market tension turns to january's jobs numbers and signs of a healing labor market. janet yellen says market infrastructure was resilient during the gamestop frenzy. esther george tells bloomberg vigilance is key. and bitcoin struggles to extend its record-breaking rally. reddit favorite -- reddit favorites like gamestop -- good morning and welcome to "bloomberg surveillance." i'm francine lacqua in london, tom keene in new york. we had quite a lot of good news in terms of earnings. do you know that peloton is running out of bikes? tom: yes. francine: i know you and i don't use them, but they are popular. tom: no. this has been part of it. took one to capri but brought it back with him. this forward -- this ford motor

story, where they are running out of data conductors, is indicative of the witches ticks challenges of a recovering economy. you -- is indicative of the logistics challenges of recovering economy. francine: we look at what central banks do in europe after the warning from the bank of england about negative rates. let's get to bloomberg first word news in new york city with ritika gupta. ritika: good morning. a strong jobs report could doom president biden -- we get reports for january at 8:30 a.m. new york time. the president is facing pushback from republicans over the planned side. the government estimates payrolls rose by $105,000 last month. house has voted to strip marjorie taylor greene of her two committee seats. that is from raising conspiracy

theories and violence against democrats. earlier she said she disavowed her previous views. the u.k. will require travelers from coronavirus hotspots to quarantine starting february 15. arrivals from countries on the u.k. travel ban list will have to isolate for 10 days in government approved accommodations. authorities are sinking -- seeking bids from -- the national football league is hoping to avoid any large-scale outbreaks at the super bowl. attendance has been capped at 25,000, a record low for football's biggest event. the league has given tickets to 7500 vaccinated health care workers. global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries, i am ritika gupta. this is bloomberg. tom? tom: before we do the data, we need to put up a banner which says it all come and we forget

this, a very elegant chart. i don't have it in front of me right now, but i do have the statement that is a -- that it is a nine-year bull market. there is no other way to put it. all the analysis, all the gloom, there is shock of margin, the pandemic. it is a live -- a nine-year bull market. gina martin adams with us in a bit. futures up 14, dow futures up 112. 21.78 on the vix. with all the gamestop gyrations. and that oil, almost $60 a barrel on brent crude, 59.57, and the dollar but nevertheless stronger. francine: the bull market is looking at earnings, better than expected from yesterday in the u.s., no filtering through to europe. they are now looking at signs of a healing labor market.

a widely watched segment. i also put in crude oil for a good measure, advancing, old steady after thursday's decline. jobless clams are falling to the lowest level since november, topping confirmed cases signaling a turning point in the pandemic. this as the main event comes into focus. investors shifting their attention to the payrolls report, expecting the economy to add 100,000 jobs after a negative december print dampened recovery outlooks. paul donovan, thank you as always for joining us. are we optimistic about a recovery in jobs? we don't know whether the new vaccines work with the new strains, and we actually don't know what the rollout will look like going forward. paul: i think we can be fairly optimistic on the jobs report. with a couple of caveats. the cyclical improvement i think continues. remember, people were getting their stimulus checks in

january, and early in january. this money was being rolled out very quickly. you have given america -- you give an american $600, they will spend it. that has been happening. that has been supportive and should fill the labor market. there is a lot of structural labor -- shuttle change going on in the labor market. that will create unemployment, particular amongst mid skilled people. the second thing is we have had an absolute boom in business creation. i don't think the jobs report is going to pick up on that, so the jobs report intentionally is underestimating some of the improvements in the labor market because it doesn't recognize the astounding growth in business creation we have had in the united states over the last four or five months. francine: what does that mean for the price for a dollar? first of all, if we have inflation, and this was one of

the biggest things we were watching in terms of reflationary trade, is it we are not endangered danger that central banks will reverse from the monetary -- meaning markets will actually go down? paul: we are going to get inflation. over the next four or five months, we have two drivers of year on year inflation. the first is the oil price. we all remember the oil price was negative second quarter of last year. the base effect of that are going to come through. second, have a degree of inflation because we have got to re-wait indices. the cpi basket has not reflected the fact that everyone has changed their consumption pattern, so that is going to be a one-off technical adjustment. we have just seen that happen in germany. central banks know these are temporary factors, but i don't think they are going to worry about that, i don't think they are going to be changing the signals they are giving in terms of policy. we are, -- we are seeing these problems come through and supply

