actually it was a year ago yesterday that we first started to get serious

stories about the virus. this year we are now coping with the relationship between business community, politics. and the science of the virus. in the reality is we are going to have to -- have a recovery. the virus is a very smart virus. this is a virus that is very clever. if you have have a chance to study the science. i think the good news is the world has been impressed by the science community and really they come up with five to 10 vaccines in less than 12 months

which historically is a record. >> do you worry the central banks are opening so much cash out there doing so much as for the economy that we are mispricing risks, we seem to have market especially equity markets. and we have to live particularly with the introduction by the fed, we have to say the mnuchin team with the buying programs stabilized the markets enormously. you are looking at a situation where we will have to have more fiscal support. clearly we have heard about biden's support focusing on relief first from covid, then longer-term on economic recovery. we are debating what is the right number, given 900 was put

forth at the end of last year and approved. now we are looking at $1.3 trillion which is being debated. i think the reason the markets, you are puzzled why they are behaving the way they are, they are looking at this situation and saying, uneven recovery, uncertainty about mutations, vaccine distribution is mixed all over the world. there will be a recovery, and it will be led by china. we have seen that in the fourth quarter. whether the recovery is robust third and fourth quarter this year, we will get there, it is a question of when, and timing. fiscal will play the role as opposed to monetary. francine: are we underestimating the huge difficulties for the economies to adapt in the post

pandemic world? how do you retrain people to do the jobs of tomorrow? john: one of the things this covid crisis has challenged the world is the question of social contracts, and in terms of the classroom of the future and the fact the age of universities has been challenged, and the lack of wi-fi and infrastructure has underscored the gap between the rich and poor, not in the undeveloped countries but also in the developed countries. the onus on the social contract and work, i think we will enter a new period when the social contract will talk more about full employment and engaging

people in employment. let's spend a minute talking about recovery. a number of industries, and talking about the tech earnings, the tech space has done well. there is no question biotechnology, medicine, health care and other batteries and artificial intelligence, all of those sectors have been accelerated in the program as a result of covid. to a certain extent, those jobs and footprints will get stronger and stronger. you are talking in some respects about one element of the economy that will do well. the other element of the economy -- and by the way, manufacturing numbers have held up. you probably heard the chinese government in a prudent way told people for chinese new year they should not travel, and they will

keep open. they normally close the manufacturing complex for three weeks during chinese new year. this year they will keep the manufacturing complex open so people will continue to work, keep up the manufacturing. the manufacturing numbers have held up in europe and the united states. it is the service sector and the jobs associated with the service sector you are worrying about, and we need to be focused on. we are concerned about economic scarring which will be a residual factor we will have to study for some time to come. francine:: where will most of the scarring take place? is it part of the economy? john: it is part of the economy. we talked about hospitality, entertainment, transport, the

types of food service. a number of those businesses have morphed into other types of deliveries and service providing catering. there will be scarring. the issue is, there has to be a lot of stress put on the politics of vaccine manufacturing and distribution. as soon as we get into herd immunity level, which some people think is 80%, the likelihood of scarring will be less. you will still have businesses that potentially will go bankrupt, and will not get back on their feet. francine: we will talk more about that shortly.

keep it here on bloomberg for the latest. we will be moderating a panel with the barclays executives. that is coming up later this afternoon. this is bloomberg. ♪

francine: economics, finance, politics, this is "bloomerg surveillance." let's get to your bloomberg business/. >> ubs is planning to buy back

$4.5 billion over the next three years. the results are a boost. the bank has been overshadowed by money laundering. >> the capital reserve we already have and the capitol generation of our business model gives us the confidence we can announce a buyback program for the next three years. >> lee on black is retiring as chief executive over his association with sex offender jeff epstein. there is no evidence he was involved with epstein's criminal activities, but he paid him 158 million dollars over five years, much more than previously known. he has called it a terrible mistake. that is your bloomberg

business/. francine: john, we were doing around the world in 60 seconds, talking about stimulus in the u.s. and china. what overall is your take on foreign affairs and how they will change in 2021? john: i think we will go into with some have called the age of multilateralism. unlike the transactional age which has come to an end with president trump, i think there is no question there will be a multilateral approach on trade. i think the original rapprochement between the united states and china will be to john kerry and his role as the climate czar, and the chinese

government's focus on esg, particularly on climate where they have been disciplined and ruthless and dogged about what they do on the climate front. given this year will be a focus on preparing, i think kerry and the relationship between the role he will play will be important. on trade there is no question trump put forth the china trade issue and established it as a firm bipartisan issue, and that will not change. no one expects it to change. when you are dealing with china, it is best to do things discreetly, quietly, one on one. i think the biden administration will engage with the european

