francine: janet says the u.s. needs big stimulus to get the economy back on track quickly. larry summers publicly disagrees. and astrazeneca vaccine is being developed. this after early data suggests limited efficacy against the south african covid variant. ecb president christine lagarde hints at a soft exit from stimulus once a recovery takes hold. the morning, everyone and welcome to "bloomberg

surveillance." i'm francine lacqua in london. let's check on the markets. that is where the action is in the reflation trade after we heard from janet yellen about what they are expecting from inflation and what we are hoping to see in terms of stimulus. the reflation trade continuing, global stocks hitting another record, brent oil topping $60. vaccine developers are working on a new shot to fight the south african variant of coronavirus. early data suggests the vaccine from astrazeneca and oxford has limited impact on mild disease caused by the mutation. a professor says the new shot should be ready by autumn. joining us, the director of research from bloomberg intelligence. great to speak with you. what can you tell us about the south africa variant? astrazeneca saying they need a new vaccine. every time we have a new

mutation, is that what we are going to see? >> the answer to your last question is we don't know, we have to wait to find out and that south africa variant is not one mutation. it is several mutations so we know the one they found in the u.k. doesn't impact the efficacy as much so it is possible future mutations when they combined together are going to evade some of the effect of the vaccines so the answer to that is yes, it is possible and in regards to your first question about losing efficacy, we have to be careful here. this was a small trial. 42 cases in total. as you rightly said, two thirds of the patients had a mild disease and in that setting, the vaccine wasn't able to prevent mild disease but i am going to go on record and say i suspect all the vaccines will be in the

same ballpark with regards to their potential for preventing mild disease. how much do we care about that? that's what we need to figure out. francine: are you worried this could be a massive setback? vas: -- sam: if the general aim of vaccination is to slow down or prevent severe disease, hospitalization, and death, that seems to still be significantly possible with the vaccines we have and i suspect it will also be shown with the astrazeneca vaccine when the study is done. to what degree and between the vaccines, time will tell. if that is the name, which i think the majority of the current aim is that, if we want to continue to annihilate any disease in response to -- the virus, we will need the next variation developed, assuming it works. francine: a lot of ifs, but we

will get back through the day for more of an update with sam fazeli. let's get to our exclusive interview and full near net income, excluding an acquisition, three point 2 billion euros in line with estimates and above company targets. now, the biggest bank is working on integrating while expanding lucrative businesses ensuring -- including insurance and asset management. we are joined by the chief executive. congratulations on your results and there is hsbc saying you are their favorite bank in italy given the political stability they are expecting. are you expecting from a draghi government? doesn't make your job easier if politics are stable? >> good morning, francine. the government can accelerate

growth for our country and reforms cap sustainability for the future, growth in the country can lead to 50 basis points in line with forecasts, this could be positive for the banking sector but also for all of europe. francine: what does it mean of the appetite to grow? does it make it easier to do an international acquisition if there is stable politics in italy? carlo: we grew by 12 million euros, the total amount -- leading us to 3.7% so probably now we are looking at common equity profitably as the strongest bank in europe. ubi could be 1,000,000,030 year

but to deliver, you need synergies because the move was perfect because it was at a lower rate and with possibility to increase synergies. if you don't have this possibility, it is difficult to make acquisitions. so the point is -- francine: does italy need a bad bank? carlo: i think that is only needs to have an acceleration in terms of growth in the country because that is something that is not the right solution to such a situation. we need to have good management in the banking sector and we need absolutely to have the right focus on recovery, so i

don't think a bad a bank would be the deaf -- solution. it is all a matter of price. if an italian bank can give very favorable prices, it could be a good solution. otherwise, if the price is the same as private equity, it is not the best solution. francine: what exactly are you expecting from mario draghi now? what does his priority need to be to get the economy back on track? carlo: i think in italy, we are a strong country. we have several conversations. italy is by definition today the strongest country to look at these companies. if you look at the savings of an

entire family, fundamentals are very strong. what we need is growth in terms of gdp, so an acceleration in terms of growth. we need to fund the next generation and acceleration in terms of gdp to reform. on the other site, the most important part of this job would be to look at growth because the countries in europe and the world, you have a number of working that are going into poverty and it is fundamental to work to avoid in order to avoid social problems and i think this would be a priority. in the next year, sustainability of debt because all these

actions in the future, you have to maintain at this point but today, priority is increasing with this focus. francine: carlo messina, when you look at the myriad of debt laden companies, how do they get out of the crisis? carlo: it is the impact on the entire economy from these prices. you have a problematic situation in a sector that is affected by reduction in consumption. i'm talking about leisure, cultural activities. other parts of the economy, the production are delivering a good result. if you look at the amount of deposits in the banking sector, both from families but also from companies so they are getting