chains, absolutely, but that is about goods. we have got an enormous amount of spare capacity in the service sector. services are far more important to inflation, far more important to the economy than our goods. so what i have got there is more a relative price pressure rather than a generalized inflation pressure. tom: paul, tom keene in new york. wonderful to have you with us. i cannot say enough about mr. donovan's wonderful effort on profit and prejudice, a really important book. paul, you drag in the social construct with all the markets and economics that we see. you talk about the revolution that started. i want you to adapt the thesis of your book, the prejudices we have, the lou date nature of this 21st century, into getting the market call wrong. what are we risking their -- what are we risking there? paul: i think the risk is really

around the fact that if we see prejudice rising in a society, what that is going to do is undermine the ability of that economy and of course the companies in that economy, to use the new technology properly, to enhance profitability and enhance efficiency. the fourth industrial revolution, the structural change we are going through, has huge potential, huge potential to increase efficiency in terms of economic efficiency and environmental efficiency. if you have prejudice, we get that wrong and that will be a serious problem for investors. tom: this goes to chapter one of his wonderful book, folks. the importance of profit, our unimaginable understanding of the things that big tech comedies profit as well -- do we grossly underrate -- do we grossly underestimate the profits to come when we sit on

cash, worried about this wall or that wall? paul: i think there is the tendency to underestimate, but there was also the tendency to misdirect. the technology is the exciting, dramatic part of what is going on. it is shiny, new, and innovative, and, look, i have the native smartphone. economies don't care about that, and neither should the market. it is what you do with the technology that really is disruptive and really offers the potential in the economy. so here i am working from home, i am using a laptop which is three years old, a webcam which is two years old, i am hardly cutting edge technology. but the disruption of working from home rather than working in an office in london, changing demand, is a key thing. francine: paul, are you losing -- tom: paul, are you using the bloomberg terminal? paul: i am using it with everything. tom: that's all i wanted to

know. francine: is there a worry about displacing even more workers, and is that going to be -- how much of a drag is that on the economy? paul: every time we have structural upheaval in the economy, there is the fear that the machines are going to take over, the machines are going to steal our jobs, the robots are going to take over. the robots are not going to take over full-time jobs are going to change, about 10% to 15% of jobs are going to be lost, but we are going to create jobs that currently don't exist. a problem, of course, is that if you don't have flex ability in the workforce, and in particular if you have got prejudice which is preventing the right person getting the right job at the right time, then the people who have lost their jobs are not going to be able to find new work, and you will be shorted on

the other end of the economy, and that is an imbalance. that is what governments in particular have got to start focusing on. francine: thank you so much, paul donovan of ubs wealth management staying with us. we also have a conversation with the u.s. council of economics advisors member full of that is at 9:40 am in new york, 2:40 5 p.m. in london, and

>> i think it is true, of course, that when you have ultra easing financial conditions for a long period of time, you can create incentives, incentives to

reach the yield, it can called desk because some to miss price and markets. the real priority has been addressing this extraordinary shock, and right now it is far away from achieving its objectives. francine: esther george -- tom: esther george of kansas city, and the jackson hole meetings. certainly on the -- that was kathleen hays a bit ago. paul donovan with us of ubs. looking at the toolkit that president george has an the governor of the bank of england has as well. with the recovery, how restrictive, paul donovan, is the toolkit of our central banks? paul: i think part of the problem is this really isn't the central bank crisis. central banks are there to assist, absolutely, but this is

very, very much a fiscal policy situation. let's look at what happened. governments took money away from you. that is what they did. they said you cannot work, businesses, you have got to close. that is governments taking money away. it is down to governments to give that money back and to open up the economy when it is safe to do so. changing the cost of credit -- that is not going to make a difference here. in fact, with the -- with what we are seeing, the cost of credit may become less significant, at least for businesses, because there is net -- there is less need to invest now full tub with working from home, you do not need to build a new office building or a new store because you can buy online. governments giving back the income that effectively they have taken away from the economy. tom: can we impart fiscal good on the part of society that we

