clicks the world has basically imploded because of the pandemic -- >> the world has basically imploded because of the pandemic. >> is going to be volatile as we look to get things under control. >> the long-term damage will become apparent. >> the public still has money in reserve. >> as long as equities are higher, we cannot do this forever. >> this is "bloomberg surveillance," with tom keene, jonathan ferro, and lisa

abramowicz. tom: good morning, everyone, simulcast on radio and television and at every gamestop from sea to shining sea. a busy tech day, microsoft with great earnings there and yes, we will talk about gamestop as well. what did we learn from bob prince? jonathan: the cycle has changed and the policy regime is here to stay. tom: he was going on about the theories of bridgewater and to be really interesting off the earnings model that they had for a year, one year ago he nailed it and it is even worse now, a whole new world. that is where there has been paying for the last of years. jonathan: if you kept it in the united states, those were the rewards. over the next couple of years

the story changes. jonathan: i'm not a diversifier -- tom: i'm not a big fan of diversifying, but there it is. i know that you have been on gamestop since 2 a.m. this morning, all the way up to 200. what else are you looking at? lisa: i want to link what bob was talking about the gamestop story, the idea of the transfer of wealth and a massive transfer underway as caskets devalued and transferred to asset owners where one motivating factor of gamestop in the rally that you see in the shares his anger, anger from the reddit crew saying why, why are they benefiting on wall street when we are not our bottom line? sticking it to the short-sellers, sticking it to the hedge funds, it's a trope underlying a lot of the commentary that.

-- commentary on reddit. that energy is very much there. tom: and it's one of the hallmarks on this show, we have done it for 15 years where we agree to disagree and i totally disagree, lisa. i think it has nothing to do with behavior as a generational construct. it's another blown massive short trade. in the close open open, remain, -- romain, i love what you said in this hermetically sealed studio, you said about the trade moving forward, it's melvin citroen covers. are you telling me that shorts are reinstituting? romaine: when you look at the options market alone, there is more put value then there was a

couple of weeks ago and a lot more people now looking at a $200 stock saying that this was not fairly valued and short interest is still high and we have got to feel something like the flow interim of short interest that is down to 100% and if you think about, talk about a stock that is heavily shorted, 10 percent, 15%, 20% on the slowdown. 100% as of yesterday. tom: john, this is important, folks, we love having romain on. this is critical. take microsoft, take the shares, take those shares and short the company. jonathan: i like having romain : because he insults you so much. i think it's wonderful. [laughter] jonathan: one thing i have hated for a long, long time, short-sellers that come on program networks like this to say i've got a grand short, put

out a report and smack the stock about. have we reset the approach they have been making to this market for the last several years? romaine: there's going to be a big reevaluation and the idea in the past there was this asymmetry of information out there and you don't have that in the same way that you use to. disclosures are coming faster, the ability for individual traders to react comes faster and it creates a different dynamic. that doesn't mean you won't have the big shorts coming in and telegraphed, but they will have to structure these trades in a much more sophisticated way. tom: a big earnings report today, romaine bostick leading it. looking forward to it. right now, away from gamestop to someone who has to deal with volatility and confidence of our market operations. from wells fargo asset management, for years they have been strong in milwaukee and in

wisconsin. i want to cut to the chase. how do short bubble delta gam a vortex full over into the -- gamma delta vortex move over? >> my concern is that institutional failures would not be good for the market in general but institutional players know what they are doing here and the retail investors could get hurt and it's not good for the business long-term. we want people to be comfortable investing, whether it is investing their own money or allowing us to help invest in the future of their money. that's what concerns me about that for the long-term. for the near term it creates more volatility. our managers are used to dealing with this and it is fairly mayor -- narrow right now, though i agree with the concerns of

others. i worry about the spread of it because mostly we have seen some of the broadest extensions that we have seen over the last two years. lisa: expand on that. some people talking about how this could be the trigger for meaningful consolidation on the stocks that hedge funds have to sell to meet leverage calls. what are you seeing in the markets that there could be concern over the validity of the argument? ann: what really concerns me is that we had a lot of narrow focus in the market during a really sharp recovery. if you look at the s&p 500, cornerstone research put out a good piece talking about the earnings multiple increases we have seen in the s&p 500. that's a fairly large cap focus think -- index. what we saw was that multiple

