round-trip, the vix signals all is clear from the 23 to 37 all the way back to 22. the dollar ever stronger. president biden talks bipartisan, but he asked my way or the highway for some democratic leadership, they will reconciliation with a gentleman and very conservative from west virginia. well, quietly, tomorrow's guesstimate payrolls migrates from 50 to 70 to 100,000. we take the measure of america post pandemic. good morning, "bloomberg surveillance." thrilled you are with us. from new york and london, francine lacqua, tom keene the better feeling out there, greater optimism. is that american optimism, francine? do you see that in the data or the feeling of the united kingdom in europe? francine: we are seeing it in her, certainly the start of a little more of inflation --

although, when you see the market participants and ecb officials, they actually cautioned inflation is going up a touch. a bit of concern on activity in china. we have these two opposing forces. reflation trade with the hope of things getting better post of stimulus in the u.s. but a bit of wobble at the margins in china. another thing i watching for is traders are no longer seeing negative rates. this was the narrative for europe. tom: one indication i look at is the 20-year swiss franc. it is a lesser negative yield. we are releasing a negative yield give way to a lesser statistic. right now in new york city with first word news, riddick of

--ritika. ritika: will not retreat on sending out the checks as part of the stingless package. the president told house democrats he is willing to tighten the eligibility for the payments. republicans suggested making the checks smaller and sending them to fewer people. republicans voted to keep whelming representative liz cheney in her leadership role. they turned back any effort to remove her from voting to peach donald trump. house democrats referring to oust marjorie taylor greene from two committees for her incendiary statements. house republican leader kevin mccarthy said he would take no action to punish her. the latest on the federal reserve is not close to scaling back its massive bond purchases. officials play down the economic impact of recent stock market volatility. chicago fed president charles evans says he does not see the markets is a link to macro

economic rowing costs for businesses or households. officials say the u.k. is past the peak of the latest wave of the coronavirus pandemic. the countries chief medical officer says a downward slope of cases, hospitalizations, and deaths. 10 million people and at u.k. have been vaccinated, about 15% of the population. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. tom: thank you. bonds, bonds, bonds for some the litmus paper of the global system right now. lower prices, higher yields. 10-year gilts to four digits. -- yields to four digits. some curve steepening as well. lots of dynamics. lisa abramowicz out of the difference in yield between the five year and 30 year. zero hedge picked that up as well.

some significant curve steepening out past the belly of the yield curve. yen back up. francine: if you look at the treasury curves steepening to that level since we have not seen from february 2016. this three-day rally in global stocks seems to be pausing a bit. the dollar rising. a lot of focus on earnings. deutsche bank an earlier gain after reported a profit in six years. if you look at some of what fixed income is doing in europe, the focus is on whether mario draghi can deliver and have a permanent injury majority in it -- parliamentary majority in italy. and opec. tom: claims coming up later with michael mckee to attend that and the jobs report tomorrow.

what is remarkable about this thursday is i don't think i have mentioned gamestop yet this money. jack ablin has new goodie and mathematics at investor that means he writes really sharp research notes and has but that cresset capital mind to what we have all witnessed with gamestop and robinhood and the rest. we get a briefing from the mathematician this morning. jack ablin, let me go to the math of a no free lunch. there we were four years ago at schwab, free commissions, fidelity, free commissions. robinhood started it all, free commissions. how is that free lunch going? ? jack: what we found where the free commissions combined with the fact that a lot of professional sports were sidelined, las vegas mothballed and a lot of people in home with stimulus checks found, the odds are better betting on wall street than they are betting

with sports look. tom: jack, what are the lessons learned? if we assume robinhood is somewhat co-opted as they go public, how do you perceive the free commission game to be a year from now or for that matter, 10 years from now? jack: i think as long as retail traders make money, this will continue. i see this as an ongoing phenomenon that the rest of us who are in the markets as investors have to reconcile. certainly, the regulators are flapping their arms over this but i don't really see much -- at least and in the fact pattern. looking forward, we have to see if they take some of their ire out on the hedge fund fatcats.