want to? 's fiscal policies such a blunt instrument it really doesn't get the job done? paul: i think fiscal policy can get the job done. there is always going to be a certain amount of error. centralized government, running something as complex as an economy, of course there is always going to be shouts of that is fraudulent, that person has gotten money they should not have gotten, that person is suffering and should have got money and has not been supported. that is likely to be magnified with social media. probably, i think governments can do the right thing. they can provide support to the people who need it, and they can make sure that once restrictions are lifted, the viable parts of the economy can get back as quickly as possible, and then what governments will do is look at the declining parts of the economy. the parts of the economy that have no future in the industrial revolution and try and mitigate

that damage and help the people involved. francine: paul, when you look at the wobble inactivity in china, does it spell trouble ahead for the rest of the world because we need china to be strong to try to get out of this economic slump? paul: to be honest, i'm not sure that china is going to play a very big role in driving the european economy or driving the u.s. economy. it simply does not buy enough from europe and the united states for its own consumption to make much of a difference. it makes a difference to the global growth aggregate, but that is just a meaningless number. nobody cares what the global growth aggregate is. it is going to drive europe and the united states, it is going to matter to europe and u.s. citizens. china is important because in some regards it is a signal of what is happening elsewhere as well. if we start to see chinese exports falter, for example, that is a signal of a decline in demand for growth that is important to investors,

important to the health of the rest of the world, but i'm not looking for china to pull up european growth or pull-up u.s. growth. i don't think that is particularly likely. francine: what are your spec and from joe biden in terms of stimulus? will the u.s. fare much better than europe in the next 12 months? paul: a lot of u.s. stimulus, remember, is a game of catch up because a lot of u.s. stimulus is not stimulus at all, it is an antidepressant rather than a stimulus. over the course of the later stages of president trump's administration and now president biden's administration, what we have been seeing is a scramble to sort of build the welfare state that europe has already got. a lot of what we have been saying, the unemployment benefits, the classic example, this is just a transfer payment. that is not a stimulus as such, that is preventing things getting worse rather than pushing things up.

so what we really need to see with this next package is what is the breakdown between the antidepressant policies versus the viagra stimulus policies? that is the balance that we need to see. our qatar looking for a stimulus. they are not pricing in downside risk, they want to see the stimulus coming through. tom: one final question -- it is an unfair question, but it is unfair friday. what is the timeline we need to frame when central banks will begin to act? is it a 2021 timeline? are you like a druggie of old, with 2022 or 2023, -- a draghi of old, with 2022 or 2023, or is it up to 2024. paul: i think we will be talking about a quantitative policy on

the second half of this year. i think there will be a more intense discussion about scaling back quantitative policy in the second half of this year, and then it happens right at the end of this year or maybe the start of next year. if the economy is recovering, you don't need the quantitative policies that you have of today. tom: paul donovan, thank you so much, and, folks, a rave review for his book. a thoughtful review. he is of course with ubs. it is jobs day. we will go beneath the headline day to day. kevin cirilli is the best guest of the day. kevin cirilli, bloomberg radio. the gentleman giving the advice to the president of the united states, jared bernstein of the council. this is bloomberg. good morning. ♪

ritika: this is bloomberg surveillance. it is the biggest internet ipo since uber went public in 2019, shares of cash of technology rose 161% and there hong kong debut. the company operates one of china's most popular video services. it brought in $5.4 billion in the ipo, attracting hundreds of billions of dollars.

a speculation that apple is seeking to develop its own electric car. kia motors is talking to potential partners about a plan to assemble an apple designed car. japan's nikkei newspaper says apple is in talks with six automakers. shares of gamestop resumed falling. the videogame retailer fell 42% yesterday, pushing its collapsed -- it's collapse past 80% this week. retail users are using twitter and read it to communicate, now moving onto other sectors of the stock market such as small drug developers. that is your bloomberg business flash. francine? francine: thank you so much. this is the picture for the market. again, tom, we are in a risk to these record highs, the overall context. we talk about up and down, but the overall trend is actually bull, bull, bull. european stocks declining today on the back of wall street, higher.