expansion took it up 48% over the last few years and if you didn't have multiple expansion the market would have been down 3%. so, what should really matter right now are the company fundamentals, which companies can pay up the dream and deliver on the dream and we are certainly seeing some companies really can. the microsoft numbers, we will see other companies really delivering on earnings and that is what the fundamental investors and investors are -- investors are focusing on. jonathan: if you could get amc entertainment premarket, stay casual, 245%. tom: radio to moonshot. jonathan: start at 2020, seven dollars. think about that, pre-pandemic, big theater company, trading at seven dollars, right now trading

at $17. for the people that get riled up about the federal reserve, it's fair to say that the story is not possible without the federal reserve and what they did nine months ago. tom: i take your point and as mr. prince alluded to, it goes over to what we are seeing with gamestop. i go back to the physics and may be the chemical engineering of the viscosity of the system. ann, how does this viscosity, the money worldwide, change institutional investment? do you get more growthy with strong heritage or do you have to stay in a strong form of value taken into some sort of new value trap? ann: i think you are on something there. it's not either or. there are certainly growth guides on the fundamentals i talked about earlier and some of those stocks have the best growth rates and cash flows.

they are really delivering. on the other side, we are seeing a global recovery happen. that is good for the value space with the manufacturing numbers we are seeing. for us, it is thinking more broadly about the market and in -- and investing across the board. they focus on that. true diversification focused across the board. you are right about the values. it's different than it used to be. back when i was investing early on, it was ok to invest in a company that was in decline as long as you understood the rate of decline. in this day and age you have to worry about secular challenges even more so. jonathan: great to get you on the program. wells fargo asset management, check in on that name. lisa can weigh in on this. amc, op 245% in early trading.

lisa: at some point we have to start thinking about the business model of the company being challenged profoundly just by virtue of everyone getting use to not going to theaters at a time when they have that much more debt to pay back. in reality, i don't see the trajectory. jonathan: is this a sign of success for the federal reserve, that they were successful on tethering financial market conditions away from economic fundamentals with a company like amc? or is it negative? lisa: there's an question as -- there's a question of a less dynamic economy and economist will be studying that long time. jonathan: smart and i think that's the debate. tom: the debate is happening right now, making this as clear as i can, we are focused on amc, gamestop, this that and the other things, but guess what,

the market has got some real balls and it. jonathan: leveraged by a basis point above 1% going into the fed interest rate meeting that gets a little bit more interesting, dare i say, dare i promo that program coming up later. i think for anyone in the press bag in this news conference, don't ask about it. just ask about what on earth is going on in this market. from new york, this is bloomberg. ♪ romaine: -- ritika: former president trump appears headed for acquittal in the second impeachment trial. only five senate republicans joined democrats to block the move to declare the trial unconstitutional, probably serving as a rough proxy that is short of the two thirds majority needed for conviction. chuck schumer says he's ready to move on with a democrat only coronavirus stimulus plan next week as republicans continue to reject the $1.9 trillion

presidential proposal. a bipartisan group made it clear that the other agreement isn't dead yet and agreed there is need for targeted relief. fed chairman jerome powell is expected to maintain aggressive support of the u.s. economy despite having seen what he called light at the end of the tunnel around the coronavirus pandemic, holding rates near zero as they wrap up their meeting today. the u.k., facing painful lessons after 200 thousand deaths from coronavirus and boris johnson last night said he was deeply sorry for every loss of life. he also had few answers about the u.k. having, with british