money with a state guarantee but they are depositing into the bank sector so there is only a matter of uncertainty. as soon as we have a government and plan for investment into the country, there could be a rebound and it will move through to the real economy. i'm not worried at all for the situation. also, if you look at our moratorium, only 1% -- there is a situation we need to move into a growth approach in the country, but if it is the situation, it will move into the real economy -- economy and it will be the engine for growth. i'm not worried about the situation. francine: you don't think there

is need for equity injection? it will work itself out? carlo: there could be in some sectors, leisure, tourism, restaurants, hotels. these areas can have something special, but on average, i don't think this would be the solution today. only a limited portion of italian companies need some form of structural support. they need now to have something that can bring them out of the situation but within six months, i think the situation will be completely different, so for limited sectors, this would be a solution but in my view, hardly the solution for all sectors in italy. francine: carlo messina of intesa sanpaolo stays with us. we will talk more about carlo:

and -- about intesa sanpaolo and plans for the banking sector. what does 2021 hold for the global advertising industry? later, we will speak to one of the sectors best known players at 9:30 a.m. london time. we will catch up on the super bowl ads. this is bloomberg. ♪

francine: economics, policy, finance. this is "bloomberg surveillance ." i'm francine lacqua in london. still with us is carlo messina, intesa sanpaolo chief executive. thank you for staying with us. we were having a spirited conversation about italian politics and for the moment,

things look more stable. you were explaining some of the things you think mario draghi can put in place now. what does it mean for intesa? you were wanting to get to 5 billion euros for 2022. is there possibility that because of the stability, you surpassed that? carlo: that is something that can allow us to accelerate growth. consider we have 1.2 trillion euros of wealth from the entirely and -- italian services and it is my view you could move a lot of deposits from italian into asset management and insurance products so for us, we would be very positive on the commission side and on the others, you can add improvement in asset quality because better

results and inflows from performing loans into nonperforming loans could be positive and a reduction would also be on the cost of equity so you have a positive attention from international investors. it would be a net positive at this point. francine: how are we going to reach the 5 billion right now? carlo: consider the reduction of 50 billion euros in nonperforming loans we realized in 2020 last quarter, reduction of position with -- would be much safer in the coming years and we decided to allocate in 2020, remember we decided to

allocate 6 billion euros of gross income for future sustainability this quarter and 2 billion were related to charges that would allow us to reduce by 7200 people and bring a massive reduction of cost. wealth management, growth, strong cost-reduction, reduction of people, and reduction of provisions, reduction of nonperforming loans, our net income will increase significantly, maintaining its strong, and allowing us to pay -- it is our priority to maintain strong equity, very low

risk profile. francine: is there a part of europe where you would consider a wealth management acquisition and is there a specific country you would be looking at? carlo: wealth management is the area in which we have a lot of potential in italy, in our country, we have 1.2 trillion euros of wealth we can manage for italian families. other areas in europe, a lot of italians can be served by intesa sanpaolo also in private banking. switzerland is one of these areas. a possible acquisition would move more into something, private banking.

the acquisition of a wealth management company is to justify synergies. the move has been more focused on making an acquisition of teams that are boutique. francine: i also want to ask about unicredit because there is a management reshuffle. are you expecting the strategy to change and what would it mean for intesa if unicredit were to buy monte dei paschi? carlo: it is a completely different business model in comparison with intesa sanpaolo. it is not only a matter of management team, but business model. we are a wealth management and protection company. a significant number of factories, we own 100%. unicredit is more pan-european a bank. it is difficult to change the

business model of the company. if they make the acquisition, they can increase managing in the country, but the problem of the integration of a significant player in the country. in the medium-term, they increase the ability of unicredit to play a role in the country but in the short term, a merger with the monte dei paschi. that is what i think. i'm not sure they would move to make the acquisition on monte dei paschi. francine: carlo messina, do you

see given where we are with the vaccine and the rollout and things may be looking a little better in the summer, do you see cross-border consolidation in europe for banks? carlo: that's a good point because it is clear that now, it is the time at which europe needs to compete with the usa and china and also the possible appointment of mr. draghi, italy can be positive for all of europe because europe cannot compete with the usa and china without a very strong italy, but looking at -- if you want to play a role, if you needs to have cross-border consolidation, the real point is the majority of the information, the banking sector is institutional investors.

you can create two synergies so the real point is it is possible to have synergies in cross-border consolidation. a number of players can have synergies. another player can deliver synergy in such an amount to accept the merger. next year, there could be a round of cross-border consolidation but synergies, in any case, is rather possible cross-border. francine: carlo messina, the chief executive of intesa sanpaolo joining us in an exclusive conversation. janet yellen pushes biden's relief bill as she hits back at her predecessor larry summers over the risk of the massive aid plan. more on that story later this hour. this is bloomberg. ♪ want to save hundreds on your wireless bill?