francine: how does this change when the market turns? i want to be in the markets of, can 50% return in 24 hours. but is there a danger -- not a danger, but is it possible that suddenly comes to a screeching halt? jack: it does, but we have to keep in mind most of this robinhood trading was born in the ashes, if you will, of the pandemic selloff. a lot of the massive selling that was going on in march was risk. trading so clearly hedge funds, quantitative hedge funds try to keep the risk in check while vix spiked to 80. that turned i think many have credited these pretty much complete risk averse traders as stepping in at the end of march.

francine: what does that mean for fees elsewhere? money managers? do these automatically go down every tell investors increase in numbers significantly? jack: great question. this is a group of investors or i will say traders who are not participating in the equity markets before. they were maybe betting on sports. we will see if they bet on the super bowl. maybe there will be fewer bets on the super bowl this year because of the 10% big compared to the stock market, expensive proposition. i think this is a new population of traders, investors in the markets. whether they will actually be looking for active management or someone else to manage their folio, at this stage, probably not. tom: the new optimism.

does the yield indicate up to the top of a range or can you? call and yield breakout? jack: i can call a breakup. never really trusted model that wheeze for the ten-year treasury. -- we have a really trusted model that we use for the 10 year treasury. this thing has called every turn and twist the last several years. right now the model is in the 10-year treasury yield should be 2%, not 1.07%. tom: are you calling a larger commodity boom? jack: i am calling yolo spending the second half of 2020 as we all finally breakout from our stay-at-home orders and want to get out and do the things we could not do for the last year or so. that combined with nearly $5 trillion of cash on the sidelines i think equates to we could see inflation prints double what the fed has targeted

at 2%. we will have to see. i think it will be a test of the fed and other central banks later this year. francine: jack, thank you so much, jack ablin i've cresset capital. later today, and exclusive conversation with esther george as 6:30 p.m. new york. this is "bloomberg." ♪ (announcer) do you want to reduce stress? shed pounds? do you want to flatten your stomach? do all that in just 10 minutes a day with aerotrainer, the total body fitness solution that uses its revolutionary ergonomic design to help you maintain comfortable, correct form. that means better results in less time. and there are over 20 exercises to choose from. get gym results at home. no expensive machines, no expensive memberships. go to aerotrainer.com to get yours now.

tom: "bloomberg surveillance." good morning, everyone. thank you for being with us. risk on field to the day. labor data coming up.

government reporter in washington. jack, any number of things to speak of here. is there a town in washington of a better labor market or are the politicians just oblivious to what is going on with the jobs report? jack: they don't always respond in their legislative negotiations to the news they get on what the economy is looking like in the near future. congressional budget office re showing much rosier picture at least for the near term in the economy that it did not change democrats focus on things that you might think would follow the table like stimulus checks or not particular targeted to the unemployed or something like that. no, this news has narrowly been changing the discussions about this next big bill. tom: my college jonathan ferro being foreign asked an intelligent question yesterday,

jack, which probably every american needs to ask as well. is $75,000 in new york city the same as $75,000 in tulsa, oklahoma? jack: no. that is a big reason, especially while you're seeing republicans lead the call to lower the threshold for who gets the check because if you are in new york or an expensive area in california, what they currently have at the $75,000 phaseout makes a lot more sense than republicans like susan collins in maine saying, why doesn't it phaseout from $40,000 to $50,000? we have not heard of really a discussion that would take a more nuanced, geographic approach to that. francine: jack, would we know exactly what -- what is the time when you're working on? jack: the house just voted to adopt the budget resolution that

sets the stage for this next big bill. the senate should vote very, very late tonight, maybe tomorrow, but first i have to go through a ridiculous voter rama which is the senate process that allows unlimited amendments as long as it is germane to what they're voting on. there will be a lot of political sort of boats and a the senate -- in the senate. when they have voted on the same exact budget, then they can work on the legislation. the deadline set and in the budget for the real legislation is february 16. essentially, we are seeing the work on the first have budget portion of this. the senate will then go to what they hope will be no more than a week long impeachment trial. and after that, there is work on the bill itself where they have to get down to the exact details of what they want to pass. francine: jack, i know this is the first test to see whether the democrats can work with republicans under this new