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>> i think that the analog is around how stimulus money boosts

monetary policy through the market. >> you have a natural froth where there is only so much you can do about it and it causes bubbles. asset bubbles come and go and there's a lot of conversation about gamestop and other companies and what's happening. >> what's markable about gamestop is two things. there's no such thing as proprietary data anymore. jonathan: what we are seeing in this market is incredible. futures are down 39 now, off i 1%. that's the broad market story. tom, you have got these million-dollar casinos beneath the surface this morning and one of them is amc. tom: a separate story, we can

agree on that. gamestop, as we heard freda talking about, it's a well contained chart. i just did a fancy chart on the bloomberg and i won't show it on tv because john will walk off the set, but basically 100 and 47 to 365, per share all in all i would say actually well behaved, as romaine bostick just said. will shorts step into do it again? jonathan: that's the gamestop story. on amc, this is the real question to chairman powell of the fed. many companies like amc may not have survived the last nine months if it wasn't for what they did. was that part of the goal? tom: it's the study of zombie companies.

identifying the tumble we are in, -- tumult we are in -- >> in a world with rising populism worldwide, much of the populism has been created because people fear the future, fearful of these issues. in my mind, they are fearful of the conversation around climate change because there are millions of jobs connected to hydrocarbon industries and others. let's be clear, how fast are we moving to ev and other types of vehicles? we are moving quickly and technology may have to move faster. bill gates talks about this well

, it's only going to be done on the backs of great technology and technology investments. that's why we need to invest in these new technologies. it's the only realistic way of us moving forward into a net carbon zero world. >> you talked about a carbon transition. at the moment, it is being left, by capitalists like you, bill gates, people are pushing for peculiar angles and in a strange way this is a place where government and societies as a whole are trying to make decisions about this, not decisions being made by businesses themselves. there was a survey that came out showing that people trust companies more than politicians and in some ways that might reassure you, but doesn't that

in another way make you feel rather sad? >> i'm actually quite pleased i'm in a group of is this leaders that are doing the right thing. i think that's what the gentleman survey is indicating is being recognized. >> but without governments doing anything, without china, america, india, doing anything, nothing's going to happen with what you are doing making a difference, and in the end it's about the state. >> you are right. we need government involvement. what i can do is help move along public companies. if we are really going to lose to net zero carbon environments, all of society has to move. public companies are only a small component of the economy.

governments, state and local governments will have to move word with what they do. government represents a large component of society and it is their job. governments are going to have to move forward. i'm indicating by letter this year that it's not just government. i'm asking large, private companies to come forward in this. we have to do it in conjunction in the cities, in the country sides and on the physical impact of climate change, it's going to have to be done through a public-private type of investment scheme. there are huge sums of private capital.

preparing themselves for the transition. just like the internet, it has changed our daily personal and professional lives. i believe that governments worldwide are going to need to invest in the r&d for preparing for climate change, helping us to design and build new technologies. from battery storage, if we had strong, efficient, cheaply made batteries that would be able to transfer those more powerfully. we need to find ways to better sequester carbon and many more things like that. it's all going to be a part of a long-term process that can be done with the government and with business.

jonathan: the conference there on the lost faith in governments. europe right now, classic case study of that happening. protests, riots, let's call them what they are. a whole lot more of it. tom: it's why it's so good to do this with you. the conversation with you yesterday, there was separation. jonathan: and it's weighing on the face of the european project . i'm not going there but i am talking about loss of faith in the eu, but a little bit later i will be catching up with the european commission, how did they maintain faith in

bureaucracy when many people would argue it has completely let down the continent as far as the early days of vaccine rollout concerns? good morning across the morning, i'm jonathan fer

jonathan: a bit of a selloff to kick things off this morning. equities are back, futures are down 1% on the nasdaq. we expect some real outperformance. we cannot keep the bid in the nasdaq, even with what we see from microsoft after the close yesterday. great numbers and a bit later. apple reporting, treasury yields look like this. no big moves here, settling down around 1% on the 10 year. 10 year yield coming in at a basis point and a 30 year as well just shy of 2% or this is where i want to finish, amc, when was the last time you watched a movie in a theater?

think about it. i will tell you where the stock was in 2020, january 1, about half of words trading now. the stock is up by 200% and change in a free market. and this goes back to the fed, i think it's important, this company comes out of talks about raising $900 million. putting off the idea bankruptcy. most people would come on this show and just say no and they would argue that companies like this would not exist if you were not for the federal reserve. i'm not saying they are responsible for this price action of 200%. some people might make that argument as well. but if this trades at twice the level of where was at 2020, when many people cannot answer the question i just asked two seconds ago, when was the last time you watched a movie at the theater, up 200%.

