francine: joe biden holds his first call with president xi, as u.s. president. president xi raises concerns over unfair economic practices. u.s. inflation adds to the debate over price pressures. jay powell calls for a push for jobs. and the eu rebuffs the u.k.'s calls to push the brexit, and says they need to honor what they made. good morning, everyone.

another pack show. an idea of how abysmal uber is doing in the u.s. i am francine lacqua here in london. we dive into the state with william jackson, bridgepoint group managing partner. later, we talk with the iea's toril bosoni. now, let's talk to the market. a lot on jay powell, oil, also equity markets have been higher, recent gains, and implications of soft u.s. inflation data. the things we are watching, you can see pound 1.3816. let's get straight to the bloomberg first word news in london with leigh-ann gerrans. hi, leigh-ann. leigh-ann: good morning, francine. a violent mob raging through the

u.s. capitol, videos showing with one calling for nancy pelosi. >> where are you, nancy? we are looking for you! ♪ nancy oh, nancy nancy ♪ where are you, nancy? leigh-ann: the siege is being portrayed as the long action to stoke insurrection. they seem far from winning the 17 gop votes needed to convict trump. bank of england governor andrew bailey says the post-brexit actions are unrealistic and underlines the go-between the u.k. and the block over equivalence roles. without them, they have to support operations in both britain and the eu. amsterdam overtook london as

europe's largest share trading hub in january. local media reports a former japanese prime minister yoshi plans to resign in the face of growing criticism over his comments about women, mom known in japan for his gaffe, he said that they need to limit the speaking time of women because they talk too much. global news, 24 hours a day, on air and at bloomberg @quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am leigh-ann gerrans. this is bloomberg. francine? francine: leigh-ann, thank you so much. literally the story that keeps giving. and actually, that gentleman has spoken to some of our male anchors. president joe biden and president xi jinping has spoken for the first time since biden entered the white house. they spoke about unfair economic

practices as well as human rights abuses in hong kong. for more on all of us, we are joined by our senior editor, derek wallbank. by all accounts, how much tougher will biden be on china than president trump? derek: well, you can expect a tougher alignment on human rights issues, on shenzhen, on hong kong. you can expect him to speak of more than donald trump did, but in a lot of places, you are going to actually see biden taking some of the trunk line and continuing it. taiwan is an interesting thing there. biden brought up taiwan in his call with xi, and there was a taiwanese senior official who went to the biden inauguration. you can see some of those things, and biden brought up taiwan in the call.

in the chinese read out of it, taiwan was mentioned, along with shenzhen and hong kong, as internal chinese issues that the u.s. should steer clear from. it does not appear that joe biden plans to steer clear, though. francine: does it mean that trade relationships will automatically get worse? derek: well, i think what is interesting here is that biden paired all of this with saying that the u.s. was willing to work with china on issues relevant to its interest, and i think, as you read into this, there is a sort of carrot and stick here. in some cases, biden is going to be maybe a little bit tougher, but in other places, they are signaling that they could get along and signal things.

biden was concerned about chinese economic practices, but i look at this and see places where things like climate, china is looking at very ambitious climate targets, and the u.s. is rejoining the paris accord, so you can see maybe some parallel places that they can go down together on that road if they wanted to, so it is very much not necessarily the exact same relationship. you can see some conflict points ahead, but you can also see some places where maybe the two could get along and do well together. francine: derek, thank you so much, derek wallbank, senior editor at bloomberg. joining us now is james bevan, chief investment officer at ccla investment management. james, jay powell, great reflation trades, but where do you stand on u.s.-china? will that be the one thing once

again that will drag markets and supply chains? james: i think the u.s.-china story will be important, but i think it will be different under mr. weidmann. i think -- under mr. weidmann. i think -- mr. biden. i think it is potentially much more dangerous given the importance of credit to china's economic growth. i think mr. biden will be very tough on human rights, a supply chain linked to china and engaging in activities with implicitly involved so closely labor. i think it is an enormous issue for mr. biden. he has come to the table with standing strong. i expect him to be tough. francine: doesn't have an impact on my renminbi and dollar?