union, possibly japan, and have a more multilateral discussion about trade practices. francine: what does that mean for markets? is it something markets will latch onto? what will be the catalyst for markets to rethink what they are looking at? john: the equity market is focused on the recovery. it is reading the recovery into it already. unless something happens to delay the recovery well into next year markets will remain well priced. remember, a lot of interesting investments in the equity space in terms of emerging strategies in biotech, tech, batteries, artificial and -- artificial

intelligence, they are not just in the united states but in china, korea, japan and taiwan. those markets in terms of innovative technologies and new places for capital are very important. that is why having a uniform market, and nothing to restrict the flow of capital is important . it is ironic in one of our thoughtful leaders in this area, she is very focused on the quality of tech and health care stocks in china, korea, united states, and japan, ironically not in europe. francine: thank you so much. we will have plenty more. john studzinski, vice chairman, pimco. after a rally of as much as 140

5% yesterday, short-sellers are doubling down, including one firm backed by ken griffin. we have all the details, next. this is bloomberg. ♪

francine: economics, finance, politics, this is bloomberg surveillance. i believe we have live pictures

of what used to be an old noble palace in rome which is now the official residence of the prime minister of italy. the current president is giuseppe conte, there is a pack of press. we know he will resign today. he should leave there shortly to go asked to formally step down and then try to maneuver at the head of the new government. we will keep an eye on the italian politics. gamestop shares have a gigantic day at one point rallying as much is 145%. gamestop wasn't the only one. shares of blackberry to u.s. retailer express saw big surges. joining us is dani burger. why exactly did these stocks see this massive surge? dani: it shows how it snowballs

from there and really has an effect. we have seen nokia shares also rally over the past few days because it was mentioned on a reddit form as well. this sort of yolo trade best explained by the rocketship emoji or is tracy alloway says, of the fundamentals don't matter as long as you get the flow in from reddit users, it can beat out the fundamentals. the fundamental picture has been somewhat captured by short-sellers in most recent days. this blue line is short interest in those had a way of going against the establishment or at least that's how reddit users had framed it. they decided to go in and buy a bunch of co-options. what you get is this now technical picture. you have the dealers on the others of the call option who need to hedge but they need to buy shares and then you have a

short squeeze as well which only goes further to up the price as they have to abandon their shorts after seeing increased borrowing. you get this effect where it really snowballs is the price picks up. it's not the only stock we've seen this happen to. >> thank you so much. we will have plenty more more on this story. also coming up we talk italian politics. giuseppe conte on his way to offer his resignation. we will see if he manages and we will discuss it next. this is bloomberg. ♪ ♪

francine: economics, finance, politics. this is "bloomberg surveillance." i'm francine lacqua, here in london.

let's get straight to the bloomberg first word news with leigh-ann gerrans. leigh-ann: president biden says he is ready to negotiate on stimulus, calling for a bipartisan deal. the white house is open to reshaping its $1.9 trillion plan , but the president says time is for the -- is of the essence for a new aid package. republicans have rejected the price tag as too much, too soon. the house of representatives has triggered the start of the second impeachment trial of donald trump, sending the single article across the senate. arguments will get underway the week of february 8. according to a statement, the former president is setting up an office to "carry on the agenda of his administration." barcelona has kept its position as top earnings only by whisker. the spanish team ended its first -- without a trophy.

revenue dropped by more than 100 million euros, second on the leaderboard were rivals real madrid. the highest earning english team is still manchester united. 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 leigh-ann gerrans. this is bloomberg. francine? francine: let's get more breaking news italy. giuseppe conte is on his way to see the country's president to offer his resignation, avoiding a damaging defeat in the senate. according to unnamed officials, he is expected to be asked to take another shot at putting together a third coalition government. joining us this morning is the global head of economics and capital market strategy. thank you so much for joining us. there are a number of died that we need to look at -- of diagrams that we need to look at. for non-italians it is something

of a blur. what are the chances that prime minister giuseppe conte, once he has his recognition -- his resignation come is able to form a new government? >> the crisis is in the head of state. the republic is in the driving seat. he is fully understood abroad because he has no invested powers. but in these types of moments with the collapse of government, he is the one that will do -- in order to form a new government. and in the end, if a new government is not possible, he will have the power to call new elections. so let's see. francine: what does italy need now? is it stability, or does it need reforms so recovery fund money can be spent wisely? >> i think it needs both.

it needs the government to be effective, and to be able to fight the pandemic, do the requisition plan, and to spend the money of the recovery in a way which is effective and in particularly which includes factual reports. italy has a normal problem of key issues which have not been addressed by the government, and we need to address them now with the sources of the structural recovery fund. this has not been fully understood yet by italian politicians. francine: and of course everything is in play at the moment. if giuseppe conte gets a new government in place by getting a couple of senators here and there, will italy be stable enough to push through in 2021?