administration, but will it be a test have things to come or is this separate just because of the large amount of money? jack: if there are looking for low hanging fruit to work with republicans, this would be it. even though there is this divide on how much money to spend and how to approach the coronavirus stimulus, this is not really as partisan as what you may see when we get to round two of a reconciliation push by the by the administration -- which the talk on that is a major green infrastructure, climate-related bill that could be even more difficult. if this were to fall apart, that could be assigned sign of better things to come. if this works, it doesn't necessarily things will be easy working with republicans in the future. tom: and that movie with daniel day-lewis and sally fields, how

is mccarthys week going? jack: he is in rough position. you stood by the republicans ms. caucus who are under pressure. marjorie taylor greene democrats are going to vote today to remove her from her two committees. mccarthy stood by her despite the qanon conspiracy theories. he simultaneously seems to stand by and the caucus stood by liz cheney, who kept her leadership position. he did not necessarily make a clear decision on the future of his caucus, but he kept everybody in the loop. tom: jack, thank you for the update. somehow the politics of the gop may come up. republican from kentucky at 8:00 a.m. our this is "bloomberg." ♪ . this is "bloomberg." ♪

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francine: what was the biggest thing you learned about what a leader needs to be? >> it is about being emotional, authentic, believing in the path you are taking. francine: this is "bloomberg surveillance." rodentia settle -- royal dutch shell reported net income that fell short of expectations. still they reiterated its commitment to growing again. here's the chief executive at the european market open. >> the year was a very deaf year and a very painful year.

--duff year and a very painful year. >> why did they miss expectations? did the analyst get ahead of their skis or did you have last-minute accounting changes that surprised them? >> is probably a combination of factors i would say, but the absolute delta is very small. percentagewise, these numbers are magnified because were talking about no numbers. it is very difficult but a lot of the adjustments and we did have a number of different tax assets to get it completely right. i thought this treated a good job -- the street did a good job from where we were in the quarter. if you look at the entire year, i think this probably more sensible to look at that. $34 billion of cash. that is the better measure for us to be measured on i think is a credible and resilience

performance. on top of it, i would say the countermeasures that we took early in the year, early in 2020, we were going to find $8 billion to $9 billion of cash to help us under these difficult times. we actually delivered $11.5 billion. we did well in that respect. he did not help us from taking the painful decision to also reduce our dividends, but i think if you look back operationally over the year, i think our staff did markedly well and i am proud of them. >> let me ask you how shareholders have received all of the messaging you have given around the dividend and buybacks. he took the start decision to do this the first time in many decades. a couple of quarters later, raised it modestly. you also committed to further buybacks. have investors capital with you along this journey? what is the feedback from

investors? >> there is a range of reactions. i think nobody and certainly not the company welcomes the need to reset a dividend. at the same time, it was also necessary and inevitable thing to do to not only preserve the financial resilience of the company, but also to preserve the long-term future of the company. >> capital expenditures by oil and gas companies is at historically low levels. do you think the sector is investing just enough to avoid a supply crunch? could we see spike in crisis as a result in the near term? >> i think it is a good question. it depends a little on the timeframe. at that moment, it was a pretty good oil prices. i think it is approaching $59 branch. i think it is much more driven by short-term. it is -- demand is not where it was a year ago but we see discipline from opec-plus and

the market is being held to balance quite well. if you look the slightly longer term, yes, we're not the only ones who have cut back on our capital spending most we went from a plan of $25 million to spend in our tar business, not just oil production, to $18 million. that is a $7 billion drop. we are not the only ones. fast-forward a little bit and, yes, and the second half of this year, beginning to see not only recovery but beginning to see a little tightness in the market appearing. i believe that next year when the recovery is probably complete and the years thereafter it could well be we see a tightness in the market that will provide for more upside pressure on the oil price. francine: that was royal dutch shell chief executive speaking earlier. the market probably focused on what treasuries are doing.