there are signs of a healing labor economy, labor market. we will see if the u.s. jobs data market supports that. crude oil advancing, gold steady. tom: brent crude right up against 60, that gets my attention. 59.47. euro-dollar now 1.19 76. it is jobs day. we have a wonderful lineup to give you the perspective you need for this friday. we are weakened reading, and quite frankly, the stagger tomorrow. can you believe we are already talking about more? we will march to jobs they with ellen zentner of morgan stanley. this is bloomberg. good morning. ♪

tom: "bloomberg surveillance" on a jobs day. good economics coming up.

a lot of other stories we will drive forward to an update on italy. francine's interviews with prime ministers. we have another prime minister? francine: i could not find a fourth one for now. tom: we will drive forward the conversation on italy in a bit. markets right -- marcus joins us right now. i did a financing movie -- fancy moving average study. we are in a nine year bull market. why is that? marcus: it is because the world is a beautiful place, or is it because the fed and central banks pumped stimulus in ad nausea him? -- ad nausim? you know more is coming, certainly another trillion will be coming in, probably close to $8 trillion on the balance sheet and we know the same is

happening in the rest of europe and the u.k.. more stimulus, infinite money against finite assets equals rising markets. tom: we see it in earnings and revenue. from where you said, does it surprise you that we get a revenue build as well as earnings? marcus: you look at the default rates, bankruptcies are falling. we have had this huge arms around from governments and fiscal policy which is not really properly kicked into life. we have more to come, we hope from the u.s., we shortly do not need -- certainly do not need -- do need a doubling in europe, and there is more to come from elsewhere. there is that feeling that corporates have done pretty well in difficult times. they have been supported and nurtured and we are expecting savings to build up and more

consumer driven sentiment with retail sales to come in the second and third quarter. francine: what does that do to inflation? marcus: i do not think it does a huge amount. the generic problems is globalization, technology, and a raft of different improvements. i think it is still much bigger short-term outside influence driven inflation, which is cost push, which central banks have done enough research -- look what happened in european inflation. very strong and everyone is looking through it. it is just basis express -- effects of vat sales tax and a lack of discounting because they were not sales to go to because it is causing a big boost in inflation but it is correcting. it will come out of the system in three months time. francine: is there something we

are underestimating the danger of? we do not know with the vaccines really work against the variants, some countries are slow and the rollouts and we do not how many will be produced and how many companies that we will be left with, and yet we see record highs for equities. marcus: i started working in 1987, in a very scary like cassandra column worrying that the fed will own this huge expansive stimulus and they will not be able to prop the markets up and it will come crashing down. at the moment, it is not quite yet. the moment we get real evidence of this, the combination of central banks with government fiscal policy means that the markets are set fair. i remain bullish but nervous that we are at some point going to have to pay the price, but i hope not for another year or

two. tom: february, i am hesitant to introduce my chart of the year. i do this for the movie of "te e dig" in the digging up of sutto n hoo. the worst moment in the western world, which was the guadalcanal lull, and it has been a mother of a bull market and that is what gamestop and other shorters are fighting. when you have the mother of all bull markets for almost a century, it is tough to make money shorting, isn't it. marcus: it is, but some of these people up until recently were skilled at it, and it is a skill set that is required to keep that disinfectant going through the markets to make sure that there is not outright belief that everything will blow up, because that is what has grabbed

the redditers and they have had fun while it lasted. i hope everyone will be a little bit wiser, but we will at least believe that short sending has a function, becauhat is something you must keep innd. tom: the optimism of the chart against going into cash and staying in cash. market that -- marcus ashworth with his wisdom. futures up 16 on this job stay with the first word news is ritika. ritika: today's job report is an important one. the economy added 105,000 jobs in january, but if the number is more than that, it could doom the stimulus package. he is already facing pushback from republicans who think the proposal is too expensive. janet yellen found that the

commodity markets remained resilient during the trading volatility after she met with the government's financial regulators and she called them meeting after certain -- called the meeting after surges and game stock and smaller retail investors. donald trump has received a surprise call for him to testify at his impeachment trial. house impeachment managers issued the request but the former president called it a public relations stunt and repeated the claim that the impeachment trial is unconstitutional. angela merkel warns that it is too early to ease the lockdown in europe's biggest a four -- economy. the pandemic is starting to show signs of slowing down. she wants the economy to reopen without having to close it soon. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. tom: thank you so much.