-- does it have an impact on renminbi and dollar? james: i think so. look, with a repositioning up of the remember the relative to the dollar. francine: when you look, james, at the underlying factor, what do you make of what jay powell said on inflation trade? will they be willing to run the economy hot? james: i think mr. powell said some very interesting issues, and clearly has already identified that he has issues on excess inflation to compensate for long periods of under inflation, relative targets. the other interesting thing, which i think is critically important is his expectation

that the market and the economy is are more dependent on fiscal policy and monetary policy. if you look at the numbers, i would anticipate the three big central banks, the federal reserve, central bank, have already added $8 trillion to their balance sheet last year. but the chinese government i think added around $15 trillion to ease their fiscal policy, and i think this will be more important for economic growth and the outlook for inflation, and that is one of mr. biden's -- francine: james, how much for inflation trade? james: i think we will see support stories, earnings recovery. i think that they are very risky. i would look through the next 12 months' earnings, the following

12 months' earnings, and have great valuation that we should take in earnings. i am penciling in around 4300 points for the s&p 500 for the end of this year, 4800 at the end of next year. my big concern is that we get the mother of all meltdowns, we get those levels earlier, and that generates the risk of a meltdown in the autumn. francine: "the mother of all meltdowns," i like the way you put it, james. we will talk about earnings shortly as well. james bevan's from ccla investment stays with us. my ipad just fell off. coming up, we will have a conversation with the eu's chief brexit negotiator, michel barnier. don't miss that conversation. this is bloomberg. ♪

francine: economics, finance, politics. this is "bloomberg surveillance." i am francine lacqua here in london. now let's get straight to the bloomberg business flash, here's leigh-ann gerrans. hi, leigh-ann. leigh-ann: hi, francine. commerzbank is posting's biggest quarterly loss in more than a decade and warning that revenue will shrink this year. this is as the ceo pitches a growth strategy in favor of steep cost cuts. commerzbank is shedding about one-third of its german workforce and closing about half of its retail branches. crude production for shell has entered a long period of decline, seeing it falling 1% to 2% a year, without point of traditional fuels about 55% lower by 2030.

shell is laying out a detailed plan for cleaner energy, including the targets for electric cars and carbon capture. and unicredit has posted an unexpectedly large loss for the fourth quarter. the final whistle found the chief executive accelerating to cleanup up the balance sheet. incoming boss andrea and harris a leaner bank that faces a slew of challenges, and that is your business flash. francine? francine: leigh-ann, thank you so much. james bevan's is with us. i have a bunch of questions. james: i still look at technology and health care, which people have had their day. i look at the resilience of the earnings numbers and the price

that we should participate in those earnings numbers. i still see value, and i am not going to let go of good quality names that i think will positively deliver free cash flows just by valuation. francine: james, where do you see, as, you know, the biggest shifts, the shortage of chips in the u.s., whether the vaccine drives inflation, but is a more a technology story on independent components that we could be looking at longer-term? james: for me, the bigger story is why and how the u.s. has to reengineer its story for economic growth. the trend growth that was in place over the global financial crisis is around two points. i believe we are considering a trend rate of growth now around 3% on the back of productivity improvement, and those productivity improvements will

come from the application of marked technologies. the internet of things is clearly going to be a significant driver. as wages increase in the state, i think we can square the circle between the requirement to keep inflation relatively low and deliver strong economic growth if we see technology being taken up in the supply chain. and that, to me, is where we have to have the focus on technology, where is the technology going to be placed within the supply chain? francine: james, what do you make of the earnings season? it seems come in many cases, quite positive, with a rumble here and there, but there is a presenter that was the vaccine roles outcome everything is ok. do you have questions about that? james: well, first off, the year on year comparisons for the companies that fell into debt bonds on the back of the covid-19 crisis are clearly going to look extraordinary, and we know that if you declined by

50%, you have to see it 100% and reese to get back to where you started. the big question for me is what will the rate of progress be after recovery is truly in place? i am expecting around 177 dollars of earnings, the s&p 500, for the end of this year, compared to about 100 $69 at the end of 2019. so the two-year progress is not going to be that much. big question is -- what are we going to see in 2022? i think it is correct that productivity will improve come we could see up to $190 in 2022, and that would allow one to be optimistic about the prospects. but any earnings shortfall in 2022, i think, is going to be punished hard, because valuations are rich. francine: where do you stand on inflation? what if inflation were willing to shoot up, central banks run through? are industries all made equal, or do some get clobbered?