we have a little data later. and all about the yield curve. focusing on the yield curve, reflation trade. a couple of questions that only on inflation imported from china but what happens to china dynamics given some of the wobbles we have seen an activity. i'm also looking at italian pocs and the can later on with the bank of england decision. next, jason farley. we continue tracking covid-19. we look at the variants some of the concerns with vaccinations going forward. this is "bloomberg." ♪

francine: this is "bloomberg surveillance."

tom and francine from new york and london. johns hopkins has been at the forefront of the international response every day we get insights from experts in public health, infectious disease, and emergency preparedness. we are happy to be joined by johns hopkins nursing professor. when you look at some of the things we are experimenting with globally. there was news there could be some kind of pfizer vaccine combined with the astrazeneca that could help with the global rollout. will this be the narrative going forward? doing everything we can, even combining vaccines to make sure we can vaccinate quickly? >> good morning from the u.s. pressure from the eu has prompted the conversation between pfizer and astrazeneca to consider combining. we have preliminary data on the combinations -- when the pfizer

vaccine was approved many of us in the astrazeneca trial including myself were instructed that we could possibly be unblinded because of the lower efficacy. we were given the option of receiving the pfizer vaccine. many health-care workers on the frontline chose to do that. subsequently we saw a great data from pfizer and we know the efficacy is quite great for severe disease as well as hospitalization. there probably wasn't a need to receive both. a significant handful of the united states have received both as part of the trial. i would encourage the companies to look at those individuals closely while they are starting a new trial of about 800 participants in the u.k. this week. francine: we also heard that the way the u.k. is giving out the

astrazeneca vaccine, one dose asap and then you wait 10-12 weeks for the second dose has an 82% efficacy rate. we see more countries like the u.s. looking at doing the same thing? prof. farley: right now the signal from the biden administration is that will not be the case. we have heard repeatedly from dr. fauci that the most important thing is getting the doses in as prescribed. we are concerned about the variants and the pressure placed on the vaccine when you have some level of antibody but not enough to protect it. the duration between dose one and dose two does apply and that is important. some vaccine is better than no vaccine at all. there is still the plausibility that having a little bit of antibody might put pressure on that variant to further evolve.

tom: i'm scheduled for my second dose in 10 days and counting. we are looking forward to that. tell me about when the age drops. what do we get from the 80's, 70's, 60's, when do we really drop down to a larger audience? prof. farley: it is all about how quickly the supply chain could provide us vaccine. until right now, i'm getting calls for my patients, others, saying one of my going to be in line for the vaccine? it is trouble what we have people who are hesitant to get the vaccine. long-term care facilities, only about 30%-40% of workers have reported receiving the vaccine out of their own choice. not that they were not offered it, they were hesitant to do so. those who want to raise their hands as quickly as possible. right now they are in group one

c, we are vaccinating those 65 years of age and older. more frontline individuals, frontline health care workers were included in that group. many healthy individuals below 65 with a few comorbidities, not severely ill are still waiting in line. francine: be sure to check out the bloomberg for the latest information and you could tune in every day for our exclusive conversation with johns hopkins experts for and inside look on battling covid-19. ritika: president biden is drawing a line in the sand on his proposal. he has told democrats he will not back off his plan to send in $1400 checks to millions of americans. republicans have suggested the

checks be smaller and that fewer people get them. this will be janet yellen's first public effort to adjust the turmoil involving gamestop shares and broker a deal at -- broker-dealer robinhood. the sec says it is seeking to identify potential misconduct. it will look at brokerages decision to halt buying. mckenzie and company have responded to claims -- they will pay $515 million to end lawsuits by roughly four dozen states. more than 30% of the u.s. property owners have considered equity risk. that means the properties were twice as much as the underlying mortgage. equity rich properties grew to

17 point 8 million of the 59 million mortgages. underwater homes, those worth less than the mortgage now over 10% in six states in the south and midwest. global news 24 hours a day on air and at bloombergquint take powered by 2700 journalists, this is bloomberg. tom: coming up, we will talk to dr. adam posen. later in our half-hour, adam posen on the bank of england announcement we will see at 7:00. futures up five, this is bloomberg.

ritika: t-mobile u.s. ceo mike stevens later today. this is bloomberg.