they call it continuing debate, you call it in college, pulling and all-nighter. it is the set on the senate with the gentleman of new york speaking with a triumph of adopting a bunch of measures to fast-track the budget -- the biden stimulus plan. vice president harris with her key vote. stay with us, let us listen. >> hopefully, put it on the president's desk. a month ago today, two senators from georgia, two democratic senators were elected. a month from that day we have taken a giant stapp -- giant step to fulfill our promise to the american people, the democratic senate and the democratic house, and president biden will have their back, and move them forward during this crisis. so, mr. president, i ask

tom: "bloomberg surveillance." and all-nighter for the survey -- for the senate of the united states. no tie-breaking votes in the senate, and that was the count at the time and we saw the first tie-breaking vote of the vice president of america, and the u.s. senate. the president of the u.s. senate. this is moving the budget forward for democrats in washington. a historic first moment. futures advance of the news up 17. francine: it feels like an e.u. summit. it is 15 hours waiting through amendments and vice president harris passing the tie-breaking

vote with the gop opposed. democrats face down taxes going down an abortion going forward. there is a bit of political turmoil in italy. mario draghi meeting with a number of political experts at the moment to try and figure out what he does in terms of his government, whether he goes 100% technocratic where he wants to trying get off a little bit of political support. the outgoing premier signaled his lukewarm support for a draghi led government calling for one of a political government instead of one of technocrats. we spoke to a number of prime ministers to understand the challenges going forward. i am delighted to be joined by a -- the global head of economics and capital markets but also at the italian treasury, so he understands the money aspect that italy has to deal with.

thank you for joining us, how crucial is it that we have some kind of legitimacy with politicians in this new government. is it a good idea, or does it mean it is more difficult to take the structural reforms needed? >> thank you for inviting me. i think what is important is that the new executive will have a majority government and a majority that will make things possible, then it will be up to the leadership to decide with the parties whether people have ministers from the political branch or not. i think what is important in this moment is that these new possibilities, the fact that we

have draghi as a possible next prime minister which is a big change and is different from the previous guy is minimalized by the political system. we are not yet at their. mr. draghi is doing a lot with the parties and there might be a second round early next week, but the public opinions is definitely in all of the projects and the president is in full support. as i said, you need a bit of that to mature. francine: for many years you were working at the treasury. you understand how much italy has and how much it has to spend. if mario draghi cannot put together a parliamentary government or get the support of

parliament, what happens to italy? fabrizio: well i think the financial markets would be brutal. at the same time, they, a perspective of a government that is generally permitted structural reform to bring back -- to solve the knots that the growth of italy has been stumbling on. tom: how does italy on a generational basis get to a better domestic government? how do they do that with a shift from the habits of the old to whatever the new will be? fabrizio: i think there is a lot of translation in the new

generation. you are right. and you see that also in the rate of people leaving italy. we are not having enough new people or skills to profit from the growth. only a new perspective, a really change of page is what mr. draghi can ensure can really end this frustration. the reforms which will help the young people find the right jobs, you need a skip -- a strategy. italy is a country that has the most problem in trade across the european union. francine: why do markets think

that mario draghi can be any better at this? italian politics have a single peculiarity, getting people who are well respected and international institutions and turning them on popular, and tying their hands. fabrizio: i think the situation is different. at that time italy was in dire fiscal moments. there was a need for a very severe fiscal initiative. that is not the case right now. at the time, also the international level was different. today, we are seeing an expansion across europe and across the unity. we saw the potential biden package. a new executive can really do

the reform that is necessary. that is also what the european union is asking, and why it is providing -- and the reason why it is providing the resources and recovery. francine: thank you so much as always for your insights. coming up next, it will be a high frequency economics -- economist to talk about jobs in the stimulus bill. this is bloomberg. ♪

tom: good morning. "bloomberg surveillance." futures with a nice lift up 18, the senate moving forward and the democratic legislation off the tie-breaking vote. he is in high frequency economics. and, you wrote a really nice short on american productivity. we are going into jobs day and everything has been turned upside down by they pandemic.