james: i find the inflation story absolutely fascinating, because the devil is most certainly in the details. the supply chain inflation, it is quite clear that a lot of inflation working through the system, but is it not come as we all know, ending up at the consumer price index level? and should we expect there to be a marginal squeeze in companies? companies cannot control the prices of their input or their output. and the market has been an absolute dog in the last month, is seeing a resurgence he. people recognize a real importance of investing in companies that have some control over the pricing. francine: are you long china? james: i find china extraordinary. it is clearly an engine of exceptional growth. i look at companies like tencent, and i see an enormous reservoir of value, but i have real reservations about china's

human rights record, a lack of commitment to the eradication of slavery. and when i think about how china is behaving with his minorities, i think biden will be tough. and the risk is that he not only says to u.s. companies that they need to reorganize their supply chains to deal with this slavery challenge, but he moves from the tariffs on trade to focus on a capitalist plan and the reduction of liquidity in china could signal a real challenge to china's economic growth. francine: james, thank you so much, james bevan, chief investment officer at ccla investment management. james: thank you. francine: coming up, we hear from the chief executive of general motors about the genera- [announcer] imagine automhaving fuller, thicker,

more voluminous hair instantly. all it takes is just one session at hairclub. introducing xtrands. xtrands adds hundreds or even thousands of hair strands to your existing hair at the root. they're personalized to match your own natural hair color and texture, so they'll blend right in for a natural, effortless look. call in the next five minutes and when you buy 500 strands, you get 500 strands free. call right now. (upbeat music)

francine: economics, finance, politics. this is "bloomberg surveillance." i am francine lacqua here in london. general motors beat the street with fourth-quarter profit and signaled continued earning strength despite short-term damage may semiconductor shortage through the auto industry. achieved executive mary barra says they will not receive parity with gasoline-powered cars until the mid of the decade.

mary: we will have a positive year in 20 21, not only for my financial perspective, but also the continued -- but very shortly, we will be launching the chevrolet bold euv, which is a great vehicle, days away, and later this year, we will be serving the market with the gmc hummer ev, and the cadillac lyric comes shortly after that, as well as tremendous progress being made from an autonomous perspective as well. so we are really excited about the year, the growth opportunities that we have in front of us. so it is a year of execution, and, you know, the issues with chips, we will work through it. david: is general motors in the same boat as everybody else, or is there something you can do to get an advantage over other automakers? mary: in general, this is an industry issue. we are working every day to look for opportunities of how we minimize the impact, so we will continue to do that.

you know, we did provide the guidance with a fairly wide range, and we will work in every day and provide updates as we go forward. david: mary come as you said, you have a lot of ev models coming out, including the bold euv new model coming out. you are investing $1 billion in part of a multiyear plan. as a practical matter, what is the difficulty of that plan? and i want to think about supply chains, battery cells. mary: we are one of only two automakers that are doing cell manufacturer in this country. we are doing a tremendous amount from r&d as well as partnering with startups and of course our joint venture that is a development as well as production, so, you know, we are working hard to make sure we have got all the cells we need,

and we are working through these supply dates to make sure we need to. as we talked about, we are accelerating our ev's by 2025, and we are covering the whole market. we continue to work it, but we think we have a very strong plan. francine: that was general motors chief executive mary barra speaking with bloomberg's david westin. coming up, we talk more about private equity as company valuations push higher. what does 20 to 21 hold for the equity industry? -- what does 2021 hold for the equity industry? that is coming up next, and this is bloomberg. ♪ his is bloomberg. ♪

francine: economics, finance, politics. this is "bloomberg surveillance." i'm francine lacqua, here in london. let's get to the bloomberg first

word news with leigh-ann gerrans. leigh-ann: germany is on course for -- schools and daycare may reopen as soon as next week. it is a win for state leaders over chancellor merkel, who wanted to extend the curves that maintained consistent rules across the country. other restrictions that were due to expire on february 14 will now last until march 7. the u.k. is setting a target to vaccinate all over 50 by the end of april. prime minister boris johnson is warning about lifting the lockdown. but say more danger -- more data on the success of vaccines is needed before the restrictions can be eased. prime minister said not to book a holidays yet. the u.s. is imposing sanctions on military leaders in myanmar following a coup. it will deprive the army chiefs of $1 billion of access to help