tom: right now there's a bit of an erosion in the stock as well. sitting right exactly on support of 198. thou give big deal but we are not there yet. we are at 8:30 wall street time here that means michael mckee is joining us now. we will get to that in a moment. mike mckee on our durable america. michael: this is the perfect example of why economists generally do not focus on durable goods all that much, especially on a month-to-month basis. they are up to 10 78 of a percent. the forecast was for a 1% gain. but it's not all bad news. the real news is that it's better than expected, or just about as expected in terms of capital goods, the proxy for business investment. the forecast was for a 5/10 game.

and november was revised to a 1% gain. businesses are ordering. so what happened with durable good headline orders? 51.8% decline in new orders in the month of december for boeing, for civilian aircraft, set -- alize. which is boeing. -- shall we say, which is boeing. this has dragged down the number. so durable goods orders are not too bad when you look at revisions. which could dictate policy or have some sort of implication for people who are looking at something called fundamentals. michael: if you're looking at what my change policy will be inflation. you get the pce monthly number for january, for december, rather. we get next friday, this coming

friday. that's an important figure to watch. it will not tell us anything now, the fed is on hold for a considerable period of time but we will see some increase in inflation because of the base effects starting in march and april. the fed will have to look through that. it's really in the fall when you start looking at what happens with inflation and what the fed is going to do next. they have tied everything to that now. an interesting headline at the bloomberg terminal. bridgewater says that he sees the pickup and growth and inflation in the fed may have to buy more bonds. if you are watching the markets, those of the fundamentals to pay attention to. tom: very quickly, we have a huge news flow right now. the news flow moves at light speed. it is the press conference a snooze today? or can you ask sharp questions

and get some clarity moving forward. michael: i think the press conference and the meeting itself will be for a mark -- will be more remarkable for what they do not do and say pay the fed wants to stay out of the way right now because they are on hold. the one thing jay powell wants to avoid is another temper tantrum. when you look at what happened in 2013, auto and home sales took a breather. they want to keep the economy going to look for jay powell to be as inoffensive as possible. tom: jon ferro, quickly, they are going to quarantine and hotels in london. is that feasible? >> they clearly can be done, we have seen other countries across asia. there is a mandate to isolate in hotels once more remarkable is

that it's january 7, 2021, and we have been doing this for 10 months. u.k., an island, has finally caught up to the idea of doing these things. all the more remarkable for me is that these sorts of restrictions to be removed is getting higher, not lower. you see this in the stocks this morning. at about four percentage points in european trading per the airlines were hoping for a better year which is not started yet. tom: futures at -44, and a man who needs no reduction -- and a woman who needs no introduction. catherine mann, we are all codependent upon this terrible pandemic. as john mentioned, it seems like the timeline is getting longer and longer. how does that adjust your economic view of the world in america?

-- and america? catherine: if we don't get to herd immunity in the advanced economy until the end of this year, that meets our projections. we have always had a very long process to get from discovering a vaccine to actually changing the economic performance of the economy. the markets have tended to collapse all of the links in the chain. there's no problem with manufacturing or logistics and getting people to get vaccinated. no problem with business investment. markets have taken all of those links in the chain, which we think are important and will delay recovery until the end of the year. they have all collapsed into one and done. when we see these pullbacks in the market there is a realization that there are these links in the chain from getting

a discovery of vaccines and actually changing economic performance. they are starting to realize that. tom: -- jonathan: another headline, england aiming to reopen schools for march 8. some of these restrictions will come off before we get to herd immunity. herd immunity for year-end is what you anticipate, what about the restrictions being slowly removed as well. catherine: the restrictions that really matter our consumer behavior. with schools opening that is certainly important, it allows some people to go back to work until peepers -- until people's behavior feels comfortable, especially on the leisure, hospitality, and tourism side, that's 10% of global gdp and it has basically flatlined. you have some work to do on that before you get to the