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francine: economics, policy, finance. this is "bloomberg surveillance ." i'm francine lacqua in london. we have a good show coming up. we will be talking about 2021, what it holds for the global advertising industry. we will speak to martin sorrell. we will talk super bowl ads next. this is bloomberg. ♪

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

let's get straight to the bloomberg first word news with leigh-ann gerrans. leigh-ann: oxford university and astrazeneca are developing a new vaccine to tackle the south african variant of coronavirus. it comes after early data shows the jab has limited effectiveness against cases caused by the mutation. the scientists leaving the program says it is likely the new vaccine will be available by autumn. myanmar has seen its biggest antigovernment demonstrations in over a decade as people demand the release of aung san suu kyi and other civilian leaders. the army shut down the internet. according to a controversial assessment from the u.k. foreign office, you -- the queue is irreversible and enter reaction be on is unlikely. one of the biggest sports of the , the super bowl, the tampa bay buccaneers beat the kansas

city chiefs by 31-9. it is tom brady's up when and his first without the new england patriots. 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'm leigh-ann gerrans. this is bloomberg. francine? francine: let's stay with that story. go box is what i was taught on bloomberg surveillance. i think tom keene is a big fan. we need to focus on the future of advertising. this year's super bowl advertisements went heavy on the stage, largely avoiding the issues of today in favor of movies, songs, and characters. $5.5 million for each 32nd tv spot with cbs saying it virtually sold out. how much is it shipping out for the advertising industry? joining us is martin sorrels, the founder of wpp.

thank you for joining us. when you look at the super bowl, they were nostalgic but also a bit punchy when it came to politics, certainly when you have the four season landscaping and things like that. how has advertising changed in the pandemic? martin: it has certainly become more responsible, more purpose driven. some would say some of it is greenwashing or virtue signaling come as they say, but basically it has become it has -- it has become relevant to the times. our industry has traditionally said in times of crisis spend, spend, spend, which is the wrong strategy. we went into the pandemic you're so ago when companies did not have distribution. you saw -- a year or so ago when companies did not have distribution. there was a corporate ad where we saw bud light, we saw

michelob, we saw ads from the traditional sectors, but we saw many more check ads. we saw reddit, we saw a robinhood, we saw amazon. uber eats. we saw things that were much more relevant to consumers at this particular time, and they were more focused on the more long-term, stakeholder driven, which was the focus that many of our clients have. there was a great sports story, tom brady, and me as i face my 76th birthday, he faces his 43rd birthday. i think it was the oldest winning coach and and -- in super bowl history at 68. i was hoping he was going to win. francine: he really captured the imagination. martin: absolutely. as far as the general industry

is concerned, it was also indicating the shift that we are seeing towards -- despite the fact that the super bowl is probably the pinnacle of western television advertising and tv commercials, at the same time you can see the influence of the rise of digital, which last year for the first time, as you know, cost 50% of spend a, $550 billion last year. francine: what is the next frontier? his clubhouse the new thing? will he replace twitter and willie replace instagram? martin: it is an alternative platform. you have to remember, francine, the domination of the big platforms. digital advertising is around $250 billion, $275 billion this year, may be little bit more,

$280 billion. google will be around 180 billion dollars, facebook will be around $85 million, snape had good numbers, up 60% a quarter. -- snap had a good number, up 60% a quarter. it is very interesting in terms of new concept and clearly it is gaining audience and share. the relative snap interests, twitter, clubhouse are relatively small in relation -- snap, pinterest, twitter, clubhouse are relatively small in relation to the big three. you see tiktok is making waves now, or trying to make waves internationally. we saw the alternative to tiktok's loaded on the hong kong stock exchange. francine: talking about getting

bigger, how big do you want as for capital to be a cow how many -- how big do you want as for capital to be? martin: we are grading organically. we had a very strong fourth quarter, which you will see on march 18, with our digital media business and data business strengthening as we went into the fourth quarter, to align more with the growth rates we have seen in content. we are committed to grow the business doubled its size over the next four years, which implies a 24% topline growth rate, but this year it is focusing around 25%, and that was before the addition of the big accounts we won last year, and so we probably have to upgrade the budget as we go into the first or through the first