from the outside this feels like a make or break moment. fabrizio: you are right, there is a lot of play for italy but also for europe. italy has the reputation, and with the future of italy at stake, at the same time the future of europe because europe has been putting a lot of weight hind these next generation e.u. come and italy is a litmus test. if italy fails, the whole program fails as well. so this is a very topical moment, and whether giuseppe conte will be at the arm of the government -- francine: when you look at some of the concerns on the periphery, this really was started from all of our

international viewers by matteo renzi, saying he did not agree with the government and hold his support. can this give matteo renzi what he wants and get on with the reforms, to have something that looks a bit more stable? and if we don't get that and we have a technical government, who will be in charge? fabrizio: i cannot answer to the second question, but i can tell you that the country needs the structural reform, which this government and the british government have not been able to do and to put in place. i mean, in terms of education, italy is lagging way behind. women employment is very low in italy. the same between kabir -- between career and having children, it is not working.

these issues have been -- they have to be addressed. with the reform of the administration and the reform of justice. if we are -- there is something very, very specific in italy. it is our baseline of growth is lower than our other european countries. and we need structure were reform to make life higher and closer to the one of state. francine: if the ecb were not there, actually holding yields firm, what would happen to italian markets in a situation like this? fabrizio: well, we have seen some activity in the last couple of days, but really, really -- if the ecb were in there, the volatility would have been much much higher. somehow the ptp and the spread

is shielded by the program of the ecb, and the fact that the ecb by now, but also by the fact that at the ecb for the next months and early next year at least. in that sense, this provides a protection but also provides a window of opportunity which the government, whichever it is, has in order to make the reform. once this window is off, there will be no more time, no more resources that italy will be again under the stress and the pressure. francine: given the current project, where do you see the italian economy in six to 12 months? could italy once again become the worst student in the union? fabrizio: the gdp of italy last

year in 20 was already one of the lowest, definitely the lowest round. the rebound we will have in 2021 is modest. however, there are signs of vitality, particularly in the manufacturing sector. the backbone, the strength of the italian economy, his medium-sized companies. in these medium-sized companies are doing relatively well. it depends on the factors because we have a k shaped recovery. but generally speaking, when you factoring is rivaled in the country. they are getting more mature, they are better managed, these companies. they are really growing in terms of their approach to the capital markets, there is murder, there is consolidation of investor sectors. so in that sense we -- there is

merger, there is consolidation of investor sectors. we have the whole weight of the public debt, and the steel. there are structural issues which are an obstacle to growth, including the weight of the public administration. francine: fabrizio, thank you so much for drawing us. separate seo pack gunny -- fabry seo pagani -- bloomberg's the year ahead event brings together leading chief executives and economic heavyweights to map out a strategic blueprint for business. we will speak with chief executives of pfizer and others. this is bloomberg. ♪

francine: economics, finance, politics. this is "bloomberg surveillance." i'm francine lacqua, here in london. vaccines are not proving to be the quickfix remedy that was hoped for. the latest -- astrazeneca is accusing the e.u. of backsliding on its contract. getting as many people vaccinated as possible, joe biden set out an ambitious target for america. pres. biden: i think we will be able to do that this spring. it will be a logistical

challenge that exceeds anything we have ever tried in this country, but i think we can do that. i feel confident that by summer we are going to be well on our way to heading toward herd immunity. francine: in the rush to wrap up vaccinations, more countries are up the opting -- are adopting other strategies. dr. fauci: you don't get full efficacy until you get the second dose, and if you allow sub optimal efficacy, you could select more mutations when you do that. that is the reason why it may not be the case, but it gets risky. that is the reason why we prefer to keep it on the time that the clinical trial is set. francine: let's get to our bloomberg business with leigh-ann gerrans.

leigh-ann: -- shares are falling this morning, disappointing investors. shares are set to grow in the mid to single digit -- in the mid-single digits. as a vaccine rollout continues, novartis thinks he will be able to accelerate growth. >> we have found a vaccine as an industry, particularly pfizer and moderna, but as well, astrazeneca and others come in record pace. we are rolling that out, and i think a remarkable way when you look at the long arc of history. it feels bumpy right now, but i hope over the course of this year as they scale up happens, people appreciate the magic of modern medicine and the fact that we could tackle a pandemic in this way. leigh-ann: the founder of apollo , leon black, is retiring as chief executive over his association with notorious x offender -- notorious sex

offender jeffrey epstein. reportedly black paid him over $150 million over five years, or than was previously known. black apologized for doing business with epstein, calling it a terrible mistake. that is your bloomberg business flash. francine? francine: ubs is doubling its size of its share buyback. manus cranny spoke with the lender's new chief executive about his first results at the helm. >> our business model has been successful getting through this pandemic, and therefore both the capital reserve that we already have and the government generation of our business model gives us the confidence that we can announce the 4 billion swiss franc share buyback program for the next three years, of which we will perform more than one