improvements in economic performance that we put to the end of the year. lisa: if you look at amc stocks he would not necessarily have that feeling of people going to the movie theater. catherine: they are not going. lisa: and that goes to the question we were talking about, to what end are we keeping some of these companies alive by having them get increasingly indebted? incurring debt to abridged to the other side? with business models that will be challenged or changing in a post pandemic world, what kind of employment are we preserving now. what's the long-term cost to employment and productivity? catherine: the questions of zombies has been out there for a long time. the issue is not so much employment, because they're not really employing a lot of people right now with theaters being closed. the question is what happens next year. not this year, we are still in a position of a lot of backstopping of the markets from

the federal reserve and fiscal policy. but next year when things start to look more normal, or we are assuming that's the case, you are going to have a hammer come down on some of those companies. that would create turbulence, for sure, in financial markets. but when you get to the other side you could handle that turbulence is the objective, and you don't have to be holding up zombies any longer. jonathan: always great to hear from you. catherine mann, let's take a look at the economy. the s&p off by about 1%, coming in at about two basis points on the 10 year, just about 1% on a 10 year maturity. tom: i'm waiting for the 10 year yields to go to 1%, we are not there yet. that would be important. even the two year yield fractionally gives way and these are subtle signals.

jonathan: subtle signals, not huge moves but i think it's fascinating nonetheless with the blowout report from microsoft after the close. not enough to get the nasdaq in positive territory. lisa: by the rumor, sell the news? is this people liquidating? i don't know. i do have to think about the turbulence and the concern that some entity hedge funds have in order to preserve capital and cover margin calls. jonathan: do you want a final word on amc and parabolic? lisa: my question is when will they raise money in the equity markets to pay down their debt? jonathan: die have no insight on that [applause] . [applause] -- i have no insight on that. [laughter] a little later this morning we are looking forward to catching up with our guest from the european commission on a

conversation on the absolute savior at the start of this vaccine rollout on the continent. big news for europe, from new york city this morning. this is bloomberg. ♪ ritika: federal law enforcement officials are defending the pace of their investigation into the riot at the u.s.. they say they have charged more than 200 people so far and more charges are expected. investigators are offering a reward for information on whoever's were on civil replacing pipe bombs near the democratic and republican headquarters in washington. senator rand paul lost the battle but may have won the war. questioning the constitutionality of former president trump's impeachment trial lost on a vote of 55-45, but it served as a rough proxy for the eventual verdict and it falls well short of the two

thirds majority needed for a conviction. and president biden will order another 200 million doses of coronavirus vaccine, also temporarily speeding up shipments for states. the new orders would increase government orders by about 50% to 600 million shots. meanwhile, a greater share of the american public wants to get a coronavirus vaccine as soon as possible, that's compared to those surveyed back in december according to the full by kaiser family foundation. about half the i don't surveyed were enthusiastic about getting the shots. in december only 34% were. -- will be the only black female running a fortune 500 country. the starbucks operating chief has been named as the next ceo. and the drugstore empire has struggled to data online competition. 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. i am ritika gupta this is

bloomberg. ♪

>> china has clearly behaved in

ways that are anticompetitive, dumping cheap steel and aluminum in america which hurts american workers and our ability to compete. so should i be concerned? i plan to be very aggressive to help americans compete. tom: whatever your politics, she is from a most interesting state , the giant state of rhode island. governor raimondo vetted for secretary of commerce, an interesting selection. it will be fascinating to see how she drives forward the debate, particularly dovetailing into the second stimulus, widely presumed to have infrastructure and the money will go to fix i-95 which goes through providence. lisa abramowicz and tom keene, we welcome you this morning. it's a morning where we have not relaxed. the news flow has been extraordinary. lisa i want to go away from --,

when you add these liquidity shots in the equity market, what does high-yield in ig do? lisa: right now nothing. you have seen flatlining with high-yield outperforming investment grade, which has been more stuck by the rate rise that we saw a couple of weeks ago were days ago as people get more risk averse. but i have to say, the stability goes to what we will hear from the federal reserve today at 2:00 p.m. or 2:30 p.m.. stay tuned with tom keene and caroline hyde. it's allowing the likes of amc to raise tons of money in the debt market. tom: they will raise tons of money and it will come in, you wonder what the others do but i will bring up now lisa, we talk about the cash out there and we have to function the weighted average cost of capital.