♪ >> strong pickup in economic activity rejected from this year will provide a temporary boost to inflation also. >> weather produces a more sustained increase with underlying inflation is an open question. tom: it is an open question of the gentleman from chicago. all you need to know is the straight line is moving from the lower left to the lower right as witnessed by the guesstimate five years out. inflation five years out from there. the stability of the pre-2007 and down we go. there's a new trend as charles evans pontificates about moments ago. we get perspective from adam

posen from the peterson institute. i could do a two commerce it -- our conversation -- two hour conversation. the respect we should have four new inflation expectations. adam: we should have respect for them in the sense that we ignored them for 20 plus years. now it is time to start putting them in the forecast that you have to take it seriously. there is a difference between acknowledging there's a risk or that you need to change policy. tom: i will do this to tease adam. the median approach is to look back to the 60's. the walter heller inflation. the world is going to die at 5% or 6%. that is the easy way to go.

what is the real world that we are going to see? adam: great question. i love that you know the classics. the real world question we will see is roughly 12-18 months. the unemployment rates start getting down below 5%, does the u.s. get up to a sustained six months of three something? how long does the fed weight before reacting? chair powell and others have made clear they will wait. i think that is the right call. the real action is whether or not the acceleration of inflation expectations and say the summer and fall of 2022. francine: how long do you think they will actually wait if that

happens? adam: good question. i have to push back like i always do at the world normal. the policy has to be judged by whether it is right for the current conditions. there is nothing normal. i think they are wisely going to see it showing up in widespread wage inflation or a sharp spike in similar measures. that will take a while. there's a lot of people on the sidelines not measured in unemployment. i don't think you will get wage inflation as we have seen elsewhere. as for china, there will not be much in the way of inflation for china. it will be if the u.s. does get inflationary boost and europe

and japan do not, what happens to the curve? francine: does it all depend on what kind of stimulus package we are getting in the u.s.? some of the conversations we maybe have. adam: i don't think inflation expectations are the anchor. the stimulus package really right now is not about stimulus, it is about funding a better and faster distribution of vaccines and protecting front-line workers, educators, government. the question is how much do savings come down? how much structural change is there? will the restaurant sector have to find new jobs or will they reopen?

will there be more permanent displacement? i'm inclined to think the amount of savings people will keep doing will be higher than it was pre-pandemic. that puts me at the lower end of the spectrum in terms of worrying about inflation risks. tom: here before the bank of england, it is an important announcement. kenneth frazier is one of the two great stories of american business history. starting out with next to nothing in philadelphia he became the ceo of merck & company. he will retire, which is unimaginable. like bezos, it won't happen. i don't know what he will do but i'm guessing it's some sort of executive chairman.

ken fraser moving on as we saw with mr. bezos the other day. round-trip, 23 up to 37. go to cash at 37 and we come back down to the nirvana. a better story across the board. having a little bit to do with washington. we will come back with adam posen. excuse me. somewhere in between the bank of england. this is bloomberg. ♪

ritika: this is "bloomberg surveillance." paypal says consumers lock to it site in the final months of the year started to use the company's wallet to buy and sell cryptocurrency. paypal added a record 72.7 million active accounts last year. fourth-quarter revenue beat estimates. ebay is gaining customers in the midst of an e-commerce boom.