-- francine: what about m&a? martin: m&a, we started off with a bang in 2021. we got five transitions -- transactions within the first month. we have added 25% of our size, so in terms of organic growth, we are going -- the market up 20%, we would expect to be around 25% to 30%. that is where we would like to be organically, just in line with our job to -- with our objective to double over three years. with our acquisition, the merger, we call it, every time we do one of these things, we are looking to people who want to buy into our philosophy, do not want to sell out. they can sell out to accenture or our competitors with private equity. we are looking for people who want to create a new age, new era, digital-based model.

i would say deals will probably be equal in terms of impact on growth. we would like to be even stephen between the two. francine: you mentioned private equity. willow bay holding companies remain public, or one b -- will the big holding company's remain public, or will they be taken out? martin: i think probably technically they said discussions were not ongoing at the time of the journalist's question, or the analyst's question. i think private equity, we are focused on value, particularly as we entered her came to the end of 2020 and into 2021. private equity casts its eye over all sectors. we see in the digital sector a lot of competition with private equity, driving the price of

assets, not so much the holding companies competing with us on deals, they are out of the market and they may come back at some point in time. accenture has been less active more recently. it is private equity and more money, driving probably around $3 trillion. i thought the figure was more like $1 trillion, but i saw an article in the fp, actually, saying the continuation funds and private equities are about $3 trillion, so there is an enormous base there. in the performance media space, one of the transactions was at 18 times. francine: i also want to ask you about brexit. you said in the past that if the u.k. becomes, or london becomes like a singapore, this would be

encouraging news. what do you see in terms of regulation? what is needed now? martin: we don't need it. the less the better. over the weekend we saw these articles about taxing the tech giants, totally the wrong thing to do. if the u.k. is going to transition from through brexit, globalization, deal with client change, deal with covid, deal with all the things we have to deal with, the less thing we need is more regulation. we need stimulation, not regulation. we need encouragement, not restriction. some of the stuff coming out in relation to rules, i can understand that with only four big audiences, there is need to tighten up and there have been major issues with companies. having said that, the last thing we need is a more burdensome -- look what the impact recently that brexit has had on imports

come on exports. we saw the figures over the weekend. we saw what is happening in ireland. we saw slow delivery times, a lot of increased bureaucracy. at this time, a time of great change, dealing with globalization, dealing with climate change, dealing with covid, dealing with brexit, all of these things that are putting enormous pressure on companies, and they have to shift their trading habits. take as for. -- take s4. we have to shift increasingly come out trading pattern, 40% in the americas, she will still be very strong. 40% in asia-pacific, dominated by china and india. these are the markets that we have to shift our pattern two, and the more restriction, the more regulation we have, and the other thing we have to do is we have to retrain, reskill, given the impact of globalization,

digitalization on businesses, and shift the pattern economy. so the less interference, francine, the better. francine: thank you so much, martin sorrel, founder of s4 capital. coming, janet yellen pushes biden's relief bill come as she hits back over her predecessor, larry summers' criticism. that is next and this is bloomberg. ♪

francine: economics, finance, politics. this is "bloomberg surveillance." i'm francine lacqua, here in london. let's get to the bloomberg business with leigh-ann gerrans. leigh-ann: france's finance ministers says annie -- by the

earlier must be friendly. it follows the decision that the firm has to suspend the hostile takeover attempt of its rivals. it made an offer directly to shareholders after being rebuffed by the company's management. suez argues the offer is illegal. investing giant rene sung technology has been hit with at least $5 billion in redemption. last year's unprecedented market swings tripped up many managers with rene france's public funds posting the worst ever returns. $1.9 billion in december and january and are set to yank and nearly $1.7 billion this month. and rene sachs of japan has agreed to buy apple supplier dialogue semi-. the latest u.k. chipmaker being sold to an asian investor. dialogue is valued by -- at

about 4.9 billion euros, 20% premium to friday's close. headquartered near london, the ship from has risen about 25% so far this year. that is your bloomberg business flash. francine? francine: larry summers's warning about the risks of the biden administration's massive $1.9 trillion to ms. plan. he said the spending could set off inflationary pressures that we have not seen in a generation. he also agrees the risk of doing too little outweigh the risks of doing too much. janet yellen took to the sunday shows in the u.s. to reiterate the need for stimulus. ms. yellin: i'm afraid the job market is stalling. we saw that in friday's employment report. we are in a deep hole with respect to the job market and a long way to dig out. francine: joining us is our executive editor from bloomberg economics. there was a huge risk of