the bottom line is microsoft has 5% debt. these giants are successful. and you have to believe out of the 10 billion yesterday that they are going to move cash out. bloomberg intelligence talking about perhaps a google dividend this week. lisa: this is why tech payments continue to do well and lead the market, they make money and if you have the rest of the market, the cyclicals have been incurring more debt. catherine mann of citigroup, i really think what she said was notable and worth emphasizing. this idea of building a bridge to the other side, these companies are not employing many people and are not being truly tested. once the pandemic is over there may be a longer process that people are currently pricing in. that's when the test will happen. jonathan: we are tom: --

tom: we send i've seen this, we live about a block away from each other and we walked different paths. before the pandemic there was a technology-service sector division. i got my haircut yesterday. on radio it looks phenomenal. i got my haircut yesterday, they are keeping it together. it was like four dollars and $.45 -- it was 4.45 -- it was $ 4.45. do you see a well three distributional? lisa: you can see it in the data but a lot of the gaps have been closed by the unemployment benefits passed by congress. the question is how long will

that last in which jobs will be available? i was hosting a job on logistics and a lot of the vance meant is in automation. even though amazon has been one of the biggest employers through the pandemic, they are working on trying to automate more of the job. there will be plenty of work within these distribution warehouses and the trucking services, but it will be for a higher skilled employee. that's a fundamental question facing the economy. tom: what i would point out which is so important is not the present stimulus bill, 1.9, whatever will be. let's say 900 billion, whatever. they will migrate that number out. the moment that bill is done we have to decide as washington and a nation do we want a second bill wrapped around policy. i understand that we have no indication of that, when will we? my guess is that in march and april we will begin that discussion. lisa: dear member when we had infrastructure week about a

decade ago and then again about nine years ago, and then again he years ago. i guess we are having it again a couple of months. tom: we are wrapping up strong here and we will continue. tracy joins us after watching gain stocks or the morning. we spoke to you at 3:40, and we have come down and there are different lines. do you have any visibility in your research on the number of shorts that are out there? tracie: you can identify short interest very easily. i'm action on front of my bloomberg right now but i think the interesting question to ask is at what point do the shorts capitulate? we saw on cnbc for example, they reported recently that the hedge fund that had a big short

position against gamestop was closing out that particular trade. we don't know if it's completely closing it out, but something like that. the other thing to take a look at is the co-option. it goes from two dollars to over $70 in the last few days. that's the kinda dynamic that will put real pressure on the short. tom: what we watch for the rest of the day? tracy: any sign that the retail momentum in gamestop is slagging. if you have hedge funds closing out, that might be one of the reasons that this could lose momentum. the other thing i would watch out for is the next wall street target. what are their editors -- red

ditors looking at? where will the hive mind go next? tom: tracy, too short of the visit. thank you so much for your contribution this morning. lisa, lots coming up. i believe david westin is speaking to mr. moiety and who has a look lisa: in order -- has a look at gamestop. lisa: a look at reddit? jonathan: i refuse to believe this is discrete short selling. lisa: this is the new game, the question is, how much do banks want to associate themselves, especially for retail investors might end up on the wrong side, eventually, not necessarily in the -- the near term. when things normalize a bit. tom: gamestop bouncing up against resistance. coming up, bank of america chief

executive officer brian moynihan . features at -40, good morning. ♪

jonathan: good morning, good morning for the can down to the open starts now with 30 minutes, futures down 1% on the s&p 500. we begin with a big issue, markets on edge ahead of a busy day and wall street, investors bracing for impact. more stimulus talks out of washington, d.c. with president biden pushing a spending plan saying it's crucial for the vaccination effort. president biden: it will require congress to pass the american rescue plan to provide funding to administer vaccines, ramp up testing, tell schools and businesses to reopen, and to give economic aid to the americans badly needed. jonathan: chuck schumer preparing to remove forward with or without republican support. senator schumer: we want to work with our republican colleagues to advance this legislation in a bipartisan way.