the online marketplace gave revenue for the current period that beat estimates. pandemic wary shoppers have turned to ebay and amazon to avoid going to stores. ebay says the number of customers rose 7% in the last quarter. the world's largest watchmaker is -- warned it is struggling to meet the market, another sign of the shortage with remote work and surging demands for computers and car buying as people avoid public transport. all of that has led to automakers to boost chip buying. that is the bloomberg business flash. francine: the bank of england prepares to release its latest rate decision and a report that could push below zero. evan, thank you so much for staying -- adam, thank you so

much for staying with us. when you look at what is happening in the market, it is just mind-boggling. the bank of england is incorporating the negative rate scenario in its toolbox, the markets are discounting. they won't go there. how do you see the dynamic? adam: i think the bank of england is in an awkward position. they have very noisy data. if they have to focus on the fundamentals, brexit is as bad as i of other people said. number two, by some miracle vaccination and the late lockdown seem to be working very well in the u.k. number three, the eu is messing itself up. maybe none of these should be a surprise. taken together you have a strong

cross current on the forecast. i think they will probably signal inclusion on the toolbox today. it is going to be important meetings. that will put the negative pressure on the pound. probably by may they will implement it when it turns out the public health recovery from the virus is overtaken from braggs it is persisting. francine: every time we speak to bank of england governor andrew bailey, he has been very generous with his time we have the debate of when the optimum time for negative interest rates is. when is the time for the better idea? is it when it starts taking place or is that too late?

adam: it is not too late i don't think. it is dependent on if the outlook is more than two years out. it is dependent on what other factors are driving the recovery? in the u.k.'s case if it is an immediate relief rally on the disease, that like the disease itself god willing is temporary. we have to look through that. i think in the end, despite recent data the u.k. has the highest deaths per capita in the g7. it has the slowest recovery in the g7. they are going to have to move, i think. tom: you have the advantage at the peterson institute. blanchard and somers are known for the chronic long-term effect of unemployment. adam: i think as olivier would

admit, the evidence is there a brilliant paper in the mid 80's characterizing what was going on in europe and what was going to happen later in the u.s. has become more -- there is the scarring but it doesn't seem as permanent as we once thought. you could see that in the return to high labor force participation rate in not just the u.s. but europe following the financial crisis. it is more like an accelerator. i think olivier's point, i should not speak for him -- she would be happy to talk to you. it is similar to what chair powell in the fed is talking about and now secretary yellen is talking about. there is a real cost to betting potential growth -- some of those are long-lasting.

there's a reason to emphasize a hot economy that pulls people back in. tom: what is the effect of the stimulus misapplied to the people who desperately need it? in conservative america the government spends money and maybe that is a good idea but they don't apply it within acuity to those that really need the funds. are we going to do that with the next potential stimulus? adam: we will do that with a small piece of the neck stimulus. people should keep perspective given the amounts of corporate spending that often does not get high returns either. if you look at the package that was passed nearly a year ago in march or april of last year. you look at the package passed in december and you look at the biden administration proposal now, the proposal on the table now -- they won't say it this way but i don't look at those kinds of stimulus towards the

problem. it is funding vaccine rollout. making sure state and local government don't have to contract basic services. it is providing long-term unemployment. things that are really about the suffering and dysfunction coming from the pandemic. then you get into these stimulus checks. the answer is -- to pick up another conservative theme, which is when i agree with, it brings a lot of resentment and extortion. it is better to set we will cut off -- say we will cut off the disbursement of checks and not get into people's business. i think that is better. should the cut off be $100,000? $75,000? that is where the bait -- debate should be. it is not a big deal.

it is not socialism. it is not some huge step. francine: thank you. adam posen, peterson institute president. joining us on a number of things from the bank of england. bank of england just moved away from releasing the rate decision. if you write down what we are expecting, no real change in interest rates. what we are expecting is a possible downgrade of the near term for the economy. tom keene will be all over this. more "bloomberg surveillance" ahead. this one simulcast on radio and tv. this is bloomberg. ♪

>> there will be the enthusiasm with many bubbles forming in markets. >> from the stability perspective it still is robust. >> the world doesn't shift just because you are buying shares online. >> markets are rewarding spaces with vaccinations. >> there are a lot of people who can't go back to work. >> the virus will dictate the shape of the recovery. >> this is "bloomberg surveillance." jonathan: this is "bloomberg surveillance." futures unchanged this thursday morning about 90 minutes time until jobless claims. tom keene, we have to startit