from america. the ambassador is still in detention amid protests across the country. 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: after a slowdown in dealmaking industry, private equity activity has come roaring back. in a moment, we will speak with bridgepoint, but first let's get more with dani burger. is it that private equity has done great worldwide, or are there specific companies that have done better in certain regions? dani: the activity for sure is global. in terms of the volume we have seen in the fourth quarter, it has bounced back worth 100 --

worth $1 trillion of deals done. you look at things like tech, despite the pandemic we see tech valuations for a lot of these deals remaining extremely rich because they are somewhat immune to the pandemic. the u.k. has been extremely active. much of that had to do with the march 3 budget coming from rishi sunak. there is a bump that the capital gains tax might be changed. across the board, part of the reason the activity looks so strong is more or less making up for lost time. at the beginning of the pandemic, we saw a lot of private equity and general deal activity slow down, perhaps trying to get used too a new virtual world where you cannot do origination in person. the numbers that we got from kc are from their earnings this week, a record $12.5 billion deployed in the fourth quarter, and they were able to raise a record $44 billion in 2020. francine: thank you so much for

the roundup. to talk more about private equity, we are joined by william sachsen from bridgepoint. the -- william jackson from bridgepoint. william, thank you again for joining us on "surveillance. when you look at how much private equity has been doing -- and it has been doing quite a lot, do you see that momentum continuing into 2022, and what does that mean for valuations? william: i think this has been a market where -- which is incredibly suited to product. there is a huge demand for capital out there, and the nature of the model of quick decision-making, of rapid connection between shareholder and management is absolutely imperfect. it has been a strong period for the industry. francine: when you look at some of the things that we follow on

bloomberg, will lbo's become even bigger? william: i think they will. there is a huge debate going on amongst those of us who do the investigative activity and our own investors over value versus growth come as we were just talking in the introduction. you know, the continued rise in the evaluation of growth has been phenomenal, and this pandemic has been very polarizing across sectors. and i think people are starting to stand back and say are these valuations just too high, and it is a better value out there in sectors that have been hit by covid. and a lot of that depends on what is going to happen with the vaccine, so this is a really interesting moment for the industry. dani: how do you deal with those

beaten up sectors? would you be more interested in buying more retail or consumer focused companies? william: this is going to be a really fascinating three or four months because you are just starting to see these vaccine rollout. nobody quite knows yet -- are they going to be fully effective, partially effective, how are they going to do with the new variance? -- the new variants? i think there will be some kind of rebounding during 2021 and into 2022 on those valuations, and part of it is when you look at the tech valuations, these are businesses that on the whole are performing extremely well, but the rise in return from those assets is coming from valuation multiple uplift, and much as earnings growth. that is going to start to make people a little bit more nervous. so as we get clarity on the

impact of the vaccine, i think you are going to see people, just to look at which are the more interesting sectors outside some of those core areas as well. dani: what do you do in the meantime? how do you make sure you not overpaying for any of the companies? william: i think we are looking at those growth sectors, and you know, the trends that we have seen in the last 12 months are a massive acceleration of existing , underlying trends. it is looking forward at 10 years of impact for some of those sectors. those trends themselves are not going to reverse. i am a firm believer in that. they are still pretty attractive assets to acquire inditex sectors, and it will be. valuable through this year. but when you look at what is going to happen as the lockdown starts to ease, i think you are

going to see hospitality recover quite fast. people will want to travel again, but the restrictions there are probably uncertain. and entertainment as well will come back into vogue. so, you know, quite a lot to look at. particularly, if you stand aside and look at sectors like health care, people are going to have a totally new relationship with health care post this crisis. francine: how do you explain the growing interest in sports franchises? william: people have been investing in sport for a long time. bridgepoint, as you know, is a big investor in sports. cdc, another great firm, used to own formula one. it is best watch to live.