sparring between janet yellen and larry summers about the u.s. economy overheating. where where are we -- where are we on that debate? >> it is certainly a hot debate, one that has been kicked off in recent weeks with commentary on bloomberg and elsewhere. there is a huge amount of money we are looking to put into an economy that is already starting to grow, but doing so creates the risk of inflation down the road. also, both yellen and some of the democrats, there is the potential for other policy proposals down the road. francine: they don't disagree that the u.s. needs additional help. is larry summers advocating a more targeted kind of relief? simon: i think it is the quantity of health and howis directed, and janet ye made thee

has spent her career worrying about inflation, but there are those that she left behind in the federal reserve to manage inflation, echoing what we are already hearing from the president on down with his administration, this concern about employment holding in the labor market, and we saw that report on friday. beyond 10 million or so people out of work compared to a year ago. but that is a concern, rather than getting -- rather than going too small. the charge against the obama administration is that they went too small less time, when larry summers was involved. francine: what does it mean for the fed? is there a danger, a possibility that inflation goes above 2% quite quickly? simon: i would think the fed would be quite happy about inflation above 2%.

they have been trying to get it up there for quite a long time. the argument is that central banks know how to handle inflation a lot more than they know how to handle deflation. jay powell thinks that the government should be providing fiscal support, taking the pressure off them. at the same time, there is no sign within the fed at the moment that they are looking to pull back on their monetary stimulus. so for the fed it is steady as it goes, with a bit of support for the government. francine: what are you looking at in terms of signs that the economy is picking up? in all of the interviews on sunday, janet yellen talking about the labor market, that seems to be her only focus right now. simon: obviously that is a key focus, one that joe biden talked about coming in as president. elsewhere you are starting to see pickups in data and company

data, so hopefully the economy is picking up steam. again, given the year we have just had, in 2021, it can be reined in judiciously, that is probably a better option than an economy that is still in trouble. you have to remember there is that big urge that president trump sign that is on track. debate over how much that the risk of doing too much and pulling back later doing too little. francine: simon kennedy, executive editor from bloomberg economics. coming up, extending the winning streak. european bank shares gained for five straight days the longest rally of more than a year, boosted by post-earnings gains. that is in store this week, or what is in store, as earnings season continues this week. we will take a look next in your week ahead with more on the

markets. this is bloomberg. ♪

francine: economics, finance, politics. this is "bloomberg surveillance." i'm francine lacqua, here in london. now let's turn to cryptocurrencies and get the latest. bitcoin is trading around $39,000. paring some of its gains after hitting the $40,000 mark over the weekend. with all the volatility, there is plenty of uncertainty over where bitcoin could be headed next. >> a decade ago, less than a cent. now millions of times higher. what about bitcoin's future? >> our fundamental work shows that bitcoin should be worth around $400,000. >> it doesn't add any value. >> people in the know doesn't seem to know where it is heading next. once the area of nerds, -- today it is drawing millions from hedge funds and wall street

giants. bitcoin is not the only crypto game in town, but it is the biggest and the best known. bitcoin's first mega run was in 2017, rising from under $1000 to almost 20,000, then it fell off a cliff. mostly retail traders back then, as many in finance would not trade bitcoin in a hazmat suit. >> we retrading bitcoin for two reasons. -- it is against our rules and it is stupid. >> but today it is gaining respectability. j.p.morgan thinks it will hit six digits. but the most famous cryptocurrency still has detractors. >> john maynard keynes says the market remains illogical and now bitcoin seems utterly illogical. >> the question is, will bitcoin continue to shoot for the heavens or come crashing back down to earth? francine: we will of course have

plenty more on the future of bitcoin throughout the day. european banking earnings season is ramping up this week. wednesday we hear from societe generale and abn amro. friday, watch out for dutch letter ing. -- dutch lender ing. we will have plenty of earnings that we get our teeth into, looking at ratios and possible cross-border consolidation. bloomberg continues into the next hour. we will talk about the reflation trade. we are close to record highs. we keep touching record highs, so we will ask what next. tom keene joins me out of new york. this is bloomberg. ♪

francine: janet yellen says the u.s. needs big stimulus to get the economy back on track quickly. larry summers publicly disagrees. a new astrazeneca vaccine is being developed, this after early data suggests the product has limited efficacy against the south african covid variant. and ecb president christine lagarde hints at a soft exit from stimulus once a recovery takes hold. good morning and welcome to "bloomberg surveillance." i'm francine lacqua in london, tom keene in new york. come -- tom, are you ok? are you thinking about the reflation trade and how you can trade it in the second week in february? there is a lot going on? we look at covid-19, vaccines, astrazeneca, and what janet yellen said about the labor market. tom: i am trying to figure out who choreographed the weekend at the super bowl. i thought the choreography was just stunning, a triumph. we are getting over the super