with the new technology and things we are learning within this pandemic, will it help and benefit our productivity, or is there a long structural harm? >> good morning, thank you for having me. i think there are a lot of issues going on with the pandemic that are going to change the way the economy operates, and it will have implications for productivity. i do think the structural issues are in play, but in the short term, i think there is a lot of noise, and i also think that company operations have changed in terms of accelerating. the pandemic has accelerated towards automation and the adoption of new technology and that should have implications for productivity, but it is unclear how this will pan out. tom: if we get a stimulus bill, if the democrats reconcile through to a second

infrastructure bill, are we drowning in a government impulse, is it almost too much money six months or six years down the road? >> i think the need is critical, and it is the right thing to do in the biden administration is clear that they would like to do more. i do think that there is a need for people who are out of jobs right now, they need income support and businesses need help. how much morning we need to do is debate -- how much more we need to do is debatable. i think sending out a lot of support to households that have not been impacted by job loss, maybe it is misdirected. we do seem to be heading that way, there is no choice out of the options available. this is the better choice to do more. francine: what kind of jobs are we creating, is it quality jobs?

the job market could be getting better, but if it is about creating 2 million more uber drivers or amazon deliveries, it is not what people will want going forward. >> i think that is what the focus should be on on any infrastructure package that comes through. if the pandemic has taught us anything, it is the fact that there were a lot of low productivity jobs that were lost during the last year. and, companies have switched to new technologies and become more efficient as a result. so, we need to focus on retraining and programs that will bring back jobs that are not low product to be -- low productivity. francine: will the biden administration focus on that? >> they will focus on it, but

right now they seem to be focused passing the 1.9 trillion dollar stimulus package. we have very little details on what else might be in there, what it is certainly the hope that we bring back as many people. that has been the fed's focus. that we bring back as many people as we can. that does not mean low income jobs will come back, but not all of them will, and there is a need to get everybody back into the living market, or as many people as we can. tom: what are wages doing? >> the numbers are being distorted by what is happening with low income job loss, so we are we are getting a clear idea what is happening with wages, but we will see that once we open the service sector back open and a lot of these low income jobs come back, we will see wages dimension -- diminish. tom: we are almost out of time

and this is important, are we going to get a fully employed economy as john writes in the " wall street journal." are we going to get a fully floyd economy like -- with next to no wage growth like before? >> that is possible, just given the dynamics on the labor market , and what we have seen in the past year, because that is what we see with full employment with no wage growth. tom: do not be a stranger. she was here on jobs and productivity which we do not talk enough about. futures up 17. francine is in charge of record highs. we are in the vicinity of that. the vix says 19 or 18 and we are only on 21.75 and i will blame it on gamestop. francine: i was looking at what was happening in the senate. maybe if you look at that that gives us a good indication of

what the market is focusing on. the senate voted 50 1-50 after the vice president broke her first tie following 15 hours of waiting for amendments on both parties and we now have a blueprint for this major stimulus. tom: i am calculating that that trait i did on gamestop, it is literally off the bloomberg terminal chart. i cannot calculate how much i have lost. francine: a big red it user with his -- read it user. tom: on jobs, what a lineup. james glassman and eleanor with us. this is bloomberg. ♪

tom: this morning, stock futures

advance and advance again on better news. brent-- crude under 60 a barrel. president biden once in america of "full employment" but yellen found slack in the economy. she finds slack in this pandemic economy, we will go with that headline data at 8:38 september 11, 2001 absolutely happened, and still a first-term congresswoman is topped off budget and education. an all-nighter on the senate floor. coffee was served and they are going home in the early morning of washington. the democrats move ahead on stimulus. bloomberg surveillance from london and new york. the news flows were extraordinary. we are not talking -- it is a votes of rama --