if you watch sport on a recording, it is pretty dull. so you get this huge amount of content with sport, and of course content is very valuable. but investing in sport is not easy because to make a good investment you have to have a great sport, and the sport has to come way ahead of the finances. but at the end of the day, you know, as a shareholder, you may own the share statistic it, but the sport is owned by the fans. francine: do you know how sport is consumed in the lacqua household? it is watch live with family members, and i think my husband rewatch is it at night. it takes a whole day for only one match. william: there you go. what is on the agenda right now is that a lot of these

franchises need capital, have been revenue hit in the last 12 months. that is why it is in the public eye. francine: can i ask you about jurisdictions? are there any that you consider more friendly peer-to-peer? for private equity -- william: for private equity investment, all the european markets are strong locations to invest in. i think if somebody has a private equity program they want decent exposure to the u.s. and europe, and asia come although the returns in asia have been better on a hole in the stock market. dani: another phenomenon we are seeing in the stock market -- people that you would not associate with these kinds of things, like colin kaepernick and to john chow. -- and what does that tell you where we are in the market right

now? william: it probably tells you that we are close to the top, doesn't it? it is difficult to comment from london on this because we have not seen any spacs in london. they are doing that at the expense of the normal scrutiny that you would expect with an ipo process. so, you know, i think buyers need to be quite careful. spac's are run by professional investors. kkr has a spac. they're well-placed to run those organizations. but when you start to see sports stars raising spac's and so on, i think there was a quote in "the new york times" this week saying that the people who have

spac's do not have covid. it shows you something. francine: coming up, with brent crude gaining 18% this year, we are next for the oil market. our interview with the international energy agency is coming up shortly, and this is bloomberg. this is bloomberg.

francine: economics, finance, politics. this is "bloomberg surveillance." i'm francine lacqua, here in london. let's get straight to your bloomberg is this flesh with leigh-ann gerrans. leigh-ann: uber is reporting declining revenue for the fourth quarter, showing that demand for food delivery is not making up for a shortfall in ridership. the ride-hailing giant narrowed

its last quarter away from asset sales. autonomous vehicles and -- commerzbank is posting its biggest quarterly loss in more than a decade and warning that revenue will shrink this year. that as the new ceo ditches a sales growth strategy in terms of cost -- in favor of cost cuts. it is closing half of its retail branches. >> because we know how the benefits that we have basically booked 50% of the structuring costs of the transformation program. leigh-ann: westfield owner unibail is scrapping dividends until 2023. they plan to resume payouts when the reduction plan is completed,

including about 4 billion euros of european asset sales and strict controls on spending. the move saw an average of just 70 normal trading days and that was last year. that is your bloomberg business flash. francine? francine: the rebalancing of global oil markets from a weaker outlook from demand and recovery supplies. that is a report from the international energy agency published in just the last hour. let's hear from the chief executive of shell. ben van beurden said that -- >> we are not going to immediately turn our back on legacy businesses. we are going to use our upstream business very much as a high-quality financial foundation of the company. that is going to pay a very significant part of shoulder distributions well into the next decade. it is a balanced narrative based on a very disciplined approach

that we will be laying out today. disciplined in cash management, this up and management. francine: to talk about oil demand in the oil markets, we are joined by toril bosoni. thank you for joining us on surveillance. when you look at what we are seeing in the oil market, what will opec-plus decide at the next meeting to try to rebalance the market? toril: good morning. as you said -- as we said in the report that was released this morning, we are seeing prices rising very strongly over the last few months, suggesting that demand is running ahead of supply, and oil inventories are falling very sharply. this is, of course, due to very good compliance with the opec-plus cuts. the market has been supported by the pledge by the opec group to continue to manage the market,

to draw down inventories that built up during the first half of 2020, and we are seeing that the outlook for the economy and oil demand during 2021 is looking brighter despite the near term weakness because of the coronavirus, the new cases, the new variants that are coming. francine: if you look at the differences in terms of fuel demand and how that compares with refinery runs -- it is different in europe than it is with the u.s. what does it actually .2? -- what does it actually point to? francine: can you hear me now? toril: yes, oil demand in europe

is particularly weak at the moment because of the restrictions that we have on mobility, travel, lockdowns, in many countries. a slow rollout of the vaccine, a number of new cases, lockdowns in many countries seeing the recovery in europe is lagging in other places in the world. in the u.s., we are seeing that refinery demand is picking up, very strong growth in asian countries, which of course are led by china, who was the first into the lockdown and the first out of it, with very strong growth formation, but also some weakness currently there as the number of cases are rising. francine: so basically if you look at fuel demand -- and i have a great chart which i will show in a second -- it is recovering more quickly than refinery runs in 2021. is that because of the way that refiners are reacting, or is there something a little bit more symptomatically that we should look at?