billion in the first quarter of this year, and 2020 has been, specifically the fourth quarter quite good in terms of proficiency, 66 million of risk off, a combination of some releases. but also a provision we had to take on a particular client related to the capital sector, and going forward, the question is really, how do the economies get through this pandemic? francine: the bank's focus on wealthy clients has allowed ubs to sail relatively smoothly through the pandemic. but with delays in vaccine rollout and double dip recession, the light at the end of the tunnel is looking dimmer. ralph: really, on one side we see the light at the end of the tunnel with a vaccine program is really taking off, and therefore

we are increasingly confident that we basically see this come to an end. on the other psych, specific -- on the other side, particularly here in europe, the lockdowns are more restrictive than ever, which will affect the real economy. that unpredictability as to how long the pandemic will really take, when the economy can really start off again and what has been the shape of that economy, i think that is the true risk that we need to see and that we need to manage this year. francine: the pandemic is not the only cause for uncertainty as the lender this year, rough' overhaul has been overshadowed by -- ralph hamers' overhaul has been overshadowed by an investigation. ralph: i will again fully cooperate in the investigation.

i have always acted with conscience during my tenure at ing, and therefore i feel confidence in a good outcome in this case. when it comes to my ability to lead, it is clear that i know the case very well. it can really focus -- i can really focus on my role and also on his future. francine: coming up, france's finance minister warns that the a's, fallout from a third lockdown will bring some of our wide-ranging conversation. this is bloomberg. ♪

francine: economics, finance, politics. this is "bloomberg surveillance." i'm francine lacqua, here in london. let's get back president macron faces mounting pressure to impose another national lockdown this week. that is at covid-19 cases threatened to overwhelm the french hospital system. the finance minister told bloomberg tv there has been no

decision on another lockdown. all sectors will still be supported affected by the virus, adding that he hopes to increase measures in 2021. >> i want to emphasize the fact that nothing has been decided yet. we will have an important meeting on wednesday to assess the health situation and take the required decisions. was too good, nothing -- once again, nothing has been decided yet. it is quite clear we will support all the economic sectors that are affected by the crisis as long as needed, and if we are to take new measures, we will have also to provide new support to the sectors that will be more severely hit i these measures.

let me be very clear that we have decided from the very beginning, from march 2020, to support the employees, support the companies, support all the sectors that have been hit by the crisis, and we will continue to do the same as long as the pandemic will continue to strike france and europe. >> how long do you think that support is now going to be required for he echo are you starting to change your -- are -- to be required for? are you starting to change your thinking? there is thinking that the traversal -- the travel and tourism sector will be back to normal by this summer. that is beginning to be called into question. are you rethinking the duration of this? bruno: back to normal is not the kind of wording i would use for the time being. our assumption is that we have

two divide the year 2021 in two parts. in the first part of the year 2021, let's say until next summer, i think that we will have to continue supporting some of the economic sectors in france, and once again we have decided to do so from the very beginning. it would be a political, social, and economic mistake to withdraw the kind of measures while the pandemic is still there. but i hope that in the single path of 2021 we will be able to lift the measures, the measures for health security, we will be able to alleviate the difficulties if the pandemic is over. i think that we can count on a very strong rebound of the french economically on the

second part of 2021. confidence in the economic situation in france, when we have decided on december 2022 lift the measures, then there has been a very strong rebound in the french economy, which means that we have everything that is required, to have a very strong and very quick rebound as soon as the pandemic is over. francine: french finance minister bruno le maire in a conversation with guy johnson. microsoft, and here in the u.k., hsbc chief exec of noel quinn will appear before the parliament foreign affairs committee, over freezing the accounts of hong kong activists.

and to the norwegian prime minister as well as the executive of pfizer, helton, and carnival. bloomberg surveillance continues through the next hour. tom keene joins me out of new york. we will talk about the reflation trade, we will look at finance. have quite a lot of earnings and we look at the bank as well. politics in france, we have a couple of things going on in italy. shortly the prime ministers should be tendering his resignation through the italian president. we will see what happens next, whether he forms a new government. the ftse regaining 0.6%. this is bloomberg. ♪

francine: janet yellen takes charge of the treasury, but president biden's team struggles to invite partisan support for their $1.9 trillion covid relief plan. conte will go, but perhaps not for long. italy's prime minister will resign today -- this morning, in fact -- in an effort to form his third government. plus, ubs announces a share buyback of up to $4.5 billion and a big beat on net income. we hear from our exclusive interview with the new chief executive, ralph hamers. good morning and welcome to "bloomberg surveillance." i'm francine lacqua in london, tom keene in new york. tom, we must look at the reflation trade. we will spend more time looking at the market, giving the setback that markets felt after we heard from the republican party, saying they will not vote, or they will not go through with the relief bill until march, and we look at politics in the u.k. the prime minister deciding whether he wants to put everyone in qua