toril: yes, so in terms of refinery demand, and in terms of oil demand, during 2020 a lot of the overhang built up in inventories was in the fine product as opposed to crude. now -- in refined product as opposed to crude. now we are seeing the refiners reacting to the collapse in demand that came about in early 2020, so they built up a lot of inventory of stocks -- of gasoline, of diesel, especially of jet fuel -- that have to be torn down. refiners will continue to draw down the inventories for the margins, and profitability for refiners to improve, we are seeing the stock draws globally are being led by product inventories, so refinery runs are expected to increase, but we still have to reduce the overhang on the product spot.

of course, for the refineries -- francine: how do you see the u.s.-china relationship impacting demand for oil? toril: the relationship between the u.s. and china -- of course now we are seeing increased exports of u.s. oil to china, direct economic recovery, and oil demand recovery is first and foremost being led by china and other asian countries at the moment. so we are seeing that, as the trade situation between the two countries normalized, increased imports from the u.s. to china, exports from china to the u.s. will support the u.s. economic recovery and vice versa.

which are both supported by oil demand growth later this year, especially the second half of the year. francine: toril bosoni of the iea. coming up, a decision comes after a battle of wills between angela merkel between regional leaders. we have that story next. this is bloomberg. ♪

francine: let's get to the latest on the lockdowns in europe, germany mapping out a path to revising the largest economy in europe for a children returning to school. the chancellor presenting the plan to parliament today, but warning on the danger posed by virus mutations. joining us is chad thomas, also our editor-in-chief for virology watch across europe. there is so much going on, and it really is everything for itself. chancellor merkel has been much more cautious about reopening in germany than other countries. why? chad: hi, francine. chancellor merkel, is, of course, a scientist by training, and she says she is very concerned about virus mutations

taking hold in germany. they have already seen some of it here, and she therefore has really pushed to keep the country lockdown -- the country locked down. the lockdown will extend into march. schools in some states will start reopening as early as next week, and they are coming forward with a plan to start to reopen things like hairdressers in march as well. but really many things are going to remain locked down here in this country for the foreseeable future. francine: how are vaccinations going? you know, it probably was the biggest spat between the u.k. and the e.u. after brexit. chad: and that is the thing that also i think is weighing on chancellor merkel, in saying that she wants to continue the lockdown here. germany is out about audra vaccinations per 100 people. -- is at about four vaccinations per 100 people. until they can get that really rolling, i think you are going to see the lockdowns continue

here to some degree. the chancellor has promised that everybody in germany who wants to get a vaccination will get one by the middle of september, but that many of those vaccinations will probably be taking place sometime over the summer. francine: chad, thank you so much for joining us. he is of course chad thomas. luber surveillance continues in the next hour. tom keene joins me out of new york. we will talk about markets, we will talk about some of the reopening's, and we have quite a lot of earnings out there. i know brexit news is creeping up, back on the agenda with the u.k. offering to change the terms of the you come and the e.u. said not for now. this is bloomberg. ♪

francine: joe biden holds his first call with president xi. as u.s. president, he raises concern over coercive and unfair economic practices. tame u.s. inflation adds to the debate over price pressures. jay powell turns his focus to the labor market, calling for a societywide push for jobs. and the e.u. rebuffs the u.k.'s call to reset the post-brexit relationship. it says britain needs to honor the promises it made on northern ireland. good morning, everyone, and welcome to "bloomberg surveillance." i'm francine lacqua in london, tom keene in new york. i just saw the u.s. bond yield posting at 0.09%. this is a huge deal as cash trading is getting underway, and you wonder what comes next. tom: it dovetails with the headlines that just came out. before we get to the chart, let's go to the e.u.